HCS SS SB 40 -- TAX INCENTIVES FOR ALTERNATIVE FUELS

SPONSOR:  Ridgeway (Ervin)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Utilities by a vote of 10 to 1.

This substitute authorizes various tax incentives to promote the
production and consumption of alternative fuels.  In its main
provisions, the substitute:

(1)  Authorizes an income tax credit for the owner of a qualified
vehicle refueling property who installs alternative fuel
compatible equipment.  The tax credit will not exceed the lesser
of $20,000 or 20% of the cost of the equipment.  The cumulative
credit amounts will not exceed $2 million for taxable year 2008,
$1 million for 2009, and $1 million for 2010.  The credit is
nonrefundable, but may be carried over for two years and is
transferable;

(2)  Authorizes an income tax deduction, beginning January 1,
2008, for taxpayers who purchase qualified hybrid vehicles.  The
deduction will be the lesser of $1,500 or 10% of the purchase
price of the vehicle and must be taken in the taxable year in
which the vehicle is purchased;

(3)  Authorizes a tax credit for the purchase of E-85 gasoline
equal to 25 cents per gallon in 2008, 20 cents per gallon in 2009
and 2010, and 15 cents per gallon in 2011.  The tax credit may
not exceed $500 per taxpayer per year, and the total amount of
the tax credits will be capped at $500,000 per year.  The tax
credit is refundable; and

(4)  Creates a rebuttable presumption that the raw materials used
by automobile manufacturers are 25% recovered materials.

The provisions of the substitute regarding the income tax credit
for qualified vehicle refueling property will expire three years
from the effective date.  The provisions of the substitute
regarding the tax credit for E-85 gasoline will expire four years
from the effective date.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2008, Could Exceed $2,993,748 in FY 2009, and Could Exceed
$1,997,608 in FY 2010.  No impact on Other State Funds in
FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that the bill provides needed
incentives to use alternative fuels.  It will encourage the
production and use of alternative fuel vehicles.

Testifying for the bill were Senator Ridgeway; Associated
Industries of Missouri; General Motors Corporation; and
DaimlerChrysler.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am