The Bill (Reg.No. 1123) establishes a legal framework for the regulation of extracting and using gas (methane) at Ukrainian coal fields. It contains proposals to lay down the major principles of State Policy concerning production and incentives for business entities extracting and using gas (methane) in coal fields; specifies liability for infringement of legislation in this area, and requirements for licensing, standardization, and measurement of work in the extraction and recovery of gas (methane) in coal fields.
The Sponsor of this Bill, People´s Deputy, S. Pashynsky, noted during the discussion that ‘the topicality of the passing of this Bill is dictated by the need to achieve reliability and safety of mining operations, and also to provide an effective use of methane in coal fields, thus reducing the dependence of Ukraine on the import of traditional energy carriers, and improving the environmental situation in Ukraine.
The Bill purports that ‘State regulation in the area of geological survey, extraction and employment of methane gas in coal fields shall be provided by the Central Authority in charge of geological surveys and rational utilization of deposits, The National Committee of Ukraine for the Regulation of Power Engineering, and other Executive bodies, authorised by The Cabinet of Minister of Ukraine in the relevant areas, under the procedure as laid down in the Law.
The Bill also envisages amendments to the Law ‘On Income Taxation of Companies´, to the effect that ‘Temporarily, until 1 January 2017, the income companies receive from methane extraction in coal fields, and business utilization activities carried out according to the Law ‘On Methane Gas in Coal Fields´, shall be exempt of Tax´.
The funds released to tax benefits shall presumably be forwarded by the taxpayer towards extending the production, re-equipment, and launching of up-to-date processes for the extraction and recovery of methane gas in coal fields. Should the taxpayer misuse these funds, he will have to increase his income taxation obligations in the outcome of the respective taxation period, and pay a fine calculated according to the Law.
The Procedure for target usage of the released funds shall be established by The Cabinet of Ministers of Ukraine.
Committee members feel that the provisions concerning incentives for coal field methane gas extraction and utilization require engrossment and clarification during the preparation of this Bill for the Second Reading.