HOUSE BILL NO. 377

View Daily Data Tracking History
View Bill Text
View Amendment
View Engrossed Bill (Original Bill with Amendment(s) Incorporated)
View Statement of Purpose / Fiscal Impact

Text to be added within a bill has been marked with Bold and Underline. Text to be removed has been marked with Strikethrough and Italic. How these codes are actually displayed will vary based on the browser software you are using.
This sentence is marked with bold and underline to show added text.
This sentence is marked with strikethrough and italic, indicating text to be removed.

Daily Data Tracking History



H0377aaS............................................by REVENUE AND TAXATION
INCOME TAX - Amends, repeals and adds to existing law to reduce the
individual income tax rates for taxable year 2001 and each year thereafter;
to increase the grocery tax credit for individuals; to reduce the corporate
income tax rate; to provide income tax credits for research and development
expenditures, creation of new jobs, installing broadband communications
equipment and investing in counties with high unemployment or low personal
income; and to provide an income tax deduction for certain health insurance
costs.
                                                                        
03/26    House intro - 1st rdg - to printing
    Rpt prt - rls susp - PASSED - 59-7-4
      AYES -- Barraclough, Barrett, Bedke, Bell, Black, Bolz, Bradford,
      Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy, Deal,
      Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner,
      Gould, Hadley, Hammond, Hansen, Harwood, Henbest(Farley), Hornbeck,
      Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader,
      McKague, Montgomery, Mortensen, Moss, Moyle, Pearce, Pomeroy,
      Raybould, Ridinger, Roberts, Sali, Schaefer, Sellman, Smith, Smylie,
      Stevenson, Stone, Tilman, Trail, Wood, Young, Mr. Speaker
      NAYS -- Bieter, Boe, Chase, Jaquet, Marley, Robison, Shepherd
      Absent and excused -- Higgins, Meyer, Pischner, Wheeler
    Floor Sponsor -- Crow
    Title apvd - to Senate
03/28    Senate intro - 1st rdg - to Loc Gov
    Rpt out - to 14th Ord
    Rpt out amen - to 1st rdg as amen
    1st rdg - to 2nd rdg as amen
    Rls susp - PASSED as amen - 34-1-0
      AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
      Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
      Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
      Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
      Stegner, Stennett, Thorne, Wheeler, Williams,
      NAYS -- Whitworth
      Absent and excused -- None
    Floor Sponsor -- Thorne
    Title apvd - to House
03/29    House concurred in Senate amend - to engros
    Rpt engros - 1st rdg to 2nd rdg as amen
    Rls susp - PASSED as amen - 62-0-8
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
      Bradford, Bruneel, Callister, Chase, Clark, Collins, Cuddy, Deal,
      Denney, Ellis, Ellsworth, Eskridge, Field(13), Gagner, Gould, Hadley,
      Hammond, Hansen, Harwood, Henbest(Farley), Hornbeck, Jaquet, Jones,
      Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Marley, McKague,
      Meyer, Moss, Moyle, Pearce, Pischner, Pomeroy, Raybould, Ridinger,
      Roberts, Robison, Sali, Schaefer, Shepherd, Smith, Smylie, Stevenson,
      Stone, Tilman, Trail, Wheeler, Wood, Young(Young), Mr. Speaker
      NAYS -- None
      Absent and excused -- Campbell, Crow, Field(20), Higgins, Mader,
      Montgomery, Mortensen, Sellman
    Floor Sponsor -- Crow
    Title apvd - to enrol
03/30    Rpt enrol - Sp signed - Pres signed
    To Governor
04/11    Governor signed
         Session Law Chapter 386
         Effective: 01/01/01, Secs 1-12 & 16
         01/01/02, Secs 13-15

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 377
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO TAXATION; AMENDING SECTION 63-3024, IDAHO CODE, TO PROVIDE  FOR  A
  3        REDUCTION  IN RATES FOR TAXABLE YEAR 2001 AND EACH YEAR THEREAFTER; AMEND-
  4        ING SECTION 63-3022H, IDAHO CODE, TO INCREASE THE  DEDUCTION  ALLOWED  FOR
  5        QUALIFIED  CAPITAL  GAINS AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SEC-
  6        TION 63-3025, IDAHO CODE, TO REDUCE THE CORPORATE  INCOME  TAX  RATE  FROM
  7        EIGHT  TO SEVEN AND SIX-TENTHS PERCENT FOR TAXABLE YEAR 2001 AND EACH YEAR
  8        THEREAFTER; AMENDING SECTION 63-3025A, IDAHO CODE, TO REDUCE THE CORPORATE
  9        FRANCHISE TAX RATE FROM EIGHT PERCENT TO THE RATE OF THE CORPORATE  INCOME
 10        TAX  AND  TO  MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 63-3029B, IDAHO
 11        CODE,  TO  PROVIDE  THAT  TAXPAYERS  MAKING  EXPENDITURES  FOR   QUALIFIED
 12        BROADBAND  EQUIPMENT  ARE  ENTITLED TO THE CREDIT AND TO REVISE PROCEDURES
 13        FOR RECAPTURE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE  ADDITION
 14        OF A NEW SECTION 63-3029G, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR
 15        CERTAIN  EXPENDITURES  RELATING TO RESEARCH ACTIVITIES CONDUCTED IN IDAHO,
 16        TO PROVIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO  PROVIDE
 17        DEFINITIONS  AND  TO  PROVIDE PROCEDURES; AMENDING SECTION 63-3029H, IDAHO
 18        CODE, TO REDESIGNATE THE SECTION; AMENDING CHAPTER  30,  TITLE  63,  IDAHO
 19        CODE,  BY  THE ADDITION OF  A NEW SECTION 63-3029I, IDAHO CODE, TO PROVIDE
 20        AN INCOME TAX CREDIT FOR  CERTAIN  EXPENDITURES  RELATING  TO  HIGH  SPEED
 21        BROADBAND  COMMUNICATIONS ACCESS IN IDAHO, TO PROVIDE A SUNSET, TO PROVIDE
 22        A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINITIONS AND TO PROVIDE  PRO-
 23        CEDURES;  AMENDING  CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A
 24        NEW SECTION 63-3022P, IDAHO CODE, TO PROVIDE, WITH RESPECT TO AN  INDIVID-
 25        UAL  TAXPAYER,  AN  AMOUNT EQUAL TO THE AMOUNT PAID BY THE TAXPAYER DURING
 26        THE TAXABLE YEAR FOR INSURANCE, WHICH CONSTITUTES  MEDICAL  CARE  FOR  THE
 27        TAXPAYER,  THE SPOUSE OR DEPENDENTS OF THE TAXPAYER WHICH IS NOT OTHERWISE
 28        DEDUCTED OR ACCOUNTED FOR BY THE TAXPAYER FOR IDAHO  INCOME  TAX  PURPOSES
 29        SHALL  BE ALLOWED AS A DEDUCTION AGAINST IDAHO TAXABLE INCOME, AND TO PRO-
 30        VIDE A DEFINITION OF INSURANCE WHICH CONSTITUTES  MEDICAL  CARE;  AMENDING
 31        CHAPTER  30,  TITLE  63,  IDAHO  CODE,  BY  THE  ADDITION OF A NEW SECTION
 32        63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDI-
 33        TURES RELATING TO INVESTMENT IN AREAS IN IDAHO WITH HIGH  UNEMPLOYMENT  OR
 34        LOW PERSONAL INCOME AT THE ELECTION OF THE TAXPAYER FOR TAXABLE YEAR 2001,
 35        TO  PROVIDE  A  CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINITIONS AND TO
 36        PROVIDE PROCEDURES; AMENDING SECTIONS 63-3029E AND 63-3029F,  IDAHO  CODE,
 37        TO  EXPAND  THE  NEW  JOBS CREDIT BY REMOVING THE LIMITATION OF QUALIFYING
 38        TAXPAYERS TO REVENUE-PRODUCING  ENTERPRISE  CREATING  VALUE-ADDED  NATURAL
 39        RESOURCE  PRODUCTS;  REPEALING SECTIONS 63-3029E AND 63-3029F, IDAHO CODE;
 40        AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A  NEW  SEC-
 41        TION  63-3029E,  IDAHO  CODE,  TO  PROVIDE DEFINITIONS AND CONSTRUCTION OF
 42        TERMS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
 43        SECTION 63-3029F, IDAHO CODE, TO PROVIDE SPECIAL CREDITS TO THE INCOME TAX
 44        FOR NEW EMPLOYEES FOR AN ENTERPRISE THAT PRODUCES,  ASSEMBLES,  FABRICATES
 45        OR  PROCESSES  NATURAL RESOURCE PRODUCTS; PROVIDING FOR NONSEVERABILITY OF
 46        CERTAIN PROVISIONS OF THIS ACT; DECLARING AN EMERGENCY AND PROVIDING  RET-
                                                                        
                                           2
                                                                        
  1        ROACTIVE  APPLICATION FOR CERTAIN PROVISIONS OF THIS ACT, AND PROVIDING AN
  2        EFFECTIVE DATE FOR CERTAIN PROVISIONS OF THIS ACT.
                                                                        
  3    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  4        SECTION 1.  That Section 63-3024, Idaho Code, be, and the same  is  hereby
  5    amended to read as follows:
                                                                        
  6        63-3024.  INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
  7    20001,  and  each  taxable  year  thereafter,  a tax measured by Idaho taxable
  8    income as defined in this chapter is hereby  imposed  upon  every  individual,
  9    trust, or estate required by this chapter to file a return.
 10        (a)  (i)  The  tax  imposed  upon individuals, trusts and estates shall be
 11    computed at the following rates:
 12    When Idaho taxable income is:    The rate is:
 13    Less than $1,000                 One and nine six-tenths percent (1.96%)
 14    $1,000 but less than $2,000      $196, plus  three and nine six-tenths
 15                                     percent (3.96%) of the amount over $1,000
 16    $2,000 but less than $3,000      $582, plus four
 17                                      and  four one-tenths
 18                                     percent (4.41%) of the amount over $2,000
 19    $3,000 but less than $4,000      $10293, plus five
 20                                      and  four one-tenths
 21                                     percent (5.41%) of the amount over $3,000
 22    $4,000 but less than $5,000      $15644, plus six
 23                                      and  four one-tenths
 24                                     percent (6.41%) of the amount over $4,000
 25    $5,000 but less than $7,500      $2205, plus seven
 26                                      and  four one-tenths
 27                                     percent (7.41%) of the amount over $5,000
 28    $7,500 but less than $20,000     $405383, plus seven and seven four-tenths
 29                                     percent (7.74%) of the amount over $7,500
 30    Over $20,000                     $1,367.508, plus eight and one-tenth seven
 31                                     and eight-tenths percent
 32                                     (8.17.8%) of the amount over $20,000
 33        (ii) For taxable year 2001 and each taxable year thereafter,  a  tax  mea-
 34    sured  by  Idaho  taxable  income as defined in this chapter is hereby imposed
 35    upon every individual, trust, or estate required by this  chapter  to  file  a
 36    return.
 37    The  tax imposed upon individuals, trusts and estates shall be computed at the
 38    following rates:
 39    When Idaho taxable income is:    The rate is:
 40    Less than $1,000                 Two percent (2.0%)
 41    $1,000 but less than $2,000      $20, plus four percent (4.0%)
 42                                     of the amount over $1,000
 43    $2,000 but less than $3,000      $60, plus four and one-half percent
 44                                     (4.5%) of the amount over $2,000
 45    $3,000 but less than $4,000      $105, plus five and one-half percent
 46                                     (5.5%) of the amount over $3,000
 47    $4,000 but less than $5,000      $160, plus six and one-half percent
 48                                     (6.5%) of the amount over $4,000
 49    $5,000 but less than $7,500      $225, plus seven and one-half percent
 50                                     (7.5%) of the amount over $5,000
 51    $7,500 but less than $20,000     $412.50, plus seven and eight-tenths percent
 52                                     (7.8%) of the amount over $7,500
                                                                        
                                           3
                                                                        
  1    Over $20,000                     $1,387.50, plus eight and two-tenths percent
  2                                     (8.2%) of the amount over $20,000
  3        For taxable year 2000 and each year thereafter, the state  tax  commission
  4    shall  prescribe  a factor which shall be used to compute the Idaho income tax
  5    brackets provided in  subsections (a)(i) and (a)(ii) of this section. The fac-
  6    tor shall provide an adjustment to the Idaho tax brackets  so  that  inflation
  7    will not result in a tax increase. The Idaho tax brackets shall be adjusted as
  8    follows:  multiply  the  bracket amounts by the percentage (the consumer price
  9    index for the calendar year immediately preceding the calendar year  to  which
 10    the  adjusted brackets will apply divided by the consumer price index for cal-
 11    endar year 1998). For the purpose of  this  computation,  the  consumer  price
 12    index  for  any calendar year is the average of the consumer price index as of
 13    the close of the twelve (12) month period for the immediately preceding calen-
 14    dar year as adopted by the state tax commission. This adoption shall be exempt
 15    from the provisions of chapter 52, title 67, Idaho Code.  The  consumer  price
 16    index  shall  mean  the consumer price index for all U.S. urban consumers pub-
 17    lished by the United States department of  labor.  The  state  tax  commission
 18    shall  annually  include the factor as provided in this subsection to multiply
 19    against Idaho taxable income in the brackets above to arrive  at  that  year's
 20    taxable income for tax bracket purposes.
 21        (b)  In  case  a joint return is filed by husband and wife pursuant to the
 22    provisions of section 63-3031, Idaho Code, the tax  imposed  by  this  section
 23    shall  be twice the tax which would be imposed on one-half (1/2) of the aggre-
 24    gate Idaho taxable income. For the purposes of this section,  a  return  of  a
 25    surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
 26    a  head of household, as defined in section 2(b) of the Internal Revenue Code,
 27    shall be treated as a joint return and the tax imposed shall be twice the  tax
 28    which would be imposed on one-half (1/2) of the Idaho taxable income.
 29        (c)  The  state  tax commission shall compute and publish Idaho income tax
 30    liability for taxpayers at the midpoint  of  each  bracket  of  Idaho  taxable
 31    income  in  fifty  dollar  ($50.00) steps to fifty thousand dollars ($50,000),
 32    rounding such calculations to the  nearest  dollar.  Taxpayers  having  income
 33    within  such brackets shall file returns based upon and pay taxes according to
 34    the schedule thus established. The state tax commission shall promulgate rules
 35    defining the conditions upon which such returns shall be filed.
                                                                        
 36        SECTION 2.  That Section 63-3022H, Idaho Code, be, and the same is  hereby
 37    amended to read as follows:
                                                                        
 38        63-3022H.  DEDUCTION  OF  CAPITAL  GAINS.  (1)  If  an individual taxpayer
 39    reports a net capital gain in determining taxable income,  sixty  one  hundred
 40    percent (6100%) of the net capital gain from the sale or exchange of qualified
 41    property shall be a deduction in determining taxable income.
 42        (2)  The  deduction  provided  in this section is limited to the amount of
 43    the net capital gain from all property included in federal taxable income. Net
 44    capital gains treated as ordinary income by the iInternal  rRevenue  cCode  do
 45    not qualify for the deduction allowed in this section. The deduction otherwise
 46    allowable  under  this  section  shall be reduced by the amount of any federal
 47    capital gains deduction relating to such property, but not below zero.
 48        (3)  As used in this section  "qualified  property"  means  the  following
 49    property having an Idaho situs at the time of sale:
 50        (a)  Real property held at least eighteen (18) months;
 51        (b)  Tangible  personal  property  used  in Idaho for at least twelve (12)
 52        months by a revenue-producing enterprise;
 53        (c)  Cattle or horses held for breeding, draft, dairy or sporting purposes
                                                                        
                                           4
                                                                        
  1        for at least twenty-four (24) months if more than one-half  (1/2)  of  the
  2        taxpayer's  gross  income  (as  defined  in section 61(a) of the iInternal
  3        rRevenue cCode) for the taxable year is from farming  or  ranching  opera-
  4        tions in Idaho;
  5        (d)  Breeding  livestock  other than cattle or horses held at least twelve
  6        (12) months if more than one-half (1/2) of the taxpayer's gross income (as
  7        defined in section 61(a) of the iInternal rRevenue cCode) for the  taxable
  8        year is from farming or ranching operations in Idaho;
  9        (e)  Timber grown in Idaho and held at least twenty-four (24) months;
 10        (f)  In  determining the period for which property subject to this section
 11        has been held by a  taxpayer,  the  provisions  of  section  1223  of  the
 12        iInternal  rRevenue cCode shall apply, except that when the holding period
 13        includes any period during which the taxpayer held property other than the
 14        property sold, all property held during the holding  period  must  qualify
 15        under this section.
 16        (4)  If  an individual reports a capital gain from qualified property from
 17    an S corporation or a partnership, a deduction shall  be  allowed  under  this
 18    section  only  to the extent the individual held his interest in the income of
 19    the S corporation or the partnership for the time required by  subsection  (3)
 20    of this section for the property sold.
 21        (5)  If  an individual reports a capital gain from an estate, no deduction
 22    shall be allowed under this section unless the holding period required in sub-
 23    section (3) of this section was satisfied by the decedent, the estate, or  the
 24    beneficiary, or a combination thereof.
 25        (6)  If  an  individual  reports a capital gain from a trust, no deduction
 26    shall be allowed under this section unless the holding period required in sub-
 27    section (3) of this section was satisfied by the grantor, the  trust,  or  the
 28    beneficiary, or a combination thereof.
 29        (7)  As used in this section "revenue-producing enterprise" means:
 30        (a)  The  production, assembly, fabrication, manufacture, or processing of
 31        any agricultural, mineral or manufactured product;
 32        (b)  The storage, warehousing, distribution, or sale at wholesale  of  any
 33        products of agriculture, mining or manufacturing;
 34        (c)  The feeding of livestock at a feedlot;
 35        (d)  The  operation  of  laboratories  or other facilities for scientific,
 36        agricultural, animal husbandry, or industrial  research,  development,  or
 37        testing.
                                                                        
 38        SECTION  3.  That  Section 63-3025, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
 40        63-3025.  TAX ON CORPORATE INCOME. For taxable  years  commencing  on  and
 41    after  January  1,  1987  2001,  a  tax is hereby imposed on the Idaho taxable
 42    income of a corporation which transacts or is authorized to transact  business
 43    in this state or which has income attributable to this state. The tax shall be
 44    equal  to  eight seven and six-tenths percent (87.6%) of Idaho taxable income;
 45    provided, however, that  the  tax  shall  not  be  less  than  twenty  dollars
 46    ($20.00);  provided  further  that  the twenty dollar ($20.00) minimum payment
 47    shall not be collected from nonproductive mining corporations. The tax imposed
 48    by this section shall not apply to corporations taxed pursuant to  the  provi-
 49    sions of section 63-3025A, Idaho Code.
                                                                        
 50        SECTION  4.  That Section 63-3025A, Idaho Code, be, and the same is hereby
 51    amended to read as follows:
                                                                        
                                           5
                                                                        
  1        63-3025A.  FRANCHISE TAX. For taxable years commencing on and after  Janu-
  2    ary  1,  1987  2001, a franchise tax shall be imposed upon any corporation for
  3    the privilege of exercising its corporate franchise within  the  state  during
  4    such  taxable  year,  including,  but  not limited to, corporations engaged in
  5    business in Idaho for the exclusive purpose of performing contracts  with  the
  6    United States department of energy at the Idaho national engineering and envi-
  7    ronmental laboratory, which tax shall be measured by income which is attribut-
  8    able to this state under the provisions of this chapter and which tax shall be
  9    equal  to  eight  percent (8%) of Idaho taxable income at the rate provided in
 10    section 63-3025, Idaho Code; provided, however, that the tax shall not be less
 11    than twenty dollars ($20.00); provided further that the twenty dollar ($20.00)
 12    minimum payment shall not be collected from nonproductive mining corporations;
 13    but the twenty dollar ($20.00) minimum tax shall apply to corporations  quali-
 14    fied  to file returns and actually filing returns under the provisions of sub-
 15    chapter "S" of the Internal Revenue Code.
                                                                        
 16        SECTION 5.  That Section 63-3029B, Idaho Code, be, and the same is  hereby
 17    amended to read as follows:
                                                                        
 18        63-3029B.  INCOME  TAX  CREDIT FOR CAPITAL INVESTMENT. (1) At the election
 19    of the taxpayer there shall be allowed, subject to the applicable  limitations
 20    provided  herein  as  a  credit  against the income tax imposed by chapter 30,
 21    title 63, Idaho Code, an amount equal to the sum of:
 22        (a)  The tax credit carryovers; and
 23        (b)  The tax credit for the taxable year.
 24        (2)  The maximum allowable amount of the credit for  the  current  taxable
 25    year  shall  be three percent (3%) of the amount of qualified investments made
 26    during the taxable year.
 27        (3)  As used in this section "qualified investment" means  certain  depre-
 28    ciable property which:
 29        (a)  (i)  Is eligible for the federal investment tax credit, as defined in
 30             sections  46(c)  and  48  of the Internal Revenue Code subject to the
 31             limitations provided for certain regulated companies in section 46(f)
 32             of the Internal Revenue Code and is not a motor vehicle  under  eight
 33             thousand (8,000) pounds gross weight; or
 34             (ii) Is qualified broadband equipment as defined in section 63-3029I,
 35             Idaho Code; and
 36        (b)  Is  acquired, constructed, reconstructed, erected or placed into ser-
 37        vice after December 31, 1981; and
 38        (c)  Has a situs in Idaho.
 39        (4)  Notwithstanding the provisions of subsections (1)  and  (2)  of  this
 40    section, the amount of the credit allowed shall not exceed fifty percent (50%)
 41    of the tax liability of the taxpayer.
 42        (5)  If the sum of credit carryovers from the credit allowed by subsection
 43    (2)  of  this  section  and the amount of credit for the taxable year from the
 44    credit allowed by subsection (2) of this section exceed the limitation imposed
 45    by subsection (4) of this section for the current  taxable  year,  the  excess
 46    attributable  to  the  current  taxable  year's  credit shall be an investment
 47    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 48    a group of corporations filing a combined report under section 63-3027,  Idaho
 49    Code,  or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
 50    (1) member of the group but not  used by that member may be  used  by  another
 51    member  of the group, subject to the provisions of subsection (4) of this sec-
 52    tion, instead of carried over. The entire amount of  unused  credit  shall  be
 53    carried  forward  to  the earliest of the succeeding years, wherein the oldest
                                                                        
                                           6
                                                                        
  1    available unused credit shall be used first, so long as the qualified  invest-
  2    ment  property  for  which the unused credit was granted still maintains Idaho
  3    situs. For a combined group of corporations, credit  carried  forward  may  be
  4    claimed  by any member of the group unless the member who earned the credit is
  5    no longer included in the combined group.
  6        (6)  Any recapture of the credit allowed by subsection (2) of this section
  7    on property disposed of or ceasing to qualify, prior to the close of its  use-
  8    ful life the recapture period, shall be determined according to the applicable
  9    recapture  provisions  of  the Internal Revenue Code. In the case of a unitary
 10    group of corporations, the increase in tax due to the recapture of  investment
 11    tax  credit  must be reported by the member of the group who earned the credit
 12    regardless of which member claimed the credit against tax.
 13        (7)  For the purpose of determining whether property placed in service  is
 14    a  "qualified  investment"  as  defined in subsection (3) of this section, the
 15    provisions of section 49 of the Internal Revenue Code shall be disregarded.
 16        (8)  For purposes of this section, property has a situs in Idaho during  a
 17    taxable year if it is used in Idaho at any time during the taxable year. Prop-
 18    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 19    the taxable year during which the property is not used in Idaho or in any sub-
 20    sequent taxable year. No credit or carryover of credit is permitted under this
 21    section  if  the  credit or carryover relates to property that does not have a
 22    situs in Idaho during the taxable year for which the credit  or  carryover  is
 23    claimed. The Idaho situs of property must be established by records maintained
 24    by the taxpayer which are created reasonably contemporaneously with the use of
 25    the property.
 26        (9)  In the case of property used both in and outside Idaho, the taxpayer,
 27    electing  to  claim the credit provided in this section, must elect to compute
 28    the qualified investment in property with  a  situs  in  Idaho  for  all  such
 29    investments first qualifying during that year in one (1), but only one (1), of
 30    the following ways:
 31        (a)  The  amount of each qualified investment in a specific asset shall be
 32        separately computed based on the percentage of the actual use of the prop-
 33        erty in Idaho by using a measure of the use, such as total miles or  total
 34        machine hours, that most accurately reflects the beneficial use during the
 35        taxable  year  in  which it is first acquired, constructed, reconstructed,
 36        erected or placed into service; provided, that the asset is placed in ser-
 37        vice more than ninety (90) days before the end of the taxable year. In the
 38        case of assets acquired, constructed,  reconstructed,  erected  or  placed
 39        into  service within ninety (90) days prior to the end of the taxable year
 40        in which the investment first qualifies, the measure of the  use  of  that
 41        asset within Idaho for that year shall be based upon the percentage of use
 42        in Idaho during the first ninety (90) days of use of the asset;
 43        (b)  The  investment  in  qualified  property used both inside and outside
 44        Idaho during the taxable year in which it is first acquired,  constructed,
 45        reconstructed,  erected  or placed into service shall be multiplied by the
 46        percent of the investment that would be included in the numerator  of  the
 47        Idaho  property factor determined pursuant to section 63-3027, Idaho Code,
 48        for the same year.
 49        (10) Only for the purposes of subsections (3)(a) and (7) of this  section,
 50    references  to  sections  of  the  "Internal  Revenue  Code" mean the sections
 51    referred to as they  existed in the Internal Revenue Code  of  1986  prior  to
 52    November 5, 1990.
                                                                        
 53        SECTION  6.  That  Chapter  30,  Title 63, Idaho Code, be, and the same is
 54    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
                                                                        
                                           7
                                                                        
  1    ignated as Section 63-3029G, Idaho Code, and to read as follows:
                                                                        
  2        63-3029G.  CREDITS  FOR  RESEARCH  ACTIVITIES  CONDUCTED  IN THIS STATE --
  3    CARRY FORWARD.
  4        (1) (a)  Subject to the limitations of this  section,  for  taxable  years
  5        beginning between January 1, 2001, and December 31, 2005, inclusive, there
  6        shall  be  allowed  to  a  taxpayer  a  nonrefundable credit against taxes
  7        imposed by  sections  63-3024,  63-3025  and  63-3025A,  Idaho  Code,  for
  8        increasing  research  activities  in Idaho during any consecutive five (5)
  9        year period beginning, at the election of the taxpayer, either:
 10             (i)   January 1, 2001, or
 11             (ii)  The first day of the taxpayer's taxable year beginning in 2001.
 12        (b)  The credit allowed by subsection (1)(a) of this section shall be  the
 13        sum of:
 14             (i)   Five  percent (5%) of the excess of qualified research payments
 15             for research conducted in Idaho over the base amount; and
 16             (ii)  Five percent (5%) basic research payments allowable under  sub-
 17             section  (e)  of  section  41  of the Internal Revenue Code for basic
 18             research conducted in Idaho.
 19        (c)  Subject to the limitation in subsection (3) of this section,  a  tax-
 20        payer  making  the election permitted by subsection (1)(a)(i) of this sec-
 21        tion, credit for research activities occurring prior to the  beginning  of
 22        the  taxpayer's  taxable  year  beginning  in 2001 shall be claimed on the
 23        taxpayer's return for its taxable year 2001 in addition to credit relating
 24        to activity in that year.
 25        (2)  As used in this section:
 26        (a)  The terms "qualified research payments," "qualified research," "basic
 27        research payments" and "basic research" shall be as defined in section  41
 28        of the Internal Revenue Code except that the research must be conducted in
 29        Idaho.
 30        (b)  The term "base amount" shall mean an amount calculated as provided in
 31        sections 41(c) and 41(h) of the Internal Revenue Code, except that:
 32             (i)   The  base amount does not include the calculation of the alter-
 33             native incremental credit provided for in  section  41(c)(4)  of  the
 34             Internal Revenue Code;
 35             (ii)  A  taxpayer's  gross receipts include only those gross receipts
 36             attributable  to sources within this state as provided in subsections
 37             (q) and (r) of section 63-3027, Idaho Code; and
 38             (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
 39             purposes of calculating the base amount, a taxpayer:
 40                  (A)  May elect to be treated as a start-up company  as  provided
 41                  in  section 41(c)(3)(B) of the Internal Revenue Code, regardless
 42                  of whether  the  taxpayer  meets  the  requirements  of  section
 43                  41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
 44                  (B)  May not revoke an election to be treated as a start-up com-
 45                  pany.
 46        (3)  The credit allowed by subsection (1)(a) of this section together with
 47    any  credits  carried  forward  under subsection (5) of this section shall not
 48    exceed the amount of tax due under sections  63-3024,  63-3025  and  63-3025A,
 49    Idaho  Code,  after allowance for all other credits permitted by this chapter.
 50    When credits earned in more than one (1) taxable year are available, the  old-
 51    est credits shall be applied first.
 52        (4)  In the case of a group of corporations filing a combined report under
 53    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 54    of  the group but not used by that member may be used by another member of the
                                                                        
                                           8
                                                                        
  1    group. For a combined group of corporations, any member of the group may claim
  2    credit carried forward unless the member who earned the credit  is  no  longer
  3    included in the combined group.
  4        (5)  The  credit  allowed  by  subsection  (1)(a) of this section shall be
  5    claimed for the taxable year during  which  the  taxpayer  qualifies  for  the
  6    credit. If the credit exceeds the limitation under subsection (3) of this sec-
  7    tion,  the  excess  amount  may  be carried forward for a period that does not
  8    exceed the next fourteen (14) taxable years.
  9        (6)  In addition to other needed rules, the state tax commission may  pro-
 10    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 11    or  estates,  a  method  of  attributing  the credit under this section to the
 12    shareholders, partners or beneficiaries in proportion to their  share  of  the
 13    income from the S corporation, partnership, trust or estate.
                                                                        
 14        SECTION  7.  That Section 63-3029H, Idaho Code, be, and the same is hereby
 15    amended to read as follows:
                                                                        
 16        63-3029HP.  PRIORITY OF CREDITS. When a  taxpayer  subject  to  any  taxes
 17    imposed under this chapter is entitled to two (2) or more credits against such
 18    taxes, the priority of credits shall be determined in the following order:
 19        (a)  Nonrefundable  credits. Nonrefundable credits shall be applied to the
 20    tax liability before application of refundable credits. If a taxpayer is enti-
 21    tled to more than one (1) nonrefundable credit, the credits shall  be  applied
 22    in the order in which the statutes authorizing the credits were enacted by the
 23    legislature.
 24        (b)  Refundable  credits.  Refundable  credits shall be applied to the tax
 25    liability after application of any nonrefundable credits.
                                                                        
 26        SECTION 8.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
 27    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 28    ignated as Section 63-3029I, Idaho Code, and to read as follows:
                                                                        
 29        63-3029I.  INCOME TAX CREDIT FOR INVESTMENT IN  BROADBAND  EQUIPMENT.  (1)
 30    Subject  to  the  limitations  of  this  section,  for taxable years beginning
 31    between January 1, 2001, and December 31,  2005,  inclusive,  there  shall  be
 32    allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
 33    63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
 34    ified broadband equipment in Idaho.
 35        (2)  The credit permitted in subsection (1) of this section shall be three
 36    percent  (3%)  of the qualified investment in qualified broadband equipment in
 37    Idaho and shall be in addition to the credit for capital investment  permitted
 38    by section 63-3029B, Idaho Code.
 39        (3)  As used in this section the term:
 40        (a)  "Qualified investment" shall be as defined in section 63-3029B, Idaho
 41        Code.
 42        (b)  "Qualified  broadband  equipment"  means equipment that qualifies for
 43        the credit for capital investment permitted  by  section  63-3029B,  Idaho
 44        Code,  and  is  capable  of transmitting signals at a rate of at least two
 45        hundred thousand (200,000) bits per second to a subscriber  and  at  least
 46        one  hundred  twenty-five  thousand  (125,000) bits per second from a sub-
 47        scriber, and
 48             (i)   In the case of a telecommunications  carrier,  such  qualifying
 49             equipment  shall  be  necessary to the provision of broadband service
 50             and an integral part of a broadband network. "Telecommunications car-
 51             rier" has the meaning given such term by section 3(44) of the  commu-
                                                                        
                                           9
                                                                        
  1             nications  act of 1934, as amended, but does not include a commercial
  2             mobile service provider.
  3             (ii)  In the case of a commercial mobile service carrier, such quali-
  4             fying equipment shall extend from the subscriber side of  the  mobile
  5             telecommunications   switching  office  to  a  transmitting/receiving
  6             antenna, including such antenna, on the outside of the  structure  in
  7             which  the subscriber is located. "Commercial mobile service carrier"
  8             means any person authorized to provide commercial mobile  radio  ser-
  9             vice  to  subscribers as defined in section 20.3 of title 47, Code of
 10             Federal Regulations (10-1-99 ed.), as amended.
 11             (iii) In the case of a cable or  open  video  system  operator,  such
 12             qualifying  equipment  shall extend from the subscriber's side of the
 13             headend to the outside of the structure in which  the  subscriber  is
 14             located. The terms "cable operator" and "open video system  operator"
 15             have  the  meanings  given  such  terms  by  sections 602(5) and 653,
 16             respectively, of the communications act of 1934, as amended.
 17             (iv)  In the case of a satellite carrier or a wireless carrier  other
 18             than  listed  above, such qualifying equipment is only that equipment
 19             that extends from a transmitting/receiving  antenna,  including  such
 20             antenna,  which  transmits  and  receives signals to or from multiple
 21             subscribers to a transmitting/receiving antenna on the outside of the
 22             structure in which the subscriber  is  located.  "Satellite  carrier"
 23             means  any  person  using  the facilities of a satellite or satellite
 24             services licensed by the federal communications commission and  oper-
 25             ating  a  fixed-satellite  service or direct broadcast satellite ser-
 26             vices to provide point-to-multipoint distribution of signals.  "Other
 27             wireless  carrier"  means any person, other than a telecommunications
 28             carrier, commercial mobile  service  carrier,  cable  operator,  open
 29             video operator, or satellite carrier, providing broadband services to
 30             subscribers through the radio transmission of energy.
 31             (v)   In  the  case of packet switching equipment, such packet equip-
 32             ment installed in connection with other qualifying  equipment  listed
 33             in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
 34             it  is  the last in a series of equipment that transmits signals to a
 35             subscriber or the first in a series of equipment that transmits  sig-
 36             nals from a  subscriber.  "Packet  switching"  means  controlling  or
 37             routing  the path of a digital transmission signal which is assembled
 38             into packets or cells.
 39             (vi)  In the case of multiplexing and demultiplexing equipment,  such
 40             equipment  only  to the extent that it is deployed in connection with
 41             providing broadband services in locations  between  packet  switching
 42             equipment  and  the  structure  in  which  the subscriber is located.
 43             "Multiplexing" means the transmission of two (2) or more signals over
 44             a communications circuit without regard to the  communications  tech-
 45             nology.
 46             (vii) Any property not primarily used to provide services in Idaho to
 47             public subscribers is not qualified broadband equipment.
 48        (4)  No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
 49    this  section  shall qualify for the credit provided in subsection (1) of this
 50    section until the taxpayer applies to and obtains from the Idaho public utili-
 51    ties commission an order confirming that the installed equipment is  qualified
 52    broadband  equipment.  Applications  submitted to the commission shall be gov-
 53    erned by the commission's rules of procedure. The commission may issue  proce-
 54    dural orders necessary to implement this section.
 55        (5)  The  credit  allowed  by subsection (1) of this section together with
                                                                        
                                           10
                                                                        
  1    any credits carried forward under subsection (7) of this section shall not, in
  2    any one (1) taxable year, exceed the lesser of:
  3        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
  4        Idaho  Code, after allowance for all other credits permitted by this chap-
  5        ter; or
  6        (b)  Seven hundred fifty thousand dollars ($750,000).
  7    When credits earned in more than one (1) taxable year are available, the  old-
  8    est credits shall be applied first.
  9        (6)  In the case of a group of corporations filing a combined report under
 10    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 11    of  the group but not used by that member may be used by another member of the
 12    group, subject to the provisions of subsection (7) of this section, instead of
 13    carried over. For a combined group of corporations, credit carried forward may
 14    be claimed by any member of the group unless the member who earned the  credit
 15    is no longer included in the combined group.
 16        (7)  If  the  credit allowed by subsection (1) of this section exceeds the
 17    limitation under subsection (5) of this section, the excess amount may be car-
 18    ried forward for a period that does not exceed the next fourteen (14)  taxable
 19    years.
 20        (8)  In the event that qualified broadband equipment upon which the credit
 21    allowed by this section has been used ceases to qualify for the credit allowed
 22    by  section  63-3029B,  Idaho Code, or is subject to recapture of that credit,
 23    the recapture of credit under this section shall be in the same proportion and
 24    subject to the same provisions as the amount of credit required to  be  recap-
 25    tured under section 63-3029B, Idaho Code.
 26        (9)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 27        tled  to  the credit or to an unused portion of the credit allowed by this
 28        section may transfer the unused credit to  another  taxpayer  required  to
 29        file a return under this chapter.
 30        (b)  Before  completing  a  transfer under this subsection, the transferor
 31        shall notify the state tax commission of its  intention  to  transfer  the
 32        credit  and the identity of the transferee. The state tax commission shall
 33        provide the transferor with a written statement of the  amount  of  credit
 34        available under this section as then appearing in the commission's records
 35        and  the  number  of  years the credit may be carried over. The transferee
 36        shall attach a copy of the statement to any return in regard to which  the
 37        transferred credit is claimed.
 38        (c)  In  the event that after the transfer the state tax commission deter-
 39        mines that the amount of credit properly available under this  section  is
 40        less  than  the amount claimed by the transferor of the credit or that the
 41        credit is subject to recapture, the commission shall assess the amount  of
 42        overstated  or  recaptured credit as taxes due from the transferor and not
 43        the transferee.  The assessment shall be made in the manner provided for a
 44        deficiency in taxes under this chapter.
 45        (10) In addition to other needed rules, the state tax commission may  pro-
 46    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 47    or  estates,  a  method  of  attributing  the credit under this section to the
 48    shareholders, partners or beneficiaries in proportion to their  share  of  the
 49    income from the S corporation, partnership, trust or estate.
                                                                        
 50        SECTION  9.  That  Chapter  30,  Title 63, Idaho Code, be, and the same is
 51    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 52    ignated as Section 63-3022P, Idaho Code, and to read as follows:
                                                                        
 53        63-3022P.  HEALTH INSURANCE COSTS. With respect to an individual taxpayer,
                                                                        
                                           11
                                                                        
  1    an amount equal to the amount paid by the taxpayer during the taxable year for
  2    insurance  which  constitutes  medical  care  for  the taxpayer, the spouse or
  3    dependents of the taxpayer which is not otherwise deducted or accounted for by
  4    the taxpayer for Idaho income tax purposes shall be allowed as a deduction for
  5    Idaho taxable income. As used in this section,  "insurance  which  constitutes
  6    medical care" includes any hospital or medical policy or certificate, any sub-
  7    scriber  contract, policies or certificates of insurance for specific disease,
  8    hospital confinement indemnity, accident-only, credit, dental, vision,  single
  9    employer  self-funded coverage, meaning that portion of health insurance which
 10    is the retained risk of the employer, student health benefits only or coverage
 11    for medical care or treatment issued as a supplement to  liability  insurance.
 12    Employers  shall  provide  to  the  employee  a  statement  as  to  whether an
 13    employee's contribution for health insurance has been  excluded  from  taxable
 14    income.
                                                                        
 15        SECTION  10.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 16    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 17    ignated as Section 63-3029J, Idaho Code, and to read as follows:
                                                                        
 18        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
 19    itations  of  this section, for taxable year 2001 only, there shall be allowed
 20    to a taxpayer  a  nonrefundable  credit  against  taxes  imposed  by  sections
 21    63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
 22    (2) of this section for qualified investments in Idaho. The credit shall be in
 23    addition  to  the credit for capital investment permitted by section 63-3029B,
 24    Idaho Code.
 25        (2)  The credit permitted in subsection (1) of this section  shall  be  at
 26    the  percentage  rate  determined  under either subsection (2)(a) or (2)(b) of
 27    this section at the election of the taxpayer.
 28        (a)  (i)   One-half (1/2) of the amount by which  the  average  three-year
 29             unemployment  rate  in  the  county  in which the property is located
 30             exceeds six percent (6%).  In the case of mobile property, the  prop-
 31             erty shall be located in the county in which it is primarily based.
 32             (ii)  For  purposes of this section the director of the department of
 33             labor shall, on or before the first day of September of each calendar
 34             year, establish and certify to the state tax commission  the  average
 35             three-year  unemployment rate in each county in Idaho for the immedi-
 36             ately preceding three (3) calendar years. The  rates  thus  certified
 37             shall  apply  to  the  calculation  of  the  credit  under subsection
 38             (2)(a)(i) of this section for property qualifying in the taxable year
 39             beginning during the next calendar year.
 40        (b)  (i)   One-tenth of one percent (.1%) for each full percent  that  the
 41             three-year  average per capita personal income level in the county in
 42             which the property is located is below ninety percent  (90%)  of  the
 43             average statewide per capita personal income level.
 44             (ii)  For  purposes of this section the director of the department of
 45             commerce shall, on or before the first day of September of each  cal-
 46             endar  year,  establish  and  certify to the state tax commission the
 47             most current three-year average per capita personal income  level  in
 48             each  county  in  Idaho  and the statewide per capita personal income
 49             level for the most current preceding three (3)  calendar  years.  The
 50             levels  thus  certified  shall apply to the calculation of the credit
 51             under subsection (2)(b)(i) of this section for property qualifying in
 52             the taxable year beginning during the next calendar year.
 53        (3)  As used in this section the  term  "qualified  investment"  shall  be
                                                                        
                                           12
                                                                        
  1    defined as in section 63-3029B, Idaho Code.
  2        (4)  The  credit  allowed  by subsection (1) of this section together with
  3    any credits carried forward under subsection (6) of  this  section  shall  not
  4    exceed in any one (1) taxable year the lesser of:
  5        (a)  The  amount  of tax due under sections 63-3024, 63-3025 and 63-3025A,
  6        Idaho Code, after allowance for all other credits permitted by this  chap-
  7        ter; or
  8        (b)  Five hundred thousand dollars ($500,000).
  9        (5)  In the case of a group of corporations filing a combined report under
 10    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 11    of  the group but not used by that member may be used by another member of the
 12    group, subject to the provisions of subsection (6) of this section, instead of
 13    carried over. For a combined group of corporations, credit carried forward may
 14    be claimed by any member of the group unless the member who earned the  credit
 15    is no longer included in the combined group.
 16        (6)  If  the  credit allowed by subsection (1) of this section exceeds the
 17    limitation under subsection (4) of this section, the excess amount may be car-
 18    ried forward for a period that does not exceed the next fourteen (14)  taxable
 19    years.
 20        (7)  In the event that property upon which the credit allowed by this sec-
 21    tion  has  been  used  ceases  to  qualify  for  the credit allowed by section
 22    63-3029B, Idaho Code, the recapture of credit under this section shall  be  in
 23    the same proportion and subject to the same provisions as the amount of credit
 24    required to be recaptured under section 63-3029B, Idaho Code.
 25        (8)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 26        tled  to  the credit or to an unused portion of the credit allowed by this
 27        section may transfer the unused credit to  another  taxpayer  required  to
 28        file a return under this chapter.
 29        (b)  Before  completing  a  transfer under this subsection, the transferor
 30        shall notify the state tax commission of its  intention  to  transfer  the
 31        credit  and the identity of the transferee. The state tax commission shall
 32        provide the transferor with a written statement  of the amount  of  credit
 33        available under this section as then appearing in the commission's records
 34        and  the  number  of  years the credit may be carried over. The transferor
 35        shall provide the transferee with the original statement.  The  transferee
 36        shall  attach a copy of the statement to any return in regard to which the
 37        transferred credit is claimed.
 38        (c)  In the event that after the transfer the state tax commission  deter-
 39        mines  that  the amount of credit properly available under this section is
 40        less than the amount claimed by the transferor of the credit and shown  in
 41        the  statement  described in subsection (8)(b) of this section or that the
 42        credit is subject to recapture, the commission shall assess the amount  of
 43        overstated credit as taxes due from the transferor and not the transferee.
 44        The  assessment  shall  be made in the manner provided for a deficiency in
 45        taxes under this chapter.
 46        (9)  In addition to other needed rules, the state tax commission may  pro-
 47    mulgate rules prescribing:
 48        (a)  In  the  case  of  S corporations, partnerships, trusts or estates, a
 49        method of attributing the credit under this section to  the  shareholders,
 50        partners  or beneficiaries in proportion to their share of the income from
 51        the S corporation, partnership, trust or estate.
 52        (b)  A requirement that a transferor under subsection (8) of this section,
 53        prior to obtaining the written statement provided in subsection (8)(b)  of
 54        this  section,  post such bond or security as the state tax commission may
 55        require to secure any liability referred to in subsection (8)(c)  of  this
                                                                        
                                           13
                                                                        
  1        section.   Such  rules shall provide an opportunity for a taxpayer, upon a
  2        showing of financial responsibility, to have the bond waiver,  for  notice
  3        of  denial  of  waiver in accordance with section 63-3045, Idaho Code, and
  4        for review in accordance with section 63-3045B, Idaho Code.
                                                                        
  5        SECTION 11.  That Section 63-3029E, Idaho Code, be, and the same is hereby
  6    amended to read as follows:
                                                                        
  7        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
  8    and in section 63-3029F, Idaho Code:
  9        (1)  (a) "New employee" means a person from whom Idaho income tax has been
 10        withheld, employed by the taxpayer, in a revenue-producing enterprise cre-
 11        ating  value-added natural resource products, and covered for unemployment
 12        insurance purposes under chapter 13, title 72, Idaho Code, during the tax-
 13        able year for which the credit allowed by section 63-3029F, Idaho Code, is
 14        claimed. A person shall be deemed to be so engaged if such person performs
 15        duties on:
 16             (i)   A regular full-time basis; or
 17             (ii)  A part-time basis if such person is customarily performing such
 18             duties at least twenty (20) hours per week.
 19        No credit shall be earned unless the new  employee  shall  have  performed
 20        such  duties  for the taxpayer for a minimum of nine (9) months during the
 21        taxable year for which the credit is claimed.
 22        (b)  The provisions of paragraph (a) of this  subsection  notwithstanding,
 23        no  credit  shall  be  allowed for employment of persons by a taxpayer who
 24        acquires a revenue-producing enterprise from another taxpayer or who oper-
 25        ates in a place of business the same or a substantially identical revenue-
 26        producing value-added natural resource  products  enterprise  business  as
 27        operated  by  another taxpayer within the prior twelve (12) months, except
 28        as the prior taxpayer would have qualified under the provisions  of  para-
 29        graph  (c)  of  this subsection. Employees transferred from a related tax-
 30        payer shall not be included in the computation of the credit.
 31        (c)  The number of employees during any  taxable  year  for  any  taxpayer
 32        shall  be  the mathematical average of the number of employees reported to
 33        the Idaho department of labor for employment security purposes during  the
 34        twelve (12) months of the taxable year which qualified under paragraph (a)
 35        of  this  subsection.  In  the event the business is in operation for less
 36        than the entire taxable year, the number of employees of the business  for
 37        the  year  shall be the average number actually employed during the months
 38        of operation, providing that the qualifications of paragraph (a)  of  this
 39        subsection are met.
 40        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
 41    cation, manufacture or processing of any natural resource product.
 42        (3)  "Same or a substantially identical revenue-producing enterprise busi-
 43    ness" means a revenue-producing enterprise business in which the products pro-
 44    duced  or  sold, or the activities conducted are the same in character and use
 45    and are produced, sold or conducted in the same manner as,  or  for  the  same
 46    types  of customers as, the products or activities produced, sold or conducted
 47    in another revenue-producing enterprise business.
                                                                        
 48        SECTION 12.  That Section 63-3029F, Idaho Code, be, and the same is hereby
 49    amended to read as follows:
                                                                        
 50        63-3029F.  SPECIAL CREDIT AVAILABLE -- NEW  EMPLOYEES.  (1)  Any  taxpayer
 51    shall  be  allowed  a  credit, in an amount determined under subsection (2) of
                                                                        
                                           14
                                                                        
  1    this section, against  the tax imposed by this chapter,  other  than  the  tax
  2    imposed  by section 63-3082, Idaho Code, for any taxable year during which the
  3    taxpayer's employment of new employees, as defined under section  63-3029E(1),
  4    Idaho  Code, increases above the taxpayer's average employment for either: (a)
  5    the prior taxable year, or (b) the average of three (3) prior  taxable  years,
  6    whichever  is higher. No credit shall be allowed under this section unless the
  7    number of new employees equals or exceeds one (1) person.
  8        (2)  The credit authorized in subsection (1) of this section shall be five
  9    hundred dollars ($500) per new employee, but the total  credit  allowed  shall
 10    not  exceed  three  and  one-quarter  percent  (3.25%)  of net income from the
 11    taxpayer's corporate, proprietorship, partnership, small business  corporation
 12    or  limited  liability  company revenue-producing enterprise business in which
 13    the employment occurred. Additionally, the total of this and all other credits
 14    allowed under this chapter except  for  the  credits  allowed  under  sections
 15    63-3024A,  63-3025D  and  63-3029,  Idaho  Code, taken during any taxable year
 16    shall not exceed forty-five percent (45%) of the tax otherwise imposed on  the
 17    taxpayer for the taxable year for which such credit is allowed.
 18        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
 19    section (2) of this section and the amount of credit for the taxable year from
 20    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 21    imposed  by  subsection  (2) of this section for the current taxable year, the
 22    excess attributable to the current taxable year's credit  shall  be  a  credit
 23    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 24    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 25    years, wherein the oldest available unused credit shall be used first, so long
 26    as the employment level for which the credit was granted is still maintained.
                                                                        
 27        SECTION  13.  That Sections 63-3029E and 63-3029F, Idaho Code, be, and the
 28    same are hereby repealed.
                                                                        
 29        SECTION 14.  That Chapter 30, Title 63, Idaho Code, be, and  the  same  is
 30    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 31    ignated as Section 63-3029E, Idaho Code, and to read as follows:
                                                                        
 32        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
 33    and in section 63-3029F, Idaho Code:
 34        (1)  (a)  "New  employee"  means  a  person from whom Idaho income tax has
 35        been withheld, employed by the taxpayer in a revenue-producing  enterprise
 36        creating  value-added natural resource products, and covered for unemploy-
 37        ment insurance purposes under chapter 13, title 72, Idaho Code, during the
 38        taxable year for which the credit allowed by section 63-3029F, Idaho Code,
 39        is claimed. A person shall be deemed to be so engaged if such person  per-
 40        forms duties on:
 41             (i)   A regular full-time basis; or
 42             (ii)  A part-time basis if such person is customarily performing such
 43             duties at least twenty (20) hours per week.
 44        No  credit  shall  be  earned unless the new employee shall have performed
 45        such duties for the taxpayer for a minimum of nine (9) months  during  the
 46        taxable year for which the credit is claimed.
 47        (b)  The  provisions  of paragraph (a) of this subsection notwithstanding,
 48        no credit shall be allowed for employment of persons  by  a  taxpayer  who
 49        acquires a revenue-producing enterprise from another taxpayer or who oper-
 50        ates in a place of business the same or a substantially identical revenue-
 51        producing  value-added natural resource products enterprise as operated by
 52        another taxpayer within the prior twelve (12) months, except as the  prior
                                                                        
                                           15
                                                                        
  1        taxpayer  would  have  qualified  under the provisions of paragraph (c) of
  2        this subsection. Employees transferred from a related taxpayer  shall  not
  3        be included in the computation of the credit.
  4        (c)  The  number  of  employees  during  any taxable year for any taxpayer
  5        shall be the mathematical average of the number of employees  reported  to
  6        the  Idaho department of labor for employment security purposes during the
  7        twelve (12) months of the taxable year which qualified under paragraph (a)
  8        of this subsection. In the event the business is  in  operation  for  less
  9        than  the entire taxable year, the number of employees of the business for
 10        the year shall be the average number actually employed during  the  months
 11        of  operation,  providing that the qualifications of paragraph (a) of this
 12        subsection are met.
 13        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
 14    cation, manufacture or processing of any natural resource product.
 15        (3)  "Same or  a  substantially  identical  revenue-producing  enterprise"
 16    means  a  revenue-producing enterprise in which the products produced or sold,
 17    or the activities conducted are the same in character and  use  and  are  pro-
 18    duced,  sold or conducted in the same manner as, or for the same types of cus-
 19    tomers as, the products or activities produced, sold or conducted  in  another
 20    revenue-producing enterprise.
                                                                        
 21        SECTION  15.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 22    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 23    ignated as Section 63-3029F, Idaho Code, and to read as follows:
                                                                        
 24        63-3029F.  SPECIAL  CREDIT  AVAILABLE  --  NEW EMPLOYEES. (1) Any taxpayer
 25    shall be allowed a credit, in an amount determined  under  subsection  (2)  of
 26    this  section,  against  the  tax  imposed by this chapter, other than the tax
 27    imposed by section 63-3082, Idaho Code, for any taxable year during which  the
 28    taxpayer's employment of new employees, as defined under section  63-3029E(1),
 29    Idaho  Code, increases above the taxpayer's average employment for either: (a)
 30    the prior taxable year, or (b) the average of three (3) prior  taxable  years,
 31    whichever  is higher. No credit shall be allowed under this section unless the
 32    number of new employees equals or exceeds one (1) person.
 33        (2)  The credit authorized in subsection (1) of this section shall be five
 34    hundred dollars ($500) per new employee, but the total  credit  allowed  shall
 35    not  exceed  three  and  one-quarter  percent  (3.25%)  of net income from the
 36    taxpayer's corporate, proprietorship, partnership, small business  corporation
 37    or limited liability company revenue-producing enterprise in which the employ-
 38    ment  occurred.  Additionally, the total of this and all other credits allowed
 39    under this chapter except for the credits  allowed  under  sections  63-3024A,
 40    63-3025D  and  63-3029,  Idaho  Code,  taken during any taxable year shall not
 41    exceed forty-five percent (45%) of the tax otherwise imposed on  the  taxpayer
 42    for the taxable year for which such credit is allowed.
 43        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
 44    section (2) of this section and the amount of credit for the taxable year from
 45    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 46    imposed  by  subsection  (2) of this section for the current taxable year, the
 47    excess attributable to the current taxable year's credit  shall  be  a  credit
 48    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 49    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 50    years, wherein the oldest available unused credit shall be used first, so long
 51    as the employment level for which the credit was granted is still maintained.
                                                                        
 52        SECTION 16.  The provisions of Sections 5, 6, 8, 10, 11 and 12 of this act
                                                                        
                                           16
                                                                        
  1    are  hereby declared to be nonseverable from other provisions within each sec-
  2    tion and if any provision of any of those sections or the application of  such
  3    provision  to  any  person or circumstance is declared invalid for any reason,
  4    such declaration shall render the entire section invalid but  not  other  sec-
  5    tions of this act.
                                                                        
  6        SECTION  17.  An  emergency  existing  therefor, which emergency is hereby
  7    declared to exist, Sections 1 through 12 and Section 16 of this act  shall  be
  8    in  full force and effect on and after passage and approval, and retroactively
  9    to January 1, 2001. Sections 13, 14 and 15 of this act shall be in full  force
 10    and effect on and after January 1, 2002.

Amendment


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                                                     Moved by    Thorne              
                                                                        
                                                     Seconded by Wheeler             
                                                                        
                                                                        
                                       IN THE SENATE
                              SENATE AMENDMENT TO H.B. NO. 377
                                                                        
  1                                AMENDMENT TO THE BILL
  2        On page 3 of the printed bill, delete lines 32 through 53; and on page  4,
  3    delete lines 1 through 33, and insert:
  4        "SECTION 2.  That Section 63-3024A, Idaho Code, be, and the same is hereby
  5    amended to read as follows:
                                                                        
  6        63-3024A.  CREDITS  AND  REFUNDS. (a) Any resident individual not entitled
  7    to the credit allowed in subsection (b)(1), who is required to file by law and
  8    who has filed an Idaho income tax return, shall be allowed  a  credit  against
  9    taxes due under the Idaho income tax act equal to the amount of fifteen twenty
 10    dollars  ($1520.00)  for each personal exemption for which a deduction is per-
 11    mitted by section 151(b) and (c) of the Internal Revenue Code if  such  deduc-
 12    tion is claimed on the taxpayer's Idaho income tax return, and if the individ-
 13    ual  for whom the deduction is claimed is a resident of the state of Idaho. If
 14    taxes due are less than the total credit allowed, the taxpayer shall be paid a
 15    refund equal to the balance of the unused credit. If the credit or  refund  is
 16    not  claimed for the year for which the individual income tax return is filed,
 17    the right thereafter to claim such credit or refund shall  be  forfeited.  The
 18    state  tax  commission shall prescribe the method by which the refund, if any,
 19    is to be made to the taxpayer.
 20        (b) (1)  A resident individual who has reached his  sixty-fifth   birthday
 21        before the end of his taxable year, who is required to file by law and who
 22        has  filed  an  Idaho income tax return, shall be allowed a credit against
 23        taxes due  under  the  Idaho  income  tax  act  equal  to  the  amount  of
 24        thirty-five  dollars  ($305.00)  for  each personal exemption representing
 25        himself, a spouse over the age of sixty-five (65) years,  or  a  dependent
 26        over  the  age  of  sixty-five  (65)  years, but shall be allowed a credit
 27        against taxes due under the Idaho income tax act equal to  fifteen  twenty
 28        dollars  ($1520.00)  for  each personal exemption representing a spouse or
 29        dependent under the age of sixty-five (65) years. If taxes  due  are  less
 30        than  the  total credit allowed, the taxpayer shall be paid a refund equal
 31        to the balance of the unused credit.  If  the  credit  or  refund  is  not
 32        claimed  for the year for which the individual income tax return is filed,
 33        the right thereafter to claim such credit or refund  shall  be  forfeited.
 34        The  state  tax commission shall prescribe the method by which the refund,
 35        if any, is to be made to the taxpayer.
 36        (2)  A resident individual who has reached his sixty-fifth   birthday  and
 37        is  not  required  by  law  to file an Idaho income tax return and who has
 38        received no credit or refund under any other subsection of  this  section,
 39        shall be entitled to a refund of thirty-five dollars ($305.00). Any refund
 40        shall be paid to such individual only upon his making application therefor
 41        at such time and in such manner as may be prescribed by the state tax com-
 42        mission.
 43        (c)  A resident individual of the state of Idaho who is:
                                                                        
                                          2
                                                                        
  1        (i)   blind, or
  2        (ii)  a  disabled  American  veteran  of  any war engaged in by the United
  3        States, whose disability is recognized as a service  connected  disability
  4        of a degree of ten per cent percent (10%) or more, or who is in receipt of
  5        a  pension  for nonservice connected disabilities, in accordance with laws
  6        and regulations administered by the United States veterans administration,
  7        substantiated by a statement as to status signed by a responsible  officer
  8        of the United States veterans administration, or
  9        (iii) over sixty-two (62) years of age, and has been allowed none, or less
 10        than  all,  of  the credit provided by subsection (a) or subsection (b) of
 11        this section, shall be entitled to a payment from the refund  fund  in  an
 12        amount  equal  to fifteen twenty dollars ($1520.00), or the balance of his
 13        unused credit, whichever is less, upon making application therefor at such
 14        time and in such manner as the state tax commission may prescribe.
 15        (d)  Any part-year resident entitled to a credit under this section  shall
 16    receive  a  proportionate credit, in the manner above provided, reflecting the
 17    part of the year in which he was domiciled in this state.
 18        (e)  No credit or refund may be claimed for an exemption which  represents
 19    a person who has himself filed an Idaho income tax return claiming a deduction
 20    for  his  own personal exemption, and in no event shall more than one (1) tax-
 21    payer be allowed a credit or refund for the same exemption, or under more than
 22    one (1) subsection of this section.
 23        (f)  The refunds authorized by this section shall be paid from  the  state
 24    refund  fund  in the same manner as the refunds authorized by section 63-3067,
 25    Idaho Code.
 26        (g)  An application for any refund which is due and payable under the pro-
 27    visions of this section must be filed with the  state  tax  commission  within
 28    three (3) years of:
 29        (i)  the due date, including extensions, of the return required under sec-
 30        tion  63-3030,  Idaho Code, if the applicant is required to file a return,
 31        or
 32        (ii) the 15th day of April of the year following the  year  to  which  the
 33        application relates if the applicant is not required to file a return.".
                                                                        
 34                                 CORRECTIONS TO TITLE
 35        On  page 1, in line 3, following "THEREAFTER;" delete the remainder of the
 36    line; delete line 4; and in line 5, delete "QUALIFIED  CAPITAL  GAINS  AND  TO
 37    MAKE  TECHNICAL  CORRECTIONS"  and  insert:  "AMENDING SECTION 63-3024A, IDAHO
 38    CODE, TO INCREASE THE INCOME TAX CREDIT FOR SALES TAXES PAID BY CERTAIN  INDI-
 39    VIDUALS AND TO MAKE TECHNICAL CORRECTIONS".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                        HOUSE BILL NO. 377, As Amended in the Senate
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO TAXATION; AMENDING SECTION 63-3024, IDAHO CODE, TO PROVIDE  FOR  A
  3        REDUCTION  IN RATES FOR TAXABLE YEAR 2001 AND EACH YEAR THEREAFTER; AMEND-
  4        ING SECTION 63-3024A, IDAHO CODE, TO INCREASE THE INCOME  TAX  CREDIT  FOR
  5        SALES TAXES PAID BY CERTAIN INDIVIDUALS AND TO MAKE TECHNICAL CORRECTIONS;
  6        AMENDING  SECTION  63-3025, IDAHO CODE, TO REDUCE THE CORPORATE INCOME TAX
  7        RATE FROM EIGHT TO SEVEN AND SIX-TENTHS PERCENT FOR TAXABLE YEAR 2001  AND
  8        EACH YEAR THEREAFTER; AMENDING SECTION 63-3025A, IDAHO CODE, TO REDUCE THE
  9        CORPORATE  FRANCHISE TAX RATE FROM EIGHT PERCENT TO THE RATE OF THE CORPO-
 10        RATE INCOME TAX  AND  TO  MAKE  TECHNICAL  CORRECTIONS;  AMENDING  SECTION
 11        63-3029B,  IDAHO  CODE,  TO PROVIDE THAT TAXPAYERS MAKING EXPENDITURES FOR
 12        QUALIFIED BROADBAND EQUIPMENT ARE ENTITLED TO THE  CREDIT  AND  TO  REVISE
 13        PROCEDURES  FOR  RECAPTURE;  AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY
 14        THE ADDITION OF A NEW SECTION 63-3029G, IDAHO CODE, TO PROVIDE  AN  INCOME
 15        TAX  CREDIT  FOR CERTAIN EXPENDITURES RELATING TO RESEARCH ACTIVITIES CON-
 16        DUCTED IN IDAHO, TO PROVIDE A SUNSET, TO PROVIDE  A  CARRYOVER  OF  UNUSED
 17        CREDITS,  TO  PROVIDE DEFINITIONS AND TO PROVIDE PROCEDURES; AMENDING SEC-
 18        TION 63-3029H, IDAHO CODE, TO REDESIGNATE THE  SECTION;  AMENDING  CHAPTER
 19        30,  TITLE  63,  IDAHO  CODE,  BY THE ADDITION OF  A NEW SECTION 63-3029I,
 20        IDAHO CODE, TO PROVIDE AN  INCOME  TAX  CREDIT  FOR  CERTAIN  EXPENDITURES
 21        RELATING  TO  HIGH SPEED BROADBAND COMMUNICATIONS ACCESS IN IDAHO, TO PRO-
 22        VIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE  DEFI-
 23        NITIONS  AND  TO  PROVIDE PROCEDURES; AMENDING CHAPTER 30, TITLE 63, IDAHO
 24        CODE, BY THE ADDITION OF A NEW SECTION 63-3022P, IDAHO CODE,  TO  PROVIDE,
 25        WITH RESPECT TO AN INDIVIDUAL TAXPAYER, AN AMOUNT EQUAL TO THE AMOUNT PAID
 26        BY  THE  TAXPAYER DURING THE TAXABLE YEAR FOR INSURANCE, WHICH CONSTITUTES
 27        MEDICAL CARE FOR THE TAXPAYER, THE SPOUSE OR DEPENDENTS  OF  THE  TAXPAYER
 28        WHICH IS NOT OTHERWISE DEDUCTED OR ACCOUNTED FOR BY THE TAXPAYER FOR IDAHO
 29        INCOME  TAX PURPOSES SHALL BE ALLOWED AS A DEDUCTION AGAINST IDAHO TAXABLE
 30        INCOME, AND TO PROVIDE A DEFINITION OF INSURANCE WHICH CONSTITUTES MEDICAL
 31        CARE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A  NEW
 32        SECTION  63-3029J, IDAHO CODE, TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN
 33        EXPENDITURES RELATING TO INVESTMENT IN AREAS IN IDAHO WITH HIGH  UNEMPLOY-
 34        MENT  OR  LOW  PERSONAL INCOME AT THE ELECTION OF THE TAXPAYER FOR TAXABLE
 35        YEAR 2001, TO PROVIDE A CARRYOVER OF UNUSED CREDITS,  TO  PROVIDE  DEFINI-
 36        TIONS  AND TO PROVIDE PROCEDURES; AMENDING SECTIONS 63-3029E AND 63-3029F,
 37        IDAHO CODE, TO EXPAND THE NEW JOBS CREDIT BY REMOVING  THE  LIMITATION  OF
 38        QUALIFYING  TAXPAYERS TO REVENUE-PRODUCING ENTERPRISE CREATING VALUE-ADDED
 39        NATURAL RESOURCE PRODUCTS; REPEALING SECTIONS 63-3029E AND 63-3029F, IDAHO
 40        CODE; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A  NEW
 41        SECTION  63-3029E,  IDAHO CODE, TO PROVIDE DEFINITIONS AND CONSTRUCTION OF
 42        TERMS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
 43        SECTION 63-3029F, IDAHO CODE, TO PROVIDE SPECIAL CREDITS TO THE INCOME TAX
 44        FOR NEW EMPLOYEES FOR AN ENTERPRISE THAT PRODUCES,  ASSEMBLES,  FABRICATES
 45        OR  PROCESSES  NATURAL RESOURCE PRODUCTS; PROVIDING FOR NONSEVERABILITY OF
 46        CERTAIN PROVISIONS OF THIS ACT; DECLARING AN EMERGENCY AND PROVIDING  RET-
                                                                        
                                           2
                                                                        
  1        ROACTIVE  APPLICATION FOR CERTAIN PROVISIONS OF THIS ACT, AND PROVIDING AN
  2        EFFECTIVE DATE FOR CERTAIN PROVISIONS OF THIS ACT.
                                                                        
  3    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  4        SECTION 1.  That Section 63-3024, Idaho Code, be, and the same  is  hereby
  5    amended to read as follows:
                                                                        
  6        63-3024.  INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
  7    20001,  and  each  taxable  year  thereafter,  a tax measured by Idaho taxable
  8    income as defined in this chapter is hereby  imposed  upon  every  individual,
  9    trust, or estate required by this chapter to file a return.
 10        (a)  (i)  The  tax  imposed  upon individuals, trusts and estates shall be
 11    computed at the following rates:
 12    When Idaho taxable income is:    The rate is:
 13    Less than $1,000                 One and nine six-tenths percent (1.96%)
 14    $1,000 but less than $2,000      $196, plus  three and nine six-tenths
 15                                     percent (3.96%) of the amount over $1,000
 16    $2,000 but less than $3,000      $582, plus four
 17                                      and  four one-tenths
 18                                     percent (4.41%) of the amount over $2,000
 19    $3,000 but less than $4,000      $10293, plus five
 20                                      and  four one-tenths
 21                                     percent (5.41%) of the amount over $3,000
 22    $4,000 but less than $5,000      $15644, plus six
 23                                      and  four one-tenths
 24                                     percent (6.41%) of the amount over $4,000
 25    $5,000 but less than $7,500      $2205, plus seven
 26                                      and  four one-tenths
 27                                     percent (7.41%) of the amount over $5,000
 28    $7,500 but less than $20,000     $405383, plus seven and seven four-tenths
 29                                     percent (7.74%) of the amount over $7,500
 30    Over $20,000                     $1,367.508, plus eight and one-tenth seven
 31                                     and eight-tenths percent
 32                                     (8.17.8%) of the amount over $20,000
 33        (ii) For taxable year 2001 and each taxable year thereafter,  a  tax  mea-
 34    sured  by  Idaho  taxable  income as defined in this chapter is hereby imposed
 35    upon every individual, trust, or estate required by this  chapter  to  file  a
 36    return.
 37    The  tax imposed upon individuals, trusts and estates shall be computed at the
 38    following rates:
 39    When Idaho taxable income is:    The rate is:
 40    Less than $1,000                 Two percent (2.0%)
 41    $1,000 but less than $2,000      $20, plus four percent (4.0%)
 42                                     of the amount over $1,000
 43    $2,000 but less than $3,000      $60, plus four and one-half percent
 44                                     (4.5%) of the amount over $2,000
 45    $3,000 but less than $4,000      $105, plus five and one-half percent
 46                                     (5.5%) of the amount over $3,000
 47    $4,000 but less than $5,000      $160, plus six and one-half percent
 48                                     (6.5%) of the amount over $4,000
 49    $5,000 but less than $7,500      $225, plus seven and one-half percent
 50                                     (7.5%) of the amount over $5,000
 51    $7,500 but less than $20,000     $412.50, plus seven and eight-tenths percent
 52                                     (7.8%) of the amount over $7,500
                                                                        
                                           3
                                                                        
  1    Over $20,000                     $1,387.50, plus eight and two-tenths percent
  2                                     (8.2%) of the amount over $20,000
  3        For taxable year 2000 and each year thereafter, the state  tax  commission
  4    shall  prescribe  a factor which shall be used to compute the Idaho income tax
  5    brackets provided in  subsections (a)(i) and (a)(ii) of this section. The fac-
  6    tor shall provide an adjustment to the Idaho tax brackets  so  that  inflation
  7    will not result in a tax increase. The Idaho tax brackets shall be adjusted as
  8    follows:  multiply  the  bracket amounts by the percentage (the consumer price
  9    index for the calendar year immediately preceding the calendar year  to  which
 10    the  adjusted brackets will apply divided by the consumer price index for cal-
 11    endar year 1998). For the purpose of  this  computation,  the  consumer  price
 12    index  for  any calendar year is the average of the consumer price index as of
 13    the close of the twelve (12) month period for the immediately preceding calen-
 14    dar year as adopted by the state tax commission. This adoption shall be exempt
 15    from the provisions of chapter 52, title 67, Idaho Code.  The  consumer  price
 16    index  shall  mean  the consumer price index for all U.S. urban consumers pub-
 17    lished by the United States department of  labor.  The  state  tax  commission
 18    shall  annually  include the factor as provided in this subsection to multiply
 19    against Idaho taxable income in the brackets above to arrive  at  that  year's
 20    taxable income for tax bracket purposes.
 21        (b)  In  case  a joint return is filed by husband and wife pursuant to the
 22    provisions of section 63-3031, Idaho Code, the tax  imposed  by  this  section
 23    shall  be twice the tax which would be imposed on one-half (1/2) of the aggre-
 24    gate Idaho taxable income. For the purposes of this section,  a  return  of  a
 25    surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
 26    a  head of household, as defined in section 2(b) of the Internal Revenue Code,
 27    shall be treated as a joint return and the tax imposed shall be twice the  tax
 28    which would be imposed on one-half (1/2) of the Idaho taxable income.
 29        (c)  The  state  tax commission shall compute and publish Idaho income tax
 30    liability for taxpayers at the midpoint  of  each  bracket  of  Idaho  taxable
 31    income  in  fifty  dollar  ($50.00) steps to fifty thousand dollars ($50,000),
 32    rounding such calculations to the  nearest  dollar.  Taxpayers  having  income
 33    within  such brackets shall file returns based upon and pay taxes according to
 34    the schedule thus established. The state tax commission shall promulgate rules
 35    defining the conditions upon which such returns shall be filed.
                                                                        
 36        SECTION 2.  That Section 63-3024A, Idaho Code, be, and the same is  hereby
 37    amended to read as follows:
                                                                        
 38        63-3024A.  CREDITS  AND  REFUNDS. (a) Any resident individual not entitled
 39    to the credit allowed in subsection (b)(1), who is required to file by law and
 40    who has filed an Idaho income tax return, shall be allowed  a  credit  against
 41    taxes due under the Idaho income tax act equal to the amount of fifteen twenty
 42    dollars  ($1520.00)  for each personal exemption for which a deduction is per-
 43    mitted by section 151(b) and (c) of the Internal Revenue Code if  such  deduc-
 44    tion is claimed on the taxpayer's Idaho income tax return, and if the individ-
 45    ual  for whom the deduction is claimed is a resident of the state of Idaho. If
 46    taxes due are less than the total credit allowed, the taxpayer shall be paid a
 47    refund equal to the balance of the unused credit. If the credit or  refund  is
 48    not  claimed for the year for which the individual income tax return is filed,
 49    the right thereafter to claim such credit or refund shall  be  forfeited.  The
 50    state  tax  commission shall prescribe the method by which the refund, if any,
 51    is to be made to the taxpayer.
 52        (b) (1)  A resident individual who has reached his  sixty-fifth   birthday
 53        before the end of his taxable year, who is required to file by law and who
                                                                        
                                           4
                                                                        
  1        has  filed  an  Idaho income tax return, shall be allowed a credit against
  2        taxes due  under  the  Idaho  income  tax  act  equal  to  the  amount  of
  3        thirty-five  dollars  ($305.00)  for  each personal exemption representing
  4        himself, a spouse over the age of sixty-five (65) years,  or  a  dependent
  5        over  the  age  of  sixty-five  (65)  years, but shall be allowed a credit
  6        against taxes due under the Idaho income tax act equal to  fifteen  twenty
  7        dollars  ($1520.00)  for  each personal exemption representing a spouse or
  8        dependent under the age of sixty-five (65) years. If taxes  due  are  less
  9        than  the  total credit allowed, the taxpayer shall be paid a refund equal
 10        to the balance of the unused credit.  If  the  credit  or  refund  is  not
 11        claimed  for the year for which the individual income tax return is filed,
 12        the right thereafter to claim such credit or refund  shall  be  forfeited.
 13        The  state  tax commission shall prescribe the method by which the refund,
 14        if any, is to be made to the taxpayer.
 15        (2)  A resident individual who has reached his sixty-fifth   birthday  and
 16        is  not  required  by  law  to file an Idaho income tax return and who has
 17        received no credit or refund under any other subsection of  this  section,
 18        shall be entitled to a refund of thirty-five dollars ($305.00). Any refund
 19        shall be paid to such individual only upon his making application therefor
 20        at such time and in such manner as may be prescribed by the state tax com-
 21        mission.
 22        (c)  A resident individual of the state of Idaho who is:
 23        (i)   blind, or
 24        (ii)  a  disabled  American  veteran  of  any war engaged in by the United
 25        States, whose disability is recognized as a service  connected  disability
 26        of a degree of ten per cent percent (10%) or more, or who is in receipt of
 27        a  pension  for nonservice connected disabilities, in accordance with laws
 28        and regulations administered by the United States veterans administration,
 29        substantiated by a statement as to status signed by a responsible  officer
 30        of the United States veterans administration, or
 31        (iii) over sixty-two (62) years of age, and has been allowed none, or less
 32        than  all,  of  the credit provided by subsection (a) or subsection (b) of
 33        this section, shall be entitled to a payment from the refund  fund  in  an
 34        amount  equal  to fifteen twenty dollars ($1520.00), or the balance of his
 35        unused credit, whichever is less, upon making application therefor at such
 36        time and in such manner as the state tax commission may prescribe.
 37        (d)  Any part-year resident entitled to a credit under this section  shall
 38    receive  a  proportionate credit, in the manner above provided, reflecting the
 39    part of the year in which he was domiciled in this state.
 40        (e)  No credit or refund may be claimed for an exemption which  represents
 41    a person who has himself filed an Idaho income tax return claiming a deduction
 42    for  his  own personal exemption, and in no event shall more than one (1) tax-
 43    payer be allowed a credit or refund for the same exemption, or under more than
 44    one (1) subsection of this section.
 45        (f)  The refunds authorized by this section shall be paid from  the  state
 46    refund  fund  in the same manner as the refunds authorized by section 63-3067,
 47    Idaho Code.
 48        (g)  An application for any refund which is due and payable under the pro-
 49    visions of this section must be filed with the  state  tax  commission  within
 50    three (3) years of:
 51        (i)  the due date, including extensions, of the return required under sec-
 52        tion  63-3030,  Idaho Code, if the applicant is required to file a return,
 53        or
 54        (ii) the 15th day of April of the year following the  year  to  which  the
 55        application relates if the applicant is not required to file a return.
                                                                        
                                           5
                                                                        
  1        SECTION  3.  That  Section 63-3025, Idaho Code, be, and the same is hereby
  2    amended to read as follows:
                                                                        
  3        63-3025.  TAX ON CORPORATE INCOME. For taxable  years  commencing  on  and
  4    after  January  1,  1987  2001,  a  tax is hereby imposed on the Idaho taxable
  5    income of a corporation which transacts or is authorized to transact  business
  6    in this state or which has income attributable to this state. The tax shall be
  7    equal  to  eight seven and six-tenths percent (87.6%) of Idaho taxable income;
  8    provided, however, that  the  tax  shall  not  be  less  than  twenty  dollars
  9    ($20.00);  provided  further  that  the twenty dollar ($20.00) minimum payment
 10    shall not be collected from nonproductive mining corporations. The tax imposed
 11    by this section shall not apply to corporations taxed pursuant to  the  provi-
 12    sions of section 63-3025A, Idaho Code.
                                                                        
 13        SECTION  4.  That Section 63-3025A, Idaho Code, be, and the same is hereby
 14    amended to read as follows:
                                                                        
 15        63-3025A.  FRANCHISE TAX. For taxable years commencing on and after  Janu-
 16    ary  1,  1987  2001, a franchise tax shall be imposed upon any corporation for
 17    the privilege of exercising its corporate franchise within  the  state  during
 18    such  taxable  year,  including,  but  not limited to, corporations engaged in
 19    business in Idaho for the exclusive purpose of performing contracts  with  the
 20    United States department of energy at the Idaho national engineering and envi-
 21    ronmental laboratory, which tax shall be measured by income which is attribut-
 22    able to this state under the provisions of this chapter and which tax shall be
 23    equal  to  eight  percent (8%) of Idaho taxable income at the rate provided in
 24    section 63-3025, Idaho Code; provided, however, that the tax shall not be less
 25    than twenty dollars ($20.00); provided further that the twenty dollar ($20.00)
 26    minimum payment shall not be collected from nonproductive mining corporations;
 27    but the twenty dollar ($20.00) minimum tax shall apply to corporations  quali-
 28    fied  to file returns and actually filing returns under the provisions of sub-
 29    chapter "S" of the Internal Revenue Code.
                                                                        
 30        SECTION 5.  That Section 63-3029B, Idaho Code, be, and the same is  hereby
 31    amended to read as follows:
                                                                        
 32        63-3029B.  INCOME  TAX  CREDIT FOR CAPITAL INVESTMENT. (1) At the election
 33    of the taxpayer there shall be allowed, subject to the applicable  limitations
 34    provided  herein  as  a  credit  against the income tax imposed by chapter 30,
 35    title 63, Idaho Code, an amount equal to the sum of:
 36        (a)  The tax credit carryovers; and
 37        (b)  The tax credit for the taxable year.
 38        (2)  The maximum allowable amount of the credit for  the  current  taxable
 39    year  shall  be three percent (3%) of the amount of qualified investments made
 40    during the taxable year.
 41        (3)  As used in this section "qualified investment" means  certain  depre-
 42    ciable property which:
 43        (a)  (i)  Is eligible for the federal investment tax credit, as defined in
 44             sections  46(c)  and  48  of the Internal Revenue Code subject to the
 45             limitations provided for certain regulated companies in section 46(f)
 46             of the Internal Revenue Code and is not a motor vehicle  under  eight
 47             thousand (8,000) pounds gross weight; or
 48             (ii) Is qualified broadband equipment as defined in section 63-3029I,
 49             Idaho Code; and
 50        (b)  Is  acquired, constructed, reconstructed, erected or placed into ser-
                                                                        
                                           6
                                                                        
  1        vice after December 31, 1981; and
  2        (c)  Has a situs in Idaho.
  3        (4)  Notwithstanding the provisions of subsections (1)  and  (2)  of  this
  4    section, the amount of the credit allowed shall not exceed fifty percent (50%)
  5    of the tax liability of the taxpayer.
  6        (5)  If the sum of credit carryovers from the credit allowed by subsection
  7    (2)  of  this  section  and the amount of credit for the taxable year from the
  8    credit allowed by subsection (2) of this section exceed the limitation imposed
  9    by subsection (4) of this section for the current  taxable  year,  the  excess
 10    attributable  to  the  current  taxable  year's  credit shall be an investment
 11    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 12    a group of corporations filing a combined report under section 63-3027,  Idaho
 13    Code,  or sections 63-3027B through 63-3027E, Idaho Code, credit earned by one
 14    (1) member of the group but not  used by that member may be  used  by  another
 15    member  of the group, subject to the provisions of subsection (4) of this sec-
 16    tion, instead of carried over. The entire amount of  unused  credit  shall  be
 17    carried  forward  to  the earliest of the succeeding years, wherein the oldest
 18    available unused credit shall be used first, so long as the qualified  invest-
 19    ment  property  for  which the unused credit was granted still maintains Idaho
 20    situs. For a combined group of corporations, credit  carried  forward  may  be
 21    claimed  by any member of the group unless the member who earned the credit is
 22    no longer included in the combined group.
 23        (6)  Any recapture of the credit allowed by subsection (2) of this section
 24    on property disposed of or ceasing to qualify, prior to the close of its  use-
 25    ful life the recapture period, shall be determined according to the applicable
 26    recapture  provisions  of  the Internal Revenue Code. In the case of a unitary
 27    group of corporations, the increase in tax due to the recapture of  investment
 28    tax  credit  must be reported by the member of the group who earned the credit
 29    regardless of which member claimed the credit against tax.
 30        (7)  For the purpose of determining whether property placed in service  is
 31    a  "qualified  investment"  as  defined in subsection (3) of this section, the
 32    provisions of section 49 of the Internal Revenue Code shall be disregarded.
 33        (8)  For purposes of this section, property has a situs in Idaho during  a
 34    taxable year if it is used in Idaho at any time during the taxable year. Prop-
 35    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 36    the taxable year during which the property is not used in Idaho or in any sub-
 37    sequent taxable year. No credit or carryover of credit is permitted under this
 38    section  if  the  credit or carryover relates to property that does not have a
 39    situs in Idaho during the taxable year for which the credit  or  carryover  is
 40    claimed. The Idaho situs of property must be established by records maintained
 41    by the taxpayer which are created reasonably contemporaneously with the use of
 42    the property.
 43        (9)  In the case of property used both in and outside Idaho, the taxpayer,
 44    electing  to  claim the credit provided in this section, must elect to compute
 45    the qualified investment in property with  a  situs  in  Idaho  for  all  such
 46    investments first qualifying during that year in one (1), but only one (1), of
 47    the following ways:
 48        (a)  The  amount of each qualified investment in a specific asset shall be
 49        separately computed based on the percentage of the actual use of the prop-
 50        erty in Idaho by using a measure of the use, such as total miles or  total
 51        machine hours, that most accurately reflects the beneficial use during the
 52        taxable  year  in  which it is first acquired, constructed, reconstructed,
 53        erected or placed into service; provided, that the asset is placed in ser-
 54        vice more than ninety (90) days before the end of the taxable year. In the
 55        case of assets acquired, constructed,  reconstructed,  erected  or  placed
                                                                        
                                           7
                                                                        
  1        into  service within ninety (90) days prior to the end of the taxable year
  2        in which the investment first qualifies, the measure of the  use  of  that
  3        asset within Idaho for that year shall be based upon the percentage of use
  4        in Idaho during the first ninety (90) days of use of the asset;
  5        (b)  The  investment  in  qualified  property used both inside and outside
  6        Idaho during the taxable year in which it is first acquired,  constructed,
  7        reconstructed,  erected  or placed into service shall be multiplied by the
  8        percent of the investment that would be included in the numerator  of  the
  9        Idaho  property factor determined pursuant to section 63-3027, Idaho Code,
 10        for the same year.
 11        (10) Only for the purposes of subsections (3)(a) and (7) of this  section,
 12    references  to  sections  of  the  "Internal  Revenue  Code" mean the sections
 13    referred to as they  existed in the Internal Revenue Code  of  1986  prior  to
 14    November 5, 1990.
                                                                        
 15        SECTION  6.  That  Chapter  30,  Title 63, Idaho Code, be, and the same is
 16    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 17    ignated as Section 63-3029G, Idaho Code, and to read as follows:
                                                                        
 18        63-3029G.  CREDITS  FOR  RESEARCH  ACTIVITIES  CONDUCTED  IN THIS STATE --
 19    CARRY FORWARD.
 20        (1) (a)  Subject to the limitations of this  section,  for  taxable  years
 21        beginning between January 1, 2001, and December 31, 2005, inclusive, there
 22        shall  be  allowed  to  a  taxpayer  a  nonrefundable credit against taxes
 23        imposed by  sections  63-3024,  63-3025  and  63-3025A,  Idaho  Code,  for
 24        increasing  research  activities  in Idaho during any consecutive five (5)
 25        year period beginning, at the election of the taxpayer, either:
 26             (i)   January 1, 2001, or
 27             (ii)  The first day of the taxpayer's taxable year beginning in 2001.
 28        (b)  The credit allowed by subsection (1)(a) of this section shall be  the
 29        sum of:
 30             (i)   Five  percent (5%) of the excess of qualified research payments
 31             for research conducted in Idaho over the base amount; and
 32             (ii)  Five percent (5%) basic research payments allowable under  sub-
 33             section  (e)  of  section  41  of the Internal Revenue Code for basic
 34             research conducted in Idaho.
 35        (c)  Subject to the limitation in subsection (3) of this section,  a  tax-
 36        payer  making  the election permitted by subsection (1)(a)(i) of this sec-
 37        tion, credit for research activities occurring prior to the  beginning  of
 38        the  taxpayer's  taxable  year  beginning  in 2001 shall be claimed on the
 39        taxpayer's return for its taxable year 2001 in addition to credit relating
 40        to activity in that year.
 41        (2)  As used in this section:
 42        (a)  The terms "qualified research payments," "qualified research," "basic
 43        research payments" and "basic research" shall be as defined in section  41
 44        of the Internal Revenue Code except that the research must be conducted in
 45        Idaho.
 46        (b)  The term "base amount" shall mean an amount calculated as provided in
 47        sections 41(c) and 41(h) of the Internal Revenue Code, except that:
 48             (i)   The  base amount does not include the calculation of the alter-
 49             native incremental credit provided for in  section  41(c)(4)  of  the
 50             Internal Revenue Code;
 51             (ii)  A  taxpayer's  gross receipts include only those gross receipts
 52             attributable  to sources within this state as provided in subsections
 53             (q) and (r) of section 63-3027, Idaho Code; and
                                                                        
                                           8
                                                                        
  1             (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
  2             purposes of calculating the base amount, a taxpayer:
  3                  (A)  May elect to be treated as a start-up company  as  provided
  4                  in  section 41(c)(3)(B) of the Internal Revenue Code, regardless
  5                  of whether  the  taxpayer  meets  the  requirements  of  section
  6                  41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
  7                  (B)  May not revoke an election to be treated as a start-up com-
  8                  pany.
  9        (3)  The credit allowed by subsection (1)(a) of this section together with
 10    any  credits  carried  forward  under subsection (5) of this section shall not
 11    exceed the amount of tax due under sections  63-3024,  63-3025  and  63-3025A,
 12    Idaho  Code,  after allowance for all other credits permitted by this chapter.
 13    When credits earned in more than one (1) taxable year are available, the  old-
 14    est credits shall be applied first.
 15        (4)  In the case of a group of corporations filing a combined report under
 16    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 17    of  the group but not used by that member may be used by another member of the
 18    group. For a combined group of corporations, any member of the group may claim
 19    credit carried forward unless the member who earned the credit  is  no  longer
 20    included in the combined group.
 21        (5)  The  credit  allowed  by  subsection  (1)(a) of this section shall be
 22    claimed for the taxable year during  which  the  taxpayer  qualifies  for  the
 23    credit. If the credit exceeds the limitation under subsection (3) of this sec-
 24    tion,  the  excess  amount  may  be carried forward for a period that does not
 25    exceed the next fourteen (14) taxable years.
 26        (6)  In addition to other needed rules, the state tax commission may  pro-
 27    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 28    or  estates,  a  method  of  attributing  the credit under this section to the
 29    shareholders, partners or beneficiaries in proportion to their  share  of  the
 30    income from the S corporation, partnership, trust or estate.
                                                                        
 31        SECTION  7.  That Section 63-3029H, Idaho Code, be, and the same is hereby
 32    amended to read as follows:
                                                                        
 33        63-3029HP.  PRIORITY OF CREDITS. When a  taxpayer  subject  to  any  taxes
 34    imposed under this chapter is entitled to two (2) or more credits against such
 35    taxes, the priority of credits shall be determined in the following order:
 36        (a)  Nonrefundable  credits. Nonrefundable credits shall be applied to the
 37    tax liability before application of refundable credits. If a taxpayer is enti-
 38    tled to more than one (1) nonrefundable credit, the credits shall  be  applied
 39    in the order in which the statutes authorizing the credits were enacted by the
 40    legislature.
 41        (b)  Refundable  credits.  Refundable  credits shall be applied to the tax
 42    liability after application of any nonrefundable credits.
                                                                        
 43        SECTION 8.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
 44    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 45    ignated as Section 63-3029I, Idaho Code, and to read as follows:
                                                                        
 46        63-3029I.  INCOME TAX CREDIT FOR INVESTMENT IN  BROADBAND  EQUIPMENT.  (1)
 47    Subject  to  the  limitations  of  this  section,  for taxable years beginning
 48    between January 1, 2001, and December 31,  2005,  inclusive,  there  shall  be
 49    allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
 50    63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
 51    ified broadband equipment in Idaho.
                                                                        
                                           9
                                                                        
  1        (2)  The credit permitted in subsection (1) of this section shall be three
  2    percent  (3%)  of the qualified investment in qualified broadband equipment in
  3    Idaho and shall be in addition to the credit for capital investment  permitted
  4    by section 63-3029B, Idaho Code.
  5        (3)  As used in this section the term:
  6        (a)  "Qualified investment" shall be as defined in section 63-3029B, Idaho
  7        Code.
  8        (b)  "Qualified  broadband  equipment"  means equipment that qualifies for
  9        the credit for capital investment permitted  by  section  63-3029B,  Idaho
 10        Code,  and  is  capable  of transmitting signals at a rate of at least two
 11        hundred thousand (200,000) bits per second to a subscriber  and  at  least
 12        one  hundred  twenty-five  thousand  (125,000) bits per second from a sub-
 13        scriber, and
 14             (i)   In the case of a telecommunications  carrier,  such  qualifying
 15             equipment  shall  be  necessary to the provision of broadband service
 16             and an integral part of a broadband network. "Telecommunications car-
 17             rier" has the meaning given such term by section 3(44) of the  commu-
 18             nications  act of 1934, as amended, but does not include a commercial
 19             mobile service provider.
 20             (ii)  In the case of a commercial mobile service carrier, such quali-
 21             fying equipment shall extend from the subscriber side of  the  mobile
 22             telecommunications   switching  office  to  a  transmitting/receiving
 23             antenna, including such antenna, on the outside of the  structure  in
 24             which  the subscriber is located. "Commercial mobile service carrier"
 25             means any person authorized to provide commercial mobile  radio  ser-
 26             vice  to  subscribers as defined in section 20.3 of title 47, Code of
 27             Federal Regulations (10-1-99 ed.), as amended.
 28             (iii) In the case of a cable or  open  video  system  operator,  such
 29             qualifying  equipment  shall extend from the subscriber's side of the
 30             headend to the outside of the structure in which  the  subscriber  is
 31             located. The terms "cable operator" and "open video system  operator"
 32             have  the  meanings  given  such  terms  by  sections 602(5) and 653,
 33             respectively, of the communications act of 1934, as amended.
 34             (iv)  In the case of a satellite carrier or a wireless carrier  other
 35             than  listed  above, such qualifying equipment is only that equipment
 36             that extends from a transmitting/receiving  antenna,  including  such
 37             antenna,  which  transmits  and  receives signals to or from multiple
 38             subscribers to a transmitting/receiving antenna on the outside of the
 39             structure in which the subscriber  is  located.  "Satellite  carrier"
 40             means  any  person  using  the facilities of a satellite or satellite
 41             services licensed by the federal communications commission and  oper-
 42             ating  a  fixed-satellite  service or direct broadcast satellite ser-
 43             vices to provide point-to-multipoint distribution of signals.  "Other
 44             wireless  carrier"  means any person, other than a telecommunications
 45             carrier, commercial mobile  service  carrier,  cable  operator,  open
 46             video operator, or satellite carrier, providing broadband services to
 47             subscribers through the radio transmission of energy.
 48             (v)   In  the  case of packet switching equipment, such packet equip-
 49             ment installed in connection with other qualifying  equipment  listed
 50             in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
 51             it  is  the last in a series of equipment that transmits signals to a
 52             subscriber or the first in a series of equipment that transmits  sig-
 53             nals from a  subscriber.  "Packet  switching"  means  controlling  or
 54             routing  the path of a digital transmission signal which is assembled
 55             into packets or cells.
                                                                        
                                           10
                                                                        
  1             (vi)  In the case of multiplexing and demultiplexing equipment,  such
  2             equipment  only  to the extent that it is deployed in connection with
  3             providing broadband services in locations  between  packet  switching
  4             equipment  and  the  structure  in  which  the subscriber is located.
  5             "Multiplexing" means the transmission of two (2) or more signals over
  6             a communications circuit without regard to the  communications  tech-
  7             nology.
  8             (vii) Any property not primarily used to provide services in Idaho to
  9             public subscribers is not qualified broadband equipment.
 10        (4)  No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
 11    this  section  shall qualify for the credit provided in subsection (1) of this
 12    section until the taxpayer applies to and obtains from the Idaho public utili-
 13    ties commission an order confirming that the installed equipment is  qualified
 14    broadband  equipment.  Applications  submitted to the commission shall be gov-
 15    erned by the commission's rules of procedure. The commission may issue  proce-
 16    dural orders necessary to implement this section.
 17        (5)  The  credit  allowed  by subsection (1) of this section together with
 18    any credits carried forward under subsection (7) of this section shall not, in
 19    any one (1) taxable year, exceed the lesser of:
 20        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
 21        Idaho  Code, after allowance for all other credits permitted by this chap-
 22        ter; or
 23        (b)  Seven hundred fifty thousand dollars ($750,000).
 24    When credits earned in more than one (1) taxable year are available, the  old-
 25    est credits shall be applied first.
 26        (6)  In the case of a group of corporations filing a combined report under
 27    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 28    of  the group but not used by that member may be used by another member of the
 29    group, subject to the provisions of subsection (7) of this section, instead of
 30    carried over. For a combined group of corporations, credit carried forward may
 31    be claimed by any member of the group unless the member who earned the  credit
 32    is no longer included in the combined group.
 33        (7)  If  the  credit allowed by subsection (1) of this section exceeds the
 34    limitation under subsection (5) of this section, the excess amount may be car-
 35    ried forward for a period that does not exceed the next fourteen (14)  taxable
 36    years.
 37        (8)  In the event that qualified broadband equipment upon which the credit
 38    allowed by this section has been used ceases to qualify for the credit allowed
 39    by  section  63-3029B,  Idaho Code, or is subject to recapture of that credit,
 40    the recapture of credit under this section shall be in the same proportion and
 41    subject to the same provisions as the amount of credit required to  be  recap-
 42    tured under section 63-3029B, Idaho Code.
 43        (9)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 44        tled  to  the credit or to an unused portion of the credit allowed by this
 45        section may transfer the unused credit to  another  taxpayer  required  to
 46        file a return under this chapter.
 47        (b)  Before  completing  a  transfer under this subsection, the transferor
 48        shall notify the state tax commission of its  intention  to  transfer  the
 49        credit  and the identity of the transferee. The state tax commission shall
 50        provide the transferor with a written statement of the  amount  of  credit
 51        available under this section as then appearing in the commission's records
 52        and  the  number  of  years the credit may be carried over. The transferee
 53        shall attach a copy of the statement to any return in regard to which  the
 54        transferred credit is claimed.
 55        (c)  In  the event that after the transfer the state tax commission deter-
                                                                        
                                           11
                                                                        
  1        mines that the amount of credit properly available under this  section  is
  2        less  than  the amount claimed by the transferor of the credit or that the
  3        credit is subject to recapture, the commission shall assess the amount  of
  4        overstated  or  recaptured credit as taxes due from the transferor and not
  5        the transferee.  The assessment shall be made in the manner provided for a
  6        deficiency in taxes under this chapter.
  7        (10) In addition to other needed rules, the state tax commission may  pro-
  8    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
  9    or  estates,  a  method  of  attributing  the credit under this section to the
 10    shareholders, partners or beneficiaries in proportion to their  share  of  the
 11    income from the S corporation, partnership, trust or estate.
                                                                        
 12        SECTION  9.  That  Chapter  30,  Title 63, Idaho Code, be, and the same is
 13    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 14    ignated as Section 63-3022P, Idaho Code, and to read as follows:
                                                                        
 15        63-3022P.  HEALTH INSURANCE COSTS. With respect to an individual taxpayer,
 16    an amount equal to the amount paid by the taxpayer during the taxable year for
 17    insurance  which  constitutes  medical  care  for  the taxpayer, the spouse or
 18    dependents of the taxpayer which is not otherwise deducted or accounted for by
 19    the taxpayer for Idaho income tax purposes shall be allowed as a deduction for
 20    Idaho taxable income. As used in this section,  "insurance  which  constitutes
 21    medical care" includes any hospital or medical policy or certificate, any sub-
 22    scriber  contract, policies or certificates of insurance for specific disease,
 23    hospital confinement indemnity, accident-only, credit, dental, vision,  single
 24    employer  self-funded coverage, meaning that portion of health insurance which
 25    is the retained risk of the employer, student health benefits only or coverage
 26    for medical care or treatment issued as a supplement to  liability  insurance.
 27    Employers  shall  provide  to  the  employee  a  statement  as  to  whether an
 28    employee's contribution for health insurance has been  excluded  from  taxable
 29    income.
                                                                        
 30        SECTION  10.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 31    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 32    ignated as Section 63-3029J, Idaho Code, and to read as follows:
                                                                        
 33        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
 34    itations  of  this section, for taxable year 2001 only, there shall be allowed
 35    to a taxpayer  a  nonrefundable  credit  against  taxes  imposed  by  sections
 36    63-3024, 63-3025 and 63-3025A, Idaho Code, in the amount allowed by subsection
 37    (2) of this section for qualified investments in Idaho. The credit shall be in
 38    addition  to  the credit for capital investment permitted by section 63-3029B,
 39    Idaho Code.
 40        (2)  The credit permitted in subsection (1) of this section  shall  be  at
 41    the  percentage  rate  determined  under either subsection (2)(a) or (2)(b) of
 42    this section at the election of the taxpayer.
 43        (a)  (i)   One-half (1/2) of the amount by which  the  average  three-year
 44             unemployment  rate  in  the  county  in which the property is located
 45             exceeds six percent (6%).  In the case of mobile property, the  prop-
 46             erty shall be located in the county in which it is primarily based.
 47             (ii)  For  purposes of this section the director of the department of
 48             labor shall, on or before the first day of September of each calendar
 49             year, establish and certify to the state tax commission  the  average
 50             three-year  unemployment rate in each county in Idaho for the immedi-
 51             ately preceding three (3) calendar years. The  rates  thus  certified
                                                                        
                                           12
                                                                        
  1             shall  apply  to  the  calculation  of  the  credit  under subsection
  2             (2)(a)(i) of this section for property qualifying in the taxable year
  3             beginning during the next calendar year.
  4        (b)  (i)   One-tenth of one percent (.1%) for each full percent  that  the
  5             three-year  average per capita personal income level in the county in
  6             which the property is located is below ninety percent  (90%)  of  the
  7             average statewide per capita personal income level.
  8             (ii)  For  purposes of this section the director of the department of
  9             commerce shall, on or before the first day of September of each  cal-
 10             endar  year,  establish  and  certify to the state tax commission the
 11             most current three-year average per capita personal income  level  in
 12             each  county  in  Idaho  and the statewide per capita personal income
 13             level for the most current preceding three (3)  calendar  years.  The
 14             levels  thus  certified  shall apply to the calculation of the credit
 15             under subsection (2)(b)(i) of this section for property qualifying in
 16             the taxable year beginning during the next calendar year.
 17        (3)  As used in this section the  term  "qualified  investment"  shall  be
 18    defined as in section 63-3029B, Idaho Code.
 19        (4)  The  credit  allowed  by subsection (1) of this section together with
 20    any credits carried forward under subsection (6) of  this  section  shall  not
 21    exceed in any one (1) taxable year the lesser of:
 22        (a)  The  amount  of tax due under sections 63-3024, 63-3025 and 63-3025A,
 23        Idaho Code, after allowance for all other credits permitted by this  chap-
 24        ter; or
 25        (b)  Five hundred thousand dollars ($500,000).
 26        (5)  In the case of a group of corporations filing a combined report under
 27    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 28    of  the group but not used by that member may be used by another member of the
 29    group, subject to the provisions of subsection (6) of this section, instead of
 30    carried over. For a combined group of corporations, credit carried forward may
 31    be claimed by any member of the group unless the member who earned the  credit
 32    is no longer included in the combined group.
 33        (6)  If  the  credit allowed by subsection (1) of this section exceeds the
 34    limitation under subsection (4) of this section, the excess amount may be car-
 35    ried forward for a period that does not exceed the next fourteen (14)  taxable
 36    years.
 37        (7)  In the event that property upon which the credit allowed by this sec-
 38    tion  has  been  used  ceases  to  qualify  for  the credit allowed by section
 39    63-3029B, Idaho Code, the recapture of credit under this section shall  be  in
 40    the same proportion and subject to the same provisions as the amount of credit
 41    required to be recaptured under section 63-3029B, Idaho Code.
 42        (8)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 43        tled  to  the credit or to an unused portion of the credit allowed by this
 44        section may transfer the unused credit to  another  taxpayer  required  to
 45        file a return under this chapter.
 46        (b)  Before  completing  a  transfer under this subsection, the transferor
 47        shall notify the state tax commission of its  intention  to  transfer  the
 48        credit  and the identity of the transferee. The state tax commission shall
 49        provide the transferor with a written statement  of the amount  of  credit
 50        available under this section as then appearing in the commission's records
 51        and  the  number  of  years the credit may be carried over. The transferor
 52        shall provide the transferee with the original statement.  The  transferee
 53        shall  attach a copy of the statement to any return in regard to which the
 54        transferred credit is claimed.
 55        (c)  In the event that after the transfer the state tax commission  deter-
                                                                        
                                           13
                                                                        
  1        mines  that  the amount of credit properly available under this section is
  2        less than the amount claimed by the transferor of the credit and shown  in
  3        the  statement  described in subsection (8)(b) of this section or that the
  4        credit is subject to recapture, the commission shall assess the amount  of
  5        overstated credit as taxes due from the transferor and not the transferee.
  6        The  assessment  shall  be made in the manner provided for a deficiency in
  7        taxes under this chapter.
  8        (9)  In addition to other needed rules, the state tax commission may  pro-
  9    mulgate rules prescribing:
 10        (a)  In  the  case  of  S corporations, partnerships, trusts or estates, a
 11        method of attributing the credit under this section to  the  shareholders,
 12        partners  or beneficiaries in proportion to their share of the income from
 13        the S corporation, partnership, trust or estate.
 14        (b)  A requirement that a transferor under subsection (8) of this section,
 15        prior to obtaining the written statement provided in subsection (8)(b)  of
 16        this  section,  post such bond or security as the state tax commission may
 17        require to secure any liability referred to in subsection (8)(c)  of  this
 18        section.   Such  rules shall provide an opportunity for a taxpayer, upon a
 19        showing of financial responsibility, to have the bond waiver,  for  notice
 20        of  denial  of  waiver in accordance with section 63-3045, Idaho Code, and
 21        for review in accordance with section 63-3045B, Idaho Code.
                                                                        
 22        SECTION 11.  That Section 63-3029E, Idaho Code, be, and the same is hereby
 23    amended to read as follows:
                                                                        
 24        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
 25    and in section 63-3029F, Idaho Code:
 26        (1)  (a) "New employee" means a person from whom Idaho income tax has been
 27        withheld, employed by the taxpayer, in a revenue-producing enterprise cre-
 28        ating  value-added natural resource products, and covered for unemployment
 29        insurance purposes under chapter 13, title 72, Idaho Code, during the tax-
 30        able year for which the credit allowed by section 63-3029F, Idaho Code, is
 31        claimed. A person shall be deemed to be so engaged if such person performs
 32        duties on:
 33             (i)   A regular full-time basis; or
 34             (ii)  A part-time basis if such person is customarily performing such
 35             duties at least twenty (20) hours per week.
 36        No credit shall be earned unless the new  employee  shall  have  performed
 37        such  duties  for the taxpayer for a minimum of nine (9) months during the
 38        taxable year for which the credit is claimed.
 39        (b)  The provisions of paragraph (a) of this  subsection  notwithstanding,
 40        no  credit  shall  be  allowed for employment of persons by a taxpayer who
 41        acquires a revenue-producing enterprise from another taxpayer or who oper-
 42        ates in a place of business the same or a substantially identical revenue-
 43        producing value-added natural resource  products  enterprise  business  as
 44        operated  by  another taxpayer within the prior twelve (12) months, except
 45        as the prior taxpayer would have qualified under the provisions  of  para-
 46        graph  (c)  of  this subsection. Employees transferred from a related tax-
 47        payer shall not be included in the computation of the credit.
 48        (c)  The number of employees during any  taxable  year  for  any  taxpayer
 49        shall  be  the mathematical average of the number of employees reported to
 50        the Idaho department of labor for employment security purposes during  the
 51        twelve (12) months of the taxable year which qualified under paragraph (a)
 52        of  this  subsection.  In  the event the business is in operation for less
 53        than the entire taxable year, the number of employees of the business  for
                                                                        
                                           14
                                                                        
  1        the  year  shall be the average number actually employed during the months
  2        of operation, providing that the qualifications of paragraph (a)  of  this
  3        subsection are met.
  4        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
  5    cation, manufacture or processing of any natural resource product.
  6        (3)  "Same or a substantially identical revenue-producing enterprise busi-
  7    ness" means a revenue-producing enterprise business in which the products pro-
  8    duced  or  sold, or the activities conducted are the same in character and use
  9    and are produced, sold or conducted in the same manner as,  or  for  the  same
 10    types  of customers as, the products or activities produced, sold or conducted
 11    in another revenue-producing enterprise business.
                                                                        
 12        SECTION 12.  That Section 63-3029F, Idaho Code, be, and the same is hereby
 13    amended to read as follows:
                                                                        
 14        63-3029F.  SPECIAL CREDIT AVAILABLE -- NEW  EMPLOYEES.  (1)  Any  taxpayer
 15    shall  be  allowed  a  credit, in an amount determined under subsection (2) of
 16    this section, against  the tax imposed by this chapter,  other  than  the  tax
 17    imposed  by section 63-3082, Idaho Code, for any taxable year during which the
 18    taxpayer's employment of new employees, as defined under section  63-3029E(1),
 19    Idaho  Code, increases above the taxpayer's average employment for either: (a)
 20    the prior taxable year, or (b) the average of three (3) prior  taxable  years,
 21    whichever  is higher. No credit shall be allowed under this section unless the
 22    number of new employees equals or exceeds one (1) person.
 23        (2)  The credit authorized in subsection (1) of this section shall be five
 24    hundred dollars ($500) per new employee, but the total  credit  allowed  shall
 25    not  exceed  three  and  one-quarter  percent  (3.25%)  of net income from the
 26    taxpayer's corporate, proprietorship, partnership, small business  corporation
 27    or  limited  liability  company revenue-producing enterprise business in which
 28    the employment occurred. Additionally, the total of this and all other credits
 29    allowed under this chapter except  for  the  credits  allowed  under  sections
 30    63-3024A,  63-3025D  and  63-3029,  Idaho  Code, taken during any taxable year
 31    shall not exceed forty-five percent (45%) of the tax otherwise imposed on  the
 32    taxpayer for the taxable year for which such credit is allowed.
 33        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
 34    section (2) of this section and the amount of credit for the taxable year from
 35    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 36    imposed  by  subsection  (2) of this section for the current taxable year, the
 37    excess attributable to the current taxable year's credit  shall  be  a  credit
 38    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 39    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 40    years, wherein the oldest available unused credit shall be used first, so long
 41    as the employment level for which the credit was granted is still maintained.
                                                                        
 42        SECTION  13.  That Sections 63-3029E and 63-3029F, Idaho Code, be, and the
 43    same are hereby repealed.
                                                                        
 44        SECTION 14.  That Chapter 30, Title 63, Idaho Code, be, and  the  same  is
 45    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 46    ignated as Section 63-3029E, Idaho Code, and to read as follows:
                                                                        
 47        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
 48    and in section 63-3029F, Idaho Code:
 49        (1)  (a)  "New  employee"  means  a  person from whom Idaho income tax has
 50        been withheld, employed by the taxpayer in a revenue-producing  enterprise
                                                                        
                                           15
                                                                        
  1        creating  value-added natural resource products, and covered for unemploy-
  2        ment insurance purposes under chapter 13, title 72, Idaho Code, during the
  3        taxable year for which the credit allowed by section 63-3029F, Idaho Code,
  4        is claimed. A person shall be deemed to be so engaged if such person  per-
  5        forms duties on:
  6             (i)   A regular full-time basis; or
  7             (ii)  A part-time basis if such person is customarily performing such
  8             duties at least twenty (20) hours per week.
  9        No  credit  shall  be  earned unless the new employee shall have performed
 10        such duties for the taxpayer for a minimum of nine (9) months  during  the
 11        taxable year for which the credit is claimed.
 12        (b)  The  provisions  of paragraph (a) of this subsection notwithstanding,
 13        no credit shall be allowed for employment of persons  by  a  taxpayer  who
 14        acquires a revenue-producing enterprise from another taxpayer or who oper-
 15        ates in a place of business the same or a substantially identical revenue-
 16        producing  value-added natural resource products enterprise as operated by
 17        another taxpayer within the prior twelve (12) months, except as the  prior
 18        taxpayer  would  have  qualified  under the provisions of paragraph (c) of
 19        this subsection. Employees transferred from a related taxpayer  shall  not
 20        be included in the computation of the credit.
 21        (c)  The  number  of  employees  during  any taxable year for any taxpayer
 22        shall be the mathematical average of the number of employees  reported  to
 23        the  Idaho department of labor for employment security purposes during the
 24        twelve (12) months of the taxable year which qualified under paragraph (a)
 25        of this subsection. In the event the business is  in  operation  for  less
 26        than  the entire taxable year, the number of employees of the business for
 27        the year shall be the average number actually employed during  the  months
 28        of  operation,  providing that the qualifications of paragraph (a) of this
 29        subsection are met.
 30        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
 31    cation, manufacture or processing of any natural resource product.
 32        (3)  "Same or  a  substantially  identical  revenue-producing  enterprise"
 33    means  a  revenue-producing enterprise in which the products produced or sold,
 34    or the activities conducted are the same in character and  use  and  are  pro-
 35    duced,  sold or conducted in the same manner as, or for the same types of cus-
 36    tomers as, the products or activities produced, sold or conducted  in  another
 37    revenue-producing enterprise.
                                                                        
 38        SECTION  15.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 39    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 40    ignated as Section 63-3029F, Idaho Code, and to read as follows:
                                                                        
 41        63-3029F.  SPECIAL  CREDIT  AVAILABLE  --  NEW EMPLOYEES. (1) Any taxpayer
 42    shall be allowed a credit, in an amount determined  under  subsection  (2)  of
 43    this  section,  against  the  tax  imposed by this chapter, other than the tax
 44    imposed by section 63-3082, Idaho Code, for any taxable year during which  the
 45    taxpayer's employment of new employees, as defined under section  63-3029E(1),
 46    Idaho  Code, increases above the taxpayer's average employment for either: (a)
 47    the prior taxable year, or (b) the average of three (3) prior  taxable  years,
 48    whichever  is higher. No credit shall be allowed under this section unless the
 49    number of new employees equals or exceeds one (1) person.
 50        (2)  The credit authorized in subsection (1) of this section shall be five
 51    hundred dollars ($500) per new employee, but the total  credit  allowed  shall
 52    not  exceed  three  and  one-quarter  percent  (3.25%)  of net income from the
 53    taxpayer's corporate, proprietorship, partnership, small business  corporation
                                                                        
                                           16
                                                                        
  1    or limited liability company revenue-producing enterprise in which the employ-
  2    ment  occurred.  Additionally, the total of this and all other credits allowed
  3    under this chapter except for the credits  allowed  under  sections  63-3024A,
  4    63-3025D  and  63-3029,  Idaho  Code,  taken during any taxable year shall not
  5    exceed forty-five percent (45%) of the tax otherwise imposed on  the  taxpayer
  6    for the taxable year for which such credit is allowed.
  7        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
  8    section (2) of this section and the amount of credit for the taxable year from
  9    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 10    imposed  by  subsection  (2) of this section for the current taxable year, the
 11    excess attributable to the current taxable year's credit  shall  be  a  credit
 12    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 13    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 14    years, wherein the oldest available unused credit shall be used first, so long
 15    as the employment level for which the credit was granted is still maintained.
                                                                        
 16        SECTION 16.  The provisions of Sections 5, 6, 8, 10, 11 and 12 of this act
 17    are  hereby declared to be nonseverable from other provisions within each sec-
 18    tion and if any provision of any of those sections or the application of  such
 19    provision  to  any  person or circumstance is declared invalid for any reason,
 20    such declaration shall render the entire section invalid but  not  other  sec-
 21    tions of this act.
                                                                        
 22        SECTION  17.  An  emergency  existing  therefor, which emergency is hereby
 23    declared to exist, Sections 1 through 12 and Section 16 of this act  shall  be
 24    in  full force and effect on and after passage and approval, and retroactively
 25    to January 1, 2001. Sections 13, 14 and 15 of this act shall be in full  force
 26    and effect on and after January 1, 2002.

Statement of Purpose / Fiscal Impact


                      STATEMENT OF PURPOSE
                                
                            RS11301

     This income tax and property tax relief bill permanently
reduces all individual income tax rates by 0.4 percent.  It
permanently reduces the corpporate income tax rate 0.4 percent. 
It expands the current capital gains exclusin from 60% to 100%
for certain tangible assets, on going.  Provides for an income
tax credit for Research and Development expenditure, for five
years.  New jobs credit, one year only.  Broadband Communications
Investment Tax Credit, five years.  County incentive, one time. 
It allows an income tax deduction for individual health
insurance, on going.

                         FISCAL IMPACT

                                                                 FY 2002   
Reduce individual income tax rates                  $58.4
Reduce corporate income tax rates                     6.8
Research and Development                              7.0** 
Boradband ITC                                         3.5**
County Incentive                                      7.2*
Expanded Job Credit                                   1.5*
Capital Gains Tax (eliminate 40% portion)             8.7
Inc. tax deduction for indiv. Health insurance        4.5

TOTAL REDUCTION IN GENERAL FUND for 2002            $97.6

* One time only                                       8.7
* Sunsets in five years                 
TOTAL REDUCTION IN GENERAL FUND FOR 2003            $88.9





Contact
Name: Representative Dolores Crow
      Representative Mike Moyle
Phone: 332-1000



STATEMENT OF PURPOSE/FISCAL NOTE             H 37