Senate Bill No. 550
(By Senator Craigo)
[Introduced February 20, 1995; referred to the Committee
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 project financing act; legislative findings
and purpose; definitions; tax increment financing
procedures; copies of tax increment project financing
order provided to assessor, sheriff and director of
finance; issuance of obligations for development project
costs; terminating tax increment financing;
severability; and clarifying the term "assessed value".
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
that section eleven, article nine-a, chapter eighteen of said
code be amended and reenacted, all 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 capital improvements or
facilities in any area which result in the increase in the value
of property located in the area or encourage increased employment
within the area will serve a public purpose for each taxing unit
possessing the authority to impose ad valorem taxes in the area
and that each development project developed pursuant to this
article, and any leasehold interest therein, are declared to be
public property, and shall be exempt from taxation by the state
or any county, municipality or to other levying body as long as
such development project is owned by the county commission.
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 and tangible personal property of a project developer
within a development project area as shown upon the land book and
personal property records of the assessor on the first day of
July of the year preceding the effective date of the order
authorizing the tax increment financing plan.
(c) "Current assessed value" means the annual taxable
assessed value of real and tangible personal property of a
project developer within a development project area as shown upon
the land book and personal property records of the assessor.
(d) "Development project" means a project undertaken by a
county commission in a development project area in accordance
with a tax increment financing plan.
(e) "Development project area" means an area to be
designated by one or more agencies as a development project area,
which may include one or more counties, municipalities or combination thereof.
(f) "Private project" means any project which is subject to
ad valorem property taxes in the state undertaken by a project
developer in accordance with a tax increment financing plan in a
development project area.
(g) "Project" means any facility requiring an investment of
capital, including extensions, additions or improvements to
existing facilities and including water or waste water
facilities, but does not include performance of any governmental
service by a county or municipal government or any housing
facility to be rented or used as a permanent residence.
(h) "Project developer" means any person or corporation
which engages in the development of projects in the state.
(i) "Tax increment" means the amount of tax attributable to
the amount by which the current assessed value of a private
project in a development project area exceeds the base assessed
value, if any, of such private project, less the portion of tax
allocated to the state.
(j) "Tax increment obligation" means any bond or note issued
by a county commission in accordance with section six of this
(k) "Tax increment financing plan" means a plan proposed by
either an agency or a project developer requesting that a
specific development project be developed in conjunction with a
private project of such project developer, which plan is approved
by the county commission for the county in which the development
project area is located in accordance with the procedures set
forth in section four of this article.
(l) "Taxing unit" means a municipal corporation, a county
commission or a county board of education.
§7-11B-4. Tax increment financing procedures.
(a) An agency or a project developer may request that a
county commission adopt a tax increment financing plan with
respect to a development project to be developed in conjunction
with a private project of a project developer. Upon receipt of
an agency's or project developer's proposed tax increment
financing plan, the county commission of any county may adopt a
tax increment financing plan by entering an order designating a
development project area, approving a tax increment financing
plan and providing that ad valorem property taxes on real
property owned by the project developer in the development
project area shall be assessed, collected and allocated by the taxing units in such area in the following manner for so long as
any tax increment financing obligations payable from the tax
increment financing fund, hereinafter authorized, are outstanding
(1) The assessor shall record in the land and personal
property books both the base assessed value and the current
assessed value of the real and tangible personal property of the
project developer in the development project area.
(2) Ad valorem taxes upon real and tangible personal
property of the project developer which are attributable to the
lower of the base assessed value or current assessed value of
real and tangible personal property located in the development
project area shall be allocated to the taxing units in the same
manner as applicable in the year preceding adoption of the tax
increment financing order.
(3) The tax increment with respect to the private project of
the project developer in the development project area shall be
allocated and paid into a separate special fund created for each
development project entitled the "Tax Increment Financing Fund"
and used to pay the principal of and interest on tax increment
financing obligations issued to finance the costs of such development project. Any taxing unit having a private project or
any portion thereof within its borders shall allocate its tax
increment to such fund, provided, however, that the portion of
property taxes allocable to the state shall be paid over to the
state in accordance with law.
(4) In no event shall tax increment financing apply to any
levies other than the levies provided for in article eight,
chapter eleven of this code.
(b) Before entering an order approving a tax increment
financing plan, the county commission in every county in which
the development project area 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, describe in sufficient detail the tax increment
financing plan, indicate the proposed boundaries of the
development project area and the proposed tax increment financing
obligations to be issued to finance the development project 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 tax increment financing obligations issued
under this article may be used only to pay for costs of
development projects to foster economic development, including
infrastructure and other public improvements prerequisite to
private improvements, when such development projects would not
reasonably be expected to occur without tax increment financing.
There shall be a finding by any county commission which issues
tax increment financing obligations that a development project is
not reasonably expected to occur without the use of tax increment
§7-11B-5. Copies of tax increment financing order to assessor,
sheriff and director of the division of finance.
The county commission shall transmit to the assessor,
sheriff and the director of the division of finance, department
of administration, a copy of the tax increment financing order;
a description of all real and tangible personal property of the
project developer located within the development project 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 development project costs.
(a) A county commission may issue bonds or notes for the
purpose of financing the cost of acquisition and construction of
one or more development projects in a development project area
within the county which will be sold, leased with an option by
the lessee to purchase, leased or otherwise disposed of to a
project developer. Such bonds or notes shall be issued and the
payment of such bonds or notes secured in the manner provided by
the applicable provisions of sections seven, eight, nine, ten,
eleven, twelve, thirteen, except to the extent that the
provisions of said section thirteen are modified hereby with
respect to the tax increment financing fund, fourteen, fifteen,
seventeen, nineteen and twenty, article two-c, chapter thirteen
of this code: Provided, That the principal and interest on such
bonds or notes shall be payable out of the tax increment
financing fund attributable to the related private project:
Provided, however, that in the event the moneys on deposit in
such tax increment financing fund are not sufficient to fully pay
the debt service on such bonds or notes, then such bonds or notes shall be payable out of the revenues derived from the lease,
lease with an option by the lessee to purchase, sale or other
disposition in connection with the development project for which
the bonds or notes are issued, or any other revenue derived from
(b) No bonds or notes shall be issued under this article
until all questions connected with the same shall have been first
submitted to a vote of the qualified electors of the county for
which the bonds or notes are to be issued, and shall have
received three fifths of all the votes cast for and against the
same. The county commission referred to in this section may, by
order entered of record, direct that an election be held for the
purpose of submitting to the voters of the county all questions
connected with the issuing of bonds or notes. Such order shall
(1) The reasons for issuing the bonds or notes;
(2) The purpose or purposes for which the proceeds of bonds
or notes are to be expended;
(3) The amount of the proposed bond or note issue;
(4) The date of the election;
(5) If a special election, the names of commissioners for holding same; and
(6) That the tax increment attributable to the related
private project shall be used to pay the principal and interest
on such bonds or notes and will not be available for other
purposes until such bonds or notes are paid in full.
Any other provision which does not violate any provision of
law, or transgress any principle of public policy, may be
incorporated in the order. The cost of such election, if any,
shall be reimbursed by the project developer of the related
private project: 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. The
order authorizing the issuance of tax increment obligations shall
pledge all or such part of the funds deposited in the tax
increment financing fund as are necessary for the payment of the
debt service on such tax increment obligations.
(c) Any revenues in the tax increment financing fund which
are not used for the payment of the principal of or interest on
tax increment financing obligations issued shall be deemed
"surplus funds" and at the end of each 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 tax increment financing
obligations payable from the tax increment financing fund, the
county commission shall enter an order 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 tax
increment obligations payable therefrom shall be paid into the
general fund of the taxing units in proportion to their
respective contributions to the fund.
(b) Upon dissolving the tax increment financing fund, real
and tangible personal 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 order.
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 this 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 articles one-c and 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 a related private project shall be the base assessed
value as defined in section two of said article.