Senate Bill No. 550
(By Senator Craigo)
[Passed March 9, 1995; in effect ninety days from passage.]
AN ACT 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
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 landbook
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 landbook and personal property records of the
(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
(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
(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 and unpaid:
(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 financing.
§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
(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 such project.
(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 voters 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: Provided, That if a development project area includes
more than one county, the qualified voters in both counties
must adopt the measure prior to any notes or bonds being
issued. 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 state:
(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 of property.
(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 particular county.
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.