ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 2590
(By Mr. Speaker, Mr. Kiss, and Delegate Faircloth)
AN ACT to amend article one-c, chapter eleven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto two new sections, designated sections one- a and one-b; to amend and reenact sections twelve, fourteen
and fourteen-a, article three of said chapter; to further
amend said article by adding thereto a new section,
designated section seven-a; to amend and reenact section
three, article four of said chapter; and to amend and
reenact section three, article five of said chapter, all
relating generally to ad valorem property taxes; phasing out
tax on intangibles over a five-year period beginning with
tax year 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; providing for tangible personal property of banks
and savings and loan associations to be taxed beginning with
tax year one thousand nine hundred ninety-eight; allowing
banks and savings and loan associations an adjustment to
value of shares for value of tangible personal property; and
providing for banks and savings and loan associations to be
taxed like other businesses beginning tax year one thousand
nine hundred ninety-eight.
Be it enacted by the Legislature of West Virginia:
That article one-c, chapter eleven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto two new sections, designated sections
one-a and one-b; that sections twelve, fourteen and fourteen-a,
article three of said chapter be amended and reenacted; that said
article be further amended by adding thereto a new section,
designated section seven-a; that section three, article four of
said chapter, be amended and reenacted; 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 clarification 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 tax year one thousand nine hundred ninety-eight and
thereafter, notwithstanding any other provision in this article
other than section one-b;
(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 tax
year one thousand nine hundred ninety-eight.
§11-1C-1b. Phase-out of taxation of intangible personal
property.
Notwithstanding anything in this code to the contrary,
intangible personal property with tax situs in this state that
would have been taxable prior to the effective date of this act
shall be exempt from ad valorem property tax beginning tax year
one thousand nine hundred ninety-eight:
Provided, That such
property shall be subject to ad valorem property tax and taxed at
fifty percent of assessed value for tax year one thousand nine
hundred ninety-eight; at forty percent of assessed value for the
tax year one thousand nine hundred ninety-nine; at thirty percent
of assessed value for the tax year two thousand; at twenty
percent of the assessed value for the tax year two thousand one;
at ten percent of the assessed value for the tax year two
thousand two and eliminated completely for the tax year two
thousand three and thereafter.
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 interest 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 interest 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 assessors
by corporations.
(a) Each incorporated company, banking institution, and
national banking association, 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, 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: (1) The amount of capital
authorized to be employed by it; (2) the amount of cash capital
paid on each share of stock; (3) the amount of credits and investments other than its own capital stock held by it on said
date, with their fair market value; (4) the quantity, location
and fair market value of all of its real estate, and tax district
or districts in which it is located; and (5) the kinds, quantity
and 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 ..............., 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 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
purposes 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.......
....................................................
(c) The amendments to this section enacted in the year one
thousand nine hundred ninety-seven shall be effective beginning
tax year one thousand nine hundred ninety-eight and thereafter.
§11-3-14. Assessment of stock, realty and tangible personal
property of banks.
(a) Shares of stock in a banking institution, national
banking association or industrial loan company shall be assessed
at their true and actual value, according to the rules prescribed
in this chapter, to the several holders of such stock in the
county, district and town where such bank, company or association
is located, and not elsewhere, whether such holders reside there
or not. The real and actual value of such shares shall be
ascertained according to the best information which the assessor
may be able to obtain, whether from any return made by such bank,
company or association to any officer of the state or the United
States, from actual sales of the stock, from answers to questions
by the assessor, as hereinafter provided, or from other trustworthy sources. The cashier, secretary or principal
accounting officer of every such bank, company or association
shall cause to be kept a correct list of the names and residences
of all the shareholders therein, and number of shares held by
each, which list shall be open to the inspection of the assessors
of the county, and of the tax commissioner or assistants; and
such cashier, secretary or officer shall answer under oath such
questions as the assessor may ask him concerning the matters
shown by such list, and concerning the value of such shares, and
shall be subject to the same penalties, for failure to do so,
which are imposed by law upon individuals failing to answer
questions which the assessor is authorized to ask. The taxes so
assessed upon the shares of any such bank, company, or
association shall be paid by the cashier, secretary or proper
accounting officer thereof, and in the same manner and at the
same time as other taxes are required to be paid in such county,
district and town. In default of such payment such cashier,
secretary or accounting officer as well as such bank, company or
association shall be liable for such taxes, and in addition, for
a sum equal to ten percent thereof. Any taxes so paid upon any
such share may, with interest thereon, be recovered from the
owners thereof by the bank, company, association or officer
paying them, or may be deducted from the dividends accruing on
such shares. The real estate of any such bank, company or association shall be assessed as in other cases, and a
proportionate share of such assessed value shall be deducted in
ascertaining the market value of the shares. The tangible
personal property of any such bank, company, or association shall
be assessed as in other cases and a proportional share of such
assessed value shall be deducted in ascertaining the market value
of the shares for tax years as follows: Such deduction shall be
sixteen and sixty-six one hundredth percent of the assessed value
of the tangible personal property for the tax year one thousand
nine hundred ninety-eight; thirty-three and thirty-two one
hundredth percent of the assessed value of the tangible personal
property for the tax year one thousand nine hundred ninety-nine;
forty-nine and ninety-eight hundredth percent of the assessed
value of the tangible personal property for the tax year two
thousand; sixty-six and sixty-four hundredth percent of the
assessed value of the tangible personal property for the tax year
two thousand one; eighty-three and twenty one hundredth percent
for the tax year two thousand two with such personal property tax
deduction being eliminated entirely for the tax year two thousand
three and thereafter. And if such tangible personal property or
if the title to the building in which any such bank, company or
association does its business and the land on which such building
stands is held by separate corporation in which such bank,
company or association alone or together with another such bank or banks, company or companies, association or associations owns
stock, and such tangible personal property or building and land
be assessed to such separate corporation, a proportionate share
of the assessed value of such tangible personal property or real
estate of such separate company shall be deducted in ascertaining
the market value of the shares of such bank, company or
association. The return shall be made as of the first day of the
assessment year.
(b) This section shall become inoperative beginning tax
year two thousand three and thereafter.
§11-3-14a. Taxation of building and loan associations and
federal savings and loan associations.
(a) The capital of every building and loan association and
federal savings and loan association shall include all of its
assets and shall be assessed at its true and actual value
according to the rules prescribed by this chapter, to such
building and loan association or federal savings and loan
association in the county, district and town where such
association is located:
Provided, That investment shares and
investment share accounts in such associations representing money
withdrawable therefrom are hereby defined as money for purposes
of taxation under this section and, as such, shall not be taxed
but shall be deducted by the assessor in determining the true and
actual value of the capital of any such association. The real and actual value of such capital shall be ascertained according
to the best information which the assessor may be able to obtain,
whether from any return made by such association to any officer
of this state, or the United States, or from answers to questions
by the assessor, as hereinafter provided, or from other
trustworthy sources.
The secretary or principal accounting officer of every such
building and loan association and federal savings and loan
association shall cause to be kept a complete accounting record,
including a complete record of all such investment shares and
investment share accounts, which shall be open to the inspection
of the assessors of the counties, and the tax commissioner or his
assistants, and such secretary or officer shall answer under oath
such questions as the assessor may ask him concerning the matters
shown by such records and accounts, and shall be subject to the
same penalties for failure to do so, which are imposed by law
upon individuals failing to answer questions which the assessor
is authorized to ask. The tax levied and assessed upon the
capital of every such building and loan association and federal
savings and loan association shall be paid by such association in
the manner and at the same time as other taxes are required to be
paid in such county, district and town.
The real estate of any such building and loan association or
federal savings and loan association shall be assessed as in other cases, and a proportionate share of such assessed value
shall be deducted in ascertaining the value of such capital. The
tangible personal property of any such building and loan
association or federal savings and loan association shall be
assessed as in other cases and a proportional share of such
assessed value shall be deducted in ascertaining the value of the
capital for tax years as follows: Such deduction shall be
sixteen and sixty-six one hundredth percent of the assessed value
of the tangible personal property for the tax year one thousand
nine hundred ninety-eight; thirty-three and thirty-two one
hundredth percent of the assessed value of the tangible personal
property for the tax year one thousand nine hundred ninety-nine;
forty-nine and ninety-eight hundredth percent of the assessed
value of the tangible personal property for the tax year two
thousand; sixty-six and sixty-four hundredth percent of the
assessed value of the tangible personal property for the tax year
two thousand one; eighty-three and twenty one hundredth percent
for the tax year two thousand two with such personal property tax
deduction being eliminated entirely for the tax year two thousand
three and thereafter. If the title to the building in which any
such association does its business and the land on which such
building stands is held by a separate corporation, in which any
such association alone or together with another such association
or banking company or companies own stock, and such building and land be assessed in such separate corporation, a proportionate
share of the assessed value of such real estate of such separate
company shall be deducted in ascertaining the value of the
capital of such association. Every such association shall make
a return to the assessor as of the first day of the assessment
year.
(b) This section shall become inoperative beginning tax
year two thousand three and thereafter.
ARTICLE 4. ASSESSMENT OF REAL PROPERTY.
§11-4-3. Definitions.
For the purpose of giving effect to the "Tax Limitations
Amendment", this chapter shall be interpreted in accordance with
the following definitions, unless the context clearly requires a
different meaning:
"Owner" means the person, as defined in section ten, article
two, chapter two of this code, who is possessed of the freehold,
whether in fee or for life. A person seized or entitled in fee
subject to a mortgage or deed of trust securing a debt or
liability is considered the owner until the mortgagee or trustee
takes possession, after which the mortgagee or trustee shall be
considered the owner. A person who has an equitable estate of
freehold, or is a purchaser of a freehold estate who is in
possession before transfer of legal title is also considered the
owner.
"Used and occupied by the owner thereof exclusively for residential purpose" means actual habitation by the owner of all
or a portion of a parcel of real property as a place of abode to
the exclusion of any commercial use:
Provided, That if the
parcel of real property was unoccupied at the time of assessment
and either (a) was used and occupied by the owner thereof
exclusively for residential purposes on the first day of July of
the previous year or (b) was unimproved on the first of July of
the previous year but a building improvement for residential
purposes was subsequently constructed thereon between that date
and the time of assessment, the property shall be considered
"used and occupied by the owner thereof exclusively for
residential purpose":
Provided, however, tThat nothing herein
contained shall permit an unoccupied or unimproved property to be
considered "used and occupied by the owner thereof exclusively
for residential purposes" for more than one year. If a license
is required for an activity on the premises or if an activity is
conducted thereon which involves the use of equipment of a
character not commonly employed solely for domestic as
distinguished from commercial purposes, the use may not be
considered to be exclusively residential.
"Farm" means a tract or contiguous tracts of land used for
agriculture, horticulture or grazing and includes all real
property designated as "wetlands" by the United States army corps
of engineers or the United States fish and wildlife service.
"Occupied and cultivated" means subjected as a unit to farm
purposes, whether used for habitation or not, and although parts
may be lying fallow, in timber or in wastelands.
ARTICLE 5. ASSESSMENT OF PERSONAL PROPERTY.
§11-5-3. Definitions.
The words "personal property," as used in this chapter
includes all fixtures attached to land, if not included in the
valuation of such land entered in the proper land book; all things
of value, moveable and tangible, which are the subjects of
ownership; all chattels personal; all notes, bonds, and accounts
receivable, stocks and all other intangible property.
"Agriculture" means the cultivation of the soil, including the
planting and harvesting of crops and the breeding and management
of livestock.
"Horticulture" means plant production of every character
except forestry.
"Grazing" means the use of land for pasturage.
"Products of agriculture" 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" 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.
"Tax year" means the calendar year following the July first
assessment day or, in the case of a public service business
assessed pursuant to article six of this chapter, the calendar
year beginning on the January first assessment day.
"While owned by the producer:" means while title is in the
producer as above defined.
"Employed exclusively" means that the preponderant, and the
sole gainful use is for the designated purpose."
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