Senate Bill No. 432
(By Senators Plymale, Kessler (Mr. President), Kirkendoll, Prezioso, Stollings, Edgell, Beach, Fitzsimmons, D. Hall, Williams, Yost and Wells)
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[Introduced January 27, 2014; referred to the Committee on Education; and then to the Committee on Finance.]
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A BILL to amend and reenact §11-1C-5b of the Code of West Virginia, 1931, as amended; and to amend and reenact §18-9A-2, §18-9A-2a and §18-9A-11 of said code, all relating to calculating local share; changing the deadline for Tax Commissioner to report the total assessed values to the State Board of Education; delaying use of assessment ratio study for calculating local share until the second consecutive year, and consecutive years thereafter, that assessments are below sixty percent of market value including the ten-percent variance; creating assumption that all property in a county is assessed at sixty percent for the purpose of determining whether to use the sales ratio analysis in the calculation of local share when a valid sales ratio analysis cannot be obtained due to a lack of arm’s-length sales of property in a county; allowing Tax Commissioner to waive the use of the sales ratio analysis for calculating local share upon a showing by the assessor of that county that the preliminary sales ratio for the next succeeding year would meet the minimum ratio; delaying the increase in the percent of local levy rate for county boards of education used for calculating local share until the second consecutive year, and consecutive years thereafter, that assessments are below sixty percent of market value including the ten-percent variance; and requiring the state to use the most recent projections or estimations that may be available from the Tax Department for any estimation or preliminary computations of local share required prior to the report to the state board by the Tax Commissioner.
Be it enacted by the Legislature of West Virginia:
That §11-1C-5b of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that §18-9A-2, §18-9A-2a and §18-9A-11 of said code be amended and reenacted, all to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
§11-1C-5b. Assessment for purpose of calculating local share.
(a) This section is effective July 1, 2013, and distribution of state aid pursuant to the local share calculations made pursuant to this section shall occur during the 2014-2015 fiscal year and all fiscal years thereafter.
(b) The Tax Commissioner shall calculate the total assessed values for the purpose of calculating local share for each county each year pursuant to this section and report the total assessed values to the state Board of Education on or before December 1 March 1 of each year.
(c) To provide for assessors to assess at sixty percent of market value, it is the intent of the Legislature that local share, as set forth in section eleven, article nine-a, chapter eighteen of this code, be calculated assuming that the types of property included in the assessment ratio study in each county are assessed at a level in which the assessment ratio study indicates would be sixty percent of market value.
(d) For each of Classes II, III and IV as set forth in section five, article eight of this chapter, all real property of the type that is or would be included in the assessment ratio study if sold is assumed for the purpose of calculating local share to be assessed at the amount the property would be assessed at if all the property in the class were adjusted under the assumption that, using a ratio of sixty percent, all the property were under or over assessed under-assessed or over-assessed to the same extent as that property included in the assessment ratio study so that using the assessment ratio study as an indicator all the property in the class would be assessed at the ratio of sixty percent of market value, subject to the following:
(1) Provided, That If the sales ratio analysis indicates that assessments are within ten percent of sixty percent of market value, assessments are considered to be sixty percent of market value for the purposes of this section;
(2) For tax years beginning on and after the July 1, 2013, assessment date, for the first tax year when a county’s assessments are below sixty percent of market value, including the ten percent variance:
(A) The actual assessed values of the properties to which this subsection applies shall be used for the purposes of calculating local share; and
(B) In addition to any other sanctions and notices the Property Valuation Training and Procedures Commission may elect to adopt or apply, the commission shall, at a minimum, notify the county assessor that the sales ratio study indicates that assessments are below sixty percent of market value including the ten percent variance;
(3) For the second consecutive year that assessments are below sixty percent of market value including the ten percent variance, the use of the assumed assessed values shall be used for the purposes of calculating local share in the next succeeding tax year after the first tax year when a county’s assessments are below sixty percent of market value, including the ten percent variance, and for succeeding consecutive years thereafter until such time as assessments are not below sixty percent of market value, including the ten percent variance. For the purposes of this subsection, only tax years beginning on or after the July 1, 2013, assessment date may count as the first year;
(4) In any county for which a valid sales ratio analysis cannot be obtained, owing to a lack of arm’s-length sales of property in the county, it shall be assumed, for purposes of this section, that all property in that county is assessed at sixty percent of the appraised value, as determined by the Tax Commissioner; and
(5) Should a county fail in any year to meet the minimum sales ratio required by this section, the county may, upon express written waiver of the Tax Commissioner, be relieved of the penalties imposed by this section upon a showing by the assessor of that county that the preliminary sales ratio for the next succeeding year would meet the minimum ratio.
(e) The amount of the assumed assessed values determined pursuant to subsection (d) of this section shall be added to the actual assessed values of personal property, farmland, managed timberland, public utility property or any other centrally assessed property provided in paragraphs (A), (B), (C) and (D), subdivision (2), subsection (a), section five of this article and the sum of these values is the total assessed value for the purpose of calculating local share.
CHAPTER 18. EDUCATION.
ARTICLE 9A. PUBLIC SCHOOL SUPPORT.
§18-9A-2. Definitions.
For the purpose of this article:
(a) “State board” means the West Virginia Board of Education.
(b) “County board” or “board” means a county board of education.
(c) “Professional salaries” means the state legally mandated salaries of the professional educators as provided in article four, chapter eighteen-a of this code.
(d) “Professional educator” shall be synonymous with and shall have the same meaning as “teacher” as defined in section one, article one of this chapter, and includes technology integration specialists.
(e) “Professional instructional personnel” means a professional educator whose regular duty is as that of a classroom teacher, librarian, attendance director or school psychologist. A professional educator having both instructional and administrative or other duties shall be included as professional instructional personnel for that ratio of the school day for which he or she is assigned and serves on a regular full-time basis in appropriate instruction, library, attendance, or psychologist duties.
(f) “Professional student support personnel” means a “teacher” as defined in section one, article one of this chapter who is assigned and serves on a regular full-time basis as a counselor or as a school nurse with a bachelor’s degree and who is licensed by the West Virginia Board of Examiners for Registered Professional Nurses. For all purposes except for the determination of the allowance for professional educators pursuant to section four of this article, professional student support personnel are professional educators.
(g) “Service personnel salaries” means the state legally mandated salaries for service personnel as provided in section eight-a, article four, chapter eighteen-a of this code.
(h) “Service personnel” means all personnel as provided in section eight, article four, chapter eighteen-a of this code. For the purpose of computations under this article of ratios of service personnel to net enrollment, a service employee shall be counted as that number found by dividing his or her number of employment days in a fiscal year by two hundred: Provided, That the computation for any service person employed for three and one-half hours or less per day as provided in section eight-a, article four, chapter eighteen-a of this code shall be calculated as one-half an employment day.
(I) “Net enrollment” means the number of pupils enrolled in special education programs, kindergarten programs and grades one to twelve, inclusive, of the public schools of the county. Net enrollment further shall include:
(1) Adults enrolled in regular secondary vocational programs existing as of the effective date of this section, subject to the following:
(A) Net enrollment includes no more than one thousand of those adults counted on the basis of full-time equivalency and apportioned annually to each county in proportion to the adults participating in regular secondary vocational programs in the prior year counted on the basis of full-time equivalency; and
(B) Net enrollment does not include any adult charged tuition or special fees beyond that required of the regular secondary vocational student;
(2) Students enrolled in early childhood education programs as provided in section forty-four, article five of this chapter, counted on the basis of full-time equivalency;
(3) No pupil shall be counted more than once by reason of transfer within the county or from another county within the state, and no pupil shall be counted who attends school in this state from another state;
(4) The enrollment shall be modified to the equivalent of the instructional term and in accordance with the eligibility requirements and rules established by the state board; and
(5) For the purposes of determining the county’s basic foundation program, only, for any county whose net enrollment as determined under all other provisions of this definition is less than one thousand four hundred, the net enrollment of the county shall be increased by an amount to be determined in accordance with the following:
(A) Divide the state’s lowest county student population density by the county’s actual student population density;
(B) Multiply the amount derived from the calculation in paragraph (A) of this subdivision by the difference between one thousand four hundred and the county’s actual net enrollment;
(C) If the increase in net enrollment as determined under this subdivision plus the county’s net enrollment as determined under all other provisions of this subsection is greater than one thousand four hundred, the increase in net enrollment shall be reduced so that the total does not exceed one thousand four hundred; and
(D) During the 2008-2009 interim period and every three interim periods thereafter, the Legislative Oversight Commission on Education Accountability shall review the provisions of this subdivision to determine whether or not they properly address the needs of counties with low enrollment and a sparse population density.
(j) “Sparse-density county” means a county whose ratio of net enrollment, excluding any increase in the net enrollment of counties pursuant to subdivision (5) of the definition of net enrollment, to the square miles of the county is less than five.
(k) “Low-density county” means a county whose ratio of net enrollment, excluding any increase in the net enrollment of counties pursuant to subdivision (5) of the definition of net enrollment, to the square miles of the county is equal to or greater than five but less than ten.
(l) “Medium-density county” means a county whose ratio of net enrollment, excluding any increase in the net enrollment of counties pursuant to subdivision (5) of the definition of net enrollment, to the square miles of the county is equal to or greater than ten but less than twenty.
(m) “High-density county” means a county whose ratio of net enrollment, excluding any increase in the net enrollment of counties pursuant to subdivision (5) of the definition of net enrollment, to the square miles of the county is equal to or greater than twenty.
(n) “Levies for general current expense purposes” means ninety-four percent of the levy rate for county boards of education calculated or set by the Legislature pursuant to the provisions of section six-f, article eight, chapter eleven of this code: Provided, That beginning July 1, 2008, “levies for general current expense purposes” means ninety percent of the levy rate for county boards of education calculated or set by the Legislature pursuant to the provisions of section six-f, article eight, chapter eleven of this code: Provided, however, That effective July 1, 2010, the definitions definition set forth in this subsection are is subject to the provisions of section two-a of this article.
(o) “Technology integration specialist” means a professional educator who has expertise in the technology field and is assigned as a resource teacher to provide information and guidance to classroom teachers on the integration of technology into the curriculum.
(p) “State aid eligible personnel” means all professional educators and service personnel employed by a county board in positions that are eligible to be funded under this article and whose salaries are not funded by a specific funding source such as a federal or state grant, donation, contribution or other specific funding source not listed.
§18-9A-2a. Definition of levies for general current expense purposes.
(a) For the purposes of this section only, “property” means only Classes II, III and IV properties exclusive of natural resources property as defined in section ten, article one-c, chapter eleven of this code, personal property, farmland, managed timberland, public utility property or any other centrally assessed property provided in paragraphs (A), (B), (C) and (D), subdivision (2), subsection (a), section five, article one-c, chapter eleven of this code: Provided, That nothing in this subsection may be construed to require that levies for general current expense purposes be applied only to those properties that are included in this definition.
(b) For the purposes of this section only, the median ratio of the assessed values to actual selling prices in the assessment ratio study applicable to the immediately preceding fiscal year shall be used as the indicator to determine the percentage market value that properties are being assessed at.
(c) For tax years beginning on and after the July 1, 2013, assessment date, for the first tax year when a county’s assessments are below sixty percent of market value, including the ten percent variance, the requirements of subdivision (2), subsection (d), section five-b, article one-c, chapter eleven of this code shall apply.
(c) (d) Notwithstanding any other provision of this section or section two of this article, effective July 1, 2013 for any county that is not assessing property at least at fifty-four percent of market value for the second consecutive year that a county’s assessments are below sixty percent of market value including the ten percent variance and for any next succeeding consecutive years thereafter that assessments remain below that level, “levies for general current expense purposes” means ninety-eight percent of the levy rate for county boards of education set by the Legislature pursuant to section six-f, article eight, chapter eleven of this code. For the purposes of this subsection, only tax years beginning on or after the July 1, 2013, assessment date may count as the first year.
(d) (e) Any county that receives additional state aid due to its using a percentage less than ninety-eight percent in the calculation of levies for general current expense purposes, shall report to the state board how the additional state aid was used. The state board shall compile the reports from all the county boards into a single report, and shall report to the Legislative Oversight Commission on Education Accountability how the county boards used this additional state aid. The report shall be made annually as soon as practical after the end of each fiscal year.
§18-9A-11. Computation of local share; appraisal and assessment of property; public library support.
(a) On the basis of each county's certificates of valuation as to all classes of property as determined and published by the assessors pursuant to section six, article three, chapter eleven of this code for the next ensuing fiscal year in reliance upon the assessed values annually developed by each county assessor pursuant to the provisions of articles one-c and three of said chapter, the state board shall for each county compute by application of the levies for general current expense purposes, as defined in section two of this article, the amount of revenue which the levies would produce if levied upon one hundred percent of the assessed value of each of the several classes of property contained in the report or revised report of the value, made to it by the Tax Commissioner as follows:
(1) The state board shall first take ninety-five percent of the amount ascertained by applying these rates to the total assessed public utility valuation in each classification of property in the county; and
(2) The state board shall then apply these rates to the assessed taxable value of other property in each classification in the county as determined by the Tax Commissioner and shall deduct therefrom five percent as an allowance for the usual losses in collections due to discounts, exonerations, delinquencies and the like. All of the amount so determined shall be added to the ninety-five percent of public utility taxes computed as provided in subdivision (1) of this subsection and this total shall be further reduced by the amount due each county assessor's office pursuant to the provisions of section eight, article one-c, chapter eleven of this code and this amount shall be the local share of the particular county.
As to any estimations or preliminary computations of local share required prior to the report to the Legislature by the Tax Commissioner, the state shall use the most recent projections or estimations that may be available from the Tax Department for that purpose.
(b) Effective July 1, 2013, subsection (a) of this section is void and local share shall be calculated in accordance with the following:
(1) The state board shall for each county compute by application of the levies for general current expense purposes, as defined in sections two and two-a of this article, the amount of revenue which the levies would produce if levied upon one hundred percent of the assessed value calculated pursuant to section five-b, article one-c, chapter eleven of this code;
(2) Five percent shall be deducted from the revenue calculated pursuant to subdivision (1) of this subsection as an allowance for the usual losses in collections due to discounts, exonerations, delinquencies and the like; and
(3) The amount calculated in subdivision (2) of this subsection shall further be reduced by the sum of money due each assessor’s office pursuant to the provisions of section eight, article one-c, chapter eleven of this code and this reduced amount shall be the local share of the particular county.
As to any estimations or preliminary computations of local share required prior to the report to the state board by the Tax Commissioner pursuant to section five-b, article one-c, chapter eleven of this code, including computations necessary for the Governor’s proposed budget, the state shall use the most recent projections or estimations that may be available from the Tax Department for that purpose.
(c) Whenever in any year a county assessor or a county commission fails or refuses to comply with the provisions of this section in setting the valuations of property for assessment purposes in any class or classes of property in the county, the State Tax Commissioner shall review the valuations for assessment purposes made by the county assessor and the county commission and shall direct the county assessor and the county commission to make corrections in the valuations as necessary so that they comply with the requirements of chapter eleven of this code and this section and the Tax Commissioner shall enter the county and fix the assessments at the required ratios. Refusal of the assessor or the county commission to make the corrections constitutes grounds for removal from office.
(d) For the purposes of any computation made in accordance with the provisions of this section, in any taxing unit in which tax increment financing is in effect pursuant to the provisions of article eleven-b, chapter seven of this code, the assessed value of a related private project shall be the base-assessed value as defined in section two of said article.
(e) For purposes of any computation made in accordance with the provisions of this section, in any county where the county board of education has adopted a resolution choosing to use the provisions of the Growth County School Facilities Act set forth in section six-f, article eight, chapter eleven of this code, estimated school board revenues generated from application of the regular school board levy rate to new property values, as that term is designated in said section, may not be considered local share funds and shall be subtracted before the computations in subdivisions (1) and (2), subsection (a) of this section or in subdivisions (2) and (3), subsection (b) of this section, as applicable, are made.
(f) The Legislature finds that public school systems throughout the state provide support in varying degrees to public libraries through a variety of means including budgeted allocations, excess levy funds and portions of their regular school board levies as may be provided by special act. A number of public libraries are situated on the campuses of public schools and several are within public school buildings serving both the students and public patrons. To the extent that public schools recognize and choose to avail the resources of public libraries toward developing within their students such legally recognized elements of a thorough and efficient education as literacy, interests in literature, knowledge of government and the world around them and preparation for advanced academic training, work and citizenship, public libraries serve a legitimate school purpose and may do so economically. For the purposes of any computation made in accordance with the provisions of this section, the library funding obligation on the regular school board levies which is created by a special act and is due and payable from the levy revenues to a library shall be paid from the county school board’s discretionary retainage, which is hereby defined as the amount by which the regular school board levies exceeds the local share as determined hereunder. If the library funding obligation which is created by a special act and is due and payable to a library is greater than the county school board’s discretionary retainage, the library funding obligation created by the special act is amended and is reduced to the amount of the discretionary retainage, notwithstanding any provisions of the special act to the contrary. Any excess of the discretionary retainage over the library funding obligation shall be available for expenditure by the county board in its discretion for its properly budgeted purposes.
(g) It is the intent of the Legislature that whenever a provision of subsection (f) of this section is contrary to any special act of the Legislature which has been or may in the future be enacted by the Legislature that creates a library funding obligation on the regular school board levy of a county, subsection (f) of this section controls over the special act. Specifically, the special acts which are subject to said subsection upon the enactment of this section during the 2007 regular session of the Legislature include:
(1) Enrolled Senate Bill No. 11, passed on February 12, 1970, applicable to the Berkeley County Board of Education;
(2) Enrolled House Bill No. 1352, passed on April 7, 1981, applicable to the Hardy County Board of Education;
(3) Enrolled Committee Substitute for House Bill No. 2833, passed on March 14, 1987, applicable to the Harrison County Board of Education;
(4) Enrolled House Bill No. 161, passed on March 6, 1957, applicable to the Kanawha County Board of Education;
(5) Enrolled Senate Bill No. 313, passed on March 12, 1937, as amended by Enrolled House Bill No. 1074, passed on March 8, 1967, and as amended by Enrolled House Bill No. 1195, passed on January 18, 1982, applicable to the Ohio County Board of Education;
(6) Enrolled House Bill No. 938, passed on February 28, 1969, applicable to the Raleigh County Board of Education;
(7) Enrolled House Bill No. 398, passed on March 1, 1935, applicable to the Tyler County Board of Education;
(8) Enrolled Committee Substitute for Senate Bill No. 450, passed on March 11, 1994, applicable to the Upshur County Board of Education; and
(9) Enrolled House Bill No. 2994, passed on March 13, 1987, applicable to the Wood County Board of Education.
(h) Notwithstanding any provision of any special act set forth in subsection (g) of this section to the contrary, the county board of any county with a special act creating a library obligation out of the county’s regular school levy revenues may transfer that library obligation so that it becomes a continuing obligation of its excess levy revenues instead of an obligation of its regular school levy revenues, subject to the following:
(1) If a county board chooses to transfer the library obligation pursuant to this subsection, the library funding obligation shall remain an obligation of the regular school levy revenues until the fiscal year in which the excess levy is effective or would have been effective if it had been passed by the voters;
(2) If a county board chooses to transfer the library obligation pursuant to this subsection, the county board shall include the funding of the public library obligation in the same amount as its library funding obligation which exists or had existed on its regular levy revenues as one of the purposes for the excess levy to be voted on as a specifically described line item of the excess levy: Provided, That if the county board has transferred the library obligation to the excess levy and the excess levy fails to be passed by the voters or the excess levy passes and thereafter expires upon the time limit for continuation as set forth in section sixteen, article eight, chapter eleven of this code, then in any subsequent excess levy which the county board thereafter submits to the voters the library funding obligation again shall be included as one of the purposes of the subsequent excess levy as a specifically described line item of the excess levy;
(3) If a county board chooses to transfer the library obligation pursuant to this subsection, regardless of whether or not the excess levy passes, effective the fiscal year in which the excess levy is effective or would have been effective if it had been passed by the voters, a county’s library obligation on its regular levy revenues is void notwithstanding any provision of the special acts set forth in subsection (g) of this section to the contrary; and
(4) Nothing in subdivision (3) of this subsection prohibits a county board from funding its public library obligation voluntarily.
NOTE: The purpose of this bill is to delay the imposition of penalties until a county’s assessments are below the constitutionally required 60% of market value including the 10% variance for two consecutive years; changing the Tax Commissioner’s deadline for reporting the total assessed values to the state Board of Education from December 1 to March 1; requiring that in any county for which a valid sales ratio analysis cannot be obtained due to a lack of arm’s-length sales of property in the county it be assumed that all property in the county is assessed at 60% for the purpose of determining whether to use the sales ratio analysis for calculating local share; allowing the Tax Commissioner to waive the use of the sales ratio analysis for calculating local share upon a showing by the Assessor that the preliminary sales ratio for the next succeeding year would meet the minimum ratio; and providing that the state use the most recent projections or estimations that may be available from the Tax Department for the purpose of estimations or preliminary computation of local share required prior to the report to the state board by the Tax commissioner.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.