Court Opinion

ID: 3260837
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:32:09.845334+00
Date Added: 2024-06-11T08:09:43.624413
License: Public Domain

The Honorable W.R. "Bud" Rice State Representative P.O. Drawer "H" Waldron, AR  72958
Dear Representative Rice:
This is in response to your request for an opinion on the following question:
Will the severance tax on coal be applicable to lignite?
A "severance tax" is levied and collected under Act 136 of 1947, as amended, from each producer of natural resources and each producer of timber in the State.  Section 2 of Act 136 of 1947, as amended, states in pertinent part as follows:
      There is hereby levied, and there shall be collected from each producer of natural resources and each producer of timber in the State of Arkansas a privilege or license tax to be known as "severance tax," such severance tax to be paid to the [director] and to be predicated upon the quantity severed and at the rates hereafter in this section provided:
* * *
      (b)  On coal, lignite and iron ore, two cents (2¢) per ton of 2000 pounds.
The foregoing provision is codified at Arkansas Code of 1987 Annotated 26-58-107 and 26-58-111.
It is therefore apparent that the quantity and rate of tax specified under Section 2 of Act 136 of 1947, as amended, apply to both coal and lignite. Act 560 of 1983 must, however, also be considered in response to your question.  Act 560, which is entitled "An Act to Levy an Additional Severance Tax of Eight (8) Cents Per Ton on Severed Coal," states in pertinent part as follows under Section 1 [codified at A.C.A. 26-58-112(a)]:
      In addition to the tax now levied by Section 2 of Act 136 of 1947, as amended, there is hereby levied an additional severance tax on coal in the amount of eight (8) cents per ton [of] two thousand (2,000) pounds.
While the term "coal" may under some circumstances also encompass lignite, since lignite is often defined as a form of coal [see, e.g., definition of "lignite" in the Second College Edition of the American Heritage Dictionary (1985)], it is my opinion that the additional severance tax levied on coal under Act 560 of 1983 does not apply to lignite.  This conclusion was reached following a review of the pertinent Acts, since there are no cases on point.
Section 2 of Act 136 of 1947, as amended, as well as the definitional section contained in Section 1 of the Act, clearly reflect the legislature's separate use of the terms "coal" and "lignite."  The definition of "natural resources" includes "coal" and "lignite" as individually specified "natural products," indicating that these terms are not used synonymously.  See, A.C.A. 26-58-101(2).  This distinction reappears in the section addressing quantities severed and the applicable rates.  A.C.A.26-58-111(2), supra.  This legislative background supports the conclusion that the legislature's use of the term "coal" in the 1983 Act (26-58-112) was not intended to include lignite.  That result could easily have been accomplished through specific inclusion of the word "lignite," consistent with prior legislation.
It is therefore my opinion that the answer to your question is "no" with respect to the additional severance tax levied under A.C.A. 26-58-112.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.
Sincerely,
STEVE CLARK Attorney General