H. B. 2553
(By Mr. Speaker, Mr. Kiss, and Delegate Ashley)
[By Request of the Executive]
[Introduced March 14, 1997; referred to the
Committee on the Judiciary then Finance.]
A BILL to repeal sections fourteen and fourteen-a, article three,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; to amend article one-c
of said chapter by adding thereto a new section, designated
section one-a; to amend and reenact section twelve, article
three of said chapter; to further amend said article three
by adding thereto a new section, designated section seven-a;
and to amend and reenact section three, article five of said
chapter, all relating generally to ad valorem property
taxes; exempting intangibles from tax for tax years
beginning on or after the first day of January, one thousand
nine hundred ninety-eight; defining chattel interests in
real property to be real property for tax purposes; defining chattel interests in tangible personal property to be
tangible personal property for tax purposes; and providing for property of banks and savings and loans to be taxed like
other corporations for tax years beginning on or after the
first day of January, one thousand nine hundred ninety- eight.
Be it enacted by the Legislature of West Virginia:
That sections fourteen and fourteen-a, article three,
chapter eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be repealed; that article one-c
of said chapter be amended by adding thereto a new section,
designated section one-a; that section twelve, article three of
said chapter be amended and reenacted; that said article three be
further amended by adding thereto a new section, designated
section seven-a; 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 classification 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 the first day of July, one-thousand nine hundred
ninety-seven, for tax years beginning after that date,
notwithstanding any other provision in this article;
(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 the
first day of July, one thousand nine hundred ninety-seven.
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 interests in tangible personal property
are hereby defined to be an interest in real or tangible personal
property and are to be assessed and taxed like real or tangible
personal property is taxed. As so defined, chattel interests in
real property and chattel interests in tangible personal property
are not intangible personal property for property tax purposes.
§11-3-12. Assessment of corporate property; reports to assessor
by corporations.
(a) Each incorporated company, foreign or domestic, having
its principal office or chief place of business in this state,
owning property subject to taxation in this state, except
railroad, telegraph and express companies, telephone companies,
pipeline, car line companies and other public utility companies,
banking institutions, national banking associations, building and
loan associations, federal savings and loan associations and
industrial loan companies, shall annually, between the first day
of the assessment year and the first day of October, make a
written report, verified by the oath of the president or chief
accounting officer, to the assessor of the county in which its
principal office or chief place of business is situated or in
which such property subject to taxation in this state is located if such corporation does not have a principal office or chief
place of business in this state, showing the following items,
viz:
(a) (1) The amount of capital authorized to be employed by
it;
(b) (2) the amount of cash capital paid on each share of
stock;
(c) (3) the amount of credits and investments other than
its own capital stock held by it on said date, with their
true
and actual fair market value;
(d) (4) the quantity, location and
true and actual fair market value of all of its real estate, and
the tax district or districts in which it is located; and
(e) (5)
the kinds, quantity and
true and actual fair market value of all
its tangible property in each tax district in which it is
located.
(b) The oath required for this section shall be
substantially as follows, viz:
State of West Virginia, County of .........., ss:
I, ................., president (treasurer or manager) of
(here insert name of corporation), do solemnly swear (or affirm)
that the foregoing is, to the best of my knowledge and judgment,
true in all respects; that it contains a statement of all the
real estate and personal property, including credits and
investments belonging to said corporation; that the value affixed
to such property is, in my opinion, its
true and actual fair
market value, by which I mean the price at which it would sell if
voluntarily offered for sale on such terms as are usually employed in selling such property, and not the price which might
be realized at a forced or auction sale; and said corporation has
not, to my knowledge, during the sixty-day period immediately
prior to the first day of the assessment year converted any of
its assets into nontaxable securities or notes or other evidence
of indebtedness for the purpose of evading the assessment of
taxes thereon; so help me, God.
.........................................
The officer administering such oath shall append thereto the
following certificate, viz:
Subscribed and sworn to before me by .......... this the
.............. day of .........., 19.....
...................................
ARTICLE 5. ASSESSMENT OF PERSONAL PROPERTY.
§11-5-3. Definitions.
The words "personal property," as used in this chapter,
shall include includes all fixtures attached to land, if not
included in the valuation of such land entered in the property
land book; 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"
shall mean means the cultivation of the soil,
including the planting and harvesting of crops and the breeding and management of livestock.
"Horticulture"
shall mean means plant production of every
character except forestry.
"Grazing"
shall mean means the use of land for pasturage.
"Products of agriculture"
shall mean 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"
shall mean 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.
"While owned by the producer" shall mean means while title
is in the producer as above defined.
"Employed exclusively" shall mean means that the
preponderant, and the sole gainful use is for the designated
purpose.
NOTE: The purpose of this bill is to implement Amendment 5
to the West Virginia Constitution which was ratified by the
voters on November 6, 1984, with the result that intangible
personal property will become exempt from assessment and taxation
for ad valorem property tax purposes beginning July 1, 1997 for
tax the tax year beginning January 1, 1998.
§§11-1C-1a and 11-3-7a are new; therefore, strike-throughs
and underscoring have been omitted.
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