ENGROSSED
Senate Bill No. 435
(By Senators Manchin, Wooton, Yoder, Wagner,
White, Miller, Craigo, Wiedebusch, Chafin, Anderson,
Blatnik, Grubb, Tomblin, Mr. President, Sharpe, Ross,
Schoonover, Bowman, Whitlow, Bailey and Kimble)
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[Introduced February 20, 1995;
referred to the Committee on Finance.]
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A BILL to amend chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
there a new article, designated article thirteen-i, relating
to the provision of tax credits for coal producers,
transporters, public utilities or other persons; relating to
the purchase of allowances for the utilization of coal
consistent with the limitations imposed by title IV of the
clean air act amendments of one thousand nine hundred
ninety; definitions; the calculation and administration of
the tax credits; and savings clause.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article thirteen-i, to
read as follows:
ARTICLE 13I. ECONOMIC STIMULUS ALLOWANCE TAX CREDIT ACT.
§11-13I-1. Short title.
This article may be cited as the "Economic Stimulus
Allowance Tax Credit Act".
§11-13I-2. Legislative findings and purpose.
The Legislature finds that the encouragement of economic
activity by the state's businesses relating to the mining,
transport and utilization of West Virginia coal; the resultant
enhancement of revenues accruing to the state; the promotion and
preservation of jobs in the coal industry and in industries
supplying and otherwise related to the coal industry and the
general economic activity resulting therefrom; and the
amelioration of the effects of the production, transportation and
utilization of West Virginia coal on the environment are all in
the public interest and promote the general welfare of the people
of this state consistent with prudent development of the state's
natural resources.
The Legislature further finds that most coals produced in
West Virginia for electric utility steam generation are unable to
meet the sulfur dioxide emission requirements that will result
due to implementation of Title IV of the Clean Air Act Amendments
of 1990, without the use of emission control technologies or the
acquisition of sulfur dioxide emission allowances to enable such
coals to be utilized consistent with the national program of
sulfur dioxide emission reductions created by that Title; that
the national emission allowance market has not developed
sufficiently to permit the economic efficiencies it promises to
be adequately realized, resulting in actual and potential
detriment to coals produced in West Virginia as well as to the
ultimate electric consumers of West Virginia coals used in the
electric utility industry; that promotion of a more active and
vital market for emission allowances is consistent with the broad
interests of the state of West Virginia stated herein; and that
encouragement of emission allowance purchases and sales related
to the use of West Virginia coals will benefit the economy of the
state and the well-being of its citizens and industries.
In order to encourage economic activity relating to the
production, transportation and utilization of coal within the state, to enhance the economic vitality of the national emission
allowance market, thereby to increase employment and general
economic development, there is hereby provided a tax credit for
coal allowance purchases relating to the limitations imposed by
Title IV of the Clean Air Act Amendments of 1990.
§11-13I-3. Definitions.
(a) General. -- When used in this article, or in the
administration of this article, the terms defined in subsection
(b) of this section shall have the meanings ascribed to them by
this section, unless a different meaning is clearly required by
either the context in which the term is used or by specific
definition.
(b) Terms defined. --
(1) "Coal" means and includes any material composed
predominantly of hydrocarbons and carbon in a solid state and
includes, but is not limited to, all materials commonly known as
coal, bituminous coal, anthracite coal, lignite, brown coal, peat
or jet.
(2) "Eligible taxpayer" means any company, partnership or
person engaged in the production, transfer or utilization of coal
and specifically includes coal operators, coal transporters, public utilities and any other person or entity engaged in the
production, transfer or utilization of coal.
(3) "Partnership" includes a syndicate, group, pool, joint
venture or other unincorporated organization, through or by means
of which coal is produced, transferred or utilized for commercial
use. "Partner" includes a member of such a syndicate, group,
pool or joint venture organization.
(4) "Person" or "company" are herein used interchangeably
and include any individual, firm, partnership, mining
partnership, joint venture, association, corporation, trust or
any other group or combination acting as a unit and the plural as
well as the singular number, unless the intention to give a more
limited meaning is declared by the context.
(5) "Production" for the purpose of this article means and
includes the initial severance and extraction of coal in place,
from a seam within this state or from the waste or residue of
prior mining located within this state.
(6) This "state" means the state of West Virginia.
§11-13I-4. Qualification for credit; amount of credit.
(a) Qualification for credit. -- An eligible taxpayer
qualifies for tax credits pursuant to this article upon demonstrating that it:
(1) Has purchased or otherwise has obtained rights to
emission allowances created pursuant to the Clean Air Act
Amendments of 1990, §42 U.S.C. et seq., to enable it to produce,
market or transport coal produced in West Virginia, to enable
such coal to be utilized in accordance with the emission
limitations imposed by Title IV of the Clean Air Act Amendments
of 1990; and
(2) Has sold, transferred, used for compliance or otherwise
relinquished its legal title to the allowance or allowances for
the purpose of enabling such coal to be utilized in accordance
with the emission limitations imposed by Title IV of the Clean
Air Act Amendments of 1990; and
(3) The original acquisition and the subsequent sale or
transfer of said allowances have been reported to the
environmental protection agency of the United States government;
and
(4) Such coal purchases have been reported to the federal
energy regulatory commission for recordation on FERC form 423 by
the utility recipient of said coal.
(b) Allowance of credit. -- There shall be allowed to eligible taxpayers a credit against the taxes imposed by article
thirteen, twenty-three or twenty-four of this chapter. The
maximum credit allowed pursuant to this article shall be five
million dollars until further modified by the Legislature. The
amount of credit shall be determined as hereinafter provided in
this section.
(c) Calculation of credit. -- For purchases during the
period beginning the first day of January, 1990-five, of
allowances required to meet the limitations imposed by Title IV
of the Clean Air Act Amendments of 1990, the amount of the tax
credit shall be equal to the tons of coal produced in West
Virginia which are sold and shipped multiplied by a factor of
.015, with the resulting product multiplied by .95 of the actual
average price paid per ton for allowances required to meet the
limitations imposed by Title IV of the Clean Air Act Amendments
of 1990, or two hundred dollars per allowance, whichever is less:
Provided, That the total credit available under this article may
not exceed the actual total cost of the allowances obtained by
the eligible taxpayer: Provided, however, That no credit shall
be given for the purchase or transfer of emission allowances
where the coal which is related to the purchase or transfer is utilized at a utility-owned electric generating unit equipped
with flue gas desulfurization technology or other forms of
combustion or postcombustion technologies designed to reduce
sulfur dioxide emissions.
(d) Severance tax not reduced. -- The amount of the annual
credit allowed does not reduce the severance tax imposed on coal
by section three, article thirteen-a of this chapter.
(e) No carryover. -- No carryover to a subsequent taxable
year or carryback to a prior taxable year shall be allowed for
the amount of any unused portion of any annual tax credit
allowance. Such unused credit shall be forfeited.
§11-13I-5. Accounting periods and methods of accounting.
(a) General rule. -- For purposes of this article, the
taxpayer's taxable year shall be the same as the taxpayer's
taxable year for federal income tax purposes.
(b) Change of taxable year. -- If a taxpayer's taxable year
is changed for federal income tax purposes, the taxpayer's
taxable year for purposes of this article shall be similarly
changed. The taxpayer shall provide a copy of the authorization
for such change from the internal revenue service, which its
annual return for the taxable year filed under this article.
(c) Methods of accounting. --
(1) Same as federal. -- A taxpayer's method of accounting
under this article shall be the same as the taxpayer's method of
accounting for federal income tax purposes. In the absence of
any method of accounting for federal income tax purposes, the
accrual method of accounting shall be used unless the tax
commissioner, in writing, consents to or requires use of another
method.
(2) Change of accounting methods. -- If a taxpayer's method
of accounting is changed for federal income tax purposes, his
method of accounting for purposes of this article shall similarly
be changed. The taxpayer shall provide a copy of the
authorization for such a change from the internal revenue service
with its annual return for the taxable year filed under this
article.
§11-13I-6. Severability.
(a) If any provision of this article or the application
thereof shall for any reason be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not
affect, impair or invalidate the remainder of said article, but
shall be confined in its operation to the provision thereof directly involved in the controversy in which such judgment shall
have been rendered, and the applicability of such provision to
other persons or circumstances shall not be affected thereby.
(b) If any provision of this article or the application
thereof shall be made invalid or inapplicable by reason of the
failure of the Legislature to enact any statute therein addressed
or referred to, or by reason of the repeal or any other
invalidation of any statute therein addressed or referred to,
such failure to reenact on such repeal or invalidation of any
such statute shall not affect, impair or invalidate the remainder
of the said article, but shall be confined in the operation to
the provision thereof directly involved with, pertaining to,
addressing or referring to said statute, and the application of
such provision with regard to other statutes or in other
instances not affected by any such invalid or repealed statute
shall not be abrogated or diminished in any way.