GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
H 1
HOUSE BILL 750
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Short Title: Encourage LNG‑Fueled Vehicles. |
(Public) |
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Sponsors: |
Representatives Wray and Saine (Primary Sponsors). For a complete list of Sponsors, refer to the North Carolina General Assembly Web Site. |
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Referred to: |
Regulatory Reform, if favorable, Finance. |
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April 15, 2015
A BILL TO BE ENTITLED
AN ACT to provide incentives and regulatory relief for the conversion of vehicles to use of certain alternative fuels and for the construction of alternative fueling stations.
The General Assembly of North Carolina enacts:
SECTION 1. This act shall be known as, and may be cited as, the "North Carolina Energy Market Expansion Act."
SECTION 2.(a) G.S. 105‑129.16D is reenacted as it existed immediately before its repeal and reads as rewritten:
"§ 105‑129.16D.
Credit for constructing renewable alternative fuel facilities.
(a) Dispensing Credit. – A taxpayer that constructs
and installs (i) purchases or constructs, (ii) installs, and (iii)
places in service in this State a qualified commercial facility for dispensing
renewable distributing, dispensing, or storing alternative fuel at
a new or existing facility for distributing or dispensing fuel is allowed a
credit against the income tax levied in Article 4 of this Chapter equal
to fifteen percent (15%)twenty‑five percent (25%) of the
cost to the taxpayer of purchasing or constructing and installing the
part of the dispensing facility, including pumps, compressors, storage
tanks, and related equipment, that is directly and exclusively used for dispensing
distributing, dispensing, or storing renewable fuel.alternative
fuel, as well as any improvements to an existing building required because of
the presence or utilization of alternative fuels. A facility is qualified
if the equipment used to store or distribute or dispense renewable alternative
fuel is labeled for this purpose and clearly identified as associated with renewable
alternative fuel.
The entire credit may not be taken for the taxable year in
which the facility is placed in service but must be taken in three equal annual
installments beginning with the taxable year in which the facility is placed in
service. If, in one of the years in which the installment of a credit accrues,
the portion of the facility directly and exclusively used for dispensing distributing,
dispensing, or storing renewable alternative fuel is disposed
of or taken out of service, the credit expires and the taxpayer may not take
any remaining installment of the credit. The taxpayer may, however, take the
portion of an installment that accrued in a previous year and was carried
forward to the extent permitted under G.S. 105‑129.17.
(b) Production Credit. – A taxpayer that
constructs and places in service in this State a commercial facility for
processing renewable fuel is allowed a credit equal to twenty‑five
percent (25%) of the cost to the taxpayer of constructing and equipping the
facility. The entire credit may not be taken for the taxable year in which the
facility is placed in service but must be taken in seven equal annual
installments beginning with the taxable year in which the facility is placed in
service. If, in one of the years in which the installment of a credit accrues,
the facility with respect to which the credit was claimed is disposed of or
taken out of service, the credit expires and the taxpayer may not take any
remaining installment of the credit. The taxpayer may, however, take the
portion of an installment that accrued in a previous year and was carried
forward to the extent permitted under G.S. 105‑129.17.
Notwithstanding subsection (d) of this section, this
section is repealed effective for facilities placed in service on or after
January 1, 2017, in the case of a taxpayer that meets both of the following
conditions:
(1) Signs a letter of commitment with the
Department of Commerce on or before September 1, 2013, stating the taxpayer's
intent to construct and place into service in this State a commercial facility
for processing renewable fuel.
(2) Begins construction of the facility on or
before December 31, 2013.
(b1) Alternative Production Credit. – In lieu
of the credit allowed under subsection (b) of this section, a taxpayer that
constructs and places in service in this State three or more commercial
facilities for processing renewable fuel and that invests a total amount of at
least four hundred million dollars ($400,000,000) in the facilities is allowed
a credit equal to thirty‑five percent (35%) of the cost to the taxpayer
of constructing and equipping the facilities. In order to claim the credit, the
taxpayer must obtain a written determination from the Secretary of Commerce
that the taxpayer is expected to invest within a five‑year period a total
amount of at least four hundred million dollars ($400,000,000) in three or more
facilities. The credit must be taken in seven equal annual installments
beginning with the taxable year in which the first facility is placed in
service. If, in one of the years in which the installment of credit accrues, a
facility with respect to which the credit was claimed is disposed of or taken
out of service and the investment requirements of this subsection are no longer
satisfied, the credit expires and the taxpayer may take any remaining
installment of the credit only to the extent allowed under subsection (b) of
this section. The taxpayer may, however, take the portion of an installment
under this subsection that accrued in a previous year and was carried forward
to the extent permitted under G.S. 105‑129.17. Notwithstanding the
provisions of G.S. 105‑129.17, a taxpayer may carry forward unused
portions of the credit allowed under this subsection for the succeeding 10
years.
If a taxpayer that claimed a credit under this subsection
fails to meet the requirements of this subsection but meets the requirements of
subsection (b) of this section, the taxpayer forfeits the difference between
the alternative credit claimed under this subsection and the credit allowed
under subsection (b) of this section. A taxpayer that forfeits part of the
alternative credit under this subsection is liable for the additional taxes
avoided plus interest at the rate established under G.S. 105‑241.21,
computed from the date the additional taxes would have been due if the credit
had not been allowed. The additional taxes and interest are due 30 days after
the date the credit is forfeited. A taxpayer that fails to pay the additional
taxes and interest by the due date is subject to penalties provided in G.S. 105‑236.
(c) No Double Credit. – A taxpayer may not claim
the credits allowed under subsections (b) and (b1) of this section with respect
to the same facility. A taxpayer that claims any other credit allowed under
this Chapter with respect to the costs of constructing and installing a
facility may not take the credit allowed in this section with respect to the
same costs.
(d) Sunset. – This section is repealed effective for
facilities placed in service on or after January 1, 2014.2025."
SECTION 2.(b) G.S. 105‑129.15 reads as rewritten:
"§ 105‑129.15. Definitions.
The following definitions apply in this Article:
(1) Alternative fuel. – Any of the following dispensed for use in a motor vehicle by a qualified commercial facility, as defined in G.S. 105‑129.16D:
a. Compressed natural gas.
b. Liquified natural gas.
c. Liquified petroleum gas.
(1a) Business property. – Tangible personal property that is used by the taxpayer in connection with a business or for the production of income and is capitalized by the taxpayer for tax purposes under the Code. The term does not include, however, a luxury passenger automobile taxable under section 4001 of the Code or a watercraft used principally for entertainment and pleasure outings for which no admission is charged.
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(8) Renewable fuel. – Either of the following:
a. Biodiesel, as defined in G.S. 105‑449.60.
b. Ethanol either unmixed or in mixtures with gasoline that are seventy percent (70%) or more ethanol by volume."
SECTION 2.(c) Article 3B of Subchapter I of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑129.16K. Credit for vehicles propelled by alternative fuel.
(a) A taxpayer that places in service in this State a qualifying vehicle is allowed a credit as provided in this section. A taxpayer places in service a qualifying vehicle if the taxpayer purchases a qualifying vehicle or converts a currently owned vehicle into a qualifying vehicle. For a taxpayer that purchases a qualifying vehicle, the credit is fifty percent (50%) of the incremental cost. For a taxpayer that converts a currently owned vehicle, the credit is fifty percent (50%) of the conversion cost.
(b) Definitions. – The following definitions apply in this section:
(1) Alternative fuel heavy‑duty vehicle. – A vehicle with a gross vehicle weight rating equal to or greater than 26,001 pounds that is propelled at least ninety percent (90%) by alternative fuel.
(2) Alternative fuel vehicle. – A vehicle with a gross vehicle weight rating less than 26,001 pounds that is propelled solely by alternative fuel.
(3) Bi‑fuel vehicle. – A vehicle with a gross vehicle weight rating less than 26,001 pounds that can be propelled by two separate fuel systems, one of which is alternative fuel.
(4) Conversion cost. – The cost to modify a vehicle propelled by gasoline or diesel to change the fuel it uses for propulsion to an alternative fuel. In the case of a bi‑fuel vehicle, the cost to modify the vehicle to change the fuel it uses for partial propulsion to an alternative fuel.
(5) Incremental cost. – The cost determined by subtracting from the purchase price of a qualifying vehicle the manufacturer's list price of the same model motor vehicle designed to operate on gasoline or diesel, whichever is greater/less.
(6) Qualifying vehicle. – A vehicle that is used for commercial or business purposes and is an alternative fuel vehicle, an alternative fuel heavy‑duty vehicle, or a bi‑fuel vehicle.
(c) Ceilings. – The credit allowed by this section may not exceed the following:
(1) For an alternative fuel vehicle, eight thousand dollars ($8,000).
(2) For a bi‑fuel vehicle, six thousand dollars ($6,000).
(3) For an alternative fuel heavy‑duty vehicle, twelve thousand dollars ($12,000).
(d) Sunset. – This section is repealed effective for qualifying vehicles placed in service on or after January 1, 2025."
SECTION 3. G.S. 105‑130.5B reads as rewritten:
"§ 105‑130.5B. Adjustments when State decouples from federal accelerated depreciation and expensing.
(a) Special Accelerated Depreciation. – A Except
as provided in subsection (h) of this section, a taxpayer who takes a
special accelerated depreciation deduction for property under section 168(k) or
168(n) of the Code must add to the taxpayer's federal taxable income eighty‑five
percent (85%) of the amount taken for that year under those Code provisions. A
taxpayer is allowed to deduct twenty percent (20%) of the add‑back in
each of the first five taxable years following the year the taxpayer is
required to include the add‑back in income.
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(h) Special Rule for Alternative Fuel Vehicles. – A taxpayer who takes a special accelerated depreciation deduction under section 168(k) of the Code in any year with respect to an alternative fuel vehicle is not required to add to the taxpayer's federal taxable income any portion of the amount taken for that year under such Code provision with respect to such property. For this purpose, an alternative fuel vehicle shall mean a motor vehicle intended for highway use that is fueled by alternative fuel, as defined by G.S. 105‑129.15."
SECTION 4. G.S. 20‑118(c) is amended by adding a new subdivision (18) to read:
"(18) A motor vehicle that is fueled, wholly or partially, by natural gas may operate on the highways of the State with a weight no more than 2,000 pounds higher than the otherwise applicable weight limit under subsection (b) of this section. To be eligible for this exception, the operator of the vehicle must be able to demonstrate that the vehicle is an alternative fuel heavy‑duty vehicle, a bi‑fuel vehicle using natural gas, or a vehicle that has been converted to an alternative fuel heavy‑duty vehicle. The allowance may not authorize any extension of the limitations provided on federal interstate highways in this State, unless the limitations or exceptions are authorized by the federal government. For purposes of this subdivision, alternative fuel heavy‑duty vehicle and bi‑fuel vehicle shall have the meaning set forth in G.S. 105‑129.16K."
SECTION 5. Section 2 is effective for taxable years beginning on or after January 1, 2015. The remainder of this act is effective when it becomes law.