March 10, 2007

As the dust settles from the 2007 regular legislative session and we continue work on the state budget, I am pleased to report that we approved a host of legislation aimed at improving the lives' of West Virginians, both directly and indirectly.

I'd like to start by explaining in this column some of the legislation that promises to boost the state's economy.

We passed HB 2775, which exempts, beginning in July 2007, new residents of the state from payment of the privilege tax on a vehicle purchased in another state. The tax will be abolished in 2008 and a 5 percent consumer sales and use tax would be implemented in July of 2008. This would replace the money lost eliminating the privilege tax, and enable residents to deduct it from their tax returns.

SB749 will reduce the business franchise tax over five years from a rate of .55 to .20.The bill also adopts the MultiState Tax Commission's Model Statute that will require businesses who may be unfairly transferring West Virginia income to other states to file combined tax reports with our Tax Department.

I find passage of this legislation encouraging, as it was the result of a bi-partisan effort to make business more attractive to investment in West Virginia without allowing an unfair advantage against the businesses we have today.

There is the tourism tax credit expansion. Under current code, qualifying tourism development projects can apply for certain tax credits, by written agreement with and with the approval of the Development Office. The maximum amount of credit allowable is equal to 25 percent of approved costs over 10 years, with a 3-year carryover. If the project site is within or adjacent to a surface mining operation from which all coal has been or will be extracted prior to the commencement of the project, the maximum credit is equal to 50 percent of the approved costs.

HB 2309 changes, for former surface mining sites, the percentage of costs to which a tax credit may be applied from 50% to 35%, but also authorizes rules to implement the new credit. The termination date for the credit is extended from July 1, 2007 to January 1, 2013. Up to $1.5 million can be awarded each fiscal year.

Some might call HB 2956 a "tort reform" bill, in that it makes West Virginia's court system more effective. It would correct a subsection of the state code which was recently found to be unconstitutional, and codify a common law doctrine that would give courts the discretion to decline exercising jurisdiction over certain cases where the underlying principles of justice and convenience favor dismissal.

Basically, the change would permit defendants to request to move lawsuits elsewhere. This could reduced the number of class-action lawsuits from out-of-state residents while still giving plaintiffs their full rights. Many business representatives have maintained that out-of-state plaintiffs use West Virginia courts in West Virginia to obtain large judgments in class action lawsuits.

SB 406 includes qualified continuing care retirement communities' licensed facility owned by a corporation or other organization exempt from federal income taxes, at which independent living, assisted living and nursing care, if necessary, are provided to qualified residents under the provisions of the Tax Limitations Amendment for purposes of assessing whether real property is residential or commercial. This would enable this particular type of retirement community to pay taxes at the Class II level which would be the same as individuals living in their own homes in the community.

Finally, we passed a bill that will help pave the way for "home rule," or allowing cities more flexibility beyond state law. SB747 creates the Municipal Home Rule Pilot Program, which will allow up to 5 municipalities and/or metro governments to join and exercise a broad-based home
rule whereby they would be allowed pass ordinances, acts, rules or regulations that may differ from those made generally by state law. This could go a long way in providing cities in certain regions of the state the ability to pursue economic development projects and otherwise improve
their business climates.

I welcome and appreciate your input on these or any other legislative issues. Write to House Majority Leader Joe DeLong, Building 1, Room 228-M, 1900 Kanawha Blvd. E., Charleston, 25305, or joe@joedelong.com, or call 304-340-3220.