Dec 21, 2012 00:57 New flex fuel regulations set aside $9 million in tax claims New flex fuel regulations set aside $9 million in tax claims BY MICHELLE MILLHOLLON| Capitol news bureau Dec. 21, 2012 Comments New regulations that took effect Thursday nix $9 million in pending claims for tax credits on flex fuel vehicle purchases. The claims have been on hold while the state Department of Revenue wrote new rules for a tax credit that threatened to blast a hole in the state’s operating budget. At issue is a state tax credit on the purchase of vehicles that operate on alternative fuel. Then-state Revenue Secretary Cynthia Bridges approved a rule earlier this year that allowed taxpayers to claim the lesser of 10 percent of the cost or $3,000 on flexible-fuel vehicles. Chevrolet and other manufacturers make flex-fuel vehicles, which are designed to run on more than one type of fuel but can run on regular gasoline. Their inclusion threatened to divert $250 million a year from the state operating budget. Gov. Bobby Jindal rescinded the rule in June, saying the law governing issuance of an emergency rule was not followed. Bridges abruptly resigned the next day without explanation. The Revenue Department’s executive counsel, Tim Barfield, said Thursday that the new guidelines reflect the original intent of the legislation. Vehicles that operate on both alternative fuel and petroleum-based fuel no longer are eligible for the credit. Instead, the credit will apply to vehicles with a separate tank that does not burn petroleum gas or petroleum diesel. Barfield said the tax credit was designed to benefit taxpayers who purchase vehicles that burn a cleaner type of fuel. “A $10 million a year fiscal note is a fair number. I don’t want to speculate beyond that, but we don’t think it will be $10 million,” Barfield said, referring to the likely financial impact to the state of the credit under the new guidelines. Claims for flexible fuel vehicles postmarked between April 30 and June 14 will be honored, he said. The revenue department received $11.2 million in claims after the cutoff date. Of those, $9 million related to flex fuel vehicles and will be kicked out, Barfield said. In addition to drawing up tax credit guidelines, the revenue department announced a number of internal changes Thursday. The changes include: Paying $100,026 to install a more modern telephone system. The suspension of two agency-wide technology projects. A planned reduction of the agency’s 67 unclassified workers. The addition of 15 new auditors and two criminal investigators. The closure of district offices in Alexandria, Lafayette, Lake Charles, Monroe, Shreveport, Dallas and Houston at an expected annual savings of $500,000. In addition, the revenue department is requesting Civil Service approval of a retirement incentive plan to avoid layoffs. Employees, who must be eligible for regular retirement as of June 28, 2013, must retire during a five-day window in June 2013. Incentives include a lump sum payment.