Senate Bill No. 363

(Senators Ross, Helmick, Sharpe and Schoonover, original sponsors)


[Passed March 7, 1996; in effect ninety days from passage.]


AN ACT to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article six-d, relating to establishing an alternative-fuel motor vehicle tax credit which may be applied against personal net income tax and corporation net income tax; setting forth legislative findings; specifying definitions; specifying the mode and manner in which the credit may be taken; and specifying an effective date.

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 six-d, to read as follows:
§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, the state will be reducing its dependence on foreign oil and attempting to improve its air quality.
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. 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 motor vehicles 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 natural gas;
(3) Liquified petroleum gas;
(4) Methanol;
(5) Ethanol;
(6) 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;
(7) Coal-derived liquid fuels; and
(8) Electricity, including electricity from solar energy.
(b) "Alternative-fuel motor vehicle" means a motor vehicle that as a new or retrofitted or converted fuel:
(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.
§11-6D-3. Credit allowed for alternative-fuel motor vehicles;
application against personal income tax or corporate net income tax; effective date.

The tax credit provided in this article may be applied against the tax liability of a taxpayer imposed by the provisions of either article twenty-one or article twenty-four of this chapter, but in no case may more than one credit be granted for the same alternative-fuel motor vehicle as defined in subdivision (b), section two of this article. This credit shall be available for those tax years beginning after the thirtieth day of June, one thousand nine hundred ninety-seven.
§11-6D-4. Eligibility for credit.

A taxpayer is eligible to claim the credit against tax provided in this article if he or she:
(a) Converts a motor vehicle that is presently registered in West Virginia to operate:
(1) Exclusively on an alternative fuel as defined in subdivision (a), section two of this article; or
(2) In a dual fuel mode, as defined in paragraph (6), subdivision (a), section two of this article; or
(b) Purchases from an original equipment manufacturer or an after-market conversion facility a new dedicated or dually fueled alternative-fuel motor vehicle for which the taxpayer then obtains a valid West Virginia registration.
(c) 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 to the use of alternative fuels for any motor vehicle.
§11-6D-5. Amount of credit.
(a) The total amount of any credit allowed under this article is limited by and subject to the provisions set forth in this subsection and subsections (b), (c) and (d) of this section and may not exceed: (1) In the case of a motor vehicle conversions or retrofitting, the actual cost of converting from a traditionally-fueled motor vehicle to an alternatively-fueled motor vehicle; or (2) in the case of a new purchase, the incremental difference in cost between an alternative-fuel motor vehicle and a comparably equipped motor vehicle that employs traditional fuel technology.
(b) The maximum total credit allowed for an alternative-fuel motor vehicle is:
(1) For a vehicle with a gross vehicle weight of not more than ten thousand pounds, three thousand seven hundred fifty dollars;
(2) For a vehicle with a gross vehicle weight of more than ten thousand pounds up to twenty-six thousand pounds, nine thousand two hundred fifty dollars;
(3) For a truck or van with a gross vehicle weight of more than twenty-six thousand pounds, fifty thousand dollars; and
(4) For a bus capable of seating at least twenty adults, fifty thousand dollars.
(c) Subject to the limitations set forth in subsection (a) of this section, a taxpayer who is otherwise entitled to a credit against tax who claims the credit provided for in this article on the basis of any alternative-fuel motor vehicle that operates exclusively on electricity is entitled to an additional credit of ten percent of the credit which is otherwise allowed under subsection (b) of this section.
(d) The maximum incremental credit allowed per year is one third of the credit attributable to five vehicles with the cumulative credit over a three-year period not to exceed one third of the credit attributable to fifteen vehicles.
§11-6D-6. Credit to be apportioned over three-year period.
The credit against tax for any alternative-fuel motor vehicle provided for in this article may be taken by a taxpayer claiming the credit only in three equal increments over a three-consecutive tax-year period, so that in any tax year in which a taxpayer is entitled to the credit, only one third of the total credit allowed for a certain alternative-fuel motor vehicle under section five may be taken.
§11-6D-7. Duration of availability of credit.
The tax credit provided in this article shall expire by operation of law ten years after the effective date of this article: Provided, That any eligible taxpayer who makes a valid claim for the credit before that expiration is entitled to claim and receive the remaining one-third increment or increments of the total credit allowed under section five of this article for the tax year or years ensuing after the expiration of this article until the total amount of credit allowed has been exhausted.
§11-6D-8. Commissioner to design forms and schedules; promulgation of rules.

(a) The tax commissioner shall design and provide to the public simplified forms and schedules to implement and effectuate the provisions of this article.
(b) The tax commissioner is authorized to promulgate rules for the administration of this article consistent with its provisions and in accordance with article three, chapter twenty-nine-a of this code.
(c) Within one year following the expiration of the credit established in this article the state tax commissioner shall provide a written report to the Legislature setting forth the utilization of the credit, the benefit of the credit and the overall cost of the credit.