Senate Bill No. 26
(By Senators Burdette, Mr. President, and Boley,
By Request of the Executive)
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[Introduced January 14, 1994; referred to the Committee
on Finance.]
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A BILL to amend chapter seven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article eleven-b, relating
to the tax increment financing act; legislative findings and
purpose; definitions; tax increment financing procedures;
copies of tax increment financing ordinance provided to
assessor, sheriff and director of finance; issuance of
obligations for project costs; terminating tax increment
financing; and severability.
Be it enacted by the Legislature of West Virginia:
That chapter seven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article eleven-b, to
read as follows:
ARTICLE 11B. WEST VIRGINIA TAX INCREMENT FINANCING ACT.
§7-11B-1. Short title.
This article may be known and cited as "The Tax IncrementFinancing Act".
§7-11B-2. Findings and legislative purpose.
It is hereby found and declared that public improvements,
and publicly promoted private improvements, in any development
area which result in the increase in the value of property
located in the development area or result in increased employment
within the development area serve a public purpose for each
taxing district possessing the authority to impose ad valorem
taxes from such taxes in the development area. The increment in
revenues from such taxes derived by each taxing district from the
development area is found and declared to be one of the benefits
derived by each taxing unit from any economic development
project.
§7-11B-3. Definitions.
As used in this article, the term or phrase:
(a) "Agency" means a county or municipal development agency
established by section one, article twelve, chapter seven of this
code.
(b) "Base assessed value" means the taxable assessed value
of real property within a development project area as shown upon
the land book records of the assessor on the first day of July of
the year preceding the effective date of the ordinance creating
the development project area.
(c) "Current assessed value" means the annual taxable
assessed value of real property in a development project area as
recorded on the land book records of the assessor.
(d) "Development project area" means an area to be developed
by one or more agencies as a tax increment financing project,
which may include one or more counties, municipalities, or
combination thereof, and which area may not exist for more than
thirty years from the date that the project area is designated.
(e) "Project," "development project" or "tax increment
financing development project" means any capital project
undertaken in a development project area in accordance with a tax
increment financing plan. "Project" does not include performance
of any governmental service by a county or municipal government,
or any property to be sold or to be affixed to or consumed in the
production of property for sale, or any housing facility to be
rented or used as a permanent residence.
(f) "Tax increment" means the amount of tax attributable to
the amount by which the current assessed value of real property
exceeds the base assessed value, less the portion of tax
allocated to the state.
(g) "Taxing unit" means and includes a municipal corporation
or a county.
§7-11B-4. Tax increment financing procedures.
(a) Upon receipt of an agency's proposed development project
area and tax increment financing plan, or when there is no such
agency upon its own initiative, the county commission of any
county may adopt tax increment financing by passing an ordinance
designating a development project area and providing that ad
valorem property taxes on real property in the developmentproject area shall be assessed, collected and allocated by the
taxing units in the following manner for so long as any
obligations secured by the tax increment financing fund,
hereinafter authorized, are outstanding and unpaid:
1. The assessor shall record in the land book both the base
assessed value and the current assessed value of the real
property in the development project area.
2. Ad valorem taxes upon real property which are
attributable to the lower of the base assessed value or current
assessed value of real estate located in a development project
area shall be allocated to the taxing unit in the same manner as
applicable in the year preceding adoption of the tax increment
financing ordinance.
3. Ad valorem taxes upon real property which are
attributable to the increased value between the current assessed
value of any parcel of real estate and the base assessed value of
such real estate shall be allocated and paid into a special fund
entitled the "Tax Increment Financing Fund" to pay the principal
and interest on obligations issued to finance the development
project costs. Any taxing unit having a project or any portion
thereof within its borders shall allocate its tax increment to
such fund.
(b) Before adopting a tax increment financing ordinance,
the county commission shall hold a public hearing on the need for
tax increment financing in the county. Notice of the public
hearing shall be published once each week for three successiveweeks immediately preceding the public hearing as a Class III
legal advertisement in accordance with section two, article
three, chapter fifty-nine of this code. The notice shall include
the time, place and purpose of the public hearing, define tax
increment financing, indicate the proposed boundaries of the
development project area, and proposed obligations to be issued
to finance the development project area costs. All parties who
appear at the hearing shall be afforded an opportunity to express
their views on the proposal to undertake and finance the project.
(c) Proceeds from obligations issued under this article may
be used only to pay for costs of projects to foster economic
development (including infrastructure and other public
improvements prerequisite to private improvements) when such
projects and improvements would not reasonably be expected to
occur without tax increment financing. Such costs may include
the acquisition of the project site and legal and other expenses
related thereto.
§7-11B-5. Copies of tax increment financing ordinance to
assessor, sheriff and director of finance.
The county commission shall transmit to the assessor,
sheriff and director of finance a copy of the tax increment
financing ordinance, a description of all real property located
within the development project area, a map indicating the
boundaries of the development project area and the manner of
collecting and allocating property taxes pursuant to this
article.
§7-11B-6. Issuance of obligations for project costs.
(a) Any county which adopts tax increment financing, or any
municipality in such county in which all or any portion of a
project area will be located, may issue obligations secured by
the tax increment financing fund to finance the development
project costs only if approved by three fifths of the voters when
the bond creates a debt of the taxing unit, or by a simple
majority when the bond does not create such a debt. All
obligations issued pursuant to this section shall be subject to
the requirements and limitations of articles one or two-c,
chapter thirteen, or article twelve, chapter seven, or any other
relevant statutory provisions of this code. The ordinance
authorizing the issuance of obligations may pledge all or any
part of the funds deposited in the tax increment financing fund
for the payment of the development project costs and any
obligations to be issued to finance them. Such funds may include
net revenues resulting from any revenue bonds issued for a
project undertaken pursuant to this article.
(b) Any revenues in the tax increment financing fund which
are not used for the payment of project costs or pledged as
security for the obligations issued shall be deemed "surplus
funds" and at the end of the tax year shall be paid into the
general funds of the county and municipalities in proportion to
their respective contributions to the fund.
§7-11B-7. Terminating tax increment financing.
(a) Upon the retirement of all obligations secured by thetax increment financing fund, the county commission may pass an
ordinance to dissolve the tax increment financing fund and to
terminate the existence of a development project area. When the
fund is dissolved, any and all revenue remaining in the fund
after payment of all such obligations shall be paid into the
general fund of the county and municipalities in proportion to
their respective contributions to the fund.
(b) Upon dissolving the tax increment financing fund, real
property shall be assessed and taxes collected and allocated in
the same manner as applicable in the year preceding the adoption
of the tax increment financing ordinance.
§7-11B-8. Severability.
If any provision of this article or the application thereof
to any person or circumstance is held unconstitutional or
otherwise invalid, such unconstitutionality or invalidity shall
not affect, impair or invalidate other provisions or applications
of the article, and to this end the provisions of this article
are declared to be severable.
NOTE: The purpose of this bill is to give counties greater
ability to influence economic development by providing them with
tax increment financing as a means to raise funds for capital
projects. Such projects will increase the property values in the
county where they are located, creating a property tax increment
which will be used to pay project costs or to pay off bonds
issued to pay project costs.
Article 11B is new; therefore, strike-throughs and
underscoring have been omitted.