2005 Legislation
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HOUSE BILL NO. 273 – Economic expenditure accountability

HOUSE BILL NO. 273

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Bill Status



H0273......................................................by STATE AFFAIRS
TAX CREDITS - ECONOMIC EXPENDITURES - Adds to existing law to provide the
Tax Credit and Economic Development Expenditure Act; and to provide for
reporting to the Director of Commerce and Labor for tax credits and
economic development expenditures received by a company.
                                                                        
02/28    House intro - 1st rdg - to printing
03/01    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 273
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE TAX CREDIT AND ECONOMIC DEVELOPMENT EXPENDITURE ACCOUNTABILITY
  3        ACT; AMENDING CHAPTER 47, TITLE 67, IDAHO CODE, BY THE ADDITION OF  A  NEW
  4        SECTION  67-4725,  IDAHO  CODE,  TO  PROVIDE  PURPOSE, TO DEFINE "ECONOMIC
  5        DEVELOPMENT EXPENDITURE," TO PROVIDE FOR REPORTING TO THE DIRECTOR OF COM-
  6        MERCE AND LABOR, TO DEFINE "JOBS," TO DEFINE "WAGES," TO  DETAIL  INFORMA-
  7        TION  THE  REPORT SHALL CONTAIN, TO PROVIDE FOR REPORTS BY THE DIRECTOR OF
  8        THE DEPARTMENT OF COMMERCE AND LABOR AND TO PROVIDE CIVIL PENALTIES.
                                                                        
  9    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 10        SECTION 1.  That Chapter 47, Title 67, 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 67-4725, Idaho Code, and to read as follows:
                                                                        
 13        67-4725.  IDAHO TAX CREDIT AND ECONOMIC DEVELOPMENT  EXPENDITURE  ACCOUNT-
 14    ABILITY ACT. (1) It is the purpose of this section to document and improve the
 15    effectiveness  of economic development expenditures and to assist the legisla-
 16    ture in ensuring that each expenditure is truly creating  jobs  and  enhancing
 17    Idaho's economy.
 18        (2)  As used in this section, "economic development expenditure" means any
 19    combined or single corporate income tax credit, deduction, incentive or exclu-
 20    sion;  industry-specific  sales  tax  or property tax exclusion, exemption, or
 21    rebate, or any related expenditure of public funds with an annual value of  at
 22    least  forty  thousand  dollars ($40,000) claimed by a taxpayer and created by
 23    the state of Idaho for the primary purpose of  stimulating  business  economic
 24    development within the state. Community block grants and other development and
 25    infrastructure  enhancement  grants not gifted, credited, or refunded directly
 26    to taxpayers are excluded. A list of specific, reportable economic development
 27    expenditures will be developed in rule and updated annually by the tax commis-
 28    sion in cooperation with the department of commerce and labor.
 29        (3)  Reporting entity: Each person, firm, corporation, or other recognized
 30    legal entity who is or whose subsidiary or affiliate  is  the  beneficiary  of
 31    economic  development  expenditures shall file a report, called the "Idaho Tax
 32    Credits Accountability Report" (hereafter called "the report") with the direc-
 33    tor of the department of commerce and labor before August 1 of each year.  Any
 34    entity receiving a state jobs credit, regardless of whether that credit totals
 35    forty  thousand dollars ($40,000) shall also file a report as outlined in sub-
 36    section (5) of this section.
 37        (4)  For the purposes of this section, "jobs" shall include  any  and  all
 38    employment by the reporting entity, including contracted employment at facili-
 39    ties  in the state operated by the reporting entity. For purposes of this sec-
 40    tion, "wages," when calculated, shall  be  the  mathematical  average  of  the
 41    hourly wage for an employee during the twelve (12) months of the taxable year.
 42    Job  totals  will  be calculated on the mathematical average number of jobs in
 43    each wage category.
                                                                        
                                           2
                                                                        
  1        (5)  The report shall detail the following employment and taxation  infor-
  2    mation  for the period since the previous year's report or for the most recent
  3    taxable year or portion of a taxable year for the reporting entity  since  the
  4    reporting  entity first benefited from a total of at least forty thousand dol-
  5    lars ($40,000) in Idaho economic development expenditures.  The  report  shall
  6    include the following information:
  7        (a)  Percentage  of  all  jobs at all facilities in Idaho that fall within
  8        each of the following nine (9) wage categories:
  9             (i)    Less than or equal to the current Idaho minimum hourly wage;
 10             (ii)   Greater than the current Idaho minimum hourly  wage  but  less
 11             than  or  equal  to  one and one-half (1 1/2) times the current Idaho
 12             minimum hourly wage;
 13             (iii)  Greater than one and one-half (1 1/2) times the current  Idaho
 14             minimum  hourly wage but less than or equal to two (2) times the cur-
 15             rent Idaho minimum hourly wage;
 16             (iv)   Greater than two (2) times the current  Idaho  minimum  hourly
 17             wage but less than or equal to three (3) times the current Idaho min-
 18             imum hourly wage;
 19             (v)    Greater  than three (3) times the current Idaho minimum hourly
 20             wage but less than twenty-four dollars and four  cents  ($24.04)  per
 21             hour worked;
 22             (vi)   Greater  than  twenty-four dollars and four cents ($24.04) per
 23             hour worked and less than or equal to forty-eight dollars  and  eight
 24             cents ($48.08) per hour worked;
 25             (vii)  Greater  than forty-eight dollars and eight cents ($48.08) per
 26             hour worked and less than or equal to ninety-six dollars and  sixteen
 27             ($96.16) per hour worked;
 28             (viii) Greater than ninety-six dollars and sixteen cents ($96.16) per
 29             hour  worked and less than or equal to one hundred ninety-two dollars
 30             and thirty-two cents ($192.32) per hour worked;
 31             (ix)   Greater than one hundred  ninety-two  dollars  and  thirty-two
 32             cents ($192.32) per hour worked.
 33        (b)  Within  each wage category, the net number of new jobs created in the
 34        reporting period at all facilities in Idaho because of  economic  develop-
 35        ment expenditures. If new jobs were created in the five (5) years prior to
 36        the  reporting period, the annual net job gain may be listed separately by
 37        year and wage category. Part-time employment of less than thirty-five (35)
 38        hours per week must be listed separately. A narrative may  accompany  this
 39        report  detailing the nature and quantity of economic development expendi-
 40        tures that were most beneficial in creating these new jobs.
 41        (c)  Within each wage category, the net number of new jobs  at  all  Idaho
 42        facilities  created and filled by employees who have not previously worked
 43        for the reporting entity, its parent company or affiliates.
 44        (d)  Within each wage category, the net number of jobs lost at all facili-
 45        ties in Idaho.
 46        (e)  Within each wage category,  the  percentage  of  employees  in  Idaho
 47        facilities  working on a full-time, thirty-five (35) hours or more a week,
 48        basis.
 49        (f)  Within each wage category, the percentage of employees at  all  Idaho
 50        facilities  who  were eligible to receive employer provided coverage under
 51        an accident or health plan described in section 105 of the Internal  Reve-
 52        nue Code during a minimum of nine (9) months of the taxable year.
 53        (g)  Within  each  wage category, the percentage of employees at all Idaho
 54        facilities who received employer subsidized retirement savings or  pension
 55        benefits during a minimum of nine (9) months of the taxable year.
                                                                        
                                           3
                                                                        
  1        (h)  Within  each  wage  category,  the percentage of all employees in all
  2        Idaho facilities working and/or receiving pay on a temporary  or  seasonal
  3        basis of less than nine (9) full months per year.
  4        (i)  Within  each  wage  category,  the percentage of all employees at all
  5        facilities in Idaho receiving bonuses, benefits, incentives and other com-
  6        pensation in excess of six thousand  dollars  ($6,000)  per  year  in  the
  7        reporting period.
  8        (j)  During  the  reporting entity's taxable year, the total value of each
  9        economic development expenditure granted to the reporting entity by  city,
 10        county, state and local taxing entities in Idaho.
 11        (k)  Whether  the  reporting entity or a subsidiary or affiliate receiving
 12        economic development expenditures has ceased to do business in Idaho.
 13        (l)  If the reporting entity or a subsidiary or affiliate  receiving  eco-
 14        nomic  development  expenditures  has  ceased to do business in Idaho, the
 15        total amount of Idaho economic development  expenditures  both  that  have
 16        been  repaid and are required to be repaid to the state under the terms of
 17        state recapture provisions or other  contracts  and  agreements  with  the
 18        state or local taxing authorities.
 19        (6)  The  director  shall  compile  an  annual  report  detailing, both by
 20    reporting entity and by development expenditure, all the information submitted
 21    pursuant to this section. The department shall submit its annual report to the
 22    house of representatives revenue and taxation committee, the senate local gov-
 23    ernment and taxation committee, the state affairs committees  of  both  houses
 24    and the joint finance-appropriations committee each year at the regular legis-
 25    lative  session  after  the  information is submitted. The department's report
 26    will be available to the legislature and the public  by  request  and  on  the
 27    department's website within twelve (12) weeks following the August 1 submittal
 28    deadline.  Included  in  the  department's  report will be a list of reporting
 29    entities that have failed to file pursuant to this section.
 30        (7)  Qualifying entities that fail to compile and submit such reports will
 31    be fined one thousand dollars ($1,000) per month of delinquency payable to the
 32    department of commerce and labor for deposit in the state general fund.  Enti-
 33    ties  that file falsified reports or provide substantially inaccurate informa-
 34    tion will be fined five thousand dollars ($5,000) for each erroneous report.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE
                                 
                           RS 15037C1
                                
The purpose of this legislation is to enhance the accountability
of companies receiving $40,000 or more in Idaho corporate tax
incentives, credits and other state economic development
expenditures.
     
When enacted, this legislation will create a simple annual
reporting process to the Department of Commerce and Labor that
includes information on the number and type of jobs created,
wages by category, part-time, full-time and seasonal status as
well as health care and other benefits offered. 


                           FISCAL NOTE

Printing costs to mail the one-page form and instructions, to
fewer than 2,000 medium and large Idaho businesses that might
qualify, would be less than $2,000.  One-sixth of an FTE to
process the data and one-sixth of an analyst's time to compile
the report would add a maximum of $17,000 in costs for a total of
$19,000 in immediate fiscal impact.

Within a year or two, these costs should be offset by millions in
savings to the general fund as some incentive programs are
reevaluated and rewritten to provide the state more economic
benefits and stronger returns.
     

     

Contact
Name:  Representative Nicole LeFavour 
Phone: 208-332-1000




STATEMENT OF PURPOSE/FISCAL NOTE                     H 273