HB 3044 Text

H. B. 3044

(By Mr. Speaker, Mr. Kiss, and Delegate Trump)

[By Request of the Executive]

[Introduced February 18, 2003; referred to the

Committee on Finance.]

A BILL to repeal article thirteen-b, chapter eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend chapter seven of said code by adding thereto a new article, designated article twenty-two; to amend and reenact section eleven-a, article ten, chapter eleven of said code; and to amend and reenact section nine-f, article fifteen of said chapter eleven, all relating to sales tax increment financing.

Be it enacted by the Legislature of west Virginia:

That article thirteen-b, chapter eight of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; that chapter seven of said code be amended by adding thereto a new article, designated article twenty-two, that section eleven-a, article ten, chapter eleven of said code be amended and reenacted; and that section nine-f, article fifteen of said chapter eleven be amended and reenacted, all to read as follows:
CHAPTER 7. COUNTY COMMISSIONS AND OFFICERS.
ARTICLE 22. COUNTY ECONOMIC OPPORTUNITY DEVELOPMENT DISTRICTS.
§7-22-1. Short title.

This article is known and may be cited as the "County Economic Opportunity Development District Act."
§7-22-2. Legislative findings and declaration of purpose.

The Legislature finds that many significant business opportunities initiated within the counties of this state face financial and other economic obstacles. This adversely affects the economic and general well-being of the citizens of those counties. Establishment of economic opportunity development districts within counties of the state, in accordance with the purpose and powers set forth in this article, will serve a public purpose, and promote the health, safety, prosperity, security and general welfare of all citizens in the state. It will also promote the vitality of significant business opportunities within counties, while serving as an effective means for developing or restoring and promoting retail and other business activity within the economic opportunity development districts created herein. This will be of special benefit to the tax base of the counties within which any economic development district is created under this article and will stimulate economic growth and job creation.
§7-22-3. Definitions.

For purposes of this article, the term:

(1) "Council" means the council for community and economic development established in section two, article two, chapter five-b of this code;

(2) "County commission" means the governing body of a county of this state;

(3) "Development expenditures" means payments for governmental functions, programs, activities, facility construction, improvements and other goods and services which a district board is authorized to perform or provide under section five of this article.

(4) "District" means an economic opportunity development district created pursuant to this article;

(5) "District board" means a district board created pursuant to section ten of this article;

(6) "Eligible property" means any taxable or exempt real property located in a district established pursuant to this article; and

(7) "Gross annual district tax revenue amount" means the total amount of consumers sales and service tax actually remitted to the tax commissioner by retailers maintaining places of business within the district with respect to sales made and services rendered by such retailers from a location within the district for the twelve full calendar months immediately preceding the filing of an application pursuant to section seven of this article.

§7-22-4. Authorization to create economic opportunity development districts.

A county commission may, in accordance with the procedures and subject to the limitations set forth in this article:

(1) Create one or more economic opportunity development districts within its county.

(2) Provide for the administration and financing of development expenditures within the districts; and

(3) Provide for the administration and financing of a continuing program of development and redevelopment expenditures within the districts.
§7-22-5. Development expenditures.

Any county commission that has established an economic opportunity development district under this article may make, or authorize to be made by a district board and other public or private parties, such development expenditures as will promote the economic vitality of the district and the general welfare of the county, including, but not limited to, expenditures for the following purposes:

(1) Beautification of the district, by means such as landscaping and construction and erection of fountains, shelters, benches, sculptures, signs, lighting, decorations and similar amenities;

(2) Provision of special or additional public services, such as sanitation, security for persons and property and the construction and maintenance of public facilities including, but not limited to, sidewalks, parking lots, parking garages, and other public areas;

(3) Making payments for principal, interest, issuance costs, any of the costs described in section eighteen of this article and appropriate reserves for bonds and other instruments and arrangements issued or entered into by the county commission for financing the expenditures of the district described in this section and to otherwise implement the purposes of this article;

(4) Providing financial support for public transportation and vehicle parking facilities open to the general public, whether physically situate within the district's boundaries or on adjacent land;

(5) Acquiring, building, demolishing, razing, constructing, repairing, reconstructing, refurbishing, renovating, rehabilitating, expanding, altering, otherwise developing, operating and maintaining real property generally, parking facilities, commercial structures and other capital improvements to real property, fixtures and tangible personal property, whether or not physically situate within the district's boundaries: Provided, That the expenditure directly benefits the district;

(6) Developing plans for the architectural design of the district and portions thereof, and developing plans and programs for the future development of the district;

(7) Developing, promoting and supporting community events and activities open to the general public that benefit the district;

(8) Providing the administrative costs for a district management program;

(9) Providing for the usual and customary maintenance and upkeep of all improvements and amenities in the district as may be commercially reasonable and necessary to sustain its economic viability on a permanent basis;

(10) Providing any other services that the county commission or district board is authorized to perform and which the county commission does not also perform to the same extent on a county-wide basis;

(11) Making grants to the owners or tenants of economic opportunity development district for the purposes described in this section;

(12) Acquiring an interest in any entity or entities that own any portion of the real property situate in the district and contributing capital to any such entity or entities; and

(13) To do any and all things necessary, desirable or appropriate to carry out and accomplish the purposes of this article notwithstanding any provision of this code to the contrary.
§7-22-6. Notice; hearing.

(a) General. -- A county commission desiring to create an economic opportunity development district shall conduct a public hearing.

(b) Notice of hearing. -- Notice of the public hearing shall be published as a class I-0 legal advertisement in compliance with article three, chapter fifty-nine of this code, at least twenty days prior to the scheduled hearing. In addition to the time and place of the hearing, the notice must also state:

(1) The purpose of the hearing;

(2) The name of the proposed district;

(3) The general purpose of the proposed district;

(4) The property proposed to be included in the district; and

(5) The proposed method of financing any costs involved, including the base and rate of special district excise tax that may be imposed upon sales of tangible personal property and taxable services from business locations situated within the proposed district.

(c) Opportunity to be heard. -- At the time and place set forth in the notice, the county commission shall afford the opportunity to be heard to any owner of real property situated in the proposed district and any residents of the county.

(d) Application to council. -- If the county commission, following the public hearing, determines it advisable and in the public interest to establish an economic opportunity development district, it shall apply to the council for community and economic development for approval of the economic opportunity development district project pursuant to the procedures provided in section seven of this article.

§7-22-7. Application to council for community and economic development for approval of an economic opportunity development district project.

(a) General. -- The council for community and economic development shall receive and act on applications filed with it by county commissions pursuant to section six of this article. Each application must include:

(1) A true copy of the notice described in section six of this article;

(2) A general description of the capital improvements, additional or extended services and other proposed development expenditures to be made in the district;

(3) A description of the proposed method of financing the development expenditures, together with a description of the reserves to be established for financing on-going development or redevelopment expenditures necessary to permanently maintain the optimum economic viability of the district following its inception: Provided, That the amounts of such reserves shall not exceed the amounts that would be required by ordinary commercial capital market considerations;

(4) A description of the sources and anticipated amounts of all such financing, including, but not limited to, proceeds from the issuance of any bonds, or other instruments, revenues from the special district excise tax and enhanced revenues from property taxes and fees;

(5) A description of the financial contribution of the county commission to the funding of development expenditures;

(6) Identification of any businesses that the county commission expects to relocate their business locations from the district to another place in the state in connection with the establishment of the district, or from another place in this state to the district: Provided, That for purposes of this article, any such entities shall be designated "relocated entities";

(7) Identification of any businesses currently conducting business in the proposed economic opportunity development district that the county commission expects to continue doing business there after the district is created;

(8) A good faith estimate of the aggregate amount of consumers sales and service tax that was actually remitted to the tax commissioner by all business locations identified as provided in subdivisions (6) and (7)of this subsection (a) with respect to their sales made and services rendered from their then current business locations, that will be relocated from, or to, or remain in the district, for the twelve full calendar months next preceding the date of the application: Provided, That for purposes of this article, such aggregate amount shall be designated as "the base tax revenue amount"; a good faith estimate of the gross annual district tax revenue amount; and the proposed application of any surplus from all funding sources to further the objectives of this article: Provided, That the amount of all development expenditures proposed to be made in the first twenty-four months following the creation of the district shall be not less than fifty million dollars.

(b) Additional criteria. - The council may establish other criteria for consideration when approving the applications: Provided, That the council shall act to approve or not approve any such application within thirty days following the receipt of the application.

(c) Certification of project. -- If the committee approves a county's economic opportunity district project application, it shall issue to the county commission a written certificate evidencing the approval.

(1) The certificate shall expressly state a base tax revenue amount, the gross annual district tax revenue amount, and the estimated net annual district tax revenue amount, which, for purposes of this article, shall be the difference between the gross annual district tax revenue amount and the base tax revenue amount all of which the council shall have determined with respect to the district's application based on such investigation as it may deem reasonable and necessary, including, but not limited to, any relevant information the council shall request from the tax commissioner and the tax commissioner provides to the council: Provided, That, in determining the net annual district tax revenue amount, the council may not use a base tax revenue amount less than that amount certified by the tax commissioner but, in lieu of confirmation from the tax commissioner of the gross annual district tax revenue amount, the council may use the estimate of the gross annual district tax revenue amount provided by the county commission pursuant to subsection (a) of this section.

(d) Promulgation of rules. -- The council may promulgate rules to implement the economic opportunity development district project application approval process and to describe the criteria and procedures it has established in connection therewith. These rules are not subject to the provisions of chapter twenty-nine-a of this code, but shall be filed with the secretary of state.

§7-22-8. Establishment of the economic opportunity development district fund.

(a) General. -- There is hereby created a special revenue account in the state treasury, designated the "economic opportunity development district fund," which shall be an interest-bearing account and shall be invested in the manner described in section nine-c, article six, chapter twelve of the code, with the interest income a proper credit of the fund.

(b) District sub-account. -- A separate and segregated sub-account within the account shall be established for each economic opportunity development district that is approved by the council and authorized by the Legislature pursuant to subsection (c) of this section. Funds paid into the account for the credit of any such sub-account may also be derived from the following sources:

(1) All interest or return on the investment accruing to the sub-account;

(2) Any gifts, grants, bequests, transfers, appropriations or donations which may be received from any governmental entity or unit or any person, firm, foundation, or corporation; and

(3) Any appropriations by the Legislature which may be made for this purpose.
§7-22-9. Authorization to levy special district excise tax.

(a) General. -- County commissions have no inherent authority to levy taxes and have only that authority expressly granted to them by the Legislature. Because a special district excise tax has the effect of diverting, for a specified period of years, tax dollars that otherwise would go into the general revenue fund of this state, no economic opportunity development district excise tax may be levied by a county commission until after the Legislature expressly authorizes the county commission to levy a special district excise tax on sales of tangible personal property and services made within district boundaries approved by the Legislature.

(b) Authorizations. -- The Legislature authorizes the following county commissions to levy special district excise taxes on sales of tangible personal property and services made from business locations in the following economic opportunity development districts:

The Ohio county commission may levy a special district excise tax for the benefit of the "Fort Henry" economic opportunity development project district, which comprises three hundred contiguous acres of land.

§7-22-10. Ordinance to create district as approved by council and authorized by the Legislature.

(a) General. -- If an economic opportunity development district project has been approved by the council, and the levying of a special district excise tax for the district has been authorized by the Legislature, all in accordance with this article, the county commission may create the district by order entered of record as provided for in article one of this chapter: Provided, That the county commission may not amend, alter or change in any manner the boundaries of the economic opportunity development district authorized by the Legislature. In addition to all other requirements, the order shall contain the following:

(1) The name of the district and a description of its boundaries;

(2) A summary of any proposed services to be provided and capital improvements to be made within the district and a reasonable estimate of any attendant costs;

(3) The base and rate of any special district excise tax that may be imposed upon sales by businesses for the privilege of operating within the district, which tax shall be passed on to and paid by the consumer, and the manner in which the taxes will be imposed, administered and collected, all of which shall be in conformity with the requirements of this article; and

(4) The district board members' terms, their method of appointment and a general description of the district board's powers and duties, which powers may include the authority:

(A) To make and adopt all necessary bylaws and rules for its organization and operations not inconsistent with any applicable laws;

(B) To elect its own officers, to appoint committees and to employ and fix compensation for personnel necessary for its operations;

(C) To enter into contracts with any person, agency, government entity, agency or instrumentality, firm, partnership, limited partnership, limited liability company or corporation, including both public and private corporations, and for-profit and not-for-profit organizations, and generally to do any and all things necessary or convenient for the purpose of promoting, developing and advancing the purposes described in section two of this article;

(D) To amend or supplement any contracts or leases or to enter into new, additional or further contracts or leases upon such terms and conditions, for such consideration and for such term of duration, with or without option of renewal, as may be agreed upon by the district board and such person, agency, government entity, agency or instrumentality, firm, partnership, limited partnership, limited liability company or corporation;

(E) To, unless otherwise provided for in, and subject to the provisions of, such contracts, or leases, to operate, repair, manage, and maintain such buildings and structures and provide adequate insurance of all types, and in connection with the primary use thereof and incidental thereto to provide such services, such as retail stores and restaurants, and to effectuate such incidental purposes, grant leases, permits, concessions or other authorizations to any person or persons, upon such terms and conditions, for such consideration and for such term of duration as may be agreed upon by the district board and such person, agency, governmental department, firm or corporation;

(F) To delegate any authority given to it by law to any of its officers, committees, agents or employees;

(G) To apply for, receive and use grants-in-aid, donations and contributions from any source or sources, and to accept and use bequests, devises, gifts and donations from any person, firm or corporation;

(H) To acquire real property by gift, purchase or construction, or in any other lawful manner, and hold title thereto in its own name and to sell, lease or otherwise dispose of all or part of such real property which it may own, either by contract or at public auction, upon the approval by the district board;

(I) To purchase or otherwise acquire, own, hold, sell, lease and dispose of all or part of any personal property which it may own, either by contract or at public auction;

(J) Pursuant to a determination by the district board that there exists a continuing need for redevelopment expenditures, and that moneys or funds of the district are necessary therefor, to borrow money and execute and deliver the district's negotiable notes and other evidences of indebtedness therefor, on such terms as the district shall determine, and give such security therefor as shall be requisite, including, without limitation, a pledge of the district's rights in its sub-account of the downtown district redevelopment fund;

(K) To acquire (either directly or on behalf of the municipality) an interest in any entity or entities that own any real property situate in the district, to contribute capital to such entity or entities and to exercise the rights of an owner with respect thereto; and

(L) To expend its funds in the execution of the powers and authority herein given, which expenditures, by the means authorized herein, are hereby determined and declared as a matter of legislative finding to be for a public purpose and use, in the public interest, and for the general welfare of the people of West Virginia, to alleviate and prevent economic deterioration and to relieve the existing critical condition of unemployment existing within the state.

(b) Additional contents of order. -- The county commission's order shall also state the general intention of the county commission to develop and increase services and to make capital improvements within the district.

(c) Mailing of certified copies of order. - Upon entry of an order establishing an economic opportunity development district excise tax, a certified copy of the order shall be mailed to the state auditor, as ex officio the chief inspector and supervisor of public offices, the state treasurer and the tax commissioner.
§7-22-11. District board; duties.

(a) General. -- The county commission of a county that has been authorized by the Legislature to establish an economic opportunity development district, in accordance with this article, shall provide, by order entered of record, for the appointment of a district board to oversee the operations of the district: Provided, That the county commission may, by order, in lieu of appointing a separate district board, designate itself to act as the district board.

(b) Composition of board. -- If a separate district board is to be appointed, it shall be made up of at least seven members, two of which shall be owners, or representatives of owners, of real property situated in the economic opportunity development district, and the other five shall be residents of the county within which the district is located.

(c) Annual report. -- The district board, in addition to the duties prescribed by the order creating the district, shall submit an annual report to the county commission and the council containing:

(1) An itemized statement of its receipts and disbursements for the preceding fiscal year;

(2) A description of its activities for the preceding fiscal year;

(3) A recommended program of services to be performed and capital improvements to be made within the district for the coming fiscal year; and

(4) A proposed budget to accomplish its objectives.

(d) Conflict of interest exception. -- Nothing in this article prohibits any member of the district board from also serving on the board of directors of a nonprofit corporation with which the county commission may contract to provide specified services within the district.

(e) Compensation of board members. -- Each member of the district board may receive reasonable compensation for services on the board, in the amount determined by the county commission: Provided, That when a district board is not created for the district but the work of the board is done by the county commission, the county commissioners shall receive no additional compensation.
§7-22-12. Special district excise tax authorized.

(a) General. -- The county commission of a county, authorized by the Legislature to levy a special district excise tax for the benefit of an economic opportunity development district, may, by order entered of record, impose that tax on the privilege of selling tangible personal property and rendering select services in the district in accordance with this section.

(b) Tax base. -- The base of a special district excise tax imposed pursuant to this section shall be identical to the base of the consumers sales and service tax imposed pursuant to article fifteen, chapter eleven of this code on sales made and services rendered within the boundaries of the district: Provided, That, except for the exemption provided in section nine-f of article fifteen, chapter eleven of this code, all exemptions and exceptions from the consumers sales and service tax shall also apply to the special district excise tax and sales of gasoline and special fuel shall not be subject to special district excise tax but shall remain subject to the tax levied by article fifteen, chapter eleven of this code.

(c) Tax rate. -- The rate of a special district excise tax levied pursuant to this section shall be stated in an order entered of record by the county commission and shall be equal to the general rate of tax on each dollar of gross proceeds from sales of tangible personal property and services subject to the tax levied by section three, article fifteen, chapter eleven of this code. The tax on fractional parts of a dollar shall be levied and collected in conformity with the provision of section three of said article fifteen.

(d) Collection by tax commissioner. -- The order of the county commission imposing a special district excise tax shall provide for the tax to be collected by the tax commissioner in the same manner as the tax levied by section three, article fifteen, chapter eleven of this code is administered, assessed, collected and enforced.

(e) Deposit of net tax collected. --

(1) The order of the county commission imposing a special district excise tax shall provide that the tax commissioner shall deposit the net amount of tax collected in the special economic opportunity development district fund to the credit of the county commission's sub-account therein for the economic opportunity development district, and that the money in the sub-account may only be used to pay for development expenditures as provided in this article, except as provided in subsection (f) of this section.

(2) The state treasurer shall withhold from the county commission's sub-account in the economic opportunity development district fund, and shall deposit in the general revenue fund of this state, on or before the twentieth day of each calendar month next following the effective date of a special district excise tax, a sum equal to one-twelfth of the base tax revenue amount last certified by the council pursuant to section seven of this article.

(f) Effective date of special district excise tax. -- Any taxes imposed pursuant to the authority of this section shall be effective on the first day of the calendar month that begins on or after the date of adoption of an order entered of record imposing such tax, or at such later date expressly designated in the ordinance that begins on the first day of a calendar month.

(g) Copies of order. -- Upon entry of an order levying a special district excise tax, a certified copy of the order shall be mailed to the state auditor, as ex officio the chief inspector and supervisor of public offices, the state treasurer and the tax commissioner.
§7-22-13. Requisition of district sub-account funds.

(a) Sixty days after collection of a special district excise tax begins, the state auditor shall, upon receipt of a monthly requisition from the district board, issue his or her warrant on the state treasurer for the funds requested from the district's sub-account, which funds shall be applied for the purposes described in section five of this article, and the state treasurer shall pay the warrant out of funds in the sub-account.
§7-22-14. Modification of included area; notice; hearing.

(a) General. -- The order creating an economic opportunity development district may not be amended to include additional contiguous property until after the amendment is approved by the council in the same manner as an application to approve the establishment of the district is acted upon under section seven of this article and the amendment is authorized by the Legislature.

(b) Limitations. -- Additional property may not be included in the district unless it is situated within the boundaries of the county and is contiguous to the then current boundaries of the district.

(1) The county commission of any county desiring to so amend its order shall designate a time and place for a public hearing upon the proposal to include additional property. The notice shall meet the requirements set forth in section six of this article.

(2) At the time and place set forth in the notice, the county commission shall afford the opportunity to be heard to any owners of real property either currently included in or proposed to be added to the existing district and to any other residents of the county.

(d) Application to council. -- Following such hearing, the county commission may, by resolution, apply to the council to approve inclusion of the additional property in the district.

(e) Consideration by council. -- Before the council approves inclusion of the additional property in the district, the council shall determine the amount of taxes levied by article fifteen, chapter eleven of this code that were collected by businesses located in the area the county commission proposes to add to the district, in the same manner as the base amount of tax was determined when the district was first created. The state treasurer shall also deposit one twelfth of this additional tax base amount into the general revenue fund each month, as provided in section twelve of this article.

(g) Legislative action required. -- After the council approves amending the boundaries of the district the Legislature must amend section nine of this article to allow levy of the special district excise tax on business located in geographic area to be included in the district. After the Legislature amends section nine of this article, the county commission may then amend its order: Provided That the order may not be effective any earlier than the first day of the calendar month that begins thirty days after the effective date of the act of the Legislature authorizing the levy the special district excise tax on businesses located in geographic area to be added to the boundaries of the district for which the tax is levied, or such later date as set forth in the order of the county commission.

(h) Collection of special district excise tax. -- All businesses included in a district because of the boundary amendment shall on the effective date of the order, determined as provided in subsection (g) of this section, collect the special district excise tax on all sales on tangible property or services made from locations in the district on or after the effective date of the county commission's order, or such later date as set forth in the order.

§7-22-15. Abolishment and dissolution of district; notice; hearing.

(a) General. -- Except upon the express written consent of the council and of all the holders or obligees of any indebtedness or other instruments the proceeds of which were applied to any development or redevelopment expenditures or any indebtedness the payment of which is secured by revenues payable into the fund provided under section eight of this article or by any public property, a district may only be abolished by the county commission when there is no outstanding indebtedness the proceeds of which were applied to any development or redevelopment expenditures or the payment of which is secured by revenues payable into the fund provided under section eight of this article, or by any public property, and following a public hearing upon the proposed abolishment.

(b) Notice of public hearing. -- Notice of the public hearing required by subsection (a) of this section shall be provided by first class mail to all owners of real property within the district and shall be published as a class I-0 legal advertisement in compliance with article three, chapter fifty-nine of this code, at least twenty days prior to the public hearing.

(c) Transfer of district assets and funds. -- Upon the abolishment of any economic opportunity development district, any funds or other assets, contractual rights or obligations, claims against holders of indebtedness or other financial benefits, liabilities or obligations, existing after full payment has been made on all existing contracts, bonds, notes or other obligations of the district, shall be transferred to and assumed by the county commission. Any funds or other assets so transferred shall be used for the benefit of the area included in the district being abolished.

(d) Reinstatement of district. -- Following abolishment of a district pursuant to this section, its reinstatement shall require compliance with all requirements and procedures set forth in this article for the initial development, approval, establishment and creation of an economic opportunity development district.

§7-22-16. Bonds issued to finance economic opportunity development district projects.

(a) General. -- The county commission that established the economic opportunity development district may issue bonds or notes for the purpose of financing development expenditures, as described in section five of this article, with respect to one or more projects within the economic opportunity development district.

(b) Limited obligations. -- All bonds and notes issued by a county commission under the authority of this article shall be limited obligations of the county.

(c) Term of obligations. -- No county commission may issue notes, bonds or other instruments for funding district projects or improvements that exceed a repayment schedule of thirty years.

(d) Debt service. -- The principal and interest on the bonds shall be payable out of the funds on deposit in the sub-account established for the economic opportunity development district pursuant to section eight of this article, including without limitation any funds derived from the special district excise tax imposed by section twelve of this article, or other revenues derived from the economic opportunity development district, to the extent pledged for such purpose by the county commission in the resolution authorizing the bonds.

(e) Surplus funds. -- To the extent that the average daily amount on deposit in the sub-account established for a district pursuant to section eight of this article exceeds, for more than six consecutive calendar months, the sum of (1) one hundred thousand dollars, plus (2) the amount required to be kept on deposit pursuant to the documents authorizing, securing or otherwise relating to the bonds or notes issued under this section, then such excess shall be used by the district either to redeem the bonds or notes previously issued or shall be remitted to the general fund of this state.

(e) Debt not general obligation of county. -- Neither the notes or bonds and any interest coupons issued under the authority of this article shall never constitute an indebtedness of the county commission issuing the same within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary liability of the county commission issuing the same.

(f) Debt not a charge general credit or taxing powers of county. -- Neither the bonds, or notes, nor interest thereon shall be a charge against the general credit or taxing powers of the county commission and that fact shall be plainly stated on the face of each such bond or note.

(g) Issuance of bonds or notes. --

(1) Bonds or notes allowed under this section may be executed, issued and delivered at any time and from time to time; may be in such form and denomination; may be of such tenor, must be negotiable but may be registered as to the principal thereof or as to the principal and interest thereof; may be payable in such amounts and at such time or times; may be payable at such place or places; may bear interest at such rate or rates payable at such place or places and evidenced in such manner; and may contain such provisions therein not inconsistent herewith, all as shall be provided in the order or orders of the county commission whereunder the bonds or notes are authorized to be issued.

(2) The bonds may be sold by the county commission at public or private sale at, above or below par, as the county commission shall authorize.

(3) Bonds and notes issued pursuant to this article shall be signed by the president of the county commission, or other chief officer thereof, and attested by the county clerk, and be under the seal of the county.

(4) Any coupons attached to the bonds shall bear the facsimile signature of the president of the commission, or other chief officer thereof. In case any of the officials whose signatures appear on the bonds, notes or coupons shall cease to be such officers before the delivery of the bonds or notes, their signatures shall, nevertheless, be valid and sufficient for all purposes to the same extent as if they had remained in office until the delivery.

(h) Additional bonds or notes. -- If the proceeds of the bonds or notes, by error of calculation or otherwise, shall be less than the cost of the economic opportunity development district project, or if additional real or personal property is to be added to the district project or if it is determined that financing is needed for additional development or redevelopment expenditures, additional bonds or notes may in like manner be issued to provide the amount of the deficiency, or to defray the cost of acquiring or financing such additional real or personal property or such development or redevelopment expenditures, and unless otherwise provided for in the trust agreement, mortgage or deed of trust, shall be deemed to be of the same issue, and shall be entitled to payment from the same fund, without preference or priority, and shall be of equal priority as to any security.
§7-22-17. Security for bonds.

(a) General. -- Unless the county commission shall otherwise determine in the resolution authorizing the issuance of the bonds or notes under the authority of this article, there is hereby created a statutory lien upon the sub-account created pursuant to section eight of this article and all special district excise tax revenues collected for the benefit of the district pursuant to section eleven-a, article ten, chapter eleven of this code, for the purpose of securing the principal of said bonds or notes and the interest thereon.

(b) Security for debt service. -- The principal of and interest on any bonds or notes issued under the authority of this article shall be secured by a pledge of the special district excise tax revenues derived from the economic opportunity development district project by the county commission issuing the bonds or notes to the extent provided in the resolution adopted by the county commission authorizing the issuance of the bonds or notes.

(1) In the discretion and at the option of the county commission, the bonds and notes may also be secured by a trust indenture by and between the county commission and a corporate trustee, which may be a trust company or bank having trust powers, within or without the state of West Virginia.

(2) The resolution authorizing the bonds or notes and fixing the details thereof may provide that the trust indenture may contain such provisions for the protection and enforcing the rights and remedies of the bondholders as may be reasonable and proper, not in violation of law, including covenants setting forth the duties of the county commission in relation to the construction, acquisition or financing of an economic opportunity development district project, or part thereof, or an addition thereto, and the improvement, repair, maintenance and insurance thereof, and for the custody, safeguarding and application of all moneys, and may provide that the economic opportunity development district project shall be constructed and paid for under the supervision and approval of the consulting engineers or architects employed and designated by the county commission or, if directed by the county commission in the resolution, by the district board, and satisfactory to the purchasers of the bonds or notes, their successors, assigns or nominees, who may require the security given by any contractor or any depository of the proceeds of the bonds or notes or the revenues received from the district project be satisfactory to such purchasers, their successors, assigns or nominees.

(3) The indenture may set forth the rights and remedies of the bondholders, the county commission or such trustee, and said indenture may provide for accelerating the maturity of the revenue bonds, at the option of the bondholders or the county commission issuing the same, upon default in the payment of the amounts due under the bonds.

(4) The county commission may also provide by resolution and in the trust indenture for the payment of the proceeds of the sale of the bonds or notes and the revenues from the economic opportunity development district project to such depository as it may determine, for the custody and investment thereof and for the method of distribution thereof, with such safeguards and restrictions as it may determine to be necessary or advisable for the protection thereof and upon the filing of a certified copy of such resolution or of the indenture for record in the office of the clerk of the county commission of the county in which the economic opportunity develo0pment project is located, the same shall have the same effect, as to notice, as the recordation of a deed of trust or other recordable instrument.

(5) In the event that more than one such certified resolution or indenture is so recorded, the security interest granted by the first such recorded resolution or indenture shall have priority in the same manner as an earlier filed deed of trust except to the extent such earlier recorded resolution or indenture provides otherwise.

(d) Mortgage or deed of trust. --

(1) In addition to or in lieu of the indenture provided for in subsection (c) of this section, the principal of and interest on the bonds or notes may, but need not, be secured by a mortgage or deed of trust covering all or any part of the economic opportunity development district project from which the revenues so pledged may be derived, and the same may be secured by an assignment or pledge of the income received from the economic opportunity development district project.

(2) The proceedings under which such bonds or notes are authorized to be issued, when secured by a mortgage or deed of trust, may contain the same terms, conditions and provisions provided for herein when an indenture is entered into between the county commission and a trustee and any such mortgage or deed of trust may contain any agreements and provisions customarily contained in instruments securing bonds or notes, including, without limiting the generality of the foregoing, provisions respecting the fixing and collection of revenues from the economic opportunity development district project covered by such proceedings or mortgage, the terms to be incorporated in any lease, sale or financing agreement with respect to such economic opportunity development district project, the improvement, repair, maintenance and insurance of such downtown redevelopment district project, the creation and maintenance of special funds from the revenues received from the economic opportunity development district project and the rights and remedies available in event of default to the bondholders or note holders, the county commission, or to the trustee under an agreement, indenture, mortgage or deed of trust, all as the county commission body shall deem advisable and as shall not be in conflict with the provisions of this article or any existing law: Provided, That in making any such agreements or provisions a county commission shall not have the power to incur original indebtedness by indenture, ordinance, resolution, mortgage or deed of trust, except with respect to the economic opportunity development district project and the application of the revenues therefrom, and shall not have the power to incur a pecuniary liability or a charge upon its general credit or against its taxing powers unless approved by the voters in accordance with article one, chapter thirteen of this code, or as otherwise permitted by the constitution of this state.

(e) Enforcement of obligations. --

(1) The proceedings authorizing any bonds hereunder and any indenture, mortgage or deed of trust securing such bonds may provide that, in the event of default in payment of the principal of or the interest on such bonds, or notes, or in the performance of any agreement contained in such proceedings, indenture, mortgage or deed of trust, such payment and performance may be enforced by the appointment of a receiver in equity with power to charge and collect rents or other amounts and to apply the revenues from the economic opportunity development district project in accordance with such proceedings or the provisions of such agreement, indenture, mortgage or deed of trust.

(2) Any such agreement, indenture, mortgage or deed of trust may provide also that, in the event of default in such payment or the violation of any agreement contained in the mortgage or deed of trust, the agreement, indenture, mortgage or deed of trust may be foreclosed either by sale at public outcry or by proceedings in equity and may provide that the holder or holders of any of the bonds secured thereby may become the purchaser at any foreclosure sale, if the highest bidder therefor.

(f) No pecuniary liability. -- No breach of any such agreement, indenture, mortgage or deed of trust shall impose any pecuniary liability upon a municipality or any charge upon its general credit or against its taxing powers.
§7-22-18. Redemption of bonds.

The revenue bonds issued pursuant to this article may contain a provision therein to the effect that they, or any of them, may be called for redemption at any time prior to maturity by the county commission, and at such redemption prices, or premiums, which terms shall be stated in the bond.
§7-22-19. Refunding bonds.

(a) Any bonds issued hereunder and at any time outstanding may at any time and from time to time be refunded by a county commission by the issuance of its refunding bonds in such amount as the county commission may deem necessary to refund the principal of the bonds so to be refunded, together with any unpaid interest thereon; to make any improvements or alterations in the downtown redevelopment district project; and any premiums and commissions necessary to be paid in connection therewith.

(b) Any such refunding may be effected whether the bonds to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds thereof for the redemption of the bonds to be refunded thereby, or by exchange of the refunding bonds for the bonds to be refunded thereby: Provided, That the holders of any bonds so to be refunded shall not be compelled without their consent to surrender their bonds for payment or exchange prior to the date on which they are payable or, if they are called for redemption, prior to the date on which they are by their terms subject to redemption.

(c) Any refunding bonds issued under the authority of this article shall be subject to the provisions contained in section sixteen of this article and shall be secured in accordance with the provisions of section seventeen of this article.
§7-22-20. Use of proceeds from sale of bonds.

(a) General. -- The proceeds from the sale of any bonds issued under authority of this article shall be applied only for the purpose for which the bonds were issued: Provided, That any accrued interest received in any such sale shall be applied to the payment of the interest on the bonds sold: Provided, however, That if for any reason any portion of such proceeds may not be needed for the purpose for which the bonds were issued, then such unneeded portion of said proceeds may be applied to the purchase of bonds for cancellation or payment of the principal of or the interest on said bonds, or held in reserve for the payment thereof.

(b) Payment of costs. -- The costs that may be paid with the proceeds of the bonds include all development and redevelopment costs described in section five of this article and may also include but not be limited to the following:

(1) The cost of acquiring any real estate deemed necessary;

(2) The actual cost of the construction of any part of an economic opportunity development district project which may be constructed, including architects', engineers', financial or other consultants' and legal fees;

(3) The purchase price or rental of any part of an economic opportunity development district project that may be acquired by purchase or lease;

(4) All expense incurred in connection with the authorization, sale and issuance of the bonds to finance such acquisition, and the interest on such bonds for a reasonable time prior to construction, during construction, and for not exceeding twelve months after completion of construction; and

(5) Any other costs and expenses reasonably necessary in the establishment and acquisition of such economic opportunity development district project and the financing thereof.
§7-22-21. Bonds made legal investments.

Bonds issued under the provisions of this article shall be legal investments for banks, building and loan associations, and insurance companies organized under the laws of this state and for a business development corporation organized pursuant to chapter thirty-one, article fourteen of this code.
§7-22-22. Exemption from taxation.

The revenue bonds and notes issued pursuant to this article and the income therefrom shall be exempt from taxation except inheritance, estate and transfer taxes; and the real and personal property which a county commission or district board may acquire pursuant to the provisions of this article, shall be exempt from taxation by the state, or any county, municipality, or other levying body, as public property, so long as the same is owned by such county commission or district board.
CHAPTER 11. TAXATION.
ARTICLE 10. TAX PROCEDURE AND ADMINISTRATION.

§11-10-11a. Administration of special district excise tax; commission authorized.

(a) Any ~~municipality~~ county commission which, pursuant to section ~~eleven~~ twelve, article ~~thirteen-b~~ twenty-one, chapter ~~eight~~ seven of this code, imposes a special district excise tax, shall, by express provision in the ~~ordinance~~ order imposing that tax, authorize the state tax commissioner to administer, assess, collect and enforce that tax on behalf of and as its agent.

(1) The ~~municipality~~ county commission shall make such authorization by the adoption of a provision in its order levying a special district excise tax ~~ordinance~~ stating its purpose and referring to this section, and providing that such ~~ordinance~~ order shall be effective on the first day of a month at least sixty days after its adoption.

(2) A certified copy of ~~such ordinance~~ the order shall be forwarded to the state auditor, the state treasurer and the tax commissioner so that it will be received within five days after its adoption.

(b) Any special district excise tax administered under this section shall be administered and collected by the tax commissioner in the same manner and subject to the same interest, additions to tax and penalties as provided for the tax imposed in article fifteen of this chapter.

(c) All special district excise tax moneys collected by the tax commissioner under this section shall be paid into the state treasury to the credit of each ~~municipality's~~ county commission's sub-account in the ~~downtown redevelopment~~ economic opportunity development district fund created pursuant to section ~~eight~~ nine, article ~~thirteen-b~~ twenty-one, chapter ~~eight~~ seven of this code for the particular economic opportunity development district. Such special district excise tax moneys shall be credited to the sub-account of each particular ~~municipality~~ county commission levying a special district excise tax being administered under this section. The credit shall be made to the sub-account of the ~~municipality~~ county commission for the economic opportunity development district in which the taxable sales were made and services rendered as shown by the records of the tax commissioner and certified by him or her monthly to the state treasurer, namely, the location of each place of business of every vendor collecting and paying the tax to the tax commissioner without regard to the place of possible use by the purchaser.

(d) As soon as practicable after the special district excise tax moneys have been paid into the state treasury in any month for the preceding reporting period, the district board may issue a requisition to the auditor requesting issuance of a state warrant for the proper amount in favor of each ~~municipality~~ county commission entitled to the monthly remittance of its special district excise tax moneys.

(1) Upon receipt of the requisition, the auditor shall issue his warrant on the state treasurer for the funds requested, and the state treasurer shall pay the warrant out of the sub-account.

(2) If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers, or to some other fact, the errors shall be corrected and adjustments made in the payments for the next six months as follows: one-sixth of the total adjustment shall be included in the payments for the next six months. In addition, the payment shall include a refund of amounts erroneously not paid to the ~~municipality~~ county commission and not previously remitted during the three years preceding the discovery of the error.

(3) A correction and adjustment in payments described in this subsection due to the misallocation of funds by the vendor shall be made within three years of the date of the payment error.

(e) Notwithstanding any other provision of this code to the contrary, the tax commissioner shall deduct, and retain for the benefit of his or her office for expenditure pursuant to appropriation of the Legislature, from each payment into the state treasury as provided in subsection (c) of this section, one percent thereof as a commission to compensate his or her office for the discharge of the duties described in this section.
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.

§11-15-9f. Exemption for sales and services subject to special district excise tax.

Notwithstanding any provision of this article to the contrary, any sale or service upon which a special district excise tax is paid, pursuant to the provisions of section ~~eleven~~ twelve, article ~~thirteen-b~~ twenty-one, chapter ~~eight~~ seven of this code, shall be exempt from the tax imposed by this article.

NOTE: The purpose of this bill is to repeal W.Va. Code §8-13B-1 et seq., which would allow one municipality to create a downtown redevelopment district and to impose a special district excise tax and to give authority to county commissions to create economic opportunity districts and to, after authorization by the Legislature, to impose a 6% district excise tax that would apply to sales of tangible personal property and taxable services made within the district in lieu of the 6% consumers sales and service tax.

§§7-22 is new, therefore, strike-throughs and underscoring have been omitted.

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

Print On Demand