|Two important constitutional amendments were introduced in the Senate Tuesday. A constitutional amendment requires 2/3 vote of each body for passage but only a simple majority at the ballot box. Both are referenced to Judiciary and Finance Committees.
Senate Joint Resolution (SJR 8) proposes an amendment to the Constitution, amending article X by adding a new section referred to as the Manufacturing Growth Amendment. The amendment would exempt tangible manufacturing machinery and equipment personal property from ad valorem property taxation, providing for phased-in reduction until fully exempted. The amendment also provides for phased-in increases of annual appropriations and continuing annual appropriations into perpetuity to replace the revenue that the levying bodies – counties, school boards, and, to a lesser extent, municipalities receive. The amendment would empower the Legislature to enact general law to carry out this amendment if it passes. It would be designated “Amendment No. 1,” the “Manufacturing Growth Amendment” and the purpose as stated on the ballot would be: “To amend the State Constitution by elimination from ad valorem taxation tangible manufacturing inventory, machinery and equipment personal property directly used in manufacturing business activity, and providing permanent replacement revenue for affected levying bodies and levies.”
The idea for exempting business personal property tax in order to stimulate manufacturing growth has been discussed since at least the tax reform study completed in Governor Underwood’s 2nd administration. The problem has always been how to replace the estimated $150 million in revenue to counties and school boards (estimates vary depending on how broad the exemption would be).
This resolution is the mechanism for the Senate to put into motion Senate President Carmichael’s priority of removing the business inventory tax.
SJR 9 proposes an amendment to the Constitution, also amending article X by adding a new section, relating to legislative authority related to ad valorem taxation and assessment of tangible personal property. Essentially, it takes away the constitutional protection of personal property taxation altogether and gives it to the Legislature.
The Legislature would gain the authority to exempt any species of tangible personal property from ad valorem taxation and it would also allow the Legislature to reduce the rate of taxation or assessment for any species of tangible personal property. Many types of personal property have been provided a reduction to “salvage value” or 5% taxation (Examples: pollution control facilities, special manufacturing production property, qualified capital additions, special aircraft properties, and high-tech business properties). There has always been a question of constitutionality for use of salvage value but it has never been challenged. Passage of this amendment would assure its constitutionality and allow the Legislature to provide for other reductions in personal property taxation.
It would also remove the principle of uniformity in taxation. Under this amendment, uniformity would no longer be required among the different species of tangible personal property and would allow for different statewide rates of taxation and assessment for any tangible personal property. On the ballot, the amendment would be designated as the “Amendment Authorizing the Legislature to Eliminate or Lower the Ad Valorem Tax on Motor Vehicles and Any Other Tangible Personal Property” and will be stated: “The purpose of this amendment is to permit the Legislature to eliminate or lower the ad valorem personal property tax on different species of tangible personal property, such as motor vehicles; to permit the Legislature to establish different statewide rates of taxation, assessment, or methods of valuation for different species of tangible personal property; and to permit the Legislature to classify property as real property or personal property for ad valorem taxation.”
In addition to these resolutions, the Senate passed three bills, which will now go before the House for consideration.
The first bill to receive a vote was SB 125, which will prohibit victims in sexual offense prosecutions from being subjected to certain physical examinations. The bill was drafted to protect the privacy of these individuals and the argument was made that such examinations may not be sufficient for evidence in their case.
The Senate then passed SB 217, which requires the Department of Health and Human Resources to collaborate with the Workforce Development Board and the WV Division of Personnel for job placement.
The third bill passed was SB 323, which authorizes Department of Administration to promulgate rules relating to legislation.