House Extends Recycling Market Development Zone Act; Members Approve Coordination Amendment

The Utah House on Jan. 25 approved House Bill 171 as amended to extend the Recycling Market Development Zone Act and coordinate tax credits between enterprise zones and recycling zones.

Representative Perry, sponsor of the bill, said the Act, originally established in 1996, provides a 5% income tax credit for qualifying recycling assets, subject to carryforward and yearly limits. "It promotes economic development and ... environmental viability," Perry said in presenting the bill.

Representative Harper offered Amendment No. 3 to coordinate credit claims so a taxpayer cannot claim both an Enterprise Zone credit and a Recycling Zone credit for the same piece of equipment in the same year; taxpayers may choose which credit to claim on a year-to-year basis and credits carry forward up to three years, the sponsor said. The floor adopted the amendment on voice vote.

Members questioned fiscal exposure; supporters noted the fiscal analysts and Tax Commission have reviewed the fiscal note and that statutory limits throttle credits (including carryforward rules and allocation of income to the state). After discussion and a sponsor summation referencing interim committee review, HB 171 passed as amended and will be transmitted to the Senate.

The House record shows the bill passed with an overwhelmingly affirmative vote and sponsors emphasized the dual benefits of job creation and recycling incentives. The amendment is intended to prevent duplicate-year crediting and preserve the integrity of the fiscal projection.