H.
B. 4072
(By Delegates Martin, Mezzatesta, Michael and Willison)
[Introduced January 21, 1994; referred to the
Committee on the Judiciary.]
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 eleven of 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.
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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 several county 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 land books 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 the provisions 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 county which 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, or it 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 actual market 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 the property 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 the then 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, or portion 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.
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8
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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.
This bill is recommended by the West Virginia Forest Management Review Commission for passage during the 1994 Regular Session.
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