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Renewal for pollution control tax break?

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Utah currently gives businesses a sales tax break on pollution control equipment purchases - a break that cost taxpayers $4.2 million last year and as much as $8 million a few years ago.

While some Democratic lawmakers question the wisdom of that tax exemption, a GOP-dominated legislative committee on Wednesday voted to approve "in concept" renewing the tax break for five more years.The pollution control tax break has been around since 1973 - except for an 18-month period in the mid-1980s when the exemption was allowed to lapse.

Sen. Howard Nielson, R-Provo, was in the House in those early years and remembers the Legislature gave the break because Congress and President Richard Nixon created the Environmental Protection Agency, which quickly acted to impose tough air and water quality standards on polluting bus-i-nesses.

To help those businesses buy expensive equipment, Utah exempted pollution equipment sales from taxation.

But now, some say, the cost of doing business includes meeting air and water quality standards, and the incentives are outdated and unnecessary.

It's true, says Department of Environmental Quality executive director Dianne Nielson, that businesses would buy the equipment whether the tax break was there or not - it's federal law.

But some businesses go beyond federal EPA standards in air and water clean-up. And the state tax break may help those do-gooders go the extra mile, she said.

Four representatives from local businesses, oil producers and mine owners said the incentive is important.

Sen. Mike Dmitrich, D-Price - who works for a coal mining company - said rural Utah needs all the jobs it can get. And taking away a tax incentive for struggling mine operations is exactly the wrong thing to do.

But House Minority Leader Dave Jones, D-Salt Lake, said he's not convinced that the incentive is worth it today.

"The question is, who should pay the $4.2 million - the general public (via the current break) or those who pollute in the first place?" he asked.

Geneva Steel in Orem has spent millions of dollars cleaning up its steel-making process and has used the exemption in the past. Rep. John Valentine, R-Orem, introduced the tax exemption extension bill in the 1998 Legislature. It passed the House but failed in the Senate.

The current exemption doesn't end until 1999. And by trying to get it passed in the 1998 Legislature, lawmakers wouldn't have looked upon the $4.2 million as a source of income that must be made up elsewhere.

In the 1999 session, the $4.2 million tax break must compete with other programs for money. But Valentine says it is worth it - both as an important incentive to business and for the general social good of clean air and water.