Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 291 (2016GS)

Sponsor

Rep. Edwards, R.

Final action

House/ filed 3/10/2016

Outcome

Failed / filed without passage

Summary

What it does

• This bill:
• defines terms; and
• provides that the Governor's Office of Economic Development may consider the following when awarding economic development tax credits:
• certain working parent benefits;
• hiring practices favorable to veterans; and
• the strategic benefit to the state.

Every vote on this bill

Bill text

WORKING FAMILIES EMPLOYMENT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Rebecca P. Edwards
Senate Sponsor: 
 Brian E. Shiozawa
LONG TITLE
General Description:
This bill amends provisions related to tax credit incentives for economic development.
Highlighted Provisions:
This bill:
▸ defines terms; and
▸ provides that the Governor's Office of Economic Development may consider the
following when awarding economic development tax credits:
• certain working parent benefits;
• hiring practices favorable to veterans; and
• the strategic benefit to the state.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63N-2-103
, as last amended by Laws of Utah 2015, Chapter 344 and renumbered and
amended by Laws of Utah 2015, Chapter 283 and last amended by Coordination
Clause, Laws of Utah 2015, Chapter 344
63N-2-104
, as last amended by Laws of Utah 2015, Chapter 344 and renumbered and
amended by Laws of Utah 2015, Chapter 283
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
63N-2-103
 is amended to read:
63N-2-103.
Definitions.
As used in this part:
(1) "Business entity" means a person that enters into an agreement with the office to
initiate a new commercial project in Utah that will qualify the person to receive a tax credit
under Section 
59-7-614.2
 or 
59-10-1107
.
(2) "Community development and renewal agency" has the same meaning as that term
is defined in Section 
17C-1-102
.
(3) "Development zone" means an economic development zone created under Section
63N-2-104
.
(4) "High paying jobs" means:
(a) with respect to a business entity, the aggregate average annual gross wages, not
including healthcare or other paid or unpaid benefits, of newly created full-time employment
positions in a business entity that are at least 110% of the average wage of a community in
which the employment positions will exist;
(b) with respect to a county, the aggregate average annual gross wages, not including
healthcare or other paid or unpaid benefits, of newly created full-time employment positions in
a new commercial project within the county that are at least 110% of the average wage of the
county in which the employment positions will exist; or
(c) with respect to a city or town, the aggregate average annual gross wages, not
including healthcare or other paid or unpaid benefits of newly created full-time employment
positions in a new commercial project within the city or town that are at least 110% of the
average wages of the city or town in which the employment positions will exist.
(5) "Local government entity" means a county, city, or town that enters into an
agreement with the office to have a new commercial project that:
(a) is initiated within the county's, city's, or town's boundaries; and
(b) qualifies the county, city, or town to receive a tax credit under Section 
59-7-614.2
.
(6) (a) "New commercial project" means an economic development opportunity that
involves new or expanded industrial, manufacturing, distribution, or business services in Utah.
(b) "New commercial project" does not include retail business.
(7) (a) "New incremental jobs" means full-time employment positions that are filled by
employees who work at least 30 hours per week and that are:
(i) with respect to a business entity, created in addition to the baseline count of
employment positions that existed within the business entity before the new commercial
project;
(ii) with respect to a county, created as a result of a new commercial project with
respect to which the county or a community development and renewal agency seeks to claim a
tax credit under Section 
59-7-614.2
; or
(iii) with respect to a city or town, created as a result of a new commercial project with
respect to which the city, town, or a community development and renewal agency seeks to
claim a tax credit under Section 
59-7-614.2
.
(b) "New incremental jobs" may include full-time equivalent positions that are filled by
more than one employee, if each employee who works less than 30 hours per week is provided
benefits comparable to a full-time employee.
(c) "New incremental jobs" does not include jobs that are shifted from one jurisdiction
in the state to another jurisdiction in the state.
(8) "New state revenues" means:
(a) with respect to a business entity:
(i) incremental new state sales and use tax revenues that a business entity pays under
Title 59, Chapter 12, Sales and Use Tax Act, as a result of a new commercial project in a
development zone;
(ii) incremental new state tax revenues that a business entity pays as a result of a new
commercial project in a development zone under:
(A) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
(B) Title 59, Chapter 10, Part 1, Determination and Reporting of Tax Liability and
Information;
(C) Title 59, Chapter 10, Part 2, Trusts and Estates;
(D) Title 59, Chapter 10, Part 4, Withholding of Tax; or
(E) a combination of Subsections (8)(a)(ii)(A) through (D);
(iii) incremental new state tax revenues paid as individual income taxes under Title 59,
Chapter 10, Part 1, Determination and Reporting of Tax Liability and Information, by
employees of a new or expanded industrial, manufacturing, distribution, or business service
within a new commercial project as evidenced by payroll records that indicate the amount of
employee income taxes withheld and transmitted to the State Tax Commission by the new or
expanded industrial, manufacturing, distribution, or business service within the new
commercial project; or
(iv) a combination of Subsections (8)(a)(i) through (iii); or
(b) with respect to a local government entity:
(i) incremental new state sales and use tax revenues that are collected under Title 59,
Chapter 12, Sales and Use Tax Act, as a result of a new commercial project in a development
zone;
(ii) incremental new state tax revenues that are collected as a result of a new
commercial project in a development zone under:
(A) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
(B) Title 59, Chapter 10, Part 1, Determination and Reporting of Tax Liability and
Information;
(C) Title 59, Chapter 10, Part 2, Trusts and Estates;
(D) Title 59, Chapter 10, Part 4, Withholding of Tax; or
(E) a combination of Subsections (8)(b)(ii)(A) through (D);
(iii) incremental new state tax revenues paid as individual income taxes under Title 59,
Chapter 10, Part 1, Determination and Reporting of Tax Liability and Information, by
employees of a new or expanded industrial, manufacturing, distribution, or business service
within a new commercial project as evidenced by payroll records that indicate the amount of
employee income taxes withheld and transmitted to the State Tax Commission by the new or
expanded industrial, manufacturing, distribution, or business service within the new
commercial project; or
(iv) a combination of Subsections (8)(b)(i) through (iii).
(9) "Significant capital investment" means an amount of at least $10,000,000 to
purchase capital or fixed assets, which may include real property, personal property, and other
fixtures related to a new commercial project:
(a) that represents an expansion of existing operations in the state; or
(b) that maintains or increases the business entity's existing work force in the state.
(10) "Tax credit" means an economic development tax credit created by Section
59-7-614.2
 or 
59-10-1107
.
(11) "Tax credit amount" means the amount the office lists as a tax credit on a tax
credit certificate for a taxable year.
(12) "Tax credit certificate" means a certificate issued by the office that:
(a) lists the name of the business entity, local government entity, or community
development and renewal agency to which the office authorizes a tax credit;
(b) lists the business entity's, local government entity's, or community development and
renewal agency's taxpayer identification number;
(c) lists the amount of tax credit that the office authorizes the business entity, local
government entity, or community development and renewal agency for the taxable year; and
(d) may include other information as determined by the office.
(13) (a) "Working parent benefits" means non-wage compensation in addition to
normal wages that are provided to an employee who is the parent of one or more dependent
children.
(b) "Working parent benefits" may include:
(i) parental leave;
(ii) on-site child care or a child-care subsidy;
(iii) a flexible work schedule;
(iv) adoption benefits;
(v) support for a parent of a child with special needs;
(vi) paid sick leave; and
(vii) paid family care leave.
Section 2. Section 
63N-2-104
 is amended to read:
63N-2-104.
Creation of economic development zones -- Tax credits -- Assignment
of tax credit.
(1) The office, with advice from the board, may create an economic development zone
in the state if the following requirements are satisfied:
(a) the area is zoned commercial, industrial, manufacturing, business park, research
park, or other appropriate business related use in a community-approved master plan;
(b) the request to create a development zone has first been approved by an appropriate
local government entity; and
(c) local incentives have been or will be committed to be provided within the area.
(2) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
the office shall make rules establishing the requirements for a business entity or local
government entity to qualify for a tax credit for a new commercial project in a development
zone under this part.
(b) The office shall ensure that the requirements described in Subsection (2)(a) include
the following:
(i) the new commercial project is within the development zone;
(ii) the new commercial project includes direct investment within the geographic
boundaries of the development zone;
(iii) the new commercial project brings new incremental jobs to Utah;
(iv) the new commercial project includes the creation of high paying jobs in the state,
significant capital investment in the state, or significant purchases from vendors and providers
in the state, or a combination of these three economic factors;
(v) the new commercial project generates new state revenues; and
(vi) a business entity, a local government entity, or a community development and
renewal agency to which a local government entity assigns a tax credit under this section meets
the requirements of Section 
63N-2-105
.
(c) In determining the maximum potential amount and duration of a tax credit offered
to a business entity or local government entity under this part, the office may consider, along
with other discretionary criteria, whether the new commercial project will provide:
(i) working parent benefits to employees;
(ii) hiring practices favorable to veterans; or
(iii) a strategic benefit to the state.
(3) (a) The office, after consultation with the board, may enter into a written agreement
with a business entity or local government entity authorizing a tax credit to the business entity
or local government entity if the business entity or local government entity meets the
requirements described in this section.
(b) (i) With respect to a new commercial project, the office may authorize a tax credit
to a business entity or a local government entity, but not both.
(ii) In determining whether to authorize a tax credit with respect to a new commercial
project to a business entity or a local government entity, the office shall authorize the tax credit
in a manner that the office determines will result in providing the most effective incentive for
the new commercial project.
(c) (i) Except as provided in Subsection (3)(c)(ii), the office may not authorize or
commit to authorize a tax credit that exceeds:
(A) 50% of the new state revenues from the new commercial project in any given year;
or
(B) 30% of the new state revenues from the new commercial project over the lesser of
the life of a new commercial project or 20 years.
(ii) If the eligible business entity makes capital expenditures in the state of
$1,500,000,000 or more associated with a new commercial project, the office may:
(A) authorize or commit to authorize a tax credit not exceeding 60% of new state
revenues over the lesser of the life of the project or 20 years, if the other requirements of this
part are met;
(B) establish the year that state revenues and incremental jobs baseline data are
measured for purposes of an incentive under this Subsection (3)(c)(ii); and
(C) offer an incentive under this Subsection (3)(c)(ii) or modify an existing incentive
previously granted under Subsection (3)(c)(i) that is based on the baseline measurements
described in Subsection (3)(c)(ii)(B), except that the incentive may not authorize or commit to
authorize a tax credit of more than 60% of new state revenues in any one year.
(d) (i) A local government entity may by resolution assign a tax credit authorized by
the office to a community development and renewal agency.
(ii) The local government entity shall provide a copy of the resolution described in
Subsection (3)(d)(i) to the office.
(iii) If a local government entity assigns a tax credit to a community development and
renewal agency, the written agreement described in Subsection (3)(a) shall:
(A) be between the office, the local government entity, and the community
development and renewal agency;
(B) establish the obligations of the local government entity and the community
development and renewal agency; and
(C) establish the extent to which any of the local government entity's obligations are
transferred to the community development and renewal agency.
(iv) If a local government entity assigns a tax credit to a community development and
renewal agency:
(A) the community development and renewal agency shall retain records as described
in Subsection (4)(d); and
(B) a tax credit certificate issued in accordance with Section 
63N-2-106
 shall list the
community development and renewal agency as the named applicant.
(4) The office shall ensure that the written agreement described in Subsection (3):
(a) specifies the requirements that the business entity or local government entity shall
meet to qualify for a tax credit under this part;
(b) specifies the maximum amount of tax credit that the business entity or local
government entity may be authorized for a taxable year and over the life of the new commercial
project;
(c) establishes the length of time the business entity or local government entity may
claim a tax credit;
(d) requires the business entity or local government entity to retain records supporting a
claim for a tax credit for at least four years after the business entity or local government entity
claims a tax credit under this part; and
(e) requires the business entity or local government entity to submit to audits for
verification of the tax credit claimed.
Legislative Review Note
Office of Legislative Research and General Counsel