Date Requested:January 13, 2011
Time Requested:03:03 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1332 Introduced HB2135
CBD Subject: ELECTRIC PLUG-IN VEHICLES
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The stated purpose of this bill is to create a tax credit for new or converted qualified plug-in electric drive motor vehicles.
    
    As written, this bill would amend an expired article of the West Virginia Code (i.e., W. Va. Code §11-6D et seq.). The proposed bill replaces a number of definitions for alternative fuel with a definition for plug-in electric drive motor vehicles. The credit would be equal to ten percent of the actual cost of converting a vehicle, up to a maximum of $4,000 per qualifying vehicle, or equal to $2,500 plus $417 per each kilowatt of capacity in excess of five kilowatt hours, up to a maximum of $5,000 per qualifying vehicle. The State Tax Department does not have sufficient data on the number of potentially qualifying vehicles to accurately estimate the potential annual revenue reduction attributable to passage of this bill. However, the proposed state tax credit would piggyback on an existing federal tax credit of similar magnitude.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal in most years. However, the reactivation of the credit also reactivates a reporting requirement contained in West Virginia Code §11-6D-8(c). Additional costs associated with compiling information for the report would be approximately $30,000 in Fiscal Year 2022.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    As written, this bill would amend an expired article of the West Virginia Code (i.e., W. Va. Code §11-6D et seq.). The proposed bill replaces a number of definitions for alternative fuel with a definition for plug-in electric drive motor vehicles. The credit would be equal to ten percent of the actual cost of converting a vehicle, up to a maximum of $4,000 per qualifying vehicle, or equal to $2,500 plus $417 per each kilowatt of capacity in excess of five kilowatt hours, up to a maximum of $5,000 per qualifying vehicle. The State Tax Department does not have sufficient data on the number of potentially qualifying vehicles to accurately estimate the potential annual revenue reduction attributable to passage of this bill. However, the proposed state tax credit would piggyback on an existing federal tax credit of similar magnitude.
    
    According to the February 12, 2009 estimates published by the Federal Joint Committee on Taxation, the cost of federal modifications of the alternative motor vehicle credit and credit for qualified plug-in electric drive motor vehicles rises from $20 million in 2010 to $589 million in 2019. Assuming that most of the cost of the federal tax changes relate to the new plug-in electric car tax credits, the prorated cost attributable to West Virginia would likely grow from less than $100,000 per year to $2 million per year over twenty years.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal in most years. However, the reactivation of the credit also reactivates a reporting requirement contained in West Virginia Code §11-6D-8(c). Additional costs associated with compiling information for the report would be approximately $30,000 in Fiscal Year 2022.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to create a tax credit for new or converted qualified plug-in electric drive motor vehicles.
    
    As written, the bill uses a number of specific terms without providing a definition for the terms. Also, the bill contains several dates and references to periods concerning the expiration of the credit, but the exact termination date of the credit is not clear. The bill also does not establish a date after which purchases or conversions must have occurred. Additionally, the bill appears to have conflicting limits on the total amount of credit available for a qualifying vehicle.