H. B. 2563
(By Delegates Kiss and Browning)
[Introduced February 20, 1995; referred to the
Committee on Finance.]
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; and to
amend and reenact section eleven, article nine-a, chapter
eighteen of said code, all 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; security
for obligations issued; severability and clarifying the term
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; and to
amend and reenact section eleven, article nine-a, chapter
eighteen to read as follows:
CHAPTER 7. COUNTY COMMISSIONS AND OFFICERS.
ARTICLE 11B. WEST VIRGINIA TAX INCREMENT FINANCING ACT.
§7-11B-1. Short title.
This article may be known and cited as "The Tax Increment
§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, result in increased employment within the
development area or serve a public purpose of each taxing
district possessing the authority to impose ad valorem taxes from
such taxes in the development area. The increment in revenues
from the 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
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) "Person" means any individual, corporation, firm,
partnership, joint venture, private association, trust or other
(f) "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: Provided, That the term shall include
only those improvements which are permanent and immovable.
"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. The term "project" also does not
include any structure or improvement which will cause a decline
in the assessed value on adjacent property or which will cause
depletion of any contiguous mineral interest which results in a
decrease of the property tax collections attributable to the
mineral interest if the decrease is equal to or greater than
twenty-five percent of the increased property tax collections
attributable to the improvement or structure.
(g) "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.
(h) "Taxing unit" means a municipal corporation, a county
commission or a county board of education.
§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 development
project 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 and the current
assessed value of the real property in the development project
(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
(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
the 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
(4) In no event shall tax increment financing apply to any
levies other than the regular levies provided for in article eight, chapter eleven of this code. Excess levies will continue
to be calculated at an appraised value of one hundred percent of
market value and assessed at sixty percent of market value.
(b) Before adopting a tax increment financing ordinance, the
county commission in every county in which the development
project is located 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 successive
weeks 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 the
projects and improvements would not reasonably be expected to
occur without tax increment financing. There shall be a finding
by any taxing unit which incurs debt or expends funds from a tax increment financing fund that a development project is not
reasonably expected to occur without the use of tax increment
financing. The acquisition of the project site and legal and
other expenses related thereto may be included as a cost of the
(d) Prior to the implementation of any tax increment
financing ordinance all taxing units contributing to the tax
increment financing fund shall enter into intergovernmental
agreement in accordance with the provisions of article
twenty-two, chapter eight of this code.
§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 which shall include each
parcel or parcels contained within the development area; a map
indicating the boundaries of the development project area; and a
description of 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. There shall
be an affirmative vote of the voters in all taxing units in which
a development project is located: Provided, That no election is
required in a municipality in which a project development area is
located if the municipality is within a county holding an
election unless a debt of the municipality will be created. All
obligations issued pursuant to this section shall be subject to
the requirements and limitations of article 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. The funds may include net revenues resulting from
any revenue bonds issued for a project undertaken pursuant to
(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 taxing units 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 the
tax increment financing fund, the county commission shall 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 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. Security for repayment of obligations for project
Where title to a development project, development project
area or part of a development project area is owned by a person,
the person shall deliver to the taxing unit a promissory note
payable to the taxing unit in the amount and on the same terms as
the obligations for the project costs which note shall be secured
by a deed of trust on the development project area and other
security as the taxing unit may require.
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.
CHAPTER 18. EDUCATION.
ARTICLE 9A. PUBLIC SCHOOL SUPPORT.
§18-9A-11. Computation of local share; appraisal and assessment
(a) For the fiscal year beginning on the first day of July,
one thousand nine hundred ninety-three, and thereafter, on the
basis of each county's certificates of valuation as to all
classes of property as determined and published by the assessors
pursuant to section six, article three, chapter eleven of this
code for the next ensuing fiscal year in reliance upon the
assessed values annually developed by each county assessor
pursuant to the provisions of article one-c and article three,
chapter eleven of this code, the state board shall for each
county compute by application of the levies for general current
expense purposes, as defined in section two of this article, the
amount of revenue which such levies would produce if levied upon
one hundred percent of the assessed value of each of the several
classes of property contained in the report or revised report of
such value, made to it by the tax commissioner as follows:
(1) The state board shall first take ninety-five percent of
the amount ascertained by applying these rates to the total
assessed public utility valuation in each classification of
property in the county.
(2) The state board shall then apply these rates to the
assessed taxable value of other property in each classification
in the county as determined by the tax commissioner and shall
deduct therefrom five percent as an allowance for the usual
losses in collections due to discounts, exonerations,
delinquencies and the like. All of the amount so determined
shall be added to the ninety-five percent of public utility taxes
computed as provided above, and this total shall be further
reduced by the amount due each county assessor's office pursuant
to the provisions of section eight, article one-c, chapter eleven
of this code, and this amount shall be the local share of the
As to any estimations or preliminary computations of local
share that may be required prior to the report to the Legislature
by the tax commissioner, the state board of education shall use
the most recent projections or estimations that may be available
from the tax department for such purpose.
(b) Whenever in any year a county assessor or a county
commission shall fail or refuse to comply with the provisions of
this section in setting the valuations of property for assessment purposes in any class or classes of property in the county, the
state tax commissioner shall review the valuations for assessment
purposes made by the county assessor and the county commission
and shall direct the county assessor and the county commission to
make such corrections in the valuations as may be necessary so
that they shall comply with the requirements of chapter eleven of
this code and this section, and the tax commissioner shall enter
the county and fix the assessments at the required ratios.
Refusal of the assessor or the county commission to make such
corrections shall constitute ground for removal from office.
(c) For the purposes of any computation made in accordance
with the provisions of this section, in any taxing unit in which
tax increment financing is in effect pursuant to the provisions
of article eleven-b, chapter seven of this code, the assessed
value of the development project area shall be the base assessed
value as defined in section two, article eleven-b, chapter seven
of this code.
NOTE: The purpose of the bill is to allow counties to fund
public improvements through the method of tax increment
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
Article 11B is new; therefore strike-throughs and
underscoring have been omitted.