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SB185 SUB1 Senate Bill 185 History

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COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 185

(By Senators Kessler (Mr. President) and M. Hall,

By Request of the Executive)

____________

[Originating in the Committee on Transportation and Infrastructure; reported March 22, 2013.]

____________

 

A BILL to amend and reenact §11-6D-1, §11-6D-2, §11-6D-3, §11-6D-4, §11-6D-5, §11-6D-6, §11-6D-7 and §11-6D-9 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §11-6D-10, all relating to the tax credit for alternative-fuel motor vehicles and qualified alternative-fuel vehicle refueling infrastructure and qualified alternative-fuel vehicle home refueling infrastructure; setting forth legislative findings; defining terms and modifying definitions and terms; on and after the effective date of the amendment and reenactment of the section during the regular session of the Legislature in 2013, eliminating the availability of tax credits for infrastructure related to and motor vehicles that are capable of running on ethanol and certain fuel mixtures containing ethanol, methanol or other alcohols; excluding storage tanks from the definition of “qualified alternative-fuel vehicle home refueling infrastructure”; requiring that not more than one tax credit be granted for the purchase of an alternative-fuel motor vehicle, or for costs relating to conversion or retrofitting of a motor vehicle to an alternative-fuel motor vehicle, or for costs associated with qualified alternative-fuel vehicle refueling infrastructure, or for costs associated with qualified alternative-fuel home refueling infrastructure; removing the requirement that a converted vehicle must operate exclusively on an alternative fuel in order to take the credit; permitting a tax credit for certain retrofitted vehicles; requiring a taxpayer to own the alternative-fuel motor vehicle for which a claim is filed on the last day of the taxpayer’s tax year for which the credit is claimed; clarifying restrictions and eligibility for tax credits; changing the amount of credit and the cap for qualified alternative-fuel vehicle refueling infrastructure; allowing pass-through entities to distribute credits to pass-through equity owners in any manner such equity owners see fit; eliminating a rule requirement; providing for the termination of tax credit for alternative-fuel motor vehicles purchased after December 31, 2017; providing for the termination of tax credit for motor vehicles converted or retrofitted to operate on alternative fuel after December 31, 2017; providing for the termination of tax credit for construction or purchase and installation of qualified alternative-fuel vehicle refueling infrastructure occurring after December 31, 2017; providing for the termination of tax credit for construction or purchase and installation of qualified alternative-fuel vehicle home refueling infrastructure occurring in tax years beginning after December 31, 2015; capping the number of years for which a carryover credit is allowed for alternative-fuel motor vehicle tax credits and for qualified alternative-fuel vehicle home refueling infrastructure tax credits; permitting the transfer and sale of certain tax credits under certain conditions; setting forth how transfers of tax credits may be accomplished; providing an exception from consumers sales and service tax, use tax, corporation net income tax and personal income tax; and permitting government entities and nonprofit entities to utilize tax credits.

Be it enacted by the Legislature of West Virginia:

    That §11-6D-1, §11-6D-2, §11-6D-3, §11-6D-4, §11-6D-5, §11-6D-6, §11-6D-7 and §11-6D-9 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new section, designated §11-6D-10, all to read as follows:

ARTICLE 6D. ALTERNATIVE FUEL MOTOR VEHICLE TAX CREDIT.

§11-6D-1. Legislative findings and purpose.

    Consistent with the public policy as stated in section one, article two-d, chapter twenty-four of this code, the Legislature hereby finds that the use of alternative fuels is in the public interest and promotes the general welfare of the people of this state insofar as it addresses serious concerns for our environment and our state's and nation's dependence on foreign oil as a source of energy. The Legislature further finds that this state has an abundant supply of alternative fuels and an extensive supply network and that, by encouraging the use of alternatively-fueled motor vehicles, and particularly natural gas fueled and liquefied petroleum gas fueled motor vehicles, the state will be reducing its dependence on foreign oil and attempting to improve its air quality. The Legislature further finds that the wholesale cost of fuel for certain alternatively-fueled motor vehicles is significantly lower than the cost of fueling fuel for traditional motor vehicles with oil based fuels.

    However, because the cost of motor vehicles which utilize alternative-fuel technologies remains high in relation to motor vehicles that employ more traditional technologies, citizens of this state who might otherwise choose an alternatively-fueled motor vehicle are forced by economic necessity to continue using motor vehicles that are fueled by more conventional means. Additionally, the availability of commercial and residential infrastructure to support alternatively-fueled vehicles available to the public is inadequate to encourage the use of alternatively-fueled motor vehicles. It is the intent of the Legislature that the alternative fuel motor vehicle tax credit previously expired in 2006 be hereby reinstated with changes and amendments as set forth herein. Therefore, in order to encourage the use of alternatively-fueled motor vehicles and possibly reduce unnecessary pollution of our environment and reduce our dependence on foreign sources of energy, there is hereby created an alternative-fuel alternative fuel motor vehicles tax credit and an alternative-fuel alternative fuel infrastructure tax credit.

§11-6D-2. Definitions.

    As used in this article, the following terms have the meanings ascribed to them in this section:

    (a) "Alternative fuel" includes

    (1) Compressed natural gas;

    (2) Liquified Liquefied natural gas;

    (3) Liquified Liquefied petroleum gas;

    (4) Ethanol;

    (5) Fuel mixtures that contain eighty-five percent or more by volume, when combined with gasoline or other fuels, of the following:

    (A) Methanol;

    (B) Ethanol; or

    (C) Other alcohols;

    (6) Natural gas hydrocarbons and derivatives;

    (7) Hydrogen;

    (8) Coal-derived liquid fuels; and

    (9) Electricity, including electricity from solar energy.

    (b) “Alternative-fuel Alternative fuel motor vehicle” means a motor vehicle that as a new or retrofitted or converted fuel vehicle:

    (1) Operates solely on one alternative fuel;

    (2) Is capable of operating on one or more alternative fuels, singly or in combination; or

    (3) Is capable of operating on an alternative fuel and is also capable of operating on gasoline or diesel fuel.

    (c) "Bi-fueled" motor vehicle means a motor vehicle fueled from two or more tanks, each of which stores a separate type of fuel or power, which has the ability of an alternative-fuel motor vehicle to operate on an alternative fuel and another form of fuel. Bi-fueled motor vehicles as herein defined are alternative fuel motor vehicles. 

    (d) “Liquefied petroleum gas” means fuel commonly known and designated as “liquefied petroleum gas” or “LP gas.” The term “liquefied petroleum gas” also means and includes:

    (1) Propane;

    (2) Butane; or

    (3) A mix of gasses used as motor fuel which is predominantly propane or butane, or predominantly a mixture of propane and butane.

    (d) (e) “Plug-in hybrid electric vehicle” means:

    (1) A plug-in hybrid electric vehicle manufactured by an established motor vehicle manufacturer of plug-in hybrid electric vehicles that can operate solely on electric power and that is capable of recharging its battery from an on-board generation source and an off-board electricity source; and

    (2) A plug-in hybrid electric vehicle conversion that provides an increase in city fuel economy of seventy-five percent or more as compared to a comparable nonhybrid version vehicle for a minimum of twenty miles and that is capable of recharging its battery from an on-board generation source and an off-board electricity source. A vehicle is comparable if it is the same model year and the same vehicle class as established by the United States Environmental Protection Agency and is comparable in weight, size and use. Fuel economy comparisons shall be made using city fuel economy standards in a manner that is substantially similar to the manner in which city fuel economy is measured in accordance with procedures set forth in 40 C.F.R. 600 as in effect on January 1, 2011.

    (e) (f) "Qualified alternative fuel vehicle refueling infrastructure" means property owned by the applicant for the tax credit and used for storing alternative fuels and for dispensing such alternative fuels into fuel tanks of motor vehicles, including, but not limited to, natural gas supply lines, compression equipment, storage tanks and dispensing units for alternative fuel at the point where the fuel is delivered into a motor vehicle for consumption: Provided, That the property is installed and located in this state and is not located on a private residence residential property or in a private home.

    (f) (g) “Qualified alternative fuel vehicle home refueling infrastructure” means property owned by the applicant for the tax credit located on a private residence or private home and used for storing alternative fuels and for dispensing such alternative fuels into fuel tanks of motor vehicles, including, but not limited to, compression equipment, storage tanks and dispensing units, but not storage tanks, for alternative fuel at the point where the fuel is delivered or for providing electricity to plug-in hybrid electric vehicles or electric vehicles: Provided, That the property is installed and located in this state.

    (g) (h) “Taxpayer” means any natural person, corporation, limited liability company or partnership subject to the tax imposed under article twenty-one, article twenty-three or article twenty-four of this chapter or any combination thereof and, for the purposes of transferability as allowed pursuant to section ten of this article, state, county and municipal governmental entities and nonprofit entities.

§11-6D-3. Credit allowed for alternative fuel motor vehicles and alternative fuel vehicle refueling infrastructure; application against personal income tax, business franchise tax or corporate net income tax; limitation of alternative fuel qualifying for a tax credit; effective dates.

    (a) The tax credits for the purchase of alternative-fuel alternative fuel motor vehicles or conversion or retrofitting to alternative-fuel alternative fuel motor vehicles, qualified alternative fuel vehicle refueling infrastructure and qualified alternative fuel vehicle home refueling infrastructure provided in this article may be applied against the tax liability of a taxpayer imposed by the provisions of either article twenty-one, article twenty-three or article twenty-four of this chapter, but in no case may more than one tax credit be granted under this article or any combination of articles set forth in this chapter for the same alternative-fuel alternative fuel motor vehicle purchase, costs relating to conversion or retrofitting to an alternative fuel motor vehicle, costs associated with qualified alternative fuel vehicle refueling infrastructure, or costs associated with qualified alternative fuel home refueling infrastructure as defined in subdivision (b), section two of this article. This credit shall be available for those tax years beginning on or after January 1, 2011.

    (b) On and after the effective date of the amendment and reenactment of this section during the regular session of the Legislature in 2013, no tax credit shall be allowed under this article for the purchase of an alternative fuel motor vehicle, or for costs relating to conversion or retrofitting to an alternative fuel motor vehicle, or for costs associated with qualified alternative fuel vehicle refueling infrastructure, or for costs associated with qualified alternative fuel home refueling infrastructure unless the alternative fuel used for such motor vehicle or infrastructure is the following:

    (1) Compressed natural gas;

    (2) Liquefied natural gas;

    (3) Liquefied petroleum gas;

    (4) Natural gas hydrocarbons and derivatives;

    (5) Hydrogen;

    (6) Coal-derived liquid fuels; or

    (7) Electricity, including electricity from solar energy.

Tax credits shall be given for moneys expended prior to the effective date of the amendment and reenactment of this section during the regular session of the Legislature in 2013 on qualifying infrastructure and alternative fuel motor vehicles.

§11-6D-4. Eligibility for credit.

    A taxpayer is eligible to claim the credit against tax provided in this article if he or she the taxpayer:

    (a) Converts or retrofits a motor vehicle that is presently registered in West Virginia to operate exclusively on an alternative fuel or as a bi-fueled motor vehicle as defined in subdivision (a), section two of this article; or

    (b) Purchases from an original equipment manufacturer or an after-market conversion facility or any other automobile retailer, a new dedicated alternative fuel motor vehicle or bi-fueled alternative-fuel motor vehicle for which the taxpayer then obtains a valid West Virginia registration; or

    (c) Constructs or purchases and installs qualified alternative fuel vehicle refueling infrastructure or qualified alternative fuel vehicle home refueling infrastructure that is capable of dispensing alternative fuel for alternative-fuel alternative fuel motor vehicles.

    (d) The credit provided in this article is not available to and may not be claimed by any taxpayer under any obligation pursuant to any federal or state law, policy or regulation to convert or retrofit to the use of alternative fuels for any motor vehicle.

    (e) The credit provided in this article for purchase of an alternative fuel motor vehicle or conversion or retrofitting of a motor vehicle to an alternative fuel motor vehicle, is not available to and may not be claimed by any taxpayer in, or for, any tax year in which the taxpayer did not own the alternative fuel motor vehicle for which the claim is filed on the last day of the taxpayer’s tax year for which the credit is claimed.

    §11-6D-5. Amount of credit for alternative fuel motor vehicles.

    (a) For taxable years beginning on and after January 1, 2011, until the termination or cessation of the tax credit as specified in this article, the amount of the credit allowed under this article for an alternative-fuel alternative fuel motor vehicle that weighs less than twenty-six thousand pounds is thirty-five percent of the purchase price of the alternative-fuel alternative fuel motor vehicle up to a maximum amount of $7,500 or fifty percent of the actual cost of converting or retrofitting from a traditionally fueled motor vehicle to an alternative fuel motor vehicle up to a maximum amount of $7,500.

    (b) For taxable years beginning on and after January 1, 2011, until the termination or cessation of the tax credit as specified in this article, the amount of the credit allowed under this article for an alternative-fuel alternative fuel motor vehicle that weighs more than twenty-six thousand pounds is thirty-five percent of the purchase price of the alternative-fuel alternative fuel motor vehicle up to a maximum amount of $25,000 or fifty percent of the actual cost of converting or retrofitting from a traditionally fueled motor vehicle to an alternative fuel motor vehicle up to a maximum amount of $25,000.

§11-6D-6. Amount of credit for qualified alternative fuel vehicle refueling infrastructure and qualified alternative fuel vehicle home refueling infrastructure.

    (a) For taxable years beginning on and after January 1, 2011, but prior to January 1, 2014, the amount of the credit allowed under this article for qualified alternative fuel vehicle refueling infrastructure is equal to an amount of fifty percent of the total costs directly associated with the construction or purchase and installation of the qualified alternative fuel vehicle refueling infrastructure up to a maximum of $250,000: Provided, That if the qualified alternative fuel vehicle refueling infrastructure is generally accessible for public use, the amount of the credit allowed will be multiplied by 1.25 and the maximum amount allowable will be $312,500. The amount of credit allowed may not exceed the cost of construction of the qualified alternative fuel vehicle refueling infrastructure.

    (b) For taxable years beginning on and after January 1, 2014, but prior to January 1, 2016 until the termination or cessation of this credit as specified in this article, the amount of the credit allowed under this article for qualified alternative fuel vehicle refueling infrastructure is equal to an amount of fifty twenty percent per facility of the total costs directly associated with the construction or purchase and installation of the qualified alternative fuel vehicle refueling infrastructure up to a maximum of $200,000 $400,000 per facility. Provided, That if the qualified alternative fuel vehicle refueling infrastructure is generally accessible for public use, the amount of the credit allowed will be multiplied by 1.25 and the maximum amount allowable will be $250,000. The amount of credit allowed may not exceed the cost of construction of the alternative fuel vehicle refueling infrastructure

    (c) For taxable years beginning on and after January 1, 2016, but prior to January 1, 2022, the amount of the credit allowed under this article for qualified alternative fuel vehicle refueling infrastructure is equal to an amount of fifty percent of the total costs directly associated with the construction or purchase and installation of the alternative fuel vehicle refueling infrastructure up to a maximum of $150,000: Provided, That if the qualified alternative fuel vehicle refueling infrastructure is generally accessible for public use, the amount of the credit allowed will be multiplied by 1.25 and the maximum amount allowable will be $187,500. The amount of credit allowed may not exceed the cost of construction of the alternative fuel vehicle refueling infrastructure.

    (d) (c) For taxable years beginning on and after January 1, 2011, until the termination or cessation of this credit as specified in this article, the amount of the credit allowed under this article for qualified alternative fuel vehicle home refueling infrastructure is equal to an amount of fifty percent of the total costs directly associated with the construction or purchase and installation of the qualified alternative fuel vehicle home refueling infrastructure up to a maximum of $10,000.

    (e) (d) The cost of construction of the qualified alternative fuel vehicle refueling infrastructure or qualified alternative fuel vehicle home refueling infrastructure eligible for a tax credit under this section article does not include costs associated with exploration, development or production activities necessary for severing natural resources from the soil or ground.

    (f) (e) When the taxpayer is a pass-through entity treated like a partnership for federal and state income tax purposes, the credit allowed under this article for the year shall flow through to the equity owners of the pass-through entity in the same any manner that such equity owners see fit and is not required to flow through such equity owners in the same manner as distributive share flows through to the equity owners. and in accordance with any legislative rule the Tax Commissioner may propose for legislative approval in accordance with article three, chapter twenty-nine-a of this code to administer this section.

    (g) (f) No credit allowed by this article may be applied against employer withholding taxes imposed by article twenty-one of this chapter.

§11-6D-7. Duration of availability of credit.

    No person taxpayer is eligible to receive a tax credit under this article for:

    (1) An alternative-fuel alternative fuel motor vehicle purchased after December 31, 2021 2017;

    (2) A vehicle converted or retrofitted to an alternative-fuel alternative fuel motor vehicle after December 31, 2021 2017; or

    (3) The construction or purchase and installation of qualified alternative fuel vehicle refueling infrastructure or qualified alternative fuel vehicle home refueling infrastructure occurring after December 31, 2021 2017; or

    (4) The construction or purchase and installation of qualified alternative fuel vehicle home refueling infrastructure occurring after December 31, 2015.

    §11-6D-9. Carryover credit allowed; recapture of credit.

    (a) If the alternative fuel motor vehicle tax credit allowed under this article in any the first taxable year in which the tax credit is allowable to offset tax exceeds the taxpayer's tax liability as determined in accordance with article twenty-one, article twenty-three or and article twenty-four of this chapter for that taxable year, the excess may be applied for not more than the four next succeeding taxable years until the full amount of the excess tax credit is used or the end of the fourth next succeeding taxable year, whichever occurs first. Any excess credit remaining at the end of the fourth next succeeding taxable year shall be forfeited.

    (b) If the qualified alternative fuel vehicle refueling infrastructure tax credit allowed under this article in any taxable year exceeds the taxpayer's tax liability as determined in accordance with article twenty-one, article twenty-three or article twenty-four of this chapter for that taxable year, the excess may be applied for succeeding taxable years until the full amount of the excess tax credit is used.

    (c) If the qualified alternative fuel vehicle home refueling infrastructure tax credit allowed under this article in the first taxable year in which the tax credit is allowable to offset tax exceeds the taxpayer's tax liability as determined in accordance with article twenty-one, article twenty-three or article twenty-four of this chapter for that taxable year, the excess may be applied for one next succeeding taxable year. Any excess credit remaining at the end of the next succeeding taxable year shall be forfeited.

    (d) No carry back to a prior taxable year is allowed for the amount of any unused credit in any taxable year.

    (c) (e) A tax credit is subject to recapture, elimination or reduction if it is determined by the State Tax Commissioner that a taxpayer was not entitled to the credit, in whole or in part, in the tax year in which it was claimed by the taxpayer. The amount of credit that flows through to equity owners of a passthrough pass-through entity may be recaptured or recovered from either the taxpayer or the equity owners in the discretion of the Tax Commissioner.

§11-6D-10. Transfer or sale of credit.

    (a) Any taxpayer may transfer and sell the right to a tax credit issued pursuant to this article for liquefied natural gas vehicles, compressed natural gas vehicles, natural gas hydrocarbon and derivative vehicles and qualified alternative-fuel vehicle refueling infrastructure to any taxpayer, subject to the following conditions:

    (1) A single transfer or sale may involve one or more transferees, assignees or purchasers. A transfer or sale of the credits may involve multiple transfers to one or more transferees, assignees or purchasers.

    (2) Transferors and sellers shall apply to the tax department for approval of any transfer, sale or assignment of the tax credit. Any amount of the tax credit that has been transferred or assigned is subject to the same limitations and conditions that apply to transferor’s or seller’s entitlement, use and application of the credit. The application for sale, transfer or assignment of the credit shall include the transferor’s tax credit balance prior to transfer, if any, the name of the seller, the transferor’s remaining tax credit balance after transfer, if any, all tax identification numbers for both transferor, if any, and transferee, the date of transfer, the amount transferred and any other information required by the Tax Commissioner. The Tax Commissioner shall either approve or disapprove the application for sale, transfer or assignment of the tax credit within thirty days of receipt of the application. In the event the Tax Commissioner denies the application for sale, transfer or assignment of the tax credit, the Tax Commissioner shall provide the reason for such denial: Provided, That the total amount of tax credits authorized to be transferred by state, county and municipal governmental entities and nonprofit entities in any one calendar year in the aggregate shall not exceed $2 million for qualified alternative fuel motor vehicle tax credits and $2 million for qualified alternative fuel vehicle refueling infrastructure tax credits.

    (3) The Tax Commissioner may not approve the transfer or assignment of a tax credit to a taxpayer if the seller or transferor has an outstanding tax obligation with the state of West Virginia.

    (b) The transferee, assignee or purchaser shall apply the tax credits as required by this article and is subject to all conditions and limitations of this article.

    (c) For purposes of this section, any proceeds received by the transferor for its assignment or sale of the tax credits allowed pursuant to this section are exempt from the West Virginia consumers sales and service tax and use tax and from the corporation net income tax and personal income tax.

    (d) The purpose of this section is to authorize any entity to take and transfer tax credits provided in this article, and specifically allow state, county and municipal governmental entities and nonprofit entities to utilize certain tax credits issued pursuant to this article.



    NOTE: The purpose of this bill is to refine, revise and modernize the alternative fuel motor vehicle infrastructure credit and alternative fuel motor vehicle credit to more closely align the code with specific intended economic development goals and budgetary goals. The bill eliminates the availability of a tax credit for infrastructure and motor vehicles that are capable of running on ethanol and certain fuel mixtures containing ethanol, methanol or other alcohols starting on the effective date of the amendment and reenactment of the section during the regular session of the Legislature in 2013. The bill removes the requirement that a converted vehicle must operate exclusively on an alternative fuel in order to take the credit. The bill clarifies and restricts the eligibility for tax credits. The bill eliminates a rule requirement. The bill allows pass-through entities to distribute credits to pass-through equity owners in any manner the equity owners see fit. The bill permits the transfer of tax credits for purchase of alternative-fuel vehicles, conversion or retrofitting to an alternative-fuel vehicle or construction of alternative-fuel vehicle infrastructure. The bill sets forth how those transfer of tax credits may be accomplished. The bill allows government entities and nonprofit entities to utilize certain tax credits.


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


    §11-6D-10 is new; therefore, strike-throughs and underscoring have been omitted.

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