Retired former Californians living in southern Utah will get a tax break if legislators agree with a Senate committee.

California is trying to collect its state income tax from Utah residents who earned their pensions in California, but moved to Utah to retire."We provide the services for these people now and they should pay Utah, not California, income taxes," said Sen. Dixie Leavitt, R-Cedar City, the bill's sponsor.

Under the bill, California couldn't seize property of Utah residents who refused to pay California income taxes on their retirement payments.

Utah Tax Commissioner Roger Tew warned that California honors Utah's tax warrants, "and they expect we do the same."

California is being sued by several states over the matter in federal court. Nevada, which has no income tax, has adopted the law Leavitt wants for Utah, and there's some concern that Utah retirees will move to Nevada if Utah doesn't protect them in a similar manner.

- The state could collect $3 million to $4 million extra a year by eliminating the tax-free status of out-of-state municipal bonds, senators learned Thursday.

Sen. Lyle Hillyard, R-Logan, said he doesn't want to make the change to raise money, but to encourage Utahns investing in Utah municipal bonds.

"We are one of only a few states that give a tax break to those who invest in non-Utah municipal bonds. Let's give the tax break to Utah municipal bonds, but not to bonds of Iowa cities," he said.

Utah bonds, because of strong bond laws, are sought by investors across the nation. "We have no problem selling Utah paper (bonds)," said one stockbroker.

Selling isn't the real question, but who buys, said Hillyard. "We want to encourage Utahns to buy Utah bonds. It's that simple."