Print Friendly HOUSE BILL NO. 273 – Economic expenditure accountability
HOUSE BILL NO. 273
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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.
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,
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.
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
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
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.
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.
Name: Representative Nicole LeFavour
STATEMENT OF PURPOSE/FISCAL NOTE H 273