CITY OF HUNTINGTON by gdf57j

VIEWS: 27 PAGES: 119

									CITY OF HUNTINGTON
    800 Fifth Avenue
                                         WEST VIRGINIA
     P.O. Box 1659
  Huntington, WV 25717


Kim Wolfe, Honorable Mayor

Brandi Jacobs-Jones, Director
of Administration and Finance

                                  HOME RULE

                                 PILOT PROGRAM
                                   Revised 2010




City Council:
James Ritter – District 1
Teresa Loudermilk – District 2
Frances Jackson – District 3
Nate Randolph – District 4
Sandra Clements – District 5
Mark Bates – District 6
Scott Caserta – District 7
Russell Houck – District 8
Jim Insco – District 9
Steve Williams – At Large
Rebecca Thacker – At Large
                                                                City of Huntington,
                                                                      West Virginia



                               TABLE OF CONTENTS


A.   Executive Summary


B.   Section I – Narrative

     1. Land Bank Fast Track Authority

     2. Local Options for Addressing Fire Damaged to Residential/Commercial
        Structures

     3. Increased Capacity to Collect Fees/Taxes

     4. Municipal Occupation Tax/Municipal Retail Sales Tax

            a. Data Narrative
            b. Fiscal Impact of Occupation Tax
            c. Estimated Revenue Impact of Tax Reform


C.   Section II – Ordinances

     1. Land Bank Fast Track Authority

     2. Local Options for Addressing Fire Damage to Residential/Commercial
        Structures

     3. Repeal of Local Options for Addressing Fire Damage to
        Residential/Commercial Structures Ordinance

     4. Municipal Service Fee

     5. Municipal Occupation Tax

     6. Municipal Sales, Service and Use Tax

     7. Business and Occupation Tax – Elimination on Manufacturing and Reduction
        on Retail and Service Businesses
                                                                              City of Huntington,
                                                                                    West Virginia

   The City of Huntington Home Rule Pilot Program
   Executive Summary

   Huntington is a community with unlimited potential. We have a major university, excellent
   hospitals, and a reemerging central business district. As a result we are the nucleus of a
   geographical area that extends as far away as Pike County, KY and Scioto County, OH.
   While the population within Huntington city limits was once approaching 100,000, census
   estimates now have the population under 50,000. As our population has decreased, our
   obligations to our residents have not. We have many challenges to deal with, and having a
   declining tax base only adds more burdens to the remaining residents and businesses that call
   Huntington home. We have outlined solutions to what we see as some of our most pressing
   short-term and long-term challenges.

   1. Land Bank Fast Track Authority
   The ability to tackle our increasing dilapidated-structure problem may be accomplished by
   simplifying the process for us to create a land banking authority. These structures are
   magnets to curious children as well as ill-intended criminals. By allowing cities to become
   more involved in the tax lien process, we will be able to demolish the dangerous buildings
   more quickly and, even better, make it easier to transfer to entities that will rehabilitate these
   buildings. Once rehabilitated, they can again be productive taxpayers to the city, county, and
   state while bringing up surrounding property values.

   On August 24, 2009, City Council passed an ordinance (Article 1760) to establish a Land
   Bank Fast Track Authority. The purpose of the ordinance is to stabilize neighborhoods,
   preserve and increase property value, and reduce the expense and burden on the state and its
   subdivisions of the tax lien sale system.

   The ordinance is based on a Michigan law that provides for the establishment of a Land
   Bank Fast Track Authority. The Michigan model illustrates how a Land Bank Fast Track
   Authority reduces the burden and expense of tax delinquent properties to the state and units
   of local government. The ordinance is a hybrid between the Michigan model and the existing
   West Virginia tax lien process that was worked out in consultation with the Cabell County’s
   Chief Tax Deputy. The ordinance provides for:

       •   The creation of a Land Bank Fast Track Authority
       •   The right of first refusal to purchase all delinquent tax liens within the city
       •   Boarding up, repair, or demolition of properties while holding the tax lien and
           recovery of the costs as additional statutory costs at the time of redemption
       •   1% interest per month earned on the tax liens to be used to fund the Land Bank Fast
           Track Authority as provided in current statutes
       •   The assembly and possession of lots that are not redeemed and provide for the quick
           return to the tax roles

   The Land Bank Authority will take over and manage properties with funds that would have
   gone to out-of-state investors under the current system. The proposal will also provide an




Home Rule Pilot Program                                                                           Page 1
                                                                             City of Huntington,
                                                                                   West Virginia

   immediate benefit to the County and State by providing for the sale of 100% of all tax liens
   in the city.
   A petition has been filed for a writ of mandamus by Prospector, LLC, against the Cabell
   County Sheriff involving provisions in the land bank ordinance.

   On October 21, 2009, Circuit Judge Jane Hustead allowed the city to intervene in the
   petition for a writ of mandamus and asked the city and attorney David Lockwood, who is
   representing Prospector, to file briefs on the case. The petition centers on a provision in the
   city’s land bank ordinance that allows the city to purchase liens on tax-delinquent properties
   prior to the county’s annual tax auctions. Prospector argues in the petition, however, that all
   tax liens must be sold to the highest bidder at a public auction.

   The petition in the underlying litigation simply says that the proposed land bank ordinance
   conflicts with state law (which of course it does) and that it also conflicts with the West
   Virginia Constitution. Clearly, the City does not believe there is any conflict with Sec. 39 and
   39a of the West Virginia Constitution. We believe this argument is utterly without merit.
   The petition does not challenge the home rule statute itself but merely challenges the land
   bank ordinance. The City of Huntington is currently in the process of finishing its motion
   for summary judgment, and then the petitioner will file their motion for summary
   judgment. If we suffer an adverse ruling before the circuit court, it is expected that we would
   file an immediate appeal before the West Virginia Supreme Court.

   Attorney Mike Woelfel, who represents Sheriff McComas, has filed an answer to the petition
   saying the sheriff plans to adhere to state law and sell all tax liens to the highest bidder at
   auction. According to a report in the Herald-Dispatch, the sheriffs of Cabell and Wayne
   counties say they will not comply with the Huntington ordinance that allows the city to
   purchase liens on tax-delinquent properties prior to the counties’ annual tax auctions.

   Cabell Sheriff Tom McComas and Wayne Sheriff Greg Farley say they have consulted with
   the state Auditor’s Office about Huntington’s new land bank ordinance and have been
   advised that it conflicts with state law.

   According to state laws that govern county tax auctions, all tax-delinquent property must be
   sold at the auction, McComas said. “The city is under the impression that the home rule
   statute gives them the authority to pre-empt state law and acquire property in advance of an
   auction,” McComas said. “Unless I’m ordered otherwise by a court, I’m going to abide by
   what state law says.” “I’ll bend over backward to help the city of Huntington in any way I
   can, but I just can’t break state law,” Farley added. “Sheriff McComas and I are in complete
   agreement on this.”

   This is the second Home Rule ordinance that has been challenged. The City of Huntington
   believes that ordinances passed under the state home rule program carry the same weight as
   any other legislation and “allow deviation from current state statutes, policies, rules and
   responsibilities that prevent or restrict the carrying out of duties and responsibilities in a
   cost-effective, efficient and timely manner.”
    




Home Rule Pilot Program                                                                         Page 2
                                                                            City of Huntington,
                                                                                  West Virginia

   The Cabell County Tax Lien Sale took place on November 12, 2009, in accordance with the
   traditional method of tax sale. The City was represented at the lien sale by Councilman Nate
   Randolph, who is also the President of Huntington Urban Renewal Authority (HURA), and
   Director of Development and Planning Charles Holley. HURA purchased approximately 70-
   75% of the tax liens within the corporate limits where 100% of all tax liens were
   sold. Huntington city leaders walked into the Cabell County Courthouse with a $1.5 million
   line of credit and they walked out of the county’s tax sale with tax liens to 229 properties.
   Randolph indicated that approximately half of this amount was purchased at the minimum
   bid of delinquent taxes.

   A final outcome on this case is pending.

   2. Local options for Addressing Fire Damage to Residential/Commercial Structures
   The City of Huntington’s original application for the West Virginia Home Rule Pilot
   Program contained a provision requiring insurance companies to set aside a portion of
   insurance proceeds for demolition. In 2010, the West Virginia Legislature passed a Fire
   Insurance Proceeds Bill that eliminates the need for this issue to be addressed by the Home
   Rule Pilot Program. The following is a summary of events that lead up to the signing of the
   bill:

   On October 24, 2008, Council for the City of Huntington passed an ordinance (Article 954)
   based on Section 3929.25 and 3929.86 of the Ohio Revised Code that calls for insurance
   companies to transfer a portion of the proceeds from a fire insurance claim to the Finance
   Director of the City of Huntington (Approved ordinance is Attachment B). If the owner
   pays to rebuild or tear down the fire-damaged property within a certain amount of time, the
   money transferred to the Finance Director will be returned to the owner. If the owner walks
   away from the property, the City would use the money in the account to pay for demolition
   of the burned property.

   Members of the City of Huntington’s Home Rule team had several meetings with
   representatives of the Insurance Commissioner’s office and the West Virginia Insurance
   Federation while working out the details of the ordinance. The Insurance Federation took
   issue with the City of Huntington enacting an ordinance that set out different guidelines than
   those used in other parts of the state. As a potential compromise, the City agreed to work
   with State legislators on a solution that would be consistent across the state and delayed the
   effective date of the article until July 1, 2009.

   On July 1, 2009 the Insurance Federation filed the lawsuit against the city of Huntington in
   Cabell Circuit Court. The lawsuit was prompted by the enactment of the ordinance. The
   West Virginia Insurance Federation contended in the lawsuit that the Home Rule Pilot
   Program giving Huntington and three other cities home rule powers is unconstitutional and
   should be terminated.

   The City of Huntington worked closely with Governor Joe Manchin and our legislators on a
   bill that would allow counties and municipalities to place a statutory lien on a portion of fire
   insurance proceeds when there is a total loss. Governor Manchin proposed the bill during




Home Rule Pilot Program                                                                         Page 3
                                                                          City of Huntington,
                                                                                West Virginia

   the West Virginia Legislature’s regular session in January and touted its potential while
   touring several dilapidated structures in Huntington in March.

   On June 16, 2010, Governor Manchin signed the Fire Insurance Proceeds Bill into law. The
   bill was a compromise between Huntington and the Insurance Federation.

   3. Increased Capacity to Collect City Fee/Taxes
   Increased ability to collect taxes and fees would also help to ensure that people are paying
   their fair share. Many business and individuals evade their obligations, as they know of the
   inabilities we have in collecting from them. The lien process giving Huntington higher
   priority would help ensure that the public is being reimbursed while requiring the property
   owners with delinquent fees to be made current.

   The Huntington City Council passed an ordinance (Article 773.12-14) on August 24, 2009,
   which requires all landowners to pay the City any past-due refuse, municipal or other fees
   prior to transfer of property. The ordinance became effective on October 1, 2009. The new
   ordinance requires owners and closing agents to check for past-due balances with the City
   prior to a sale. The fees are removed from the sale proceeds and forwarded to the City after
   the closing. Any balances owed the City after a closing will become the responsibility of the
   new owner, thus giving the new owner a basis for legal action against the previous owner or
   closing agent. Since enactment, the City of Huntington has collected in excess of $50,000.00
   in delinquent fees.

   The Huntington City Council passed an ordinance (Article 773.15) on October 26, 2009,
   modeled after HB2723 (with a few changes using Home Rule powers) which allows the City
   to place a lien against any property which owes past-due municipal or refuse fees. The
   ordinance allows the Legal Department to place liens without the costly and time-consuming
   judgment lien process. Taxpayers are afforded a 90-day due process period (as is in HB2723)
   and a hearing before the Municipal Service Fee Board prior to liens being placed. This
   ordinance acts as a second defense against properties being transferred with past-due
   balances. Since enactment over 2,600 “Notice of Lien” letters have been sent to property
   owners and the process of perfecting said liens has been initiated.

   4. Municipal Occupation Tax / Municipal Retail Sales Use Tax
   Allowing for an occupation tax and local option sales tax would provide needed revenue to
   reduce and in some cases eliminate the B & O tax. The B & O tax has been a major
   disincentive for businesses as evidenced by the businesses that have located just outside our
   city limits and often across the Ohio River into Lawrence County, OH. The City would also
   receive enough revenue to eliminate the regressive $3-per-week User Fee.

   The imposition of these two new taxes would allow enough revenue to eliminate the B & O
   tax on manufacturing, reduce in half the B & O tax on retailers and reduce in half the B & O
   tax on service businesses. While we would be imposing the occupation tax on all who work
   in the city, we see that the system is very successful in other communities within our
   metropolitan area (at even higher rates than those proposed here). Additionally, other
   communities within our geographic region also have local option sales taxes at the same rate
   as the proposed local option sales tax.



Home Rule Pilot Program                                                                      Page 4
                                                                          City of Huntington,
                                                                                West Virginia


   Occupation taxes collected in excess of $7 million per fiscal year must be used for much-
   needed capital improvements. Recent economic events have reduced B&O revenue from
   construction activities by nearly $2 million dollars. These much needed capital improvement
   revenue dollars can be partially restored with these new revenue sources. Collections above
   $9 million per year require additional tax/fee reductions in the following fiscal
   year. Huntington is the hub of the Tri-State, and as such, must have a tax system that allows
   for all who benefit from its services to pay. The proposed occupation tax and sales tax
   allows for a wider tax base based on small (1%) contributions from all users of services
   (residents, employees, businesses and visitors).

   On Monday August 9, 2010, Huntington City Council approved a 1% occupation tax
   (maximum of $1,250 per calendar year), a 1% sales tax and B & O reductions. The
   occupation tax becomes effective October 1, 2010 and the sales tax and B & O reductions
   become effective April 1, 2011.




Home Rule Pilot Program                                                                      Page 5
                                                                            City of Huntington,
                                                                                  West Virginia

   Section I
   A. Narrative

   1. Land Bank Fast Track Authority

   Proposed Solution Area(s): Organizational & Administrative

   Specific state laws, policy rule or regulation in question
   West Virginia Code §11A-1-1 et. sec.

   A. Specific Problem
   Collection and enforcement of property taxes allows government to collect the taxes due,
   but encourages urban decay.

   The good intentions of the declaration of legislative purpose and policy have failed to
   produce the desired benefits; the policy has contributed greatly to slum and blighting
   conditions and to the decline of Huntington’s residential neighborhoods.

   The purpose of the enactment was:

       •    To provide for the speedy and expeditious enforcement of tax claims of the state and
            its subdivisions
       •    To provide for the transfer of delinquent and nonentered land to those more
            responsible to, or better able to bear, the duties of citizenship than the former
            owners
       •    To permit deputy commissioners of delinquent and nonentered lands to sell lands
            without the necessity of proceedings in the circuit courts
       •    To reduce the expense and burden on the state and its subdivisions of tax sales

   The provisions that were intended to provide for the speedy and expeditious enforcement of
   tax claims has resulted in a slow-moving process. There is not a set time limit on how long
   the process will take under West Virginia Law. The process simply takes as long as it takes.

   A piece of property is placed for auction at a county’s annual tax lien sale if the taxes on the
   property are delinquent for the previous year. At the sale, people bid on the tax lien, or the
   tax debt on the property, not the property itself. According to Tom Bell, the former Cabell
   County Chief Tax Deputy, the minimum bid must cover the taxes for the previous year and
   the current year. The money collected from the minimum bids is disbursed to the county
   and its levying bodies. Any amount that a lien holder bids above the minimum price is
   placed into the Sale of Tax Lien Surplus Fund.

   If a lien is purchased at a tax sale, the original property owner has 18 months to pay the taxes
   plus 1% interest per month. That money, including the interest, is then given to the lien
   holder. The lien holder receives the amount bid above the minimum price.




Home Rule Pilot Program                                                                         Page 6
                                                                             City of Huntington,
                                                                                   West Virginia

   “It’s a process by which the lien holder can receive a pretty good return on their
   investment,” Bell said. “I don’t know of too many places these days where you can get a
   12% annual return.”

   If the original property owner, however, fails to pay the taxes within 18 months, the lien
   holder has the option of taking title of the property or forfeiting his or her bid when
   returning the property to the original property owner.

   “When it reaches this point, it has been three-and-a-half years from the time that the original
   property owner stopped paying their taxes,” Bell said. “The whole process is crazy, because
   we’re teaching people to not pay their taxes. People call in all the time asking what the last
   day is to pay their taxes before they lose their property. In the meantime, nothing productive
   is happening with the property.”

   The tax foreclosure process can take even longer if a property lien goes unsold at a county
   sale. In that case, it is sent to the State Auditor’s Office, which gives the original property
   owner another 18 months to pay the taxes before the property falls into a statewide
   delinquent tax sale. “If the property lien is purchased at the State sale, the original property
   owner has another 90 to 120 days to redeem the property before the title is transferred to a
   new owner,” said Russ Rollyson, a Deputy State Auditor who handles delinquent real estate.

   “If the property is not sold at a delinquent land sale, then anyone can walk into our office
   and make us an offer,” said Rollyson. “That happens a lot, too.”

   If the property goes unsold, it can remain with the Deputy State Auditor for any amount of
   time until someone offers a bid that is agreeable and approved by the auditor. Additional
   blighting conditions are created when the property is finally purchased. West Virginia Code
   §16-18-3 defines defective or unusual conditions of title as a condition of blight. Under the
   tax lien process the purchaser of a tax lien must take additional steps to secure a tax deed.
   The tax deed is a quitclaim deed and the County does not promise that the buyer will obtain
   clear title to the property. A quitclaim deed neither warrants, nor professes, that the grantor’s
   claim is actually valid. It fails to meet all five traditional tests of a true deed found in
   common law and the purchaser must, in addition to securing the tax deed, institute a “quiet
   title” action in court to obtain clear title.

   Proposed Solution
   Flint, Michigan and Huntington, WV may be hundreds of miles apart, but they share the
   same dilemma. Both are fighting to stop the advancement of urban decay that is fueled by
   population loss.

   Urban researchers and planners across the country, however, say Flint is a leading example
   of how communities can aggressively manage dilapidated housing problems by making tax-
   delinquent properties available for redevelopment.

   Flint has suffered from a slow progression of layoffs at General Motors over the past 30
   years. In the 1970s, the company employed 79,000 people in Flint alone. The city’s




Home Rule Pilot Program                                                                          Page 7
                                                                            City of Huntington,
                                                                                  West Virginia

   population came close to 200,000. Today, GM employs 15,000 in Flint, which now has a
   population of 118,000.

   “We were a one-company town that was devastated when the company was forced to make
   adjustments,” said Dan Kildee, Treasurer for Genesee County, in which Flint is located.

   With that came rampant housing vacancy and abandonment problems that were exacerbated
   by a tax foreclosure system that kept tax-reverted properties out of circulation and prevented
   them from being redeveloped for up to seven years. Except for a few minor differences,
   Michigan’s old tax foreclosure system mirrors the same system West Virginia uses today, he
   said.

   Under the Michigan model, the process takes two years or less. The City of Huntington’s
   proposal would reduce the process to 18 months. Under the proposal, a Land Bank Fast
   Track Authority would be created. The Authority would purchase 100% of the tax liens at
   the County sale. The Authority will take title to all properties that are not redeemed in the
   18-month redemption period.

   B. Specific Problem
   The provisions, intended to provide for the transfer of delinquent and nonentered land to
   those more responsible or better able to bear the duties of citizenship than the former
   owners, have not met the desired outcome. The buyers in such transactions are typically
   motivated by money and show little interest or responsibility with the property; in turn, there
   is little thought placed into the effect the delinquent properties have on surrounding
   neighborhoods.

   Tax lien sales attract different people for different reasons, but there are generally three
   broad groups, according to Tom Bell. The three categories are: out-of-state investment
   companies, local rental property landlords, and average citizens not in the real estate
   business.

   The first, and largest group, are out-of-state investment companies looking to make a quick
   profit, he said. “These companies have no interest in acquiring real estate,” Bell said.
   “Instead, they purchase a large number of delinquent tax tickets at a sale in hopes that the
   property owner will pay taxes months later so they can collect interest. All these companies
   are looking for is the 12% annual return on their investment," Bell said.

   At the Cabell County 2006 tax sale, 501 tax tickets were sold. Of those, 121, or 24%, were
   purchased by Sun Rise Atlantic LLC, an investment company based in Atlanta, GA. Thirty
   other tax tickets were purchased by a group listed as Sass Muni V DTR, which, according to
   the Cabell County Clerk’s Office, is an investment company based in Philadelphia, PA.

   According to Bell, landlords who are looking to acquire rental property at a bargain-
   basement price comprise the second group that regularly attends tax sales. “[The landlords’
   way of] thinking is that if they can [purchase] an undesirable piece of property for a couple
   thousand dollars, then they can turn it into rental property and make their money back
   within a few months,” he said.



Home Rule Pilot Program                                                                        Page 8
                                                                            City of Huntington,
                                                                                  West Virginia


   The third tier of individuals who purchase tax liens are average citizens looking to acquire a
   specific piece of property, Bell said. It might be a side lot they are looking to buy or the
   dilapidated house next door that is dragging down the value of their own home. “They have
   to up their bids considerably to ensure they get the property,” he said.

   Proposed Solution
   In Michigan, county tax lien sales were always full of out-of-state investors looking for a
   return on their investment or landlords seeking inexpensive property. “It’s a system that
   creates a speculator market and allows the devaluation of not only the tax-delinquent
   property, but also neighboring properties,” Kildee said. “It’s an economic model that doesn’t
   play out well in weak-market neighborhoods.”
   The Land Bank Fast Track Authority will have the right of first refusal to all liens at the tax
   lien sale. It is anticipated that 100% of all liens will be purchased by the Authority, which
   eliminates speculators and out-of-state investors looking to make a quick profit. The
   Authority would receive 1% interest per month on all properties redeemed. The funds
   would provide a means to sustain the Land Bank Authority. An existing authority or board
   such as the Huntington Urban Renewal Authority would be utilized to act as the Land Bank
   Fast Track Authority. The Authority would then maintain, demolish, renovate, and
   redevelop the property in order to fast track their productive reuse.

   “The beauty of the program is that it’s self-sufficient,” said Kildee, who serves as Chairman
   of the Land Bank Authority. Funds used to maintain a Land Department and late fees
   collected from delinquent property owners that were given to land speculators as interest on
   their investment under the old system are now used by the land bank to maintain, redevelop,
   and market properties.

   By giving units of local government options with tax delinquent properties, the legislative
   purpose and policy to provide for the transfer of delinquent and nonentered land to those
   more responsible, or better able to bear, the duties of citizenship than the former owners can
   be realized.

   C. Specific Problem
   The provisions to reduce the expense and burden on the state and its subdivisions of tax
   sales has in itself created undue expense and burden for the City of Huntington in dealing
   with outcomes of the system. Tax lien sales are increasingly becoming a problem for
   communities dealing with dilapidated housing. Properties languish during the lengthy
   process and often fall back into the hands of original owners or land speculators.

   Every November, dozens of people gather in a courtroom at the Cabell County Courthouse
   for the County’s tax lien sale. Up for bid are the delinquent tax tickets for hundreds of
   properties. Many properties fall into the sale because their owners are unable or unwilling to
   pay their taxes on time. Other properties are simply abandoned.

   For Cabell County and its levying bodies, the tax lien sale works as it is intended. Taxes are
   paid on a delinquent property, funneling much-needed revenue into the treasury of the
   school district and county and local governments. But for Huntington’s rapidly deteriorating



Home Rule Pilot Program                                                                        Page 9
                                                                             City of Huntington,
                                                                                   West Virginia

   housing stock, a tax lien sale may be its worst enemy. “Very rarely is there a happy ending
   for a piece of property that ends up in a tax lien sale,” said Tom Bell, formerly Cabell
   County’s Chief Tax Deputy. “These are properties that people have walked away from
   because they have little or no value.”

   And most of the time, the properties purchased via the tax lien sale fall back into the hands
   of people who previously abandoned them or to a land speculator who is looking for a quick
   profit rather than a home to redevelop. Neither outcome helps the city’s vexing problem
   with its housing stock. Since 2006, the City of Huntington’s Unsafe Building Commission
   has ordered the demolition of more than 80 homes, and another 220 properties have been
   labeled as fire-damaged, unsafe, or in need in major upgrades. City housing inspectors
   believe there are probably hundreds of homes that have not been inspected or are a couple
   years away from disrepair. Last year, the City of Huntington spent $200,000 of public funds
   on demolition and placed liens on the properties. It is likely that many of these properties
   will eventually appear at a Cabell or Wayne County tax lien sale and the City will lose its lien.

   Proposed Solution
   The Michigan model illustrates how a Land Bank Fast Track Authority reduces the burden
   and expense of tax-delinquent properties to the state and units of local government. The
   Land Bank Authority takes over and manages unsold properties with funds that would have
   gone to out-of-state investors. Over the past five years, the land bank has demolished 745
   homes and rehabilitated 85 others. Almost 850 pieces of vacant property have been turned
   into green spaces, community gardens or small parks, while an additional 350 properties
   were given to adjacent property owners to use as a side yard or lot. The land bank also has
   teamed up with housing developers to build 130 new homes. It now is working on turning a
   99-unit apartment building into a 24-unit condominium complex.

   Michigan State University recently completed a two-year study on the effectiveness of the
   Genesee County Land Bank Authority. The study focused on 400 properties that the land
   bank acquired, demolished, and returned to the market. “We spent $3.5 million to demolish
   these 400 properties, but our investment increased the value of surrounding properties by
   $112 million,” Kildee said. “That's the true benefit of intervention.”

   “Improving the housing stock of a city, especially in one that has suffered from population
   decline, is not as easy as convincing lawmakers to change state laws,” Kildee said. “It
   requires strategic planning and acceptance that a community can be better even though it’s
   smaller. Becoming smaller is a hard pill for any community to swallow because of America’s
   obsession with growth and expansion. It’s the academic approach for building cities,” he
   said. “But even if you come to the conclusion that it’s OK to be smaller, you still have to
   figure out how to manage a city that was built for a larger population.”

   Fiscal Impact
   In 2005, the City undertook an ambitious program aimed at revitalizing a four-block section
   of Artisan Avenue between Hal Greer Blvd. and 20th Street. This was a relatively new
   approach for the City of Huntington to revitalize a neighborhood that has been plagued by
   an alarming increase in vacant, dilapidated homes. A basic conditions report was prepared
   for this area and the structural conditions of the primary properties were indicated. Based on



Home Rule Pilot Program                                                                         Page 10
                                                                           City of Huntington,
                                                                                 West Virginia

   the survey, 50 out of the 79 primary buildings were code deficient or economically infeasible
   to rehabilitate, which is 63% of all buildings in the study area. Title examinations were
   prepared and the examinations uncovered that nearly one half of these properties were
   purchased at tax lien sales. The tax lien process can be pointed to as one of the greatest
   single contributing factors to the decline and lack of investment in this neighborhood.

   The City of Huntington will need to invest millions in public dollars to redevelop this
   neighborhood and undo the damage done by the State’s tax collection process. The
   Michigan model shows how this could have been avoided. The creation of a Land Bank Fast
   Track Authority could take on the redevelopment of these slum and blighted areas without
   the need for additional public investment. The model is a win for the State and County tax
   collection process and addresses the decline of our neighborhoods that we experience under
   current law.

   The Michigan model is self-sufficient and does not require additional tax dollars to function.
   A Michigan University study indicated that $3.5 million was spent to demolish and put 400
   properties back on the market. The investment increased the surrounding property values by
   $112 million. This averages $8,750 invested per site and a $32 increase in property value for
   every dollar spent.

   In 2007, Cabell County auctioned off 1,180 liens on properties located within the city of
   Huntington. The county indicates that they have a success rate between 95% and 97%. This
   will leave approximately 50 liens of property unsold. Over a five-year period, this will
   amount to approximately 250 properties. Under the Michigan model, these properties would
   go the Land Bank Authority. Using the averages from the Michigan University study, the
   City would need to invest $2.2 million to demolish the 250 structures. Since the model is
   self-sufficient, the taxpayers would save $437,500 per year in demolition costs, verses the
   system currently in existence. With a $32 increase for every dollar spent, we would anticipate
   a $70 million increase in the surrounding property values. Within the city of Huntington, this
   raise in property values would increase the property taxes collected by the county to more
   than $1 million per year.

   Administrative Feasibility
   The Huntington Urban Renewal Authority will serve in the capacity as the Land Bank Fast
   Track Authority. The Huntington Urban Renewal Authority has proven experience in the
   redevelopment of residential and commercial properties. A recent project of HURA was the
   $50 million redevelopment of the “Superblock” in the central business district, into what is
   now Pullman Square. The City possesses the necessary experience in demolition,
   rehabilitation, and redevelopment via the Community Develop Block Grant program. The
   City has been a CDBG recipient for over 33 years.




Home Rule Pilot Program                                                                      Page 11
                                                                         City of Huntington,
                                                                               West Virginia

   2. Local Options for Addressing Fire Damage to Residential/Commercial Structures

   Proposed Solution Area: Administrative

   Specific state laws, policy rule or regulation in question
   In 2010, the West Virginia Legislature passed a Fire Insurance Proceeds Bill that eliminates
   the need for this issue to be addressed by the Home Rule Pilot Program (see Executive
   Summary).




Home Rule Pilot Program                                                                    Page 12
                                                                            City of Huntington,
                                                                                  West Virginia

   3. Increased Capacity to Collect City Fees/Taxes

   Proposed Solution Area: Taxing and Administrative

   Specific state laws, policy rule or regulation in question
   West Virginia Code § 8-13-13

   Specific Problem
   Though cities are permitted to charge these fees in accordance with §8-13-13 of the West
   Virginia Code, municipalities endeavoring to collect said fees that are necessary for providing
   governmental services are positioned no better than any other creditor attempting to collect
   a delinquent debt. Thus, in order to collect these necessary fees, municipalities must
   institute litigation at significant expense to the citizens. Though a judgment may be granted
   in favor of the municipality, often the prospects of the judgment being satisfied are remote.

   Inasmuch as payment of these fees is essential to the maintenance and provision of vital
   services, the failure to timely remit payments operates to lessen services for the entire
   community. Municipalities are in dire need of statutory modifications that assist in the timely
   collection of municipal service fees. Though the West Virginia Supreme Court has clearly
   indicated that fees owed pursuant to a properly enacted service fee ordinance are not taxes, it
   no doubt would be equitable and advantageous to the entire community that these fees be
   treated similar to taxes in operational effect.

   Proposed Solutions
   Specifically, §8-13-13 forbids delinquent fees to operate as a lien on the property as security
   for payments due under a properly enacted municipal service fee ordinance. If the fees were
   permitted to operate as a lien on the property as security for payments, there would
   undoubtedly be fewer burdens on the citizen fee/tax payer for expensive litigation costs in
   order to collect delinquent fees. Thus, in order to limit or, minimize the costs borne by
   citizens associated with collection of delinquent fees and to assist local government in the
   collection of said fees, the City of Huntington proposes the following solutions:

       •    Provide for statutory liens for delinquent fees and allow said liens to have the same
            priority as property tax liens
       •    Allow the requirement that all delinquent fees be paid current prior to any property
            within the City being transferred by any means or process
       •    Require that any closing statement or any entity closing the sale or transfer of
            property be required to determine if any City taxes/fees are delinquent and to
            provide for their payment as part of closing process
       •    Allow for the joint collection of delinquent municipal taxes/fees with collection of
            delinquent property taxes and fees in the same manner that payment of personal
            property taxes is a condition precedent to the issuance of motor vehicle registration
       •    Establish that a municipality has the authority to levy both interest and penalty for
            delinquent fees and taxes in order to encourage timely payment




Home Rule Pilot Program                                                                       Page 13
                                                                          City of Huntington,
                                                                                West Virginia

   Fiscal Impact
   Although difficult to determine the true fiscal impact, the City of Huntington estimates the
   above changes would generate an additional amount of $2 million to $3 million in delinquent
   fees.

   Administrative Feasibility
   During the transfer of property or closure of sale, the closing entity would contact the City
   of Huntington with the name and address of the property being sold. The City would send
   the closing entity a form with the appropriate amount needing to be withheld at closing.




Home Rule Pilot Program                                                                     Page 14
                                                                             City of Huntington,
                                                                                   West Virginia

   4. Municipal Occupation Tax / Municipal Retail Sales-Use Tax

   Proposed Solution Area: Taxing

   Specific state laws, policy rule or regulation in question
   West Virginia Code § 8-13-13

   Specific Problem
   There are currently provisions in West Virginia Code to allow cities to use a municipal
   occupation tax and a municipal retail sales/use tax, but their use is so highly restricted by
   statute that no city, including Huntington, is capable of using them. When the legislature in
   2004 passed Senate Bill 701, it allowed:

       •    Cities with “severe” under-funded police and fire pension funds (less than 3%) to
            impose a “pension relief municipal occupation tax” not to exceed one percent. (8-
            13C-2(c)(d) and 8-13C-3(a)) But the occupation tax could only be used to pay down
            the pension unfunded liability (8-13C-9 (a)) and would have to be over and above
            the premium payments already required. This would have significantly increased the
            tax burdens already imposed in Huntington without providing any tax relief or
            improved equity.
       •    Cities could impose a municipal sales/use tax but only if it repealed entirely their B &
            O tax. (8-13C-2(a)). No West Virginia City, including Huntington, could raise
            enough revenue from a city sales/use tax sufficient to replace the revenue lost from
            B & O repeal. In Huntington it would have only replaced around 40%.

   The proposal advanced by Huntington in this Home Rule proposal is to remove the
   restrictions on the use of these two taxes so they can be used for relief of other less desirable
   levies and to fund necessary capital improvements. The use of the municipal occupation tax
   and the municipal sales/use tax would be used toward tax reform which would include the
   elimination of the user fee and reduction of the B & O tax.

   Proposed Solution
   The city of Huntington proposes that it be given the authority to impose a municipal
   occupation tax and/or municipal retail sales/use tax. The reason for the request is not to
   place additional tax burdens on the citizens of the City, but to create a fairer way for the City
   to raise revenue. These new sources of revenue would be used to repeal the current user fee
   of $3 a week levied on all who work within the City. The revenue would also be used to
   reduce the current B & O taxes paid by businesses within the City.

   The reasons for using a city occupational tax to replace the current user fee are:

       •    The current user fee is regressive. It is levied at $3 a week on all working inside the
            City no matter whether full- or part-time. In addition, it pays no regard to the
            income of the fee payer. The most highly compensated and the most lowly
            compensated pay the same amount. For a part-time worker at $8 an hour working 20
            hours a week, the fee is more than 1% of his/her income. For a well-compensated




Home Rule Pilot Program                                                                         Page 15
                                                                               City of Huntington,
                                                                                     West Virginia

           worker earning $50 an hour working 40 hours a week, the fee constitutes .01% of
           their income.
       •   The user fee discourages the employment of part-time and entry-level workers. The
           percentage of their income taken reduces the incentive to seek employment or to be
           employed. For students, elderly, and the working poor, this barrier should be
           removed.

   The reasons for using a municipal occupation tax to reduce the B & O tax are:

       •   The B & O tax was rejected as being anti-business and a hindrance to economic
           development when the State repealed its use in the 1980s.
       •   Studies including those done for Governors Underwood and Manchin have found
           the local B & O levy to be a major reason why business locates just outside city
           limits. The relocation of one of Huntington’s major taxpayers outside the City was
           due primarily to avoiding the B & O Tax as was the location of a major retailer just
           outside City boundaries. The significant numbers of vacant and abandoned buildings
           along Huntington’s streets provide further confirmation.

   The use of a municipal retail sales/use tax would reduce the current B & O tax on retail
   establishments. While they would still be taxed, there are advantages to this approach:

       •   The State Department of Taxation would be able to collect the tax and remit to the
           City after deduction of an administrative fee. Since the current B & O tax is basically
           one of honesty, the ability to use State collection would improve equitability.

   Specific Provisions-Municipal Occupation Tax
   The specific provisions regarding the occupation tax are listed in entirety of attached
   Municipal Occupation Tax ordinance, Article 774 of the Codified Ordinances of the City of
   Huntington.

   Specific Provisions of the Municipal Sales/Use Tax
   The specific provisions regarding the sales/use tax are listed in entirety of attached
   Municipal Sales, Services and Use Tax ordinance, Article 776 of the Codified Ordinances of
   the City of Huntington.

   Fiscal Impact
   Feasibility of Municipal Occupational Taxes
   There are two aspects for consideration if municipal occupational taxes are enacted:
   administrative feasibility and economic feasibility. The first refers to the ability of the city to
   levy, collect and enforce the tax. The second concerns whether the amount raised will be
   sufficient to cover the repeal or reduction planned.

   Administrative Feasibility.
   Most of the issues regarding administrative feasibility have been addressed either by SB 701
   or by the successful use of these taxes in other surrounding states. All states surrounding
   West Virginia allow cities to use either one or both of these levies. The administrative issues
   have been faced and solved:



Home Rule Pilot Program                                                                           Page 16
                                                                            City of Huntington,
                                                                                  West Virginia


       •   Ohio allows for cities and school districts to levy income taxes up to 1% with higher
           amounts being allowed if voters consent.
       •   Kentucky allows for cities to levy occupational taxes from 0.25 to 2.25%. These
           taxes account for more than half of revenues in Kentucky’s major cities.

   Because of the proximity of Huntington to these two states, the proposed occupational tax
   will be designed to correspond to the levies in those states. In order for Huntington to
   effectively administer, the State Tax Commissioner must be required to share information
   and allow for joint audits under (11-10-3). Information shared must be governed under the
   same rules of confidentiality as provided in State Code.

   Fiscal Feasibility
   The following Data Narrative and Estimated Revenue Impact of Tax Reform provides the
   best estimate of the amount of revenue to be raised from the municipal occupational tax and
   retail tax. Using very conservative assumptions, the municipal occupational tax will yield $8
   million.

   Feasibility of Municipal Sales/Use Tax
   Administrative Feasibility
   SB 701 clearly provides for the administration of a local sales/use tax to be levied at the
   retail level. The municipal sales/use tax uses a base identical to the State’s (8-13C-4(c)(1)),
   with identical exemptions and exceptions (8-13C-4(c)(1)(A)). The State Tax Commissioner is
   to administer, enforce and collect the tax.(8-13C-4(4)). All provisions of the State sales
   service and use tax will be applied to the local tax (11-10-3(d)). The State will use
   “destination” not “origin” to determine the legal nexus of the sale for municipal purposes as
   is the case with the State tax.

   Fiscal Feasibility
   Using current City of Huntington Business and Occupation tax data it is estimated that a 1%
   municipal sales/use tax would yield $3.7 million dollars per year.


   Other Fiscal Flexibility Proposals


   Tax on Restaurant and Bar Receipts.
   Currently, State Code provides West Virginia Cities with the power to levy taxes on
   admission to “amusements” and “entertainments” (8-13-6). The tax is limited to 2%. There
   is no corresponding authority to collect taxes on restaurant and bar receipts. The request is
   to add the receipts of these to those levied on other forms of entertainment and
   amusements.

   The proceeds from this tax would be used to provide partial coverage for an anticipated
   bond issue to finance $3.5 million in improvements to the Big Sandy Superstore arena. The
   Arena is over 30 years old and is in desperate need of an update for both aesthetic and safety




Home Rule Pilot Program                                                                       Page 17
                                                                            City of Huntington,
                                                                                  West Virginia

   reasons. Restaurants and bars receive direct benefits from the Arena’s shows and other
   attractions that bring visitors to the area.

       •   The tax on restaurants and bars will be relatively easy to collect and administer. Bars
           must have State licenses and municipal permits. Restaurants are subject to
           inspection by the Cabell-Huntington Department of Health, which maintains a
           current list of locations and responsible parties. In addition, the State will have the
           data on their sales, which can be used for audit.
       •   At this time no estimate has been made of what the yield would be on the municipal
           tax on restaurants and bars. Prior to submission to the State Committee, that
           estimate will become available.

   Restrictions on Use of Certain Taxes
   The current State Code places certain requirements on the use and reporting of certain taxes.
   These restrictions limit local autonomy, complicate budgeting, increase costs of compliance
   to both City and State and are legislative artifacts, which currently serve no useful State
   purpose.

       •   The State currently distributes to local governments a share of the additional tax on
           severance, extraction and production of coal (11-13A-6). A minor portion of that tax
           is distributed to all cities and counties in which there is no coal production. This
           includes Huntington. The city must create a separate “coal severance tax revenue
           fund” (11-13A-6(2)(h)) which can only be spent on designated functions. A report
           must be filed with the State in addition to all other required reports on city
           expenditures (11-13A-6(2)(i)). The request from Huntington is that the proceeds be
           included in the City General Fund and spent as other revenues received.




Home Rule Pilot Program                                                                       Page 18
                                                                           City of Huntington,
                                                                                 West Virginia

   Data Narrative

   Data estimates are based primarily upon the Zip Code Business Patterns data from the U.S.
   Census Bureau. Estimates of business activity by zip code provide the number of persons
   employed and their accompanying payroll figures. A five-year average was calculated for
   each zip code either fully or partially contained within the city limits of Huntington, WV.
   The use of a five-year average will, it is hoped, remove the possibility of an outlying
   employment or payroll estimate for a given geography.

   Estimation of the geographic containment of zip codes within city limits was approximated
   with the assistance of LandView version 6. Produced by the U.S. Census Bureau, LandView
   is a mapping tool that combines demographic, environmental, and geological data sources in
   a GIS format.

   The “Geographically Contained Employment” And “Geographically Contained Payroll”
   figures were obtained by multiplying the Zip Code Business Patterns data by the estimated
   percentage of a zip code’s geographic area contained within city limits.

   These numbers were then multiplied by an “Earnings Adjustment” to derive the zip code’s
   estimated earned income. This represents the percentage of aggregate earnings beyond wage
   and salary income for the zip code. The Earnings Adjustment was derived using U.S. Census
   2000 data from Summary Tape File 3. The resulting figure does not take transfer payments,
   commissions, or other incomes into account.

   Ten percent of the employed persons for each zip code were then “removed” from the
   estimation by subtracting their wages (estimated using the 10% wage figure multiplied by
   10% of employment) from the overall Earned Income figure. This overestimates the
   withdrawal from All Earned Income in two ways: 1) using a figure of $13,330 rather than
   $10,000, and 2) the $13,330 figure is the maximum value for the lowest 10% of persons
   employed based on income. This then underestimates the potentially available tax proceeds.

   The estimate probably understates the amount of the tax yield, as only payroll is included
   rather all occupational income.

   Application of the proposed 1% tax rate upon the earnings in each geographic area then
   provides the estimated tax proceeds from the occupation tax. An estimated error rate ± 15%
   would provide a likely expected proceed of between $8.1 million and $11.0 million.




Home Rule Pilot Program                                                                         Page 19
                                                                            City of Huntington,
                                                                                  West Virginia

Fiscal Impact of Occupation Tax

                                             Estimated                                                     Geo. Contained         Earnings
        Zip           Estimated Payroll *   Employment *      Containment #     Geo. Contained Emp.            Payroll          Adjustment +
              25701       $460,545,200         17,289             100%                 17,289               $460,545,200           6.73%
              25702       $186,273,800          5,381             100%                 5,381                $186,273,800           8.68%
              25703        $84,948,600          2,556             100%                  2,556                $84,948,600           2.69%
              25704       $146,436,700          4,749             100%                 4,749                $146,436,700           5.93%
              25705       $169,504,800          5,894              33%                  1,945                $55,936,584           6.52%
Total                   $1,047,709,100         35,869                                  31,920               $934,140,884

                      Contained Income       10% Wage ^       10% Employ ^          10% Threshold        Income Estimation          Tax Rate
              25701     $491,539,892           $13,330            1,729               $23,045,704           $468,494,188              1%
              25702     $202,442,366           $13,330             538                 $7,172,340           $195,270,026              1%
              25703      $87,233,717           $13,330             256                 $3,407,681            $83,826,036              1%
              25704     $155,120,396           $13,330             475                 $6,330,550           $148,789,846              1%
              25705      $59,583,649           $13,330             195                 $2,592,800            $56,990,850              1%
Total                   $995,920,021                              3,192               $42,549,075           $953,370,946

                        Tax Proceeds                            15% Below              15% Above
              25701     $4,684,941.88                          $3,982,200.60          $5,387,683.16
              25702     $1,952,700.26                          $1,659,795.22          $2,245,605.30
              25703      $838,260.36                            $712,521.31            $963,999.42
              25704     $1,487,898.46                          $1,264,713.69          $1,711,083.23
              25705      $569,908.50                            $484,422.22            $655,394.77
Total                   $9,533,709.46                          $8,103,653.04         $10,963,765.88

# Estimation by CBER using US Census LandView software for geography containment.
* Data from Zip Code Business Patterns data, US Census Bureau (5 year average 2001-2005)
+ Earning Adjustment is based upon the 2000 US Census figure as a percentage of aggregate earnings beyond wage and salary income.
^ Based upon Bureau of Labor Statistics Huntington MSA Occupation and Wage estimates for May 2006.




 Home Rule Pilot Program                                                                                                                       Page 20
                                                                                   City of Huntington,
                                                                                         West Virginia


City of Huntington Estimated Revenue Impact of Tax Reform
As of July 26, 2010
Prepared by Deron Runyon, Finance Director



                                FY2011                    FY2012                     FY2013*
                          7/1/2010-6/30/2011       7/1/2011-6/30/2012          7/1/2012-6/30/2013
Estimated Increases:

Occupation Tax#           $             4,000,000 $              8,000,000 $                8,000,000

Sales Tax                 $                   -    $             3,700,000 $                3,700,000

Total Increases           $             4,000,000 $             11,700,000 $               11,700,000

Estimated Decreases:

User Fee                  $             (2,250,000) $            (4,500,000) $             (4,500,000)

B&O Tax Reductions
- Manufacturing           $                   -    $               (120,000)   $             (120,000)
- Retail                  $                   -    $             (1,437,000)   $           (1,437,000)
- Service                 $                   -    $             (2,202,000)   $           (2,202,000)
Total B&O Reductions      $                   -    $             (3,759,000)   $           (3,759,000)

Total Decreases           $             (2,250,000) $            (8,259,000) $             (8,259,000)

Net New Revenue           $             1,750,000 $              3,441,000 $                3,441,000




* All Home Rule Provisions end effective 6/30/2013 unless reenacted by WV State Legislature

# Under Proposed Ordinance, Occupation Tax collections > $7 million reserved for Capital
Improvements, collections > $9 million result in decrease in fees/taxes following fiscal year




Home Rule Pilot Program                                                                                  Page 21
 AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
ARTICLE 1760 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
                  AS REVISED, REGARDING LAND BANK.



           WHEREAS, the City desires an ordinance to provide for the creation of a land bank fast

track authority to assist the city in the assembly and clearance of title to property in a coordinated

manner; to facilitate the use and development of certain property; to promote economic growth; to

prescribe the powers and duties of certain authorities; to provide for the appointment of boards to

govern the land bank fast track authority and to prescribe the powers and duties; to authorize the

acquisition, maintenance, and disposal of interests in real and personal property; to authorize the

conveyance of certain properties to the land bank fast track authority; to authorize the clearing or

quieting of title by the land bank fast track authority; to provide for the distribution and use of

revenues collected or received by the land bank fast track authority; to prescribe powers and duties

of certain officers and agencies; to exempt property, income, and operations of the land bank fast

track authority from tax; and to extend protections against certain liabilities to the land bank fast

track authority,

            NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF

HUNTINGTON, CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Article 1760

of the Codified Ordinances of the City of Huntington, as revised, is hereby AMENDED,

MODIFIED AND RE-ENACTED to read as follows:

............................................................................................................................................................




Home Rule Pilot Program                                                                                                                         Page 22
                                          ARTICLE 1760
                                   Land Bank Fast Track Authority


1760.01         Short Title                              1760.10         Construction, intent, and
1760.02         Purpose                                                  scope of article
1760.03         Definitions                              1760.11         Land Bank Fast Track
1760.04         Powers                                                   Authority; Creation; Powers
1760.05         Acquisition of property                                  and Duties; Staffing;
1760.06         Preservation of property                                 Cooperation with other City
1760.07         Disposition of property by                               Departments and agencies
                authority; inventory and                 1760.12         Land Bank Fast Track fund:
                classification of property;                              Creation; Receipt of money or
                Title status and suitability for                         other assets; Money
                use; recording property                                  remaining in fund;
                transfer                                                 Expenditures; Disposition of
1760.08         Receipt of penalty, or interest                          Proceeds
                payments; Retention of                   1760.13         Borrowing money and issuing
                proceeds                                                 bonds or notes
1760.09         Property of Authority as                 1760.14         Dissolution of Authority
                public property                          1760.15         Biennial Report




        1760.01 SHORT TITLE
        This article shall be known and may be cited as the "land bank fast track act".

        1760.02 PURPOSE
        The City of Huntington is a member of the Municipal Home Rule Pilot Program enacted by
the West Virginia Legislature. W. Va. Code § 8-1-5a [2007]. The legislation authorizes pilot
municipalities to exercise broad-based home rule to improve urban and state development. The
legislation establishes a framework for municipalities to explore new ideas to see if they can or
should be implemented on a statewide basis.

         The City of Huntington finds that there exists a continuing need to strengthen and revitalize
the economy and that it is in the best interests of the city to assemble or dispose of public property
in a coordinated manner to foster the development of that property and to promote economic
growth. It is declared to be a valid public purpose for a land bank fast track authority created under
this article to acquire, assemble, dispose of, and quiet title to property. It is further declared to be a
valid public purpose for the land bank fast track authority created under this article to provide for
the financing of the acquisition, assembly, disposition, and quieting of title to property, and to
exercise other powers granted under this article. The City of Huntington finds that the land bank




Home Rule Pilot Program                                                                           Page 23
fast track authority and powers conferred by this article constitute a necessary program and serve a
necessary public purpose.


        This article is an authorized enactment under the Municipal Home Rule Pilot Program and
intended to reduce the expense and burden on the state and its subdivisions of tax lien sale system,
to provide for the transfer of delinquent and nonentered land to those more responsible or better
able to bear the duties of citizenship, to increase property value and prevent urban blight and
deterioration.

       1760.03 DEFINITIONS
       (a) "Authority" means the land bank fast track authority created under section 1760.11.
       b) "Authority board" means the Officers of the Huntington Urban Renewal Authority.

        1760.04 POWERS.
        (1) Except as otherwise provided in this article, the authority may do all things necessary or
convenient to implement the purposes, objectives, and provisions of this article, and the purposes,
objectives, and powers delegated to the board of the authority by other laws or executive orders,
including, but not limited to, all of the following:
        (a) Adopt, amend, and repeal bylaws for the regulation of its affairs and the conduct of its
business.
        (b) Sue and be sued in its own name and plead and be impleaded, including, but not limited
to, defending the authority in an action to clear title to property conveyed by the authority.
        (c) Borrow money and issue bonds and notes according to the provisions of this article.
        (d) Enter into contracts and other instruments necessary, incidental, or convenient to the
performance of its duties and the exercise of its powers.
        (e) Solicit and accept gifts, grants, labor, loans, and other aid from any person, or the
federal government, the state, or any political subdivision of the state, or any agency of the federal
government, the state, a political subdivision of the state, or an intergovernmental entity created
under the laws of the state or participate in any other way in a program of the federal government,
the state, a political subdivision of the state, or an intergovernmental entity created under the laws
of the state.
        (f) Procure insurance against loss in connection with the property, assets, or activities of
the authority.
        (g) Invest money of the authority, at the discretion of the board of the authority, in
instruments, obligations, securities, or property determined proper by the board of the authority,
and name and use depositories for its money.
        (h) Employ legal and technical experts, other officers, agents, or employees, permanent or
temporary, paid from the funds of the authority. The authority shall determine the qualifications,
duties, and compensation of those it employs. The board of the authority may delegate to one or
more members, officers, agents, or employees any powers or duties it considers proper. Members




Home Rule Pilot Program                                                                       Page 24
of the board of the authority shall serve without compensation but shall be reimbursed for actual
and necessary expenses subject to available appropriations.
         (I) Contract for goods and services and engage personnel as necessary and engage the
services of private consultants, managers, legal counsel, engineers, accountants, and auditors for
rendering professional financial assistance and advice payable out of any money of the authority.
         (j) Study, develop, and prepare the reports or plans the authority considers necessary to
assist it in the exercise of its powers under this article and to monitor and evaluate progress under
this article.
         (k) Enter into contracts for the management of, the collection of rent from, or the sale of
real property held by the authority.
         (l) Do all other things necessary or convenient to achieve the objectives and purposes of the
authority or other laws that relate to the purposes and responsibility of the authority.
         (2) The enumeration of a power in this act shall not be construed as a limitation upon the
general powers of the authority. The powers granted under this article are in addition to those
powers granted by any other statute or charter.
         (3) The authority, in its discretion, may contract with others, public or private, for the
provision of all or a portion of the services necessary for the management and operation of the
authority.
         (4) The authority is granted the right of first refusal to purchase all delinquent tax liens
within the corporate boundaries of the City of Huntington for the minimum bid of the taxes,
interest, and charges due.
         (5) If the authority holds a tax deed to abandoned property, the authority may take action to
quiet title.
         (6) The property of the authority and its income and operations are exempt from all
taxation by this state or any of its political subdivisions.
         (7) The authority shall adopt a code of ethics for its directors, officers, and employees.
         (8) The authority shall establish policies and procedures requiring the disclosure of
relationships that may give rise to a conflict of interest. The governing body of an authority shall
require that any member of the governing body with a direct or indirect interest in any matter
before the authority disclose the member's interest to the governing body before the board takes
any action on the matter.




Home Rule Pilot Program                                                                       Page 25
         1760.05 ACQUISITION OF PROPERTY
         (1) The authority may acquire by gift, devise, transfer, exchange, foreclosure, purchase, or
otherwise on terms and conditions and in a manner the authority considers proper, real or personal
property, or rights or interests in real or personal property.
         (2) Real property acquired by the authority by purchase may be by purchase contract, lease
purchase agreement, installment sales contract, and land contract. The authority may acquire real
property or rights or interests in real property for any purpose the authority considers necessary to
carry out the purposes of this article, including, but not limited to, one or more of the following
purposes:
         (a) The use or development of property the authority has otherwise acquired.
         (b) To facilitate the assembly of property for sale or lease to any other public or private
person, including, but not limited to, a nonprofit or for profit corporation.
         (c) To protect or prevent the extinguishing of any lien, including a tax lien, held by the
authority or imposed upon property held by the authority.
         (3) The authority may also acquire by gift or purchase, on terms and conditions and in a
manner the authority considers proper, property or rights or interest in property deemed
uninhabitable and foreclosed by the City of Huntington.
          (4) The authority may hold and own in its name any property acquired by it or conveyed to
it by this state, a county, a local unit of government, an intergovernmental entity created under the
laws of this state, or any other public or private person, including, but not limited to property with
or without clear title.
         (5) All deeds, mortgages, contracts, leases, purchases, or other agreements regarding
property of the authority, including agreements to acquire or dispose of real property, may be
approved by and executed in the name of the authority.

         1760.06 PRESERVATION OF PROPERTY VALUE
         (1) The authority may control, hold, manage, maintain, operate, repair, lease as lessor,
secure, prevent the waste or deterioration of, demolish, and take all other actions necessary to
preserve the value of the property it holds or owns. The authority may take or perform the
following with respect to property held or owned by the authority:
         (a) Grant or acquire a license, easement, or option with respect to property as the authority
determines is reasonably necessary to achieve the purposes of this article.
         (b) Fix, charge, and collect rents, fees, and charges for use of property under the control of
the authority or for services provided by the authority.
         (c) Pay any tax or special assessment due on property acquired or owned by the authority.
         (d) Take any action, provide any notice, or institute any proceeding required to clear or
quiet title to property held by the authority in order to establish ownership by and vest title to
property in the authority.
         (e) Remediate environmental contamination on any property held by the authority.
         (2) The authority shall be made a party to and shall defend any action or proceeding
concerning title claims against property held by the authority.



Home Rule Pilot Program                                                                        Page 26
        1760.07 DISPOSITION OF PROPERTY BY AUTHORITY; INVENTORY AND
        CLASSIFICATION OF PROPERTY; TITLE STATUS AND SUITABILITY FOR
        USE; RECORDING PROPERTY TRANSFER.
        (1) Except as the authority otherwise agrees by intergovernmental agreement or otherwise,
on terms and conditions, and in a manner and for an amount of consideration the authority
considers proper, fair, and valuable, including for no monetary consideration, the authority may
convey, sell, transfer, exchange, lease as lessor, or otherwise dispose of property or rights or
interests in property in which the authority holds a legal interest to any public or private person for
value determined by the authority. The transfer and use of property under this section and the
exercise by the authority of powers and duties under this article shall be considered a necessary
public purpose and for the benefit of the public.
        (2) All property held by the authority shall be inventoried and classified according to title
status and suitability for use.
        (3) A document, including, but not limited to, a deed, evidencing the transfer under this act
of one or more parcels of property to the authority by the state or a political subdivision of the state
may be recorded with the register of deeds office in the county in which the property is located
without the payment of a fee.

        1760.08 RECEIPT OF PENALTY, OR INTEREST PAYMENTS; RETENTION OF
        PROCEEDS.
        (1) Except as otherwise provided in this article, as required by other law, as required under
the provisions of a deed, or as the authority otherwise agrees, any proceeds received by the
authority may be retained by the authority for the purposes of this article.

        1760.09 PROPERTY OF AUTHORITY AS PUBLIC PROPERTY.
        Property of the authority is public property devoted to an essential public and
governmental function and purpose. Income of the authority is considered to be for a public and
governmental purpose. The property of the authority and its income and operation are exempt from
all taxes and special assessments of the state or a political subdivision of the state. Bonds or notes
issued by the authority, and the interest on and income from those bonds and notes, are exempt
from all taxation of the state or political subdivision of the state.

         1760.10 CONSTRUCTION, INTENT, AND SCOPE OF ARTICLE.
         (1) This article shall be construed liberally to effectuate the intent and the purposes as
complete and independent authorization for the performance of each and every act and thing
authorized by this article, and all powers granted shall be broadly interpreted to effectuate the
intent and purposes and not as a limitation of powers. In the exercise of its powers and duties under
this article and its powers relating to property held by the authority, the authority shall have
complete control as fully and completely as if it represented a private property owner.
         (2) The provisions of this article apply notwithstanding any resolution, ordinance, or
charter provision to the contrary. This section is not intended to exempt an authority from local
zoning or land use controls.




Home Rule Pilot Program                                                                         Page 27
        1760.11 LAND BANK FAST TRACK AUTHORITY; CREATION; POWERS AND
        DUTIES; STAFFING; COOPERATION WITH CITY DEPARTMENTS AND
        AGENCIES.
        (1) The land bank fast track authority is created as a public body corporate and politic.
        (2) The authority shall exercise its powers, duties, functions, and responsibilities
independently of the city. The budgeting, procurement, and related administrative or management
functions of the authority shall be performed under the direction and supervision of the city.
        (3) Subject to available appropriations, if requested by the authority, the city shall provide
staff and other support to the authority sufficient to carry out its duties, powers, and
responsibilities.
        (4) All departments and agencies shall provide full cooperation to the authority in the
performance of its duties, powers, and responsibilities.

        1760.12 LAND BANK FAST TRACK FUND; CREATION; RECEIPT OF MONEY
        OR OTHER ASSETS; MONEY REMAINING IN FUND; EXPENDITURES;
        DISPOSITION OF PROCEEDS.
         (1) The land bank fast track fund is created under the jurisdiction and control of the
authority and may be administered to secure any notes and bonds of the authority.
        (2) The authority may receive money or other assets from any source for deposit into the
fund. The authority shall credit to the fund interest and earnings from the redemption of tax liens
and fund investments.
        (3) Money in the fund at the close of the fiscal year shall remain in the fund and shall not
lapse to any other fund.
        (4) The authority may provide funds for the payment of statutory costs incurred on real
estate after the purchase of delinquent tax liens from the county. Notice of these statutory costs
shall be provided to the Clerk of the County Commission and recorded as additional expenses for
inclusion in the Notice to Redeem. The authority shall be entitled to reimbursement of these
statutory costs upon redemption of the real estate pursuant to W Va. Code § 11A-3-25.
        (a) Statutory costs may include the payment of liens imposed by the municipality against
the real property for an amount that reflects all costs incurred for repairing, altering or improving,
or of vacating and closing, removing or demolishing any dwelling or building pursuant to W Va.
Code § 8-12-16 and City of Huntington Codified Ordinance 1739.
        (5) The authority shall expend money from the fund only for one or more of the following:
        (a) Costs to clear or quiet title to property held by the authority.
        (b) To repay a loan made to the authority.
        (c) Any other purposes provided in this act.
        (6) The authority shall deposit into the fund all money it receives from the sale or transfer
of property under this article. The authority shall credit to the fund the proceeds of the sale of notes
or bonds to the extent provided for in the authorizing resolution of the authority, and any other
money made available to the authority for the purposes of the fund.




Home Rule Pilot Program                                                                         Page 28
        1760.13 BORROWING MONEY AND ISSUING BONDS OR NOTES.
        (1) By resolution of its board, the authority may borrow money and issue bonds and notes,
subject to limitations set forth in this section, for the purpose of achieving the purposes of and
objectives incident to and necessary or convenient to carry out the purposes and objectives of the
authority, including, but not limited to, necessary administrative and operational costs. The bonds
or notes shall mature in not more than 30 years and shall bear interest and be sold and be payable in
the manner and upon the terms and conditions determined, or within the parameters specified, by
the authority in the resolution authorizing issuance of the bonds or notes. The bonds or notes may
include capitalized interest, an amount sufficient to fund costs of the issuance of the bonds or
notes, and a sum to provide a reasonable reserve for payment of principal and interest on the bonds
or notes. The resolution authorizing the obligations shall create a lien on revenues pledged by the
resolution that shall be a statutory lien and shall be a first lien subject only to liens previously
created. The resolution may provide the terms upon which additional bonds or notes may be issued
of equal standing and parity of lien as to revenues pledged under the resolution.
        (2) The city may by a majority vote of its governing body make a limited pledge to support
the authority's bonds or notes.
        (3) The bonds or notes issued under this section shall be secured by one or more sources of
revenue available to the authority, as provided by resolution of the authority, including revenues
available to the authority from monies received from the redemption of tax liens.
        (4) The bonds and notes of the authority may be invested by the state treasurer and all other
public officers, state agencies, and political subdivisions, insurance companies, banks, savings and
loan associations, investment companies, and fiduciaries and trustees, and may be deposited with
and received by the state treasurer and all other public officers and the agencies and political
subdivisions of this state for 1 or more of the purposes for which the deposit of bonds or notes is
authorized. The authorization granted by this section is supplemental and in addition to all other
authority granted by law.
         (6) An obligation issued by the authority under this section shall not appreciate in
principal amount or be sold at a discount of more than 10% unless the obligation of the authority is
issued to the state, an agency of the state, the county, or the city.
        (7) Bonds and notes issued by the authority under this section and the interest on and
income from the bonds and notes are exempt from taxation by the state or a political subdivision of
the state.


       1760.14 DISSOLUTION OF AUTHORITY.
       If the authority has completed the purposes for which it was organized, the authority board,
by vote, may provide for the dissolution of the authority and may provide for the transfer of any
property held by the authority to another authority or agency. Upon the dissolution of the authority,
any remaining balance in the fund shall be transferred to the general fund of the city.

       1760.15 BIENNIAL REPORT.
       The authority shall report biennially to the city on the activities of the authority.




Home Rule Pilot Program                                                                        Page 29
  AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
 ARTICLE 954 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
     AS REVISED, CONCERNING INSURANCE COMPANIES’ TRANSFER OF
                INSURANCE PROCEEDS TO MUNICIPALITY.

           BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON,
CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Section Article 954 of the
Codified Ordinances of the City of Huntington, as revised, are hereby AMENDED, MODIFIED
and RE-ENACTED to read as follows:
............................................................................................................................................................
                                             ARTICLE 954
                                    INSURANCE COMPANIES’ TRANSFER
                               OF INSURANCE PROCEEDS TO MUNICIPALITY.

            954.01                 PURPOSE.
        The City of Huntington is a member of the Municipal Home Rule Pilot Program enacted by
the West Virginia Legislature. W. Va. Code § 8-1-5a [2007]. The legislation authorizes pilot
municipalities to exercise broad-based home rule to improve urban and state development. The
legislation establishes a framework for municipalities to explore new ideas to see if they can or
should be implemented on a statewide basis.
        One of the greatest problems facing The City of Huntington is the issue of dilapidated
residential/commercial structures and the resulting effect on property values, tax revenues, public
safety, local economy, housing stock and the general welfare of the community. Fires have
ravaged vacant buildings in the city and absentee landowners are pocketing the proceeds from fire
insurance claims without removing the debris and/or paying delinquent taxes. The burned out
buildings are later demolished at tax payer expense by the City of Huntington.
       This article is an authorized enactment under the Municipal Home Rule Pilot Program and
intended to deter the commission of arson and related crimes, to discourage the abandonment of
property and to prevent urban blight and deterioration.
            954.02                 DEFINITIONS.
            For purposes of this Article, the following definitions apply:
        “Total loss by fire” means a fire loss agreed to between the named insured(s) and the
insurer which equals or exceeds sixty per cent of the aggregate limits of liability on all fire policies
covering the building or structure.
        “Certificate of Good Standing” is a certified document issued by the City of Huntington
following a “total loss by fire” of a structure within the City of Huntington which verifies the
property is not subject to delinquent municipal service fees, refuse service fees, assessments,
penalties, or charges against the property. The Certificate must also verify one of the following:
(a) repairs to the building have been completed and a new occupancy permit is issued by the
Director of Public Works; (b) removal of the building has been completed and the Chief Building


Home Rule Pilot Program                                                                                                                         Page 30
Inspector has certified that the debris have been removed, the sewer has been capped, and the lot
properly leveled; or, ( c ) that the insured has a valid contract for the removal of debris in force
which allows for the release of any remaining funds from the City of Huntington to the insured.
       954.03          SCOPE.
        This Article applies to all residential/commercial structures located within the City of
Huntington and insured for fire loss under a policy of insurance. This Article applies to claims for
total loss by fire, commonly referred to as Coverage A, relating to an insured’s residence,
buildings or structures located upon the subject property. This ordinance shall not be construed to
prevent any insurance company from making payment to an insured for personal property claims
and/or loss of use, liability, rent/living expenses or any other claims not related to the loss of the
insured’s residence, building or structures located on the property. Nothing herein shall be
construed to limit payment of a claim under demolition or debris removal coverage to the extent
the same exists. This ordinance shall apply to all policies written after the effective date herein and
all renewals of existing policies made after said effective date.

       954.04          PAYMENT WITHHELD.
      No insurance company shall pay an insured for a “total loss by fire” unless the insurance
company is furnished with a verified “Certificate of Good Standing” issued by the City of
Huntington. In the absence of such certificate, an insurance company must comply with 954.06.
       954.05          ISSUANCE OF A CERTIFICATE OF GOOD STANDING.
        A named insured(s) may request “Certificate of Good Standing” from the City of
Huntington following a “total loss by fire.” The named insured shall provide the City of
Huntington with the location of the subject property, the names of all insurance companies and the
respective policy numbers insuring the property, the value of the insurance policies and the name
and address of the insuring agent/adjuster. The City of Huntington shall respond in writing within
thirty days of the written request. A refusal to issue a certificate shall be made in writing with the
reasons so stated and copy shall be sent to the designated insurance agent.
       954.06          PAYMENT TO CITY FROM INSURANCE PROCEEDS.
        If a “Certificate of Good Standing” is denied by the City of Huntington, or the City of
Huntington does not respond under 954.05 within 30 days, the insurance company shall transfer
from the insurance proceeds to the Finance Director of the City of Huntington, in the aggregate,
two thousand dollars for each fifteen thousand dollars of the “total loss by fire” claim. The
transfer of proceeds shall be on a pro rata basis by all companies insuring the building or other
structure. Policy proceeds remaining after the transfer to the City of Huntington shall be disbursed
by the insurance company in accordance with the policy terms.
       The named insured(s) may submit a good faith estimate by a licensed contractor of the
costs of securing and removing, or the costs of repairing the building or other structure in
compliance with the State Building Code after the transfer, and the Finance Director may return
the amount in excess of the estimate to the named insured, provided that the City of Huntington has
not commenced to remove, repair, or secure the building or other structure.
       Nothing in this section shall be construed to prohibit the City and the named insured from
entering into an agreement that permits the transfer of funds to the named insured(s) if some other
reasonable disposition of the damaged property has been negotiated.

       954.07          PLACEMENT OF FUNDS; TRANSFER OF FUNDS; RECEIPT OF


Home Rule Pilot Program                                                                        Page 31
                       PROOF OF REPAIR; TIME LIMIT ON TRANSFER.
       Upon receipt of proceeds by the City of Huntington as authorized in this Article, the
Finance Director shall place the proceeds in a separate fund. When transferring the funds, the
insurance company shall provide the City of Huntington with the name and address of the named
insured(s). The City of Huntington shall thereafter contact the named insured(s) and certify that
the proceeds have been received. The City of Huntington shall notify the named insured(s) that
the funds shall be returned to the named insured(s) upon the issuance of a “Certificate of Good
Standing.”
       The failure by a named insured(s) to obtain a “Certificate of Good Standing” within 90
days of a “total loss by fire” will authorize the City of Huntington to withdraw monies from the
fund to satisfy any delinquent municipal service fees, refuse service fees, assessments, penalties,
or charges against the property.
        The failure by a named insured(s) to obtain a “Certificate of Good Standing” within 180
days of a “total loss by fire” will authorize the City of Huntington to withdraw monies from the
fund to cause the structure and debris to be safely removed, cap the sewer, and properly leveled the
property.
       954.08          PROOF OF PAYMENT SHOWS DISCHARGE OF INSURER.
       Proof of payment by the company or companies of proceeds under a policy in accordance
with Section 954.04 of this section is conclusive evidence of the discharge of its obligation to the
insured or insureds under the policy to the extent of the payment and of compliance by the
company or companies.
       954.09          NO LIABILITY ON CITY OR INSURER CREATED.
        Nothing in this Article shall be construed to make an insurance company liable to its
insured in excess of proceeds payable under its insurance policy or for any other act performed
pursuant to Article 954. Nothing in this article shall be construed to make the City an additional
insured under a policy of insurance. The City of Huntington has standing to bring a private cause
of action to enforce the provisions of Article 954, and seek damages arising from violation thereof.
       954.10          INSURER’S SUBROGATION AND ASSIGNMENT PRESERVED.
       An insurance company making payment of policy proceeds under this section for
delinquent municipal service fees, refuse service fees, or structure removal liens or debris removal
expenses incurred by the City shall have full benefit of such payment including all rights of
subrogation and of assignment.
       954.11          DUTIES OF THE INSURANCE COMMISSIONER.

        The insurance commissioner of West Virginia shall enforce the provisions contained
herein under the authority created by the West Virginia Legislature found in Chapter 33 of the
West Virginia Code.

       954.12          EFFECTIVE DATE.

        The provisions of this Article apply to all fires which occur in the City of Huntington after
July 1, 2009.

       954.13          SEVERABILITY.


Home Rule Pilot Program                                                                      Page 32
            The provisions of this Ordinance are severable, and if any provision or part thereof shall be
declared invalid or unconstitutional or inapplicable to any person or circumstances, such
invalidity, unconstitutionality or inapplicability shall not affect or impair the remaining provisions
of this Ordinance.
...........................................................................................................................................................


           BE IT FURTHER ORDAINED that all other articles, sections and sub-sections of the
Codified Ordinances of the City of Huntington, as revised, shall remain in full force and effect
until further Ordinance of this Council.




Home Rule Pilot Program                                                                                                                        Page 33
  AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
 ARTICLE 954 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
     AS REVISED, CONCERNING INSURANCE COMPANIES’ TRANSFER OF
                INSURANCE PROCEEDS TO MUNICIPALITY.

           BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON,
CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Section Article 954 of the
Codified Ordinances of the City of Huntington, as revised, are hereby AMENDED, MODIFIED
and RE-ENACTED to read as follows:
............................................................................................................................................................
                                             ARTICLE 954
                                    INSURANCE COMPANIES’ TRANSFER
                               OF INSURANCE PROCEEDS TO MUNICIPALITY.
                                         ARTICLE REPEALED IN ITS ENTIRETY.
            954.01                 PURPOSE.
        The City of Huntington is a member of the Municipal Home Rule Pilot Program enacted by
the West Virginia Legislature. W. Va. Code § 8-1-5a [2007]. The legislation authorizes pilot
municipalities to exercise broad-based home rule to improve urban and state development. The
legislation establishes a framework for municipalities to explore new ideas to see if they can or
should be implemented on a statewide basis.
        One of the greatest problems facing The City of Huntington is the issue of dilapidated
residential/commercial structures and the resulting effect on property values, tax revenues, public
safety, local economy, housing stock and the general welfare of the community. Fires have
ravaged vacant buildings in the city and absentee landowners are pocketing the proceeds from fire
insurance claims without removing the debris and/or paying delinquent taxes. The burned out
buildings are later demolished at tax payer expense by the City of Huntington.
       This article is an authorized enactment under the Municipal Home Rule Pilot Program and
intended to deter the commission of arson and related crimes, to discourage the abandonment of
property and to prevent urban blight and deterioration.
           954.02                  DEFINITIONS.
           For purposes of this Article, the following definitions apply:
        “Total loss by fire” means a fire loss agreed to between the named insured(s) and the
insurer which equals or exceeds sixty per cent of the aggregate limits of liability on all fire policies
covering the building or structure.
        “Certificate of Good Standing” is a certified document issued by the City of Huntington
following a “total loss by fire” of a structure within the City of Huntington which verifies the
property is not subject to delinquent municipal service fees, refuse service fees, assessments,
penalties, or charges against the property. The Certificate must also verify one of the following:
(a) repairs to the building have been completed and a new occupancy permit is issued by the


Home Rule Pilot Program                                                                                                                         Page 34
Director of Public Works; (b) removal of the building has been completed and the Chief Building
Inspector has certified that the debris have been removed, the sewer has been capped, and the lot
properly leveled; or, ( c ) that the insured has a valid contract for the removal of debris in force
which allows for the release of any remaining funds from the City of Huntington to the insured.
       954.03          SCOPE.
        This Article applies to all residential/commercial structures located within the City of
Huntington and insured for fire loss under a policy of insurance. This Article applies to claims for
total loss by fire, commonly referred to as Coverage A, relating to an insured’s residence,
buildings or structures located upon the subject property. This ordinance shall not be construed to
prevent any insurance company from making payment to an insured for personal property claims
and/or loss of use, liability, rent/living expenses or any other claims not related to the loss of
the insured’s residence, building or structures located on the property. Nothing herein
shall be construed to limit payment of a claim under demolition or debris removal coverage
to the extent the same exists. This ordinance shall apply to all policies written after the
effective date herein and all renewals of existing policies made after said effective date.

       954.04          PAYMENT WITHHELD.
      No insurance company shall pay an insured for a “total loss by fire” unless the insurance
company is furnished with a verified “Certificate of Good Standing” issued by the City of
Huntington. In the absence of such certificate, an insurance company must comply with 954.06.
       954.05          ISSUANCE OF A CERTIFICATE OF GOOD STANDING.
        A named insured(s) may request “Certificate of Good Standing” from the City of
Huntington following a “total loss by fire.” The named insured shall provide the City of
Huntington with the location of the subject property, the names of all insurance companies and the
respective policy numbers insuring the property, the value of the insurance policies and the name
and address of the insuring agent/adjuster. The City of Huntington shall respond in writing within
thirty days of the written request. A refusal to issue a certificate shall be made in writing with the
reasons so stated and copy shall be sent to the designated insurance agent.
       954.06          PAYMENT TO CITY FROM INSURANCE PROCEEDS.
        If a “Certificate of Good Standing” is denied by the City of Huntington, or the City of
Huntington does not respond under 954.05 within 30 days, the insurance company shall transfer
from the insurance proceeds to the Finance Director of the City of Huntington, in the aggregate,
two thousand dollars for each fifteen thousand dollars of the “total loss by fire” claim. The
transfer of proceeds shall be on a pro rata basis by all companies insuring the building or other
structure. Policy proceeds remaining after the transfer to the City of Huntington shall be disbursed
by the insurance company in accordance with the policy terms.
       The named insured(s) may submit a good faith estimate by a licensed contractor of the
costs of securing and removing, or the costs of repairing the building or other structure in
compliance with the State Building Code after the transfer, and the Finance Director may return
the amount in excess of the estimate to the named insured, provided that the City of Huntington has
not commenced to remove, repair, or secure the building or other structure.
       Nothing in this section shall be construed to prohibit the City and the named insured from
entering into an agreement that permits the transfer of funds to the named insured(s) if some other
reasonable disposition of the damaged property has been negotiated.




Home Rule Pilot Program                                                                       Page 35
       954.07          PLACEMENT OF FUNDS; TRANSFER OF FUNDS; RECEIPT OF
                       PROOF OF REPAIR; TIME LIMIT ON TRANSFER.
       Upon receipt of proceeds by the City of Huntington as authorized in this Article, the
Finance Director shall place the proceeds in a separate fund. When transferring the funds, the
insurance company shall provide the City of Huntington with the name and address of the named
insured(s). The City of Huntington shall thereafter contact the named insured(s) and certify that
the proceeds have been received. The City of Huntington shall notify the named insured(s) that
the funds shall be returned to the named insured(s) upon the issuance of a “Certificate of Good
Standing.”
       The failure by a named insured(s) to obtain a “Certificate of Good Standing” within 90
days of a “total loss by fire” will authorize the City of Huntington to withdraw monies from the
fund to satisfy any delinquent municipal service fees, refuse service fees, assessments, penalties,
or charges against the property.
        The failure by a named insured(s) to obtain a “Certificate of Good Standing” within 180
days of a “total loss by fire” will authorize the City of Huntington to withdraw monies from the
fund to cause the structure and debris to be safely removed, cap the sewer, and properly leveled the
property.
       954.08          PROOF OF PAYMENT SHOWS DISCHARGE OF INSURER.
       Proof of payment by the company or companies of proceeds under a policy in accordance
with Section 954.04 of this section is conclusive evidence of the discharge of its obligation to the
insured or insureds under the policy to the extent of the payment and of compliance by the
company or companies.
       954.09          NO LIABILITY ON CITY OR INSURER CREATED.
        Nothing in this Article shall be construed to make an insurance company liable to its
insured in excess of proceeds payable under its insurance policy or for any other act performed
pursuant to Article 954. Nothing in this article shall be construed to make the City an additional
insured under a policy of insurance. The City of Huntington has standing to bring a private cause
of action to enforce the provisions of Article 954, and seek damages arising from violation thereof.
       954.10          INSURER’S SUBROGATION AND ASSIGNMENT PRESERVED.
       An insurance company making payment of policy proceeds under this section for
delinquent municipal service fees, refuse service fees, or structure removal liens or debris removal
expenses incurred by the City shall have full benefit of such payment including all rights of
subrogation and of assignment.
       954.11          DUTIES OF THE INSURANCE COMMISSIONER.

        The insurance commissioner of West Virginia shall enforce the provisions contained
herein under the authority created by the West Virginia Legislature found in Chapter 33 of the
West Virginia Code.

       954.12          EFFECTIVE DATE.

        The provisions of this Article apply to all fires which occur in the City of Huntington after
July 1, 2009.



Home Rule Pilot Program                                                                      Page 36
           954.13                  SEVERABILITY.
            The provisions of this Ordinance are severable, and if any provision or part thereof shall be
declared invalid or unconstitutional or inapplicable to any person or circumstances, such
invalidity, unconstitutionality or inapplicability shall not affect or impair the remaining provisions
of this Ordinance.
...........................................................................................................................................................


           BE IT FURTHER ORDAINED that all other articles, sections and sub-sections of the
Codified Ordinances of the City of Huntington, as revised, shall remain in full force and effect
until further Ordinance of this Council.




Home Rule Pilot Program                                                                                                                        Page 37
  AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
 ARTICLE 773 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
            AS REVISED, REGARDING MUNICIPAL SERVICE FEE.

   BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON, CABELL

   AND WAYNE COUNTIES, WEST VIRGINIA, that Section Article 773 of the Codified

   Ordinances of the City of Huntington, as revised, are hereby AMENDED, MODIFIED and

   RE-ENACTED to read as follows:

                                                                 ARTICLE 773

                                                  MUNICIPAL SERCVICE FEE.
 ..........................................................................................................................................................

 773.12 PURPOSE.

         The City of Huntington is a member of the Municipal Home Rule Pilot Program enacted
 by the West Virginia Legislature. W. Va. Code § 8-1-5a [2007]. The legislation authorizes pilot
 municipalities to exercise broad-based home rule to improve urban and state development. The
 legislation establishes a framework for municipalities to explore new ideas to see if they can or
 should be implemented on a statewide basis.

         The article is an authorized enactment under the Municipal Home Rule Pilot Program
 and is intended to prevent owners of real property within the City of Huntington from failing to
 remit fees, taxes and charges owed unto the City of Huntington prior to the transfer of the
 property to a new owner.

             773.13                  REPORTING OF TRANSFERS OF REAL PROPERTY WITHIN
                                     CITY LIMITS; PAYMENT OF CITY FEES.

                 (a)     All transfers of real property located within the corporate boundaries of
 The City and consummated after the effective date of the enactment of this section, shall be
 reported, in writing, to the director of Finance, by either, the closing agent, purchasing agent,
 closing attorney or any individual responsible for the consummation of a real estate transaction
 and the disbursement of the proceeds of said transfer, twenty-four (24) hours prior to the date
 the transaction is scheduled to be closed. Prior to the closing, date, the Director of Finance shall
 provide to the closing agent an accounting of all outstanding municipal service and refuse fees,
 and any other City fees, taxes and charges which are due and owing for the subject property. It
 shall be the responsibility of the closing agent to remit said fees within twenty-four (24) hours
 of the closing.
                 Said fees, taxes and charges shall be remitted to the Division of Finance within
 twenty-four (24) hours of the closing thereof, provided, that, in the event the transaction is
 closed on a regular business day after the close of business or on a Friday after the close of
 business, or on a Saturday or Sunday, or on a legally recognized holiday pursuant to West
 Virginia Code Article 2-2, as amended, such sale shall be reported to the Division of Finance no
 later than the close of business on the next regular business day. The written report shall be
 made on a form to be prescribed and provided by the Director of the Division of Finance. The
Home Rule Pilot Program                                                                                                                        Page 38
 grantor, or a closing agent on behalf of the grantor, shall further pay any and all refuse service
 fees, municipal service fees and any other City fees, taxes and charges which are due and owing
 the City for services provided to the real property being conveyed, over to the Division of
 Finance within the time periods set forth in this subsection for reporting the sale of such
 property. Any fees, taxes and charges that remain due and owing after the date of the transfer of
 the real property shall be the responsibility of the new property owner as said fees, taxes and
 charges shall assess against the real property.


                 (b)     The Director of the Division of Finance and the Director of the Division
 of Audit and compliance, or their designees, shall have plenary power and authority to enforce
 this section by civil action in the Circuit Courts of Cabell and Wayne Counties, West Virginia,
 or in any other court of competent jurisdiction.

                    (c)    The Provisions of this article shall apply to all real estate transactions
     closed on or after October 1, 2009.

      773.14                OFFICAL SQUARE FOOTAGE FROM GOVERNMENT
 OFFICES.

         The Mayor and/or his designee may from time to time as necessary acquire official
 square footage of structures from any county or state office and may use such in computing the
 fee on any lot or parcel as outlined in Section 773.03.
 ……………………………………………………………………………………………………

 BE IF FURTHER ORDAINED that these amendments shall become effective upon its

 adoption by Council and approval by the Mayor unless provided otherwise.

 BE IT FURTHER ORDAINED that all other sections and sub-sections of Article 773 of the

 Codified Ordinances of the City of Huntington, as revised, shall remain in full force and effect

 until further Ordinance of this Council.

  




Home Rule Pilot Program                                                                          Page 39
     AN ORDINANCE OF THE CITY OF HUNTINGTON COUNCIL CREATING A
    MUNICIPAL OCCUPATION TAX FOR THOSE INDIVIDUALS ENGAGED IN A
  BUSINESS, PROFESSION, OCCUPATION OR TRADE WITHIN THE CORPORATE
   LIMITS OF THE CITY OF HUNTINGTON EITHER AS AN EMPLOYEE OR AS A
                        SELF-EMPLOYED PERSON.

            BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON,
CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Article 774 of the Codified
Ordinances of the City of Huntington, as revised, are hereby CREATED and ENACTED to read
as follows:
............................................................................................................................................................
                                                                 ARTICLE 774

                                               MUNICIPAL OCCUPATION TAX

INDEX:

774.01                 Statement of Authority
774.02                 Statement of Policy and Findings
774.03                 Definitions
774.04                 Imposition of Tax
774.05                 Filing of Returns; Annual Filing of Reconciliation of Returns; Payment of
                       The Tax; Bulk Submissions
774.06                 Annual Filing of Reconciliation Returns
774.07                 Timely Mailing Treated as Timely Filing and Paying
774.08                 Bulk Submissions
774.09                 Extension of Time for Making Return
774.10                 Where Work Done or Services Performed both within and/without the City
774.11                 Maintenance of Records; Investigative Powers; Audit and Subpoena
                       Authority
774.12                 Refunds
774.13                 Preliminary and Final Assessments
774.14                 Time Limitation for Entering Assessments
774.15                 Appeals
774.16                 Penalties and Interest
774.17                 Confidentiality of Tax Returns
774.18                 Regulations may be Promulgated; Payments Due Taxpayers may be
                       Withheld
774.19                 Disposition of Funds Derived from Occupation Tax
774.20                 Liens, release; subordination; foreclosure
774.21                 Levy and Distraint
774.22                 Property Exempt from Levy
774.23                 Surrender of Property Subject to Levy
774.24                 Sale of Seized Property



Home Rule Pilot Program                                                                                                                         Page 40
774.25         Sale of Perishable Goods
774.26         Redemption of Property
774.27         Certificate of Sale; Deed to Real Property
774.28         Legal Effect of Certificate of Sale of Personal Property and Deed of Real
               Property
774.29         Records of Sale
774.30         Expense of Levy and Sale
774.31         Application of Proceeds of Levy
774.32         Authority to Release Levy and Return Property
774.33         Collection by Civil Suit
774.34         Violations
774.35         Request for Ruling on Items of Compensation
774.36         Severability
774.37         Repeal of Article 772 as Amended
774.38         Effective Date of Ordinance
774.01         Statement of Authority

        West Virginia Code Section 8-1-5a created a pilot program known as the Municipal
Home Rule Pilot Program granting five selected Class I, Class II and/or Class III municipalities
and/or metro governments the authority to enact any ordinances, acts, resolutions, rules and
regulations not contrary to the constitutions of the United States or West Virginia, federal law or
chapters sixty-a, sixty-one and sixty-two of the West Virginia Code. On or about December 21,
2007 the City of Huntington applied to the Municipal Home Rule Board to be selected as one of
the five municipalities to be authorized to have a Municipal Home Rule Pilot Program.
Thereafter, the City was notified that it was selected to be one of the municipalities authorized to
undertake a Municipal Home Rule Pilot Program.
        West Virginia Code Section 8-1-5a provides that a pilot municipalities selected to
participate in the pilot program shall have the following powers: (1) the authority to pass any
ordinances, acts, resolutions, rules and regulations not contrary to the constitutions of the United
States or West Virginia, federal law or chapters sixty-a, sixty-one and sixty-two of the West
Virginia Code as specified in its written and approved plans: Provided, that the pilot
municipalities may not adopt any ordinance, rule, regulation or resolution or take any action that
would create a defined contribution employee pension or retirement plan for its employees
currently covered by a defined benefit pensions plan; and (2) any other powers necessary to
implement the provisions of its approved plan.
        The City’s Municipal Home Rule Pilot Program approved plan provides for the
enactment of a municipal occupation tax on persons employed within the boundaries of the City
at a tax rate of one percent (1%) of salaries, wages, commissions and other earned income for
federal income tax purposes.
        This Ordinance is for the purpose of raising revenue and should not be considered as
regulating professions, occupations and matters of employment and to the extent it could be so
interpreted should be disregarded.




Home Rule Pilot Program                                                                     Page 41
774.02                 Statement of Policy and Findings

(a) The City Council determines and declares that the performance of services within the City
by an employee for an employer or by an individual as a self-employed person, for any period of
time for compensation, is the exercise of a taxable privilege, whether or not all or only part of the
services of such natural person are performed within the City.

(b) The City Council further determines and declares that considering the relationship existing
between the exercise by employees and self-employed persons of the taxable privilege set forth
in subsection (a) and the expenditures required by the City for street maintenance, police and fire
protection and other municipal services and to provide for the general welfare, and the
relationship of the exercise of the taxable privilege by employees to a proper, just and equitable
distribution of the tax burdens within the City, and all matters considered in relation thereto, that
the tax herein imposed on employees and self-employed persons is reasonable, proper, uniform,
nondiscriminatory and necessary for a just and proper distribution of the tax burdens within the
City.

(c) The City Council finds that pursuant to West Virginia Code Section 8-1-5a that the City,
pursuant to the Municipal Home Rule Pilot Program, has the plenary power and authority to
provide by ordinance for the enactment of a municipal occupation tax to provide revenue for the
operation of its government to be collected in the manner prescribed in this Ordinance.

(d) The City Council finds that employers located within the City possess important
employment information necessary to properly enforce certain aspects and provisions of this
Ordinance and that, therefore, reasonable regulations concerning obtaining certain information
from such employers shall be a necessary and important part of the administration of the City
municipal occupation tax.

774.03                 Definitions

        The following words, terms and phrases when used in this Ordinance shall have the
following meanings, except when the context clearly indicates a different meaning. When used
herein, the singular shall include the plural and vice versa, and the masculine shall include the
feminine and the neuter.

         (a) “City" means the City of Huntington, West Virginia.

       (b) "Division" means the Division of Finance of the City, and includes the Director of
Finance.

       (c) "Director of Finance" means the Director of Finance of the City, or his or her duly
authorized agent.

       (d) "Employee" shall mean and include any person engaging in any trade, occupation or
profession within the meaning of subsection (v) of this section under the control of an employer.
Any person who does any kind of work or renders any kind of personal services subject to




Home Rule Pilot Program                                                                      Page 42
control by an employer both as to what work or services shall be performed and as to how they
shall be performed, where the relationship between the person performing the services and the
person for whom such services are rendered is, as to those services, the legal relationship of
employer and employee, shall be classified as an employee under this Ordinance. In determining
whether a person is an "employee" or an “independent contractor," the Director of Finance shall
consider the following factors, along with other relevant factors:

              (1) Whether the person receiving the benefit of the service has the right to control
the manner and method of performance;

               (2) Whether the person rendering the service has a substantial investment in his
own tools or/and equipment;

               (3) Whether the person rendering the service undertook substantial costs to
perform the services;

              (4) Whether the person performing the service had an opportunity for profit
dependent on his managerial skill;

               (5) Whether the service rendered required special training and skill;

               (6) The duration of the relationship between the parties;

                (7) Whether the service performed is an integral part of the recipient's business
rather than an ancillary portion;

               (8) Whether the person rendering the service had a risk of loss;

               (9) The relationship which the parties believed they created;

               (10) Whether or not the person who performed the services offered these services
publicly and practiced an independent trade;

              (11) Whether the custom in the trade or industry was for the service to be
performed on an independent contractor or employee basis;

              (12) Whether the person who received the benefit of the service had the right to
discharge without cause the person who performed the services;

                (13) Whether the person who performed the services had the right to delegate his
duty to others; and

                (14) Whether the person who performed the services had a current City business
license/registration to conduct business in the City.




Home Rule Pilot Program                                                                      Page 43
       (e) "Employer" means and includes any person, business, firm, corporation, partnership,
limited liability company, association (incorporated or otherwise), institution, trust,
governmental body or unit or agency, or any other kind of organization or profession, who or
that employs any person in any trade, occupation or profession in the City within the meaning of
subsection (v) of this section.

      (f) "Final Assessment" means the final notice of underpayment or nonpayment of the
municipal occupation tax imposed by this Ordinance.

        (g) "Gross Receipts" and "Compensation" shall have the same meaning, and both
words shall mean Net Earnings from Self-Employment derived by a Self-Employed Person from
services rendered within the City and any payment granted or given an employee unless
specifically excluded, and shall include, but not be limited to, the total of the following items
which a person receives from or is entitled to receive from or be given credit for by his employer
for any work done or personal services rendered in any trade, occupation or profession within the
City, including any kind of deductions before "Take Home" pay is received, and which are
includible in gross income for Federal income tax purposes:

      (1)     Salaries, wages, commissions, bonuses, incentive payments, and other
compensation received by an individual, whether directly or indirectly through an agent and
whether in cash or in property, for services rendered:

      a.      As an officer, director, agent, or employee, or both, of a corporation (including a
nonprofit corporation), joint stock association or joint stock company;

        b.     As an officer, agent or employee (as distinguished from a partner or member) of a
partnership, limited partnership, limited liability company or any other form of unincorporated
enterprise owned by one (1) or more persons;

        c.      As an agent employee (as distinguished from the proprietor) of a business, trade
or profession, conducted by an individual owner;

       d.     As an officer, agent or employee (whether elected or appointed, enlisted or
commissioned) of a governmental administration, agency, authority, board, body, branch,
bureau, department, division, section or unit thereof.

       e.      As an officer, agent or employee of any other entity.

      (2)     Salaries, wages, commissions, bonuses, incentive payments, and other
compensation received by an individual, whether directly or indirectly through an agent and
whether in cash or in property, for services rendered:

       a.      Whether based upon hourly, daily, weekly, semimonthly, monthly, annual, unit
of production of piece-work rates; and




Home Rule Pilot Program                                                                   Page 44
       b.      Whether paid by an individual, partnership, association, limited liability company,
corporation (including a nonprofit corporation), governmental administration, agency, authority,
board, body, branch, bureau, department, division, section or unit, or any other entity.

        (3)   Commissions received by an employee, whether directly or indirectly through an
agent, and whether in cash or in property, for services rendered, regardless of how computed or
by whom paid.

       (4)     Fees and other earned income. Compensation paid to a director or officer of a
corporation are subject to withholding under this Ordinance as in the case of any other employee.

       (5)     Other compensation will be treated as follows:

       a.      SUBJECT TO THE OCCUPATION TAX:

       (i)     Tips Received by Waiters and Others: Tips received are subject to the occupation
tax and will be reported in the same manner as regular earnings.

      (ii)    Vacation, Holiday and/or Sick Benefits: Payments made to employees by an
employer as vacation, holiday and/or sick payments are subject to the occupation tax.

       (iii)   Separation Payments: Payments made to employees by an employer at the time
of a voluntary or involuntary separation (dismissal) of the employee from the service of the
employer, are to be regarded as subject to the occupation tax.

       (iv)    Employee contributions to any welfare benefit, fringe or other benefit plan made
by salary reduction or other payment method which permits employees to elect to reduce federal
taxable compensation under the Internal Revenue Code, including but not limited to Sections 125
and 132 of the Internal Revenue Code are subject to the occupation tax.

        (v)   Property and Services Received as Compensation: The fair market value of
property or services received as compensation by an employee and paid by the employer
including board and lodging and similar items where such board and lodging is considered part
of the compensation paid and is not afforded for the convenience of the employer.

       (vi) Other Income: All other income paid by an employer and received by an employee
for the performance of any activity subject to the occupation tax, not expressly exempt (see
below) is subject to the occupation tax.


       b.      NOT SUBJECT TO THE OCCUPATION TAX:

        (i)     Retirement Payments: Periodic payments commonly recognized as old-age or
retirement pensions, made to persons retired from services after reaching a specified age or after
a stated period of employment, are not subject to the occupation tax.




Home Rule Pilot Program                                                                   Page 45
       (ii)    Disability and Unemployment Compensation: Payments made to employees by
an employer under a disability, or accident plan are not subject to the occupation tax.
Unemployment compensation payments by any state or any other agency are not subject to the
occupation tax.

        (iii) Death Benefits: Death benefits payable by an employer to the beneficiary of an
employee or to the employee’s estate, whether payable in a single sum or otherwise, are not
subject to the occupation tax.

        (iv)    Benefits arising under state or federal workers’ compensation laws: Amounts
received by employees under state or federal workers compensation laws as compensation for a
disability sustained during the course of employment, together with any amount of damages
received by suit or agreement on account of such disability, are not subject to the occupation tax.

        (v)     Allowances and Reimbursements for Expenses: Reasonable sums allowed and
paid by employers to employees for expenses necessarily and actually incurred by the employee
in the direct performance of his services are not subject to the occupation tax..

        (vi)   Strike Benefits: Strike pay benefits paid from a fund which is established and/or
replenished, in whole or in part, from the employee’s wages are not subject to the occupation tax.

       (vii) West Virginia National Guard: Compensation paid members of the West Virginia
National Guard for active duty training, unit training assemblies and annual field training.

        (viii) Employer contributions to qualified retirement plans not arising from employee
elections are not subject to the occupation tax.

      (ix)    Employer Payments for Employee Benefits:            Employer’s payments for
employee’s life insurance premiums not treated as wages for federal income tax purposes,
employer’s payments for employee’s health insurance benefits are not subject to the occupation
tax.

        (x)    Student Grants: Stipends, honorariums, grants and other payments made to
students to the extent that such payments are conditioned only upon the recipient’s pursuit of
studies and/or participation in athletic or other intercollegiate competition, and scholarships and
other noncash fringe benefits received by duly registered students from the school, college or
university in which they are enrolled are not subject to the occupation tax.

       (xi)   Payments to Nonresident Military Personnel: Payments to nonresident military
personnel exempt from state and location taxation under the Soldiers and Sailors Federal Relief
Act (USCA 574) are not subject to the occupation tax.

       (xii) Compensation to individual domestic workers or care providers are not subject to
the occupation tax.
       (xiii) Compensation to individuals with single newspaper routes are not subject to the
occupation tax.




Home Rule Pilot Program                                                                    Page 46
       (xiv) Employee contributions to any retirement, profit sharing or deferred
compensation plan, which are deferred for federal income tax purposed under a salary reduction
agreement or similar arrangement, including but not limited to salary reduction arrangements
under Section 401(a), 401(k), 402(e), 403(a), 403(b), 408, 414(h) or 457 of the Internal Revenue
Code and retirement plans of state, local and federal governmental entities are not subject to the
occupation tax.

        (h) “Independent Contractor” shall mean a person who is subject to the control and
direction of another as to the result of his work, but not as to means or methods.

       (i) “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

        (j) “Net Earnings from Self-Employment” means with respect to any individual the
individual’s “net earnings from self-employment” as determined pursuant to Section 1402 of the
Internal Revenue Code and which is attributable to services performed within the City.

       (k) "Notice of Appeal" means any written notice sufficient to identify the name of the
taxpayer or other party appealing, the specific matter appealed from, the basis for that appeal,
and the relief sought.

       (l)"Person" means any natural person.

       (m)"Petition for Refund" means a written request for a refund of tax previously paid,
including in the form of an amended return. Unless otherwise provided by law, such request shall
include sufficient information to identify the amount of tax overpaid, the taxpayer, the period
included, the reasons for the refund and sufficient documentation as required by the Director of
Finance.

        (n)"Petition for Review" means a written document filed with the Division in response
to a preliminary assessment in which the taxpayer sets forth reasonably specific objections to the
preliminary assessment.

       (o)"Preliminary Assessment" means the preliminary notice of underpayment of the
occupation tax by a taxpayer.

       (p) "Reasonable Cause" shall include, but not be limited to, those instances in which the
taxpayer has acted in good faith. The burden of proving reasonable cause shall be on the
taxpayer.

       (q)"Return" means any report, document, or other statement required to be filed with the
Division for the purpose of paying, reporting, or determining the proper amount of value or tax
due.
       (r) “Self-Employed Person” means an individual who has Net Earnings from Self-
Employment from services performed within the City.




Home Rule Pilot Program                                                                   Page 47
       (s)"Tax" means any amount, including applicable penalty and interest, levied or assessed
against a taxpayer and which the Division is required or authorized to administer under the
provisions of this Ordinance.

        (t)"Taxpayer" means any person subject to or liable for taxes herein levied; any person
required to file a return with respect to, or to pay, or withhold and remit the tax herein levied or
to report any information or value to the Division; or its designee.

        (u)"Taxpayer's Authorized Representative" means any individual with written authority
or power of attorney to represent a taxpayer before the Division; provided however, that nothing
herein shall be construed as entitling any such individual who is not a licensed attorney to engage
in the practice of law.

        (v)"Trade, Occupation, and Profession" means and includes the doing of any kind of
work, the rendering of any kind of personal services either as an employee or a Self-Employed
Person, or the holding of any kind of position or job within the City, by any clerk, laborer,
tradesman, manager, official, professional or other employee or the providing of any services by
a Self-Employed Person, including any non-resident of the City who is a Self-Employed Person
or or any non-resident employed by any employer as defined in this section, where the
relationship between the individual performing the services and the person for whom such
services are rendered is, as to those services, the legal relationship of employer and employee,
including also a partner of a firm or an officer of a firm or corporation, if such partner or officer
receives a salary for his personal services rendered in the business of such firm or corporation.
"Trade, Occupation, and Profession" shall also mean and include the holding of any kind of
office or position, either by election or appointment, by any federal, state, county or city officer
or employee where the services of such official or employee are rendered within the City.

774.04                 Imposition of Tax

        A municipal occupation tax is hereby imposed upon any person who engages in any
trade, occupation or profession within the City when the relationship between the individual
performing the services and the person for whom such services are rendered is the legal
relationship of employer and employee or where the person is a Self-Employed Person. This
includes both residents and nonresidents of the City, an officer or partner of a corporation or firm
if such officer or partner receives a salary for his personal services rendered in the business of
such corporation or firm, and governmental employees performing services within the City. The
municipal occupation tax shall be measured by and shall be equal to one percent (1.0%) of the
gross receipts of such person which are earned by such person for work done or services
rendered in the City regardless of where the payment is made or received. In no event shall
such liability exceed $1,250.00 for any calendar year.


774.05 Filing of Returns; Annual Filing of Reconciliation of Returns; Payment of the Tax;
Bulk Submissions.




Home Rule Pilot Program                                                                      Page 48
(a) Employers to Withhold Occupation Tax and File Returns; Due Date of Tax. Each
employer shall deduct from each payment of gross receipts and compensation due each
employee the amount of the occupation tax measured by one percent (1%) of the compensation
due each employee beginning on the 1st day of October, 2010. The payments required to be
made on account of such deductions by employers shall be made monthly to the City on or
before the twentieth (20th) day of the month next following the end of each such monthly period
(i.e., the initial payments to the City shall be due on November 20, 2010 for any gross receipts
and compensation paid to employees for the time period from October 1, 2010 to October 31,
2010.) Each payment of occupation tax shall be accompanied with a return on the form
prescribed by the Division. Notwithstanding the foregoing, employers may, with the consent of
the Division, file returns more frequently than monthly.

       (1) Quarterly Returns Permitted for Certain Small Businesses. If the total amount of
           occupation tax due from all employees of an employer averages less than fifty
           ($50.00) dollars per month during the preceding calendar year, a quarterly return and
           remittance in lieu of monthly returns may be made for the current calendar year. If
           an employer qualifies for this exception, the employer must make an election,
           submitted to the Division, to file quarterly returns prior to January 31st of the current
           calendar year. If such election is properly made, the return, and the remittance of
           occupation tax to the City for the quarterly periods shall be due on or before the
           twentieth (20th) day of the month next following the end of each such calendar
           quarterly period. For calendar year 2010 employers may seek the consent of the
           Director of Finance to file on a quarterly basis.

(b) Contents of Returns. Each monthly or quarterly return shall show:

       (1) The number of employees, both taxable and nontaxable, of the employer;
       (2) The amount of gross compensation of all employees;
       (3) Nontaxable compensation;
       (4) The amount of occupation tax deducted and paid by such employer for all
       or any part of the period being reported;
       (5) The correct reporting period; and
       (6) In addition to items (1) through (5) above, such return shall show such other pertinent
       information as may be required by the Division.

(c) Employer’s Responsibility When No Form Received. The Division is authorized to
provide prescribed forms necessary for compliance with the filing requirement outlined in this
section. The failure of an employer to receive forms from the Division does not relieve the
employer or the taxpayer of the responsibility of the timely reporting of the information required
on the return, nor the timely payment of the tax.

(d) Employers Deemed to be Trustees. Each employer is deemed to be a trustee of the City in
collecting and holding the occupation tax required under this Ordinance to be withheld and
submitted to the City, and the funds so collected by such withholding are deemed to be trust
funds. Every such employer required to deduct and withhold the occupation tax at the source is




Home Rule Pilot Program                                                                     Page 49
liable directly to the City for the payment of such tax whether actually collected by the employer
or not.

(e) Failure or Omission by Employer--Employee’s Responsibility. The failure of any
employer to collect occupation tax and to make such return shall not relieve the employee from
payment of such occupation tax in compliance with this Ordinance respecting the making of
returns and payment of the occupation tax.

(f) Returns to be Filed by Employees or Self-Employed Persons; Due Date of Tax. When a
monthly or quarterly return, as required hereby is not filed by an employer and the occupation
tax is not paid to the City by such employer as herein provided or in the case of tax due from a
Self-Employed Person, the employee for whom no return has been filed and no payment has
been made or the Self-Employed Person shall file a return with the Director of Finance on or
before the twentieth (20th) day of the month next following the end of each such monthly or
quarterly period, showing in said return his gross receipts subject to occupation taxes for such
month or quarter. If for any reason all occupation taxes of a person subject to the provisions of
this Ordinance were not withheld by his employer from his gross receipts, such person shall file
each return required by this section on a form obtainable from the Director of Finance. In
addition to the gross receipts earned by him, such return shall show such other pertinent
information as may be required by the Director of Finance. Each person making a return required
by this section shall, at the time of filing thereof, pay to the City the amount of occupation taxes
due under this Ordinance; provided, however, that any portion of the occupation tax deducted by
the employer shall be deducted on the return and only the balance, if any, shall be due and
payable by the employee at the time of filing said return.

774.06     Annual Filing of Reconciliation Returns

(a) Each employer or Self-Employed Person shall file with the Division on or before February
28th of each year, an annual return regarding the previous calendar year on a form prescribed by
the Division. This annual return shall show the gross amount of compensation of each employee
or Self-Employed Person for the previous calendar year, the amount of occupation taxes
deducted and paid by such employer or Self-Employed Person for the preceding calendar year
and other information as may be prescribed on such annual return form.

(b) Each employee for which no return was filed by the employer, shall file a return with the
Division on or before February 28th of each year thereafter in which his employer has failed to
file any monthly or quarterly return required in the preceding calendar year, showing on said
return the gross receipts subject to occupation taxes during the preceding calendar year. If for
any reason all occupational taxes of a person subject to the provisions of this Ordinance were not
withheld by his employer from his gross receipts, such person shall file each return required by
this Section on a form obtainable in the Division.
(c) Each employer shall file with the Division on or before February 28th of each year, a copy of
all Internal Revenue Service Forms 1099 or a report showing the amount of compensation earned
by any person not considered an employee, as defined in this Ordinance, who has rendered
personal services for which the occupational tax was not withheld by the taxpayer receiving the
personal services during the preceding calendar year. Each Self-Employed Person shall file




Home Rule Pilot Program                                                                     Page 50
with the Division on or before April 15th of each year, a copy of all Internal Revenue Service
Form 1065 - K-1s or Form 1040 - Schedule Cs, as applicable, showing such Self-Employed
Person’s Net Earnings from Self-Employment with any adjusting schedules detailing the portion
of such person’s Net Earnings from Self-Employment which is attributable to services performed
within the City.

774.07    Timely Mailing Treated as Timely Filing and Paying

The provisions outlined in this section for the timely filing of any returns, payments, claims,
statements, or other documents shall be administered as provided herein.

(a) Date of Delivery by Use of United States Mail. If any return, claim, statement, or other
document required to be filed, or any payment required to be made, within a prescribed period or
on or before a prescribed date under the authority of any provision of this Ordinance is, after
such period or such date, delivered by United States mail to the Division or to the Division’s
designated depository where such return, claim, statement, or other document is required to be
filed, or to which such payment is required to be made, the date of the United States postmark
stamped on the cover in which such return, claim, statement, or other document, or payment, is
mailed shall be deemed to be the date of delivery, or the date of payment, as the case may be;
provided, however:

         (1) Weekends and Holidays. When the due date falls on a Saturday, Sunday, or City
         holiday, payment of the tax may be made without penalty on the first business day
         following the due date.

         (2) Mailing Requirements. The return, claim, statement, or other document, or payment
         was, within the time prescribed in subsection (a) above, deposited in the mail in the
         United States in an envelope or other appropriate wrapper, postage prepaid, properly
         addressed to the Division or to the Division’s designated depository where such return,
         claim, statement, or other document is required to be filed, or to where such payment is
         required to be made.

(b) Date of Delivery by Method Other Than United States Mail. Returns, claims, statements,
or other documents, or payments which are required under any provision of this Ordinance
which are delivered by any method other than by United States mail shall be considered timely
filed when such items are received by the Division or the Division’s designated depository on or
before the due date prescribed.

(c) Untimely Filing. Any return, payment, claim, statement, or other document not received in
accordance with the provisions of this section shall be deemed untimely filed and shall be
assessed applicable penalties and interest as prescribed by this Ordinance.

774.08      Bulk Submissions

The Division may accept, for reporting and payment of the occupation tax, bulk submissions of
returns. Any such bulk submissions of reports and payments shall include:




Home Rule Pilot Program                                                                  Page 51
1. The City’s assigned taxpayer identification number for each such taxpayer for each tax paid;
and,

2. Sufficiently detailed information by which each taxpayer can be identified such that a
determination can be made as to the amount and method of assessment of tax against such
taxpayer for the City.

The acceptance by the City of such bulk submissions shall not relieve the taxpayer on whose
behalf such submissions were made from liability for any occupational tax arising from an error
or omission made by the taxpayer’s representative. Such bulk submission shall be signed by the
taxpayer or its properly authorized representative.

774.09    Extension of Time for Making Return

The Director of Finance, at his discretion, for reasonable cause, may extend the time for making
any return required under the provisions of this Ordinance, however, the time for filing any such
return shall not be extended for a period greater than thirty (30) days from the date such return is
due to be made and shall not prevent penalty and interest from accruing during the period of such
extension.




Home Rule Pilot Program                                                                     Page 52
   A.      Where Work Done or Services Performed Both Within and Without the
          City
   (a)Tax as a Percentage of Work Performed Within the City. In cases where
   compensation is earned as a result of work done or services performed both within and
   without the City, the occupation taxes required under this Ordinance shall be computed
   by determining upon the oath of the employer or Self-Employed Person, or if required by
   the Director of Finance upon the oath of the employee, that percentage of the
   compensation earned from the proportion of the work which was done or performed
   within the City.

   (b) Tax on Commission-Based Income. If an individual is a traveling salesperson, agent
   or other employee, whose compensation on the basis of commission depends directly on
   the volume of business transacted by the individual, the deducting and withholding shall
   attach to the portion of the entire compensation which the volume of business transacted
   by the employee within the city bears to the volume of business transacted by the
   employee both within and without the city. There shall be no proration of compensation
   for employees headquartered within the City where travel is only incidentally connected
   with the occupation.
   (c) Unusual Cases. If it is impossible to apportion the earnings as provided above
   because of the peculiar nature of the services of the employee, or of the usual basis of
   compensation, apportionment shall be made in accordance with facts, and the tax
   deducted and withheld accordingly. With respect to each such employee or group of
   employees similarly or identically circumstanced, the employer shall furnish the Finance
   Director a detailed statement of facts.

   (d) Occasional Entry Within City. The occasional entry into the city of an employee,
   who performs duties for which the employee is employed entirely outside the city, but
   enters the city for the purposes of reporting, receiving instructions, accounting, etc.,
   incidental to the employee’s duties outside the city shall not be deemed to take such
   employee out of the class of those rendering their services entirely outside the city.

   774.11    Maintenance of Records; Investigative Powers; Audit and Subpoena
   Authority

   The provisions of this section shall be administered in accordance with the procedures set
   forth herein.

   (a) Records to be Kept. It shall be the duty of every employer employing employees and
   every Self-Employed Person subject to the occupation tax imposed by this Ordinance to
   keep and preserve suitable records of the gross receipts and compensation earned of such
   employees and such other books or accounts as may be necessary to allow the Division to
   determine the correct amount of tax for which he is liable, or other records or information
   as may be necessary for the proper administration of any matters, under the provisions of
   this Ordinance. It shall also be the duty of every person to keep and preserve, for a period
   of not less than five (5) years from the due date of the return on which the underlying tax
   is required to be reported, or five (5) years of the date the return is filed, whichever is




Home Rule Pilot Program                                                                    Page 53
   later, all such payroll journals or registers, canceled checks, expense reports or otherwise,
   and all such payroll journals or registers, canceled checks, expense reports and other
   records. All such records described in this paragraph shall be open for examination by
   the Division, upon request, at a reasonable time and location.

          (1) Reasonable Time and Reasonable Location. "Reasonable time" shall be
          considered to be during normal business hours of the Division. "Reasonable
          location" shall be considered to be the taxpayer’s place of business or the offices
          of the taxpayer’s authorized representative, provided such business or
          representative is located within a fifty (50) mile radius of the City. Taxpayers
          maintaining records outside of this radius must make records available at City
          Hall or at such other location as agreed upon by the Division. The Division, when
          conducting an audit, review, or examination for verification, may, at its election,
          require any taxpayer conducting business within the City to provide records,
          accounts, books, papers and other documents at a reasonable time and reasonable
          place agreed upon by the Division, as provided herein.

          (2) Employer May Be Assessed Reasonable Costs. The Division may assess and
          collect from employers the reasonable costs, based on the then current City
          government employee per diem rates incurred by, or charged to, the City in
          connection with performing an examination of the employer’s books and records
          if the employer or Self-Employed Person received notice by certified U.S. mail,
          return receipt requested, at least thirty (30) days prior to the date on which the
          examination was to commence, and

                  1. The employer or Self-Employed Person either failed or refused to
                  respond or did not propose a reasonable alternative date on which the
                  examination was to commence within 15 days of receipt of notice of the
                  pending examination, or if

                  2. The employer or Self-Employed Person and the Division agreed in
                  writing as to an alternative date on which the examination was to
                  commence but the taxpayer then failed or refused to permit reasonable
                  access to its books and records on the alternative date.

   (b) Investigative Powers. Each taxpayer shall give to the Division the means, facilities
   and opportunity for the making of such audit, examination and investigation of the
   records, books, or other relevant information maintained by any taxpayer or other person
   for the purpose of computing and determining the correct amount of tax as provided for
   in subsection 774.04 of this Ordinance. The Director of Finance is hereby authorized to
   examine any person under oath concerning any gross receipts and compensation which
   were or should have been shown in a return, and to this end, he may compel the
   production of books, papers, records and the attendance of all persons before him,
   whether as parties or as witnesses, whom he believes to have knowledge of such gross
   receipts and compensation.




Home Rule Pilot Program                                                                     Page 54
   (c) Audit and Subpoena Authority; Additional Requirements. The Division is
   authorized to audit, to subpoena records, and to enter into contracts with private
   examining or collecting firms as provided herein.

            (1) The Director of Finance or any agent or employee authorized by him is hereby
            authorized to examine and audit the books, papers, records, or other information
            of any taxpayer in order to determine the accuracy of any return made, or if no
            return was made, to ascertain the amount of occupation taxes due under the terms
            of this Ordinance by such audit or examination. In addition to any audits that may
            be conducted at the direction of the Director of Finance, audits of no less than five
            percent (5%) of the total occupation tax accounts shall be conducted on an annual
            basis to ensure compliance with the ordinance.

            (2) The Division may summon any witness to appear and give testimony, and
            summon by subpoena duces tecum any records, books, or other information of
            any kind relating to any matter which the Division has authority to administer.
            The witness may be summoned by subpoena issued by any circuit judge, any
            magistrate, or any City judge, in the name of the Division, directed to any sheriff
            in the State of West Virginia and returnable to the Division. The subpoena may be
            served in like manner as subpoenas issued out of any circuit court, or the
            subpoena may be served by an authorized employee of the Division or by
            certified mail, return receipt requested. If any witness has been subpoenaed to
            appear and testify or appear and produce records, books, or other information, and
            fails or refuses to appear or testify or to produce the books, records, or other
            information, that witness shall be subject to contempt proceedings in the circuit
            court.

            (3) The Division is authorized to enter into contracts with private examining or
            collecting firms.

   774.12     Refunds

   (a) Petitions for Refund.

            (1) Any taxpayer may file a petition for refund with the Division for any
            overpayment of tax erroneously paid to the Division. If a final assessment for the
            tax has been entered by the Division, a petition for refund of all or a portion of the
            tax may be filed only if the final assessment plus applicable interest has been paid
            in full prior to or with the filing of the petition for refund.

            (2) The petition for refund must be filed in writing by the employer who collected
            and remitted the tax to the Division or by an employee or Self-Employed Person
            who paid the tax or on whose behalf the tax was paid. All petitions for refunds
            must be in writing.




Home Rule Pilot Program                                                                       Page 55
            (3) All petitions for refund shall include sufficient information to identify the
            amount of tax overpaid, the taxpayer, the period included, and the reasons for the
            refund. Such petition shall be accompanied with sufficient supporting
            documentation as the Division may deem necessary and proper.

   (b) Automatic Refund. Where the Division determines that a taxpayer is entitled to a
   refund on the annual return properly submitted, the Division shall automatically refund to
   that taxpayer the amount of any excess tax so paid to the City; provided, however, that
   the time limitation provisions of this Ordinance shall apply.

   (c) Time Limitations.

            (1) A petition for refund must be filed in writing with the Division within (i) three
            (3) years after the due date of the return in respect of which the tax was imposed,
            determined by including any authorized extension of time for filing the return, or
            within two (2) years from the date the tax was paid, whichever of the periods
            expires the later, or if no return was filed by the taxpayer, within two (2) years
            from the date of payment of the tax, and not thereafter.

            (2) The Division shall either grant or deny a petition for refund within six (6)
            months from the date the petition is filed, unless the period is extended by written
            agreement of the taxpayer and the Division. The taxpayer shall be notified of the
            Division’s decision concerning the petition for refund by first class United States
            mail, or by certified mail, with return receipt requested, sent to the taxpayer's last
            known address. If the Division is unable to grant a refund within the time
            provided herein due to the taxpayer’s failure to provide adequate information, the
            petition for refund shall be deemed to be denied.

            (3) The Division and the taxpayer may, prior to the expiration of the period for the
            filing of a petition for refund, agree in writing to extend the time provided for
            filing the petition. The petition for refund may be filed at any time prior to the
            expiration of the period agreed upon. The period agreed upon may be extended by
            subsequent agreements in writing made before the expiration of the period
            previously agreed upon.

   774.13      Preliminary and Final Assessments

   All preliminary and final assessments issued by the Division shall be executed as
   provided herein. The terms "preliminary assessment" and "final assessment" shall have
   the respective meanings as ascribed by Article 774.03, "Definitions" of this Ordinance.

   (a) Entry of Preliminary Assessment. If the Division determines that the amount of any
   tax as reported on a return is incorrect, or if no return is filed, or if the Division is
   required to determine the amount of tax owed, the Division may calculate the correct tax
   based on the most accurate and complete information reasonably obtainable by the




Home Rule Pilot Program                                                                       Page 56
   Division. The Division may thereafter enter a preliminary assessment for the correct tax,
   including any applicable penalty and interest.

   (b) Service of Preliminary Assessment Upon Taxpayer. The preliminary assessment
   entered by the Division, or a copy thereof, shall be promptly mailed by the Division to
   the taxpayer’s last known address by either first class U.S. mail or certified mail with
   return receipt requested, but at the option of the Division, the preliminary assessment
   may be delivered to the taxpayer by personal delivery.

            (1) Disputed Preliminary Assessments. If a taxpayer disagrees with a
            preliminary assessment as entered by the Division, the taxpayer may file a written
            petition for review with the Division within sixty (60) calendar days from the date
            of entry of the preliminary assessment, setting out the specific objections to the
            preliminary assessment and showing cause why such assessment should not be
            made final. If a petition for review is timely filed, or if the Division otherwise
            deems it necessary, the Division shall schedule a conference with the taxpayer for
            the purpose of allowing the taxpayer and the Division to present their respective
            positions, discuss any omissions or errors, and to attempt to agree upon any
            changes or modifications to their respective positions.

            (2) If a written petition for appeal/review:

            i. Is not timely filed, or

          ii. Is properly filed, and upon further review the Division determines the
          preliminary assessment is due to be upheld in whole or in part, the Division may
          make the assessment final in the amount of tax due as computed by the Division,
          with applicable interest and penalty computed to the date of entry of the final
          assessment.
   (c) Service of Final Assessment Upon Taxpayer. The final assessment entered by the
   Division, or a copy thereof, shall be mailed by the Division to the taxpayer’s last known
   address (i) by either first class U.S. mail or certified mail with return receipt requested in
   the case of assessments of tax of five hundred dollars ($500) or less or (ii) by certified
   mail with return receipt requested in the case of assessments of tax of more than five
   hundred dollars ($500). In either case and at the option of the Division, the final
   assessment, or a copy thereof, may be delivered to the taxpayer by personal delivery.

   (d) Undisputed Preliminary Assessments. Where the amount of tax reported on a return
   is undisputed by the Division, or the taxpayer consents in writing to the Division's
   determination of the amount of any deficiency or preliminary assessment as provided by
   this Ordinance, the Division may immediately enter a final assessment for the amount of
   the tax, plus applicable penalty and interest.

   774.14     Time Limitation for Entering Assessments




Home Rule Pilot Program                                                                      Page 57
   (a) Any preliminary assessment must be entered within three (3) years from the due date
   of the return, or three (3) years from the date the return is filed with the Division,
   whichever is later. A preliminary assessment may be entered at any time if no return is
   filed as required, or if a false or fraudulent return is filed with the intent to evade tax.
   Additionally, a preliminary assessment may be entered within six (6) years from the due
   date of the return or six (6) years from the date the return is filed with the Division,
   whichever is later, if the taxpayer omits from the taxable base an amount properly
   includable therein which is in excess of twenty five percent (25%) of the amount of the
   taxable base stated in the return.

   For purposes of this paragraph:

                  (A) The term "taxable base" means the gross receipts and compensation or
                  other amounts on which the tax paid with the return is computed; and

                  (B) In determining the amount omitted from the taxable base, there shall
                  not be taken into account any amount which is omitted from the taxable
                  base stated in the return if the amount is disclosed in the return, or in a
                  statement attached to the return, in a manner adequate to apprise the
                  Division of the nature and amount of the item.

   (b) The Division and the taxpayer may, prior to the expiration of the period for entering a
   preliminary assessment, agree in writing to extend the time provided for entering the
   assessment. The tax may be assessed at any time prior to the expiration of the period
   agreed upon. The period agreed upon may be extended by subsequent agreements in
   writing made before the expiration of the period previously agreed upon.

   (c) Additional tax may be assessed by the Division within any applicable period allowed
   above, even though a preliminary or final assessment has been previously entered by the
   Division against the same taxpayer for the same or a portion of the same tax period.
   774.15      Appeals

   Appeals from denial of refunds and final assessments shall be executed as provided for in
   this section.

   (a) If aggrieved by a decision of the Director with respect to a claim for refund or a final
   assessment, a taxpayer may appeal the decision of the Director to either the Circuit Court
   of Cabell County or Wayne County, depending upon the taxpayer’s location within the
   City, within 60 days after service of the Director's decision.

   (1) The appeal shall be taken by the filing of a petition and notice, which petition and
   notice shall be served upon or accepted by the Director as an original notice. When the
   petition and notice is so served it shall, with the return or acceptance thereon, be filed in
   the Office of the Clerk of the Cabell County Circuit Court or the Office of the Clerk of
   the Wayne County Circuit Court, as applicable, and docketed as other cases, with the
   aggrieved party as plaintiff and the Director as defendant.




Home Rule Pilot Program                                                                     Page 58
   (2) The filing of the appeal shall not stay the collection of the occupation tax unless the
   plaintiff shall file with such clerk a bond for the use of the defendant, with sureties
   approved by the Clerk of the Circuit Court of Cabell County or the Office of the Clerk of
   the Wayne County Circuit Court, as applicable, the penalty of the bond to be not less than
   the total amount of the tax, and accumulated interest and penalties to the date of the
   appeal, and conditioned that the plaintiff shall perform the orders of the Cabell County
   Circuit Court or the Wayne County Circuit Court, as applicable; provided, that the judge
   of the Cabell County Circuit Court or the Wayne County Circuit Court, as applicable,
   may stay the collection of the tax and accumulated interest and penalties without the
   requirement of a bond, upon a proper showing by the plaintiff that the properties of the
   plaintiff are sufficient to secure performance of the Cabell County Circuit Court's or the
   Wayne County Circuit Court’s, as applicable, orders or that the ends of justice will be
   served thereby.

   (3) The Cabell County Circuit Court or the Wayne County Circuit Court, as applicable,
   shall hear the appeal and determine anew all questions submitted to it on appeal from the
   decision of the Director. In such appeal a certified copy of the Final Assessment
   approved by the Director or the Director’s decision with respect to a refund claim shall be
   admissible and shall constitute prima facie evidence of the tax, interest and penalties due
   under the provisions of this Ordinance.

   (b) The administrative remedies set forth in this Ordinance are exclusive. Failure to
   timely file a refund claim in accordance with this Ordinance shall preclude any right to
   refund with respect to any tax paid to the City prior to the claim. If no appeal is taken
   pursuant to this section within sixty (60) days after service of the Director's decision, said
   decision shall become final and conclusive and not subject to administrative or judicial
   review. The amount of the tax and accumulated interest and penalties, if any, due the City
   under such decision shall be due and payable on the day following the date upon which
   such decision becomes final.




Home Rule Pilot Program                                                                      Page 59
   774.16    Penalties and Interest

   (a) Failure to Timely File Return. If a taxpayer fails, neglects, or refuses to file any
   return required to be filed with the Division on or before the date prescribed therefor,
   determined with regard to any extension of time for filing granted by the Director of
   Finance, there shall be assessed, in addition to the tax due or the amount of tax herein
   required to be withheld/remitted, a penalty of five percent (5%) of the amount due or fifty
   dollars ($50.00), whichever is greater, if the failure is for more than one (1) month with
   an additional five percent (5%) or fifty dollars ($50.00), whichever is greater, for each
   additional month or fraction thereof during which such failure continues, not exceeding
   twenty-five percent (25%) or $250 in the aggregate, whichever is greater. Such penalty
   shall be assessed and collected as part of the tax.

   (b) Underpayment of Tax. Any taxpayer failing to pay the tax herein levied to the City
   or any amount of tax herein required to be withheld and remitted to the City, within the
   time required by this Ordinance shall pay, in addition to the tax or the amount of tax
   herein required to be withheld and remitted, a penalty of five percent (5%) of the amount
   due or fifty dollars ($50.00), whichever is greater, if the failure is for more than one (1)
   month with an additional five percent (5%) or fifty dollars ($50.00), whichever is greater,
   for each additional month or fraction thereof during which such failure continues, not
   exceeding twenty-five percent (25%) or $250 in the aggregate, whichever is greater.
   Such penalty shall be assessed and collected as part of the tax.

   (c) Underpayment Due to Negligence. If any part of any underpayment of tax is due to
   negligence or disregard of rules or regulations, there shall be added to the tax an amount
   equal to ten percent (10%) of that part of the tax attributable to negligence or disregard of
   rules or regulations. For the purpose of this section, the term "negligence" includes any
   failure to make a reasonable attempt to comply with this Ordinance, and the term
   "disregard" includes any careless, reckless or intentional disregard. Provided, however,
   that the minimum penalty imposed against such person or employer shall be five dollars
   ($5.00).

   (d) Underpayment Due to Fraud. In the case of the filing of any false or fraudulent
   return with intent to evade the occupation tax imposed by this Ordinance, or in the case
   of willful failure to file a return with intent to evade tax, there shall be added to the tax
   due an amount equal to fifty percent (50%) thereof. The burden of proving fraud,
   willfulness or intent to evade tax shall be upon the Finance Director.

   (e) Frivolous Appeal Penalty. If any appeal to the Director of Finance or Circuit Court
   is determined to be frivolous or primarily for the purpose of delay or to impede collection
   of the tax imposed by this Ordinance, a penalty of two hundred fifty dollars ($250.00) or
   twenty-five percent (25%) of the tax in question, whichever is greater, shall be assessed
   in addition to any tax due.

   (f) Penalties Not Exclusive. The penalties provided in this section for failure to timely
   file a return, failure to timely pay tax, underpayment of tax, underpayment due to




Home Rule Pilot Program                                                                     Page 60
   negligence and fraud, or filing a frivolous appeal, may be asserted against the same
   taxpayer for the same tax period.

   (g) Waiver of Penalties. Penalties may be waived, in whole or in part, by the Director of
   Finance upon a determination of reasonable cause. The burden of proving reasonable
   cause shall be on the taxpayer.

   (h) Penalty and Interest Assessed as Tax. All penalties and interest levied or assessed
   against a taxpayer and which are administered by the Division shall be assessed and
   collected in the same manner as taxes.

   (i) Interest. Interest shall be computed at a rate of one percent (1%) per month or fraction
   thereof, and shall be added as provided herein to any tax or other amount due the
   Division which is not paid by the due date. Interest on any delinquency or underpayment
   shall be charged from the due date of the tax.

   (j) Abatement of Penalty. The Division shall abate any penalty attributable to erroneous
   written advice furnished to a taxpayer by an employee of the Division. However, this
   subsection shall apply only if the Division employee provided the written advice in good
   faith while acting in his official capacity, the written advice was reasonably relied on by
   the taxpayer and was in response to a specific written request of the taxpayer, and the
   penalty did not result from the taxpayer’s failure to provide adequate or accurate
   information.

   (k) Penalty for Failure to Perform Duties. Any person required to collect, withhold,
   truthfully account for, and/or pay over any tax imposed by this Ordinance who willfully
   fails to collect or withhold such tax, or truthfully account for, and/or pay over such tax, or
   willfully attempts in any manner to evade or defeat any such tax or the payment thereof,
   shall in addition to the tax due and other penalties provided by law, be liable for a penalty
   up to the total amount of the tax evaded, or not collected, or not account for and paid
   over.

   774.17    Confidentiality of Tax Returns

   (a) General rule. -- Except when required in an official investigation by the Director of
   Finance into the amount of occupation tax due under this Ordinance or in any proceeding
   in which the Director of Finance is a party before a court of competent jurisdiction to
   collect or ascertain the amount of such tax and except as provided in subsections (c)
   through (f), inclusive, of this section, it shall be unlawful for any officer, employee or
   agent of the City to divulge or make known in any manner the tax return, or any part
   thereof, of any person or disclose information concerning the personal affairs of any
   individual or the business of any single firm or corporation, or disclose the amount of
   income, or any particulars set forth or disclosed in any report, declaration or return
   required to be filed with the Director of Finance by this Ordinance or by any rule or
   regulation of the Director of Finance issued thereunder, or disclosed in any audit or
   investigation conducted under this Ordinance.




Home Rule Pilot Program                                                                      Page 61
   (b) Definitions. -- For purposes of this section:
   (1) Disclosure. -- The term "disclosure" means making known to any person in any
   manner whatsoever a return or return information.
   (2) Inspection. -- The terms "inspection" and "inspected" means any examination of a
   return or return information.
   (3) Return. -- The term "return" means any tax or information return or report, declaration
   of estimated tax, claim or petition for refund or credit or petition for reassessment that is
   required by, or provided for, or permitted under the provisions of this Ordinance which is
   filed with the Director of Finance by, on behalf of, or with respect to any person and any
   amendment or supplement thereto, including supporting schedules, attachments or lists
   which are supplemental to, or part of, the return so filed.
   (4) Return information. -- The term "return information" means a taxpayer's identity; the
   nature, source or amount of his or her income, payments, receipts, deductions,
   exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies,
   overassessments or tax payments, whether the taxpayer's return was, is being, or will be
   examined or subject to other investigation or processing, or any other data received by,
   recorded by, prepared by, furnished to or collected by the Director of Finance with
   respect to a return or with respect to the determination of the existence, or possible
   existence, of liability (or the amount thereof) or by any person under the provisions of
   this Ordinance for any tax, additions to tax, penalty, interest, fine, forfeiture or other
   imposition or offense.
   (5) Tax administration. -- The term "tax administration" means:
   (A) The administration, management, conduct, direction and supervision of the execution
   and application of the this Ordinance; and
   (B) Includes assessment, collection, enforcement, litigation, publication and statistical
   gathering functions under the laws of the City.
   (6) Taxpayer identity. -- The term "taxpayer identity" means the name of a person with
   respect to whom a return is filed, his or her mailing address, his or her taxpayer
   identifying number or a combination thereof.
   (7) Taxpayer return information. -- The term "taxpayer return information" means return
   information as defined in subdivision (4) of this subsection which is filed with, or
   furnished to, the Director of Finance by or on behalf of the taxpayer to whom such return
   information relates.
   (c) Disclosure to designee of taxpayer. -- Any person protected by the provisions of this
   section may, in writing, waive the secrecy provisions of this section for such purpose and
   such period as he or she shall therein state. The Director of Finance may, subject to such
   requirements and conditions as he or she may prescribe, thereupon release to designated
   recipients such taxpayer's return or other particulars filed under the provisions of this
   Ordinance, but only to the extent necessary to comply with a request for information or
   assistance made by the taxpayer to such other person. However, return information shall
   not be disclosed to such person or persons if the Director of Finance determines that such
   disclosure would seriously impair administration of this Ordinance.
   (d) Disclosure of returns and return information for use in criminal investigations. -


Home Rule Pilot Program                                                                       Page 62
   (1) In general. -- Any return or return information with respect to any specified taxable
   period or periods shall, pursuant to and upon the grant of an ex parte order by a federal
   district court judge, federal magistrate or circuit court judge of West Virginia, under
   subdivision (2) of this subsection, be open (but only to the extent necessary as provided
   in such order) to inspection by, or disclosure to, officers and employees of any federal
   agency, or of any agency of West Virginia, who personally and directly engaged in:
   (A) Preparation for any judicial or administrative proceeding pertaining to the
   enforcement of a specifically designated state or federal criminal statute to which West
   Virginia, the United States or such agency is or may be a party;
   (B) Any investigation which may result in such a proceeding; or
   (C) Any state or federal grand jury proceeding pertaining to enforcement of such a
   criminal statute to which West Virginia, the United States or such agency is or may be a
   party. Such inspection or disclosure shall be solely for the use of such officers and
   employees in such preparation, investigation or grand jury proceeding.
   (2) Application of order. -- Any United States attorney, any special prosecutor appointed
   under Section 593 of Title 28, United States Code, or any attorney in charge of a United
   States justice department criminal division organized crime strike force established
   pursuant to Section 510 of Title 28, United States Code, may authorize an application to a
   circuit court judge or magistrate, as appropriate, for the order referred to in subdivision
   (1) of this subsection. Any prosecuting attorney of West Virginia may authorize an
   application to a circuit court judge of West Virginia for the order referred to in said
   subdivision. Upon the application, the judge or magistrate may grant such order if he or
   she determines on the basis of the facts submitted by the applicant that:
   (A) There is reasonable cause to believe, based upon information believed to be reliable,
   that a specific criminal act has been committed;
   (B) There is reasonable cause to believe that the return or return information is or may be
   relevant to a matter relating to the commission of such act; and
   (C) The return or return information is sought exclusively for use in a state or federal
   criminal investigation or proceeding concerning such act and the information sought to be
   disclosed cannot reasonably be obtained, under the circumstances, from another source.
   (e) Statistical use. -- This section shall not be construed to prohibit the publication or
   release of statistics so classified as to prevent the identification of particular returns and
   the items thereof.
   (f) Disclosure of amount of outstanding lien. -- If notice of lien has been recorded, the
   amount of the outstanding obligation secured by such lien may be disclosed to any person
   who furnishes written evidence satisfactory to the Director of Finance that such person
   has a right in the property subject to the lien or intends to obtain a right in such property.

   774.18       Regulations may be Promulgated; Payments Due Taxpayers may be
   Withheld

    (a) Regulations May Be Promulgated.




Home Rule Pilot Program                                                                      Page 63
            (1) The Director of Finance shall from time to time promulgate rules and
            regulations for making returns and for ascertainment, assessment and remittance
            of the tax imposed hereunder as he/she may deem necessary to enforce its
            provisions; and upon request shall furnish any taxpayer with a copy of such rules
            and regulations.

            (2) The Director of Finance may prescribe, adopt, promulgate and enforce
            reasonable rules and regulations not in conflict with this Ordinance relating to any
            matter or thing pertaining to the administration and enforcement of the provisions
            of this Ordinance, including but not limited to provisions for the re-examination
            and correction of returns as to which overpayment or underpayment is claimed or
            found to have been made, and the rules and regulations so promulgated shall be
            binding upon all taxpayers.

            (3) The Director of Finance shall prescribe printed forms for use by persons
            subject to the provisions of this Ordinance and shall make such forms available at
            his/her office for use by such persons.

   (b) Payments Due Taxpayers may be Withheld. The Director of Finance, in order to
   protect the interests of the City, is authorized to withhold the payment of any claim or
   demand for payment of monies due from the City to any vendor, contractor, consultant or
   other person having unpaid or delinquent occupation tax liabilities until such unpaid tax,
   including applicable interest and penalties, shall first have been settled and adjusted. The
   Director of Finance shall notify the taxpayer by certified mail with return receipt
   requested, sent to the taxpayer’s last known address, of his/her intention to make such
   levy, the effect of which shall be continuous from the date such levy is first made until
   the liability out of which such levy arose is satisfied.

   774.19 Disposition of Funds Derived from Occupation Tax

   All monies derived from the occupation tax levied under the provisions of this Ordinance
   up to seven million dollars per fiscal year shall be paid to the City and placed to the credit
   of the general fund of the City, and shall be used and expended as authorized by law.
   Any occupation tax revenue generated in excess of seven million dollars per fiscal year
   shall be deposited in a separate account and utilized exclusively for capital improvement
   projects. All expenditures from this line item shall require council approval prior to
   encumbrance. In the event that occupation tax revenues exceed nine million dollars per
   fiscal year, council shall provide for reductions in business and occupation taxes and/or
   other fees in like amount for the subsequent fiscal year.

   774.20     Liens, release; subordination; foreclosure
   (a) General. -- Any tax, penalties or interest due and payable under this Ordinance shall
   be a debt due the City. It shall be a personal obligation of the taxpayer and shall be a lien
   upon the real and personal property of the taxpayer.
   (b) Duration of lien. -- The lien created by this section shall continue until the liability
   for the tax, penalties and interest is satisfied or upon the expiration of ten years from the



Home Rule Pilot Program                                                                      Page 64
   date the tax, penalties and interest are due and payable under this Ordinance or the date
   the tax return is filed, whichever is later.
   (c) Recordation. -- The lien created by this section shall be subject to the restrictions and
   conditions embodied in Article ten-c, chapter thirty-eight of the West Virginia Code and
   any amendment made or which may hereafter be made thereto: Provided, That the notice
   of lien shall indicate the date the tax, penalties and interest are due and payable under this
   Ordinance or the date the tax return was filed.
   (d) Release or subordination. -- The Director of Finance, pursuant to rules or
   regulations prescribed by him, may issue his certificate of release of any lien created
   pursuant to this section when the debt is adequately secured by bond or other security. He
   shall issue his certificate of release when the debt secured has been satisfied. The
   certificate of release shall be issued in duplicate. One copy shall be forwarded to the
   taxpayer, and the other copy shall be forwarded to the clerk of the county commission of
   the county wherein the lien is recorded. The clerk of the county commission shall record
   the release without payment of any fee and such recordation shall constitute a release and
   full discharge of the lien. The Director of Finance may issue his certificate of release of
   any such lien as to all or any part of the property subject to the lien, or may subordinate
   such lien to any other lien or interest, but only if there is paid to the City an amount not
   less than the value of the interest of the City in such property, or if the interest of the City
   in such property has no value.
   (e) Foreclosure. -- The Director of Finance may enforce any lien created and recorded
   under this section, against any property subject to such lien by civil action in the circuit
   court of the county wherein such property is located, in order to subject such property to
   the payment of the tax secured by such lien. All persons having liens upon or having any
   interest in the property shall be made parties to such action. The court may appoint a
   receiver or commissioner who shall ascertain and report all liens, claims and interests in
   and upon the property, the validity, amount and priority of each. The court shall, after
   notice to all parties, proceed to adjudicate all matters involved therein, shall determine
   the validity, amount and priorities of all liens, claims and interests in and upon the
   property and shall decree a sale of such property by the sheriff or any commissioner to
   whom the action is referred, and shall decree distribution of the proceeds of such sale
   according to the findings of the court in respect to the interests of the parties.
   (f) Discharge of lien. -- A sale of property against which the City has a lien under this
   section, made pursuant to an instrument creating a lien on such property, or made
   pursuant to a statutory lien on such property, or made pursuant to a judicial order to
   enforce any judgment in any civil action, shall be made subject to and without disturbing
   the City tax lien if the City tax lien was recorded more than thirty days before such sale,
   unless:
   (1) The Director of Finance is made a party to such civil action, or
   (2) The Director of Finance is given notice of such sale in writing not less than fifteen
   days prior to sale, or
   (3) The Director of Finance consents to such sale. Such notice shall contain the name of
   the owner of the property and the social security number or federal employer
   identification number of the owner.



Home Rule Pilot Program                                                                        Page 65
   774.21 Levy and Distraint
   (a) Authority of Director of Finance. -- If the municipal occupation tax is shown to be
   due on a return, it is required to be paid at the time a return is filed and if any portion of
   such tax is not so paid, or if an assessment of tax is made by the Director of Finance and
   notice thereof is given as required by this Ordinance and such assessment has become
   final and is not subject to administrative or judicial review, then, if any person liable to
   pay any tax administered under this Ordinance neglects or refuses to pay the same within
   fifteen days after notice and demand, it shall be lawful for the Director of Finance (or his
   delegate) to collect such tax (and such further sum as is sufficient to cover the expense of
   the levy) by levy upon all property and rights to property belonging to such person or on
   which there is a lien provided in this Ordinance, for payment of the tax. If the Director of
   Finance makes a finding that the collection of such tax is in jeopardy, notice and demand
   for immediate payment of such tax may be given by the Director of Finance (or his
   delegate) and, upon failure or refusal to pay such tax, collection thereof by levy shall be
   lawful without regard to the fifteen-day period provided in this section.
   (b) "Levy" defined. -- The term "levy" as used in this section includes the power of
   distraint and seizure by any means. Except as otherwise provided in this section, a levy
   shall extend only to property possessed and obligations existing at the time thereof. In
   any case in which the Director of Finance, or his delegate, may levy upon property or
   rights to property, he may seize and sell such property or rights to property, whether such
   property be real or personal, tangible or intangible.
   (c) Successive seizures. -- Whenever any property or a right to property upon which levy
   has been made by virtue of subsection (a) is not sufficient to satisfy the claim of the City
   for which levy is made, the Director of Finance may, thereafter, and as often as may be
   necessary, proceed to levy in like manner upon any other property liable to levy of the
   person against whom such claim exists, until the amount due from him, together with all
   expenses, is fully paid.
   (d) Distress warrant. -- The Director of Finance may issue a distress warrant to the
   sheriff of any county of West Virginia, or to any officer or employee of the Division,
   commanding him to levy upon and sell any such property or rights to property subject to
   levy in accordance with the provisions of this Ordinance. A distress warrant shall be
   executed within sixty days from the date the warrant was issued. The sheriff shall return
   the warrant and any money collected to the Director of Finance within sixty-five (65)
   days from the date the warrant was issued.
   (e) Requirement of notice before levy.
   (1) In general. -- Levy may be made under subsection (a) upon the salary or wages or
   other property or rights to property of any person with respect to any unpaid tax only
   after the Director of Finance has notified such person in writing of his intention to make
   such levy.
   (2) Ten-day requirement. -- The notice required under paragraph (1) shall be given in
   person, or left at the dwelling or usual place of business of such person, or sent by
   certified mail to such person's last known address, no less than ten days prior to the day
   of levy: Provided, That no notice need be given if the Director of Finance has made a
   finding under the last sentence of subsection (a) that collection of the tax is in jeopardy.



Home Rule Pilot Program                                                                      Page 66
   (3) Continuing levy on salary and wages. -- The effect of a levy on salary or wages
   payable to or received by a taxpayer shall be continuous from the date such levy is first
   made until the liability out of which such levy arose is satisfied or becomes
   unenforceable by reason of lapse of time, at which time the Director of Finance shall
   promptly release such levy and notify the person upon whom such levy was made that
   such levy has been released.
   774.22   Property Exempt from Levy
   (a) Enumeration. -- There shall be exempt from levy:
   (1) Wearing apparel and school books. -- Items of wearing apparel and school books
   that are necessary for the taxpayer or for members of his or her family.
   (2) Fuel, provisions, furniture and personal effects. -- If the taxpayer is the head of a
   family, so much of the fuel, provisions, furniture and personal effects in his household
   and of the arms for personal use, livestock and poultry of the taxpayer, as does not exceed
   one thousand five hundred dollars in value; if the taxpayer is an individual who is not the
   head of a household, this exemption shall not exceed one thousand dollars.
   (3) Books and tools of a trade, business or profession. -- So many of the books and
   tools necessary for the trade, business, or profession of the taxpayer as do not exceed in
   the aggregate one thousand dollars in value.
   (4) Unemployment benefits. -- Any amount payable to an individual with respect to his
   or her unemployment (including any portion thereof payable with respect to dependents)
   under an unemployment compensation law of the United States, or of any state.
   (5) Undelivered mail. -- Mail, addressed to any person, which has not been delivered to
   the addressee.
   (6) Annuity and pension payments. -- Annuity or pension payments under any pension
   or retirement plan, including social security payments.
   (7) Workers' compensation. -- Any amount payable to an individual as workers'
   compensation (including any portion thereof payable with respect to dependents) under a
   workers' compensation law of the United States, or of any state.
   (8) Judgments for support of minor children. -- If the taxpayer is required by a
   judgment of a court of competent jurisdiction, entered prior to the date of levy, to
   contribute to the support of his other minor children, so much of his or her salary, wages
   or other income as is necessary to comply with such judgment.
   (9) Public assistance. -- Any amount payable to any person from a public assistance or
   relief fund created under the law of the United States or of any state.
   (10) Minimum exemption for wages, salary and other income. -- Any amount payable
   to or receivable by an individual as wages or salary for services provided by an employee
   to his or her employer, or as income derived from other sources, during any period, to the
   extent that the total of such amounts payable to or received by him or her during such
   period does not exceed the applicable exempt amount determined under subsection (d).
   (11) Homestead. -- If the taxpayer owns a homestead located in West Virginia, the first
   five thousand dollars thereof shall be exempt from levy.




Home Rule Pilot Program                                                                   Page 67
   (b) Appraisal. -- The officer seizing property of the type described in subsection (a) shall
   appraise and set aside to the owner the amount of such property declared to be exempt. If
   the taxpayer objects at the time of the seizure to the valuation fixed by the office making
   the seizure, the Director of Finance shall summon three disinterested individuals who
   shall make the valuation.
   (c) No other property exempt. -- No property or rights to property shall be exempt from
   levy other than property specifically made exempt by subsection (a).
   (d) Exempt amount of wages, salary or other income.
   (1) In the case of an individual who is paid or receives all of his wages, salary and other
   income on a weekly basis, the amount of the wages, salary and other income payable to
   or receivable by the person during any week which is exempt from levy under paragraph
   (1), subsection (a) shall be:
   (A) Thirty times the state minimum wage per hour, plus
   (B) Twenty-five dollars for each additional dependent of the taxpayer.
   774.23 Surrender of Property Subject to Levy
   (a) Requirement. -- Any person in possession of (or obligated with respect to) property
   or rights to property subject to levy upon which a levy has been made shall, upon demand
   of the Director of Finance, surrender such property or rights (or discharge such
   obligation) to the Director of Finance, except such part of the property or rights as is, at
   the time of such demand, subject to any prior attachment, execution or levy.
   (b) Enforcement of levy.
   (1) Extent of personal liability. -- Any person in possession of or obligated with respect
   to property subject to levy upon which levy has been made, who fails or refuses to
   surrender any property or rights to property, subject to levy, upon demand by the Director
   of Finance, shall be personally liable to the City in a sum equal to the value of the
   property or rights not so surrendered, but not exceeding the amount of taxes for the
   collection of which such levy has been made, together with costs and interest on such
   sum at a rate of twelve percent (12%) per annum, from the date of the levy. Any amount
   (other than costs) received under this paragraph shall be credited against the liability for
   the collection of which such levy was made.
   (2) Penalty for violation. -- In addition to the personal liability imposed by paragraph
   (1), if any person required to surrender property or rights to property fails or refuses to
   surrender the same without reasonable cause, such person shall be liable for a money
   penalty equal to fifty percent (50%) of the amount recovered under paragraph (1). No
   part of this penalty shall be credited against the tax liability for the collection of which
   such levy was made.
   (c) Effect of honoring levy. -- Any person in possession of (or obligated with respect to)
   property or rights to property subject to levy upon which levy has been made, who upon
   demand by the Director of Finance, surrenders such property or rights to property (or
   discharges such obligation) to the Director of Finance, or who pays a liability under
   subsection (b)(1) shall be discharged from any obligation or liability to the delinquent
   taxpayer with respect to such property or rights to property arising from such surrender or
   payment.


Home Rule Pilot Program                                                                    Page 68
   (d) "Person" defined. -- The term "person" as used in subsection (a) includes an officer
   or employee of a corporation or a member or employee of a partnership, who as such
   officer, employee or member is under a duty to surrender the property or rights to
   property or to discharge the obligation.
   774.24 Sale of Seized Property
   (a) Notice of seizure. -- As soon as practicable after seizure of property, notice in writing
   shall be given by the Director of Finance to the owner of the property (or, in the case of
   personal property, the possessor thereof), or shall be left at his usual place of abode or
   business if he has such within the county where the seizure is made. If the owner cannot
   be readily located, or has no dwelling or place of business within such county, the notice
   may be mailed to his last known address. Such notice shall specify the sum demanded
   and shall contain, in the case of personal property, an account of the property seized and,
   in the case of real property, a description with reasonable certainty of the property seized.
   (b) Notice of sale. -- The Director of Finance may sell any property seized under section
   774.21. As soon as practicable after the seizure of the property, the Director of Finance
   shall give notice to the owner, in the manner prescribed in subsection (a), and shall cause
   a notice of sale to be published as a Class II legal advertisement in some newspaper
   published or generally circulated within the county wherein such seizure is made, or the
   county where the property is located, the last date of publication being not less than five
   days prior to sale. This notice shall identify the property to be sold, and the date, time,
   place, manner and conditions of the sale thereof, all of which shall be at the discretion of
   the Director of Finance. The sale shall be conducted by public auction, or by public sale
   under sealed bids. Before the sale, the Director of Finance may determine a minimum
   price for which the property shall be sold, and if no person offers for such property at the
   sale, the amount of the minimum price, the property shall be declared to be purchased at
   such price for the City; otherwise the property shall be declared to be sold to the highest
   bidder. In determining the minimum price, the Director of Finance shall take into account
   the expense of making the levy and sale.
   (c) Sale of indivisible property. -- If any property liable to levy is not divisible, so as to
   enable the Director of Finance by sale of a part thereof to raise the whole amount of the
   tax and expense of making the levy and sale, the whole of such property shall be sold.
   However, where the property sold is co-owned or jointly-owned by the taxpayer and an
   innocent third party, the proceeds of sale shall be divided, based on the respective
   interests of the persons owning the property immediately prior to the levy and sale, and
   the proceeds attributable to the interest of the innocent owner or owners shall be
   distributed to them: Provided, That where the property to be sold is so co-owned or
   jointly-owned by an innocent third party, having no delinquent tax liability attempted to
   be collected under such levy and sale, such innocent party may petition the circuit court
   of the county in which the property is located for relief, including postponement of the
   sale, in order that the court can determine if the property can be partitioned, so as to avoid
   sale of the innocent party's portion or grant and afford other relief by the court protective
   of the rights and interests of such innocent party.
   774.25 Sale of Perishable Goods




Home Rule Pilot Program                                                                      Page 69
   If the Director of Finance determines that any property seized is liable to perish or
   become greatly reduced in price or value by keeping, or that such property cannot be kept
   without great expense, he shall appraise the value of such property and:
   (a) Return to owner. -- If the owner of the property can be readily found, the Director of
   Finance shall give him notice of such determination of the appraised value of the
   property. The property shall be returned to the owner if, within such time as may be
   specified in the notice, the owner either:
   (1) Pays to the Director of Finance an amount equal to the appraised value; or
   (2) Gives bond in such form, with such sureties, and in such amount as the Director of
   Finance shall prescribe, to pay the appraised amount at such time as the Director of
   Finance determines to be appropriate under the circumstances.
   (b) Immediate sale. -- If the owner does not pay such amount or furnish such bond in
   accordance with this subsection, the Director of Finance shall, as soon as practicable,
   make public sale of the property in accordance with such regulations as may be
   prescribed by the Director of Finance.
   774.26 Redemption of Property
   (a) Before sale. -- Any person whose property has been levied upon shall have the right
   to pay the amount due, together with the expenses of the proceeding, if any, to the
   Director of Finance at any time prior to the sale thereof, and upon such payment, the
   Director of Finance shall restore such property to him, and all further proceedings in
   connection with the levy on such property shall cease from the time of such payment.
   (b) Redemption of real estate after sale.
   (1) Period. -- The owners of any real property sold as provided in section 774.24, their
   heirs, executors or administrators, or any person having any interest therein, or a lien
   thereon, or any person in their behalf, shall be permitted to redeem the property sold, or
   any particular tract of such property, at any time within one hundred eighty (180) days
   after the sale thereof.
   (2) Price. -- Such property or tract of property shall be permitted to be redeemed upon
   payment to the purchaser, or in case he cannot be found in the county in which the
   property to be redeemed is situated, then to the Director of Finance, for the use of the
   purchaser, his heirs or assigns, the amount paid by such purchaser and interest thereon at
   a rate of twelve percent (12%) per annum from the date the purchaser paid the purchase
   price to the date the property is redeemed.
   (c) Record. -- When any lands sold are redeemed as provided in this section, the Director
   of Finance shall cause entry of the fact to be made upon the record mentioned in section
   774.29 and such entry shall be evidence of such redemption.
   (d) Subrogation to City Lien. -- Any person redeeming the interest of another shall be
   subrogated to the lien of the City on such interest. Such person shall lose his right to this
   lien, however, unless within thirty days after receiving the certificate of sale of personal
   property or the Director of Finance's deed of real property, he shall file with the clerk of
   the county in which the real property is located or of the county in which the personal
   property is located or where the delinquent taxpayer resides or has his business location,
   or if neither be in West Virginia, the clerk of Cabell County, his claim against the


Home Rule Pilot Program                                                                      Page 70
   delinquent taxpayer and a copy of the certificate of sale of personal property or deed to
   real property.
   774.27 Certificate of Sale; Deed to Real Property
   (a) Certificate of sale. -- In the case of property sold as provided in section 774.24 the
   Director of Finance shall provide to the purchaser a certificate of sale upon payment in
   full of the purchase price. In the case of real property, such certificate shall set forth the
   real property purchased, for whose taxes the same was sold, the name of the purchaser
   and the price paid therefor.
   (b) Deed to real property. -- In the case of any real property sold as provided in section
   774.24 and not redeemed in the manner and within the time provided in section 774.26,
   the Director of Finance shall execute, in accordance with the laws of West Virginia
   pertaining to sales of real property under execution, to the purchaser of such real property
   at such sale, upon his surrender of the certificate of sale, a deed to the real property so
   purchased by him reciting the facts set forth in the certificate.
   (c) Real property purchased by the City. -- If real property is declared purchased by
   the City at a sale pursuant to section 774.24, the Director of Finance shall, at the proper
   time, execute a deed therefor, and without delay cause such deed to be duly recorded in
   the office of the clerk of the county in which the real property is located.
   774.28 Legal Effect of Certificate of Sale of Personal Property and Deed of Real
   Property
   (a) Certificate of sale of property other than real property. -- In all cases of sale
   pursuant to section 774.24 of property (other than real property), the certificate of such
   sale:
   (1) As evidence. -- Shall be prima facie evidence of the right of the officer to make such
   sale, and conclusive evidence of the regularity of his proceedings in making the sale; and
   (2) As conveyances. -- Shall transfer to the purchaser all right, title and interest of the
   party delinquent in and to the property sold; and
   (3) As authority for transfer of corporate stock. -- If such property consists of stocks,
   shall be notice, when received, to any corporation, company or association of such
   transfer, and shall be authority to such corporation, company or association to record the
   transfer on its books and records in the same manner as if the stocks were transferred or
   assigned by the party holding the same, in lieu of any original or prior certificate, which
   shall be void, whether canceled or not; and
   (4) As receipts. -- If the subject of sale is securities or other evidences of debt, shall be a
   good and valid receipt to the person holding the same, as against any person holding or
   claiming to hold possession of such securities or other evidences of debt; and
   (5) As authority for transfer of title to motor vehicle. -- If such property consists of a
   motor vehicle, shall be notice to any public official charged with the registration of title
   to motor vehicles, of such transfer and shall be authority to such official to record the
   transfer on his books and records in the same manner as if the certificate of title to such
   motor vehicle has been transferred or assigned by the party holding the same, in lieu of
   any original or prior certificate, which shall be void, whether canceled or not.




Home Rule Pilot Program                                                                        Page 71
   (b) Deed of real property. -- In the case of the sale of real property, pursuant to section
   774.24;
   (1) Deed as evidence. -- The deed of sale given pursuant to section 774.24 shall be prima
   facie evidence of the facts therein stated; and
   (2) Deed as conveyance of title. -- If the proceedings of the Director of Finance as set
   forth have been substantially in accordance with the provisions of law, such deed shall be
   considered and operate as a conveyance of all the rights, title and interest the party
   delinquent had in and to the real property thus sold at the time the lien of the City
   attached thereto.
   (c) Effect of junior encumbrances. -- A certificate of sale of personal property given or
   a deed to real property executed pursuant to section 774.27 shall discharge such property
   from all liens, encumbrances and titles over which the lien of the City with respect to
   which the levy was made had priority.
   774.29   Records of Sale
   (a) Requirement. -- The Director of Finance shall, for each county, keep a record of all
   sales of real property under section 774.24 and of redemptions of such property. The
   record shall set forth the tax for which any such sale was made, the dates of seizure and
   sale, the name of the party assessed and all proceedings in making such sale, the amount
   of expenses, the names of the purchasers and the date of the deed.
   (b) Copy as evidence. -- A copy of such record, or any part thereof, certified by the
   Director of Finance shall be evidence in any court of West Virginia of the truth of the
   facts therein stated.
   774.30 Expense of Levy and Sale
   The Director of Finance shall determine the expenses to be allowed in all cases of levy
   and sale under this Ordinance.
   774.31 Application of Proceeds of Levy
   (a) Collection of liability. -- Any money realized from a levy shall be applied as follows:
   (1) Expense of levy and sale. -- First, against the expenses of the proceedings;
   (2) Liability of delinquent taxpayer. -- The amount, if any, remaining after applying
   paragraph (1) shall then be applied against the liability in respect of which the levy was
   made or the sale conducted. The amount, if any, remaining shall then be applied against
   any other delinquent tax liability of the taxpayer for which levy may be made under
   section thirteen.
   (b) Surplus proceeds. -- Any surplus proceeds remaining after the application of
   subsection (a) shall, upon application and satisfactory proof in support thereof, be
   credited or refunded by the Director of Finance to the person or persons legally entitled
   thereto.
   774.32 Authority to Release Levy and Return Property
   (a) Release of levy. -- It shall be lawful for the Director of Finance, under regulations
   prescribed by him, to release the levy upon all or part of the property or rights to property




Home Rule Pilot Program                                                                     Page 72
   levied upon where the Director of Finance determines that such action will facilitate the
   collection of the liability, but such release shall not operate to prevent a subsequent levy.
   (b) Return of property. -- If the Director of Finance determines that property has been
   wrongfully levied upon, it shall be lawful for the Director of Finance to return:
   (1) The specific property levied upon;
   (2) An amount of money equal to the amount of money levied upon; or
   (3) An amount of money equal to the amount of money received by the City from a sale
   of such property. Property may be returned at any time. An amount equal to the amount
   of money levied upon or received from such sale may be returned at any time before the
   expiration of nine months from the date of such levy. For purposes of paragraph (3), if
   property is declared purchased by the City at a sale pursuant to section 774.24 (relating to
   manner and conditions to sale), the City shall be treated as having received an amount of
   money equal to the minimum price determined pursuant to such section or (if larger) the
   amount received by the City from the resale of such property.
   (c) The Director of Finance shall, upon request, make public the names and persons in
   whose favor a release of levy or return of property has been made in subsections (a) and
   (b).
   (d) Interest. -- Interest shall be allowed and paid at a rate of twelve percent (12%) per
   annum:
   (1) In a case described in subsection (b)(2), from the date the Director of Finance receives
   the money to a date (to be determined by the Director of Finance) preceding the date of
   return by not more than thirty days; or
   (2) In a case described in subsection (b)(3), from the date of the sale of the property to a
   date (to be determined by the Director of Finance) preceding the date of return by not
   more than thirty days.
   774.33 Collection by Civil Suit

   The Division may initiate and/or maintain a civil action to recover delinquent taxes
   herein levied, interest, penalties, and administrative costs incurred in connection
   therewith, in any court of competent jurisdiction, which remedy shall be in addition to
   any and all other remedies which may be provided.

   774.34 Violations

   (a) Failure to Pay the Tax, Make Reports, Keep or Provide Records.

   Any person subject to the provisions of this Ordinance, who shall fail to pay the tax,
   make the reports or any of them as herein required, or who shall fail to keep or provide
   records, or supply any information, as herein required, shall, be guilty of a misdemeanor,
   and upon conviction, shall be fined not less than fifty dollars ($50.00), nor more than five
   hundred dollars ($500.00) for each offense and, in addition, may be imprisoned for a
   period not to exceed thirty (30) days. Each occurrence of such failure shall constitute a
   separate offense.



Home Rule Pilot Program                                                                     Page 73
   (b) Willful Refusal to Make Reports, or Permit Examination of Records.

   Any person subject to the provisions of this Ordinance willfully failing or refusing to
   make the reports, furnish any supplemental returns or other data herein required, or who
   shall refuse to permit the examination of his records by the Division, as provided herein
   shall be guilty of a misdemeanor and, upon conviction shall be fined not less than fifty
   dollars ($50.00) nor more than five hundred dollars ($500.00) for each offense, and in
   addition, may be imprisoned for a period not to exceed six (6) months. Each occurrence
   of a failure to make such reports shall constitute a separate offense, and each refusal of a
   written demand by the Division to examine, inspect, or audit such records shall constitute
   a separate offense.




Home Rule Pilot Program                                                                    Page 74
   (c) Violation of Ordinance.

   Any person who shall fail or neglect or refuse to perform any duty imposed by this
   Ordinance or any rule, regulation, or law thereof or who shall fail or neglect to do or
   perform any act or series of acts as required by this Ordinance or other City Ordinances
   shall, upon conviction, be punished by a fine not exceeding five hundred dollars
   ($500.00) for each offense, and in addition may be imprisoned for a period not to exceed
   thirty (30) days, or by both such fine and imprisonment.

   (d) Fraudulent Statement or Failure to Furnish Statement to the Division.

   In addition to the criminal penalty provided herein, any person required under this
   Ordinance to furnish a statement to the Division who willfully furnishes a false statement
   or fraudulent statement, or who willfully fails to furnish a statement in the manner, at the
   time, and showing the information required shall for each such failure be subject to a
   penalty under this Ordinance of not less than fifty dollars ($50.00) nor more than five
   hundred dollars ($500.00) for each offense, and in addition may be imprisoned for a
   period not to exceed thirty (30) days, or by both such fine and imprisonment.

   774.35 Request for Ruling on Items of Compensation

   Any taxpayer may request a ruling on the determination of whether items of
   compensation are included in gross receipts and compensation or are not to be included in
   gross receipts and compensation as a measure of the taxes due and payable as levied by
   this Ordinance. Such requests shall be made in writing to the Division, and shall contain
   all pertinent facts relating to the item(s) in question.

   774.36 Severability

   The provisions of this Ordinance are severable. If any provision, section, paragraph,
   sentence or part thereof, or the application thereof to any employer, employee or class or
   persons, shall be declared unconstitutional or invalid by a court of competent jurisdiction,
   such declaration shall not affect or impair the remainder of the Ordinance, it being the
   legislative intent to ordain and enact each provision, section, paragraph, sentence and part
   thereof, separately and independently of each other.

   774.37 Repeal of Article 772 as Amended

   The city service law adopted by Article 772, as amended, and as it has been amended is
   hereby repealed as of October 1, 2010, the date upon which this occupation tax becomes
   effective in the City; provided, however, that neither any cause of action nor fine,
   forfeiture judgment, penalty, writ, remedy or defense, accrued at said date, nor any
   prosecution, or complaint pending at said date shall be in any manner released, affected,
   abated, or impaired, by this Ordinance. Should the effective date of the occupation tax
   imposed by this Ordinance be postponed beyond October 1, 2010 due to the issuance of




Home Rule Pilot Program                                                                    Page 75
   an injunction or other court order, then Article 772 shall remain effective and shall not be
   repealed until the date that the occupation tax does become effective.

   774.38 Effective Date of Ordinance

   This Ordinance shall become effective and operative as such, commencing on and after
   October 1, 2010, and on and after said date shall be binding in the City.

   …………………………………………………………………………………………….


          BE IT FURTHER ORDAINED that all other articles, sections and sub-sections
   of the Codified Ordinances of the City of Huntington, as revised, shall remain in full
   force and effect until further Ordinance of this Council.
   SPONSORED BY COUNCILMAN STEVE WILLIAMS
   APPROVED AS TO FORM BY SEM




Home Rule Pilot Program                                                                     Page 76
AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
ARTICLE 776 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
AS REVISED, CONCERNING MUNICIPAL SALES, SERVICES AND USE TAX.


            BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON,

CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Article 776 of the Codified

Ordinances of the City of Huntington, as revised, are hereby AMENDED, MODIFIED and RE-

ENACTED to read as follows:

............................................................................................................................................................

                                                                 ARTICLE 776

                                  MUNICIPAL SALES, SERVICES AND USE TAX

       West Virginia Code Section 8-1-5a created a pilot program known as the Municipal Home
Rule Pilot Program granting five selected Class I, Class II and/or Class III municipalities and/or
metro governments the authority to enact any ordinances, acts, resolutions, rules and regulations
not contrary to the constitutions of the United States or West Virginia, federal law or chapters
sixty-a, sixty-one and sixty-two of the West Virginia Code. On or about December 21, 2007 the
City of Huntington applied to the Municipal Home Rule Board to be selected as one of the five
municipalities to be authorized to have a Municipal Home Rule Pilot Program. Thereafter the
City was notified that it was selected to be one of the municipalities authorized to undertake a
Municipal Home Rule Pilot Program.
        West Virginia Code Section 8-1-5a provides that a pilot municipalities selected to
participate in the pilot program shall have the following powers: (1) the authority to pass any
ordinances, acts, resolutions, rules and regulations not contrary to the constitutions of the United
States or West Virginia, federal law or chapters sixty-a, sixty-one and sixty-two of the West
Virginia Code as specified in its written and approved plans: Provided, that the pilot
municipalities may not adopt any ordinance, rule, regulation or resolution or take any action that
would create a defined contribution employee pension or retirement plan for its employees
currently covered by a defined benefit pensions plan; and (2) any other powers necessary to
implement the provisions of its approved plan.
        The City’s Municipal Home Rule Pilot Program approved plan provides for the
enactment of a municipal sales, service and use for the sale of all goods within the corporate
limits.
            776.01 General consumers sales, service and use tax imposed.
       The purpose of this article is to impose a municipal sales, service and use tax in
accordance with the Municipal Home Rule Pilot Program.
            776.02 Findings.




Home Rule Pilot Program                                                                                                                         Page 77
       The City Council hereby finds and declares that:
        (1) It is the intent of the Council that the municipal sales, service and use tax imposed by
the provisions of this article, be complementary laws and wherever possible be construed and
applied to accomplish such intent as to the imposition, administration and collection of these
taxes; and further, that the taxes imposed pursuant to this article shall be in all respects consistent
with the imposition and collection of the state sales, service and use tax pursuant to articles 15,
15-a, and 15-b, Chapter eleven of the West Virginia Code.
        (2)The Council understands that the collection of this tax will be accomplished through
the voluntary and cooperative efforts of the State Tax Commissioner and his/her office and that
the City of Huntington is without authority to compel the Tax Commissioner’s cooperation in
this regard. Further, remittance of all local sales, service and use taxes to the West Virginia
Department of Revenue will allow for the efficient and consistent collection of local sales,
service and use taxes for the state and its political subdivisions. Should any provision contained
herein conflict with state law, the same shall be stricken and be of no further force and effect.
       (3) On and after the first day of April, 2011, the taxes levied by this article shall also be
administered and collected in accordance with the provisions of this article and state law.
        (4) It is further the intention of Council to implement and enact Article 9a and 9b,
Chapter 11 of the West Virginia Code, as enacted and amended, as if the same were included in
their entirety herein.
       776.03 Definitions.

(a) General. -- When used in this article, words defined in subsection (b) of this section have the
meanings ascribed to them in this section, except in those instances where a different meaning is
provided in this article or the context in which the word is used clearly indicates that a different
meaning is intended by the Council.


       (b) Definitions. --
        (1) "Business" includes all activities engaged in or caused to be engaged in with the
object of gain or economic benefit, direct or indirect, and all activities of the state and its
political subdivisions which involve sales of tangible personal property or the rendering of
services when those service activities compete with or may compete with the activities of other
persons.
        (2) "Communication" means all telephone, radio, light, light wave, radio telephone,
telegraph and other communication or means of communication, whether used for voice
communication, computer data transmission or other encoded symbolic information transfers and
includes commercial broadcast radio, commercial broadcast television and cable television.


       (3) "Contracting":
        (A) In general. -- "Contracting" means and includes the furnishing of work, or both
materials and work, for another (by a sole contractor, general contractor, prime contractor,
subcontractor or construction manager) in fulfillment of a contract for the construction,
alteration, repair, decoration or improvement of a new or existing building or structure, or any



Home Rule Pilot Program                                                                        Page 78
part thereof, or for removal or demolition of a building or structure, or any part thereof, or for the
alteration, improvement or development of real property. Contracting also includes services
provided by a construction manager so long as the project for which the construction manager
provides the services results in a capital improvement to a building or structure or to real
property.
        (B) Form of contract not controlling. -- An activity that falls within the scope of the
definition of contracting constitutes contracting regardless of whether the contract governing the
activity is written or verbal and regardless of whether it is in substance or form a lump sum
contract, a cost-plus contract, a time and materials contract, whether or not open-ended, or any
other kind of construction contract.
       ( C) Special rules. -- For purposes of this definition:
        (i) The term "structure" includes, but is not limited to, everything built up or composed of
parts joined together in some definite manner and attached or affixed to real property or which
adds utility to real property or any part thereof or which adds utility to a particular parcel of
property and is intended to remain there for an indefinite period of time;
      (ii) The term "alteration" means, and is limited to, alterations which are capital
improvements to a building or structure or to real property;
        (iii) The term "repair" means, and is limited to, repairs which are capital improvements to
a building or structure or to real property;
      (iv) The term "decoration" means, and is limited to, decorations which are capital
improvements to a building or structure or to real property;
      (v) The term "improvement" means, and is limited to, improvements which are capital
improvements to a building or structure or to real property;
        (vi) The term "capital improvement" means improvements that are affixed to or attached
to and become a part of a building or structure or the real property or which add utility to real
property, or any part thereof, and that last or are intended to be relatively permanent. As used
herein, "relatively permanent" means lasting at least a year in duration without the necessity for
regularly scheduled recurring service to maintain the capital improvement. "Regular recurring
service" means regularly scheduled service intervals of less than one year;
         (vii) Contracting does not include the furnishing of work, or both materials and work, in
the nature of hookup, connection, installation or other services if the service is incidental to the
retail sale of tangible personal property from the service provider's inventory: Provided, That the
hookup, connection or installation of the foregoing is incidental to the sale of the same and
performed by the seller thereof or performed in accordance with arrangements made by the seller
thereof. Examples of transactions that are excluded from the definition of contracting pursuant to
this subdivision include, but are not limited to, the sale of wall-to-wall carpeting and the
installation of wall-to-wall carpeting, the sale, hookup and connection of mobile homes, window
air conditioning units, dishwashers, clothing washing machines or dryers, other household
appliances, drapery rods, window shades, venetian blinds, canvas awnings, free-standing
industrial or commercial equipment and other similar items of tangible personal property.
Repairs made to the foregoing are within the definition of contracting if the repairs involve
permanently affixing to or improving real property or something attached thereto which extends




Home Rule Pilot Program                                                                       Page 79
the life of the real property or something affixed thereto or allows or intends to allow the real
property or thing permanently attached thereto to remain in service for a year or longer; and
        (viii) The term "construction manager" means a person who enters into an agreement to
employ, direct, coordinate or manage design professionals and contractors who are hired and
paid directly by the owner or the construction manager. The business activities of a "construction
manager" as defined in this subdivision constitute contracting, so long as the project for which
the construction manager provides the services results in a capital improvement to a building or
structure or to real property.
       (4) "Directly used or consumed" in the activities of manufacturing, transportation,
transmission, communication or the production of natural resources means used or consumed in
those activities or operations which constitute an integral and essential part of the activities, as
contrasted with and distinguished from those activities or operations which are simply incidental,
convenient or remote to the activities.
       (A) Uses of property or consumption of services which constitute direct use or
consumption in the activities of manufacturing, transportation, transmission, communication or
the production of natural resources include only:
        (i) In the case of tangible personal property, physical incorporation of property into a
finished product resulting from manufacturing production or the production of natural resources;
      (ii) Causing a direct physical, chemical or other change upon property undergoing
manufacturing production or production of natural resources;
       (iii) Transporting or storing property undergoing transportation, communication,
transmission, manufacturing production or production of natural resources;
     (iv) Measuring or verifying a change in property directly used in transportation,
communication, transmission, manufacturing production or production of natural resources;
        (v) Physically controlling or directing the physical movement or operation of property
directly used in transportation, communication, transmission, manufacturing production or
production of natural resources;
     (vi) Directly and physically recording the flow of property undergoing transportation,
communication, transmission, manufacturing production or production of natural resources;
       (vii) Producing energy for property directly used in transportation, communication,
transmission, manufacturing production or production of natural resources;
       (viii) Facilitating the transmission of gas, water, steam or electricity from the point of
their diversion to property directly used in transportation, communication, transmission,
manufacturing production or production of natural resources;
       (ix) Controlling or otherwise regulating atmospheric conditions required for
transportation, communication, transmission, manufacturing production or production of natural
resources;
       (x) Serving as an operating supply for property undergoing transmission, manufacturing
production or production of natural resources, or for property directly used in transportation,
communication, transmission, manufacturing production or production of natural resources;




Home Rule Pilot Program                                                                     Page 80
        (xi) Maintaining or repairing of property, including maintenance equipment, directly used
in transportation, communication, transmission, manufacturing production or production of
natural resources;
       (xii) Storing, removal or transportation of economic waste resulting from the activities of
manufacturing, transportation, communication, transmission or the production of natural
resources;
        (xiii) Engaging in pollution control or environmental quality or protection activity
directly relating to the activities of manufacturing, transportation, communication, transmission
or the production of natural resources and personnel, plant, product or community safety or
security activity directly relating to the activities of manufacturing, transportation,
communication, transmission or the production of natural resources; or
       (xiv) Otherwise using as an integral and essential part of transportation, communication,
transmission, manufacturing production or production of natural resources.
        (B) Uses of property or services which do not constitute direct use or consumption in the
activities of manufacturing, transportation, transmission, communication or the production of
natural resources include, but are not limited to:
       (i) Heating and illumination of office buildings;
       (ii) Janitorial or general cleaning activities;
       (iii) Personal comfort of personnel;
       (iv) Production planning, scheduling of work or inventory control;
       (v) Marketing, general management, supervision, finance, training, accounting and
administration; or
        (vi) An activity or function incidental or convenient to transportation, communication,
transmission, manufacturing production or production of natural resources, rather than an
integral and essential part of these activities.
        (5) "Directly used or consumed" in the activities of gas storage, the generation or
production or sale of electric power, the provision of a public utility service or the operation of a
utility business means used or consumed in those activities or operations which constitute an
integral and essential part of those activities or operation, as contrasted with and distinguished
from activities or operations which are simply incidental, convenient or remote to those
activities.
       (A) Uses of property or consumption of services which constitute direct use or
consumption in the activities of gas storage, the generation or production or sale of electric
power, the provision of a public utility service or the operation of a utility business include only:
       (i) Tangible personal property, custom software or services, including equipment,
machinery, apparatus, supplies, fuel and power and appliances, which are used immediately in
production or generation activities and equipment, machinery, supplies, tools and repair parts
used to keep in operation exempt production or generation devices. For purposes of this
subsection, production or generation activities shall commence from the intake, receipt or storage
of raw materials at the production plant site;




Home Rule Pilot Program                                                                      Page 81
        (ii) Tangible personal property, custom software or services, including equipment,
machinery, apparatus, supplies, fuel and power, appliances, pipes, wires and mains, which are
used immediately in the transmission or distribution of gas, water and electricity to the public,
and equipment, machinery, tools, repair parts and supplies used to keep in operation exempt
transmission or distribution devices, and these vehicles and their equipment as are specifically
designed and equipped for those purposes are exempt from the tax when used to keep a
transmission or distribution system in operation or repair. For purposes of this subsection,
transmission or distribution activities shall commence from the close of production at a
production plant or wellhead when a product is ready for transmission or distribution to the
public and shall conclude at the point where the product is received by the public;
        (iii) Tangible personal property, custom software or services, including equipment,
machinery, apparatus, supplies, fuel and power, appliances, pipes, wires and mains, which are
used immediately in the storage of gas or water, and equipment, machinery, tools, supplies and
repair parts used to keep in operation exempt storage devices;
       (iv) Tangible personal property, custom software or services used immediately in the
storage, removal or transportation of economic waste resulting from the activities of gas storage,
the generation or production or sale of electric power, the provision of a public utility service or
the operation of a utility business;
        (v) Tangible personal property, custom software or services used immediately in
pollution control or environmental quality or protection activity or community safety or security
directly relating to the activities of gas storage, generation or production or sale of electric
power, the provision of a public utility service or the operation of a utility business.
        (B) Uses of property or services which would not constitute direct use or consumption in
the activities of gas storage, generation or production or sale of electric power, the provision of a
public utility service or the operation of a utility business include, but are not limited to:
       (i) Heating and illumination of office buildings;
       (ii) Janitorial or general cleaning activities;
       (iii) Personal comfort of personnel;
       (iv) Production planning, scheduling of work or inventory control;
       (v) Marketing, general management, supervision, finance, training, accounting and
administration; or
       (vi) An activity or function incidental or convenient to the activities of gas storage,
generation or production or sale of electric power, the provision of public utility service or the
operation of a utility business.
       (6) "Gas storage" means the injection of gas into a storage reservoir or the storage of gas
for any period of time in a storage reservoir or the withdrawal of gas from a storage reservoir
engaged in by businesses subject to the business and occupation tax imposed by sections two and
two-e, article thirteen of this chapter.
       (7) "Generating or producing or selling of electric power" means the generation,
production or sale of electric power engaged in by businesses subject to the business and
occupation tax imposed by section two, two-d, two-m or two-n, article thirteen, chapter eleven of
the West Virginia Code.



Home Rule Pilot Program                                                                      Page 82
       (8) "Gross proceeds" means the amount received in money, credits, property or other
consideration from sales and services within this city, without deduction on account of the cost
of property sold, amounts paid for interest or discounts or other expenses whatsoever. Losses
may not be deducted, but any credit or refund made for goods returned may be deducted.
       (9) "Includes" and "including", when used in a definition contained in this article, does
not exclude other things otherwise within the meaning of the term being defined.
        (10) "Manufacturing" means a systematic operation or integrated series of systematic
operations engaged in as a business or segment of a business which transforms or converts
tangible personal property by physical, chemical or other means into a different form,
composition or character from that in which it originally existed.
         (11) "Person" means any individual, partnership, association, corporation, limited
liability company, limited liability partnership or any other legal entity, or the guardian, trustee,
committee, executor or administrator of any person.
       (12) "Personal service" includes those: (A) Compensated by the payment of wages in the
ordinary course of employment; and (B) rendered to the person of an individual without, at the
same time, selling tangible personal property, such as nursing, barbering, shoe shining,
manicuring and similar services.
       (13) "Prepaid wireless calling service" means a telecommunications service that provides
the right to utilize mobile wireless service as well as other nontelecommunications services,
including the download of digital products delivered electronically, content and ancillary
services, which must be paid for in advance that is sold in predetermined units or dollars of
which the number decline with use in a known amount.
       (14) Production of natural resources.
        (A) "Production of natural resources" means, except for oil and gas, the performance, by
either the owner of the natural resources or another, of the act or process of exploring,
developing, severing, extracting, reducing to possession and loading for shipment and shipment
for sale, profit or commercial use of any natural resource products and any reclamation, waste
disposal or environmental activities associated therewith and the construction, installation or
fabrication of ventilation structures, mine shafts, slopes, boreholes, dewatering structures,
including associated facilities and apparatus, by the producer or others, including contractors and
subcontractors, at a coal mine or coal production facility.
        (B) For the natural resources oil and gas, "production of natural resources" means the
performance, by either the owner of the natural resources, a contractor or a subcontractor, of the
act or process of exploring, developing, drilling, well-stimulation activities such as logging,
perforating or fracturing, well-completion activities such as the installation of the casing, tubing
and other machinery and equipment and any reclamation, waste disposal or environmental
activities associated therewith, including the installation of the gathering system or other pipeline
to transport the oil and gas produced or environmental activities associated therewith and any
service work performed on the well or well site after production of the well has initially
commenced.




Home Rule Pilot Program                                                                      Page 83
        ( C) All work performed to install or maintain facilities up to the point of sale for
severance tax purposes is included in the "production of natural resources" and subject to the
direct use concept.
        (D) "Production of natural resources" does not include the performance or furnishing of
work, or materials or work, in fulfillment of a contract for the construction, alteration, repair,
decoration or improvement of a new or existing building or structure, or any part thereof, or for
the alteration, improvement or development of real property, by persons other than those
otherwise directly engaged in the activities specifically set forth in this subdivision as
"production of natural resources".
       (15) "Providing a public service or the operating of a utility business" means the
providing of a public service or the operating of a utility by businesses subject to the business
and occupation tax imposed by sections two and two-d, article thirteen, chapter eleven of the
West Virginia Code.
       (16) "Purchaser" means a person who purchases tangible personal property, custom
software or a service taxed by this article.
        (17) "Sale", "sales" or "selling" includes any transfer of the possession or ownership of
tangible personal property or custom software for a consideration, including a lease or rental,
when the transfer or delivery is made in the ordinary course of the transferor's business and is
made to the transferee or his or her agent for consumption or use or any other purpose. "Sale"
also includes the furnishing of a service for consideration. "Sale" also includes the furnishing of
prepaid wireless calling service for consideration.
        (18) "Service" or "selected service" includes all nonprofessional activities engaged in for
other persons for a consideration, which involve the rendering of a service as distinguished from
the sale of tangible personal property or custom software, but does not include contracting,
personal services or the services rendered by an employee to his or her employer or any service
rendered for resale: Provided, That the term "service" or "selected service" does not include
payments received by a vendor of tangible personal property as an incentive to sell a greater
volume of such tangible personal property under a manufacturer's, distributor's or other third
party's marketing support program, sales incentive program, cooperative advertising agreement
or similar type of program or agreement, and these payments are not considered to be payments
for a "service" or "selected service" rendered, even though the vendor may engage in attendant or
ancillary activities associated with the sales of tangible personal property as required under the
programs or agreements.
         (19) "Streamlined Sales and Use Tax Agreement" or "agreement", when used in this
article, has the same meaning as when used in article fifteen-b, chapter 11 of the West Virginia
Code, except when the context in which the word "agreement" is used clearly indicates that a
different meaning is intended by the West Virginia State Legislature.
        (20) "Tax" includes all taxes, additions to tax, interest and penalties levied under this
article or article ten of this chapter.
        (21) "Finance Director" means the city Finance Director or his or her delegate. The term
"delegate" in the phrase "or his or her delegate", when used in reference to the Finance Director,
means any officer or employee of the Finance Division duly authorized by the Finance Director
directly, or indirectly by one or more redelegations of authority, to perform the functions




Home Rule Pilot Program                                                                    Page 84
mentioned or described in this article or rules promulgated for this article. Notwithstanding the
foregoing, such definition shall also include the State Tax Commissioner.
         (22) "Taxpayer" means any person liable for the tax imposed by this article or additions
to tax, penalties and interest imposed by article ten of this chapter.
        (23) "Transmission" means the act or process of causing liquid, natural gas or electricity
to pass or be conveyed from one place or geographical location to another place or geographical
location through a pipeline or other medium for commercial purposes.
        (24) "Transportation" means the act or process of conveying, as a commercial enterprise,
passengers or goods from one place or geographical location to another place or geographical
location.
        (25) "Ultimate consumer" or "consumer" means a person who uses or consumes services
or personal property.
        (26) "Vendor" means any person engaged in this state in furnishing services taxed by this
article or making sales of tangible personal property or custom software. "Vendor" and "seller"
are used interchangeably in this article.
        (c)Additional definitions. -- Other terms used in this ordinance are defined in article
fifteen-b, chapter 11 of the West Virginia Code which definitions are incorporated herein by
reference. Additionally, other sections of this article may define terms primarily used in the
section in which the term is defined.


       776.04 Amount of tax; allocation of tax and transfers.
         (a) Vendor to collect. -- For the privilege of selling tangible personal property or custom
software and for the privilege of furnishing certain selected services defined in 776.03 of this
article, the vendor shall collect from the purchaser the tax as provided under this article and
article fifteen-b, chapter eleven of the West Virginia Code, and shall pay the amount of tax to the
State Tax Commissioner in accordance with the provisions of this article or article fifteen-b,
chapter eleven of the West Virginia Code..
         (b) Amount of tax. -- The general consumer sales, service and use tax imposed by this
article shall be at the rate of one percent.
         The tax computation under subsection (b) of this section shall be carried to the third
decimal place, and the tax rounded up to the next whole cent whenever the third decimal place is
greater than four and rounded down to the lower whole cent whenever the third decimal place is
four or less. The vendor may elect to compute the tax due on a transaction on a per item basis or
on an invoice basis provided the method used is consistently used during the reporting period.
       (c) No aggregation of separate sales transactions, exception for coin-operated devices. --
Separate sales, such as daily or weekly deliveries, shall not be aggregated for the purpose of
computation of the tax even though the sales are aggregated in the billing or payment therefor.
Notwithstanding any other provision of this article, coin-operated amusement and vending
machine sales shall be aggregated for the purpose of computation of this tax.
        (d) Rate of tax on certain mobile homes. -- Notwithstanding any provision of this article
to the contrary, the tax levied on sales of mobile homes to be used by the owner thereof as his or




Home Rule Pilot Program                                                                     Page 85
her principal year-round residence and dwelling shall be an amount equal to one percent of fifty
percent of the sales price.
       (e) Construction; custom software. – whenever the words "tangible personal property" or
"property" appear in this article, the same shall also include the words "custom software".
        776.05 Purchaser to pay; accounting by vendor.
       (a) The purchaser shall pay to the vendor the amount of tax levied by this article which is
added to and constitutes a part of the sales price, and is collectible by the vendor who shall
account to the city for all tax paid by the purchaser.
        (b) The vendor shall keep records necessary to account for:
        (1) The vendor's gross proceeds from sales of personal property and services;
        (2) The vendor's gross proceeds from taxable sales;
        (3) The vendor's gross proceeds from exempt sales;
        (4) The amount of taxes collected under this article, which taxes shall be held in trust for
the City of Huntington until paid over to the State Tax Commissioner; and
      (5) Any other information as required by this article, or article fifteen-b, chapter eleven of
the West Virginia Code, or as required by the State Tax Commissioner and/or the City of
Huntington Finance Director.
        776.06 Failure to collect tax; liability of vendor.
       If any vendor fails to collect the tax imposed by section 776.04 of this article, the vendor
shall be personally liable for the amount the vendor failed to collect, except as otherwise
provided in this article.
        776.07 Liability of purchaser; assessment and collection.
        (a) General. -- If any purchaser refuses or otherwise does not pay to the vendor the tax
imposed by section 776.04 of this article, or a purchaser refuses to present to the vendor a proper
certificate indicating the sale is not subject to this tax, or presents to the vendor a false certificate,
or after presenting a proper certificate uses the items purchased in a manner that the sale would
be subject to the tax, the purchaser shall be personally liable for the amount of tax applicable to
the transaction or transactions.
         (b) Collection of tax from purchaser. -- Nothing in this section relieves any purchaser
who owes the tax and who has not paid the tax imposed by section three of this article from
liability for payment of the tax. In those cases the Tax Commissioner has authority to make an
assessment against the purchaser, based upon any information within his or her possession or
that may come into his or her possession.
         ( c) Liability of vendor. -- This section may not be construed as relieving the vendor from
liability for the tax, except as otherwise provided in this article or article fifteen-b, chapter eleven
of the West Virginia Code.
        776.08 Total amount collected is to be remitted.
        No profit shall accrue to any person as a result of the collection of the tax levied by this
article notwithstanding the total amount of the taxes collected may be in excess of the amount for
which the person would be liable by the application of the rate of tax levied by section three of



Home Rule Pilot Program                                                                           Page 86
this article to the vendor's gross proceeds from taxable sales and services. The total amount of all
taxes collected by the vendor shall be returned and remitted to the State Tax Commissioner as
provided in this article or article fifteen-b, chapter eleven of the West Virginia Code.
       776.09 Vendor must show sale or service exempt; presumption.

(a) The burden of proving that a sale or service was exempt from the tax shall be upon the
vendor, unless the vendor takes from the purchaser an exemption certificate signed by and
bearing the address of the purchaser and setting forth the reason for the exemption and
substantially in the form prescribed by the Tax Commissioner.
        (b) To prevent evasion, it is presumed that all sales and services are subject to the tax
until the contrary is clearly established.
       776.10 Tax on gross proceeds of sales or value of manufactured, etc., products.

(a) A person exercising the privilege of producing for sale, profit or commercial use, any natural
resources, product or manufactured product, and either engaged in the business of selling such
product not otherwise exempted herein, or engaged in a business or activity in which such
natural resource, product or manufactured product is used or consumed by him and such use or
consumption is not otherwise exempt under this article, shall make returns of the gross proceeds
of such sales or, in the absence of sale, the gross value of the natural resource, product or
manufactured product, so used or consumed by him, and pay the tax imposed by this article.
        (b) The Tax Commissioner shall promulgate such uniform and equitable rules as he
deems necessary for determining the gross value upon which the tax imposed by this article is
levied in the absence of a sale, which value shall correspond as nearly as possible to the gross
proceeds from the sale of similar products of like quality or character by the same person or by
another person.
       ( c) The provisions of this section, as amended by this act, shall apply to natural
resources, products or manufactured products, used or consumed by the producer or
manufacturer thereof.


       776.11 Tax on the manufacture, sale and installation of modular dwellings.

(a) Notwithstanding the provisions of section seven, article fifteen, Chapter eleven of the West
Virginia Code, persons engaged in the manufacture and sale or the manufacture, sale and
installation of a modular dwelling shall pay the tax imposed by this article only on the value of
the building supplies and materials used in the manufacture and installation of the modular
dwelling and the preparation of the site for permanent installation, and not on the labor involved
in such activities. For purposes of this section, the value of the building supplies and materials
shall be the actual cost of the building supplies and materials. If the manufacturer asserts an
exemption at the time of purchase of the building supplies and materials, the manufacturer shall
remit the tax due on the value of the building supplies and materials used in the manufacture of
the modular dwelling at the time of sale of the modular dwelling. If the manufacturer pays the
tax at the time of purchase of the building supplies and materials, the manufacturer is responsible




Home Rule Pilot Program                                                                     Page 87
for maintaining records evidencing payment of the tax. Failure to maintain such records will
result in the tax being assessed to the manufacturer.
        (b) Persons engaged in the sale and installation of a modular dwelling shall pay the tax
imposed by this article on only the value of the materials used in the manufacture and installation
of the modular dwelling and the preparation of the site for permanent installation, and not on the
labor involved in such activities. For purposes of this section, the value of the materials used in
the manufacture of the modular dwelling shall be the actual cost of the materials and building
supplies to the manufacturer as delineated on the invoice to the purchaser. If the actual cost of
the materials is not available, then the cost of the materials used in the manufacture of the
modular dwelling shall be sixty percent of the total cost of the modular dwelling. A credit will be
given to the purchaser for any sales or use tax that has been lawfully imposed by another state
and paid by the manufacturer on the purchase of building supplies and materials used in the
manufacture of the modular dwelling. If the manufacturer pays the tax at the time of purchase of
the building supplies and materials, the manufacturer is responsible for maintaining records
evidencing payment of the tax and delineating this amount on the invoice. Failure to maintain
such records will result in the credit being denied.
        ( c) Definition of modular dwelling. -- For purposes of this article, a modular dwelling
shall include, but not be limited to, single and multi-family houses, apartment units and
commercial dwellings comprised of two or more sections without a permanent chassis, built to a
state or model code other than the National Manufactured Housing Construction and Safety
Standards Act of 1974, which are primarily constructed at a location other than the permanent
site at which they are to be finally assembled and which are shipped to the site with most
permanent components in place.
       776.12 Furnishing of services included; exceptions.
        The provisions of this article apply not only to selling tangible personal   property and
custom software, but also to the furnishing of all services, except professional     and personal
services, and except those services furnished by businesses subject to the control   of the public
service commission when the service or the manner in which it is delivered           is subject to
regulation by the public service commission.
       776.13 Contractors.
       (a) The provisions of this article shall not apply to contracting services. However,
purchases by a contractor of tangible personal property or taxable services for use or
consumption in the providing of a contracting service shall be taxable, except as otherwise
provided in this article.
       (b) Transition rules. -- The exemption from payment of tax on purchases of tangible
personal property or taxable services directly used or consumed in the activity of contracting, as
defined in section two of this article, which expires as of the first day of March, one thousand
nine hundred eighty-nine, shall nevertheless remain in effect with respect to:
        (1) Tangible personal property or taxable services purchased by a contractor on or after
said first day of March in fulfillment of a written contract for contracting, as defined in section
two of this article, that was executed and legally binding on the parties thereto on or before the
fifteenth day of February, one thousand nine hundred eighty-nine; or in fulfillment of a written
contract entered into after the said fifteenth day of February pursuant to a written bid for
contracting that was made on or before the said fifteenth day of February that was binding on the



Home Rule Pilot Program                                                                    Page 88
contractor, but only to the extent that the bid is subsequently incorporated into a written contract;
or
        (2) Tangible personal property or taxable services purchased by a contractor on or after
the said first day of March pursuant to a written contract executed on or before the fifteenth day
of February, one thousand nine hundred eighty-nine, to purchase in specified quantities identified
tangible personal property or specified taxable services; or
        (3) Tangible personal property or taxable services purchased by a contractor for
consumption or use in fulfillment of a written contract entered into before the first day of
September, one thousand nine hundred eighty-nine, when such contract is for the construction of
a new improvement to real property the construction or operation of which was approved by a
federal or state regulatory body prior to the first day of February, one thousand nine hundred
eighty-nine, or pursuant to a federal grant awarded prior to such first day of February.
        ( c) Renewals and extensions. -- A renewal of any contract shall constitute a new
contract for purposes of this section, and the date of entry into a contract renewal by the parties,
the date or dates of tender of consideration and the time of performance of any contractual
obligations under a renewed contract shall be treated as the dates for determining application of
this section to the renewed contract. Extensions of time granted or agreed upon by the parties to a
contract for performance of the contract or for tender of consideration under the contract shall
not be treated as contract renewals. Contracts to which such extensions apply shall be treated
under these transition rules as if the original contractual provisions for performance and tender of
consideration remain in effect.
       (d) Definitions. -- For purposes of this section:
       (1) The term "contract" or "contracts" means written agreements reciting or setting forth a
fixed price consideration or a consideration based upon cost plus a stated percentage or a stated
monetary increment. This term shall not mean or include ongoing sales contracts, contracts
whereby any element of the consideration or the property or services sold or to be rendered in
performance of the contract are undefined, or determined, as to either nature or quantity,
subsequent to the making of the contract, or any open-ended contract.
       (2) The term "contract renewal" or "renewal" means a covenant or agreement entered into
or assumed by parties which have a current contractual relation or which have had a past
contractual relation, whereby the parties agree to incur obligations beyond those which they
were, or would have been, required, at the minimum, to carry out under their current or past
contractual relation.
       776.14 Nonresident contractor--registration, bond, etc.
       (a) Every nonresident contractor shall register with the Tax Commissioner prior to
engaging in the performance of a contract in the City of Huntington.
       (b) (1) At the time of registration, the contractor shall deposit with the Tax Commissioner
percent of the amount the contractor is to receive for the performance of the contract which shall
be held within a Contractors Use Tax Fund pending the completion of the contract, the
determination of the taxes due this state under this article and article fifteen-a of this chapter
Eleven of the West Virginia Code, because of such contract and the payment of the tax.




Home Rule Pilot Program                                                                      Page 89
        (2) In lieu of the deposit, the contractor may provide a corporate surety bond to be
approved by the Tax Commissioner as to form, sufficiency, value, amount, stability, and other
features necessary to provide a guarantee of payment of the compensating tax due this state.
         ( c) In addition, within thirty days after registration, under this section, the contractor
shall file a statement with the Tax Commissioner itemizing the machinery, materials, supplies,
and equipment that he has or will have on hand at the time he begins the fulfillment of the
contract, including where such tangible personal property has been brought, shipped, or
transported from outside this state upon which neither the tax imposed by this article nor article
fifteen-a (use tax) of this chapter has been paid, and shall pay the tax due thereon at the time of
filing and thereafter shall report and pay the taxes as required by this article and article fifteen-a,
chapter eleven of the West Virginia Code.
       776.15 Transition rules for elimination of exemption for materials and supplies
              incorporated in real property owned by governmental entities.
        (a) General rule. -- The expired provisions in subsection (j), section nine of this article,
which previously exempted sales of tangible personal property to persons engaging in the
activity of contracting, pursuant to a written contract with the United States, this state, or with a
political subdivision thereof, or with a public corporation created by the Legislature or by
another governmental entity pursuant to an act of the Legislature, for a building or structure, or
improvement thereto, or other improvement to real property that is or will be owned and used by
the governmental entity for a governmental or proprietary purpose, shall continue in force for:
       (1) Tangible personal property purchased by a contractor on or after the first day of
October, one thousand nine hundred ninety, in fulfillment of a written contract for contracting, as
defined in section two of this article, that was executed and legally binding on the parties thereto
on or before the fifteenth day of September, one thousand nine hundred ninety; or in fulfillment
of a written contract entered into after said fifteenth day of September pursuant to a written bid
for contracting that was made on or before said fifteenth day of September that was binding on
the contractor, but only to the extent that the bid is subsequently incorporated into a written
contract; and
         (2) Tangible personal property purchased by a contractor on or after the first day of
October, one thousand nine hundred ninety, for consumption or use in fulfillment of a written
contract for the construction of a new improvement to real property, the construction or
operation of which was approved by a federal or state regulatory body prior to the fifteenth day
of September, one thousand nine hundred ninety, or pursuant to a federal grant awarded prior to
said fifteenth day of September.
        (b) Renewals and extensions. -- A renewal of any contract shall constitute a new
contract for purposes of this section, and the date of entry into a contract renewal by the parties,
the date or dates of tender of consideration and the time of performance of any contractual
obligations under a renewed contract shall be treated as the dates for determining application of
this section to the renewed contract. Extensions of time granted or agreed upon by the parties to a
contract for performance of the contract or for tender of consideration under the contract shall
not be treated as contract renewals. Contracts to which such extensions apply shall be treated
under these transition rules as if the original contractual provisions for performance and tender of
consideration remain in effect. For purposes of this section, the terms "contract" or "contracts",




Home Rule Pilot Program                                                                        Page 90
and "contract renewal" or "renewal" shall have the same meaning as defined in subsection (d),
section eight-a of this article.
       776.16 Limitations on right to assert exemptions.

(a) Persons who perform "contracting" as defined in section 776.03 of this article, or persons
acting in an agency capacity, may not assert any exemption to which the purchaser of such
contracting services or the principal is entitled. Any statutory exemption to which a taxpayer
may be entitled shall be invalid unless the tangible personal property or taxable service is
actually purchased by such taxpayer and is directly invoiced to and paid by such taxpayer. This
section shall not apply to purchases by an employee for his or her employer; purchases by a
partner for his or her partnership; or purchases by a duly authorized officer of a corporation, or
unincorporated organization, for his or her corporation or unincorporated organization so long as
the purchase is invoiced to and paid by the employer, partnership, corporation or unincorporated
organization.
        (b) Transition rule. -- This section shall not apply to purchases of tangible personal
property or taxable services in fulfillment of a purchasing agent or procurement agent contract
executed and legally binding on the parties thereto prior to September 15, 1999: Provided, That
this transition rule shall not apply to any purchases of tangible personal property or taxable
services made under such a contract after August 31, 1991; and this transition rule shall not
apply if the primary purpose of the purchasing agent or procurement agent contract was to avoid
payment of consumers sales and use taxes. However, effective July 1, 2007, this section shall not
apply to purchases of services, machinery, supplies or materials, except gasoline and special fuel,
to be directly used or consumed in the construction, alteration, repair or improvement of a new or
existing building or structure by a person performing "contracting", as defined in section two of
this article, if the purchaser of the "contracting" services would be entitled to claim the
refundable exemption under subdivision (2), subsection (b), section nine of this article had it
purchased the services, machinery, supplies or materials. Effective July 1, 2009, this section shall
not apply to purchases of services, computers, servers, building materials and tangible personal
property, except purchases of gasoline and special fuel, to be installed into a building or facility
or directly used or consumed in the construction, alteration, repair or improvement of a new or
existing building or structure by a person performing "contracting", as defined in section two of
this article, if the purchaser of the "contracting" services would be entitled to claim the
exemption under subdivision (7), subsection (a), section nine-h of this article.
       776.17 Exemptions.

(a) Exemptions for which exemption certificate may be issued. -- A person having a right or
claim to any exemption set forth in this subsection may, in lieu of paying the tax imposed by this
article and filing a claim for refund, execute a certificate of exemption, in the form required by
the Tax Commissioner, and deliver it to the vendor of the property or service in the manner
required by the Tax Commissioner. However, the Tax Commissioner may, by rule, specify those
exemptions authorized in this subsection for which exemption certificates are not required. The
following sales of tangible personal property and services are exempt as provided in this
subsection:




Home Rule Pilot Program                                                                     Page 91
        (1) Sales of gas, steam and water delivered to consumers through mains or pipes and
sales of electricity;
         (2) Sales of textbooks required to be used in any of the schools of this state or in any
institution in this state which qualifies as a nonprofit or educational institution subject to the
West Virginia Department of Education and the Arts, the Board of Trustees of the University
System of West Virginia or the board of directors for colleges located in this state;
        (3) Sales of property or services to this state, its institutions or subdivisions,
governmental units, institutions or subdivisions of other states: Provided, That the law of the
other state provides the same exemption to governmental units or subdivisions of this state and to
the United States, including agencies of federal, state or local governments for distribution in
public welfare or relief work;
        (4) Sales of vehicles which are titled by the Division of Motor Vehicles and which are
subject to the tax imposed by section four, article three, chapter seventeen-a of the West Virginia
code or like tax;
       (5) Sales of property or services to churches which make no charge whatsoever for the
services they render: Provided, That the exemption granted in this subdivision applies only to
services, equipment, supplies, food for meals and materials directly used or consumed by these
organizations and does not apply to purchases of gasoline or special fuel;
       (6) Sales of tangible personal property or services to a corporation or organization which
has a current registration certificate issued under article twelve of this chapter, which is exempt
from federal income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of
1986, as amended, and which is:
        (A) A church or a convention or association of churches as defined in Section 170 of the
Internal Revenue Code of 1986, as amended;
       (B) An elementary or secondary school which maintains a regular faculty and curriculum
and has a regularly enrolled body of pupils or students in attendance at the place in this state
where its educational activities are regularly carried on;
       ( C) A corporation or organization which annually receives more than one half of its
support from any combination of gifts, grants, direct or indirect charitable contributions or
membership fees;
        (D) An organization which has no paid employees and its gross income from fundraisers,
less reasonable and necessary expenses incurred to raise the gross income (or the tangible
personal property or services purchased with the net income), is donated to an organization
which is exempt from income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue
Code of 1986, as amended;
        (E) A youth organization, such as the Girl Scouts of the United States of America, the
Boy Scouts of America or the YMCA Indian Guide/Princess Program and the local affiliates
thereof, which is organized and operated exclusively for charitable purposes and has as its
primary purpose the nonsectarian character development and citizenship training of its members;
       (F) For purposes of this subsection:
       ( i) The term "support" includes, but is not limited to:
       (I) Gifts, grants, contributions or membership fees;



Home Rule Pilot Program                                                                    Page 92
       (II) Gross receipts from fundraisers which include receipts from admissions, sales of
merchandise, performance of services or furnishing of facilities in any activity which is not an
unrelated trade or business within the meaning of Section 513 of the Internal Revenue Code of
1986, as amended;
        (III) Net income from unrelated business activities, whether or not the activities are
carried on regularly as a trade or business;
       (IV) Gross investment income as defined in Section 509(e) of the Internal Revenue Code
of 1986, as amended;
      (V) Tax revenues levied for the benefit of a corporation or organization either paid to or
expended on behalf of the organization; and
        (VI) The value of services or facilities (exclusive of services or facilities generally
furnished to the public without charge) furnished by a governmental unit referred to in Section
170(c)(1) of the Internal Revenue Code of 1986, as amended, to an organization without charge.
This term does not include any gain from the sale or other disposition of property which would
be considered as gain from the sale or exchange of a capital asset or the value of an exemption
from any federal, state or local tax or any similar benefit;
       (ii) The term "charitable contribution" means a contribution or gift to or for the use of a
corporation or organization, described in Section 170(c)(2) of the Internal Revenue Code of
1986, as amended; and
       (iii) The term "membership fee" does not include any amounts paid for tangible personal
property or specific services rendered to members by the corporation or organization;
        (G) The exemption allowed by this subdivision does not apply to sales of gasoline or
special fuel or to sales of tangible personal property or services to be used or consumed in the
generation of unrelated business income as defined in Section 513 of the Internal Revenue Code
of 1986, as amended. The exemption granted in this subdivision applies only to services,
equipment, supplies and materials used or consumed in the activities for which the organizations
qualify as tax-exempt organizations under the Internal Revenue Code and does not apply to
purchases of gasoline or special fuel;
        (7) An isolated transaction in which any taxable service or any tangible personal property
is sold, transferred, offered for sale or delivered by the owner of the property or by his or her
representative for the owner's account, the sale, transfer, offer for sale or delivery not being made
in the ordinary course of repeated and successive transactions of like character by the owner or
on his or her account by the representative: Provided, That nothing contained in this subdivision
may be construed to prevent an owner who sells, transfers or offers for sale tangible personal
property in an isolated transaction through an auctioneer from availing himself or herself of the
exemption provided in this subdivision, regardless of where the isolated sale takes place.
        (8) Sales of tangible personal property or of any taxable services rendered for use or
consumption in connection with the commercial production of an agricultural product the
ultimate sale of which is subject to the tax imposed by this article or which would have been
subject to tax under this article: Provided, That sales of tangible personal property and services
to be used or consumed in the construction of or permanent improvement to real property and
sales of gasoline and special fuel are not exempt: Provided, however, That nails and fencing may
not be considered as improvements to real property;



Home Rule Pilot Program                                                                      Page 93
        (9) Sales of tangible personal property to a person for the purpose of resale in the form of
tangible personal property: Provided, That sales of gasoline and special fuel by distributors and
importers is taxable except when the sale is to another distributor for resale: Provided, however,
That sales of building materials or building supplies or other property to any person engaging in
the activity of contracting, as defined in this article, which is to be installed in, affixed to or
incorporated by that person or his or her agent into any real property, building or structure is not
exempt under this subdivision;
       (10) Sales of newspapers when delivered to consumers by route carriers;
       (11) Sales of drugs, durable medical goods, mobility-enhancing equipment and prosthetic
devices dispensed upon prescription and sales of insulin to consumers for medical purposes;
      (12) Sales of radio and television broadcasting time, preprinted advertising circulars and
newspaper and outdoor advertising space for the advertisement of goods or services;
       (13) Sales and services performed by day care centers;
        (14) Casual and occasional sales of property or services not conducted in a repeated
manner or in the ordinary course of repetitive and successive transactions of like character by a
corporation or organization which is exempt from tax under subdivision (6) of this subsection on
its purchases of tangible personal property or services. For purposes of this subdivision, the term
"casual and occasional sales not conducted in a repeated manner or in the ordinary course of
repetitive and successive transactions of like character" means sales of tangible personal property
or services at fundraisers sponsored by a corporation or organization which is exempt, under
subdivision (6) of this subsection, from payment of the tax imposed by this article on its
purchases when the fundraisers are of limited duration and are held no more than six times
during any twelve-month period and "limited duration" means no more than eighty-four
consecutive hours: Provided, That sales for volunteer fire departments and volunteer school
support groups, with duration of events being no more than eighty-four consecutive hours at a
time, which are held no more than eighteen times in a twelve-month period for the purposes of
this subdivision are considered "casual and occasional sales not conducted in a repeated manner
or in the ordinary course of repetitive and successive transactions of a like character";
       (15) Sales of property or services to a school which has approval from the Board of
Trustees of the University System of West Virginia or the Board of Directors of the State
College System to award degrees, which has its principal campus in this state and which is
exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended: Provided, That sales of gasoline and special fuel are taxable;
        (16) Sales of lottery tickets and materials by licensed lottery sales agents and lottery
retailers authorized by the state Lottery Commission, under the provisions of article twenty-two,
chapter twenty-nine of this code;
       (17) Leases of motor vehicles titled pursuant to the provisions of article three, chapter
seventeen-a of the West Virginia code to lessees for a period of thirty or more consecutive days;
        (18) Notwithstanding the provisions of section eighteen or eighteen-b of this article or
any other provision of this article to the contrary, sales of propane to consumers for poultry
house heating purposes, with any seller to the consumer who may have prior paid the tax in his
or her price, to not pass on the same to the consumer, but to make application and receive refund
of the tax from the Tax Commissioner pursuant to rules which are promulgated after being



Home Rule Pilot Program                                                                     Page 94
proposed for legislative approval in accordance with chapter twenty-nine-a of the West Virginia
code by the Tax Commissioner;
        (19) Any sales of tangible personal property or services purchased and lawfully paid for
with food stamps pursuant to the federal food stamp program codified in 7 U. S. C. §§2011, et
seq., as amended, or with drafts issued through the West Virginia special supplement food
program for women, infants and children codified in 42 U. S. C. §§1786;
        (20) Sales of tickets for activities sponsored by elementary and secondary schools located
within this state;
       (21) Sales of electronic data processing services and related software: Provided, That, for
the purposes of this subdivision, "electronic data processing services" means:
       (A) The processing of another's data, including all processes incident to processing of
data such as keypunching, keystroke verification, rearranging or sorting of previously
documented data for the purpose of data entry or automatic processing and changing the medium
on which data is sorted, whether these processes are done by the same person or several persons;
and
      (B) Providing access to computer equipment for the purpose of processing data or
examining or acquiring data stored in or accessible to the computer equipment;
       (22) Tuition charged for attending educational summer camps;
        (23) Dispensing of services performed by one corporation, partnership or limited liability
company for another corporation, partnership or limited liability company when the entities are
members of the same controlled group or are related taxpayers as defined in Section 267 of the
Internal Revenue Code. "Control" means ownership, directly or indirectly, of stock, equity
interests or membership interests possessing fifty percent or more of the total combined voting
power of all classes of the stock of a corporation, equity interests of a partnership or membership
interests of a limited liability company entitled to vote or ownership, directly or indirectly, of
stock, equity interests or membership interests possessing fifty percent or more of the value of
the corporation, partnership or limited liability company;
       (24) Food for the following are exempt:
       (A) Food purchased or sold by a public or private school, school-sponsored student
organizations or school-sponsored parent-teacher associations to students enrolled in the school
or to employees of the school during normal school hours; but not those sales of food made to
the general public;
        (B) Food purchased or sold by a public or private college or university or by a student
organization officially recognized by the college or university to students enrolled at the college
or university when the sales are made on a contract basis so that a fixed price is paid for
consumption of food products for a specific period of time without respect to the amount of food
product actually consumed by the particular individual contracting for the sale and no money is
paid at the time the food product is served or consumed;
        ( C) Food purchased or sold by a charitable or private nonprofit organization, a nonprofit
organization or a governmental agency under a program to provide food to low-income persons
at or below cost;




Home Rule Pilot Program                                                                    Page 95
        (D) Food sold by a charitable or private nonprofit organization, a nonprofit organization
or a governmental agency under a program operating in West Virginia for a minimum of five
years to provide food at or below cost to individuals who perform a minimum of two hours of
community service for each unit of food purchased from the organization;
        (E) Food sold in an occasional sale by a charitable or nonprofit organization, including
volunteer fire departments and rescue squads, if the purpose of the sale is to obtain revenue for
the functions and activities of the organization and the revenue obtained is actually expended for
that purpose;
        (F) Food sold by any religious organization at a social or other gathering conducted by it
or under its auspices, if the purpose in selling the food is to obtain revenue for the functions and
activities of the organization and the revenue obtained from selling the food is actually used in
carrying out those functions and activities: Provided, That purchases made by the organizations
are not exempt as a purchase for resale; or
        (G) Food sold by volunteer fire departments and rescue squads that are exempt from
federal income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as
amended, when the purpose of the sale is to obtain revenue for the functions and activities of the
organization and the revenue obtained is exempt from federal income tax and actually expended
for that purpose;
       (25) Sales of food by little leagues, midget football leagues, youth football or soccer
leagues, band boosters or other school or athletic booster organizations supporting activities for
grades kindergarten through twelve and similar types of organizations, including scouting groups
and church youth groups, if the purpose in selling the food is to obtain revenue for the functions
and activities of the organization and the revenues obtained from selling the food is actually used
in supporting or carrying on functions and activities of the groups: Provided, That the purchases
made by the organizations are not exempt as a purchase for resale;
        (26) Charges for room and meals by fraternities and sororities to their members:
Provided, That the purchases made by a fraternity or sorority are not exempt as a purchase for
resale;
       (27) Sales of or charges for the transportation of passengers in interstate commerce;
       (28) Sales of tangible personal property or services to any person which this state is
prohibited from taxing under the laws of the United States or under the constitution of this state;
       (29) Sales of tangible personal property or services to any person who claims exemption
from the tax imposed by this article or article fifteen-a of this chapter pursuant to the provision of
any other chapter of this code;
       (30) Charges for the services of opening and closing a burial lot;
        (31) Sales of livestock, poultry or other farm products in their original state by the
producer of the livestock, poultry or other farm products or a member of the producer's
immediate family who is not otherwise engaged in making retail sales of tangible personal
property; and sales of livestock sold at public sales sponsored by breeders or registry associations
or livestock auction markets: Provided, That the exemptions allowed by this subdivision may be
claimed without presenting or obtaining exemption certificates provided the farmer maintains
adequate records;




Home Rule Pilot Program                                                                       Page 96
         (32) Sales of motion picture films to motion picture exhibitors for exhibition if the sale of
tickets or the charge for admission to the exhibition of the film is subject to the tax imposed by
this article and sales of coin-operated video arcade machines or video arcade games to a person
engaged in the business of providing the machines to the public for a charge upon which the tax
imposed by this article is remitted to the Tax Commissioner: Provided, That the exemption
provided in this subdivision may be claimed by presenting to the seller a properly executed
exemption certificate;
        (33) Sales of aircraft repair, remodeling and maintenance services when the services are
to an aircraft operated by a certified or licensed carrier of persons or property, or by a
governmental entity, or to an engine or other component part of an aircraft operated by a
certificated or licensed carrier of persons or property, or by a governmental entity and sales of
tangible personal property that is permanently affixed or permanently attached as a component
part of an aircraft owned or operated by a certificated or licensed carrier of persons or property,
or by a governmental entity, as part of the repair, remodeling or maintenance service and sales of
machinery, tools or equipment directly used or consumed exclusively in the repair, remodeling
or maintenance of aircraft, aircraft engines or aircraft component parts for a certificated or
licensed carrier of persons or property or for a governmental entity;
        (34) Charges for memberships or services provided by health and fitness organizations
relating to personalized fitness programs;
        (35) Sales of services by individuals who babysit for a profit: Provided, That the gross
receipts of the individual from the performance of baby-sitting services do not exceed five
thousand dollars in a taxable year;
        (36) Sales of services by public libraries or by libraries at academic institutions or by
libraries at institutions of higher learning;
       (37) Commissions received by a manufacturer's representative;
       (38) Sales of primary opinion research services when:
       (A) The services are provided to an out-of-state client;
       (B) The results of the service activities, including, but not limited to, reports, lists of
focus group recruits and compilation of data are transferred to the client across state lines by
mail, wire or other means of interstate commerce, for use by the client outside the State of West
Virginia; and
        ( C) The transfer of the results of the service activities is an indispensable part of the
overall service.
       For the purpose of this subdivision, the term "primary opinion research" means original
research in the form of telephone surveys, mall intercept surveys, focus group research, direct
mail surveys, personal interviews and other data collection methods commonly used for
quantitative and qualitative opinion research studies;
       (39) Sales of property or services to persons within the state when those sales are for the
purposes of the production of value-added products: Provided, That the exemption granted in
this subdivision applies only to services, equipment, supplies and materials directly used or
consumed by those persons engaged solely in the production of value-added products: Provided,
however, That this exemption may not be claimed by any one purchaser for more than five
consecutive years, except as otherwise permitted in this section.


Home Rule Pilot Program                                                                       Page 97
       For the purpose of this subdivision, the term "value-added product" means the following
products derived from processing a raw agricultural product, whether for human consumption or
for other use. For purposes of this subdivision, the following enterprises qualify as processing
raw agricultural products into value-added products: Those engaged in the conversion of:
       (A) Lumber into furniture, toys, collectibles and home furnishings;
       (B) Fruits into wine;
       ( C) Honey into wine;
       (D) Wool into fabric;
       (E) Raw hides into semifinished or finished leather products;
       (F) Milk into cheese;
       (G) Fruits or vegetables into a dried, canned or frozen product;
       (H) Feeder cattle into commonly accepted slaughter weights;
       (I) Aquatic animals into a dried, canned, cooked or frozen product; and
       (J) Poultry into a dried, canned, cooked or frozen product;
         (40) Sales of music instructional services by a music teacher and artistic services or
artistic performances of an entertainer or performing artist pursuant to a contract with the owner
or operator of a retail establishment, restaurant, inn, bar, tavern, sports or other entertainment
facility or any other business location in this state in which the public or a limited portion of the
public may assemble to hear or see musical works or other artistic works be performed for the
enjoyment of the members of the public there assembled when the amount paid by the owner or
operator for the artistic service or artistic performance does not exceed three thousand dollars:
Provided, That nothing contained herein may be construed to deprive private social gatherings,
weddings or other private parties from asserting the exemption set forth in this subdivision. For
the purposes of this exemption, artistic performance or artistic service means and is limited to the
conscious use of creative power, imagination and skill in the creation of aesthetic experience for
an audience present and in attendance and includes, and is limited to, stage plays, musical
performances, poetry recitations and other readings, dance presentation, circuses and similar
presentations and does not include the showing of any film or moving picture, gallery
presentations of sculptural or pictorial art, nude or strip show presentations, video games, video
arcades, carnival rides, radio or television shows or any video or audio taped presentations or the
sale or leasing of video or audio tapes, air shows or any other public meeting, display or show
other than those specified herein: Provided, however, That nothing contained herein may be
construed to exempt the sales of tickets from the tax imposed in this article. Provided further,
That nude dancers or strippers may not be considered as entertainers for the purposes of this
exemption;
        (41) Charges to a member by a membership association or organization which is exempt
from paying federal income taxes under Section 501(c)(3) or (c)(6) of the Internal Revenue Code
of 1986, as amended, for membership in the association or organization, including charges to
members for newsletters prepared by the association or organization for distribution primarily to
its members, charges to members for continuing education seminars, workshops, conventions,
lectures or courses put on or sponsored by the association or organization, including charges for
related course materials prepared by the association or organization or by the speaker or speakers



Home Rule Pilot Program                                                                      Page 98
for use during the continuing education seminar, workshop, convention, lecture or course, but
not including any separate charge or separately stated charge for meals, lodging, entertainment or
transportation taxable under this article: Provided, That the association or organization pays the
tax imposed by this article on its purchases of meals, lodging, entertainment or transportation
taxable under this article for which a separate or separately stated charge is not made. A
membership association or organization which is exempt from paying federal income taxes under
Section 501(c)(3) or (c)(6) of the Internal Revenue Code of 1986, as amended, may elect to pay
the tax imposed under this article on the purchases for which a separate charge or separately
stated charge could apply and not charge its members the tax imposed by this article or the
association or organization may avail itself of the exemption set forth in subdivision (9) of this
subsection relating to purchases of tangible personal property for resale and then collect the tax
imposed by this article on those items from its member;
       (42) Sales of governmental services or governmental materials by county assessors,
county sheriffs, county clerks or circuit clerks in the normal course of local government
operations;
        (43) Direct or subscription sales by the Division of Natural Resources of the magazine
currently entitled Wonderful West Virginia and by the Division of Culture and History of the
magazine currently entitled Goldenseal and the journal currently entitled West Virginia History;
       (44) Sales of soap to be used at car wash facilities;
       (45) Commissions received by a travel agency from an out-of-state vendor;
         (46) The service of providing technical evaluations for compliance with federal and state
environmental standards provided by environmental and industrial consultants who have formal
certification through the West Virginia Department of Environmental Protection or the West
Virginia Bureau for Public Health or both. For purposes of this exemption, the service of
providing technical evaluations for compliance with federal and state environmental standards
includes those costs of tangible personal property directly used in providing such services that
are separately billed to the purchaser of such services and on which the tax imposed by this
article has previously been paid by the service provider;
        (47) Sales of tangible personal property and services by volunteer fire departments and
rescue squads that are exempt from federal income taxes under Section 501(c)(3) or (c)(4) of the
Internal Revenue Code of 1986, as amended, if the sole purpose of the sale is to obtain revenue
for the functions and activities of the organization and the revenue obtained is exempt from
federal income tax and actually expended for that purpose;
       (48) Lodging franchise fees, including royalties, marketing fees, reservation system fees
or other fees that have been or may be imposed by a lodging franchiser as a condition of the
franchise agreement; and
        (49) Sales of the regulation size United States flag and the regulation size West Virginia
flag for display.
        (b) Refundable exemptions. -- Any person having a right or claim to any exemption set
forth in this subsection shall first pay to the vendor the tax imposed by this article and then apply
to the Tax Commissioner for a refund or credit, or as provided in section nine-d of this article,
give to the vendor his or her West Virginia direct pay permit number. The following sales of
tangible personal property and services are exempt from tax as provided in this subsection:



Home Rule Pilot Program                                                                      Page 99
       (1) Sales of property or services to bona fide charitable organizations who make no
charge whatsoever for the services they render: Provided, That the exemption granted in this
subdivision applies only to services, equipment, supplies, food, meals and materials directly used
or consumed by these organizations and does not apply to purchases of gasoline or special fuel;
         (2) Sales of services, machinery, supplies and materials directly used or consumed in the
activities of manufacturing, transportation, transmission, communication, production of natural
resources, gas storage, generation or production or selling electric power, provision of a public
utility service or the operation of a utility service or the operation of a utility business, in the
businesses or organizations named in this subdivision and does not apply to purchases of
gasoline or special fuel;
        (3) Sales of property or services to nationally chartered fraternal or social organizations
for the sole purpose of free distribution in public welfare or relief work: Provided, That sales of
gasoline and special fuel are taxable;
       (4) Sales and services, fire-fighting or station house equipment, including construction
and automotive, made to any volunteer fire department organized and incorporated under the
laws of the State of West Virginia: Provided, That sales of gasoline and special fuel are taxable;
        (5) Sales of building materials or building supplies or other property to an organization
qualified under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended,
which are to be installed in, affixed to or incorporated by the organization or its agent into real
property or into a building or structure which is or will be used as permanent low-income
housing, transitional housing, an emergency homeless shelter, a domestic violence shelter or an
emergency children and youth shelter if the shelter is owned, managed, developed or operated by
an organization qualified under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of
1986, as amended; and
       (6) Sales of construction and maintenance materials acquired by a second party for use in
the construction or maintenance of a highway project.
       776.18 Exemptions; exceptions for sales of liquors and wines to private clubs.
         The exemptions provided in this article for sales of tangible personal property and
services rendered for use or consumption in connection with the conduct of the business of
selling tangible personal property to consumers or dispensing a service subject to the tax under
this article and, for sales of tangible personal property for the purpose of resale in the form of
tangible personal property, shall not apply to persons or organizations licensed under authority of
article seven, chapter sixty of the West Virginia code, for the purchase of liquor or wines for
resale either from the alcohol beverage control commissioner or from retail liquor licensees
licensed under authority of article three-a, chapter sixty of the West Virginia code.
       776.19 Exemption for purchases of tangible personal property and services for
              direct use in research and development.

(a) Sales of tangible personal property and services directly used or consumed in the activity of
research and development are exempt from tax imposed by this article. Any person having a
right or claim to the exemption set forth in this section shall first pay to the vendor the tax
imposed by this article and then apply to the Tax Commissioner for a refund or credit or give to




Home Rule Pilot Program                                                                    Page 100
the vendor the person's West Virginia direct pay permit number in accordance with the
provisions of section nine-d of this article.
       (b) For purposes of this article:
       (1) "Directly used or consumed in the activity of research and development" means used
or consumed in those activities or operations which constitute an integral and essential part of
research and development, as contrasted with and distinguished from those activities or
operations which are simply incidental, convenient or remote to research and development.
      (A) Uses of property or consumption of services which constitute direct use or
consumption in the activity of research and development include only:
       (i) In the case of tangible personal property, physical incorporation of property into
tangible personal property that is the subject of, or directly used in, research and development;
        (ii) Causing a direct physical, chemical or other change upon property that is the subject
of, or directly used in, research and development;
       (iii) Transporting or storing property that is the subject of, or directly used in, research
and development;
       (iv) Measuring or verifying a change in property that is the subject of, or directly used in,
research and development;
         (v) Physically controlling or directing the physical movement or operation of property
that is the subject of, or directly used in, research and development;
        (vi) Directly and physically recording the flow of property that is the subject of, or
directly used in, research and development;
       (vii) Producing energy for property that is the subject of, or directly used in, research and
development;
       (viii) Controlling or otherwise regulating atmospheric or other environmental conditions
required for research and development;
       (ix) Serving as an operating supply for property that is the subject of, or directly used in,
research and development;
        (x) Maintenance or repair of property, including maintenance equipment, that is directly
used in research and development;
        (xi) Storage, removal or transportation of economic or other waste resulting from the
activity of research and development;
        (xii) Pollution control or environmental quality or environmental protection activity
directly relating to the activity of research and development, and personnel, plant, property or
community safety or security activity directly relating to the activity of research and
development; or
       (xiii) Otherwise being used as an integral and essential part of research and development.
        (B) Uses of property or services which do not constitute direct use or consumption in the
activity of research and development include, but are not limited to:
       (i) Heating and illumination of office buildings;
       (ii) Janitorial or general cleaning activities;



Home Rule Pilot Program                                                                    Page 101
       (iii) Personal comfort of personnel;
       (iv) Planning or scheduling of work or inventory control;
       (v) Marketing, general management, supervision, finance, training, accounting and
administration; or
       (vi) An activity or function incidental or convenient to research and development, rather
than an integral and essential part of these activities.
       (2) "Research and development" means systematic scientific, engineering or
technological study and investigation in a field of knowledge in the physical, computer or
software sciences, often involving the formulation of hypotheses and experimentation, for the
purpose of revealing new facts, theories or principles, or increasing scientific knowledge, which
may reveal the basis for new or enhanced products, equipment or manufacturing processes.
Research and development includes, but is not limited to, design, refinement and testing of
prototypes of new or improved products, or design, refinement and testing of manufacturing
processes before commercial sales relating thereto have begun. For purposes of this section
commercial sales include, but are not limited to, sales of prototypes or sales for market testing.
       (A) Research and development does not include:
       ( i) Market research;
       (ii) Sales research;
       (iii) Efficiency surveys;
       (iv) Consumer surveys;
       (v) Product market testing;
      (vi) Product testing by product consumers or through consumer surveys for evaluation of
consumer product performance or consumer product usability;
        (vii) The ordinary testing or inspection of materials or products for quality control
(quality control testing);
       (viii) Management studies;
       (ix) Advertising;
       (x) Promotions;
       (xi) The acquisition of another's patent, model, production or process or investigation or
evaluation of the value or investment potential related thereto;
       (xii) Research in connection with literary, historical or similar projects;
       (xiii) Research in the social sciences, economics, humanities or psychology and other
nontechnical activities; and
       (xiv) The providing of sales services or any other service, whether technical service or
nontechnical service.
        ( C) No provision of this section may be interpreted to alter, abrogate or impede
application of the exemption for sales of primary opinion research services set forth in section
nine of this article.




Home Rule Pilot Program                                                                  Page 102
       776.19 Exemption for services and materials regarding technical evaluation for
              compliance to federal and state environmental standards provided by
              environmental and industrial consultants.
        The service of providing technical evaluations for compliance with federal and state
environmental standards provided by environmental and industrial consultants who have formal
certification through the West Virginia department of environmental protection or the West
Virginia bureau for public health or both is exempt from the tax imposed by this article. For
purposes of this exemption, the service of providing technical evaluations for compliance with
federal and state environmental standards includes those costs of tangible personal property
directly used in providing the services that are separately billed to the purchaser of the services,
and on which the tax imposed by this article has previously been paid by the service provider.
       776.20 Apportionment of purchase price; existing contracts protected.
        Whenever a purchaser will use acquired tangible personal property, a service, or the
results of a service for both exempt and nonexempt purposes, the gross proceeds of such sale
paid to the vendor for such property or service shall be apportioned between the exempt and
nonexempt uses, in a manner established as reasonable by the Tax Commissioner, by regulations
the Tax Commissioner may prescribe, for the purpose of determining the tax liability in respect
of such purchase.
        Contracts existing, executed, and binding prior to the first day of July, one thousand nine
hundred eighty-seven, for the purchase of tangible personal property or services, by lease or
otherwise, and in connection with which an exemption from tax was applicable to such purchase
prior to such date but terminated on and after the same; no new tax liability shall arise in respect
of payments to be subsequently made under such a contract nor to payments prepaid thereunder
for any periods subsequent to such date, but only new contracts entered into on and after the first
day of July, one thousand nine hundred eighty-seven, shall be liable for tax under the provisions
of this article or of article fifteen-a of this chapter where such a prior applicable exemption has
been so terminated.
       776.21 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 twelve, article
twenty-two, chapter seven of the West Virginia code, section eleven, article thirteen-b, chapter
eight of the West Virginia code, or section twelve, article thirty-eight, chapter eight of the West
Virginia code is exempt from the tax imposed by this article: Provided, That the special district
excise tax does not apply to sales of gasoline and special fuel.
       776.22 Exemptions for sales of computer hardware and software directly
              incorporated into manufactured products; certain leases; sales of electronic
              data processing service; sales of computer hardware and software directly
              used in communication; sales of educational software; sales of internet
              advertising; sales of high-technology business services directly used in
              fulfillment of a government contract; sales of tangible personal property for
              direct use in a high-technology business or internet advertising business;
              definitions.

(a) In order to modernize the exemptions from tax contained in this article as a result of



Home Rule Pilot Program                                                                    Page 103
technological advances in computers and the expanded role of computers, the internet and global
instant communications in business and to encourage computer software developers, computer
hardware designers, systems engineering firms, electronic data processing companies and other
high-technology companies to locate and expand their businesses in West Virginia, the following
sales of tangible personal property and software are exempt:
        (1) Sales of computer hardware or software (including custom designed software) to be
directly incorporated by a manufacturer into a manufactured product. For purposes of this
subsection, the payment of licensing fees for the right to incorporate hardware or software
developed by persons other than the manufacturer into a manufactured product is exempt from
the tax imposed by this article;
        (2) Sales of computer hardware or software (including custom designed software)
directly used in communication as defined in this article;
       (3) Sales of electronic data processing services;
        (4) Sales of educational software required to be used in any of the public schools of this
state or in any institution in this state which qualifies as a nonprofit or educational institution
subject to administration, regulation, certification or approval of the Department of Education,
the Department of Education and the Arts or the Higher Education Policy Commission;
       (5) Sales of internet advertising of goods and services;
       (6) Sales of high-technology business services to high-technology businesses which enter
into contracts with this state, its institutions and subdivisions, governmental units, institutions or
subdivisions of other states, or with the United States, including agencies of federal, state or local
governments for direct use in fulfilling the government contract; and
        (7) Sales of prewritten computer software, computers, computer hardware, servers and
building materials and tangible personal property to be installed into a building or facility for
direct use in a high-technology business or an internet advertising business.
       (b) Definitions. --
       As used in this article, the following terms have the following meanings:
       (1) "Computer hardware" means a computer, as defined in article fifteen-b, chapter
eleven of the West Virginia code, and the directly and immediately connected physical
equipment involved in the performance of data processing or communications functions,
including data input, data output, data processing, data storage, and data communication
apparatus that is directly and immediately connected to the computer. The term "computer
hardware" does not include computer software.
        (2) "High-technology business" means and is limited to businesses primarily engaged in
the following activities: Computer hardware design and development; computer software design,
development, customization and upgrade; computer systems design and development; website
design and development; network design and development; design and development of new
manufactured products which incorporate computer hardware and software; electronic data
processing; network management, maintenance, engineering, administration and security
services; website management, maintenance, engineering, administration and security services
and computer systems management, maintenance, engineering, administration and security
services. High-technology business as defined herein is intended to include businesses which
engage in the activities enumerated in this definition as their primary business activity, and not as


Home Rule Pilot Program                                                                      Page 104
a secondary or incidental activity and not as an activity in support of or incidental to business
activity not specifically enumerated in this definition.
       (3) "High-technology business services" means and is limited to computer hardware
design and development; computer software design, development, customization and upgrade;
computer systems design and development; website design and development; network design
and development; electronic data processing; computer systems management; computer systems
maintenance; computer systems engineering; computer systems administration and computer
systems security services.
        (4) "Internet advertising business" means a for-profit business that is engaged, for
monetary remuneration, in the primary business activity of announcing, or calling public
attention to, goods or services in order to induce the public to purchase those goods or services,
and which uses the internet as its sole advertising communications medium. For purposes of this
definition, internet advertising must be the primary business activity of the business and not a
secondary or incidental activity and not an activity in support of or incidental to other business
activity.
       (5) "Network" means a group of two or more computer systems linked together.
       (6) "Server" means a computer or device on a network that manages network resources.
       ( c) The amendments to this section made in the first extraordinary session of the
Legislature in 2009 shall apply to purchases made on and after July 1, 2009.
       776.23 Exempt drugs, durable medical goods, mobility enhancing equipment and
              prosthetic devices.

(a) Notwithstanding any provision of this article, article fifteen-a or article fifteen-b, chapter
eleven of the West Virginia code, the purchase by a health care provider of drugs, durable
medical goods, mobility enhancing equipment and prosthetic devices, all as defined in section
two, article fifteen-b of this chapter, to be dispensed upon prescription and intended for use in the
diagnosis, cure, mitigation, treatment or prevention of injury or disease are exempt from the tax
imposed by this article.
        (b) For purposes of this exemption, "health care provider" means any person licensed to
prescribe drugs, durable medical goods, mobility enhancing equipment and prosthetic devices
intended for use in the diagnosis, cure, mitigation, treatment or prevention of injury or disease.
For purposes of this section, the term "health care provider" includes any hospital, medical clinic,
nursing home or provider of inpatient hospital services and any provider of outpatient hospital
services, physician services, nursing services, ambulance services, surgical services or veterinary
services.
       776.24 Exemption for Sales of clothing and clothing accessories by tax-exempt
              organizations.
       Sales of clothing and clothing accessories by organizations that are exempt from federal
income taxes under Section 501(c)(3) or Section 501(c)(4) of the Internal Revenue Code of
1986, as amended, and that have annual revenue obtained from the sales of less than $40,000, are
exempt from the tax imposed under this article and article fifteen-a of this chapter: Provided,
That the purpose of the sale is to obtain revenue for the activities and functions of the
organization, and the revenue obtained is exempt from federal income tax and actually expended



Home Rule Pilot Program                                                                     Page 105
for that purpose: Provided, however, That the clothing and clothing accessories sold are acquired
or obtained by donation only, without compensation, remuneration or consideration to the donor.
The Tax Commissioner may, by rule, specify the exemption authorized in this section to be a
"per se" exemption for which exemption certificates are not required.
       776.25 Discretionary designation of per se exemptions.
       Notwithstanding any other provision of this article, the Tax Commissioner may, by rule,
specify those exemptions authorized in this article or in other provisions of this code or
applicable federal law for which exemption certificates or direct pay permits are not required.
       776.26 Tax paid by ultimate consumer.
        It is the intent of this article that the tax levied hereunder shall be passed on to and be
paid by the ultimate consumer. The amount of the tax shall be added to the sales price, and shall
constitute a part of that price and be collectible as such.
       776.27 Exemption for certain organizations.
         (a) Sales of taxable services by a corporation or organization that are exempt from federal
income tax under Section 501(c)(3) of the Internal Revenue Code, and that meet the
requirements set forth in subsection (b) of this section, are exempt from the tax imposed by this
article, except that this exemption shall not apply to sales of taxable services to the extent that
income received from the sales of such services is taxable under Section 511 of the Internal
Revenue Code.
       (b) The exemption set forth in this section applies only to those corporations or
organizations meeting the following criteria:
        (1) The corporation or organization is organized and operated primarily for charitable or
educational purposes and its activities and programs contribute importantly to promoting the
general welfare of youth, families and the aged, improving health and fitness and providing
recreational opportunities to the public;
         (2) The corporation or organization offers membership or participation in its programs
and activities to the general public and charges fees or dues which make its programs and
activities accessible by a reasonable cross-section of the community; and
        (3) The corporation or organization offers financial assistance on a regular and on-going
basis to individuals unable to afford the organization's membership dues or fees.
       (c) For purposes of this section, the term "corporation" and the term "organization" are
used interchangeably and mean a corporation or other organization that is exempt from income
tax under Section 501(c)(3) of the Internal Revenue Code, as amended.
      (d) Nothing in this section shall affect the application of this article to nonprofit tax-
exempt hospitals.
       776.28 Agreements by competing taxpayers.
        To provide uniform methods of adding the average equivalent of the tax to the selling
price in each sale or transaction subject to the tax, appropriate rules and regulations, except as
otherwise herein provided, may be agreed upon or adopted by competing taxpayers or
associations of taxpayers, except that all collections shall be made on the basis of the total
transaction at the time of sale, without regard to the value of the separate items making up the




Home Rule Pilot Program                                                                    Page 106
total amount of the sale. Such rules and regulations, if they do not involve price fixing, shall not
be deemed illegal as in restraint of trade or commerce. The Tax Commissioner shall cooperate in
formulating such rules and regulations, and, in the event appropriate rules and regulations are not
submitted to him within thirty days after this article takes effect, or within a reasonable extended
period fixed by the Tax Commissioner, he shall himself formulate and promulgate appropriate
rules and regulations to effectuate the purpose of this section.
       776.29 Collection of tax when sale on credit.
       A vendor doing business wholly or partially on a credit basis shall remit to the Tax
Commissioner the tax due on the credit sale for the month in which the credit transaction
occurred.
       776.30 When separate records of sales required.
         (a) Any vendor engaged in a business subject to this tax, who is at the same time engaged
in some other kind of business, occupation or profession, not taxable under this article, shall keep
records to show separately the transactions used in determining the tax base taxed under this
article.
       (b) In the event the person fails to keep separate records there shall be levied upon the
person a tax based upon the entire gross proceeds of both or all of the person's businesses.
       776.31 Sales to affiliated companies or persons.
        In determining gross proceeds of sales from one to another of affiliated companies or
persons, or under other circumstances where the relation between the buyer and seller is such
that the gross proceeds from a sale are not indicative of the true value of the subject matter of the
sale, the Tax Commissioner shall prescribe uniform and equitable rules for determining the
amount upon which the tax shall be levied, corresponding as nearly as possible to gross proceeds
from the sale of similar products of like quality or character, where no common interest exists
between the parties.
       776.32 Tax return and payment.


        (a) Payment of tax. -- The taxes levied by this article are due and payable in monthly
installments, on or before the twentieth day of the month next succeeding the month in which the
tax accrued, except as otherwise provided in this article.


       (b) Tax return. -- The taxpayer shall, on or before the twentieth day of each month, make
out and mail to the Tax Commissioner a return for the preceding month, in the form prescribed
by the Tax Commissioner, showing:
       (1) The total gross proceeds of the vendor's business for the preceding month;
       (2) The gross proceeds of the vendor's business upon which the tax is based;
       (3) The amount of the tax for which the vendor is liable; and
        (4) Any further information necessary in the computation and collection of the tax which
the Tax Commissioner may require, except as otherwise provided in this article or article fifteen-
b of this chapter.




Home Rule Pilot Program                                                                     Page 107
        ( c) Remittance to accompany return. -- Except as otherwise provided in this article or
article fifteen-b of this chapter, a remittance for the amount of the tax shall accompany the
return.
       (d) Deposit of collected tax. -- Tax collected by the Tax Commissioner shall be deposited
as provided in section thirty of this article, except that:
       (1) Tax collected on sales of gasoline and special fuel shall be deposited in the state road
fund; and
        (2) Any sales tax collected by the Alcohol Beverage Control Commissioner from persons
or organizations licensed under authority of article seven, chapter sixty of this code shall be paid
into a revolving fund account in the State Treasury, designated the Drunk Driving Prevention
Fund, to be administered by the Commission on Drunk Driving Prevention, subject to
appropriations by the Legislature.
        (e) Return to be signed. -- A return shall be signed by the taxpayer or the taxpayer's duly
authorized agent, when a paper return is prepared and filed. When the return is filed
electronically, the return shall include the digital mark or digital signature, as defined in article
three, chapter thirty-nine-a of the West Virginia code, or the personal identification number of
the taxpayer, or the taxpayer's duly authorized agent, made in accordance with any procedural
rule that may be promulgated by the Tax Commissioner.
       (f) Accelerated payment. --
         (1) Taxpayers whose average monthly payment of the taxes levied by this article and
article fifteen-a of this chapter during the previous calendar year exceeds one hundred thousand
dollars, shall remit the tax attributable to the first fifteen days of June each year on or before the
twentieth day of June: Provided, That on and after the first day of June, two thousand seven, the
provisions of this subsection that require the accelerated payment on or before the twentieth day
of June of the tax imposed by this article and article fifteen-a, chapter eleven, of the West
Virginia Code are no longer effective and any such tax due and owing shall be payable in
accordance with subsection (a) of this section.
         (2) For purposes of complying with subdivision (1) of this subsection, the taxpayer shall
remit an amount equal to the amount of tax imposed by this article and article fifteen-a, chapter
eleven, of the West Virginia code, on actual taxable sales of tangible personal property and
custom software and sales of taxable services during the first fifteen days of June or, at the
taxpayer's election, the taxpayer may remit an amount equal to fifty percent of the taxpayer's
liability for tax under this article on taxable sales of tangible personal property and custom
software and sales of taxable services made during the preceding month of May.
         (3) For a business which has not been in existence for a full calendar year, the total tax
due from the business during the prior calendar year shall be divided by the number of months,
including fractions of a month, that it was in business during the prior calendar year; and if that
amount exceeds one hundred thousand dollars, the tax attributable to the first fifteen days of June
each year shall be remitted on or before the twentieth day of June as provided in subdivision (2)
of this subsection.
        (4) When a taxpayer required to make an advanced payment of tax under subdivision (1)
of this subsection makes out its return for the month of June, which is due on the twentieth day
of July, the taxpayer may claim as a credit against liability under this article for tax on taxable



Home Rule Pilot Program                                                                      Page 108
transactions during the month of June the amount of the advanced payment of tax made under
subdivision (1) of this subsection.
       776.33 Liability of officers of corporation, etc.
         If the taxpayer is an association or corporation, the officers thereof shall be personally
liable, jointly and severally, for any default on the part of the association or corporation, and
payment of the tax and any additions to tax, penalties and interest thereon imposed by article ten
of this chapter may be enforced against them as against the association or corporation which they
represent.
       776.34 Receivership; bankruptcy; priority of tax.
         In the distribution, voluntary or compulsory, in receivership, bankruptcy or otherwise, of
the property or estate of any person, all taxes due and unpaid under this article shall be paid from
the first money available for distribution in priority to all claims and liens except taxes and debts
due the United States which under federal law are given priority over the debts and liens created
by this article. Any person charged with the administration or distribution of any such property
or estate who shall violate the provisions of this section shall be personally liable for any taxes
accrued and unpaid under this article which are chargeable against the person whose property or
estate is in administration or distribution.
       776.35 Other times for filing returns.
       The Tax Commissioner may, upon written request, authorize a taxpayer whose books and
records are not kept on a monthly basis to file returns at times other than those specified in
section sixteen, but in no event shall a taxpayer make less than one return a calendar month,
except as provided by section twenty or as may be authorized in writing by the Tax
Commissioner.
       776.36 Quarterly and annual returns.

(a) When the total consumers sales and use tax remittance for which a person is liable does not
exceed an average monthly amount over the taxable year of two hundred fifty dollars, he or she
may pay the tax and make a quarterly return on or before the twentieth day of the first month in
the next succeeding quarter in lieu of monthly returns.
        (b) When the total consumers sales and use tax remittance for which a person is liable
does not in the aggregate exceed six hundred dollars for the taxable year, he or she may pay the
tax and make an annual return on or before thirty days after the end of his or her taxable year for
federal and state income tax purposes.
       776.37 Annual return; extension of time.
        (a) Date due. -- On or before thirty days after the end of the tax year, each person liable
for the payment of any tax due under this article shall make and file an annual return in such
form as may be required by the Tax Commissioner, showing:
       (1) Total gross proceeds of his business for preceding tax year,
       (2) Gross proceeds upon which the tax for that year was computed, and
      (3) Any other information necessary in the computation or collection of the tax that the
Tax Commissioner may require.




Home Rule Pilot Program                                                                     Page 109
       (b) Supporting schedule for consolidated return. -- Whenever a person operates two or
more places of business and files a consolidated monthly return, a schedule shall be attached to
the consolidated annual return showing, for each place of business, total sales and charges for
rendering services, total transactions subject to tax and total tax collections.
        ( c) Payment. -- After deducting the amount of prior payments during the tax year, the
taxpayer shall forward the annual return along with payment of any remaining tax, due for the
preceding tax year, to the Tax Commissioner. The taxpayer or his duly authorized agent shall
verify the return under oath.
         (d) Extension of time. -- The Tax Commissioner for good cause shown, may, on written
application of a taxpayer, extend the time for making any return required by the provisions of
this article.
       776.38 Consolidated returns.
       A person operating two or more places of business of like character from which are made
or dispensed sales or services which are taxable hereunder shall file consolidated returns
covering all such sales or services.
       776.39 Keeping and preserving of records.
        Each taxpayer shall keep complete and accurate records of taxable sales and of charges,
together with a record of the tax collected thereon, and shall keep all invoices, bills of lading and
such other pertinent documents in such form as the Tax Commissioner may by regulation
require. Such records and other documents shall be preserved for a period of time not less than
three years, unless the Tax Commissioner shall consent in writing to their destruction within that
period or by order require that they be kept longer.
       776.40 Records of nonresidents doing business in state.
        A nonresident person or foreign corporation engaged in a business within this state in the
conduct of which the tax levied by this article becomes due, shall keep within this state adequate
records concerning the operation of the business, and all taxes collected in the course of the
business. The amount of the tax collected shall not be transmitted outside of this state without the
written consent of, and in accordance with the conditions prescribed by the Tax Commissioner.




Home Rule Pilot Program                                                                     Page 110
776.41 Records of Finance Director; preservation of returns.
       The Finance Director shall keep full and accurate records of all moneys received by him.
He shall preserve all returns filed with him hereunder for five years.


           776.42 Proceeds of tax.
      The proceeds of the tax imposed by this article shall be deposited in the General
Revenue Fund of the City of Huntington.


           776.43 Severability.
       Severability. -- If any section, subsection, subdivision, paragraph, sentence, clause or
phrase of this article is for any reason held to be invalid, unlawful or unconstitutional, that
decision may not affect the validity of the remaining portions of this article or any part thereof.
           776.44 General procedure and administration.
            Each and every provision of the "West Virginia Tax Procedure and Administration Act"
set forth in article ten of this chapter shall apply to the tax imposed by this article fifteen with
like effect as if said act were applicable only to the tax imposed by this article.
............................................................................................................................................................
           BE IT FURTHER ORDAINED that all other articles, sections and sub-sections of the

Codified Ordinances of the City of Huntington, as revised, shall remain in full force and effect

until further Ordinance of this Council.




Home Rule Pilot Program                                                                                                                       Page 111
  AN ORDINANCE OF COUNCIL AMENDING, MODIFYING AND RE-ENACTING
 ARTICLE 787 OF THE CODIFIED ORDINANCES OF THE CITY OF HUNTINGTON,
    AS REVISED, ELIMINATING THE BUSINESS AND OCCUPATION TAX ON
     MANUFACTURING BUSINESSES, AND REDUCING THE BUSINESS AND
   OCCUPATION TAX ON RETAIL BUSINESSES AND SERVICE BUSINESSES.

            BE IT ORDAINED BY THE COUNCIL OF THE CITY OF HUNTINGTON,
CABELL AND WAYNE COUNTIES, WEST VIRGINIA, that Article 787 of the Codified
Ordinances of the City of Huntington, as revised, is hereby AMENDED, MODIFIED and RE-
ENACTED to read as follows:
                                                                 ARTICLE 787
                                             BUSINESS AND OCCUPATION TAX
............................................................................................................................................................

787.08 MANUFACTURING, COMPOUNDING OR PREPARING PRODUCTS.

       Upon every person engaging or continuing within this City in the business of
manufacturing, compounding or preparing for sale, profit, or commercial use, either directly or
through the activity of others in whole or part, any article or articles, substance or substances,
commodity or commodities, or electric power produced by public utilities or others and not taxed
under other sections of this article, the amount of the tax to be equal to the value of the article,
substance, commodity or electric power manufactured, compounded or prepared for sale, as
shown by the gross proceeds derived from the sale thereof by the manufacturer or person
compounding or preparing the same, except as otherwise provided, multiplied by a rate of twenty
one-hundredths of one percent.

        The measure of the tax in this section is the value of the entire product manufactured,
compounded or prepared in this City for sale, profit or commercial use, regardless of the place of
sale or the fact that deliveries may be made to points outside this City.

        It is further provided, however, that in those instances in which the same person partially
manufactures, compounds or prepares products within this City and partially manufactures,
compounds, or prepares such products outside this City, the measure of his tax under this section
shall be that proportion of the sale price of the product that the payroll cost of manufacturing
within this City bears to the entire payroll cost of manufacturing the product.

        A person exercising any privilege taxable under this section and engaging in the business
of selling his products in this City shall be required to make returns of the gross proceeds of such
sales and pay the tax imposed in Section 787.09 for the privilege of engaging in the business of
selling such products in this City.

        Persons who manufacture, compound or prepare products outside of this City and who
make sale of the same within this City shall not pay the tax imposed by this section but shall pay
the tax imposed by Section 787.09 for the privilege of selling said product within this City.




Home Rule Pilot Program                                                                                                                       Page 112
       .....................................................................................................................

       787.09 THE BUSINESS OF SELLING TANGIBLE PROPERTY; SALES EXEMPT.

        Upon every person engaging or continuing within this City in the business of selling any
tangible property whatsoever, real or person, including the sale of food in hotels, restaurants,
cafeterias, confectioneries, and other public eating houses, except sales of any person engaging
or continuing in the business of horticulture, agriculture, or grazing, or selling stocks, bonds or
other evidences of indebtedness, there is likewise hereby levied, and shall be collected, a tax
equal to five=tenths of one percent (.50%) one-fourth of one percent (.25%) of the gross income
of the business, except that in the case of selling at wholesale, the tax shall be equal to three-
twentieths of one percent of the gross income of the business.

       .....................................................................................................................

       787.13 SERVICE BUSINESS OR CALLING NOT OTHERWISE SPECIFICALLY
              TAXED.

       Upon every person engaging or continuing within this City in any service, business or
calling not otherwise specifically taxed under this article, there is likewise hereby levied and
shall be collected a tax equal to one- percent (1%) .50% of the gross income of any such
business.

       .....................................................................................................................

       787.54 TAX INCENTIVES FOR CERTAIN BUSINESSES.

       (a)For the purpose of this section, the following definitions shall apply:
               (1)    “New business” means any business for gain or economic benefit which
                      opens an office or other place of business within the City on or after June
                      1, 2008; provided that, businesses located within the City that transfer
                      ownership shall not be considered “new businesses” within the meaning of
                      this section.
               (2)    “Back office operation” means any business that has an office located in
                      the City which is used solely for providing administrative services for the
                      business and said office does not solicit or conduct business directly with
                      clients or customers at that location.
               (3)    “Retail sales” are sales of any kind for gain or economic benefit which is
                      not being sold at wholesale as defined in Section 787.05(I).

       (b)Back Office Operation Exemption. Every new business, which does not have any
other existing office or existing business located within the City as of June 1, 2008, and has not
maintained another office or other place of business in the City for the preceding twelve (12)
month period, upon locating a back office operation within the City, shall be granted a partial
exemption, as stated in subsection (b)(1) hereof, from the Business and Occupation Tax set forth




Home Rule Pilot Program                                                                                                        Page 113
in this article. Said tax incentives may only take effect upon the enactment of a resolution
granting a specific business the tax incentive.
                (1)    Tax credits granted under subsection (b) hereof shall be granted to
                       businesses employing a minimum of fifty (50) full-time employees or the
                       equivalent of fifty (50) full-time employees during the time of the credit as
                       follows:
                       A.      For the first three (3) full years of operation, the business shall be
                               granted a tax credit equal to fifty percent (50%) of the business and
                               occupation tax due.
                       B.      After the end of the third full year of operation, the business shall
                               pay one hundred percent (100%) of all business and occupation
                               taxes due.
                       C.      Fifty (50) full-time employees or the equivalent thereof would be
                               1,875 hours per week worked by all employees (37.5 X 50 =
                               1,875).
                (2)    The administration may promulgate regulations which shall provide for
                       tax credits to be provided to back office operations employing less than
                       fifty (50) full-time employees or the equivalent thereof during the period
                       of the credit. The regulations shall provide for tax incentives that shall be
                       provided consistent with this section. Regulations would include but not
                       be limited to:
                       A. The number of hours worked.
                       B. The amount of projected gross sales.
                       C. The total square footage occupied by the business.
                       D. The gross amount of payroll the company would generate in the City.
                (3)    In order to qualify for tax credits under subsection (b), the business must
                       make available all necessary information to verify qualification under this
                       section. This requirement shall be in effect for the duration of the tax
                       credit.
        (c)New Retail Business Exemption. Any New Business that locates within the corporate
limits of the Municipality and employs a minimum of fifteen (15) or more full-time employees
or the equivalent of fifteen (15) or more full-time employees shall be granted a partial
exemption, as stated in subsection( c)(1) hereof, on their Retail Sales, as defined in subsection
(a)(3) hereof, from the Business and Occupation Tax set forth in this article. Fifteen (15) full-
time employees or the equivalent thereof would be 562.50 hours per week worked by all
employees (37.5 X 15 = 562.50).
                (1)    Tax credits granted under subsection ( c) hereof may be granted to New
                       Businesses solely on their Retail Sales as follows:
                       A.      Fifty percent (50%) of the amount of tax computed under the
                               provisions of this article during the first full year of the New
                               Business=s operation.
                       B.      Fifty percent (50%) of the amount of tax computed under the
                               provisions of this article for the second full year, or portion thereof
                               of the New Business=s operation.




Home Rule Pilot Program                                                                      Page 114
                       C.      Fifty percent (50%) of the amount of tax computed under the
                               provisions of this article for the third full year, or portion thereof,
                               of the New Business=s operation.
                       D.      There shall be no further tax credits under subsection ( c) hereof
                               for the fourth full year, or portion thereof, and for each successive
                               year thereafter, of the New Business’s operation.
               (2)     The administration may promulgate regulations which may provide for tax
                       credits on Retail Sales to be provided new businesses employing less than
                       fifteen (15) full-time employees or the equivalent thereof during the period
                       of the credit. The regulations shall provide for tax incentives that shall be
                       provided consistent with this section. Regulations would include but not
                       be limited to:
                       A.      The number of hours worked.
                       B.     The amount of projected gross sales.
                       C.      The total square footage occupied by the business.
                       D.      The gross amount of payroll the company would generate in the
                               City.
               (3)     Tax credits granted under subsection ( c) hereof cannot be taken by any
                       business who is receiving tax credits under subsection (b) or (d) hereof.

        (d)Manufacturing Business Exemption. Any manufacturing business that establishes
operations in the City of Huntington by start up of a new manufacturing business employing a
minimum of ten (10) employees, an established manufacturing business moving into the City of
Huntington employing a minimum of ten (10) employees, or an established manufacturing
business voluntarily being annexed into the City employing a minimum of ten (10) employees
shall be granted a tax credit equal to fifty percent (50%) of the Business and Occupation Tax due
for the first three (3) full years of operation.

        (e)Service Business Exemption. Any service business that establishes operations in the
City of Huntington by start up of a new business, an established service business moving into the
City of Huntington or an established service business voluntarily being annexed into the City of
Huntington shall receive a fifty percent (50%) reduction in B&O tax if a minimum of five (5)
employees (including Owner/Operator) are maintained for the duration of the three-year period.

        (f)Annexation Exemption. Any existing ongoing business situated outside of the
corporate limits of the Municipality which would otherwise be subject to the terms of this article
if located within the corporate limits of the Municipality, shall upon the annexation of territory in
which such business is located, into the corporate limits of the Municipality be granted a partial
exemption, as stated in subsection (d) hereof, in the amount of fifty percent (50%) of the amount
of tax computed under the provisions of this article during the first three (3) years of operation,
or portion thereof, after annexation of the additional territory into the corporate limits of the
Municipality.
                (1)     Tax credits granted under subsection (e) hereof cannot be taken by any
                        business who is receiving tax credits under subsection (b), ( c) or (d)
                        hereof.




Home Rule Pilot Program                                                                      Page 115
        (g)Notwithstanding the provisions of this section, any tax credit previously granted a
business which has transferred ownership shall continue for the remainder of the period of the
credit.

        (h)All new businesses that are eligible for multiple incentives are to be given a choice of
the best option incentive available to them.

        (i)Notwithstanding the provisions of this section, tax credits allowable under this section
shall be claimed within six (6) months of the business being registered with the Municipality.
Failure to timely apply for tax incentives for the six (6) month period shall operate as a waiver to
any claim for tax incentives identified in this article.

....................................................................................................................

        787.56 ADDITIONAL CREDITS.
        (a)A person taxable under Section 787.09 with respect to selling products at wholesale in
this City shall be allowed a non-refundable credit against those taxes for any of the following:
                (1)     Manufacturing taxes paid by such person with respect to the
                        manufacturing of products so sold at wholesale in this City; and/or
                (2)     Extracting taxes paid by such person with respect to the extracting of
                        products so sold in this City or ingredients of products so sold at
                        wholesale in this City.

            (b)For the purposes of this section:
                    (1)    “Manufacturing tax” means a gross receipts tax imposed by a municipality
                           or other local government unit on the act or privilege of engaging in the
                           business as a manufacturer and includes: (i) the tax imposed in Section
                           787.08 and (ii) similar gross receipts taxes paid to other municipalities or
                           other local government units (other than State governments) within the
                           United States.
                    (2)    “Extracting tax” means a gross receipts of tax imposed by a municipality
                           or other local government unit on the act or privilege of engaging in the
                           business as a producer of natural resource products and includes: (i) the
                           tax imposed in Section 787.07 and (ii) similar gross receipts taxes paid to
                           other municipalities or other local government units within the United
                           States (other than State governments within the United States).
                    (32) “Gross receipts tax” means a tax which (i) is imposed on or measured by
                           the gross volume of business in terms of gross receipts or in other terms
                           and in the determination of which deduction allowed would not constitute
                           the tax an income tax or value added tax and (ii) which is not, pursuant to
                           law or custom, separately stated from the sales price.

        (c)If imposition of City’s tax would place an undue burden upon interstate commerce or
violate constitutional requirements, a taxpayer shall be allowed a credit to the extent necessary to
preserve the validity of the City’s tax, and still apply the City’s tax to as much of the taxpayer’s
activities as may be subject to the City’s taxing authority.




Home Rule Pilot Program                                                                                                Page 116
............................................................................................................................................................

            BE IT FURTHER ORDAINED that this ordinance shall become effective April 1, 2011

upon its adoption by Council and approval by the Mayor.

            BE IT FURTHER ORDAINED that all other sections and sub-sections of Article 787

of the Codified Ordinances of the City of Huntington, as revised, shall remain in full force and

effect until further Ordinance of this Council


SPONSORED BY COUNCILMAN STEVE WILLIAMS
APPROVED AS TO FORM BY SEM




Home Rule Pilot Program                                                                                                                       Page 117

								
To top