COMMITTEE SUBSTITUTE

FOR

H. B. 4526


(By Delegates Cann, Martin, Michael,

Kominar, Beane, Campbell and Leach)


(Originating in the House Committee on the Judiciary)

[February 25, 2000]


A BILL to amend and reenact section one-a, article one-c, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact section seven-a, article three of said chapter; and to amend and reenact section three, article five of said chapter, all relating to the ad valorem property taxation of chattel interests; and providing for the assessment and taxing of chattel interests in both real and personal property as tangible personal property.

Be it enacted by the Legislature of West Virginia:
That section one-a, article one-c, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that section seven-a, article three of said chapter be amended and reenacted; and that section three, article five of said chapter be amended and reenacted, all to read as follows:
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.

§11-1C-1a. Further legislative findings and declarations; effect of declarations and clarification of chattel interests in real or tangible personal property.

(a) The Legislature hereby finds that:
(1) The voters of this state, in the general election held in the year one thousand nine hundred eighty-four, ratified amendment five to the constitution of West Virginia which essentially provides that once the first statewide reappraisal of property pursuant to section one-b, article ten of the constitution is implemented and first employed to fix values for ad valorem property tax purposes, no intangible personal property shall be subject to ad valorem property taxation except as provided by general law enacted after ratification of amendment five;
(2) In ratifying amendment five, the voters intended for intangible personal property to become exempt from ad valorem property tax at some point after ratification, except as provided in general legislation enacted subsequent to ratification of amendment five;
(3) Due to numerous problems, actual or perceived, with the results of the first statewide reappraisal under section one-b, article ten of the constitution, and the public's lack of confidence in those results, the first statewide reappraisal was never implemented and results were never employed to fix values for ad valorem property tax purposes;
(4) The Legislature responded to these problems, actual or perceived, by enacting this article which, as its primary purpose, resulted in the making of the second statewide reappraisal of property for ad valorem property tax purposes, which now results in all property being assessed and taxed at sixty percent of its market value, except as otherwise provided by general law; and
(5) The intent and objective of the voters in causing the first statewide reappraisal to be made under section one-b, article ten of the constitution, has now been achieved, although not in the manner originally intended by the voters when they ratified amendment five, and that the will and objective of the people in ratifying amendment five will unintentionally be circumvented unless the Legislature acts to prevent such a result.
(b) The Legislature, therefore, does hereby declare that:
(1) It has the power and authority under the constitution and these circumstances to implement amendment five;
(2) The provisions of amendment five shall be implemented beginning tax year one thousand nine hundred ninety-eight and thereafter, notwithstanding any other provision in this article other than section one-b;
(3) Chattel interests in real or tangible personal property are tangible property for ad valorem property tax purposes, which shall be assessed and taxed in the levy classification in which the underlying real or tangible personal property is taxed for ad valorem property tax purposes, notwithstanding any other provision in this chapter; and
(4) The property of banks and savings and loans shall be assessed and taxed like that of other corporations beginning tax year one thousand nine hundred ninety-eight.
ARTICLE 3. ASSESSMENTS GENERALLY.

§11-3-7a. Chattel interests in real and tangible personal
property.
For ad valorem property tax purposes, chattel interests in real property and chattel interest in tangible personal property are hereby defined to be an interest in real or interests in tangible personal property and are to be assessed and taxed like real or tangible personal property is taxed as such. As so defined, chattel interest in real property and chattel interests in tangible personal property are not intangible personal property for ad valorem property tax purposes.
ARTICLE 5. ASSESSMENT OF PERSONAL PROPERTY.
§11-5-3. Definitions.
The words "personal property," as used in this chapter includes all fixtures attached to land, if not included in the valuation of such land entered in the proper landbook; all things of value, moveable and tangible, which are the subjects of ownership; all chattels real and personal; all notes, bonds, and accounts receivable, stocks and all other intangible property.
"Agriculture" means the cultivation of the soil, including the planting and harvesting of crops and the breeding and management of livestock.
"Horticulture" means plant production of every character except forestry.
"Grazing" means the use of land for pasturage.
"Products of agriculture" means those things the existence of which follows directly from the activity of agriculture, horticulture or grazing, including dairy, poultry, bee and any other similar products, whether in the natural form or processed as an incident to the marketing of the raw material.
"Producer" means the person who is actually engaged in the agriculture, horticulture and grazing which gives existence and fruition to products of agriculture as distinguished from the broker or middleman.
"Tax year" means the calendar year following the July first assessment day or, in the case of a public service business assessed pursuant to article six of this chapter, the calendar year beginning on the January first assessment day.
"While owned by the producer" means while title is in the producer as above defined.
"Employed exclusively" means that the preponderant and the sole gainful use is for the designated purpose.



Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.