Energy, West Virginia Legislature

Senate Transportation Committee expands House $50K coal tax credit bill to up to $60 million

MORGANTOWN – The Senate Transportation Committee took a House bill offering coal companies a potential $50,000 tax break for making road improvements and expanded it to somewhere between $50 million and $60 million.

HB 4722 allows a coal company to take a deduction against its severance taxes to cover a portion of its costs for road and bridge improvements. The deduction may not affect county and municipal severance revenue. It passed the House 94-3.

The Senate committee took it up Monday afternoon. They learned the bill allows for a credit of up to 50% of a $100,000 expenditure, to be applicable to up to 20% of a company’s liability. Unused credits can be carried over for up to nine years.

Deputy Revenue Secretary Mark Muchow said the bill’s wording is unclear if it applies to any number of $100,000 projects per year, or $100,000 total in a single year, but they take the latter view. The bill would reduce general revenue by $50,000 but would benefit the Road Fund because the Divison of Highways wouldn’t be footing the bill for that project.

The bill grew after Sen. Mike Stuart brought up that the introduced version included a separate coal production and processing facility tax credit, which the House Technology and Infrastructure Committee struck from the bill before it came to the House floor.

Muchow said this credit would fall in the $50 million to $60 million range.

Chris Hamilton, speaking for the West Virginia Coal Association, advocated for restoration of that provision. West Virginia’s severance tax is higher than that of surrounding states, and the bill as it came from the House “is virtually useless.

Even just limited to road projects, the total deduction per company should be at least $1 million, he said. “I’m not sure how far $50,000 goes in highway repair – maybe an inch of asphalt.”

So Stuart proposed an amendment to restore the introduced House version. “There is no question that the coal industry, all of our fossil fuel industries, are under immense assault,” he said.

The committee adopted the amendment and then approved the amended bill. It goes next to Senate Finance – where Stuart acknowledged it could again revert to the version the House passed.

Other bills

HB 4434 prohibits state agencies and local governments from restricting sale or use of vehicles based on their fuel source. It does not affect any policies relating to agency or local government vehicle purchases. The committee approved a new version with technical amendments and it goes next to Government Organization.

HB 4885 is a response to the many posts seen on social media of protesters blocking traffic on streets and highways. It prohibits walking, sitting, standing, kneeling, lying down or placing an object in a road to block traffic. The bill doesn’t list any form of penalty for violations. Its next stop is Judiciary.