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H.B. 24 Enrolled

             1     

ECONOMIC DEVELOPMENT INCENTIVES ACT

             2     
AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: C. Brent Wallis

             6     
Senate Sponsor: Jerry W. Stevenson

             7      Cosponsors:
             8      Laura BlackNeil A. Hansen
Steven R. MascaroChristine F. Watkins              9     
             10      LONG TITLE
             11      General Description:
             12          This bill modifies provisions of the Economic Development Incentives Act related to
             13      significant capital investment and requirements for receiving a tax credit under the act.
             14      Highlighted Provisions:
             15          This bill:
             16          .    defines "significant capital investment" for purposes of the Economic Development
             17      Incentives Act to be an amount of at least $10,000,000 to purchase a capital asset
             18      or fixed asset; and
             19          .    requires an applicant for a tax credit under the act to provide the Governor's Office
             20      of Economic Development with documentation that it has satisfied the performance
             21      benchmarks required under the act, including significant capital investment, the
             22      creation of high paying jobs, significant purchases from Utah vendors or providers,
             23      or any combination of these economic factors.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          None
             28      Utah Code Sections Affected:
             29      AMENDS:


             30          63M-1-2403, as enacted by Laws of Utah 2008, Chapter 372
             31          63M-1-2405, as enacted by Laws of Utah 2008, Chapter 372
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 63M-1-2403 is amended to read:
             35           63M-1-2403. Definitions.
             36          As used in this part:
             37          (1) "Business entity" means a person that enters into an agreement with the office to
             38      initiate a new commercial project in Utah that will qualify the person to receive a tax credit
             39      under Section 59-7-614.2 or 59-10-1107 .
             40          (2) "Development zone" means an economic development zone created under Section
             41      63M-1-2404 .
             42          (3) "High paying jobs" means the annual wages of employment positions in a business
             43      entity that compare favorably against the average wage of a community in which the
             44      employment positions will exist.
             45          (4) (a) "New commercial project" means an economic development opportunity that
             46      involves new or expanded industrial, manufacturing, distribution, or business services in Utah.
             47          (b) "New commercial project" does not include retail business.
             48          (5) "New incremental jobs" means employment positions that are:
             49          (a) not shifted from one jurisdiction in the state to another jurisdiction in the state; and
             50          (b) created in addition to the baseline count of employment positions that existed
             51      within the business entity before the new commercial project.
             52          (6) "New state revenues" means:
             53          (a) incremental new state sales and use tax revenues that a business entity pays under
             54      Title 59, Chapter 12, Sales and Use Tax Act, as a result of a new commercial project in a
             55      development zone;
             56          (b) incremental new state tax revenues, if any, that a business entity pays as a result of
             57      a new commercial project in a development zone under:


             58          (i) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
             59          [(i)] (ii) Title 59, Chapter 10, Part 1, Determination and Reporting of Tax Liability
             60      and Information;
             61          [(ii)] (iii) Title 59, Chapter 10, Part 2, Trusts and Estates;
             62          [(iii)] (iv) Title 59, Chapter 10, Part 4, Withholding of Tax; or
             63          [(iv) Title 59, Chapter 7, Corporate Franchise and Income Taxes; or]
             64          [(v)] (v) a combination of Subsections (6)(b)(i) through (iv);
             65          (c) incremental new state tax revenues paid as individual income taxes under Title 59,
             66      Chapter 10, Part 1, Determination and Reporting of Tax Liability and Information, by
             67      employees of the new commercial project as evidenced by payroll records that indicate the
             68      amount of employee income taxes withheld and transmitted to the State Tax Commission by
             69      the business entity; or
             70          (d) a combination of Subsections (6)(a) through (c).
             71          (7) "Office" means the Governor's Office of Economic Development.
             72          (8) "Significant capital investment" means an amount of at least $10,000,000 to
             73      purchase a capital asset or a fixed asset:
             74          (a) with the primary purpose of the investment to increase a business entity's rate at
             75      which it produces goods based on output per unit of labor;
             76          (b) that represents an expansion of existing Utah operations; and
             77          (c) that maintains or increases the business entity's existing Utah work force.
             78          [(8)] (9) "Tax credit" means an economic development tax credit created by Section
             79      59-7-614.2 or 59-10-1107 .
             80          [(9)] (10) "Tax credit amount" means the amount the office lists as a tax credit on a
             81      tax credit certificate for a taxable year.
             82          [(10)] (11) "Tax credit certificate" means a certificate issued by the office that:
             83          (a) lists the name of the applicant;
             84          (b) lists the applicant's taxpayer identification number;
             85          (c) lists the amount of tax credit that the office awards the applicant for the taxable


             86      year; and
             87          (d) may include other information as determined by the office.
             88          Section 2. Section 63M-1-2405 is amended to read:
             89           63M-1-2405. Qualifications for tax credit -- Procedure.
             90          (1) The office shall certify a business entity's eligibility for a tax credit as provided in
             91      this section.
             92          (2) A business entity seeking to receive a tax credit shall provide the office with:
             93          (a) an application for a tax credit certificate;
             94          (b) documentation of the new state revenues from the business entity's new
             95      commercial project that were paid during the preceding calendar year; [and]
             96          (c) a document that expressly directs and authorizes the State Tax Commission to
             97      disclose the business entity's returns and other information concerning the business entity that
             98      would otherwise be subject to confidentiality under Section 59-1-403 or Section 6103, Internal
             99      Revenue Code, to the office[.]; and
             100          (d) documentation that the business entity has satisfied the performance benchmarks
             101      outlined in the agreement described in Subsection 63M-1-2404 (3)(a), including:
             102          (i) significant capital investment;
             103          (ii) the creation of high paying jobs;
             104          (iii) significant purchases from Utah vendors and providers; or
             105          (iv) any combination of Subsections (2)(d)(i), (ii), and (iii).
             106          (3) (a) The office shall submit the document described in Subsection (2)(c) to the State
             107      Tax Commission.
             108          (b) Upon receipt of the document described in Subsection (2)(c), the State Tax
             109      Commission shall provide the office with the information requested by the office that the
             110      business entity directed or authorized the State Tax Commission to provide to the office in the
             111      document described in Subsection (2)(c).
             112          (4) If, after review of the information provided by the State Tax Commission, the
             113      office determines that the documentation provided by the business entity is inadequate to


             114      provide a reasonable justification for authorizing a tax credit, the office shall either:
             115          (a) deny the tax credit; or
             116          (b) inform the business entity that the documentation was inadequate and ask the
             117      business entity to submit new documentation.
             118          (5) If after review of the information provided by the State Tax Commission, the office
             119      determines that the documentation provided by the business entity provides reasonable
             120      justification for authorizing a tax credit, the office shall, based upon the documentation:
             121          (a) determine the amount of the tax credit to be granted to the business entity;
             122          (b) issue a tax credit certificate to the business entity; and
             123          (c) provide a duplicate copy of the tax credit certificate to the State Tax Commission.
             124          (6) A business entity may not claim a tax credit unless the business entity has a tax
             125      credit certificate issued by the office.
             126          (7) (a) A business entity may claim a tax credit in the amount listed on the tax credit
             127      certificate on its tax return.
             128          (b) A business entity that claims a tax credit under this section shall retain the tax
             129      credit certificate in accordance with Section 59-7-614.2 or 59-10-1107 .


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