West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-01M - Valuation Of Public Utility Property For Ad Valorem Property Tax Purposes
Section 110-1M-2 - Definition
Current through Register Vol. XLI, No. 38, September 20, 2024
As used in this rule and unless the context clearly requires a different meaning, the following terms have the meaning ascribed in this section.
2.1. "Bands of investment technique" means a synthesis of capital components used in financing an investment.
2.2. "Capitalization rate" means a rate, used to convert an estimate of income to an estimate of market value.
2.3. "Interstate commercial motor vehicle" means a qualified motor vehicle registered under a proportional registration agreement, or a qualified motor vehicle that, except for the fact that it is engaged only in intrastate commerce, would otherwise be subject to registration under proportional registration agreements. "Commercial motor vehicle" status may, at the option of the party registering the vehicle, be conferred upon a non-qualified motor vehicle such as a vehicle, or a combination thereof, that have a gross vehicle weight of 26,000 pounds or less, that have only two axles, or are used in the transportation of charter parties.
2.4. "Cost approach" means the appraisal process in which cost of the property being valued is considered in determining an estimate of fair market value. As a general rule, original cost shall be used to value public utility operating property; however, when such original cost is not available, replacement cost or reproduction cost may be considered.
2.5. "Economic obsolescence" means a loss in value of a property arising from factors such as changes in use, legislation that restricts or impairs property rights, or changes in supply and demand relationships.
2.6. "Fair market value" means the highest price in terms of money that a property will bring in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale and assuming that the price is not affected by undue stimulations.
2.7. "Final assessed values" means values established by the Board of Public Works required by W. Va. Code '11-6-11.
2.8. "Functional obsolescence" means a loss in value of a property due to changes in style, taste, or technology.
2.9. "Gross capital cost" means the actual cost of the new or used vehicle at the time of purchase, as illustrated on the bill of sale, purchase contract, or similar document showing the purchase price of the vehicle. The cost at the time of purchase means 100% of the cost as shown on the books and records of the purchaser and includes freight, installation charges, trade-ins, federal tax allowances and any applicable credits utilized by the purchaser at the time of purchase.
2.10. "Income approach" means the appraisal process of discounting an estimate of future benefits into an expression of present worth.
2.11. "Market data approach" means the appraisal process of examining sales data and translating the data into an estimate of present worth.
2.12. "Operating property" means utility operating property used for purposes immediately connected with providing the respective utility service. The Tax Commissioner construes "purposes immediately connected with providing utility service" to be synonymous with properties considered by regulatory bodies in constructing the utility rate base for rate making purposes. The Tax Commissioner shall therefore give primary consideration to whether property is included in utility operating property classification as reflected in the applicable uniform system of accounts when deciding operating non-operating property issues.
2.13. "Original cost" means the initial cost paid for constructing or acquiring property.
2.14. "Physical deterioration" means a loss in value due to wear and tear in service.
2.15. "Proportional registration agreement" means an agreement entered into by the West Virginia Commissioner of Motor Vehicles under the authority of W. Va. Code '17A-2-10a.
2.16. "Public service corporation" means business entities contemplated by the provisions of W. Va. Code '11-6-1 et seq.
2.17. "Qualified motor vehicle" means a motor vehicle used, designed or maintained for the transportation of persons and property and:
2.18. "Rate base" means that group of accounts or derivatives of those accounts, from the Uniform System of Accounts, on which a public utility is allowed a return on investment.
2.19. "Regulation" means the oversight of public service corporations by applicable federal and state regulatory bodies.
2.20. "Replacement cost" means the cost, including material, labor, and overhead, that would be incurred in constructing an improvement having the same utility to its owner as the improvement in question, without necessarily reproducing exactly any particular characteristic of the property.
2.21. "Reproduction cost" means the cost, including material, labor, and overhead, that would be incurred in constructing an improvement having exactly the same characteristics as the improvement in question.
2.22. "Return on investment" means a margin of profit generally expressed as a percentage of investment capital.
2.23. "Stock and debt technique" means a process of reviewing market trading prices of securities in order to arrive at an estimate of value.
2.24. "Tentative assessments" means property valuation estimates furnished by the Tax Commissioner to the Board of Public Works in accordance with W. Va. Code '11-6-9.
2.25. "Uniform system of accounts" means the most current system of accounting developed and required by state and federal regulatory bodies.
2.26. "Unit rule" means an appraisal of an integrated property as a whole without any reference to the values of its component parts.
