Senate Bill No. 142
(By Senators Chafin, Fanning, Minear, Helmick, Sharpe and Ross)
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[Introduced February 28, 1997; referred to the Committee
on Finance.]
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A BILL to amend article thirteen, chapter eleven of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
thirteen-h, relating to the creation of the coalfield
employment enhancement tax credit; and allowing a tax credit
for persons with economic interests in coal mined in West
Virginia by underground methods, based upon seam thickness.
Be it enacted by the Legislature of West Virginia:
That article thirteen, chapter eleven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
thirteen-h,
to read as follows:
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-13h. Credit allowed; amount of credit; effective date.
(a) For tax years beginning on and after the first day of January, one thousand nine hundred ninety-eight, but before the
first day of January, two thousand four, any person, partnership,
corporation or other legal entity who has an economic interest in
coal mined in the state of West Virginia shall be allowed a
credit against the tax imposed by article thirteen-a of this
chapter, relating to severance taxes and any other tax imposed by
the state 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 ThicknessCredit per Ton
36" and under$2.00
Above 36"$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 the 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 tax
commissioner. The director of the division of environmental
protection 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 forty cents per ton for coal sold in the year one
thousand nine hundred ninety-seven, and each year thereafter.
(b) In addition to the credit allowed in subsection (a), for
tax years beginning on and after the first day of January, one
thousand nine hundred ninety-eight, any person who is a producer
of coal bed methane shall be allowed a credit in the amount of
one cent per million BTUs of coalbed methane produced in the
state against the tax imposed by article thirteen-a of this
chapter and any other tax imposed by the state 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 the thirty-first day
of December, one thousand nine hundred seventy-seven. A party
who only receives an arm's length royalty may not be considered
as having an economic interest in coal mines in the state.
(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 state for ninety-five percent of
the face value within ninety days after filing the return. If
the state does not redeem the 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) of this section.
No person may claim a credit pursuant to this section for any ton
of coal for which a credit has been claimed under any other
provision of this article. Persons who qualify for the credit may not apply the credit to their tax returns prior to the first
day of January, two thousand, and only one year of credits shall
be allowed annually beginning in two thousand.
(f) The amount of credit allowed pursuant to subsection (a)
of this section shall be the amount of credit earned multiplied
by the person's employment factor. The person's employment
factor shall be the percentage obtained by dividing the total
number of coal mining jobs of the person filing the return,
including the jobs of the contract operators for such person, as
reflected in the annual tonnage reports filed with the division
of environmental protection for the year in which the credit was
earned by the total number of coal mine jobs of persons or
operators as reflected in the annual tonnage reports for the year
immediately prior to the year in which the credit was earned. In
no case shall the credit claimed exceed that amount set forth in
subsection (a) of this section.
(g) The tax credit allowed under this section shall be
claimed according to the following schedule:
(1) Fifty percent of the credit allowed in tax year one
thousand nine hundred ninety-seven shall be claimed in tax year
two thousand and the remainder in the year two thousand six.
(2) Fifty percent of the credit allowed in tax year one
thousand nine hundred ninety-eight shall be claimed in tax year
two thousand one and the remainder in the year two thousand seven.
(3) Seventy-five percent of the credit allowed in tax year
one thousand nine hundred ninety-nine shall be claimed in tax
year two thousand two and the remainder in the year two thousand
eight.
(4) Seventy-five percent of the credit allowed in tax year
two thousand shall be claimed in tax year two thousand three and
the remainder in the year two thousand nine.
(5) One hundred percent of the credit allowed in tax year
two thousand one shall be claimed in tax year two thousand three.
(6) One hundred percent of the credit allowed in tax year
two thousand two shall be claimed in tax year two thousand five.
(hg) The provisions of this section shall become effective
for all taxable years beginning on or after the first day of
January, one thousand nine hundred ninety-eight, through the
thirty-first day of December, two thousand three, however,
credits earned for these taxable years may continue to be
utilized after taxable year two thousand three as provided in
this section.
NOTE: The purpose of this bill is to provide a tax credit,
for persons, including individuals, partnerships , corporations
or other legal entities, who have economic interests in coal
mined by underground methods in West Virginia, based upon the
seam thickness of the coal.
This section is new; therefore, strike-throughs and
underscoring have been omitted.