Senate Bill No. 464
(By Senators Chafin, Fanning,
Helmick, Bailey, McCabe and Hunter)
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[Introduced March 12, 2001; referred to the Select Committee on
Economic Development; and then to the Committee on Finance.]
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A BILL to amend article thirteen, chapter eleven of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
two-f relating to increasing the privilege tax on
manufacturing or producing synthetic fuel from coal; and
dedicating the increase to county development and
infrastructure.
Be it enacted by the Legislature of West Virginia:
That article thirteen, chapter eleven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section two-f
to read as follows:
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-2f. Manufacturing or producing 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 one dollar 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 increase in the tax
created by this amendment to this section shall be dedicated
equally to the counties of this state for the sole purpose of
economic development and infrastructure.
(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 $1.50 a ton; and dedicating the increase
to county development and infrastructure.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.