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Tax bill might hit this year's car buyers

CHARLESTON, W.Va. - Though the legislative session so far has been dominated by education reform (and pepperoni rolls), there's one bill state drivers should watch.

Gov. Earl Ray Tomblin has introduced legislation (Senate Bill 185) to reform the state's tax credit system for alternative-fuel vehicles.

Under current law, anyone who buys a plug-in electric or hybrid vehicle, or one fueled by natural gas or 15-percent ethanol fuel blends, is eligible for a $7,500 personal income tax credit to offset the cost of buying the vehicle.

But Tomblin wants to limit that credit to apply only to natural gas-powered vehicles.

There are a few reasons behind the change.

First, promoting natural gas-powered vehicles over other could further stimulate industry in the Marcellus shale region of the state.

Second, as economist Tom Witt pointed out in a recent Blue Ribbon Commission on Highways meeting, giving people $7,500 to drive more fuel-efficient cars while officials are struggling to offset stagnant fuel tax revenues for the State Road Fund is a conflict of public policy.

Third, the tax credit is apparently quite costly. The state stands to save $10 million by limiting the credit.

Given the state is already $35 million short for its current budget year, that $10 million could help offset some dwindling revenue.

While Tomblin seems to have support for the plan, one aspect of his proposal likely will not survive.

Under his current plan, the changes would be effective Jan. 1, 2013 - meaning anyone who has already bought a plug-in, hybrid or E85 vehicle so far this year thinking they would get the credit will come up short during tax season next year.

State Automobile and Truck Dealers Association president Ruth Lemmon told me in January that state auto dealers and consumers were starting to catch on to the credit and take advantage of it.

One can only imagine the outcry when those buyers find the rug pulled out from under them.

Leaders in both the House of Delegates and state Senate have both told me they intend to change the bill so that anyone who has already purchased an alternative-fuel vehicle this year will still be able to use the credit.

The changes to the credit were already factored into the fiscal year 2014 budget Tomblin presented to the Legislature in February. So if lawmakers want to extend the existing credit beyond July 1, they'll have to find a way make up for the credit.

The bill has been on the agenda for the Senate Transportation and Infrastructure Committee, but has yet to advance. Senators have until April 3 to pass the bill and move it to the House.

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Speaking of stagnant road fund revenues, I might have a solution.

Pass a bill allowing police to pull over and issue a $10 fine to any Ohio driver caught driving too slow in the left lane of the interstate.

Throw in North and South Carolina drivers, and we could probably have that $200 million section of U.S. 35 built by Christmas. 


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