COMMITTEE SUBSTITUTE
FOR
H. B. 3000
(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)
(Originating in the Committee on Finance)
[March 27, 2009]
A BILL to amend and reenact §11-13-2 of the Code of West Virginia,
1931, as amended; to amend said code by adding thereto a new
section, designated §11-13-2q; and to amend and reenact §24-2-
11a of said code, all relating to a business and occupation
tax on the business of the transmission of electricity through
certain electric transmission lines; imposing a business and
occupation tax; setting forth legislative findings; defining
certain terms; providing for the rate and measure of tax;
prohibiting certain credits against tax; providing for the
dedication of tax proceeds; establishing the Crossed County
Transmission Line Fund; establishing the All Counties
Municipalities Transmission Line Revenue Fund; providing for
the distribution of tax proceeds to local governmental units;
specifying establishment of accounts and for local
governmental units' expenditure of funds for limited purposes;
authorizing the Tax Commissioner to promulgate rules; requiring reports to the Legislature; requiring additional
notice to certain property owners impacted by transmission
line construction; providing for severability; providing
criteria for a certificate of public convenience and necessity
for the construction of certain high voltage transmission
lines.
Be it enacted by the Legislature of West Virginia:
That §11-13-2 of the Code of West Virginia, 1931, as amended,
be amended an reenacted; that said code by adding thereto a new
section, designated §11-13-2q; and that §24-2-11a of said code be
amended and reenacted, all to read as follows:
CHAPTER ELEVEN. TAXATION.
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-2. Imposition of privilege tax.
(a)
Imposition of tax. -- There is hereby levied and shall be
collected annual privilege taxes against the persons, on account of
their business and other activities, and in the amount to be
determined by the application of rates against the measures of tax
as set forth in sections two-d, two-e, two-f, two-m, two-n,
and
two-o,
and two-q of this article.
(b) If any person liable for any tax under section two-m shall
ship or transport his products or any part thereof out of the state
without making sale of such products, the value of the products in
the condition or form in which they exist immediately before
transportation out of the state shall be the basis for the assessment of the tax imposed in the applicable section, except in
those instances in which another measure of the tax is expressly
provided. The Tax Commissioner shall prescribe equitable and
uniform rules for ascertaining the value.
(c) In determining value, however, as regards sales from one
to another of affiliated companies or persons, or under other
circumstances where the relation between the buyer and seller is
such that the gross proceeds from the sale are not indicative of
the true value of the subject matter of the sale, the Tax
Commissioner shall prescribe uniform and equitable rules for
determining the value upon which the applicable privilege tax shall
be levied, corresponding as nearly as possible to the gross
proceeds from the sale of similar products of like quality or
character where no common interest exists between the buyer and
seller but the circumstances and conditions are otherwise similar.
§11-13-2q. Legislative findings; business of transmission of
electricity through certain electric transmission
lines; rate and measure of tax; definitions;
credits not allowed against tax; emergency rule
authorized; severability.
(a) Legislative findings. --
(1) The Federal Energy Regulatory Commission has authorized
the formation of Regional Transmission Organizations and
Independent System Operators for the purposes of promoting
competition in wholesale electricity markets and exercising independent functional control of the interconnected regional
electric transmission systems necessary to deliver electricity from
electric generating plants to the distribution systems of electric
load serving entities.
(2) Pursuant to authorization by the Federal Energy Regulatory
Commission, Regional Transmission Organizations and Independent
System Operators operate competitive wholesale electricity markets
and functionally control the transmission of electricity across
wide geographic regions, matching generation to the load
instantaneously to keep supply and demand of electricity in balance
and to assure that sufficient generation is available in case
demand rises or a power plant or transmission line is out of
service.
(3) Regional Transmission Organizations and Independent System
Operators also provide nondiscriminatory transmission access, which
facilitates competition among wholesale suppliers.
(4) Regional Transmission Organizations and Independent System
Operators are authorized by the Federal Energy Regulatory
Commission to require the construction or modification of electric
transmission lines and other transmission facilities to assure the
reliability of the interconnected regional transmission systems and
to reduce economic congestion in the transmission of electricity.
(5) While the construction of long distance, extra-high
voltage electric transmission lines as required by Regional
Transmission Organizations and Independent System Operators
promotes the purposes for which such entities were created and serves a public purpose, the siting, construction, operation and
maintenance of long distance, extra-high voltage electric
transmission lines places significant additional burdens on the
state, local governments and their citizens, affects public and
private land use, increases electric rates and impacts aesthetic
and recreational values important to the state, local governments
and their citizens.
(6) Accordingly, the imposition of a privilege tax on the
transmission of electricity through an electric transmission line
that: (A) Was constructed by a public utility, person or
corporation in West Virginia at the direction of a Regional
Transmission Organization or Independent System Operator pursuant
to authority granted by the Federal Energy Regulatory Commission;
(B) has a voltage carrying capacity of at least four hundred fifty
kilovolts; and (C) Was designed and constructed to transmit
electricity over a total distance of at least fifty miles within
this state whether interconnected with one or more electric
substations located either within this state or outside of this
state, serves a legitimate public purpose.
(b) Definitions. -- For purposes of this section:
(1) "County infrastructure project" means any project of a
public nature that is intended to foster and enhance the basic
physical and organizational structures needed for the operation of
a county including, but not limited to, roads, streets, parks and
recreational facilities, bridges, buildings, curbs, sidewalks,
water supply, sewers, electric lines and telecommunications.
(2) "Kilovolt" means one thousand volts;
(3) "Long distance, extra-high voltage electric transmission
line" means a series of towers, wires, electrical substations and
other transmission-related equipment that: (A) Was constructed by
a public utility, person or corporation in West Virginia at the
direction of a Regional Transmission Organization or Independent
System Operator pursuant to authority granted by the Federal Energy
Regulatory Commission; (B) has a voltage carrying capacity of at
least four hundred fifty kilovolts; and (C) was designed and
constructed to transmit electricity over a total distance of at
least fifty miles within this state whether interconnected with one
or more electric substations located either within this state or
outside of this state;
(4) "Transmission of electricity" means the act or process of
causing electricity to pass or be conveyed from one place or
geographical location to another place or geographical location
through an electric transmission line; and
(5) "Voltage carrying capacity" means the rated voltage
capacity of an electric transmission line expressed in kilovolts.
For the purpose of computing the tax imposed by subsection (C) of
this section, the voltage carrying capacity of any long distance,
extra-high voltage electric transmission line shall be set an
amount equal to five hundred kilovolts.
(c) Imposition of tax. -- For the privilege of engaging or
continuing within this state in the business of the transmission of
electricity through one or more long distance, extra-high voltage electric transmission lines, for sale, profit or commercial use,
there is hereby levied and shall be collected from every public
utility, person or corporation exercising such privilege an annual
tax.
(d) Rate and measure of tax. -- The tax imposed in subsection
(c) of this section shall be computed by multiplying the number of
miles of long distance, extra-high voltage electric transmission
lines in service in West Virginia during the tax year by an amount
equal to the product of the tax rate of $750 per mile multiplied by
the voltage carrying capacity of the long distance, extra-high
voltage electric transmission line.
(e) Credits not allowed against tax. -- When determining the
amount of tax due under this section, no credit shall be allowed
under any provision of this code unless it is expressly provided
that the credit applies to the tax on the privilege of operating a
long distance, extra-high voltage electric transmission line.
(f) Dedication of taxes collected. -- Effective July 1, 2009:
(1) One-third of the net proceeds of the tax imposed in
subsection (c) of this section is hereby dedicated for the use and
benefit of counties crossed or containing long distance, extra-high
voltage electric transmission lines. The proceeds of this
dedicated tax shall be distributed by the State Treasurer in the
manner specified in this section to the various counties crossed or
containing long distance, extra-high voltage electric transmission
lines;
(2) One-third of the net proceeds of the tax imposed in subsection (c) of this section shall be dedicated for the use and
benefit of the West Virginia Infrastructure and Jobs Development
Council. The proceeds of this dedicated tax shall be deposited in
the West Virginia Infrastructure Fund, as established in section
nine, article fifteen-a, chapter thirty-one of this code, for the
purpose of funding infrastructure projects, as that term is defined
in section two, article fifteen-a, chapter thirty-one of this code;
and
(3) One-third of the net proceeds of the tax imposed in
subsection (c) of this section is hereby dedicated for the use and
benefit of counties and municipalities in this state. The proceeds
of this dedicated tax shall be distributed by the State Treasurer
in the manner specified in subsection (j).
(g) Creation of fund. -- There is hereby created in the State
Treasury a special fund entitled the "Crossed County Transmission
Line Fund." The fund shall consist of the portion of the tax
proceeds collected by the Tax Commissioner that is dedicated for
the use and benefit of counties containing or crossed by long
distance, extra-high voltage electric transmission lines pursuant
to subsection (f) paragraph (2) of this section. The Tax
Commissioner shall deposit moneys into the fund, from time to time,
as such proceeds are received.
(h) Distribution of moneys in the Crossed County Transmission
Line Fund; use of funds by counties; special budgets required. --
(1) Moneys in the Crossed County Transmission Line Fund shall
be distributed by the State Treasurer annually to counties containing or crossed by long distance, extra-high voltage electric
transmission lines. The distribution to each county shall be based
on the proportion of the total miles of long distance, extra-high
voltage electric transmission lines located within each county to
the total miles of long distance, extra-high voltage electric
transmission lines located within the state. Moneys distributed to
a county pursuant to this section shall be deposited in the county
general fund or a special fund established by the county for the
receipt of such moneys and may be expended as follows:
(A) On or before March 28, 2010, and each March 28 thereafter,
each county commission or other governing body of the county
receiving moneys pursuant to this section shall submit to the State
Auditor, on a form provided by the State Auditor, a special budget
detailing how the moneys are to be spent by the county in a fiscal
year.
(B) The State Auditor shall approve or disapprove, in whole or
in part, a special budget within thirty days of his or her receipt
thereof. The State Auditor shall approve of a special budget if he
or she determines that any expenditures set forth therein are for
county infrastructure projects. Any portion of a special budget
not approved by the State Auditor may be resubmitted for approval.
Failure of the State Auditor to approve or disapprove the special
budget within thirty days results in the budget being deemed
approved by the State Auditor.
(C) A county may not expend moneys received pursuant to this
section for any purpose that was not approved by the State Auditor in accordance with this section.
(D) A county may, on its own initiative, submit amendments to
its special budget for a fiscal year. The State Auditor shall
approve of an amendment to a county's special budget if he or she
determines that any expenditures set forth therein are for county
infrastructure projects.
(E) Any moneys distributed to a county pursuant to this
section that remain in a county's general fund or special fund
established in accordance with this subsection at the close of a
fiscal year shall remain in the general Fund or special fund and
may not be appropriated for any purpose that was not approved by
the State Auditor in accordance with this section.
(F) The balance of any unexpended moneys distributed to a
county pursuant to this section may be included within a county's
special budget for a subsequent fiscal year.
(2) The Office of Chief Inspector shall annually determine
whether the distributions of funds from the Crossed County
Transmission Line Fund are in compliance with the requirements of
this section.
(i) Creation of fund. In order to provide a procedure for the
distribution of the remaining one third of the net proceeds of the
additional tax to all counties and municipalities of the state,
the special fund known as the "all counties and municipalities
transmission line revenue fund" is hereby created. The fund shall
consist of the portion of the tax proceeds collected by the Tax
Commissioner that is dedicated for the use and benefit of all counties and municipalities in the state as provided in subsection
(f) paragraph (3) of this section.
(j) Distribution of moneys in the All Counties and
Municipalities Counties and Municipalities Transmission Line
Revenue Fund . -- (1) The net proceeds allocated in this subsection
shall be deposited in the all counties and municipalities
transmission line revenue fund, from time to time, as the proceeds
are received by the Tax Commissioner. The moneys in the funds
shall be distributed to the respective counties and municipalities
entitled to the moneys in the manner set forth in subdivision (2)
of this section.
(2) The moneys in the all counties and municipalities
transmission line revenue fund shall be allocated among and
distributed quarterly to the counties and municipalities entitled
to the moneys by the State Treasurer in the manner specified in
this section. On or before each distribution date, the State
Treasurer shall determine the total amount of moneys in each fund
which will be available for distribution to the respective counties
and municipalities entitled to the moneys on that distribution
date. The amount to which every county and municipality is
entitled from the all counties and municipalities utility revenue
fund shall be determined in accordance with subdivision (3) of this
subsection. After determining the amount each county and
municipality is entitled to receive from the respective fund or
funds, a warrant of the State Auditor for the sum due to each
county or municipality shall issue and a check drawn thereon making payment of such amount shall thereafter be distributed to each such
county or municipality.
(3) The amount to which each county and municipality is
entitled from the all counties and municipalities transmission line
revenue fund shall be determined in accordance with the provisions
of this subsection. For purposes of this subsection "population"
means the population as determined by the most recent decennial
census taken under the authority of the United States:
(A) The State Treasurer shall first apportion the total amount
of moneys available in the all counties and municipalities utility
revenue fund by multiplying the total amount in the fund by the
percentage which the population of each county bears to the total
population of the state. The amount thus apportioned for each
county is the county's "base share".
(B) Each county's base share shall then be subdivided into two
portions. One portion is determined by multiplying the base share
by that percentage which the total population of all unincorporated
areas within the county bears to the total population of the
county, and the other portion is determined by multiplying the base
share by that percentage which the total population of all
municipalities within the county bears to the total population of
the county. The former portion shall be paid to the county and the
latter portion is the "municipalities' portion" of the county's
base share. The percentage of the latter portion to which each
municipality in the county is entitled shall be determined by
multiplying the total of the latter portion by the percentage which the population of each municipality within the county bears to the
total population of all municipalities within the county.
(C) All counties and municipalities shall create a
"infrastructure construction revenue fund" which shall be the
depository for moneys distributed to any county or municipality
under the provisions of this section, from either or both special
funds. Moneys in the infrastructure construction revenue fund, in
compliance with subsection (h) of this section, may be expended by
the county commission or governing body of the municipality for
infrastructure projects as defined in subsection (b) of this
section as the best interest of the people of the respective county
and municipality: Provided, That the infrastructure construction
revenue fund moneys shall not be budgeted for personal services in
an amount to exceed one fourth of the total funds available in such
fund.
(j) Emergency rule authorized, proration, allocation. -- The
Tax Commissioner may promulgate an emergency rule as provided in
article three, chapter twenty-nine-a of this code that clarifies,
explains or implements the provisions of this section and that
equitably prorates taxes for a taxable year in which a long
distance, extra-high voltage electric transmission line is first
placed in service or retired, or in which a taxpayer acquires or
transfers an interest in a long distance, extra-high voltage
electric transmission line, or that equitably allocates taxes among
multiple taxpayers with interests in a long distance, extra-high
voltage electric transmission line, it being the intent of the Legislature to prohibit multiple taxation of the same taxable
transmission capacity.
(k) On or before December 15, 2010, and each December 15
thereafter, the Tax Commissioner shall deliver to the Clerk of the
Senate and the Clerk of the House of Delegates a consolidated
report of the special budgets submitted to the Tax Commissioner in
accordance with this section for all county commissions,
municipalities or other governing bodies as of July 15 of the
current year.
(l) Severability. -- If any provision of this section or the
application thereof to any person or circumstance is held invalid,
such invalidity shall not affect other provisions or applications
of the section which can be given effect without the invalid
provision or its application, and to this end the provisions of
this section are declared to be severable.
CHAPTER 24. PUBLIC SERVICE COMMISSION.
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
§24-2-11a. Requirement for certificate of public convenience and
necessity before beginning construction of high
voltage transmission lines; contents of application;
notice; hearing; criteria for granting or denying
certificate; regulations.
(a) No public utility, person or corporation shall begin
construction of a high voltage transmission line of two hundred
thousand volts or over, which line is not an ordinary extension of an existing system in the usual course of business as defined by
the Public Service Commission, unless and until it or he
or she
shall have obtained from the Public Service Commission a
certificate of public convenience and necessity approving the
construction and proposed location of such transmission line.
(b) The application for such certificate shall be in such form
as the commission may prescribe and shall contain:
(1) A description, in such detail as the commission may
prescribe, of the location and type of line facilities which the
applicant proposes to construct;
(2) A statement justifying the need for such facilities.
If
the applicant seeks a certificate of public convenience and
necessity for a high voltage transmission line of four hundred
fifty thousand volts or over, the applicant must demonstrate that
it has studied the economic and technical feasibility of
retensioning, double-circuiting or reconductoring existing
transmission lines and, in light of that study, has determined that
the proposed transmission line is required;
(3) A statement of the environmental impact of such line
facilities; and
(4) Such other information as the applicant may deem relevant
or the commission may require.
(c) Upon the filing of such application, the applicant
shall
make a good faith effort to provide either by personal service or
by certified mail, notice to each and every property owner whose
property lies within one-quarter mile of the center line of the proposed property line, and, shall publish, in such form as the
commission shall direct, as a Class II legal advertisement in
compliance with the provisions of article three, chapter fifty-nine
of this code, the publication area for such publication to be each
county in which any portion of the proposed transmission line is to
be constructed, a notice of the filing of such application and that
the commission may approve the same unless within fifteen days
after completion of publication a written request for a hearing
thereon has been received by the commission from a person or
persons alleging that the proposed transmission line or its
location is against the public interest. If such request be timely
received, the commission shall set the matter for hearing on a date
within sixty days from completion of said publication, and shall
require the applicant to publish notice of the time and place of
hearing in the same manner as is herein required for the
publication of notice of the filing of the application.
(d) Within sixty days after the filing of said application, or
if hearing shall be held thereon, within ninety days after final
submission on oral argument or brief, the commission may approve
the application if it shall find and determine that:
the proposed
transmission line
(1)
The proposed transmission line will economically,
adequately and reliably contribute to meeting the present and
anticipated requirements for electric power of the customers served
by the applicant or is necessary and desirable for present and
anticipated reliability of service for electric power for its service area or region;
and
(2) Retensioning, double-circuiting or reconductoring existing
transmission lines is not technically or economically feasible to
meet the present and anticipated requirements for electric power of
the customers served by the applicant or to provide present and
anticipated reliability of service for electric power for its
service area or region; and
(2) (3) The proposed transmission line will result in an
acceptable balance between reasonable power needs and reasonable
environmental factors.
(e) The commission may impose conditions upon its approval of
the application, or modify the applicant's proposal, to achieve an
acceptable balance between reasonable power needs and reasonable
environmental factors.
(f) The provisions of this section shall not apply to the
construction of line facilities which will be part of a
transmission line for which any right-of-way has been acquired
prior to January 1, 1973.
(g) The commission shall prescribe such rules and regulations
as it may deem proper for the administration and enforcement of the
provisions of this section, which rules and regulations shall be
promulgated in accordance with the applicable provisions of chapter
twenty-nine-a of this code as if the same were set forth herein in
extenso.
(h) Notwithstanding any other provision of the law to the
contrary, the commission shall determine, in its discretion, which transmission line or lines crossing above the Ohio River must be
marked to be made visible to airborne traffic flying in any area
where such lines exist, and shall, within one hundred twenty days
of the effective date of this section, promulgate rules requiring
that all public utilities or persons who install or maintain such
lines make the necessary markings.