Incentives for mineral exploration.

WORKING DRAFT
2005
STATE OF WYOMING
05LSO-0130

HOUSE BILL
NO.
HB0317

Incentives for mineral exploration.

Sponsored by:
Representative(s) Miller, Buchanan, Cohee and Simpson

A BILL

for

AN ACT relating to taxation and revenue; providing for a severance tax credit for certain mineral exploration as specified; providing procedures; providing for a report; providing for rules and regulations; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.
W.S. 39
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105 by creating a new subsection (e), 39
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205 by creating a new subsection (m), 39
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305, 39
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14
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405, 39
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14
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505 by creating a new subsection (c), 39
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605 and 39
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14
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705 are amended to read:

39
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105.

Exemptions.

(e)

The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
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14
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104(a)(ii) or (b)(ii). In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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104(a)(ii) or (b)(ii) for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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104(a)(ii) or (b)(ii) for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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205.

Exemptions.

(m)

The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the well construction commencement date of a new well. As used in this paragraph, "well construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a well the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the well; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the well is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
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204(a)(ii). In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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204(a)(ii) for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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204(a)(ii) for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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305.

Exemptions.

(a)

There are no specific applicable provisions for exemptions for this chapter.
The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
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304(a)(ii). In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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304(a)(ii) for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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304(a)(ii) for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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405.

Exemptions.

(a)

There are no specific applicable provisions for exemptions for this chapter.
The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
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404. In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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404 for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
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14
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404 for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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505.

Exemptions.

(c)

The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
‑
14
‑
504(a)(ii). In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
504(a)(ii) for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
504(a)(ii) for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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14
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605.

Exemptions.

(a)

There are no specific applicable provisions for exemptions for this chapter.
The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
‑
14
‑
604. In no event shall the credit taken against the severance tax due exceed the lesser of:

(A)

Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
604 for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
604 for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

39
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14
‑
705.

Exemptions
.

(a)

There are no specific applicable provisions for exemptions for this article.
The following shall apply to the mineral exploration tax credit:

(i)

Any person conducting certain mineral exploration activities which are performed on or for the benefit of land in this state for the purpose of determining the existence, location, extent or quality of a locatable or leasable mineral deposit may be eligible for a tax credit as provided by this subsection. The mineral exploration activities eligible for the credit shall include:

(A)

Surveying by geophysical or geochemical methods;

(B)

Drilling an exploration hole;

(C)

Conducting underground exploration;

(D)

Surface trenching and bulk sampling; or

(E)

Performing other exploratory work, including aerial photographs, geological and geophysical logging, sample analysis and metallurgical testing.

(ii)

An exploration incentive exemption may not be granted under paragraph (i) of this subsection for exploration activity described in that paragraph which occurs after the mine construction commencement date of a new mine. As used in this paragraph, "mine construction commencement date" means the date not later than which all of the following have occurred:

(A)

There has been issued to the owner or an agent of the owner permits, leases, title and other rights in land, and other approvals, permits, licenses and certificates by federal, state and local agencies that a reasonable and prudent person would consider adequate to commence construction of a mine in the expectation that all other approvals, permits, licenses and certificates necessary for the completion of the facilities will be obtained;

(B)

All approvals, permits, licenses and certificates are in full force and effect, unrevoked and without any modification which might jeopardize the completion or continued construction of the mine; and

(C)

An order, judgment decree, determination or award of a court or administrative or regulatory agency enjoining, either temporarily or permanently, the construction or the continuation of construction of the mine is not in effect.

(iii)

Any person wishing to obtain the credit authorized by this subsection shall apply to the department of revenue on a form and in such manner approved by the department. The application shall:

(A)

Include a list of expenditures qualifying for the credit authorized under this subsection in a manner approved by the department;

(B)

Describe the work accomplished during each year of the period covered by the request, the number of employees, and the names and number of consultants;

(C)

Provide a detailed list or ledger of expenditures of the accomplishments described in subparagraph (B) of this paragraph and a list of exploration activity data to be provided to the department;

(D)

Provide a statement by a certified public accountant that expenditures are supported by receipts for all activities eligible for the credit under paragraph (i) of this subsection for each calendar year that these expenditures for a single mining operation equal or exceed forty thousand dollars ($40,000.00);

(E)

Such other items as the department by rule and regulation may reasonably require.

(iv)

If the application for the tax credit is granted, the person obtaining the credit may apply the credit against the tax due under W.S. 39
‑
14
‑
704. In no event shall the credit taken against the severance tax due exceed the lesser of:

(A) Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
704 for the tax year that is related to production from the mining operation at which the exploration activities occurred;

(B)

Fifty percent (50%) of the person's total tax liability under W.S. 39
‑
14
‑
704 for the calendar year.

(v)

In no event shall the total credit granted under this subsection exceed two hundred thousand dollars ($200,000.00) and shall not exceed a length of five (5) years from the date the application is made under paragraph (iii) of this subsection;

(vi)

The department shall promulgate reasonable rules and regulations for the implementation of this subsection;

(vii)

The department shall report on the results of the credit authorized by this subsection annually on or before November 1 to the governor and the legislature.

Section 2.
This act is effective January 1, 2006.

(END)

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HB0317