                                 CODE OF VIRGINIA

 COALFIELD EMPLOYMENT ENHANCEMENT TAX CREDIT (§ 58.1-439.2)

A. For tax years beginning on and after January 1, 1996, but before January 1,
2017, and on and after January 1, 2018, but before January 1, 2022, 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 metallurgical coal mined by underground methods, the credit amount
   shall be based on the seam thickness as follows:
   				The seam thickness shall be based on the weighted average isopach mapping
   of actual metallurgical 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 Energy is hereby authorized
   to audit all information upon which the isopach mapping is based.

   2. For metallurgical coal mined by surface mining methods, a credit in the
   amount of 40 cents ($0.40) 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, but before January 1, 2022, any person who is a
producer of coalbed methane shall be allowed a credit in the amount of one cent
($0.01) per million BTUs of coalbed methane produced in the Commonwealth against
the tax imposed by &#xA7; 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 &#xA7; 611 of the Internal Revenue Code which was
in effect on December 31, 1977. A party who only receives an arm&#8217;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&#8217;s state tax liability for the tax
year, the excess shall be redeemable by the Tax Commissioner on behalf of the
Commonwealth for 90 percent of the face value within 90 days after filing the
return; however, for credit earned in tax years beginning on and after January
1, 2002, but before January 1, 2022, such excess shall be redeemable by the Tax
Commissioner on behalf of the Commonwealth for 85 percent of the face value
within 90 days after filing the return. The remaining 10 or 15 percent of the
value of the credit being redeemed, as applicable for such tax year, shall be
deposited by the Commissioner in a regional economic development fund
administered by the Virginia Coalfield Economic Development Authority to be used
for regional economic diversification in accordance with guidelines developed by
the Virginia Coalfield Economic Development Authority and the Virginia Economic
Development Partnership.

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 &#xA7; 58.1-433.1
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.

F. The amount of credit allowed pursuant to subsection A shall be the amount of
credit earned multiplied by the person&#8217;s employment factor. The
person&#8217;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 of such person, as reflected in the annual
tonnage reports filed with the Department of Energy for the year in which the
credit was earned by the total number of coal mining jobs of such 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.

G. The tax credit allowed under this section shall be claimed in the third
taxable year following the taxable year in which the credit was earned and
allowed.

H. As used in this section, &#8220;metallurgical coal&#8221; means bituminous
coal used for the manufacture of iron and steel with calorific value of 14,000
BTUs or greater on a moisture and ash free basis.

HISTORY: 1995, c. 775; 1996, c. 1034; 1999, c. 971; 2000, cc. 91, 1066; 2006,
cc. 788, 803; 2011, c. 851; 2012, cc. 309, 649; 2018, cc. 853, 855; 2021, Sp.
Sess. I, cc. 532, 553, 554.