State ex rel. County Commission of Boone County v. Cooke

475 S.E.2d 483, 197 W. Va. 391, 1996 W. Va. LEXIS 115
CourtWest Virginia Supreme Court
DecidedJuly 17, 1996
DocketNo. 23375
StatusPublished
Cited by3 cases

This text of 475 S.E.2d 483 (State ex rel. County Commission of Boone County v. Cooke) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. County Commission of Boone County v. Cooke, 475 S.E.2d 483, 197 W. Va. 391, 1996 W. Va. LEXIS 115 (W. Va. 1996).

Opinion

McHUGH, Chief Justice.

The petitioner, the County Commission of Boone County (hereinafter the “County Commission”), seeks a writ of mandamus to compel the respondent, Ed Cooke, the Clerk of the County Commission of Boone County (hereinafter the “Clerk”), to publish notice of a public hearing, pursuant to The Tax Increment Financing Act found in W. Va.Code, 7-11B-1, et seq. [1995], regarding the issuance of tax increment bonds for the purpose of financing a county water project which will be referred to as the Boone County Development Project. The Clerk refused to publish [393]*393the notice of the hearing because he asserts that the Tax Increment Financing Act is unconstitutional on many grounds. For reasons explained below, we decline to issue a writ of mandamus.

I.

In order to facilitate an understanding of this case, it is necessary to initially analyze the Tax Increment Financing Act. That analysis will be applied to the Boone County Development Project.

A.

The Tax Increment Financing Act

The Tax Increment Financing Act allows a private project developer and a county commission to jointly make capital improvements or build facilities which result “in the increase in the value of property located in the area or encourage increased employment within the area[.]” W. Va.Code, 7-11B-2 [1995]. More specifically, the act authorizes a county commission to issue tax increment obligations1 in order to finance “development projects to foster economic development, including infrastructure and other public improvements prerequisite to private improvements[.]” W. Va.Code, 7-11B-4(c) [1995],

The objective of the Tax Increment Financing Act is to use the increased ad valo-rem tax revenue which is generated as a result of the development project to pay the principal of and interest on the tax increment obligations. The underlying premise of the tax increment financing scheme is the assumption that the assessed property value of the private project will increase as a result of the development project thereby increasing the amount of ad valorem taxes collected. Thus, in order to measure the increased assessed property value, the act initially requires a base assessed value to be established on the private project property. W. Va.Code, 7-11B-4(a) [1995]. The base assessed value is the taxable assessed value of the private project property in the year preceding the county’s adoption of a tax increment financing plan. W. Va.Code, 7-11B-3(b) [1995].2 After the tax increment financing plan is adopted by the county commission “the amount of tax attributable to the amount by which the current assessed value of a private project in a development project area exceeds the base assessed value, if any, of such private project, less the portion of tax allocated to the state[,]” is called the “tax increment.” W. Va.Code, 7-11B-3© [1995]. The tax increment is paid to the tax increment financing fund which, in turn, is used to pay the principal of and interest on tax increment obligations. W. Va.Code, 7-11B-4(a)(3) [1995]. Thus, the tax increment is the amount of additional ad valorem taxes collected as a result of the increase in the value of the private project property.

The process by which a county commission finances a project using tax increment financing begins when an agency or project developer requests the county commission to adopt a tax increment financing plan3 “with respect to a development project to be developed [by the county] in conjunction with a private project of a project developer.” W. Va.Code, 7-llB-4(a) [1995]. Before the county commission may enter an order approving a tax increment financing plan, the [394]*394county commission must hold a public hearing regarding the proposed plan. W. Va. Code, 7-11B-A(b) [1995]. The county commission must also submit the tax increment financing plan to the voters and receive an approving vote of three-fifths of the participating voters. W. Va.Code, 7-11B-6(b) [1995].

Once approved by the voters, the county commission is authorized to issue the tax increment obligations. W. Va.Code, 7-11B-6(a) [1995]. The county commission is also authorized to dedicate the tax increment, if any, to the tax increment financing fund. W. Va.Code, 7-11B-4(a)(3) [1995]. The moneys in the tax increment financing fund are then “used to pay the principal of and interest on tax increment obligations issued to finance the costs of such development project.” Id. The Tax Increment Financing Act does not change the rate of taxation; however, when a tax increment financing plan is adopted the allocation of a portion of the ad valorem tax assessed on the private project property is changed. The increase in assessed property value of the private project property does not directly inure to the benefit of other levying bodies such as the board of education.

The county’s development project is to “be sold, leased with an option by the lessee to purchase, leased or otherwise disposed of to a project developer.” W. Va.Code, 7-11B-6(a) [1995]. In the event the moneys collected from the tax increment are insufficient to pay the principal of and interest on the tax increment obligations

then such bonds or notes shall be payable out of the revenues derived from the lease, lease with an option by the lessee to purchase, sale or other disposition in connection with the development project for which the bonds or notes are issued, or any other revenue derived from such project.

W. Va.Code, 7-11B-6(a) [1995]. The legislature has by reference to W. Va.Code, 13-2C-7 [1975] in the Tax Increment Financing Act stated that the bonds do not constitute an indebtedness of the county issuing them within the meaning of the Constitution of West Virginia. W. Va.Code, 7-11B-6(a) [1995].4 Additionally, the Tax Increment Financing Act makes clear “that the portion of property taxes allocable to the state shall be paid over to the state in accordance with law.”5 W. Va.Code, 7-11B-4(a)(3) [1995],

When the tax increment obligations are retired, the tax increment financing fund is to be dissolved and the tax increment is to be “paid into the general fund of the taxing units in proportion to their respective contributions to the fund.” W. Va.Code, 7-11B-7(a) [1995]. The act further states that upon the dissolution of the tax increment financing fund the “real and tangible personal property shall be assessed and taxes collected and allocated in the same manner as applicable in the year preceding the adoption of the tax [395]*395increment financing order.” W. .Vq.Cpde,/I-llB-7(b) [1995], _

B.

The Boone County Development Project

Sometime in 1995 the West' Virginia-American Water Company (hereinafter the ‘Water Company”) requested the County Commission to adopt a tax increment financing plan pursuant to the Tax Increment Financing Act in order to improve water service in Boone County. The plan would require the County Commission to work in conjunction with, the Water Company in order to implement the improvements in water service.

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Related

STATE EX REL. COUNTY COM'N v. Cooke
475 S.E.2d 483 (West Virginia Supreme Court, 1996)

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Bluebook (online)
475 S.E.2d 483, 197 W. Va. 391, 1996 W. Va. LEXIS 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-county-commission-of-boone-county-v-cooke-wva-1996.