ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 450
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Originating in the Committee on Finance;
reported February 25, 2003.]
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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 ten-c, relating to creation and development of an automated tax administration system and funding thereof; setting forth legislative finding; specifying short title and purpose; authorizing benefits- funded automated tax administration system purchasing program; authorizing benefits' funding of the automated tax administration system and payment of costs and compensation on the basis of a percentage of the increase in the amount of taxes, interest and penalties collected which is attributable to implementation of the automated tax administration system, as described in detail by contract or on a fixed-fee contract basis, the fees to be paid from the increase in the amount of taxes, interest and penalties collected which is attributable to implementation of the automated tax administration system, as described in detail by contract; requiring the tax commissioner to make an annual determination of increased revenue attributable to implementation of the automated tax administration system; specifying deposit of moneys and treatment of local and municipal moneys; creating automated tax administration system development fund; specifying uses of moneys in the automated tax administration system development fund and operation of automated tax administration system development fund; specifying an annual report; and specifying other contracts and purchases are not prohibited or hindered by this article.

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 ten-c, to read as follows:
ARTICLE 10C. BENEFITS FUNDED PURCHASING.
§11-10C-1. Legislative finding, short title and purpose.
The Legislature hereby finds that creation, development, acquisition and maintenance of an automated tax administration system by the tax division of the department of tax and revenue are crucial to efficient operation of state government and in the best interests of the people of West Virginia; that the accuracy, efficiency and cost effectiveness of an automated tax administration system will benefit the people of West Virginia through cost savings, more efficient tax administration and more uniform and effective application of the tax laws of the state.
This article shall be known as the "Benefits Funded Purchasing Act" and is hereby established by the Legislature for the purpose of creating, developing and maintaining an automated tax administration system by the tax division of the department of tax and revenue.

§11-10C-2. Authorization of benefits funded automated tax administration system purchasing program.

The tax commissioner is hereby authorized to enter into contracts to finance and acquire an automated tax administration system and associated computer hardware and software for use in the registration of taxpayers, processing of remittances and returns and collection of delinquent taxes and any interest and penalties thereon and for general tax administration. The tax commissioner is further authorized to acquire the technical services and related services necessary to develop, implement and maintain the systems.
§11-10C-3. Benefits funding.
Notwithstanding any provision of chapter five-a, article three of this code to the contrary, or any other provision of this code to the contrary, payment of costs and compensation for the automated tax administration system, related hardware, software and services may be computed and paid: (1) On the basis of a percentage of the increase in the amount of taxes, interest and penalties collected which is attributable to implementation of the automated tax administration system, as described in detail by contract; or (2) on a fixed-fee contract basis, the fees to be paid from the increase in the amount of taxes, interest and penalties collected which is attributable to implementation of the automated tax administration system, as described in detail by contract.

§11-10C-4. Annual determination of increased revenue attributable to automated tax administration system, deposit of moneys, creation and operation of automated tax administration system development fund; annual report.

(a) Revenue increment, fund created, operation of fund. -- The tax commissioner shall determine annually the total amount of increased revenue attributable to the successful implementation of the automated tax administration system under this article and the amount shall be paid into the state treasury and deposited to the credit of a special fund known as the "Automated Tax Administration System Development Fund" which is hereby created as a revolving fund. The tax commissioner is authorized to use moneys deposited in the automated tax administration system development fund to pay vendors of hardware, software or services, pursuant to the terms of contracts created in accordance with this article. All moneys in excess of that required to be paid to the vendors, as determined by the tax commissioner, shall be transferred to the general revenue fund: Provided, That seven hundred fifty thousand dollars be retained in the fund each year for use by the tax commissioner for maintenance and upgrades of tax division information systems and for general tax administration. Appropriations made to the automated tax administration system development fund are not deemed expired at the end of any fiscal period.
(b) Treatment of local moneys. --
(1) The amount of the local moneys derived from any tax imposed under this code which is directed or dedicated to local or municipal subdivisions shall not be deposited in the automated tax administration system development fund, but paid undiminished, including any increase resulting from implementation of the automated tax administration system, to the local or municipal subdivision to which it is directed or dedicated by law. Local or municipal moneys shall be deposited, as directed by law, in those funds designated for orderly distribution of revenues to local or municipal subdivisions.
(2) For purposes of this section, the total amount of increased revenue attributable to the successful implementation of an automated tax administration system for purposes of determining the amount to be deposited in the automated tax administration system development fund and the amount of any benefits-funded payments to vendors under this article are determined after subtraction of any tax revenues payable to a local or municipal subdivision under this code.
(c) Reports. -- During each regular session of the Legislature, the tax commissioner shall submit a report to the governor, the speaker of the West Virginia House of Delegates and the president of the West Virginia Senate. This report shall include detailed information on the costs and benefits of implementing the automated tax administration system pursuant to this article during the fiscal year immediately preceding the submission of the report. The report required in this subsection shall be made annually until two complete fiscal years have elapsed following full implementation of the automated tax administration system by the tax commissioner.
(d) Other contracts and purchases not prohibited or hindered. -- This article is not construed to prohibit or hinder the tax commissioner from acquiring any goods or services for any tax division function or program not specifically included in any contract entered into pursuant to this article.