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 the bill is to provide a tax incentive for plug-in electric drive motor vehicles and vehicles using compressed natural gas as an engine motor fuel. The bill defines terms. The bill specifies initial availability of the credit and duration of the credit. The bill sets forth eligibility for the credit and provides a calculation of the amount of the credit, up to a maximum credit of $2,500 per vehicle. Further, the bill updates language to apply only to plug-in electric drive and compressed natural gas 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 definitions for new qualified plug-in electric drive motor vehicles and new qualified compressed natural gas motor vehicles. The credit would be available for tax years beginning after June 30, 2011 and would expire ten years after the date of enactment. The credit would be equal to $2,500 for new purchases, or ten percent of the actual cost of converting a vehicle, up to a maximum of $2,500 per qualifying vehicle, where the conversion must occur by December 31, 2012. 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 for some of the qualifying models 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 following the ten year eligibility period.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	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

Explanation of above estimates (including long-range effect):

Passage of 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 definitions for new qualified plug-in electric drive motor vehicles and new qualified compressed natural gas motor vehicles. The credit would be available for tax years beginning after June 30, 2011 and would expire ten years after the date of enactment. The credit would be equal to $2,500 for new purchases, or ten percent of the actual cost of converting a vehicle, up to a maximum of $2,500 per qualifying vehicle, where the conversion must occur by December 31, 2012. 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 for some of the qualifying models 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 following the ten year eligibility period.

Memorandum

Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov