Coal tax; limits aggregate amount of credits that may be allocated or claimed for employment, etc. (HB298)

Introduced By

Del. Terry Kilgore (R-Gate City) with support from co-patrons Del. Will Morefield (R-North Tazewell), and Del. Israel O'Quinn (R-Bristol)

Progress

Introduced
Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law

Description

Coal tax credits.Limits the aggregate amount of credits that may be allocated or claimed for the coal employment and production incentive tax credit to $7.5 million each year. An electricity generator must file an application with the Department of Taxation each year to determine the amount of credits that it may claim or allocate, including credits earned in prior taxable years. If the total amount of approved applications for tax credits for the fiscal year exceeds $7.5 million, the Department of Taxation shall apportion the credits on a pro rata basis. The bill extends from July 1, 2016, to January 1, 2020, the date by which coal employment and production incentive tax credits must be earned in order to be allocated to persons with an economic interest in coal. The bill also extends the sunset date of the coalfield employment enhancement tax credit through taxable year 2019. Read the Bill »

Outcome

Bill Has Failed

History

DateAction
01/04/2016Committee
01/04/2016Prefiled and ordered printed; offered 01/13/16 16102050D
01/04/2016Referred to Committee on Finance
01/24/2016Impact statement from TAX (HB298)
02/10/2016Assigned Finance sub: Subcommittee #3
02/12/2016Subcommittee recommends reporting (4-Y 1-N)
02/15/2016Reported from Finance (14-Y 7-N) (see vote tally)
02/16/2016Read first time
02/17/2016Passed by for the day
02/18/2016Read second time and engrossed
02/19/2016Read third time and passed House (75-Y 23-N)
02/19/2016VOTE: PASSAGE (75-Y 23-N) (see vote tally)
02/19/2016Reconsideration of passage agreed to by House
02/19/2016Passed House (74-Y 23-N 1-A)
02/19/2016VOTE: PASSAGE #2 (74-Y 23-N 1-A) (see vote tally)
02/22/2016Constitutional reading dispensed
02/22/2016Referred to Committee on Finance
02/23/2016Impact statement from TAX (HB298)
03/01/2016Reported from Finance with substitute (14-Y 1-N) (see vote tally)
03/01/2016Committee substitute printed 16105939D-S1
03/02/2016Constitutional reading dispensed (40-Y 0-N) (see vote tally)
03/02/2016Read third time
03/02/2016Reading of substitute waived
03/02/2016Committee substitute agreed to 16105939D-S1
03/02/2016Engrossed by Senate - committee substitute HB298S1
03/02/2016Passed Senate with substitute (29-Y 11-N) (see vote tally)
03/02/2016Senate substitute agreed to by House 16105939D-S1 (70-Y 24-N 1-A)
03/02/2016VOTE: ADOPTION (70-Y 24-N 1-A) (see vote tally)
03/03/2016Enrolled
03/03/2016Bill text as passed House and Senate (HB298ER)
03/03/2016Signed by Speaker
03/06/2016Signed by President
03/07/2016Enrolled Bill communicated to Governor on 3/7/2016
03/07/2016G Governor's Action Deadline Midnight, Sunday, April 10, 2016
03/08/2016Impact statement from TAX (HB298ER)
03/11/2016G Vetoed by Governor
04/20/2016Placed on Calendar
04/20/2016Governor's veto overridden (68-Y 30-N 1-A)
04/20/2016VOTE: OVERRIDE GOVERNOR'S VETO (68-Y 30-N 1-A)
04/20/2016Passed in enrolled form (26-Y 13-N)
04/20/2016Motion to reconsider passed in enrolled form agreed to (23-Y 13-N)
04/20/2016Motion to pass in enrolled form rejected (24-Y 15-N)
04/20/2016Requires 26 affirmative votes to pass in enrolled form
04/20/2016Senate sustained Governor's veto

Video

This bill was discussed on the floor of the General Assembly. Below is all of the video that we have of that discussion, 5 clips in all, totaling 13 minutes.

Transcript

This is a transcript of the video clips in which this bill is discussed.



Del. Terry Kilgore (R-Gate City): AND HOPE IT BE THE PLEASURE OF THE HOUSE TO ENGROSS THE BILL AND PASS IT TO THIRD READING. THOSE IN FAVOR SAY AYE. OPPOSED, NO. BILL IS ENGROSSED AND PASSED TO THIRD READING.

[Unknown]: HOUSE BILL 1191 A BILL TO
SUPPLEMENTAL CALENDAR, HOUSE BILLS WITH SENATE AMENDMENTS. NEXT UP, HOUSE BILL 298. A BILL TO AMEND AND REENACT A SECTION OF THE CODE OF VIRGINIA RELATING TO COAL TAX BILL PASSED THE HOUSE FEBRUARY CREDITS. 19, THE SENATE WITH A SUBSTITUTE ON THE 2ND OF MARCH.

Del. Bill Howell (R-Fredericksburg): GENTLEMAN FROM SCOTT, MR. KILGORE.

Del. Terry Kilgore (R-Gate City): MR. SPEAKER, LADIES AND GENTLEMEN OF THE HOUSE, I ASK THAT WE ACCEPT THE SENATE AMENDMENT. THE SENATE AMENDMENTS PUT IT IN THE SAME -- WITH THE SAME LANGUAGE THAT WAS SENT TO THE GOVERNOR. SO HOPEFULLY WE WILL ACCEPT THE SENATE AMENDMENTS.

[Unknown]: MR. TOSCANO.

Del. Terry Kilgore (R-Gate City): MR. SPEAKER, PARLIAMENTARY INQUIREY.

[Unknown]: STATE IT. THANK YOU, MR. SPEAKER. SORRY TO ASK THIS AGAIN, IT'S COME UP IN THE CONTEXT OF THIS BILL, AND IT REALLY RELATES TO REQUIREMENTS OF PEOPLE TO ABSTAIN ON A BILL. WOULD IT BE CORRECT UNDERSTANDING THAT ONE REASON WHY PEOPLE SHOULD ABSTAIN ON A BILL IS IF THEY HAVE A PERSONAL INTEREST IN THE FORM OF OWNING STOCK IN A COMPANY OR UTILITY THAT MIGHT BENEFIT FROM A CREDIT SUCH AS THIS. I GUESS THAT COULD BE A REASON. I THINK THAT THE LAW PROVIDES THAT IF YOU OWN LESS THAN A CERTAIN PERCENTAGE, I THINK 5% OR SOMETHING OF THE COMPANY, YOU DON'T HAVE TO ABSTAIN, BUT I THINK IT IS A PERSONAL DECISION THAT EVERYONE NEEDS TO MAKE. THANK YOU. I WOULD LIKE TO SPEAK TO THE BILL.

Del. Bill Howell (R-Fredericksburg): GENTLEMAN HAS THE FLOOR.

[Unknown]: THANK YOU, MR. SPEAKER, LADIES AND GENTLEMEN OF THE HOUSE, THERE IS NO DOUBT THAT SOUTHWEST VIRGINIA IS HURTING. THE VOEKS ON THE OTHER SIDE OF THE AISLE WHO HAVE PUSHED SO STRONGLY AND ADVOCATED SO FERVENTLY FOR PEOPLE WHO VERY REPRESENT ARE DOING WHAT THEY NEED TO BE DOING. WE NEED TO DO MORE TO HELP OUT. THE QUESTION IS WHETHER THIS IS THE WAY TO DO IT, AND I WOULD SUBMIT TO YOU THAT IF YOU TAKE A LOOK AT THESE TAX CREDITS IN CONTEXT YOU MIGHT ASK A SERIOUS QUESTION IF THEY ARE THE MOST EFFICIENT WAY OF USING TAXPAYER DOLLARS TO HELP PEOPLE WHO REALLY NEED THAT HELP. NOW, IF YOU WERE A BUSINESS, AND AS AN EXECUTIVE OF THAT BUSINESS, YOU INVESTED MILLIONS AND MILLIONS OF DOLLARS INTO YOUR PLANT AND EQUIPMENT TO GROW YOUR BUSINESS. IN 20 YEARS DOWN THE ROAD, YOU FOUND OUT THAT NOT ONLY WERE YOU PRODUCING 67% LESS THAN WHEN YOU STARTED MAKING THIS MAJOR INVESTMENT, BUT YOUR EMPLOYMENT HAD ALSO DROPPED PRECIP TUSLY SINCE YOU HAD MADE THAT INVESTMENT. WHAT WOULD YOU SAY. WOULD YOU CONTINUE TO POUR MONEY INTO YOUR COMPANY, OR WOULD YOU SAY THERE'S GOT TO BE A DIFFERENT WAY. WHAT'S HAPPENED WITH THESE CREDITS HAS BEEN A GOOD IDEA AT THE START, BUT A GOOD IDEA THAT NOW HAS RUN ITS COURT COURSE, AND TIME TO TAKE A DIFFERENT TACK. IT WAS A GOOD IDEA THAT HAS NOW COST VIRGINIA TAXPAYERS OVER THE LAST TWO DECADES $630 OR, IN 2015 DOLLARS, OVER $730 MILLION. MILLION. THAT'S A LOT OF CHANGE. COUPLE WEEKS AGO WE GOT VERY UPSET BECAUSE THERE WAS A BUSINESS THAT TRIED TO HELP CREATE IN VIRGINIA WHERE WE APPARENTLY LOST A MILLION DOLLARS. WE HAVE $630 MILLION OVER THAT PERIOD OF TIME. SO WHAT'S HAPPENING IN THE COALFIELDS? TONNAGE HAS DROPPED PRECIPITOUSLY, 67% IN THE LAST COUPLE DECADES. EMPLOYMENT FROM OVER 11,000 PEOPLE WORKING TO 2850 PEOPLE WORKING. THE COST PER JOB, $675 PER JOB WHEN THESE WERE ENACTED. NOW IT'S OVER $9,000 PER JOB. IS THAT A GOOD RETURN ON THE TAXPAYER DOLLARS? AND THAT'S WHAT WE SHOULD BE DOING HERE, MR. SPEAKER, LADIES AND GENTLEMEN OF THE BODY, WE ARE THE STEWARDS, THE CUSTODIANS OF THE TAXPAYER DOLLARS. BACK IN THE MID-90s THERE WAS A STUDY ABOUT THE ECONOMIC IMPACT OF COAL TAX CREDITS ON SOUTHWEST VIRGINIA. IN 1996, THIS IS WHAT THEY CONCLUDED: THE CREDITS SHOULD NOT BE SEEN AS A LONG-TERM CURE TO A THE CREDITS ONLY PROVIDE AN OPPORTUNITY FOR THE REGION TO INVEST IN ITSELF, AND ENHANCE OPPORTUNITIES FOR ECONOMIC DIVERSIFICATION. THAT IS 1996, THAT'S 20 YEARS AGO. THERE WAS A STUDY IN 2011 THAT JLARC DID, THIS IS OUR PROBLEM. FAVORITE STUDY COMMISSION. AND THEY SAID, IN 2011, THAT THE TAX CREDITS HAD OUTLIVED THEIR USEFULNESS. THAT'S PRETTY GOOD DOCUMENTATION ABOUT THE PROBLEM HERE. THE LONG-TERM ECONOMIC SOLUTION IS DIVERSIFICATION, AND WE ARE NOT DOING THAT WITH THESE TAX CREDITS. NOW, YOU MIGHT SAY, OH, YEAH, THERE'S A WAR ON COAL. OKAY. THERE IS A WAR ON COAL. BUT MOST OF THE ARTILLERY BEING FIRED IN THAT WAR IS COMING FROM FRACKING AND NATURAL GAS, AND THE FACT THAT THE CHINESE ARE NOT BUYING MET COAL, WHICH COMES OUT OF VIRGINIA COAL MINES, THE WAY THEY WRUNS -- ONCE WERE. IT'S THE MARKET, AND WE KNOW WHAT MR. MARKET SAYS, DON'T WE? MR. MARKET SAYS FOLLOW WHAT THE MARKET SAYS. AND THE MARKET HERE SAYS DON'T INVEST IN THIS TAX CREDIT. MR. SPEAKER, LADIES AND GENTLEMEN OF THE HOUSE, WE CAN DO A LOT TO HELP SOUTHWEST VIRGINIA, BUT WE HAVE TO GO BACK TO ALL OUR CONSTITUENTS AND WE HAVE TO JUSTIFY HOW WE CONTINUE TO SPEND MORE AND MORE OF THEIR HARD-EARNED TAXPAYER DOLLARS ON A PROGRAM THAT DOESN'T BRING THE RESULTS THAT PEOPLE HAVE EXPECTED IT TO. MR. SPEAKER, I HOPE THAT YOU REJECT THE SUBSTITUTE.

Del. Bill Howell (R-Fredericksburg): GENTLEMAN FROM SCOTT, MR. KILGORE.

Del. Terry Kilgore (R-Gate City): MR. SPEAKER, LADIES AND GENTLEMEN OF THE HOUSE, SPEAKING TO THE AMENDMENTS.

Del. Bill Howell (R-Fredericksburg): GENTLEMAN HAS THE FLOOR.

Del. Terry Kilgore (R-Gate City): MR. SPEAKER, I WOULD SAY BRIEFLY TO THIS MATTER THAT, YOU KNOW, IF THIS WAS HAPPENING IN NORTHERN VIRGINIA, IN TIDEWATER OR OTHER PARTS OF THE STATE, THERE WOULD BE ALL KINDS OF FOLKS UP THERE JUST DOING WHATEVER THEY COULD TO MAKE SURE THEY SAVED THESE JOBS. THESE JOBS ARE $90,000 A YEAR JOBS, LADIES AND GENTLEMEN. TO SAY THAT THEY DO NOT HAVE AN EFFECT ON THE COMMONWEALTH, JUST ASK OUR FRIENDS IN ROANOKE AREA ABOUT THE RAILROAD. ASK OUR FRIENDS IN NEWPORT NEWS ABOUT HOW THE DECLINE IN THE SHIPPING HAS -- HOW THEY HAVE SEEN A DECLINE IN THE SHIPPING OF THE COAL THAT HAS SO, YOU KNOW, IT DOES HAVE AN GONE DOWN. EFFECT ACROSS THE COMMONWEALTH. AND THEN WE'VE GOT ALL THE INDIRECT JOBS THAT WE HAVE THAT YOU SEE, YOU KNOW, IN WYTHE COUNTY, FOR EXAMPLE, STORES ARE CLOSING, PEOPLE ARE MOVING, JUST BECAUSE OF COAL. AND WE ARE TRYING TO DIVERSIFY, BUT IT'S HARD TO RAISE FAMILIES ON 15 TO $20 AN HOUR, WHEN YOU USED TO MAKE A LOT MORE THAN THAT. AND I HEAR YOU, I HEAR THE MINORITY LEADER, BUT I ASK FOR YOUR VOTE. I ASK FOR YOUR HELP FOR SOUTHWEST VIRGINIA, AND I ASK THAT YOU ADOPT THESE AMENDMENTS. THANK YOU.

[Unknown]: SHALL THE SENATE AMENDMENTS BE AGREED TO.

Del. Bill Howell (R-Fredericksburg): CLERK WILL CLOSE THE ROLL.

[Unknown]: AYES 7 OH, NO'S 24.


Del. Bill Howell (R-Fredericksburg): THE CLERK WILL CLOSE THE ROLL.

[Unknown]: AYES 40, NOS 0. AYES 40, NOS 0. THE BILLS PASS IN BLOCK. RETURNING TO PAGE 39, REGULAR CALENDAR, HOUSE BILLS ON NOW THIRD READ. HOUSE BILL 298 A BILL RELATING TO COAL TAX CREDITS REPORTED RED FROM THE COMMITTEE ON FINANCE WITH A SUBSTITUTE. THE SENATOR FROM AUGUSTA COUNTY SENATOR HANGER.

Sen. Emmett Hanger (R-Mount Solon): THANK YOU, MR. PRESIDENT. HE MOVE THAT WE ADOPT THE COMMITTEE SUBSTITUTE.

[Unknown]: THE QUESTION IS SHALL THE COMMITTEE SUBSTITUTE BE AGREED TO. ALL IN FAVOR SAY AYE. THOSE OPPOSED, NO. AYES HAVE IT. THE SUBSTITUTE IS AGREED TO. SENATOR FROM AUGUSTA.

Sen. Emmett Hanger (R-Mount Solon): THANK YOU, MR. PRESIDENT. IS THIS NOW ON THIRD READING DO I NEED TO ENGRASS.

[Unknown]: JUST MOVE TO PASS. MR. PRESIDENT, THIS BILL NOW IN ITS CREPT POSTURE IS IDENTICAL TO A BILL PREVIOUSLY PASSED BY THE SENATE DEALING WITH COAL TAX CREDITS. I MOVE THE BILL PASS.

Del. Bill Howell (R-Fredericksburg): THANK YOU, SENATOR. THE QUESTION IS SHALL HOUSE BILL 298 PASS.


[Unknown]: AYES 23, NOS 13. THE MOTION IS AGREED TO. THE SENATOR FROM GRAYSON COUNTY, SENATOR CARRICO.

Sen. Bill Carrico (R-Grayson): THANK YOU, MR. PRESIDENT. HAVING PREVIOUSLY EXPLAINED THE BILL, I MOVE THAT HOUSE BILL 298 BE PASSED IN ITS ENROLLED FORM NOT WITHSTANDING THE OBJECTIONS OF THE GOVERNOR.

Del. Bill Howell (R-Fredericksburg): THANK YOU, SENATOR. THE QUESTION IS SHALL THE BILL PASS IN ENROLLED FORM NOTWITHSTANDING THE OBJECTIONS