(By Senators McKenzie and Bowman)

[Introduced February 23, 1998; referred to the

Committee on Finance.]

Proposing an amendment to the Constitution of the State of West Virginia, amending section one, article ten thereof, relating to permitting the state and municipalities, along with the counties to levy property taxes; permitting a phase out of tax on personal property; permitting lower rates on improvements than on land; numbering and designating such proposed amendment; and providing a summarized statement of the purpose of such proposed amendment.

Resolved by the Legislature of West Virginia, two thirds of the members elected to each house agreeing thereto:
That the question of ratification or rejection of an amendment to the Constitution of the State of West Virginia be submitted to the voters of the state at the next general election to be held in the year one thousand nine hundred ninety-eight, which proposed amendment is that section one, article ten thereof, be amended, to read as follows:

§1. Taxation and finance.

(a) Subject to the exceptions in this section contained, taxation shall be equal and uniform throughout the state, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value; except that the aggregate of taxes assessed in any one year upon personal property employed exclusively in agriculture, including horticulture and grazing, products of agriculture as above defined, including livestock, while owned by the producer, and money, notes, bonds, bills and accounts receivable, stocks and other similar intangible personal property shall not exceed fifty cents on each one hundred dollars of value thereon and upon all property owned, used and occupied by the owner thereof exclusively for residential purposes and upon farms occupied and cultivated by their owners or bona fide tenants, one dollar; and upon all other property situated outside of municipalities, one dollar and fifty cents; and upon all other property situated within municipalities, two dollars; and the Legislature shall further provide by general law for increasing the maximum rates, authorized to be fixed, by the different levying bodies upon all classes of property, by submitting the question to the voters of the taxing units affected, but no increase shall be effective unless at least sixty percent of the qualified voters shall favor such increase, and such increase shall not continue for a longer period than three years at any one time, and shall never exceed by more than fifty percent the maximum rate herein provided and prescribed by law; and the revenue derived from this source shall be apportioned by the Legislature among the levying units of the state in proportion to the levy laid in said units upon real and other personal property; but property used for educational, literary, scientific, religious or charitable purposes, all cemeteries, public property, the personal property, including livestock, employed exclusively in agriculture as above defined and the products of agriculture as so defined while owned by the producers may by law be exempted from taxation; household goods to the value of two hundred dollars shall be exempted from taxation. The Legislature shall have authority to tax privileges, franchises, and incomes of persons and corporations and to classify and graduate the tax on all incomes according to the amount thereof and to exempt from taxation, incomes below a minimum to be fixed from time to time, and such revenues as may be derived from such tax may be appropriated as the Legislature may provide. After the year nineteen hundred thirty-three, the rate of the state tax upon property shall not exceed one cent upon the hundred dollars valuation, except to pay the principal and interest of bonded indebtedness of the state now existing.
(b) The sState by legislative action, and the counties and municipalities by local option may levy taxes in proportion to the value of: (1) Land; (2) the improvements thereon; and (3) personal property. These taxes shall be uniform on all properties in each of these categories throughout their respective taxing jurisdictions. State, county and municipal legislative bodies shall each determine annual rates of such taxes. Real property shall be reassessed at least every three years at full and fair market value according to procedures prescribed by general law. The state may phase out the tax on personal property. The state, counties and municipalities may set lower rates on improvements than on land, but not higher rates on improvements than on land. Full or partial property tax exemptions or deferrals shall be subject to approval by the Legislature at intervals no longer than every five years.
Resolved further, That in accordance with the provisions of article eleven, chapter three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, such proposed amendment is hereby numbered ""Amendment No. 1"" and designated as the "State and Local Option Two-Rate Property Tax Amendment," and the purpose of the proposed amendment is summarized as follows: "To provide an amendment that will allow the state, counties and municipalities to levy taxes on land, improvements and personal property; and also to permit all levels of taxing jurisdictions to lower the tax rate on improvement values below the tax rate set for land values."

NOTE: The purpose of this bill is to provide a property tax amendment that will allow the state, counties and municipalities to levy taxes on land, improvements and personal property; and also to permit all levels of taxing jurisdictions to lower the tax rate on improvement values below the tax rate set for land values.

Property classes and rates are purposely not addressed in this amendment in line with modern tax administration principals which hold that these matters are the proper province of the Legislature.

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