H. B. 4433


(By Delegates Stemple, Proudfoot,
Hunt, Fletcher and Shelton)
[Introduced February 7, 2000; referred to the
Committee on Finance.]



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 a special method for appraising certain charitable property that is leased for profit; requiring certification by the tax commissioner; and providing an appeal process.

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 QUALIFIED CHARITABLE RENTAL PROPERTY.

§11-6H-1. Definitions.
As used in this article, the term:
(1) "Qualified charitable rental property" means that portion of real property owned by a charitable organization that would otherwise be exempt from ad valorem tax on the property under the provisions of subdivision (12), subsection (a), section nine, article three of this chapter, but for the fact that it is held or is leased out for profit; and
(2) "Market rental value" is the annual rental payment, determined by the state tax commissioner, at or for which a particular parcel or species of property would rent if it were leased to a willing lessee by a willing lessor in an arms-length transaction without either the lessee or the lessor being under any compulsion to rent or lease. In determining value, primary consideration shall be given to the trends of annual rental payments paid for like or similar property in the area or locality where the property is located. For purposes of this article the annual rent paid on the property pursuant to an arms-length lease is presumed to be its market rental value.
§11-6H-2. Tax treatment of certified qualified charitable rental property.

Notwithstanding any other provisions of law, the value of certified qualified charitable rental property, for purposes of ad valorem property taxation under this chapter, is its market rental value.
§11-6H-3. Application and certification.
(a) Any person seeking designation of property as certified qualified charitable rental property and a determination of its market rental value, shall first make a sworn application to the state tax commissioner on forms prescribed by the state tax commissioner on or before a date designated by the commissioner. The commissioner shall within ninety days of the application determine in writing whether the property is or will be qualified charitable rental property and determine its market rental value. The commissioner shall provide a copy of the written determination to the applicant and the assessor or assessors in the county or counties in which the charitable rental property is located. The applicant may file an appeal with the commissioner to have a formal hearing for a review and redetermination of a decision of the commissioner concerning whether property is qualified charitable rental property or its market rental value, within thirty days of the official written notification from the commissioner. After the commissioner determines the property is or will be qualified charitable rental property, the property is and remains certified qualified charitable rental property for purposes of this article until the earlier of:
(1) The transfer of the property to a third party; or
(2) The property becomes exempt from ad valorem taxation.
(b) All applications and determinations under this section constitute return information and are subject to section twenty- three, article one-a of this chapter.
§11-6H-4. Authority to propose rules.
The state tax commissioner shall propose rules for promulgation in accordance with article three, chapter twenty-nine- a of this code for the administration of this article as may be necessary to implement the provisions of this article, except that the commissioner may promulgate the initial rules as emergency rules in order to facilitate the implementation of the provisions of this article.
§11-6H-5. Effective date.
This article is effective for the tax years beginning on and after the first day of July, two thousand one.




NOTE: The purpose of this bill is to provide a special method for appraising certain charitable property that is leased for profit, based on its rental payments received.

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