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6 Howard A. Stephenson
7 This act modifies the Revenue and Taxation Code S and Repeal Dates by Title s to
7a S [
7b to s the Utah steam coal
8 tax credit S [
8a and Taxation Interim Committee to conduct a periodic review of the Utah steam coal tax cred it, s and
8b to make technical
10 This act affects sections of Utah Code Annotated 1953 as follows:
12 59-7-604, as last amended by Chapter 346, Laws of Utah 1997
13 63-55b-159, as renumbered and amended by Chapter 21, Laws of Utah 1999
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 59-7-604 is amended to read:
16 59-7-604. Utah steam coal tax credit.
17 (1) For purposes of this section, "Utah steam coal sold" means coal:
18 (a) mined in Utah, as certified by the producer of the coal; and
19 (b) that is sold:
20 (i) by the taxpayer;
21 (ii) from a permitted mine; and
22 (iii) to a purchaser outside of the United States.
24 nonrefundable credit against any taxes imposed by this chapter or Chapter 8, an amount equal to
25 $1 per ton for each ton of Utah steam coal sold during the taxpayer's current taxable year that
26 exceeds the number of tons of Utah steam coal sold during the taxpayer's taxable year beginning:
27 (a) on or after January 1, 1992[
28 (b) on or before December 31, 1992.
35 (3) If the amount of a credit under this section for which a taxpayer is eligible for the
36 taxable year exceeds the taxpayer's tax liability for the taxable year, the taxpayer may carry forward
37 for 15 taxable years the portion of the tax credit that exceeds the taxpayer's tax liability for the
38 taxable year.
39 S [
40 or after January 1,
40a TAXATION INTERIM COMMITTEE:
40b (a) SHALL REVIEW THE TAX CREDIT PROVIDED FOR IN THIS SECTION ONE OR MORE TIMES
40c EVERY FIVE YEARS;
40d (b) SHALL DETERMINE ON OR BEFORE THE NOVEMBER INTERIM MEETING OF THE YEAR IN
40e WHICH THE REVENUE AND TAXATION INTERIM COMMITTEE REVIEWS THE TAX CREDIT PROVIDED
40f FOR IN THIS SECTION WHETHER THE TAX CREDIT SHOULD BE:
40g (i) CONTINUED;
40h (ii) MODIFIED; OR
40i (iii) REPEALED; AND
40j (c) MAY REVIEW ANY OTHER ISSUE RELATED TO THE TAX CREDIT PROVIDED FOR IN THIS
40k SECTION AS DETERMINED BY THE REVENUE AND TAXATION INTERIM COMMITTEE. s
41 Section 2. Section 63-55b-159 is amended to read:
42 63-55b-159. Repeal dates -- Title 59.
43 S [
46 S [
47 an assessment under Section 59-9-101.1 after December 31, 2000.
Legislative Review Note
as of 11-14-00 4:22 PM
This legislation raises the following constitutional or statutory concerns:
The United States has entered into international agreements that favor free trade. Two of
these agreements, the World Trade Organization/General Agreement on Tariffs and Trade and the
North American Free Trade Agreement (Trade Agreements), include provisions designed to
eliminate nontariff barriers to free trade, such as a statute that favors an internal market. Utah's
steam coal tax credit could be viewed as a statute favoring an internal market. However, in some
circumstances a statute favoring an internal market could be permissible under the Trade
Agreements, and a statute that is in conflict with the Trade Agreements does not automatically
result in the statute's invalidation or preemption. Such conflicts are generally resolved through
compliance proceedings provided for in the Trade Agreements.
Utah's steam coal tax credit might also be found to violate the Commerce Clause of the
Constitution of the United States (Commerce Clause), which protects the national economy from
undue state interference. The Supreme Court of the United States has relied upon the Commerce
Clause in striking down laws that favor local businesses over competitors engaged in interstate
operations. The tax credit could be found to violate the Commerce Clause because it favors coal
that is mined in Utah. On the other hand, a court could uphold the tax credit as a permissible
subsidy for economic development.
Office of Legislative Research and General Counsel
The Revenue and Taxation Interim Committee recommended this bill.
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