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.