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Introduced Version House Bill 4547 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 4547


(By Delegates McGeehan and Shook)

[Introduced February 18, 2010 ; referred to the

Committee on Energy, Industry and Labor, Economic Development and Small Business then Finance.]





A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §11-13AA-1, §11-13AA- 2, §11-13AA-3, §11-13AA-4 and §11-13AA-5, all relating to providing certain economic incentives for the construction and operation of coal-to-liquid plants, coal gasification plants or both coal-to-liquid and coal gasification plants; and providing that the state shall purchase all of the gasoline and diesel fuel necessary to operate state vehicles from such plants for ten years.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §11-13AA-1, §11-13AA-2, §11-13AA-3, §11-13AA-4 and §11-13AA-5, all to read as follows:

ARTICLE 13AA. COAL-TO-LIQUID PLANT ACT OF 2010.

§11-13AA-1. Short title.

This article may be cited as the "Coal-to-Liquid Act of 2010"

§11-13AA-2. Legislative findings.
The Legislature finds that significant research has gone into alternative energy measures to help our state and nation achieve energy independence. Among those alternative energy opportunities, coal-to-liquid and coal gasification technology represents a promising opportunity to aid in the energy independence of the state and nation. West Virginia is uniquely positioned to take advantage of the recent developments in increased efficiencies of coal-to-liquid and coal gasification technology, particularly those stemming from improvements of the Fischer-Tropsch process. The United States Air Force has made an official policy objective to have half of its fleet of aircraft fueled by blends consisting of high proportions of synthesized fuel produced from coal or natural gas. West Virginia with its proven reserves of coal has a unique opportunity to develop this technology to the advantage of the state and the country. Expediting the implementation of coal-to- liquid technology transcends the obvious benefits of greater employment and economic development, as it will also increase the energy independence of the nation and will aid in the development and maintenance of a strong national defense.
The Legislature, therefore, declares it to be in the best interest of its citizens that this state establish as a principle that coal-to-liquid and coal gasification technology to be a high priority for the state's development. The development would stimulate the economy of the state and aid in our national defense. To help achieve those ends it is the policy of the state to encourage any entity to construct a coal-to-liquid or coal gasification plant in the state by providing a series of economic incentives.
§11-13AA-3. Definitions.
In this article the following terms have the following definitions:
(1) "Barrel" means a volumetric measure of exactly forty-two gallons of any liquid.
(2) "Commercialized coal-to-liquid plant" means a coal-to- liquid plant constructed to be capable of producing at least thirty thousand barrels of liquid fuel per day when fully completed.
(3) "Commercialized coal gasification plant" is a plant which utilizes a process for converting coal partially or completely to combustible gases.
(4) "First day of operations" means the first date upon which one thousand barrels of liquid fuel are produced in one day.
§11-13AA-4. Coal-to-liquid or coal gasification plant.
(a) For a period of ten years from the first day of operations, a commercialized coal-to-liquid plant, a coal gasification plant, or both a coal-to-liquid plant and a coal gasification plant constructed in the state shall be exempt from: (1) The corporation net income tax as set forth in article twenty- four, chapter eleven of this code; and (2) the business franchise tax as set forth in article twenty-three, chapter eleven of this code.
(b) Any company that has an ownership interest of fifty percent or greater in a commercialized coal-to-liquid plant, a coal gasification plant, or both a coal-to-liquid plant and a coal gasification plant constructed in the state or supplies a commercialized coal-to-liquid plant, a coal gasification plant, or both a coal-to-liquid plant and a coal gasification plant with coal for operations shall be exempt from the minimum severance tax on coal, as set forth in article twelve-b, chapter eleven of this code, on any coal sold to, consumed or utilized by the plant for a period of ten years from the first day of operations. This exemption shall not apply to those severance taxes imposed by any county or other political subdivision.
(c) When available, the Purchasing Division of the Department of Administration shall purchase all of the gasoline and diesel fuel produced by a commercialized coal-to-liquid plant constructed in West Virginia for a period of ten years from the first day of operations at a competitive rate as deemed by the state. Notwithstanding this provision, the Purchasing Division shall have the authority to purchase additional fuels in amounts necessary to operate vehicles in the state fleet from other suppliers, should the production of commercialized coal-to-liquid plants not prove sufficient for the needs of the state vehicle fleet.
(d) The Department of Environmental Protection shall expedite the permitting process for the construction of any coal-to-liquid plant, a coal gasification plant, or both a coal-to-liquid plant and a coal gasification plant to be built in the state, by including, but not limited to, permitting which shall be concurrent with the construction process.
§11-13AA-5. Termination.
This article shall expire on June 30, 2020, and its provisions shall be terminated and be of no effect.



NOTE: The purpose of this bill is to provide tax incentives to an operational coal-to-liquid and/or coal gasification plant built in the state. The bill provides that the plant will be exempt from corporation income tax and the business franchise tax for ten years from the date operations begin. The bill also provides that any holder of fifty percent or more in that plant or who supplies coal for the plant's operations shall be exempt from the minimum severance tax on coal for ten years. Additionally, the bill provides that the state is required, when available, to purchase all gasoline and diesel fuel necessary to operate state vehicles from the plant for ten years. The bill further provides that its provisions expire on June 30, 2020.

This article is new; therefore, it has been completely underscored.

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