West Virginia Nonprofit Youth Organization Tax Exemption, Amendment 1 (2014)

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Amendment 1
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Type:Constitutional amendment
Constitution:West Virginia Constitution
Referred by:West Virginia State Legislature
Topic:Taxes
Status:On the ballot
2014 measures
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November 4
Amendment 1
Endorsements
The West Virginia Nonprofit Youth Organization Tax Exemption, Amendment 1 is on the November 4, 2014 ballot in West Virginia as a legislatively-referred constitutional amendment. The measure, upon voter approval, would provide that properties owned by nonprofit youth organizations that are used for "adventure, educational or recreational activities for young people and others" and that were constructed for a minimum of $100 million are exempt from ad valorem property taxation. The measure would also permit these nonprofit properties to be leased or used to generate revenue and still be exempted from property taxation.[1]

If approved by voters, the measure would not become effective until the legislature adopts legislation prescribing requirements, limitations and conditions for the use of the tax exempt facility in order to protect local businesses from “unfair competition and unreasonable loss of revenue.”[1]

The measure's legislatively assigned name was Nonprofit Youth Organization Tax Exemption Support Amendment.[1]

The Boy Scout's Summit Bechtel Family National Scout Reserve is the only existing entity in West Virginia that would be affected by the proposed amendment's approval.[2]

The proposed amendment was sponsored in the West Virginia Legislature by Speaker of the House Timothy Miley (D-48) as House Joint Resolution 108.[3]

Text of measure

Ballot title

The official ballot text is:[4]

Nonprofit Youth Organization Tax Exemption Support Amendment

“To amend the State Constitution to exempt from property tax certain properties in this state owned by nonprofit youth organizations and built at cost of at least $100 million whether or not the property is used for the nonprofit youth organization’s charitable or nonprofit purpose to help raise funds for the benefit of the nonprofit youth organization. If approved, the Legislature would be required to enact laws that would protect local and regional businesses from unfair competition and unreasonable loss of revenue caused by the nonprofit organization use of the tax exemption.”

Voting “FOR” means you are in favor of the amendment and would allow the nonprofit youth organization to use the property for other purposes without losing its currently available charitable use property tax exemption. Before taking effect, the Legislature would have to pass laws that define the types of use of the property and that protect non-tax-exempt businesses from unfair competition.

Voting “AGAINST” means that you are against the amendment and would not allow for the property tax exemption if the property is used for non-charitable purposes.[5]

Constitutional changes

See also: Article X, West Virginia Constitution

The proposed amendment would add a Section 12 to Article X of the Constitution of West Virginia:[1]

§12. Nonprofit youth organization revenue exemption.
Notwithstanding any provision of this Constitution to the contrary, real property in this state which is owned by a non-profit organization that has as its primary purpose the development of youth through adventure, educational or recreational activities for young people and others, which property contains facilities built at a cost of not less than $100,000,000 and which property is capable of supporting additional activities within the region and the State of West Virginia is exempt from ad valorem property taxation whether or not such property is used for the nonprofit organization’s nonprofit purpose to generate revenue for the benefit of the non-profit organization subject to any requirements, limitations and conditions as may be prescribed by general law: Provided, That the tax exemption authorized by the provisions of this section shall not become effective until the Legislature adopts enabling legislation authorizing the exemption’s implementation and concurrently prescribing requirements, limitations and conditions for the use of the tax exempt facility that protect local and regionally located businesses from use of the tax exempt facility in a manner that causes unfair competition and unreasonable loss of revenue to those businesses.[5]


Background

The proposed amendment was encouraged by the Boy Scouts' Summit Bechtel Family National Scout Reserve - a 10,600 acre property in Fayette County.[6] Dan McCarthy, the reserve’s director, called the amendment a “win-win.” He said, “When the Boy Scouts started talking to the state of West Virginia seriously, part of the commitment was using the site as a venue for the state where large events could be held. We realized this was a facility unlike any other in the state.” He noted that the organization could lose its tax-exempt status in West Virginia if it leased its property. He continued, “If someone came to us and asked us, 'We would like to host a concert in your stadium,' we would have to say 'No, we can't do that,' because then the property tax would come to us.”[7]

The Register-Herald reported that the Boy Scout's Summit Bechtel Family National Scout Reserve is the only existing entity in West Virginia that would be affected by the proposed amendment's approval.[2]

Support

Supporters

Officials

The following officials sponsored the amendment in the West Virginia Legislature:[3]

Other officials who support the measure include:

Organizations

  • Boy Scouts' Summit Bechtel Family National Scout Reserve[7]

Arguments

Rep. Timothy Miley was the amendment's lead sponsor in the legislature.

Rep. Timothy Miley (D-48) said the amendment would help stimulate a tourism sector, which would benefit local businesses and restraints. He continued:

It's a shame that its use be limited to only boy scouts who are visiting the facility. Allowing other groups to come in and participate in high adventure and extreme sports at the summit, without adverse consequences to its nonprofit status, holds tremendous economic and tourism potential for Southern West Virginia. In crafting the language for the constitutional amendment, we wanted to be sure that the non-profit facility would not be used for the same type of activities and business interests that are otherwise available in the region and local community. This was done to create a win-win for the Boy Scouts Summit Bechtel National Reserve, local and regional businesses, as well as for the tourism industry as a whole.

[5]

—Rep. Timothy Miley[8]

Other arguments in favor of the amendment include:

  • Rep. Adam R. Young (D-41) argued, “I think it can have outreaching impact in every county that touches Fayette (County) and beyond. When you bring in something like that, there's bound to be economic development because the more people you bring into the area, the more money they'll be putting into the area, so I see it as a total positive.”[7]
  • Gary Hartley, director of community and government relations for the Summit, responded to oppositional concerns that the amendment may hurt local businesses. He said, "When we chose to build a high-adventure base in West Virginia, it was in no way intended to compete with local business. We want to promote local business and grow the economy. It is not in our interest to compete with local business. Working with local business makes us a better camp and creates a community we can function and thrive in."[9]

Opposition

Opponents

Rep. Barbara Evans Fleischauer (D-51) was the sole representative to vote against placing the measure on the ballot.[3]

Arguments

  • Rep. David Perry (D-32) expressed concerns about the amendment, saying, “We are very excited about the continued development of the Boy Scout adventure camp, which holds great economic and tourism potential for Southern West Virginia. But we were concerned that a tax-exempt entity like the Boy Scouts could profit at the expense of our local businesses.”[7]
  • Fayette County Commissioner Matt Wender (D) said the amendment may decrease the county's property tax revenue. The Summit's property will be tax exempt, while other firms providing similar services will pay taxes. If the Summit competes with local businesses, then the businesses' profits will shrink and so will county tax revenues. He continued, "That’s a part of our county’s tax base. The Scouts in no way are part of our county’s tax base. If they compete with for-profit enterprises that are our tax base, how fair is it to those who have to pay taxes? I don’t think the Scouts intend upon passage of this constitutional amendment to open up to be a competitor to private enterprise."[9]

Path to the ballot

See also: Amending the West Virginia Constitution

According to the West Virginia Constitution, a two-thirds vote in both chambers of the West Virginia Legislature was required to refer the amendment to the ballot. On March 7, 2014, HJR 108 was adopted in the West Virginia Senate. On March 8, 2014, HJR 108 was adopted in the West Virginia House of Representatives.[3] Legislative votes are not available for the Senate.

House vote

March 8, 2014 House vote

West Virginia HJR 108 House Vote
ResultVotesPercentage
Approveda Yes 96 98.97%
No11.03%

See also

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External links

Additional reading

References