AN ACT CONCERNING TAX TREATMENT OF CERTAIN ALTERNATIVE FUELS.
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<!-- field: HtmlTitle -->AN ACT CONCERNING TAX TREATMENT OF CERTAIN ALTERNATIVE FUELS. Connecticut Seal Connecticut Seal

General Assembly

Raised Bill No. 5667

February Session, 2002

LCO No. 2322

Referred to Committee on Finance, Revenue and Bonding

Introduced by:

(FIN)

AN ACT CONCERNING TAX TREATMENT OF CERTAIN ALTERNATIVE FUELS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (2) of subsection (b) of section 12-587 of the general statutes, as amended by sections 20 and 67 of public act 01-6 of the June special session, is repealed and the following is substituted in lieu thereof (Effective July 1, 2002):

(2) Gross earnings derived from the first sale of the following petroleum products within this state shall be exempt from tax: (A) Any petroleum products sold for exportation from this state for sale or use outside this state; (B) the product designated by the American Society for Testing and Materials as "Specification for Heating Oil D396-69", commonly known as number 2 heating oil, to be used exclusively for heating purposes or to be used in a commercial fishing vessel, which vessel qualifies for an exemption pursuant to section 12-412, as amended; (C) kerosene, commonly known as number 1 oil, to be used exclusively for heating purposes, provided delivery is of both number 1 and number 2 oil, and via a truck with a metered delivery ticket to a residential dwelling or to a centrally metered system serving a group of residential dwellings; (D) the product identified as propane gas, to be used exclusively for heating purposes; (E) bunker fuel oil, intermediate fuel, marine diesel oil and marine gas oil to be used in any vessel having a displacement exceeding four thousand dead weight tons; (F) for any first sale occurring prior to January 1, 2000, or during the period commencing July 1, 2001, and ending June 30, [2002] 2003, propane gas to be used as a fuel for a motor vehicle; (G) for any first sale occurring on or after July 1, 2002, grade number 6 fuel oil, as defined in regulations adopted pursuant to section 16a-22c, to be used exclusively by a company which, in accordance with census data contained in the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 edition, is included in code classifications 2000 to 3999, inclusive, or in Sector 31, 32 or 33 in the North American Industrial Classification System United States Manual, United States Office of Management and Budget, 1997 edition; (H) for any first sale occurring on or after July 1, 2002, number 2 heating oil to be used exclusively in a vessel primarily engaged in interstate commerce, which vessel qualifies for an exemption under section 12-412, as amended; [or] (I) for any first sale occurring on or after July 1, 2000, paraffin or microcrystalline waxes; or (J) for any first sale occurring on or after July 1, 2002, and prior to June 30, 2003, petroleum products to be used as a fuel for a fuel cell, as defined in subdivision (113) of section 12-412, as amended.

Sec. 2. Subsection (a) of section 12-264 of the general statutes, as amended by section 21 of public act 01-6 of the June special session, is repealed and the following is substituted in lieu thereof (Effective July 1, 2002):

(a) Each (1) Connecticut municipality or department or agency thereof, or Connecticut district, manufacturing, selling or distributing gas or electricity to be used for light, heat or power, in this chapter and in chapter 212a called a "municipal utility", (2) company the principal business of which is manufacturing, selling or distributing gas or steam to be used for light, heat or power, including each foreign municipal electric utility, as defined in section 12-59, and given authority to engage in business in this state pursuant to the provisions of section 16-246c, and (3) company required to register pursuant to section 16-258a shall pay a quarterly tax upon gross earnings from such operations in this state. Gross earnings from such operations under subdivisions (1) and (2) of this subsection shall include (A) all income classified as operating revenues by the Department of Public Utility Control in the uniform systems of accounts prescribed by said department for operations within the taxable quarter and, with respect to each such company, (B) all income classified in said uniform systems of accounts as income from merchandising, jobbing and contract work, (C) income from nonutility operations, (D) revenues from lease of physical property not devoted to utility operation, and (E) receipts from the sale of residuals and other by-products obtained in connection with the production of gas, electricity or steam. Gross earnings from such operations under subdivision (3) of this subsection shall be gross income from the sales of natural gas. Gross earnings of a gas company, as defined in section 16-1, as amended, shall not include income earned in a taxable quarter commencing prior to June 30, [2002] 2003, from the sale of natural gas or propane as a fuel for a motor vehicle. No deductions shall be allowed from such gross earnings for any commission, rebate or other payment, except a refund resulting from an error or overcharge and those specifically mentioned in section 12-265. Gross earnings of a company as described in subdivision (2) of this subsection shall not include income earned in any taxable quarter commencing on or after July 1, 2000, from the sale of steam.

Sec. 3. Subdivisions (67) to (69), inclusive, of section 12-412 of the general statutes, as amended by section 22 of public act 01-6 of the June special session, are repealed and the following is substituted in lieu thereof (Effective July 1, 2002):

(67) Sales of and the storage, use or other consumption, prior to July 1, [2002] 2003, of a new motor vehicle which is exclusively powered by a clean alternative fuel. As used in this subsection and subsections (68) and (69), "clean alternative fuel" shall mean natural gas, hydrogen or electricity when used as a motor vehicle fuel or propane when used as a motor vehicle fuel if such a vehicle meets the federal fleet emissions standards under the federal Clean Air Act or any emissions standards adopted by the Commissioner of Environmental Protection as part of the state's implementation plan under said act.

(68) Sales of and the storage, use or other consumption, prior to July 1, [2002] 2003, of conversion equipment incorporated into or used in converting vehicles powered by any other fuel to either exclusive use of a clean alternative fuel or dual use of any other fuel and a clean alternative fuel, including, but not limited to, storage cylinders, cylinder brackets, regulated mixers, fill valves, pressure regulators, solenoid valves, fuel gauges, electronic ignitions and alternative fuel delivery lines.

(69) Sales of and the storage, use or other consumption, prior to July 1, [2002] 2003, of equipment incorporated into or used in a compressed natural gas or hydrogen filling or electric recharging station for vehicles powered by a clean alternative fuel, including, but not limited to, compressors, storage cylinders, associated framing, tubing and fittings, valves, fuel poles and fuel delivery lines used for clean alternative fuel storage and filling facilities.

This act shall take effect as follows:

Section 1

July 1, 2002

Sec. 2

July 1, 2002

Sec. 3

July 1, 2002

Statement of Purpose:

To extend favorable tax treatment for certain alternative fuels for the next fiscal year.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]