2001 Legislation
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HOUSE BILL NO. 200 – Income tax, rebate, credits

HOUSE BILL NO. 200

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H0200...............................................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 2002 and thereafter;
to provide for rebates of 10.6% of the 1999 income tax paid by individuals,
subject to a $25.00 minimum and $25,000 maximum; to increase the grocery
tax credit; to increase the capital gains deduction; to permanently reduce
the corporate income tax rate by 0.2%; to provide five new or expanded
income tax credits for research and development expenditures, creation of
new jobs, providing new venture capital, installing broadband
communications equipment, investing in counties with high unemployment or
low personal income; to change the child care deduction to a credit equal
to one-half the federal credit; and to permanently increase credit for
caring for a dependent over 65 years of age or caring for a person who is
developmentally disabled from $100 to $500.
                                                                        
02/09    House intro - 1st rdg - to printing
02/12    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 200
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INCOME TAX RELIEF; AMENDING SECTION 63-3024, IDAHO CODE,  TO  PRO-
  3        VIDE FOR A REDUCTION IN RATES OF ONE-TENTH OF ONE PERCENT FOR TAXABLE YEAR
  4        2001 AND TO PROVIDE FOR A REDUCTION IN RATES OF FOUR-TENTHS OF ONE PERCENT
  5        FOR TAXABLE YEAR 2002 AND THEREAFTER; AMENDING CHAPTER 30, TITLE 63, IDAHO
  6        CODE,  BY  THE ADDITION OF A NEW SECTION 63-3081, IDAHO CODE, TO PROVIDE A
  7        REBATE OF INCOME TAXES PAID BY INDIVIDUALS FOR TAXABLE YEARS BEGINNING  IN
  8        1999,  TO  DETERMINE  THE  RATE  OF THE REBATE, TO SET MAXIMUM AND MINIMUM
  9        AMOUNTS, TO PROVIDE PROCEDURES, TO APPROPRIATE  MONEYS  AND  TO  AUTHORIZE
 10        CONTRACTS;  REPEALING  SECTION  63-3022D,  IDAHO  CODE;  AMENDING  SECTION
 11        63-3022E,  IDAHO CODE, TO INCREASE THE DEDUCTION FOR DEPENDENTS SIXTY-FIVE
 12        YEARS OF AGE OR OLDER OR PERSONS WITH DEVELOPMENTAL DISABILITIES FROM  ONE
 13        THOUSAND  DOLLARS  TO  FIVE  THOUSAND  DOLLARS; AMENDING SECTION 63-3022H,
 14        IDAHO CODE, TO INCREASE THE DEDUCTION ALLOWED FOR QUALIFIED CAPITAL  GAINS
 15        AND  TO ADD CERTAIN INVESTMENTS HELD BY IDAHO PRIVATE VENTURE CAPITAL COM-
 16        PANIES FOR A PERIOD OF THREE YEARS TO THE PROPERTY QUALIFYING FOR THE CAP-
 17        ITAL GAINS DEDUCTION AND TO MAKE TECHNICAL CORRECTIONS;  AMENDING  SECTION
 18        63-3024A,  IDAHO  CODE,  TO INCREASE THE INCOME TAX CREDIT FOR SALES TAXES
 19        PAID BY INDIVIDUALS AND TO MAKE TECHNICAL  CORRECTIONS;  AMENDING  SECTION
 20        63-3025, IDAHO CODE, TO REDUCE THE CORPORATE INCOME TAX RATE FROM EIGHT TO
 21        SEVEN  AND  EIGHT-TENTHS  PERCENT  FOR  TAXABLE YEAR 2001 AND TO SEVEN AND
 22        FIVE-TENTHS PERCENT FOR TAXABLE YEAR 2002 AND THEREAFTER; AMENDING SECTION
 23        63-3025A, IDAHO CODE, TO REDUCE THE  CORPORATE  FRANCHISE  TAX  RATE  FROM
 24        EIGHT  PERCENT TO THE RATE OF THE CORPORATE INCOME TAX AND TO MAKE TECHNI-
 25        CAL CORRECTIONS; AMENDING SECTION 63-3025D, IDAHO CODE,  TO  INCREASE  THE
 26        PAYMENT  FOR  DEPENDENTS  SIXTY-FIVE YEARS OF AGE OR OLDER OR PERSONS WITH
 27        DEVELOPMENTAL DISABILITIES FROM ONE HUNDRED DOLLARS TO FIVE  HUNDRED  DOL-
 28        LARS  AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-3029B, IDAHO
 29        CODE,  TO  PROVIDE  THAT  TAXPAYERS  MAKING  EXPENDITURES  FOR   QUALIFIED
 30        BROADBAND  EQUIPMENT  ARE  ENTITLED TO THE CREDIT AND TO REVISE PROCEDURES
 31        FOR RECAPTURE;  AMENDING SECTIONS 63-3029E AND 63-3029F,  IDAHO  CODE,  TO
 32        EXPAND  THE  NEW JOBS CREDIT BY REMOVING THE LIMITATION OF QUALIFYING TAX-
 33        PAYERS  TO  REVENUE-PRODUCING  ENTERPRISE  CREATING  VALUE-ADDED   NATURAL
 34        RESOURCE  PRODUCTS;   AMENDING  CHAPTER  30,  TITLE 63, IDAHO CODE, BY THE
 35        ADDITION OF A NEW SECTION 63-3029G, IDAHO CODE, TO PROVIDE AN  INCOME  TAX
 36        CREDIT  FOR CERTAIN EXPENDITURES RELATING TO RESEARCH ACTIVITIES CONDUCTED
 37        IN IDAHO, TO PROVIDE A SUNSET, TO PROVIDE A CARRYOVER OF  UNUSED  CREDITS,
 38        TO  PROVIDE  DEFINITIONS  AND  TO  PROVIDE  PROCEDURES;  AMENDING  SECTION
 39        63-3029H,  IDAHO  CODE,  TO  REDESIGNATE THE SECTION; AMENDING CHAPTER 30,
 40        TITLE 63, IDAHO CODE, BY THE ADDITION OF  A NEW  SECTION  63-3029H,  IDAHO
 41        CODE,  TO  PROVIDE A CREDIT FOR EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE;
 42        AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF  A NEW  SEC-
 43        TION  63-3029I,  IDAHO  CODE,  TO PROVIDE AN INCOME TAX CREDIT FOR CERTAIN
 44        EXPENDITURES RELATING TO HIGH SPEED  BROADBAND  COMMUNICATIONS  ACCESS  IN
 45        IDAHO,  TO  PROVIDE A SUNSET, TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO
 46        PROVIDE DEFINITIONS AND TO PROVIDE PROCEDURES; AMENDING CHAPTER 30,  TITLE
                                                                        
                                           2
                                                                        
  1        63,  IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-3029J, IDAHO CODE, TO
  2        PROVIDE AN INCOME TAX CREDIT FOR CERTAIN EXPENDITURES RELATING TO  INVEST-
  3        MENT  IN  AREAS  IN IDAHO WITH HIGH UNEMPLOYMENT OR LOW PERSONAL INCOME AT
  4        THE ELECTION OF THE TAXPAYER, TO PROVIDE A SUNSET, TO PROVIDE A  CARRYOVER
  5        OF  UNUSED  CREDITS,  TO  PROVIDE  DEFINITIONS  AND TO PROVIDE PROCEDURES;
  6        AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A  NEW  SEC-
  7        TION  63-3029K, IDAHO CODE, TO PROVIDE A TEN PERCENT INCOME TAX CREDIT FOR
  8        INVESTMENTS IN IDAHO PRIVATE VENTURE CAPITAL COMPANIES, TO PROVIDE A  SUN-
  9        SET,  TO PROVIDE A CARRYOVER OF UNUSED CREDITS, TO PROVIDE DEFINITIONS AND
 10        TO PROVIDE PROCEDURES; REPEALING SECTIONS  63-3029E  AND  63-3029F,  IDAHO
 11        CODE;  AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
 12        SECTION 63-3029E, IDAHO CODE, TO PROVIDE DEFINITIONS AND  CONSTRUCTION  OF
 13        TERMS; AMENDING CHAPTER 30, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW
 14        SECTION 63-3029F, IDAHO CODE, TO PROVIDE SPECIAL CREDITS TO THE INCOME TAX
 15        FOR  NEW  EMPLOYEES FOR AN ENTERPRISE THAT PRODUCES, ASSEMBLES, FABRICATES
 16        OR PROCESSES NATURAL RESOURCE PRODUCTS; PROVIDING FOR  NONSEVERABILITY  OF
 17        CERTAIN PROVISIONS OF THIS ACT; DECLARING AN EMERGENCY, PROVIDING RETROAC-
 18        TIVE  APPLICATION  FOR CERTAIN PROVISIONS OF THIS ACT AND PROVIDING EFFEC-
 19        TIVE DATES.
                                                                        
 20    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 21        SECTION 1.  That Section 63-3024, Idaho Code, be, and the same  is  hereby
 22    amended to read as follows:
                                                                        
 23        63-3024.  INDIVIDUALS' TAX AND TAX ON ESTATES AND TRUSTS. For taxable year
 24    20001,  a  tax  measured by Idaho taxable income as defined in this chapter is
 25    hereby imposed upon every individual, trust, or estate required by this  chap-
 26    ter to file a return.
 27        (a)  (i)  The  tax  imposed  upon individuals, trusts and estates shall be
 28    computed at the following rates:
 29    When Idaho taxable income is:    The rate is:
 30    Less than $1,000                 One and nine-tenths percent (1.9%)
 31    $1,000 but less than $2,000      $19, plus  three and nine-tenths
 32                                     percent (3.9%) of the amount over $1,000
 33    $2,000 but less than $3,000      $58, plus four and  four-tenths
 34                                     percent (4.4%) of the amount over $2,000
 35    $3,000 but less than $4,000      $102, plus five and  four-tenths
 36                                     percent (5.4%) of the amount over $3,000
 37    $4,000 but less than $5,000      $156, plus six and  four-tenths
 38                                     percent (6.4%) of the amount over $4,000
 39    $5,000 but less than $7,500      $220, plus seven and  four-tenths
 40                                     percent (7.4%) of the amount over $5,000
 41    $7,500 but less than $20,000     $405, plus seven and seven-tenths
 42                                     percent (7.7%) of the amount over $7,500
 43    Over $20,000                     $1,367.50, plus eight and one-tenth
 44                                     percent (8.1%) of the amount over $20,000
 45        (ii) For taxable year 20012 and each taxable year thereafter, a  tax  mea-
 46    sured  by  Idaho  taxable  income as defined in this chapter is hereby imposed
 47    upon every individual, trust, or estate required by this  chapter  to  file  a
 48    return.
 49    The  tax imposed upon individuals, trusts and estates shall be computed at the
 50    following rates:
 51    When Idaho taxable income is:    The rate is:
 52    Less than $1,000                 Two percent (2.0%)
                                                                        
                                           3
                                                                        
  1    $1,000 but less than $2,000      $20, plus four percent (4.0%)
  2                                     of the amount over $1,000
  3    $2,000 but less than $3,000      $60, plus four and one-half percent
  4                                     (4.5%) of the amount over $2,000
  5    $3,000 but less than $4,000      $105, plus five and one-half percent
  6                                     (5.5%) of the amount over $3,000
  7    $4,000 but less than $5,000      $160, plus six and one-half percent
  8                                     (6.5%) of the amount over $4,000
  9    $5,000 but less than $7,500      $225, plus seven and one-half percent
 10                                     (7.5%) of the amount over $5,000
 11    $7,500 but less than $20,000     $412.50, plus seven and eight-tenths percent
 12                                     (7.8%) of the amount over $7,500
 13    Over $20,000                     $1,387.50, plus eight and two-tenths percent
 14                                     (8.2%) of the amount over $20,000
 15    Less than $1,000                 One and five-tenths percent (1.5%)
 16    $1,000 but less than $2,000      $15, plus three and five-tenths percent
 17                                     (3.5%) of the amount over $1,000
 18    $2,000 but less than $3,000      $50, plus four percent
 19                                     (4.0%) of the amount over $2,000
 20    $3,000 but less than $4,000      $90, plus five percent
 21                                     (5.0%) of the amount over $3,000
 22    $4,000 but less than $5,000      $140, plus six percent
 23                                     (6.0%) of the amount over $4,000
 24    $5,000 but less than $7,500      $200, plus seven percent
 25                                     (7.0%) of the amount over $5,000
 26    $7,500 but less than $20,000     $375, plus seven and three-tenths percent
 27                                     (7.3%) of the amount over $7,500
 28    Over $20,000                     $1,287.50, plus seven and seven-tenths percent
 29                                     (7.7%) of the amount over $20,000
 30        For taxable year 2000 and each year thereafter, the state  tax  commission
 31    shall  prescribe  a factor which shall be used to compute the Idaho income tax
 32    brackets provided in  subsections (a)(i) and (a)(ii) of this section. The fac-
 33    tor shall provide an adjustment to the Idaho tax brackets  so  that  inflation
 34    will not result in a tax increase. The Idaho tax brackets shall be adjusted as
 35    follows:  multiply  the  bracket amounts by the percentage (the consumer price
 36    index for the calendar year immediately preceding the calendar year  to  which
 37    the  adjusted brackets will apply divided by the consumer price index for cal-
 38    endar year 1998). For the purpose of  this  computation,  the  consumer  price
 39    index  for  any calendar year is the average of the consumer price index as of
 40    the close of the twelve (12) month period for the immediately preceding calen-
 41    dar year as adopted by the state tax commission. This adoption shall be exempt
 42    from the provisions of chapter 52, title 67, Idaho Code.  The  consumer  price
 43    index  shall  mean  the consumer price index for all U.S. urban consumers pub-
 44    lished by the United States department of  labor.  The  state  tax  commission
 45    shall  annually  include the factor as provided in this subsection to multiply
 46    against Idaho taxable income in the brackets above to arrive  at  that  year's
 47    taxable income for tax bracket purposes.
 48        (b)  In  case  a joint return is filed by husband and wife pursuant to the
 49    provisions of section 63-3031, Idaho Code, the tax  imposed  by  this  section
 50    shall  be twice the tax which would be imposed on one-half (1/2) of the aggre-
 51    gate Idaho taxable income. For the purposes of this section,  a  return  of  a
 52    surviving spouse, as defined in section 2(a) of the Internal Revenue Code, and
 53    a  head of household, as defined in section 2(b) of the Internal Revenue Code,
 54    shall be treated as a joint return and the tax imposed shall be twice the  tax
 55    which would be imposed on one-half (1/2) of the Idaho taxable income.
                                                                        
                                           4
                                                                        
  1        (c)  The  state  tax commission shall compute and publish Idaho income tax
  2    liability for taxpayers at the midpoint  of  each  bracket  of  Idaho  taxable
  3    income  in  fifty  dollar  ($50.00) steps to fifty thousand dollars ($50,000),
  4    rounding such calculations to the  nearest  dollar.  Taxpayers  having  income
  5    within  such brackets shall file returns based upon and pay taxes according to
  6    the schedule thus established. The state tax commission shall promulgate rules
  7    defining the conditions upon which such returns shall be filed.
                                                                        
  8        SECTION 2.  That Chapter 30, Title 63, Idaho Code, be,  and  the  same  is
  9    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 10    ignated as Section 63-3081, Idaho Code, and to read as follows:
                                                                        
 11        63-3081.  REBATE OF INCOME TAX. (1) Subject to  the  limitations  of  this
 12    section,  in  regard to each individual income tax return required to be filed
 13    pursuant to section  63-3030, Idaho Code, and that is actually  filed,  for  a
 14    twelve  (12)  month taxable year beginning in 1999 for which tax is imposed by
 15    section 63-3024, Idaho Code, on at least one dollar ($1.00) of  Idaho  taxable
 16    income,  the  state  tax  commission shall, on a one-time basis, rebate to the
 17    taxpayer named on the return the amount specified in subsection  (2)  of  this
 18    section.  In the case of a joint return, the rebate shall be paid to both tax-
 19    payers jointly.
 20        (2)  (a)  The rebate provided by subsection (1) of this section  shall  be
 21        ten  and  six-tenths  percent  (10.6%) of the amount of tax computed under
 22        section 63-3024, Idaho Code, reduced by credits provided by:
 23             (i)   Section 63-3029, Idaho Code, relating to taxes paid to  another
 24             state;
 25             (ii)  Sections 63-3029A and 63-3029C, Idaho Code, relating to certain
 26             charitable contributions;
 27             (iii) Section 63-3029B, Idaho Code, relating to capital investments;
 28             (iv)  Section  63-3029D,  Idaho Code, relating to qualified equipment
 29             utilizing postconsumer waste or postindustrial waste.
 30        (b)  When the amount of a rebate payable under subsection (2)(a)  of  this
 31        section  is  less  than  twenty-five  dollars  ($25.00), the amount of the
 32        rebate shall be twenty-five dollars ($25.00). When the amount of a  rebate
 33        payable  under subsection (2)(a) of this section is more than two thousand
 34        five hundred dollars ($2,500), the amount of the rebate shall be two thou-
 35        sand five hundred dollars ($2,500). In the case of married taxpayers  fil-
 36        ing  separate  returns,  only  one  (1) minimum or maximum rebate shall be
 37        paid.
 38        (3)  No rebate shall be paid pursuant to  this  section  in  regard  to  a
 39    return  described in subsection (1) of this section if the return is not filed
 40    within three (3) years of the original due date of the return, without  regard
 41    to  extensions.  In  the  event  that  the amount of tax due on a return filed
 42    within the time required by this subsection is  amended  by  the  taxpayer  or
 43    changed  by the state tax commission the rebate provided by this section shall
 44    be adjusted proportionally. The state  tax  commission  may  offset  a  rebate
 45    against taxes assessed the taxpayer but unpaid.
 46        (4)  In  the  case  of a short period return, the rebates provided by this
 47    section shall be reduced in proportion to the portion of calendar year 1999 to
 48    which the return applies.
 49        (5)  Except as provided in this subsection, no application  for  a  rebate
 50    provided  in  this  section  shall be required. The state tax commission shall
 51    cause each rebate to be mailed to the taxpayer or  taxpayers  at  the  address
 52    shown  on  the  return,  unless,  as a result of a more recent return, a newer
 53    address is shown on the commission's records. The  state  tax  commission  may
                                                                        
                                           5
                                                                        
  1    provide a procedure by which rebates that are returned or undeliverable may be
  2    claimed.
  3        (6)  Any  person  aggrieved  by  any action of the state tax commission in
  4    regard to the rebates provided in this section shall file a petition with  the
  5    state  tax  commission  in the manner provided in section 63-3045, Idaho Code.
  6    Such a petition shall be subject to administrative and judicial review in  the
  7    manner provided by sections 63-3045 through 63-3049, Idaho Code.
  8        (7)  Rebates  authorized  by  this  section  shall  be paid from the state
  9    refund account established by section 63-3067,  Idaho  Code,  from  which  the
 10    amounts  necessary  to  pay  the rebates are hereby appropriated. In the event
 11    that, at the time the rebates are paid, there is an  insufficient  balance  in
 12    the  state  refund  account, the state board of examiners, upon application by
 13    the state tax commission, shall transfer sufficient  funds  from  the  general
 14    fund  to  make  the rebate payments and any other refunds due and payable from
 15    the state refund account.
 16        (8)  The state tax commission, the state treasurer and the state  control-
 17    ler  may  contract  with  a  commercial  bank for some or all of the services,
 18    including issuing payments,  relating to payment of  the  rebate  provided  in
 19    this section.
                                                                        
 20        SECTION  3.  That Section 63-3022D, Idaho Code, be, and the same is hereby
 21    repealed.
                                                                        
 22        SECTION 4.  That Section 63-3022E, Idaho Code, be, and the same is  hereby
 23    amended to read as follows:
                                                                        
 24        63-3022E.  HOUSEHOLD  DEDUCTION  FOR DEPENDENTS SIXTY-FIVE YEARS OF AGE OR
 25    OLDER OR PERSONS WITH DEVELOPMENTAL DISABILITIES. (1) An additional  deduction
 26    from  taxable  income  shall be allowed in the case of an individual who main-
 27    tains a household, which includes as an immediate member of the family  resid-
 28    ing  in  that  household, one (1) or more individuals sixty-five (65) years of
 29    age or older, or a person with developmental disabilities as defined  in  sub-
 30    section (5) of section 66-402, Idaho Code, regardless of the age of the person
 31    when  such  developmental disability appeared, each of whom receives more than
 32    one-half (1/2) of his or her support for the  year  from  the  individual  who
 33    maintains  the  household. The amount of the deduction shall be one five thou-
 34    sand dollars ($15,000)  for each individual sixty-five (65) years  of  age  or
 35    older or with developmental disabilities.
 36        (2)  There shall not be allowed more than three (3) deductions of one five
 37    thousand dollars ($15,000) under the provisions of this section on any one (1)
 38    return.
 39        (3)  No  deductions  shall be allowed under this section for the person(s)
 40    in whose name(s) the income tax return is filed except as set forth in subsec-
 41    tion (4) of this section.
 42        (4)  A deduction of one five thousand dollars ($15,000) shall  be  allowed
 43    under this section for a person with a developmental disability, as defined in
 44    subsection (5) of section 66-402, Idaho Code, who is filing his own return.
                                                                        
 45        SECTION  5.  That Section 63-3022H, Idaho Code, be, and the same is hereby
 46    amended to read as follows:
                                                                        
 47        63-3022H.  DEDUCTION OF CAPITAL  GAINS.  (1)  If  an  individual  taxpayer
 48    reports  a  net  capital gain in determining taxable income, sixty one hundred
 49    percent (6100%) of the net capital gain from the sale or exchange of qualified
 50    property shall be a deduction in determining taxable income.
                                                                        
                                           6
                                                                        
  1        (2)  The deduction provided in this section is limited to  the  amount  of
  2    the net capital gain from all property included in federal taxable income. Net
  3    capital  gains  treated  as ordinary income by the iInternal rRevenue cCode do
  4    not qualify for the deduction allowed in this section. The deduction otherwise
  5    allowable under this section shall be reduced by the  amount  of  any  federal
  6    capital gains deduction relating to such property, but not below zero.
  7        (3)  As  used  in  this  section  "qualified property" means the following
  8    property having an Idaho situs at the time of sale:
  9        (a)  Real property held at least eighteen (18) months;
 10        (b)  Tangible personal property used in Idaho for  at  least  twelve  (12)
 11        months by a revenue-producing enterprise;
 12        (c)  Cattle or horses held for breeding, draft, dairy or sporting purposes
 13        for  at  least  twenty-four (24) months if more than one-half (1/2) of the
 14        taxpayer's gross income (as defined in  section  61(a)  of  the  iInternal
 15        rRevenue  cCode)  for  the taxable year is from farming or ranching opera-
 16        tions in Idaho;
 17        (d)  Breeding livestock other than cattle or horses held at  least  twelve
 18        (12) months if more than one-half (1/2) of the taxpayer's gross income (as
 19        defined  in section 61(a) of the iInternal rRevenue cCode) for the taxable
 20        year is from farming or ranching operations in Idaho;
 21        (e)  Timber grown in Idaho and held at least twenty-four (24) months;
 22        (f)  An equity interest held by an Idaho private venture  capital  company
 23        as  defined in section 63-3029K, Idaho Code, including stock in a corpora-
 24        tion, interest in a partnership or membership in a limited liability  com-
 25        pany, if:
 26             (i)   The Idaho private venture capital company or its investors have
 27             held  the  equity interest for at least three (3) years from the date
 28             of the original investment; and
 29             (ii)  The equity interest is issued by a business enterprise that  is
 30             headquartered  and  managed  in Idaho whose business activity for the
 31             entity's three (3) taxable years immediately preceding  the  sale  is
 32             entirely  in Idaho or at least fifty percent (50%) in Idaho as deter-
 33             mined by the average  property  and  payroll  factors  under  section
 34             63-3027, Idaho Code.
 35        (g)  In  determining the period for which property subject to this section
 36        has been held by a  taxpayer,  the  provisions  of  section  1223  of  the
 37        iInternal  rRevenue cCode shall apply, except that when the holding period
 38        includes any period during which the taxpayer held property other than the
 39        property sold, all property held during the holding  period  must  qualify
 40        under this section.
 41        (4)  If  an individual reports a capital gain from qualified property from
 42    an S corporation or a partnership, a deduction shall  be  allowed  under  this
 43    section  only  to the extent the individual held his interest in the income of
 44    the S corporation or the partnership for the time required by  subsection  (3)
 45    of this section for the property sold.
 46        (5)  If  an individual reports a capital gain from an estate, no deduction
 47    shall be allowed under this section unless the holding period required in sub-
 48    section (3) of this section was satisfied by the decedent, the estate, or  the
 49    beneficiary, or a combination thereof.
 50        (6)  If  an  individual  reports a capital gain from a trust, no deduction
 51    shall be allowed under this section unless the holding period required in sub-
 52    section (3) of this section was satisfied by the grantor, the  trust,  or  the
 53    beneficiary, or a combination thereof.
 54        (7)  As used in this section "revenue-producing enterprise" means:
 55        (a)  The  production, assembly, fabrication, manufacture, or processing of
                                                                        
                                           7
                                                                        
  1        any agricultural, mineral or manufactured product;
  2        (b)  The storage, warehousing, distribution, or sale at wholesale  of  any
  3        products of agriculture, mining or manufacturing;
  4        (c)  The feeding of livestock at a feedlot;
  5        (d)  The  operation  of  laboratories  or other facilities for scientific,
  6        agricultural, animal husbandry, or industrial  research,  development,  or
  7        testing.
                                                                        
  8        SECTION  6.  That Section 63-3024A, Idaho Code, be, and the same is hereby
  9    amended to read as follows:
                                                                        
 10        63-3024A.  CREDITS AND REFUNDS. (a) Any resident individual  not  entitled
 11    to the credit allowed in subsection (b)(1), who is required to file by law and
 12    who  has  filed  an Idaho income tax return, shall be allowed a credit against
 13    taxes due under the Idaho income tax act equal to the amount of fifteen thirty
 14    dollars ($1530.00) for each personal exemption for which a deduction  is  per-
 15    mitted  by  section 151(b) and (c) of the Internal Revenue Code if such deduc-
 16    tion is claimed on the taxpayer's Idaho income tax return, and if the individ-
 17    ual for whom the deduction is claimed is a resident of the state of Idaho.  If
 18    taxes due are less than the total credit allowed, the taxpayer shall be paid a
 19    refund  equal  to the balance of the unused credit. If the credit or refund is
 20    not claimed for the year for which the individual income tax return is  filed,
 21    the  right  thereafter  to claim such credit or refund shall be forfeited. The
 22    state tax commission shall prescribe the method by which the refund,  if  any,
 23    is to be made to the taxpayer.
 24        (b) (1)  A  resident  individual  who has reached his sixty-fifth birthday
 25        before the end of his taxable year, who is required to file by law and who
 26        has filed an Idaho income tax return, shall be allowed  a  credit  against
 27        taxes  due  under  the  Idaho income tax act equal to the amount of thirty
 28        sixty dollars ($360.00) for each personal exemption representing  himself,
 29        a  spouse  over  the age of sixty-five (65) years, or a dependent over the
 30        age of sixty-five (65) years, but shall be allowed a credit against  taxes
 31        due  under  the  Idaho  income  tax  act  equal  to fifteen thirty dollars
 32        ($1530.00) for each personal exemption representing a spouse or  dependent
 33        under  the  age  of  sixty-five (65) years. If taxes due are less than the
 34        total credit allowed, the taxpayer shall be paid a  refund  equal  to  the
 35        balance  of  the unused credit. If the credit or refund is not claimed for
 36        the year for which the individual income tax return is  filed,  the  right
 37        thereafter  to  claim  such credit or refund shall be forfeited. The state
 38        tax commission shall prescribe the method by which the refund, if any,  is
 39        to be made to the taxpayer.
 40        (2)  A resident individual who has reached his sixty-fifth birthday and is
 41        not  required  by  law  to  file  an  Idaho  income tax return and who has
 42        received no credit or refund under any other subsection of  this  section,
 43        shall  be  entitled  to  a  refund  of thirty sixty dollars ($360.00). Any
 44        refund shall be paid to such individual only upon his  making  application
 45        therefor at such time and in such manner as may be prescribed by the state
 46        tax commission.
 47        (c)  A resident individual of the state of Idaho who is:
 48        (i)   blind, or
 49        (ii)  a  disabled  American  veteran  of  any war engaged in by the United
 50        States, whose disability is recognized as a service  connected  disability
 51        of a degree of ten per cent percent (10%) or more, or who is in receipt of
 52        a  pension  for nonservice connected disabilities, in accordance with laws
 53        and regulations administered by the United States veterans administration,
                                                                        
                                           8
                                                                        
  1        substantiated by a statement as to status signed by a responsible  officer
  2        of the United States veterans administration, or
  3        (iii) over sixty-two (62) years of age, and has been allowed none, or less
  4        than  all,  of  the credit provided by subsection (a) or subsection (b) of
  5        this section, shall be entitled to a payment from the refund  fund  in  an
  6        amount  equal  to fifteen thirty dollars ($1530.00), or the balance of his
  7        unused credit, whichever is less, upon making application therefor at such
  8        time and in such manner as the state tax commission may prescribe.
  9        (d)  Any part-year resident entitled to a credit under this section  shall
 10    receive  a  proportionate credit, in the manner above provided, reflecting the
 11    part of the year in which he was domiciled in this state.
 12        (e)  No credit or refund may be claimed for an exemption which  represents
 13    a person who has himself filed an Idaho income tax return claiming a deduction
 14    for  his  own personal exemption, and in no event shall more than one (1) tax-
 15    payer be allowed a credit or refund for the same exemption, or under more than
 16    one (1) subsection of this section.
 17        (f)  The refunds authorized by this section shall be paid from  the  state
 18    refund  fund  in the same manner as the refunds authorized by section 63-3067,
 19    Idaho Code.
 20        (g)  An application for any refund which is due and payable under the pro-
 21    visions of this section must be filed with the  state  tax  commission  within
 22    three (3) years of:
 23        (i)  the due date, including extensions, of the return required under sec-
 24        tion  63-3030,  Idaho Code, if the applicant is required to file a return,
 25        or
 26        (ii) the 15th day of April of the year following the  year  to  which  the
 27        application relates if the applicant is not required to file a return.
                                                                        
 28        SECTION  7.  That  Section 63-3025, Idaho Code, be, and the same is hereby
 29    amended to read as follows:
                                                                        
 30        63-3025.  TAX ON CORPORATE INCOME. For taxable  years  commencing  on  and
 31    after  January  1,  1987  2001,  a  tax is hereby imposed on the Idaho taxable
 32    income of a corporation which transacts or is authorized to transact  business
 33    in this state or which has income attributable to this state. The tax shall be
 34    equal  to  eight seven and eight-tenths percent (7.8%) of Idaho taxable income
 35    for taxable year 2001 and seven and five-tenths percent (7.5%) of  Idaho  tax-
 36    able  income for taxable year 2002 and thereafter; provided, however, that the
 37    tax shall not be less than twenty dollars ($20.00); provided further that  the
 38    twenty  dollar ($20.00) minimum payment shall not be collected from nonproduc-
 39    tive mining corporations. The tax imposed by this section shall not  apply  to
 40    corporations taxed pursuant to the provisions of section 63-3025A, Idaho Code.
                                                                        
 41        SECTION  8.  That Section 63-3025A, Idaho Code, be, and the same is hereby
 42    amended to read as follows:
                                                                        
 43        63-3025A.  FRANCHISE TAX. For taxable years commencing on and after  Janu-
 44    ary  1,  1987  2001, a franchise tax shall be imposed upon any corporation for
 45    the privilege of exercising its corporate franchise within  the  state  during
 46    such  taxable  year,  including,  but  not limited to, corporations engaged in
 47    business in Idaho for the exclusive purpose of performing contracts  with  the
 48    United States department of energy at the Idaho national engineering and envi-
 49    ronmental laboratory, which tax shall be measured by income which is attribut-
 50    able to this state under the provisions of this chapter and which tax shall be
 51    equal  to  eight  percent (8%) of Idaho taxable income at the rate provided in
                                                                        
                                           9
                                                                        
  1    section 63-3025, Idaho Code; provided, however, that the tax shall not be less
  2    than twenty dollars ($20.00); provided further that the twenty dollar ($20.00)
  3    minimum payment shall not be collected from nonproductive mining corporations;
  4    but the twenty dollar ($20.00) minimum tax shall apply to corporations  quali-
  5    fied  to file returns and actually filing returns under the provisions of sub-
  6    chapter "S" of the Internal Revenue Code.
                                                                        
  7        SECTION 9.  That Section 63-3025D, Idaho Code, be, and the same is  hereby
  8    amended to read as follows:
                                                                        
  9        63-3025D.  PAYMENT FOR DEPENDENTS SIXTY-FIVE YEARS OF AGE OR OLDER OR PER-
 10    SONS  WITH  DEVELOPMENTAL DISABILITIES. (1) In lieu of the deduction from tax-
 11    able income allowed by section 63-3022E, Idaho Code, a resident individual who
 12    maintains a household, which  includes as an immediate member  of  the  family
 13    residing  in that household, one (1) or more individuals sixty-five (65) years
 14    of age or older or individuals with developmental disabilities, as defined  in
 15    subsection  (5) of section 66-402, Idaho Code, each of whom receives more than
 16    one-half (1/2) of his or her support for the  year  from  the  individual  who
 17    maintains  the  household,  shall  be  entitled  to  a payment from the refund
 18    account of one five hundred dollars ($1500) for each such  elderly  member  of
 19    the  family or family member with a developmental disability. Any such payment
 20    shall be paid to such individual only upon his making application therefor  at
 21    such time and in such manner as may be prescribed by the state tax commission.
 22        (2)  No  more  than three (3) such payments shall be made under the provi-
 23    sions of this section to any one (1) individual in any calendar year.
 24        (3)  No payment may be claimed under the provisions of this section by the
 25    individual himself except as set forth in subsection (4) of this section.
 26        (4)  A credit of one five hundred dollars ($1500) shall be  allowed  under
 27    this  section  for a person with a developmental disability as defined in sub-
 28    section (5) of section 66-402, Idaho Code, who is filing his own tax return.
                                                                        
 29        SECTION 10.  That Section 63-3029B, Idaho Code, be, and the same is hereby
 30    amended to read as follows:
                                                                        
 31        63-3029B.  INCOME TAX CREDIT FOR CAPITAL INVESTMENT. (1) At  the  election
 32    of  the taxpayer there shall be allowed, subject to the applicable limitations
 33    provided herein as a credit against the income  tax  imposed  by  chapter  30,
 34    title 63, Idaho Code, an amount equal to the sum of:
 35        (a)  The tax credit carryovers; and
 36        (b)  The tax credit for the taxable year.
 37        (2)  The  maximum  allowable  amount of the credit for the current taxable
 38    year shall be three percent (3%) of the amount of qualified  investments  made
 39    during the taxable year.
 40        (3)  As  used  in this section "qualified investment" means certain depre-
 41    ciable property which:
 42        (a)  (i)  Is eligible for the federal investment tax credit, as defined in
 43             sections 46(c) and 48 of the Internal Revenue  Code  subject  to  the
 44             limitations provided for certain regulated companies in section 46(f)
 45             of  the  Internal Revenue Code and is not a motor vehicle under eight
 46             thousand (8,000) pounds gross weight; or
 47             (ii) Is qualified broadband equipment as defined in section 63-3029I,
 48             Idaho Code; and
 49        (b)  Is acquired, constructed, reconstructed, erected or placed into  ser-
 50        vice after December 31, 1981; and
 51        (c)  Has a situs in Idaho.
                                                                        
                                           10
                                                                        
  1        (4)  Notwithstanding  the  provisions  of  subsections (1) and (2) of this
  2    section, the amount of the credit allowed shall not exceed fifty percent (50%)
  3    of the tax liability of the taxpayer.
  4        (5)  If the sum of credit carryovers from the credit allowed by subsection
  5    (2) of this section and the amount of credit for the  taxable  year  from  the
  6    credit allowed by subsection (2) of this section exceed the limitation imposed
  7    by  subsection  (4)  of  this section for the current taxable year, the excess
  8    attributable to the current taxable  year's  credit  shall  be  an  investment
  9    credit carryover to the fourteen (14) succeeding taxable years. In the case of
 10    a  group of corporations filing a combined report under section 63-3027, Idaho
 11    Code, or sections 63-3027B through 63-3027E, Idaho Code, credit earned by  one
 12    (1)  member  of  the group but not  used by that member may be used by another
 13    member of the group, subject to the provisions of subsection (4) of this  sec-
 14    tion,  instead  of  carried  over. The entire amount of unused credit shall be
 15    carried forward to the earliest of the succeeding years,  wherein  the  oldest
 16    available  unused credit shall be used first, so long as the qualified invest-
 17    ment property for which the unused credit was granted  still  maintains  Idaho
 18    situs.  For  a  combined  group of corporations, credit carried forward may be
 19    claimed by any member of the group unless the member who earned the credit  is
 20    no longer included in the combined group.
 21        (6)  Any recapture of the credit allowed by subsection (2) of this section
 22    on  property disposed of or ceasing to qualify, prior to the close of its use-
 23    ful life the recapture period, shall be determined according to the applicable
 24    recapture provisions of the Internal Revenue Code. In the case  of  a  unitary
 25    group  of corporations, the increase in tax due to the recapture of investment
 26    tax credit must be reported by the member of the group who earned  the  credit
 27    regardless of which member claimed the credit against tax.
 28        (7)  For  the purpose of determining whether property placed in service is
 29    a "qualified investment" as defined in subsection (3)  of  this  section,  the
 30    provisions of section 49 of the Internal Revenue Code shall be disregarded.
 31        (8)  For  purposes of this section, property has a situs in Idaho during a
 32    taxable year if it is used in Idaho at any time during the taxable year. Prop-
 33    erty not used in Idaho during a taxable year does not have a situs in Idaho in
 34    the taxable year during which the property is not used in Idaho or in any sub-
 35    sequent taxable year. No credit or carryover of credit is permitted under this
 36    section if the credit or carryover relates to property that does  not  have  a
 37    situs  in  Idaho  during the taxable year for which the credit or carryover is
 38    claimed. The Idaho situs of property must be established by records maintained
 39    by the taxpayer which are created reasonably contemporaneously with the use of
 40    the property.
 41        (9)  In the case of property used both in and outside Idaho, the taxpayer,
 42    electing to claim the credit provided in this section, must elect  to  compute
 43    the  qualified  investment  in  property  with  a  situs in Idaho for all such
 44    investments first qualifying during that year in one (1), but only one (1), of
 45    the following ways:
 46        (a)  The amount of each qualified investment in a specific asset shall  be
 47        separately computed based on the percentage of the actual use of the prop-
 48        erty  in Idaho by using a measure of the use, such as total miles or total
 49        machine hours, that most accurately reflects the beneficial use during the
 50        taxable year in which it is first  acquired,  constructed,  reconstructed,
 51        erected or placed into service; provided, that the asset is placed in ser-
 52        vice more than ninety (90) days before the end of the taxable year. In the
 53        case  of  assets  acquired,  constructed, reconstructed, erected or placed
 54        into service within ninety (90) days prior to the end of the taxable  year
 55        in  which  the  investment first qualifies, the measure of the use of that
                                                                        
                                           11
                                                                        
  1        asset within Idaho for that year shall be based upon the percentage of use
  2        in Idaho during the first ninety (90) days of use of the asset;
  3        (b)  The investment in qualified property used  both  inside  and  outside
  4        Idaho  during the taxable year in which it is first acquired, constructed,
  5        reconstructed, erected or placed into service shall be multiplied  by  the
  6        percent  of  the investment that would be included in the numerator of the
  7        Idaho property factor determined pursuant to section 63-3027, Idaho  Code,
  8        for the same year.
  9        (10) Only  for the purposes of subsections (3)(a) and (7) of this section,
 10    references to sections of  the  "Internal  Revenue  Code"  mean  the  sections
 11    referred  to  as  they   existed in the Internal Revenue Code of 1986 prior to
 12    November 5, 1990.
                                                                        
 13        SECTION 11.  That Section 63-3029E, Idaho Code, be, and the same is hereby
 14    amended to read as follows:
                                                                        
 15        63-3029E.  DEFINITIONS -- CONSTRUCTION OF TERMS. As used in  this  section
 16    and in section 63-3029F, Idaho Code:
 17        (1)  (a) "New employee" means a person from whom Idaho income tax has been
 18        withheld, employed by the taxpayer, in a revenue-producing enterprise cre-
 19        ating  value-added natural resource products, and covered for unemployment
 20        insurance purposes under chapter 13, title 72, Idaho Code, during the tax-
 21        able year for which the credit allowed by section 63-3029F, Idaho Code, is
 22        claimed. A person shall be deemed to be so engaged if such person performs
 23        duties on:
 24             (i)   A regular full-time basis; or
 25             (ii)  A part-time basis if such person is customarily performing such
 26             duties at least twenty (20) hours per week.
 27        No credit shall be earned unless the new  employee  shall  have  performed
 28        such  duties  for the taxpayer for a minimum of nine (9) months during the
 29        taxable year for which the credit is claimed.
 30        (b)  The provisions of paragraph (a) of this  subsection  notwithstanding,
 31        no  credit  shall  be  allowed for employment of persons by a taxpayer who
 32        acquires a revenue-producing enterprise from another taxpayer or who oper-
 33        ates in a place of business the same or a substantially identical revenue-
 34        producing value-added natural resource  products  enterprise  business  as
 35        operated  by  another taxpayer within the prior twelve (12) months, except
 36        as the prior taxpayer would have qualified under the provisions  of  para-
 37        graph  (c)  of  this subsection. Employees transferred from a related tax-
 38        payer shall not be included in the computation of the credit.
 39        (c)  The number of employees during any  taxable  year  for  any  taxpayer
 40        shall  be  the mathematical average of the number of employees reported to
 41        the Idaho department of labor for employment security purposes during  the
 42        twelve (12) months of the taxable year which qualified under paragraph (a)
 43        of  this  subsection.  In  the event the business is in operation for less
 44        than the entire taxable year, the number of employees of the business  for
 45        the  year  shall be the average number actually employed during the months
 46        of operation, providing that the qualifications of paragraph (a)  of  this
 47        subsection are met.
 48        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
 49    cation, manufacture or processing of any natural resource product.
 50        (3)  "Same or a substantially identical revenue-producing enterprise busi-
 51    ness" means a revenue-producing enterprise business in which the products pro-
 52    duced  or  sold, or the activities conducted are the same in character and use
 53    and are produced, sold or conducted in the same manner as,  or  for  the  same
                                                                        
                                           12
                                                                        
  1    types  of customers as, the products or activities produced, sold or conducted
  2    in another revenue-producing enterprise business.
                                                                        
  3        SECTION 12.  That Section 63-3029F, Idaho Code, be, and the same is hereby
  4    amended to read as follows:
                                                                        
  5        63-3029F.  SPECIAL CREDIT AVAILABLE -- NEW  EMPLOYEES.  (1)  Any  taxpayer
  6    shall  be  allowed  a  credit, in an amount determined under subsection (2) of
  7    this section, against  the tax imposed by this chapter,  other  than  the  tax
  8    imposed  by section 63-3082, Idaho Code, for any taxable year during which the
  9    taxpayer's employment of new employees, as defined under section  63-3029E(1),
 10    Idaho  Code, increases above the taxpayer's average employment for either: (a)
 11    the prior taxable year, or (b) the average of three (3) prior  taxable  years,
 12    whichever  is higher. No credit shall be allowed under this section unless the
 13    number of new employees equals or exceeds one (1) person.
 14        (2)  The credit authorized in subsection (1) of this section shall be five
 15    hundred dollars ($500) per new employee, but the total  credit  allowed  shall
 16    not  exceed  three  and  one-quarter  percent  (3.25%)  of net income from the
 17    taxpayer's corporate, proprietorship, partnership, small business  corporation
 18    or  limited  liability  company revenue-producing enterprise business in which
 19    the employment occurred. Additionally, the total of this and all other credits
 20    allowed under this chapter except  for  the  credits  allowed  under  sections
 21    63-3024A,  63-3025D  and  63-3029,  Idaho  Code, taken during any taxable year
 22    shall not exceed forty-five percent (45%) of the tax otherwise imposed on  the
 23    taxpayer for the taxable year for which such credit is allowed.
 24        (3)  If  the  sum of the credit carryovers from the credit allowed by sub-
 25    section (2) of this section and the amount of credit for the taxable year from
 26    the credit allowed by subsection (2) of this  section  exceed  the  limitation
 27    imposed  by  subsection  (2) of this section for the current taxable year, the
 28    excess attributable to the current taxable year's credit  shall  be  a  credit
 29    carryover  to  the  three  (3)  succeeding taxable years. The entire amount of
 30    unused credit shall be carried forward  to  the  earliest  of  the  succeeding
 31    years, wherein the oldest available unused credit shall be used first, so long
 32    as the employment level for which the credit was granted is still maintained.
                                                                        
 33        SECTION  13.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 34    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 35    ignated as Section 63-3029G, Idaho Code, and to read as follows:
                                                                        
 36        63-3029G.  CREDITS  FOR  RESEARCH  ACTIVITIES  CONDUCTED  IN THIS STATE --
 37    CARRY FORWARD.
 38        (1) (a)  Subject to the limitations of this  section,  for  taxable  years
 39        beginning between January 1, 2001, and December 31, 2005, inclusive, there
 40        shall  be  allowed  to  a  taxpayer  a  nonrefundable credit against taxes
 41        imposed by  sections  63-3024,  63-3025  and  63-3025A,  Idaho  Code,  for
 42        increasing  research  activities  in Idaho during any consecutive five (5)
 43        year period beginning, at the election of the taxpayer, either:
 44             (i)   January 1, 2001, or
 45             (ii)  The first day of the taxpayer's taxable year beginning in 2001.
 46        (b)  The credit allowed by subsection (1)(a) of this section shall be  the
 47        sum of:
 48             (i)   Five  percent (5%) of the excess of qualified research payments
 49             for research conducted in Idaho over the base amount; and
 50             (ii)  Five percent (5%) basic research payments allowable under  sub-
 51             section  (e)  of  section  41  of the Internal Revenue Code for basic
                                                                        
                                           13
                                                                        
  1             research conducted in Idaho.
  2        (c)  Subject to the limitation in subsection (3) of this section,  a  tax-
  3        payer  making  the election permitted by subsection (1)(a)(i) of this sec-
  4        tion, credit for research activities occurring prior to the  beginning  of
  5        the  taxpayer's  taxable  year  beginning  in 2001 shall be claimed on the
  6        taxpayer's return for its taxable year 2001 in addition to credit relating
  7        to activity in that year.
  8        (2)  As used in this section:
  9        (a)  The terms "qualified research payments," "qualified research," "basic
 10        research payments" and "basic research" shall be as defined in section  41
 11        of the Internal Revenue Code except that the research must be conducted in
 12        Idaho.
 13        (b)  The term "base amount" shall mean an amount calculated as provided in
 14        sections 41(c) and 41(h) of the Internal Revenue Code, except that:
 15             (i)   The  base amount does not include the calculation of the alter-
 16             native incremental credit provided for in  section  41(c)(4)  of  the
 17             Internal Revenue Code;
 18             (ii)  A  taxpayer's  gross receipts include only those gross receipts
 19             attributable  to sources within this state as provided in subsections
 20             (q) and (r) of section 63-3027, Idaho Code; and
 21             (iii) Notwithstanding section 41(c) of the Internal Revenue Code, for
 22             purposes of calculating the base amount, a taxpayer:
 23                  (A)  May elect to be treated as a start-up company  as  provided
 24                  in  section 41(c)(3)(B) of the Internal Revenue Code, regardless
 25                  of whether  the  taxpayer  meets  the  requirements  of  section
 26                  41(c)(3)(B)(i)(I) or (II) of the Internal Revenue Code; and
 27                  (B)  May not revoke an election to be treated as a start-up com-
 28                  pany.
 29        (3)  The credit allowed by subsection (1)(a) of this section together with
 30    any  credits  carried  forward  under subsection (5) of this section shall not
 31    exceed the amount of tax due under sections  63-3024,  63-3025  and  63-3025A,
 32    Idaho  Code,  after allowance for all other credits permitted by this chapter.
 33    When credits earned in more than one (1) taxable year are available, the  old-
 34    est credits shall be applied first.
 35        (4)  In the case of a group of corporations filing a combined report under
 36    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 37    of  the group but not used by that member may be used by another member of the
 38    group. For a combined group of corporations, any member of the group may claim
 39    credit carried forward unless the member who earned the credit  is  no  longer
 40    included in the combined group.
 41        (5)  The  credit  allowed  by  subsection  (1)(a) of this section shall be
 42    claimed for the taxable year during  which  the  taxpayer  qualifies  for  the
 43    credit. If the credit exceeds the limitation under subsection (3) of this sec-
 44    tion,  the  excess  amount  may  be carried forward for a period that does not
 45    exceed the next fourteen (14) taxable years.
 46        (6)  In addition to other needed rules, the state tax commission may  pro-
 47    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 48    or  estates,  a  method  of  attributing  the credit under this section to the
 49    shareholders, partners or beneficiaries in proportion to their  share  of  the
 50    income from the S corporation, partnership, trust or estate.
                                                                        
 51        SECTION 14.  That Section 63-3029H, Idaho Code, be, and the same is hereby
 52    amended to read as follows:
                                                                        
 53        63-3029HP.  PRIORITY  OF  CREDITS.  When  a  taxpayer subject to any taxes
                                                                        
                                           14
                                                                        
  1    imposed under this chapter is entitled to two (2) or more credits against such
  2    taxes, the priority of credits shall be determined in the following order:
  3        (a)  Nonrefundable credits. Nonrefundable credits shall be applied to  the
  4    tax liability before application of refundable credits. If a taxpayer is enti-
  5    tled  to  more than one (1) nonrefundable credit, the credits shall be applied
  6    in the order in which the statutes authorizing the credits were enacted by the
  7    legislature.
  8        (b)  Refundable credits. Refundable credits shall be applied  to  the  tax
  9    liability after application of any nonrefundable credits.
                                                                        
 10        SECTION  15.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 11    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 12    ignated as Section 63-3029H, Idaho Code, and to read as follows:
                                                                        
 13        63-3029H.  CREDIT  FOR HOUSEHOLD AND DEPENDENT CARE SERVICES NECESSARY FOR
 14    GAINFUL EMPLOYMENT. (1) A resident individual who  is  entitled,  for  federal
 15    income  tax  purposes, to claim and who does claim the credit provided by sec-
 16    tion 21 of the Internal Revenue Code shall  be  entitled  to  a  nonrefundable
 17    credit against taxes imposed by section 63-3024, Idaho Code, equal to one-half
 18    (1/2)  of  the credit allowable on that taxpayer's federal return for the same
 19    taxable year.
 20        (2)  A nonresident or part-year resident individual who is  entitled,  for
 21    federal  income  tax purposes, to claim and who does claim the credit provided
 22    by section 21 of the Internal Revenue Code shall be entitled to a proportional
 23    part of the credit otherwise provided in subsection (1) of this  section.  The
 24    proportion  shall  be  determined in accordance with the provisions of section
 25    63-3026A(6), Idaho Code.
 26        (3)  The credit allowed by this section shall not exceed the total  amount
 27    of  taxes  due under section 63-3024, Idaho Code, after allowance of all other
 28    credits provided in this chapter.
                                                                        
 29        SECTION 16.  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 63-3029I, Idaho Code, and to read as follows:
                                                                        
 32        63-3029I.  INCOME TAX CREDIT FOR INVESTMENT IN  BROADBAND  EQUIPMENT.  (1)
 33    Subject  to  the  limitations  of  this  section,  for taxable years beginning
 34    between January 1, 2001, and December 31,  2005,  inclusive,  there  shall  be
 35    allowed to a taxpayer a nonrefundable credit against taxes imposed by sections
 36    63-3024, 63-3025 and 63-3025A, Idaho Code, for qualified expenditures in qual-
 37    ified broadband equipment in Idaho.
 38        (2)  The credit permitted in subsection (1) of this section shall be three
 39    percent  (3%)  of the qualified investment in qualified broadband equipment in
 40    Idaho and shall be in addition to the credit for capital investment  permitted
 41    by section 63-3029B, Idaho Code.
 42        (3)  As used in this section the term:
 43        (a)  "Qualified investment" shall be as defined in section 63-3029B, Idaho
 44        Code.
 45        (b)  "Qualified  broadband  equipment"  means equipment that qualifies for
 46        the credit for capital investment permitted  by  section  63-3029B,  Idaho
 47        Code,  and  is  capable  of transmitting signals at a rate of at least two
 48        hundred thousand (200,000) bits per second to a subscriber  and  at  least
 49        one  hundred  twenty-five  thousand  (125,000) bits per second from a sub-
 50        scriber, and
 51             (i)   In the case of a telecommunications  carrier,  such  qualifying
                                                                        
                                           15
                                                                        
  1             equipment  shall  be  necessary to the provision of broadband service
  2             and an integral part of a broadband network. "Telecommunications car-
  3             rier" has the meaning given such term by section 3(44) of the  commu-
  4             nications  act of 1934, as amended, but does not include a commercial
  5             mobile service provider.
  6             (ii)  In the case of a commercial mobile service carrier, such quali-
  7             fying equipment shall extend from the subscriber side of  the  mobile
  8             telecommunications   switching  office  to  a  transmitting/receiving
  9             antenna, including such antenna, on the outside of the  structure  in
 10             which  the subscriber is located. "Commercial mobile service carrier"
 11             means any person authorized to provide commercial mobile  radio  ser-
 12             vice  to  subscribers as defined in section 20.3 of title 47, Code of
 13             Federal Regulations (10-1-99 ed.), as amended.
 14             (iii) In the case of a cable or  open  video  system  operator,  such
 15             qualifying  equipment  shall extend from the subscriber's side of the
 16             headend to the outside of the structure in which  the  subscriber  is
 17             located. The terms "cable operator" and "open video system  operator"
 18             have  the  meanings  given  such  terms  by  sections 602(5) and 653,
 19             respectively, of the communications act of 1934, as amended.
 20             (iv)  In the case of a satellite carrier or a wireless carrier  other
 21             than  listed  above, such qualifying equipment is only that equipment
 22             that extends from a transmitting/receiving  antenna,  including  such
 23             antenna,  which  transmits  and  receives signals to or from multiple
 24             subscribers to a transmitting/receiving antenna on the outside of the
 25             structure in which the subscriber  is  located.  "Satellite  carrier"
 26             means  any  person  using  the facilities of a satellite or satellite
 27             services licensed by the federal communications commission and  oper-
 28             ating  a  fixed-satellite  service or direct broadcast satellite ser-
 29             vices to provide point-to-multipoint distribution of signals.  "Other
 30             wireless  carrier"  means any person, other than a telecommunications
 31             carrier, commercial mobile  service  carrier,  cable  operator,  open
 32             video operator, or satellite carrier, providing broadband services to
 33             subscribers through the radio transmission of energy.
 34             (v)   In  the  case of packet switching equipment, such packet equip-
 35             ment installed in connection with other qualifying  equipment  listed
 36             in subsections (2)(b)(i) through (2)(b)(iv) of this section, provided
 37             it  is  the last in a series of equipment that transmits signals to a
 38             subscriber or the first in a series of equipment that transmits  sig-
 39             nals from a  subscriber.  "Packet  switching"  means  controlling  or
 40             routing  the path of a digital transmission signal which is assembled
 41             into packets or cells.
 42             (vi)  In the case of multiplexing and demultiplexing equipment,  such
 43             equipment  only  to the extent that it is deployed in connection with
 44             providing broadband services in locations  between  packet  switching
 45             equipment  and  the  structure  in  which  the subscriber is located.
 46             "Multiplexing" means the transmission of two (2) or more signals over
 47             a communications circuit without regard to the  communications  tech-
 48             nology.
 49             (vii) Any property not primarily used to provide services in Idaho to
 50             public subscribers is not qualified broadband equipment.
 51        (3)  No equipment described in subsections (2)(b)(i) through (2)(b)(vi) of
 52    this  section  shall qualify for the credit provided in subsection (1) of this
 53    section until the taxpayer applies to and obtains from the Idaho public utili-
 54    ties commission an order confirming that the installed equipment is  qualified
 55    broadband  equipment.  Applications  submitted to the commission shall be gov-
                                                                        
                                           16
                                                                        
  1    erned by the commission's rules of procedure. The commission may issue  proce-
  2    dural orders necessary to implement this section.
  3        (4)  The  credit  allowed  by subsection (1) of this section together with
  4    any credits carried forward under subsection (6) of this section shall not, in
  5    any one (1) taxable year, exceed the lesser of:
  6        (a)  The amount of tax due under sections 63-3024, 63-3025  and  63-3025A,
  7        Idaho  Code, after allowance for all other credits permitted by this chap-
  8        ter; or
  9        (b)  Seven hundred fifty thousand dollars ($750,000).
 10    When credits earned in more than one (1) taxable year are available, the  old-
 11    est credits shall be applied first.
 12        (5)  In the case of a group of corporations filing a combined report under
 13    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 14    of  the group but not used by that member may be used by another member of the
 15    group, subject to the provisions of subsection (6) of this section, instead of
 16    carried over. For a combined group of corporations, credit carried forward may
 17    be claimed by any member of the group unless the member who earned  the credit
 18    is no longer included in the combined group.
 19        (6)  If the credit allowed by subsection (1) of this section  exceeds  the
 20    limitation under subsection (4) of this section, the excess amount may be car-
 21    ried  forward for a period that does not exceed the next fourteen (14) taxable
 22    years.
 23        (7)  In the event that qualified broadband equipment upon which the credit
 24    allowed by this section has been used ceases to qualify for the credit allowed
 25    by section 63-3029B, Idaho Code, or is subject to recapture  of  that  credit,
 26    the recapture of credit under this section shall be in the same proportion and
 27    subject  to  the same provisions as the amount of credit required to be recap-
 28    tured under section 63-3029B, Idaho Code.
 29        (8)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 30        tled to the credit or to an unused portion of the credit allowed  by  this
 31        section  may  transfer  the  unused credit to another taxpayer required to
 32        file a return under this chapter.
 33        (b)  Before completing a transfer under this  subsection,  the  transferor
 34        shall  notify  the  state  tax commission of its intention to transfer the
 35        credit and the identity of the transferee. The state tax commission  shall
 36        provide  the  transferor  with a written statement of the amount of credit
 37        available under this section as then appearing in the commission's records
 38        and the number of years the credit may be  carried  over.  The  transferee
 39        shall  attach a copy of the statement to any return in regard to which the
 40        transferred credit is claimed.
 41        (c)  In the event that after the transfer the state tax commission  deter-
 42        mines  that  the amount of credit properly available under this section is
 43        less than the amount claimed by the transferor of the credit or  that  the
 44        credit  is subject to recapture, the commission shall assess the amount of
 45        overstated or recaptured credit as taxes due from the transferor  and  not
 46        the transferee.  The assessment shall be made in the manner provided for a
 47        deficiency in taxes under this chapter.
 48        (9)  In  addition to other needed rules, the state tax commission may pro-
 49    mulgate rules prescribing, in the case of S corporations, partnerships, trusts
 50    or estates, a method of attributing the  credit  under  this  section  to  the
 51    shareholders,  partners  or  beneficiaries in proportion to their share of the
 52    income from the S corporation, partnership, trust or estate.
                                                                        
 53        SECTION 17.  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-
                                                                        
                                           17
                                                                        
  1    ignated as Section 63-3029J, Idaho Code, and to read as follows:
                                                                        
  2        63-3029J.  INCENTIVE INCOME TAX INVESTMENT CREDIT. (1) Subject to the lim-
  3    itations of this section, for taxable years beginning between January 1, 2001,
  4    and December 31, 2005, inclusive, there shall be allowed to a taxpayer a  non-
  5    refundable  credit  against  taxes  imposed  by  sections 63-3024, 63-3025 and
  6    63-3025A, Idaho Code, in the amount allowed by subsection (2) of this  section
  7    for  qualified  investments  in  Idaho. The credit shall be in addition to the
  8    credit for capital investment permitted by section 63-3029B, Idaho Code.
  9        (2)  The credit permitted in subsection (1) of this section  shall  be  at
 10    the  percentage  rate  determined  under either subsection (2)(a) or (2)(b) of
 11    this section at the election of the taxpayer.
 12        (a)  (i)   One-half (1/2) of the amount by which  the  average  three-year
 13             unemployment  rate  in  the  county  in which the property is located
 14             exceeds six percent (6%).  In the case of mobile property, the  prop-
 15             erty shall be located in the county in which it is primarily based.
 16             (ii)  For  purposes of this section the director of the department of
 17             labor shall, on or before the first day of September of each calendar
 18             year, establish and certify to the state tax commission  the  average
 19             three-year  unemployment rate in each county in Idaho for the immedi-
 20             ately preceding three (3) calendar years. The  rates  thus  certified
 21             shall  apply  to  the  calculation  of  the  credit  under subsection
 22             (2)(a)(i) of this section for property qualifying in the taxable year
 23             beginning during the next calendar year.
 24        (b)  (i)   One-tenth of one percent (.1%) for each full percent  that  the
 25             three-year  average per capita personal income level in the county in
 26             which the property is located is below ninety percent  (90%)  of  the
 27             average statewide per capita personal income level.
 28             (ii)  For  purposes of this section the director of the department of
 29             commerce shall, on or before the first day of September of each  cal-
 30             endar  year,  establish  and  certify to the state tax commission the
 31             most current three-year average per capita personal income  level  in
 32             each  county  in  Idaho  and the statewide per capita personal income
 33             level for the most current preceding three (3)  calendar  years.  The
 34             levels  thus  certified  shall apply to the calculation of the credit
 35             under subsection (2)(b)(i) of this section for property qualifying in
 36             the taxable year beginning during the next calendar year.
 37        (3)  As used in this section the  term  "qualified  investment"  shall  be
 38    defined as in section 63-3029B, Idaho Code.
 39        (4)  The  credit  allowed  by subsection (1) of this section together with
 40    any credits carried forward under subsection (6) of  this  section  shall  not
 41    exceed in any one (1) taxable year the lesser of:
 42        (a)  The  amount  of tax due under sections 63-3024, 63-3025 and 63-3025A,
 43        Idaho Code, after allowance for all other credits permitted by this  chap-
 44        ter; or
 45        (b)  Five hundred thousand dollars ($500,000).
 46        (c)  When  credits earned in more than one (1) taxable year are available,
 47        the oldest credits shall be applied first.
 48        (5)  In the case of a group of corporations filing a combined report under
 49    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
 50    of the group but not used by that member may be used by another member of  the
 51    group, subject to the provisions of subsection (6) of this section, instead of
 52    carried over. For a combined group of corporations, credit carried forward may
 53    be  claimed by any member of the group unless the member who earned the credit
 54    is no longer included in the combined group.
                                                                        
                                           18
                                                                        
  1        (6)  If the credit allowed by subsection (1) of this section  exceeds  the
  2    limitation under subsection (4) of this section, the excess amount may be car-
  3    ried  forward for a period that does not exceed the next fourteen (14) taxable
  4    years.
  5        (7)  In the event that property upon which the credit allowed by this sec-
  6    tion has been used ceases  to  qualify  for  the  credit  allowed  by  section
  7    63-3029B,  Idaho  Code, the recapture of credit under this section shall be in
  8    the same proportion and subject to the same provisions as the amount of credit
  9    required to be recaptured under section 63-3029B, Idaho Code.
 10        (8)  (a)  Subject to the requirements of this subsection, a taxpayer enti-
 11        tled to the credit or to an unused portion of the credit allowed  by  this
 12        section  may  transfer  the  unused credit to another taxpayer required to
 13        file a return under this chapter.
 14        (b)  Before completing a transfer under this  subsection,  the  transferor
 15        shall  notify  the  state  tax commission of its intention to transfer the
 16        credit and the identity of the transferee. The state tax commission  shall
 17        provide  the  transferor with a written statement  of the amount of credit
 18        available under this section as then appearing in the commission's records
 19        and the number of years the credit may be  carried  over.  The  transferor
 20        shall  provide the transferee with the original statement.  The transferee
 21        shall attach a copy of the statement to any return in regard to which  the
 22        transferred credit is claimed.
 23        (c)  In  the event that after the transfer the state tax commission deter-
 24        mines that the amount of credit properly available under this  section  is
 25        less  than the amount claimed by the transferor of the credit and shown in
 26        the statement described in subsection (8)(b) of this section or  that  the
 27        credit  is subject to recapture, the commission shall assess the amount of
 28        overstated credit as taxes due from the transferor and not the transferee.
 29        The assessment shall be made in the manner provided for  a  deficiency  in
 30        taxes under this chapter.
 31        (9)  In  addition to other needed rules, the state tax commission may pro-
 32    mulgate rules prescribing:
 33        (a)  In the case of S corporations, partnerships,  trusts  or  estates,  a
 34        method  of  attributing the credit under this section to the shareholders,
 35        partners or beneficiaries in proportion to their share of the income  from
 36        the S corporation, partnership, trust or estate.
 37        (b)  A requirement that a transferor under subsection (8) of this section,
 38        prior  to obtaining the written statement provided in subsection (8)(b) of
 39        this section, post such bond or security as the state tax  commission  may
 40        require  to  secure any liability referred to in subsection (8)(c) of this
 41        section.  Such rules shall provide an opportunity for a taxpayer,  upon  a
 42        showing  of  financial responsibility, to have the bond waiver, for notice
 43        of denial of waiver in accordance with section 63-3045,  Idaho  Code,  and
 44        for review in accordance with section 63-3045B, Idaho Code.
                                                                        
 45        SECTION  18.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
 46    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 47    ignated as Section 63-3029K, Idaho Code, and to read as follows:
                                                                        
 48        63-3029K.  VENTURE  CAPITAL  INCOME  TAX INVESTMENT CREDIT. (1) Subject to
 49    the limitations of this section, for taxable years beginning  between  January
 50    1,  2001,  and  December 31, 2005, inclusive, there shall be allowed to a tax-
 51    payer a nonrefundable  credit  against  taxes  imposed  by  sections  63-3024,
 52    63-3025  and  63-3025A, Idaho Code, in the amount allowed by subsection (2) of
 53    this section for investments described in subsection (2) of this section  made
                                                                        
                                           19
                                                                        
  1    in  Idaho.   The credit shall be in addition to the credit for capital invest-
  2    ment permitted by section 63-3029B, Idaho Code.
  3        (2)  The credit permitted in subsection (1) of this section shall  be  ten
  4    percent  (10%) of the taxpayer's investment made during the taxable year in an
  5    Idaho private venture capital company.
  6        (3)  As used in this section:
  7        (a)  Definition. "Idaho private venture capital company" means a  corpora-
  8        tion,  limited  liability  company,  partnership or other entity, with its
  9        principal place of business located within Idaho which meets the following
 10        criteria:
 11             (i)   Committed capitalization of not less than five million  dollars
 12             ($5,000,000)  and  contributed  capital  of not less than twenty-five
 13             percent (25%) of its committed capitalization;
 14             (ii)  Having a purpose and objective of making at least fifty percent
 15             (50%) of its venture or risk capital  available  to  business  enter-
 16             prises  that are headquartered and managed in Idaho and whose primary
 17             business activities are reasonably expected to  establish  or  expand
 18             the development of business and industry within Idaho; and
 19             (iii) Investment  of  not  more than twenty-five percent (25%) of its
 20             committed funds in any one (1) company.
 21        (b)  Certification. An entity shall not qualify as an Idaho  private  ven-
 22        ture  capital  company  until  the company applies to and obtains from the
 23        director of the Idaho department of  finance,  hereafter  referred  to  as
 24        "director,"  a  certificate  confirming that it meets the criteria of this
 25        section. Applications submitted to the director shall contain such  infor-
 26        mation  relating to the applicant as the director shall require, and a fee
 27        as set by the director in an amount not to  exceed  five  hundred  dollars
 28        ($500). Unless the Idaho private venture capital company is decertified as
 29        described  in  subsection (3)(f) of this section, a copy of the certifica-
 30        tion shall be provided by the Idaho private venture capital company to the
 31        investor seeking the credit allowed by this section  who  shall  attach  a
 32        copy to the original return on which the credit is claimed.
 33        (c)  Requirements  to  maintain  certification.  To continue in certifica-
 34        tion, an Idaho private venture capital company shall:
 35             (i)   Invest at least thirty percent (30%) of its  original  capital-
 36             ization at the end of the initial three (3) years in such a manner as
 37             to acquire equity in the ventures in which the investments are made;
 38             (ii)  Have  invested  at least fifty percent (50%) in the same manner
 39             at the end of  five (5) years;
 40             (iii) At the time of an initial investment, have no investor or  com-
 41             bination  of  investors in that Idaho private venture capital company
 42             who own a controlling equity interest in a business in which the ven-
 43             ture capital company is investing;
 44             (iv)  Not invest funds for use by an Idaho business for oil  and  gas
 45             exploration and development, for real estate development or apprecia-
 46             tion,  or  for  banking  or  lending operations. Any investment by an
 47             Idaho private venture capital company in any of these  sectors  shall
 48             not  be  counted  as equity investments for the purpose of continuing
 49             certification under this section;
 50             (v)   Meet such books and records or other requirements as the direc-
 51             tor may, by rule or order, direct; and
 52             (vi)  Pay an annual renewal fee in an amount set by the director  not
 53             to exceed five hundred dollars ($500).
 54        (d)  Reporting  requirements. Each certified Idaho private venture capital
 55        company shall report to the director on an annual basis  such  information
                                                                        
                                           20
                                                                        
  1        as  the  director requires to be submitted to maintain certification. As a
  2        part of such information, each Idaho private venture capital company shall
  3        report the name, address and taxpayer identification number of each inves-
  4        tor who has invested in such company, the amounts invested  by  each  such
  5        investor and the companies in which the Idaho private venture capital com-
  6        pany has invested. The director shall provide the information contained in
  7        this subsection to the state tax commission on an annual basis.
  8        (e)  Compliance examinations. All the records of a certified Idaho private
  9        venture  capital  company are subject at any time to such reasonable peri-
 10        odic, special or other examinations by representatives of the director, as
 11        the director deems necessary or appropriate in the  public  interest.  The
 12        director,  or  his  designee, may examine  under oath any of the officers,
 13        directors, agents, employees, or investors of  an  Idaho  private  venture
 14        capital  company  regarding  the  affairs and business of the company. The
 15        director may administer oaths, subpoena witnesses, require the  production
 16        of  any books, papers, correspondence, or other documents or records which
 17        the director deems relevant or material to the inquiry.  In  the  case  of
 18        refusal  to  obey  a  subpoena  issued to a person, any court of competent
 19        jurisdiction, upon application of the director, may issue to  that  person
 20        an order requiring him to appear before the director or the officer desig-
 21        nated  by  him,  there to produce documentary evidence if so ordered or to
 22        give evidence relating to the matter under inquiry. Any  failure  to  obey
 23        such order of the court may be punished by the court as contempt of court.
 24        (f)  Decertification.  If  the  director determines that a certified Idaho
 25        private venture capital company is not in substantial compliance with  the
 26        requirements  for continuing certification or is in violation of any other
 27        provision of this act, the director shall, by written notice,  inform  the
 28        officers  of  the company and the board of directors or partners that they
 29        will be decertified in one hundred twenty (120)  days  from  the  date  of
 30        mailing  of  the  notice unless they correct the deficiencies and are once
 31        again in compliance with the requirements for certification.  At  the  end
 32        of  the  one hundred twenty (120) day period, if the Idaho private venture
 33        capital company is still not in substantial compliance, the director shall
 34        send a notice of decertification to the company and to the state tax  com-
 35        mission.
 36        (g)  Liability  disclaimed.  The state of Idaho, the department of finance
 37        and its employees and agents may not be held civilly or criminally  liable
 38        or  liable upon their official bonds to any person including, but not lim-
 39        ited to, investors, Idaho private venture capital  companies,  and  appli-
 40        cants to become an Idaho private venture capital company, for action taken
 41        under this section or for any failure to act under it.
 42        (h)  To  facilitate furtherance of the purposes of this section with other
 43        state and federal programs including, but not limited to,  small  business
 44        investment  companies  and  business and industrial development companies,
 45        the director shall have authority to waive any provision of  this  subsec-
 46        tion  (3) which for good cause shown, he deems appropriate and in the pub-
 47        lic interest.
 48        (i)  The director may promulgate rules or issue  orders  as  necessary  to
 49        implement this section.
 50        (j)  Documents and other materials submitted by Idaho private venture cap-
 51        ital companies or by Idaho businesses pursuant to this subsection shall be
 52        exempt from public disclosure.
 53        (4)  The  credit  allowed  by subsection (1) of this section together with
 54    any credits carried forward under subsection (6) of  this  section  shall  not
 55    exceed in any one (1) taxable year either:
                                                                        
                                           21
                                                                        
  1        (a)  Fifty  percent (50%) of the amount of tax due under sections 63-3024,
  2        63-3025 and 63-3025A, Idaho Code, after allowance for  all  other  credits
  3        permitted by this chapter; or
  4        (b)  One hundred fifty thousand dollars ($150,000).
  5        (5)  In the case of a group of corporations filing a combined report under
  6    subsection (t) of section 63-3027, Idaho Code, credit earned by one (1) member
  7    of  the group but not used by that member may be used by another member of the
  8    group, subject to the provisions of subsection (6) of this section, instead of
  9    carried over. For a combined group of corporations, credit carried forward may
 10    be claimed by any member of the group unless the member who earned the  credit
 11    is no longer included in the combined group.
 12        (6)  If  the  credit allowed by subsection (1) of this section exceeds the
 13    limitation under subsection (4) of this section the excess amount may be  car-
 14    ried  forward for a period that does not exceed the next fourteen (14) taxable
 15    years. When credits earned in more than one (1) taxable  year  are  available,
 16    the oldest credits shall be applied first.
 17        (7)  In the event that the company in which the investment was made ceases
 18    to  qualify  as an Idaho private venture capital company before the expiration
 19    of the carryover period provided in subsection (6) of this section,  the  por-
 20    tion  of  the credit equal to the portion of the carryover period during which
 21    the company did not so qualify shall be subject to  recapture.  The  recapture
 22    must  be  reported  on  the  income  tax return of the taxpayer who earned the
 23    credit subject to  the  requirements  for  amounts  recaptured  under  section
 24    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, the commis-
 42        sion shall assess the amount of overstated credit as taxes  due  from  the
 43        transferor  and  not  the  transferee. The assessment shall be made in the
 44        manner provided for a deficiency in taxes under this chapter.
 45        (9)  In addition to other needed rules, the state tax commission may  pro-
 46    mulgate rules prescribing:
 47        (a)  In  the  case  of  S corporations, partnerships, trusts or estates, a
 48        method of attributing the credit under this section to  the  shareholders,
 49        partners  or beneficiaries in proportion to their share of the income from
 50        the S corporation, partnership, trust or estate.
 51        (b)  A requirement that a transferor under subsection (8) of this section,
 52        prior to obtaining the written statement provided in subsection (8)(b)  of
 53        this  section,  post such bond or security as the state tax commission may
 54        require to secure any liability referred to in subsection (8)(c)  of  this
 55        section.   Such  rule  shall provide an opportunity for a taxpayer, upon a
                                                                        
                                           22
                                                                        
  1        showing of financial responsibility, to have the bond waiver,  for  notice
  2        of  denial  of  waiver in accordance with section 63-3045, Idaho Code, and
  3        for review in accordance with section 63-3045B, Idaho Code.
                                                                        
  4        SECTION 19.  That Sections 63-3029E and 63-3029F, Idaho Code, be, and  the
  5    same are hereby repealed.
                                                                        
  6        SECTION  20.  That  Chapter  30, Title 63, Idaho Code, be, and the same is
  7    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
  8    ignated as Section 63-3029E, Idaho Code, and to read as follows:
                                                                        
  9        63-3029E.  DEFINITIONS  --  CONSTRUCTION OF TERMS. As used in this section
 10    and in section 63-3029F, Idaho Code:
 11        (1)  (a)  "New employee" means a person from whom  Idaho  income  tax  has
 12        been  withheld, employed by the taxpayer in a revenue-producing enterprise
 13        creating value-added natural resource products, and covered for  unemploy-
 14        ment insurance purposes under chapter 13, title 72, Idaho Code, during the
 15        taxable year for which the credit allowed by section 63-3029F, Idaho Code,
 16        is  claimed. A person shall be deemed to be so engaged if such person per-
 17        forms duties on:
 18             (i)   A regular full-time basis; or
 19             (ii)  A part-time basis if such person is customarily performing such
 20             duties at least twenty (20) hours per week.
 21        No credit shall be earned unless the new  employee  shall  have  performed
 22        such  duties  for the taxpayer for a minimum of nine (9) months during the
 23        taxable year for which the credit is claimed.
 24        (b)  The provisions of paragraph (a) of this  subsection  notwithstanding,
 25        no  credit  shall  be  allowed for employment of persons by a taxpayer who
 26        acquires a revenue-producing enterprise from another taxpayer or who oper-
 27        ates in a place of business the same or a substantially identical revenue-
 28        producing value-added natural resource products enterprise as operated  by
 29        another  taxpayer within the prior twelve (12) months, except as the prior
 30        taxpayer would have qualified under the provisions  of  paragraph  (c)  of
 31        this  subsection.  Employees transferred from a related taxpayer shall not
 32        be included in the computation of the credit.
 33        (c)  The number of employees during any  taxable  year  for  any  taxpayer
 34        shall  be  the mathematical average of the number of employees reported to
 35        the Idaho department of labor for employment security purposes during  the
 36        twelve (12) months of the taxable year which qualified under paragraph (a)
 37        of  this  subsection.  In  the event the business is in operation for less
 38        than the entire taxable year, the number of employees of the business  for
 39        the  year  shall be the average number actually employed during the months
 40        of operation, providing that the qualifications of paragraph (a)  of  this
 41        subsection are met.
 42        (2)  "Revenue-producing enterprise" means the production, assembly, fabri-
 43    cation, manufacture or processing of any natural resource product.
 44        (3)  "Same  or  a  substantially  identical  revenue-producing enterprise"
 45    means a revenue-producing enterprise in which the products produced  or  sold,
 46    or  the  activities  conducted  are the same in character and use and are pro-
 47    duced, sold or conducted in the same manner as, or for the same types of  cus-
 48    tomers  as,  the products or activities produced, sold or conducted in another
 49    revenue-producing enterprise.
                                                                        
 50        SECTION 21.  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-
                                                                        
                                           23
                                                                        
  1    ignated as Section 63-3029F, Idaho Code, and to read as follows:
                                                                        
  2        63-3029F.  SPECIAL CREDIT AVAILABLE -- NEW  EMPLOYEES.  (1)  Any  taxpayer
  3    shall  be  allowed  a  credit, in an amount determined under subsection (2) of
  4    this section, against the tax imposed by this  chapter,  other  than  the  tax
  5    imposed  by section 63-3082, Idaho Code, for any taxable year during which the
  6    taxpayer's employment of new employees, as defined under section  63-3029E(1),
  7    Idaho Code, increases above the taxpayer's average employment for either:  (a)
  8    the  prior  taxable year, or (b) the average of three (3) prior taxable years,
  9    whichever is higher. No credit shall be allowed under this section unless  the
 10    number of new employees equals or exceeds one (1) person.
 11        (2)  The credit authorized in subsection (1) of this section shall be five
 12    hundred  dollars  ($500)  per new employee, but the total credit allowed shall
 13    not exceed three and one-quarter  percent  (3.25%)  of  net  income  from  the
 14    taxpayer's  corporate, proprietorship, partnership, small business corporation
 15    or limited liability company revenue-producing enterprise in which the employ-
 16    ment occurred. Additionally, the total of this and all other  credits  allowed
 17    under  this  chapter  except  for the credits allowed under sections 63-3024A,
 18    63-3025D and 63-3029, Idaho Code, taken during  any  taxable  year  shall  not
 19    exceed  forty-five  percent (45%) of the tax otherwise imposed on the taxpayer
 20    for the taxable year for which such credit is allowed.
 21        (3)  If the sum of the credit carryovers from the credit allowed  by  sub-
 22    section (2) of this section and the amount of credit for the taxable year from
 23    the  credit  allowed  by  subsection (2) of this section exceed the limitation
 24    imposed by subsection (2) of this section for the current  taxable  year,  the
 25    excess  attributable  to  the  current taxable year's credit shall be a credit
 26    carryover to the three (3) succeeding taxable  years.  The  entire  amount  of
 27    unused  credit  shall  be  carried  forward  to the earliest of the succeeding
 28    years, wherein the oldest available unused credit shall be used first, so long
 29    as the employment level for which the credit was granted is still maintained.
                                                                        
 30        SECTION 22.  The provisions of Section 5, Sections 10 through 13 and  Sec-
 31    tions  16,  17  and 18 of this act are hereby declared to be nonseverable from
 32    other provisions within each section and if any provision of any of those sec-
 33    tions or the application of such provision to any person  or  circumstance  is
 34    declared invalid for any reason, such declaration shall render the entire sec-
 35    tion invalid but not other sections of this act.
                                                                        
 36        SECTION  23.  An  emergency  existing  therefor, which emergency is hereby
 37    declared to exist, Sections 1 through 18 and Section 22 of this act  shall  be
 38    in  full  force and effect on and after passage and approval and retroactively
 39    to January 1, 2001. Sections 19, 20 and 21 of this act shall be in full  force
 40    and effect on and after January 1, 2006.

Statement of Purpose / Fiscal Impact


                       STATEMENT OF PURPOSE

                             RS 11051

     TI-us income tax relief bill makes permanent a .5% rate
 reduction from year 2000 rate for individuals, rebates 10.6% of
1999 income tax paid to individuals subject to a $25 minimum and
$2,500 maximum, permanently doubles grocery credit for everyone
and permanently reduces the corporate income rate .5%. It
expands the current capital gains exclusion from 60% to 100% for
certain tangible assets. It provides five new or expanded
credits for Idaho business development including: research and
development expenditures, creation of new jobs, providing new
venture capital, installing broadband communications equipment,
and investing in counties with high unemployment or low personal
income. It changes the child care deduction to a credit equal to
half the federal credit and permanently increases the elderly
dependant care credit from $100 to $500.
                          FISCAL IMPACT
                            Provision
                                                 FY       FY
                                              2002      2003
               Individual rate reduction             14.6           61.2
               Individual rebate                     91
               Grocery credit                        18.6             .2
               Corporate rate reduction               3.4            5.1
                    Business credits
               Research and development               7.0             .75
               New Jobs                               1.5
               Venture Capital                        2.0
               Broadband                             35
               County incentive                       7.3
               Child care credit                      1.5
               Elderly dependant care                 1.2
               Capital gains                          8.7      _______
                                         $          160.3         $ 67.25





Contact
Name: Representative Dolores Crow
      Phone: 332 1000





STATEMENT OF PURPOSE/FISCAL NOTE                    H 20