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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
]]]] 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 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