BILL ORIGINATING FROM COMMITTEE

H. B. 4506

(By Delegates Michael, Doyle, Cann,
Kominar and Warner)

(Originating in the Committee on Finance)

[February 15, 2002]

A BILL to amend chapter eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article thirteen-b; to amend article ten, chapter eleven of said code by adding thereto a new section, designated section eleven-a; and to amend article fifteen of said chapter by adding thereto a new section, designated section nine-f, all relating to special downtown redevelopment districts; providing a short title, making findings and declaring a purpose; defining terms; authorizing municipalities to create special downtown redevelopment districts; describing redevelopment expenditures; providing for treatment of redevelopment expenditures by licensed race tracks; providing for notice and hearing; providing for approval by council for community and economic development; establishing a downtown redevelopment fund; providing for the Legislature's authorization of establishment of a district; describing ordinance to create district; establishing a board to oversee operations; authorizing special district excise tax; modifications to district boundaries; procedures for abolition and dissolution of district; authorizing issuance of municipal revenue obligations; providing for administration of special district excise tax by tax commissioner; and exempting certain sales and services in district from consumers sales and service tax.

Be it enacted by the Legislature of West Virginia:

That chapter eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article thirteen-b; that article ten, chapter eleven of said code be amended by adding thereto a new section, designated section eleven-a; and that article fifteen of said chapter be amended by adding thereto a new section, designated section nine-f, all to read as follows:
CHAPTER 8. MUNICIPAL CORPORATIONS.
ARTICLE 13B. DOWNTOWN REDEVELOPMENT DISTRICTS.
§8-13B-1. Short title.

This article is known and may be cited as the "Downtown Redevelopment District Act."
§8-13B-2. Legislative findings and declaration of purpose.

The Legislature finds that many downtown business districts within the municipalities of this state are economically depressed. This adversely affects the economic and general well- being of the citizens of those municipalities. Establishment of downtown redevelopment districts within municipalities of the state, in accordance with the purpose and powers set forth in this article, will serve a public purpose, and promote the health, safety, prosperity, security and general welfare of all citizens in the state. It will also promote the vitality of retail business areas within municipalities, while serving as an effective means for restoring and promoting retail and other business activity within the downtown redevelopment districts created herein. This will be of special benefit to the tax base of the downtown municipalities within which any downtown redevelopment district is created under this article and will stimulate economic growth and job creation.
§8-13B-3. Definitions.

For purposes of this article, the term:

(1) "Council" means the council for community and economic development established in section two, article two, chapter five-b of this code;

(2) "District" means a downtown redevelopment district created pursuant to this article

(3) "District board" means a district board created pursuant to section ten of this article;

(4) "Downtown property" means any taxable or exempt real property which is classified for ad valorem real property tax purposes as Class IV;

(5) "Gross annual district tax revenue amount" means the total amount of consumers sales and service tax actually remitted to the tax commissioner by vendors maintaining places of business within the district with respect to sales made and services rendered by such vendors from a location within the district for the twelve full calendar months immediately preceding the filing of an application pursuant to section seven of this article;

(6) "Municipality" means a municipal corporation recognized as such in chapter eight of this code; and

(7) "Redevelopment expenditures" means payments for governmental functions, programs, activities, facility construction, improvements and other goods and services which a district board is authorized to perform or provide under section five of this article.
§8-13B-4. Authorization.

The governing body of any municipality may, in accordance with the procedures and subject to the limitations set forth in this article, create one or more downtown redevelopment districts within the municipality. The municipality may, in accordance with the procedures and subject to the limitations set forth in this article, provide for the administration and financing of redevelopment expenditures within the districts and for the administration and financing of a continuing program of redevelopment expenditures within the districts.
§8-13B-5. Redevelopment expenditures.

Any municipality that has established a downtown redevelopment district under this article may make, or authorize to be made by a district board and other public or private parties, such redevelopment expenditures as will restore or promote the economic vitality of the district and the general welfare of the municipality, including, but not limited to, expenditures for the following purposes:

(a)Beautification of the district, by means such as landscaping and construction and erection of fountains, shelters, benches, sculptures, signs, lighting, decorations and similar amenities;

(b) Provision of special or additional public services, such as sanitation, security for persons and property and the construction and maintenance of public facilities, including sidewalks and other public areas;

(c) Making payments for principal, interest, issuance costs, any of the costs described in section eighteen of this article and appropriate reserves for bonds and other instruments and arrangements issued or entered into by the municipality for financing the expenditures of the district described in this section and to otherwise implement the purposes of this article;

(d) Providing financial support for public transportation and vehicle parking facilities open to the general public, whether or not physically situate within the district's boundaries;

(e) Acquiring, demolishing, razing, constructing, repairing, reconstructing, refurbishing, renovating, rehabilitating, expanding, altering, otherwise developing, operating and maintaining real property generally, parking facilities, commercial structures and other capital improvements to real property, fixtures and tangible personal property, whether or not physically situate within the district's boundaries;

(f) Developing plans for the architectural design of the district and portions thereof, and developing plans and programs for the future development of the district;

(g) Developing, promoting and supporting community events and activities open to the general public;

(h) Providing the administrative costs for a district management program;

(i) Providing for the usual and customary maintenance and upkeep of all improvements and amenities in the district as may be commercially reasonable and necessary to sustain its economic viability on a permanent basis;

(j) Providing any other services which the municipality or district board is authorized to perform and which the municipality does not also perform to the same extent on a municipality-wide basis;

(k) Making grants to the owners or tenants of downtown property for the purposes described in this section;

(l) Acquiring an interest in any entity or entities that own any portion of the real property situate in the district and contributing capital to any such entity or entities; and

(m) To do any and all things necessary, desirable or appropriate to carry out and accomplish the purposes of this article: Provided, That notwithstanding anything in this code to the contrary, any redevelopment expenditure made by a licensed race track, as defined in section three, article twenty-two-a, chapter twenty-nine of this code, within thirty days after such redevelopment expenditure shall have been requested in writing by the district board, shall entitle such licensed race track to receive the same recoupment from its capital reinvestment fund account as any other capital improvement expenditure described in subsection (b), section ten-c, article twenty-two-a, chapter twenty-nine of this code.
§8-13B-6. Notice; hearing.

The governing body of a municipality desiring to create a downtown redevelopment district shall conduct a public hearing. A notice of the public hearing shall be published as a Class I-0 legal advertisement in compliance with article three, chapter fifty-nine of this code at least twenty days prior to the scheduled hearing. In addition to the time and place of the hearing, the notice must also state:

(a) The purpose of the hearing;

(b) The name of the proposed district;

(d) The property proposed to be included in the district; and

(e) The proposed method of financing any costs involved, including the base and rate of special district excise tax that may be imposed upon any businesses operating and properties situated within the proposed district.

At the time and place set forth in the notice, the governing body shall afford the opportunity to be heard to any owner of real property situated in the proposed district and any residents of the municipality.

If the governing body of the municipality, following the public hearing, determines it advisable and in the public interest to establish a downtown redevelopment district, it shall apply to the council for approval of a downtown redevelopment district project pursuant to the procedures provided in section seven of this article.

§8-13B-7. Application to council for community and economic development for approval of a downtown redevelopment district project.

(a) The council shall receive and act on applications filed with it by municipalities pursuant to section six of this article. Each such application must contain a copy of the notice described in section six of this article; a general description of the capital improvements, additional or extended services and other proposed redevelopment expenditures to be made in the district; a description of the proposed method of financing such redevelopment expenditures, together with a description of such reserves to be established for financing on-going redevelopment expenditures necessary to permanently maintain the optimum economic viability of the district following its inception: Provided, That the amounts of such reserves shall not exceed the amounts that would be required by ordinary commercial capital market considerations; a description of the sources and anticipated amounts of all such financing, including, but not limited to, proceeds from the issuance of any bonds, or other instruments, revenues from the special district excise tax and enhanced revenues from municipal business and occupation taxes, property taxes and fees; a description of the financial contribution of the municipality to the funding of redevelopment expenditures, which contribution may include, but not be necessarily limited to, incremental business and occupation taxes generated from district; a description of the financial contribution to the funding of redevelopment expenditures by the county commission of the county in which the district is situate; identification of any entities which the municipality expects to relocate their business locations from the district to another place in the state in connection with the establishment of district: Provided, That for purposes of this article, any such entities shall be designated "relocated entities"; a good faith estimate of the aggregate amount of consumers sales and service tax that was actually remitted to the tax commissioner by all relocated entities with respect to their sales made and services rendered from their business locations in the district for the twelve full calendar months next preceding the date of the application: Provided, That for purposes of this article, such aggregate amount shall be designated as "the relocated tax revenue amount"; a good faith estimate of the gross annual district tax revenue amount; and the proposed application of any surplus from all funding sources to further the objectives of this article: Provided, That the amount of all redevelopment expenditures proposed to be made in the first twenty-four months following the creation of the district shall be not less than fifty million dollars. The council may establish other criteria for approving such applications: Provided, That the council shall act to approve or not approve any such application within thirty days following the receipt of the application.

(b)

If the council approves a municipality's downtown redevelopment district project application, it shall issue to the municipality a written certificate evidencing such approval: Provided, That such certificate shall expressly state a base tax revenue amount which, for purposes of this article shall be the difference between the gross annual district tax revenue amount and the relocated tax revenue amount all of which the council shall have determined with respect to such district's application based on such investigation as it may deem reasonable and necessary, including but not limited to any relevant information the council shall request from the tax commissioner and the tax commissioner shall provide to the council: Provided, however, That, in determining the base tax revenue amount, in lieu of confirmation from the tax commissioner of the gross annual district tax revenue amount, the council shall use the estimate of the gross annual district tax revenue amount provided by the municipality pursuant to subsection (a) of this section.

(c) The council may promulgate rules to implement the downtown redevelopment district project application approval process and to describe the criteria and procedures it has established in connection therewith. These rules are not subject to the provisions of chapter twenty-nine-a of this code, but shall be filed with the secretary of state.

§8-13B-8. Establishment of the downtown redevelopment district fund; Legislature's authorization of establishment of district.

(a) There is hereby created a special revenue account in the state treasury, designated the "downtown redevelopment district fund," which shall be an interest-bearing account and shall be invested in the manner described in section nine-c, article six, chapter twelve of the code, with the interest income a proper credit of the Fund. A separate and segregated sub-account within the account shall be established for each municipality's downtown redevelopment district, which has been approved by the council and authorized by the Legislature pursuant to subsection (b) of this section. Funds paid into the account for the credit of any such sub-account may also be derived from the following sources:

(1) All interest or return on the investment accruing to the sub-account;

(2) Any gifts, grants, bequests, transfers, appropriations or donations which may be received from any governmental entity or unit or any person, firm, foundation, or corporation; and

(3) Any appropriations by the Legislature which may be made for this purpose.

(b) The Legislature may authorize the establishment of a downtown redevelopment district if the district has been approved by the council pursuant to section seven of this article. Once the establishment of the district has been authorized by the Legislature, the auditor shall thereafter, upon receipt of a monthly requisition from the district board, issue his warrant on the state treasurer for the funds requested from the district's sub-account as provided in section eleven-a, article ten, chapter eleven of this code, to be applied for the purposes described in section five of this article, and the state treasurer shall pay the warrant out of the sub-account.

§8-13B-9. Ordinance to create district as approved by council and authorized by the Legislature; statement of limitation on use of revenues from taxes.

(a) If a downtown redevelopment district project has been approved by the council, and the establishment of such a district has been authorized by the Legislature, all in accordance with this article, the governing body of the municipality may create the district by ordinance as provided for in article eleven of this chapter: Provided, That the governing body may not amend, alter or change in any manner the boundaries of the downtown redevelopment district as approved by the council. In addition to all other requirements, the ordinance shall contain the following:

(1) The name of the district and a description of its boundaries;

(2) A summary of any proposed services to be provided and capital improvements to be made within the district and a reasonable estimate of any attendant costs;

(3) The base and rate of any special district excise tax that may be imposed upon the businesses for the privilege of operating within the district, which tax shall be passed on to and paid by the consumer, and the manner in which the taxes will be imposed, administered and collected, all of which shall be in conformity with the requirements of this article; and

(4) The district board members' terms, their method of appointment and a general description of the district board's powers and duties: Provided, That such powers may include the authority to (A) make and adopt all necessary bylaws and rules for its organization and operations not inconsistent with any applicable laws; (B) to elect its own officers, to appoint committees and to employ and fix compensation for personnel necessary for its operations; (C) to enter into contracts with any person, agency, government entity, agency or instrumentality, firm, partnership, limited partnership, limited liability company or corporation, including both public and private corporations, and for-profit and not-for-profit organizations, and generally to do any and all things necessary or convenient for the purpose of promoting, developing and advancing the purposes described in section two of this article; (D) to amend or supplement any contracts or leases or to enter into new, additional or further contracts or leases upon such terms and conditions, for such consideration and for such term of duration, with or without option of renewal, as may be agreed upon by the district board and such person, agency, government entity, agency or instrumentality, firm, partnership, limited partnership, limited liability company or corporation; (E) unless otherwise provided for in, and subject to the provisions of, such contracts, or leases, to operate, repair, manage, and maintain such buildings and structures and provide adequate insurance of all types, and in connection with the primary use thereof and incidental thereto to provide such services, such as retail stores, and restaurants, and to effectuate such incidental purposes, grant leases, permits, concessions or other authorizations to any person or persons, upon such terms and conditions, for such consideration and for such term of duration as may be agreed upon by the district board and such person, agency, governmental department, firm or corporation; (F) to delegate any authority given to it by law to any of its officers, committees, agents or employees; (G) to apply for, receive and use grants-in-aid, donations and contributions from any source or sources, and to accept and use bequests, devises, gifts and donations from any person, firm or corporation; (H) to acquire real property by gift, purchase, or construction, or in any other lawful manner, and hold title thereto in its own name and to sell, lease or otherwise dispose of all or part of such real property which it may own, either by contract or at public auction, upon the approval by the district board; (I) to purchase or otherwise acquire, own, hold, sell, lease and dispose of all or part of any personal property which it may own, either by contract or at public auction; (J) pursuant to a determination by the district board that there exists a continuing need for redevelopment expenditures, and that moneys or funds of the district are necessary therefor, to borrow money and execute and deliver the district's negotiable notes and other evidences of indebtedness therefor, on such terms as the district shall determine, and give such security therefor as shall be requisite, including, without limitation, a pledge of the district's rights in its sub-account of the downtown district redevelopment fund; (K) to acquire (either directly or on behalf of the municipality) an interest in any entity or entities that own any real property situate in the district, to contribute capital to such entity or entities and to exercise the rights of an owner with respect thereto; and (L) to expend its funds in the execution of the powers and authority herein given, which expenditures, by the means authorized herein, are hereby determined and declared as a matter of legislative finding to be for a public purpose and use, in the public interest, and for the general welfare of the people of West Virginia, to alleviate and prevent economic deterioration and to relieve the existing critical condition of unemployment existing within the state.

(b) The ordinance shall also state the general intention of the municipality to redevelop and increase services and to make capital improvements within the district.
§8-13B-10. District board; duties.

(a) The governing body of any municipality that has been authorized by the Legislature to establish a downtown redevelopment district, in accordance with this article, shall provide by ordinance for the appointment of a district board to oversee the operations of the district: Provided, That the governing body may, by ordinance in lieu of appointing a separate district board, designate itself to act as the district board. If a separate district board is to be appointed, it shall be made up of at least seven members, two of which shall be owners, or representatives of owners, of downtown property situated in the district, and the other five shall be residents of the county within which the municipality is located.

(b) The district board, in addition to the duties prescribed by the ordinance creating the improvement district, shall submit an annual report to the governing body and the council containing:

(1) An itemized statement of its receipts and disbursements for the preceding fiscal year;

(2) A description of its activities for the preceding fiscal year;

(3) A recommended program of services to be performed and capital improvements to be made within the district for the coming fiscal year; and

(4) A proposed budget to accomplish its objectives.

(c) Nothing in this article prohibits any member of the district board from also serving on the board of directors of a nonprofit corporation with which the municipality may contract to provide specified services within the district.

(d) Each member of the district board may receive reasonable compensation for services on the board, determined by the governing body of the municipality.
§8-13B-11. Special district excise tax authorized.

(a) The governing body of a municipality, authorized by the Legislature to establish a downtown redevelopment district, may, by ordinance, impose a special district excise tax on the privilege of selling tangible personal property and rendering selected services in the district in accordance with this section.

(b) The base of a special district excise tax imposed pursuant to this section shall be identical to the base of the consumers sales and service tax imposed pursuant to article fifteen, chapter eleven of this code on sales made and services rendered within the boundaries of the district: Provided, That, except for the exemption provided in section nine-f of article fifteen, chapter eleven of this code, all exemptions and exceptions from the consumers sales and service tax shall also apply to the special district excise tax.

(c) The rate of a special district excise tax imposed pursuant to this section shall be provided in an ordinance adopted by the governing body of the municipality and shall be six cents on the dollar of sales and services subject to the tax.

(d) The ordinance of a municipality imposing a special district excise tax shall provide procedures for the administration, assessment, collection and enforcement of the tax in conformity with similar provisions and requirements set forth in articles ten and fifteen, chapter eleven of this code, and to those procedures in article ten, chapter eleven of this code, and shall conform with such provisions as they relate to waiver of penalties and additions to tax: Provided, That the governing body of the municipality shall, in any such ordinance, also provide that the state tax commissioner shall administer, assess, collect and enforce a special district excise tax on behalf of and as the agent for the municipality as provided in section eleven-a, article ten of chapter eleven of this code.

(e) The ordinance of a municipality imposing a special district excise tax shall provide that the tax commissioner shall deposit the net amount of tax collected in the special downtown redevelopment district fund to the credit of the municipality's sub-account therein, and may only be used to pay for development expenditures provided under this article: Provided, That the state treasurer shall withhold from the municipality's sub- account in the downtown redevelopment district fund, and shall deposit in the general revenue fund of this State, on or before the fifteenth day of each calendar month next following the effective date of a special district excise tax, a sum equal to one-twelfth of the base tax revenue amount last certified by the council pursuant to section seven of this article.

(f) Any taxes imposed pursuant to the authority of this section shall be effective on the first day of the calendar month that begins on or after the date of adoption of an ordinance imposing such tax, or at such later date expressly designated in the ordinance that begins on the first day of a calendar month.
§8-13B-12. Modification of included area; notice; hearing.

(a) The ordinance creating a downtown redevelopment district may be amended to include additional downtown property only after such amendment has been approved by the council in the same manner as an application to approve the establishment of the district is acted upon under section seven of this article.

Additional property may not be included in the district unless it is situated within the boundaries of the municipality.

(b) The governing body of any municipality desiring to so amend its ordinance shall designate a time and place for a public hearing upon the proposal to include additional property. The notice shall meet the requirements set forth in section six of this article.

(c) At the time and place set forth in the notice, the governing body shall afford the opportunity to be heard to any owners of downtown property either currently included in or proposed to be added to the existing district and to any other residents of the municipality.

(d) Following such hearing, the governing body may, by resolution, apply to the council to approve inclusion of such additional property in the district.

(e) If the council shall approve inclusion of such additional property in the district, the governing body of the municipality may then amend its ordinance accordingly.

(f) All businesses and additional property included in a district shall thereafter be subject to all special district excise taxes whether currently existing or thereafter levied.

§8-13B-13. Abolishment and dissolution of district; notice; hearing.

(a) Except upon the express written consent of the council and of all the holders or obligees of any indebtedness or other instruments the proceeds of which were applied to any redevelopment expenditures or any indebtedness the payment of which is secured by revenues payable into the fund provided under section eight of this article or by any public property, a district may only be abolished by the governing body of the municipality when there is no outstanding indebtedness the proceeds of which were applied to any redevelopment expenditures or the payment of which is secured by revenues payable into the fund provided under section eight of this article, or by any public property, and following a public hearing upon the proposed abolishment. Notice of such hearing must be provided by first class mail to all owners of downtown property within the district and shall be published as a Class I-0 legal advertisement in compliance with article three, chapter fifty- nine of this code at least twenty days prior to the public hearing. Upon the abolishment of any downtown redevelopment district, any funds or other assets, contractual rights or obligations, claims against holders of indebtedness or other financial benefits, liabilities or obligations, existing after full payment has been made on all existing contracts, bonds, notes or other obligations of the district, shall be transferred to and assumed by the municipality. Any funds or other assets so transferred shall be used for the benefit of the area included in the district being abolished.

(b) Following abolishment of a district pursuant to this section, its reinstatement shall require compliance with all requirements and procedures set forth in this article for the initial development, approval, establishment and creation of a district. No municipality may issue notes, bonds or other instruments for funding district projects or improvements that exceed a repayment schedule of forty years. Upon the dissolution of any downtown redevelopment district, any funds or other assets, contractual rights or obligations, claims against holders of indebtedness, or other financial benefits, liabilities or obligations of the district, existing after full payment has been made on all obligations of the district, shall be transferred and assumed by the municipality. Any funds or other assets so transferred shall be used for the benefit of the area included in the district being dissolved.

§8-13B-14. Bonds issued to finance downtown redevelopment district projects.

The governing body of a municipality may issue bonds or notes for the purpose of financing redevelopment expenditures, as described in section five of this article, with respect to one or more downtown redevelopment district projects within the municipality. All bonds issued by a municipality under the authority of this article shall be limited obligations of the municipality. The principal and interest on such bonds shall be payable out of the funds on deposit in the sub-account established for the downtown redevelopment district pursuant to section eight of this article, including without limitation any funds derived from the special district excise tax imposed by section eleven of this article, or other revenues derived from the downtown redevelopment project to the extent pledged for such purpose by the governing body of the municipality in the resolution authorizing the bonds. To the extent that the average daily amount on deposit in the sub-account established for a district pursuant to section eight of this article exceeds, for more than six consecutive calendar months, the sum of (1) one hundred thousand dollars, plus (2) the amount required to be kept on deposit pursuant to the documents authorizing, securing or otherwise relating to the bonds or notes issued under this section, then such excess shall be used by the district either to redeem the bonds or notes previously issued or shall be remitted to the general fund of this state. The bonds and any interest coupons issued under the authority of this article shall never constitute an indebtedness of the municipality issuing the same within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary liability of the municipality issuing the same. Neither shall such bond nor interest thereon be a charge against the general credit or taxing powers of the municipality and such fact shall be plainly stated on the face of each such bond. Such bonds may be executed, issued and delivered at any time and from time to time; may be in such form and denomination; may be of such tenor, must be negotiable but may be registered as to the principal thereof or as to the principal and interest thereof; may be payable in such amounts and at such time or times; may be payable at such place or places; may bear interest at such rate or rates payable at such place or places and evidenced in such manner; and may contain such provisions therein not inconsistent herewith, all as shall be provided in the proceedings of the governing body of the municipality whereunder the bonds shall be authorized to be issued. Said bonds may be sold by the governing body of the municipality at public or private sale at, above or below par, as the governing body of the municipality shall authorize.

The bonds issued pursuant to this article shall be signed by the mayor or other chief officer thereof and attested by the clerk, recorder or other official custodian of the records of said municipality and under the seal of the municipality. Any coupons attached thereto shall bear the facsimile signature of the mayor or other chief officer of the municipality. In case any of the officials whose signatures appear on the bonds or coupons shall cease to be such officers before the delivery of such bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes to the same extent as if they had remained in office until such delivery.

If the proceeds of such bonds, by error of calculation or otherwise, shall be less than the cost of the downtown redevelopment district project, or if additional real or personal property is to be added to the downtown redevelopment district project or if it is determined that financing is needed for additional redevelopment expenditures, additional bonds may in like manner be issued to provide the amount of the deficiency, or to defray the cost of acquiring or financing such additional real or personal property or such redevelopment expenditures, and unless otherwise provided for in the trust agreement, mortgage or deed of trust, shall be deemed to be of the same issue, and shall be entitled to payment from the same fund, without preference or priority, and shall be of equal priority as to any security.
§8-13B-15. Security for bonds.

Unless the governing body of the municipality shall otherwise determine in the resolution authorizing the issuance of the revenue bonds under the authority of this article, there is hereby created a statutory lien upon the sub-account created pursuant to section eight of this article and all special district excise tax revenues collected for the benefit of the district pursuant to section eleven-a, article ten, chapter eleven of this code, for the purpose of securing the principal of said bonds and the interest thereon. The principal of and interest on any bonds issued under the authority of this article shall be secured by a pledge of the special district excise tax revenues derived from the downtown redevelopment district project by the governing body of the municipality issuing such bonds to the extent provided in the resolution adopted by the governing body of the municipality authorizing the issuance of the bonds. In the discretion and at the option of the municipality, such revenue bonds may also be secured by a trust indenture by and between the municipality and a corporate trustee, which may be a trust company or bank having trust powers, within or without the State of West Virginia. The governing body may authorize the issuance of such revenue bonds by resolution. The resolution authorizing the revenue bonds and fixing the details thereof may provide that such trust indenture may contain such provisions for the protection and enforcing the rights and remedies of the bondholders as may be reasonable and proper, not in violation of law, including covenants setting forth the duties of the municipality in relation to the construction, acquisition or financing of a downtown redevelopment district project, or part thereof, or an addition thereto, and the improvement, repair, maintenance and insurance thereof, and for the custody, safeguarding and application of all moneys, and may provide that the downtown redevelopment district project shall be constructed and paid for under the supervision and approval of the consulting engineers or architects employed and designated by the governing body or, if directed by the governing body in the resolution, by the district board, and satisfactory to the purchasers of the bonds, their successors, assigns or nominees, who may require the security given by any contractor or any depository of the proceeds of the bonds or the revenues received from the downtown redevelopment district project be satisfactory to such purchasers, their successors, assigns or nominees. Such indenture may set forth the rights and remedies of the bondholders, the municipality or such trustee, and said indenture may provide for accelerating the maturity of the revenue bonds, at the option of the bondholders or the governmental body issuing the same, upon default in the payment of the amounts due under the bonds. The governing body may also provide by resolution and in such trust indenture for the payment of the proceeds of the sale of the bonds and the revenues from the downtown redevelopment district project to such depository as it may determine, for the custody and investment thereof and for the method of distribution thereof, with such safeguards and restrictions as it may determine to be necessary or advisable for the protection thereof and upon the filing of a certified copy of such resolution or of the indenture for record in the office of the clerk of the county commission of the county in which a downtown redevelopment district project is located, the same shall have the same effect, as to notice, as the recordation of a deed of trust or other recordable instrument. In the event that more than one such certified resolution or indenture is so recorded, the security interest granted by the first such recorded resolution or indenture shall have priority in the same manner as an earlier filed deed of trust except to the extent such earlier recorded resolution or indenture provides otherwise.

In addition to or in lieu of the indenture provided for hereinabove the principal of and interest on said bonds may, but need not, be secured by a mortgage or deed of trust covering all or any part of the downtown redevelopment district project from which the revenues so pledged may be derived, and the same may be secured by an assignment or pledge of the income received from the downtown redevelopment district project. The proceedings under which such bonds are authorized to be issued, when secured by a mortgage or deed of trust, may contain the same terms, conditions and provisions provided for herein when an indenture is entered into between the governing body and a trustee and any such mortgage or deed of trust may contain any agreements and provisions customarily contained in instruments securing bonds, including, without limiting the generality of the foregoing, provisions respecting the fixing and collection of revenues from the downtown redevelopment district project covered by such proceedings or mortgage, the terms to be incorporated in any lease, sale or financing agreement with respect to such downtown redevelopment district project, the improvement, repair, maintenance and insurance of such downtown redevelopment district project, the creation and maintenance of special funds from the revenues received from the downtown redevelopment district project and the rights and remedies available in event of default to the bondholders, the governing body, or to the trustee under an agreement, indenture, mortgage or deed of trust, all as the governing body shall deem advisable and as shall not be in conflict with the provisions of this article or any existing law: Provided, That in making any such agreements or provisions a municipality shall not have the power to incur original indebtedness by indenture, ordinance, resolution, mortgage or deed of trust, except with respect to the downtown redevelopment district project and the application of the revenues therefrom, and shall not have the power to incur a pecuniary liability or a charge upon its general credit or against its taxing powers unless approved by the voters in accordance with article one, chapter thirteen of this code, or as otherwise permitted by the Constitution of this State. The proceedings authorizing any bonds hereunder and any indenture, mortgage or deed of trust securing such bonds may provide that, in the event of default in payment of the principal of or the interest on such bonds or in the performance of any agreement contained in such proceedings, indenture, mortgage or deed of trust, such payment and performance may be enforced by the appointment of a receiver in equity with power to charge and collect rents or other amounts and to apply the revenues from the downtown redevelopment district project in accordance with such proceedings or the provisions of such agreement, indenture, mortgage or deed of trust. Any such agreement, indenture, mortgage or deed of trust may provide also that, in the event of default in such payment or the violation of any agreement contained in the mortgage or deed of trust, the agreement, indenture, mortgage or deed of trust may be foreclosed either by sale at public outcry or by proceedings in equity and may provide that the holder or holders of any of the bonds secured thereby may become the purchaser at any foreclosure sale, if the highest bidder therefor. No breach of any such agreement, indenture, mortgage or deed of trust shall impose any pecuniary liability upon a municipality or any charge upon its general credit or against its taxing powers.
§8-13B-16. Redemption of bonds.

The revenue bonds issued pursuant to this article may contain a provision therein to the effect that they, or any of them, may be called for redemption at any time prior to maturity by the municipality, and at such redemption prices, or premiums, which terms shall be stated in the bond.
§8-13B-17. Refunding bonds.

Any bonds issued hereunder and at any time outstanding may at any time and from time to time be refunded by a municipality by the issuance of its refunding bonds in such amount as the governing body may deem necessary to refund the principal of the bonds so to be refunded, together with any unpaid interest thereon; to make any improvements or alterations in the downtown redevelopment district project; and any premiums and commissions necessary to be paid in connection therewith. Any such refunding may be effected whether the bonds to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds thereof for the redemption of the bonds to be refunded thereby, or by exchange of the refunding bonds for the bonds to be refunded thereby: Provided, That the holders of any bonds so to be refunded shall not be compelled without their consent to surrender their bonds for payment or exchange prior to the date on which they are payable or, if they are called for redemption, prior to the date on which they are by their terms subject to redemption. Any refunding bonds issued under the authority of this article shall be subject to the provisions contained in section fourteen of this article and shall be secured in accordance with the provisions of section fifteen of this article.
§8-13B-18. Use of proceeds from sale of bonds.

The proceeds from the sale of any bonds issued under authority of this article shall be applied only for the purpose for which the bonds were issued: Provided, That any accrued interest received in any such sale shall be applied to the payment of the interest on the bonds sold: Provided, however, That if for any reason any portion of such proceeds may not be needed for the purpose for which the bonds were issued, then such unneeded portion of said proceeds may be applied to the purchase of bonds for cancellation or payment of the principal of or the interest on said bonds, or held in reserve for the payment thereof. The costs that may be paid with the proceeds of the bonds include all redevelopment costs described in section five of this article and may also include but not be limited to the following: The cost of acquiring any real estate deemed necessary, the actual cost of the construction of any part of a downtown redevelopment district project which may be constructed, including architects', engineers', financial or other consultants' and legal fees, the purchase price or rental of any part of a downtown redevelopment district project that may be acquired by purchase or lease, all expense incurred in connection with the authorization, sale and issuance of the bonds to finance such acquisition, and the interest on such bonds for a reasonable time prior to construction, during construction, and for not exceeding twelve months after completion of construction and any other costs and expenses reasonably necessary in the establishment and acquisition of such downtown redevelopment district project and the financing thereof.
§8-13B-19. Bonds made legal investments.

Bonds issued under the provisions of this article shall be legal investments for banks, building and loan associations, and insurance companies organized under the laws of this State and for a business development corporation organized pursuant to chapter thirty-one, article fourteen of this code.
§8-13B-20. Exemption from taxation.

The revenue bonds issued pursuant to this article and the income therefrom shall be exempt from taxation except inheritance, estate and transfer taxes; and the real and personal property which a municipality or district board may acquire pursuant to the provisions of this article, shall be exempt from taxation by the State, or any county, municipality, or other levying body, as public property, so long as the same is owned by such municipality or district board.
CHAPTER 11. TAXATION.
ARTICLE 10. PROCEDURE AND ADMINISTRATION

§11-10-11a. Administration of special district excise tax; commission authorized.

(a) Any municipality which, pursuant to section eleven, article thirteen-b, chapter eight of this code, imposes a special district excise tax, shall, by express provision in the ordinance imposing that tax, authorize the state tax commissioner to administer, assess, collect and enforce that tax on behalf of and as its agent. The municipality shall make such authorization by the adoption of a provision in its special district excise tax ordinance stating its purpose and referring to this section, and providing that such ordinance shall be effective on the first day of a month at least sixty days after its adoption. A certified copy of such ordinance shall be forwarded to the tax commissioner so that it will be received within five days after its adoption.

(b) Any special district excise tax administered under this section shall be administered and collected by the tax commissioner in the same manner and subject to the same interest, additions to tax and penalties as provided for the tax imposed in article fifteen of this chapter.

(c) All special district excise tax moneys collected by the tax commissioner under this section shall be paid into the state treasury to the credit of each municipality's sub-account in the downtown redevelopment district fund created pursuant to section eight, article thirteen-b, chapter eight of this code. Such special district excise tax moneys shall be credited to the sub- account of each particular municipality levying a special district excise tax being administered under this section. The credit shall be made to the sub-account of the municipality in which the taxable sales were made and services rendered as shown by the records of the tax commissioner and certified by him or her monthly to the state treasurer, namely, the location of each place of business of every vendor collecting and paying the tax to the tax commissioner without regard to the place of possible use by the purchaser.

(d) As soon as practicable after the special district excise tax moneys have been paid into the state treasury in any month for the preceding reporting period, the district board may issue a requisition to the auditor requesting issuance of a state warrant for the proper amount in favor of each municipality entitled to the monthly remittance of its special district excise tax moneys. Upon receipt of the requisition, the auditor shall issue his warrant on the state treasurer for the funds requested, and the state treasurer shall pay the warrant out of the sub- account. If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers, or to some other fact, the errors shall be corrected and adjustments made in the payments for the next six months as follows: one-sixth of the total adjustment shall be included in the payments for the next six months. In addition, the payment shall include a refund of amounts erroneously not paid to the municipality and not previously remitted during the three years preceding the discovery of the error. A correction and adjustment in payments described in this subsection due to the misallocation of funds by the vendor shall be made within three years of the date of the payment error.

(e) Notwithstanding any other provision of this code to the contrary, the tax commissioner shall deduct, and retain for the benefit of his office for expenditure pursuant to appropriation of the Legislature, from each payment into the state treasury as provided in subsection (c) of this section, one percent thereof as a commission to compensate his or her office for the discharge of the duties described in this section.
ARTICLE 15.CONSUMERS SALES AND SERVICE TAX.

§11-15-9f. Exemption for sales and services subject to special district excise tax.

Notwithstanding any provision of this article to the contrary, any sale or service upon which a special district excise tax is paid, pursuant to the provisions of section eleven, article thirteen-b, chapter eight of this code, shall be exempt from the tax imposed by this article.

The provisions of this bill are new; therefore, strike-throughs and underscoring have been omitted.