H. B. 2747
(By Delegate Martin)
[Introduced March 27, 1993; referred to the
Committee on Finance.]
A BILL to amend and reenact sections five and eleven, article
one-c, chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to further
amend said article by adding thereto a new section,
designated section eleven-a; and to amend and reenact
section five, article eight, chapter eleven of said code,
all relating to assessment and taxation of real property;
requiring method for indicating taxation as managed
timberland on land books; providing for recapture of real
estate taxes upon change in use of managed timberland;
providing generally therefor and exceptions thereto;
providing for penalty for failure to report such change in
use; requiring notice to certain taxpayers of recaptured tax
and penalty provisions; authorizing and requiring tax
commissioner to promulgate rules, with limitations.
Be it enacted by the Legislature of West Virginia:
That sections five and eleven, article one-c, chapter elevenof the code of West Virginia, one thousand nine hundred thirty-
one, as amended, be amended and reenacted; that said article be
further amended by adding thereto a new section, designated
section eleven-a; and that section five, article eight, chapter
eleven of said code be amended and reenacted, all to read as
follows:
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
§11-1C-5. Tax commissioner powers and duties.
(a) In addition to the powers and duties of the tax
commissioner in other provisions of this article and this code,
the tax commissioner shall have the power and duty to:
(1) Perform such duties and exercise such powers as may be
necessary to accomplish the purposes of this article;
(2) Determine the methods of valuation for both real and
personal property in accordance with the following:
(A) As to personal property, the tax commissioner shall
provide a method to appraise each major specie of personal
property in the state so that all such items of personal property
are valued in the same manner no matter where situated in the
state, shall transmit these methods to each county assessor who
shall use these methods to value the various species of personal
property. The tax commissioner shall periodically conduct such
studies as are necessary to determine that such methods are being
followed. Such method shall be in accordance with the provisions
of article five of this chapter:
Provided,
That notwithstanding
any other provision of this code to the contrary, the severalcounty assessors shall appraise motor vehicles as follows: The
state tax commissioner shall annually compile a schedule of
automobile values based upon the lowest values shown in a
nationally accepted used car guide, which said schedule shall be
furnished to each assessor and shall be used by the several
county assessors to determine the assessed value for all motor
vehicles in an amount equal to sixty percent of said lowest
values.
(B) As to managed timberland as defined in section two of
this article, the tax commissioner shall provide a method to
appraise such property in the state so that all such property is
valued in the same manner no matter where it is situated in the
state, which shall be a valuation based on its use and productive
potential as managed timberland, which may be accorded special
valuation as forestlands as authorized by section fifty-three,
article six of the Constitution of West Virginia:
Provided,
That
timberland that does not qualify for identification as managed
timberland shall be valued at market value:
Provided, however,
That the tax commissioner may not implement any rules or
regulations in title one hundred ten, which relate to valuation
or classification of timberland:
Provided further,
That on or
before the first day of October, one thousand nine hundred
ninety, the tax commissioner shall, in accordance with chapter
twenty-nine-a of this code, promulgate new rules relating to the
valuation and classification of timberland. The tax commissioner
shall further provide a method for clearly indicating on the landbooks that the property is being valued as managed timberland.
(C) As to farmland used, occupied and cultivated by an owner
or bona fide tenant, the tax commissioner shall provide a method
to appraise such property in the state so that all such property
is valued in the same manner no matter where it is situated in
the state, which valuation shall be arrived at according to the
fair and reasonable value of the property for the purpose for
which it is actually used regardless of what the value of the
property would be if used for some other purpose, in accordance
with section one, article three of this chapter and as authorized
by subsection B, section one-b, article X of the Constitution of
West Virginia.
(D) As to public utility property, the tax commissioner
shall prescribe appropriate methods for the appraisal of the
various types of property subject to taxation as public utilities
and the types of property which are to be included in the
operating property of a public utility and thereby not subject to
taxation by the county assessor. Only parcels or other property,
or portions thereof, which are an integral part of the public
utility's function as a utility shall be included as operating
property and assessed by the board of public works under
provisions of article six of this chapter;
(3) Evaluate the performance of each assessor based upon the
criteria established by the commission and each county's approved
plan and take appropriate measures to require any assessor who
does not meet these criteria or adequately carry out theprovisions of the plan to correct any deficiencies. Such
evaluation shall include the periodic review of the progress of
each assessor in conducting the appraisals required in sections
seven and nine of this article and in following the approved
valuation plan. If the tax commissioner determines that an
assessor has substantially failed to perform the duties required
by said sections, the tax commissioner shall take all necessary
steps, including the appointment of one or more special assessors
in accordance with the provisions of section one, article three
of this chapter, or utilize such other authority as the
commissioner has over county assessors pursuant to other
provisions of this code as may be necessary to complete the tasks
and duties imposed by this article:
Provided,
That a writ of
mandamus shall be the appropriate remedy if the tax commissioner
fails to perform his or her statutory duty provided for in
section five, article one of this chapter;
(4) Submit to the Legislature, on or before the fifteenth
day of February of each year, a preliminary statewide aggregate
tax revenue projection and other information which shall assist
the Legislature in its deliberations regarding county board of
education levy rates pursuant to section six-f, article eight of
this chapter, which information shall include any amount of
reduction required by said section six-f;
(5) Maintain the valuations each year by making or causing
to be made such surveys, examinations, audits and investigations
of the value of the several classes of property in each countywhich should be listed and taxed under the several
classifications; and
(6) Establish by uniform rules a procedure for the sale of
computer generated material and appraisal manuals. Any funds
received as a result of the sale of such reproductions shall be
deposited to the appropriate account from which the payment for
reproduction is made.
(b) The tax commissioner may adopt any regulation adopted
prior to the first day of January, one thousand nine hundred
ninety, pursuant to article one-a of this chapter, which adoption
shall not constitute an implementation of the statewide mass
reappraisal of property. Such adoption, including context
modifications made necessary by the enactment of this article,
shall occur on or before the first day of July, one thousand nine
hundred ninety-one, through inclusion in the plan required by
section ten of this article or inclusion in the minute record of
the valuation commission. Upon the adoption of any such
regulations, any modification or repeal of such regulation shall
be in accordance with the provisions of article three, chapter
twenty-nine-a of this code.
§11-1C-11. Managed timberland.
Upon request of state, county or other taxing authorities of
appropriate jurisdiction, the division of forestry shall inspect
property under contract as managed timberland and determine
whether or not such properties do qualify. In the event that a
property is found not to qualify by reason of a change in use, orit is discovered that a material misstatement of fact was made by
the owner in the certification required in subdivision (1),
subsection (d), section ten of this article, the division of
forestry shall notify the state tax commissioner and the
appropriate county assessor or assessors that the property is
disqualified from its identification as managed timberland and
that the provisions in section eleven-a of this article relating
to recaptured taxes apply.
§11-1C-11a. Change in use of farmland or managed timberland
property; recaptured taxes; exceptions.
(a) When property qualifies for assessment and taxation on
the basis of use as managed timberland pursuant to the
appropriate subsection of section ten of this article and the use
by which it qualified changes to a nonqualifying use, or, as to
managed timberland, the qualifying professionally prepared forest
management plan is not followed, it is subject to additional
taxes, hereinafter referred to as recaptured taxes. The amount
of the recaptured taxes shall be an amount equal to the amount,
if any, by which the taxes paid or payable on the basis of the
managed timberland valuation, assessment and rate of taxation is
less than the taxes that would have been paid or payable on the
basis of the valuation, assessment and rate of taxation for that
property in the year of the change and in each of the five years
immediately preceding the year of the change, or such lesser
number of years as the property was taxed as managed timberland,
if such property had been assessed in accordance with its actualmarket value for each such year. Such additional taxes shall
only be assessed against that portion of land which no longer
qualifies for assessment and taxation on the basis of its prior
use.
(b) In determining recaptured taxes chargeable on property
which has been changed in use, the county assessor shall cause an
assessment to be made based on the actual market value of the
property for the then current year, and each of the years, up to
five years, immediately preceding the year of the change in which
the property was taxed as managed timberland. In making such
assessment, the assessor shall not consider the purchase or sale
price of the property subject to the recaptured taxes. The rate
of tax to be used in calculating the recaptured tax is that rate
in effect for each particular year it is to be charged. The
resulting taxes less the taxes actually paid during that period
of years are the recaptured taxes due.
(c) Liability for the recaptured taxes shall attach when a
change in use occurs but not when a change in ownership of the
title takes place if the new owner continues the property in the
managed timberland use. The owner of property appraised and
assessed as managed timberland property shall, within sixty days
following any change in use, report such change to the county
assessor on such forms as may be prescribed. In accordance with
such rules as may be promulgated by the tax commissioner, the
assessor shall forthwith determine and assess the recaptured tax
which shall be assessed against and paid by the owner of theproperty at the time the change in use which no longer qualifies
occurs and forward information regarding the assessment to the
county commission and the sheriff on such forms as shall be
developed by the tax commissioner. The sheriff shall send
forthwith by certified mail, return receipt requested, a bill to
the property owner, who may appeal the assessment to the county
commission within fifteen days of receipt of the bill or who
shall pay the recaptured property tax to the sheriff within
thirty days of receipt of the bill. The county commission shall
hold a hearing on the assessment within fifteen days of receipt
of the notice of appeal and shall render a decision thereon
within fifteen days of the hearing, which decision may approve or
reduce the assessment. Such decision may be appealed to the
circuit court within twenty days of the date of such decision,
and interest shall not accrue on the amount of taxes finally
determined to be due and owing.
Upon receipt of the tax bill from the sheriff, or, if
appealed, upon final determination of the amount of the
recaptured tax due and owing, an amount equal to the amount of
the recaptured tax shall constitute a lien against the property
until the tax has been paid and, if the tax is not paid within
thirty days of receipt of the bill or the final determination
upon appeal, interest shall accrue on that amount at the rate
then applicable to the late payment of property taxes, such
interest to be calculated from the date of the change of use.
The sheriff shall refuse to receive any tax payment due for thethen current tax year on real property until the delinquent
recaptured tax has been paid.
Recaptured taxes shall be distributed to the county
commissions, county boards of education and municipalities in the
same proportion as such tax revenues would have been originally
levied by or for and distributed to them. Any amount of
recaptured tax for years other than the then current year so
distributed to county boards of education shall not be included
in any calculations required to determine basic state aid for
schools pursuant to article nine-a, chapter eighteen of this
code, nor shall such amounts be included in any levy rate
reduction calculation pursuant to section six-e, six-f or six-g
of article eight of this chapter.
(d) Any penalties provided for in this chapter or elsewhere
in this code relating to failure to list any property or to file
any return or report may be applied to any owner of property who
fails to report a change in use of real estate taxed as managed
timberland within sixty days. The sheriff shall provide written
notice to each taxpayer of property assessed on the basis of use
as managed timberland of such penalties as well as notice of the
recapture provisions of this section, such notice to be attached
to the annual statement of taxes due and sent to the taxpayer.
For such failure to file within sixty days, an additional
amount of tax equal to the amount of property tax assessed for
the then current tax year shall be added to that required
pursuant to subsection (b) of this section for each year, orportion thereof, that such change was not reported. The sixty
day reporting period shall be included in determining the number
of months for which the additional amount of tax pursuant to this
subsection shall be charged.
(e) The provisions relating to recaptured taxes under this
section do not apply to any property sold at a foreclosure sale.
ARTICLE 8. LEVIES.
§11-8-5. Classification of property for levy purposes.
For the purpose of levies, property shall be classified as
follows:
Class I. All tangible personal property employed
exclusively in agriculture, including horticulture and grazing;
All products of agriculture (including livestock) while
owned by the producer;
All notes, bonds, bills and accounts receivable, stocks and
any other intangible personal property;
Class II. All property owned, used and occupied by the
owner exclusively for residential purposes;
All farms, including land used for horticulture and grazing,
occupied and cultivated by their owners or bona fide tenants;
All timberland properly certified as managed timberland;
Class III. All real and personal property situated outside
of municipalities, exclusive of Classes I and II;
Class IV. All real and personal property situated inside of
municipalities, exclusive of Classes I and II.
NOTE: The purpose of this bill is to require a method for
indicating taxation on managed timberland in land books; to
provide a penalty for failure to report such change in use; to
provide notice to taxpayers of recaptured tax and penalty
provision; and to provide time limits to report change in use.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§11-1C-11a is new; therefore, strike-throughs and
underscoring have been omitted.