Senate Bill No. 537

(By Senators Oliverio and Prezioso)

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[Introduced February 15, 1999;

referred to the Committee on Finance.]

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A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article six-h, relating to providing an alternative valuation for ad valorem taxation for certain property within a municipality that is revitalized.

Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article six-h, to read as follows:
ARTICLE 6H. SPECIAL METHOD FOR APPRAISING CERTIFIED REVITALIZED PROPERTY.

§11-6H-1. Legislative findings.
The Legislature finds that the encouragement of economic growth and development in this state is in the public interest and promotes the general welfare of the people of this state. The Legislature further finds that the ad valorem property tax valuation set forth in this article for certified revitalized property, as defined in section two of this article, will help preserve the tax base and preserve and create jobs in municipal areas existing in this state.
§11-6H-2. Definitions.
As used in this article, the term:
(1) "Certified revitalized property" means all real property within a qualified local enterprise zone, certified by a municipality, pursuant to a qualified municipal ordinance and approved by the tax commissioner as eligible revitalized property pursuant to section four of this article;
(2) "Employee" means any person holding less than a five percent ownership interest in the taxpayer, working for a wage, salary or commission at a site within a local enterprise zone;
(3) "Full-time" means being employed for a wage, salary or commission for at least thirty-five hours a week. In addition full-time includes any number of employees who together are employed for a wage, salary or commission for a total of at least thirty-five hours per week;
(4) "Municipality" means a municipality within the state that imposes a business and occupation tax;
(5) "New facility" means a building or series of buildings constructed with new construction materials which construction is in compliance with all federal, state and local building codes and local zoning regulations and requirements, and the plans for which including the style and design of the facade and exterior must be preapproved by the municipality and follow the general design criteria to be established by the municipality;
(6) "Qualified local enterprise zone" means an area within the boundaries of a municipality that has been designated as a local enterprise zone by a qualified municipal ordinance;
(7) "Qualified municipal ordinance" means a municipal ordinance that:
(A) Designates an area within the corporate limits of the municipality as a local enterprise zone that satisfies the United States department of housing and urban development's statutory eligibility requirements for designation as an urban federal empowerment zone;
(B) Provides for a credit from its business and occupation tax for a taxpayer who:
(i) Has made substantial renovations to an existing structure within the designated local enterprise zone or who construct a new facility within the designated zone which structure houses the taxpayer's business or occupation which is subject to the municipality's business and occupation tax;
(ii) Has one or more full-time employees at the facility located within the subject zone; and
(iii) For each and every tax period for which the business and occupation tax credit is applied for, has at least ten percent of all of the taxpayer's employees who work at the facility within the subject local enterprise zone that reside or when employed did reside within the zone.
(8) "Real property" means all property specified in subdivision (p), section ten, article two, chapter two of this code and includes, but is not limited to, lands, buildings and improvements on the land such as sewers, fences, roads, paving and leasehold improvements.
(9) "Substantial renovation" means renovation, renewal, rehabilitation of an existing structure or structures located within a local enterprise zone, which renovation, renewal, and rehabilitation is in compliance with all federal, state and local building codes and local zoning regulations and requirements, and which renovation includes facade and exterior renovations, renewals and rehabilitations which are required to be preapproved by the municipality and which follow the general design criteria established by the municipality; and
(10) "Taxpayer" means a natural person, firm, limited liability company, partnership, corporation or other entity liable for a municipal business and occupation tax.
§11-6H-3. Tax treatment of certified capital addition property.
Notwithstanding section seven, article one-c of this chapter or any other provision of law, the appraised value of certified revitalized property, for purposes of ad valorem property taxation under this chapter, is:
(1) For the first five years that it is certified revitalized property, its salvage value, which for purposes of this article is one percent of the certified revitalized property's value after it becomes certified revitalized property; and
(2) For years six through ten that it is certified revitalized property, its improved salvage value, which for purposes of this article is fifty percent of the certified revitalized property's value after it becomes certified revitalized property.
§11-6H-4. Application and certification.
(a) Any person seeking designation of property as certified revitalized property shall first make a sworn application to the municipality on forms prescribed by the municipality. If the municipality determines the property is certified revitalized property under its ordinance and is eligible for credit against its business and occupation tax, it shall give the taxpayer a certificate indicating its approval.
(b) The taxpayer shall then make a sworn application, that includes the certificate, to the state tax commissioner on forms prescribed by the tax commissioner. The state tax commissioner shall within ninety days of the application determine in writing whether the property qualifies for the tax treatment under the provisions of section three of this article and shall provide a copy of the written determination to the applicant and the assessor in the county in which the property is located. Upon receipt of a determination finding that certain property is certified revitalized property, the assessor shall, notwithstanding section seven, article one-c of this chapter or any other provision of law, appraise the property in accordance with section three of this article.
(c) The applicant may file an appeal with the state tax commissioner to have a formal hearing for a review and redetermination on property the state tax commissioner has found not to meet the requirements of this article to be certified revitalized property, within thirty days of the official written notification from the state tax commissioner.
(d) After the state tax commissioner determines that property qualifies as certified revitalized property, the property is and remains certified revitalized property for purposes of this article until the earlier of:
(1) The disposition of the property to an unrelated third party other than a transferee who continues to operate the facility;
(2) The cessation of all business at the facility; or
(3) The tenth year succeeding the year in which the certified revitalized property became certified.
(e) All applications and determinations under this section are return information and are subject to section twenty-three, article one-a of this chapter. The state tax commissioner shall report annually the number of applications filed, certified, denied and pending pursuant to this section for the preceding year along with recommendations regarding the structure, benefits and costs of the valuation method specified in this article to the joint committee on government and finance and to the governor. In no event may identifying characteristics and facts about applicants be disclosed under this section.
§11-6H-5. Authority to propose rules.
The state tax commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine of this code for the administration of this article as may be necessary to implement the provisions of this article. The state tax commissioner may promulgate emergency rules to implement the provisions of this article.
§11-6H-6. Effective date.
This article is effective for the tax years beginning on and after the first day of July, one thousand nine hundred ninety-nine.




NOTE: The purpose of this bill is to provide for reduced property taxes on certain property within municipalities that is revitalized.

This article is new; therefore, strike-throughs and underscoring have been omitted.