H. B. 3081
(By Delegates McGeehan, Kominar, Moore,
Boggs, Armstead, Shott and Shook)
[Introduced March 12, 2009; 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 §11-13Z-1, §11-13Z-2,
§11-13Z-3, §11-13Z-4 and §11-13Z-5, all relating to providing
certain economic incentives for the construction and operation
of the state's first coal-to-liquid plant; and providing that
the state shall purchase all of the gasoline and diesel fuel
necessary to operate state vehicles from the plant for four
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 §11-13Z-1, §11-13Z-2,
§11-13Z-3, §11-13Z-4 and §11-13Z-5, all to read as follows:
ARTICLE 11-13Z. COAL-TO-LIQUID PLANT ACT OF 2009.
§11-13Z-1. Short title.
This article may be cited as the "Coal-to-Liquid Act of 2009"
§11-13Z-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 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 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 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 the first
entity to construct a coal-to-liquid plant in the state by
providing a series of economic incentives.
§11-13Z-3. Definitions.
In this article the following terms have the following
definitions:
(a) "Barrel" means a volumetric measure of exactly forty-two
gallons of any liquid.
(b) "Commercialized coal-to-liquid plant" means the first
coal-to-liquid plant constructed to be capable of producing at
least thirty thousand barrels of liquid fuel per day.
(c) "First day of operations" means the first date upon which
ten thousand barrels of liquid fuel are produced in one day;
§11-13Z-4. Coal-to-liquid plant.
(a) For a period of four years from the first day of
operations, the first commercialized coal-to-liquid 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 the first commercialized coal-to-liquid plant
constructed in the state or supplies that first commercialized coal-to-liquid 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 the first fifteen thousand tons
per day of any coal sold to, consumed or utilized by the plant for
a period of four 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) The Purchasing Division of the Department of
Administration shall purchase all of the gasoline and diesel fuel
produced by the first commercialized coal-to-liquid plant
constructed in West Virginia for a period of four years from the
first day of operations at the price of $2.25 per gallon or 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
the first commercialized coal-to-liquid plant not prove sufficient
for the needs of the state vehicle fleet.
§11-13Z-5. Termination.
This article shall expire on June 30, 2019 and its provisions
shall be terminated and be of no effect.
NOTE: The purpose of this bill is to provide tax incentives to
the first operational coal-to-liquid plant built in the state. The
bill provides that the plant will be exempt from corporation income tax and the business franchise tax for four 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 for four
years on the first fifteen thousand tons of coal. Additionally, the
bill provides that the state is required to purchase all of
gasoline and diesel fuel necessary to operate state vehicles from
the plant for four years. The bill further provides that its
provisions expire on June 30, 2019.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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