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1996 SESSION

965501727
SENATE BILL NO. 539
Offered January 22, 1996
A BILL to amend and reenact § 58.1-439.1 of the Code of Virginia, relating to the coalfield employment enhancement tax credit.
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Patrons-- Reasor and Wampler; Delegates: Stump and Tate
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Referred to the Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That § 58.1-439.1 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-439.1. Coalfield employment enhancement tax credit.

A. For tax years beginning on and after January 1, 1996, but before January 1, 2001, any person who has an economic interest in coal mined in the Commonwealth shall be allowed a credit against the tax imposed by § 58.1-400 and any other tax imposed by the Commonwealth in accordance with the following:

1. For coal mined by underground methods, the credit amount shall be based on the seam thickness as follows: 



           Seam Thickness                    Credit per Ton
             Under 33" 36" and under             $.60 $2.00
             33" and Above 36"                   $.50 $1.00




The seam thickness shall be based on the weighted average isopach mapping of
actual coal thickness by mine as certified by a professional engineer.  Copies
of such certification shall be maintained by the person qualifying for the
credit under this section for a period of three years after the credit is
applied for and received and shall be available for inspection by the
Department of Taxation.  The Department of Mines, Minerals and Energy is hereby
authorized to audit all information upon which the isopach mapping is based.




2.  For coal mined by surface mining methods, a credit in the amount of
twenty-five forty cents per ton for coal sold in 1996,
and each year thereafter.




B. In addition to the credit allowed in subsection A, for tax years beginning
on and after January 1, 1996, any person who is a producer of coalbed methane
shall be allowed a credit in the amount of one cent per million BTUs of coalbed
methane produced in the Commonwealth against the tax imposed by § 58.1-400
and any other tax imposed by the Commonwealth on such person.




C.  For purposes of this section, economic interest is the same as the economic
ownership interest required by § 611 of the Internal Revenue Code which
was in effect on December 31, 1977.  A party who only receives an arm's length
royalty shall not be considered as having an economic interest in coal mined in
the Commonwealth.




D.  If the credit exceeds the person's state tax liability for the tax year,
the excess may be redeemable by the Tax Commissioner on behalf of the
Commonwealth for ninety-five percent of the face value within ninety days after
filing the return.  If the Commonwealth does not redeem such excess amount, it
shall be transferable by sale.




E.  No person may utilize more than one of the credits on a given ton of coal
described in subsection A.   No person may claim a credit pursuant to this
section for any ton of coal for which a credit has been claimed under §
58.1-433 or § 58.1-2626.1.  Persons who qualify for the credit may
not apply such credit to their tax returns prior to January 1, 1999, and only
one year of credits shall be allowed annually beginning in 1999.  No credit
authorized by subsections A and B shall be taken by any taxpayer in 1999 unless
general fund revenue in fiscal year 1997-98 exceeds the official estimate of
general fund revenue by at least the cost of the credits authorized by
subsections A and B as estimated by the Department of Taxation.  In each
following year no credit shall be taken by any taxpayer unless general fund
revenue in the fiscal year ending the prior June 30 exceeds the official
estimate of general fund revenue by at least the cost of the credits authorized
by subsections A and B.