H. B. 2832


(By Delegates Perdue, R. Thompson,
Browning, Doyle and Campbell)
[Introduced March 12, 2001; referred to the
Committee on Finance.]



A BILL to amend and reenact section two-f, article thirteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to increasing the privilege tax on manufacturing or producing fuel synthetic fuel from coal; and dedicating the increase to county development and infrastructure.

Be it enacted by the Legislature of West Virginia:
That section two-f, article thirteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 13. BUSINESS AND OCCUPATION TAX.

§11-13-2f. Manufacturing or producing fuel synthetic fuel from coal.

(a) Rate and measure of tax. -- Upon every person engaging or continuing within this state in the business of manufacturing or producing synthetic fuel from coal for sale, profit, or commercial use, either directly or through the activity of others, in whole or in part, the amount of the tax shall be equal to two dollars and fifty cents per ton of synthetic fuel manufactured or produced for sale, profit or commercial use. When a fraction of a ton is included in the measure of tax, the rate of tax as to that fraction of a ton shall be proportional. The measure of tax is the total number of tons of synthetic fuel product manufactured or produced in this state for sale, profit or commercial use, regardless of the place of sale or the fact that deliveries may be made to points outside this state. Liability for payment of this tax shall accrue when the synthetic fuel product is sold by the manufacturer or producer, determined by when the producer or manufacturer recognizes gross receipts for federal income tax purposes. When there is no sale of the synthetic fuel product, liability for tax shall accrue when the synthetic fuel product is shipped from the manufacturing facility for commercial use, whether by the taxpayer or by a related party, except as otherwise provided in legislative rules promulgated by the tax commissioner as provided in article three, chapter twenty-nine-a of this code.
(b) Definitions. -- For purposes of this section:
(1) "Fuel" means material that produces usable heat upon combustion.
(2) "Fuel manufactured or produced from coal" means liquid, gaseous, or solid fuels produced from coal including, but not limited to, such fuels when used as feedstocks.
(3) "Synthetic fuel manufactured or produced from coal" or "synthetic fuel" means fuel manufactured or produced from coal for which credit is allowable for federal income tax purposes under section twenty-nine of the United States Internal Revenue Code, as in effect on the effective date of this section, or for which credit would have been allowable if the synthetic fuel was produced from a facility, or expansion of a facility, that meets the requirement of section twenty-nine of the Internal Revenue Code or would have met the requirements on the effective date of this section. "Synthetic fuel" does not include coke or coke gas. (4) "Ton" means two thousand pounds.
(c) Credits not allowed against tax. -- When determining the amount of tax due under this section, no credit shall be allowed under section three-c or three-d of this article or under any other article of this chapter or chapter of this code, unless it is expressly provided that the credit applies to the business and occupation tax on the privilege of manufacturing or producing synthetic fuel.
(d) Emergency rule authorized. -- The tax commissioner may, in the commissioner's discretion, promulgate an emergency rule, as provided in article three, chapter twenty-nine-a of this code, that clarifies, explains or implements the provisions of this section.
(e) Dedication of proceeds. -- The net amount of tax collected for exercise of the privilege taxed under this section shall be deposited into the "Mining and Reclamation Operations Fund" created in the state treasury by section thirty-two, article three, chapter twenty-two of this code: Provided, That the one dollar and fifty cents of this tax shall be paid into the general revenue fund of the state and one dollar of the increase in the tax created by this amendment to this section shall be dedicated to the county in which the synthetic fuel was manufactured or produced for sale, profit or commercial use for the sole purpose of economic development and infrastructure funding.
(f) Effective date. -- This section shall take effect upon enactment, and the measure of tax shall include all synthetic fuel sold or shipped after the first day of January, two thousand one, regardless of when the synthetic fuel was manufactured or produced in this state. The increase of the tax imposed by this section takes effect on enactment.
(g) Expiration date. -- The tax imposed in this section shall expire and become void and of no effect for synthetic fuels produced after the thirtieth day of June, two thousand two three.

NOTE: The purpose of this bill is to increase the privilege tax on manufacturing or producing fuel synthetic fuel from coal from fifty cents a ton to $2.50 a ton; and dedicating $1.50 of the increase to the state general revenue fund and $1.00 to the county in which the synthetic fuel was manufactured or produced for sale, profit or commercial use for development and infrastructure funding.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.