Pub. 5 2015 Issue 3

10 AT THE CENTER OF UTAH INDUSTRY U tah recently enacted new tax credits to address two important social issues: economic develop- ment in our rural counties and air pollution in our urban ones. S.B. 216, enacted in the 2015 legisla- tive session and signed March 30, 2015 by Governor Herbert, takes a novel approach to addressing these issues. A sad irony in the rural counties, while they have most of Utah’s natural resources (particularly, coal, oil and gas, miner- als, and good locations for solar and wind energy production), they do not have good infrastructure in place to use the re- sources within those rural counties. Rather, the infrastructure generally exists to get the resources to Utah’s urban counties, or to transport the resources out of state altogether. For years, the rural counties have been pushing for in- centives to build infrastructure within their counties, which is necessary for any meaningful economic development. But, while rural counties have been supporting bills like S.B. 216, they have repeatedly failed to pass. This year, that dynamic changed because S.B. 216 also addressed the needs of the urban counties. Indeed, S.B. 216 passed 68-4 in the House and 25-0 in the Senate. The chief sponsor of the bill, Sena- tor Ralph Okerlund, represents the rural Counties of Beaver, Garfield, Juab, Kane, Millard, Piute, Sanpete, Sevier and Wayne, and the more urban Utah County. He is a member of the Rural Development Legislative Liaison Committee and the Governor’s Energy Advisory Council. For the urban counties, the bill provides incentives to re- duce air pollution. While the economy in the urban counties is truly booming, air pollution serves as a significant restraint on future growth. In particular, most of our urban counties are restrained by Utah’s PM10 and PM2.5 SIPs (State Implementa- tion Plans, required by the federal Clean Air Act). Additionally, the United States Environmental Protection Agency (USEPA) just announced a new 70 parts per billion (ppb) National Am- bient Air Quality Standard (NAAQS) for ground-level ozone. The ozone NAAQS, if it survives legal challenges, has the potential to reduce economic growth in both urban and rural Utah counties. One of the most significant ways to reduce air pollutants, and thus to allow future growth, is to convert Utah’s passen- ger car fuel to the USEPA’s Tier 3 gasoline sulfur standard. Many parts of the country will convert to Tier 3 by 2017, but the timeline depends on the size of the refineries making the gasoline. Because the refineries that supply Utah’s gasoline are relatively small, and they are thus less able to incur the substantial cost associated with retrofitting, they are not re- quired to retrofit to produce Tier 3 fuel until 2020. Meanwhile, Utah’s Infrastructure Tax Credit Should Help Expansion of Mining Projects in Urban and Rural Counties