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H.B. 140

             1     

TAX CREDIT AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Brian S. King

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill addresses provisions related to tax credits.
             10      Highlighted Provisions:
             11          This bill:
             12          .    enacts tax credits for the employment of persons who are homeless;
             13          .    repeals provisions related to tax credits and enacts the Tax Credit Administration
             14      Act; and
             15          .    enacts the Tax Credit for Employment of Persons Who Are Homeless Act,
             16      including:
             17              .    defining terms;
             18              .    addressing the procedures and requirements for the Department of Workforce
             19      Services to authorize, and a person to claim, a tax credit; and
             20              .    requires the Department of Workforce Services to make certain reports to the
             21      Legislature.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          This bill provides effective dates.
             26      Utah Code Sections Affected:
             27      ENACTS:


             28           35A-5-301 , Utah Code Annotated 1953
             29           35A-5-302 , Utah Code Annotated 1953
             30           35A-5-303 , Utah Code Annotated 1953
             31           35A-5-304 , Utah Code Annotated 1953
             32           35A-5-305 , Utah Code Annotated 1953
             33           35A-5-306 , Utah Code Annotated 1953
             34           59-7-616 , Utah Code Annotated 1953
             35           59-7-901 , Utah Code Annotated 1953
             36           59-7-902 , Utah Code Annotated 1953
             37           59-7-903 , Utah Code Annotated 1953
             38           59-10-1032 , Utah Code Annotated 1953
             39      REPEALS:
             40           59-7-615 , as enacted by Laws of Utah 2002, Chapter 62
             41     
             42      Be it enacted by the Legislature of the state of Utah:
             43          Section 1. Section 35A-5-301 is enacted to read:
             44     
Part 3. Tax Credit for Employment of Persons Who Are Homeless Act

             45          35A-5-301. Title.
             46          This part is known as the "Tax Credit for Employment of Persons Who Are Homeless
             47      Act."
             48          Section 2. Section 35A-5-302 is enacted to read:
             49          35A-5-302. Definitions.
             50          As used in this part:
             51          (1) "Date of hire" means the date a person who is homeless first performs labor or
             52      services for compensation for an employer.
             53          (2) "Governmental entity" is as defined in Section 59-2-511 .
             54          (3) "Permanent housing, permanent supportive, or transitional facility" means a
             55      facility:
             56          (a) located within the state;
             57          (b) that provides supervision of residents of the facility; and
             58          (c) that is:


             59          (i) a publicly or privately operated shelter:
             60          (A) designed to provide temporary living accommodations, including a welfare hotel,
             61      congregate shelter, or transitional housing for the mentally ill; and
             62          (B) that receives federal homeless assistance funding distributed by the United States
             63      Department of Housing and Urban Development; or
             64          (ii) an emergency shelter that receives homeless assistance funding from a county, city,
             65      or town.
             66          (4) "Person who is homeless" means an individual whose primary nighttime residence
             67      is a permanent housing, permanent supportive, or transitional facility.
             68          (5) "Wage requirement" means that an employer pays a person who is homeless $4,000
             69      or more in wages during a time period that:
             70          (a) begins on the date of hire; and
             71          (b) ends no later than the last day of a three-calendar-quarter period, the first day of
             72      which is the first day of the first calendar quarter that begins on or after the date of hire.
             73          Section 3. Section 35A-5-303 is enacted to read:
             74          35A-5-303. Application for tax credit certificate.
             75          (1) An employer who employs a person who is homeless and seeks to receive a tax
             76      credit certificate under this part shall file an application with the department with respect to
             77      each person who is homeless that the employer employs.
             78          (2) The application shall be on a form the department provides to the employer.
             79          (3) The application shall require the employer to certify that:
             80          (a) the person who is homeless who the employer employs:
             81          (i) on the date of hire, has a primary nighttime residence at a permanent housing,
             82      permanent supportive, or transitional facility;
             83          (ii) is an employee, and not an independent contractor, of the employer;
             84          (iii) is legally eligible to work in the United States; and
             85          (iv) has not worked for the employer for more than 40 hours during the 60-day period
             86      immediately preceding the date of hire; and
             87          (b) the employer:
             88          (i) complies with all state, federal, or local requirements related to the employment of
             89      the person who is homeless; and


             90          (ii) is not a governmental entity.
             91          (4) The application:
             92          (a) shall list, for each person who is homeless that the employer employs:
             93          (i) the person's name;
             94          (ii) the person's taxpayer identification number; and
             95          (iii) the person's current address;
             96          (b) shall list the employer's taxpayer identification number; and
             97          (c) may require additional information as determined by the department.
             98          (5) An employer shall provide documentation to the department to support the
             99      certifications and other information the employer provides in the application described in this
             100      section.
             101          (6) If the department determines that, on the basis of the documentation and other
             102      information the employer provides, the employer has satisfied the certification requirements of
             103      Subsection (3) and provided the information described in Subsection (4), the department shall
             104      enter into a participation agreement with the employer as provided in Section 35A-5-304 for
             105      each person who is homeless who the employer employs.
             106          (7) If the department determines that, on the basis of the documentation and other
             107      information the employer provides, the employer has not satisfied the certification
             108      requirements of Subsection (3) or provided the information described in Subsection (4), the
             109      department:
             110          (a) shall deny the application; or
             111          (b) inform the employer that the documentation the employer provided is inadequate
             112      and request the employer to submit new or additional documentation.
             113          Section 4. Section 35A-5-304 is enacted to read:
             114          35A-5-304. Participation agreements.
             115          (1) If the department enters into a participation agreement with an employer, the
             116      participation agreement shall:
             117          (a) be provided by the department; and
             118          (b) establish the requirements the employer is required to meet to be eligible to receive
             119      a tax credit certificate, including:
             120          (i) requiring the employer to meet the certification requirements of Subsection


             121      35A-5-303 (3);
             122          (ii) requiring the employer to provide written notice to the department within 10 days
             123      after the date the employer meets the wage requirement; and
             124          (iii) requiring the employer to provide documentation or other information the
             125      department requests:
             126          (A) to establish the hours and dates that the person who is homeless works for the
             127      employer; and
             128          (B) to support the employer's eligibility to receive a tax credit certificate under this
             129      part.
             130          (2) An agreement under this section does constitute a right to receive a tax credit
             131      certificate under this part.
             132          Section 5. Section 35A-5-305 is enacted to read:
             133          35A-5-305. Tax credit certificate.
             134          (1) An employer shall provide written notice to the department within 10 days after the
             135      date the employer meets the wage requirement as provided in the participation agreement
             136      described in Section 35A-5-304 .
             137          (2) No later than 90 days after the date that an employer provides the written notice
             138      described in Subsection (1) to the department, the department shall determine whether the
             139      employer has met the requirements of the participation agreement under Section 53A-5-304 to
             140      receive a tax credit certificate.
             141          (3) Subject to the other provisions of this section, if the department determines that an
             142      employer has met the requirements of the participation agreement under Section 53A-5-304 to
             143      receive a tax credit certificate, the department may issue a tax credit certificate to the employer.
             144          (4) A tax credit certificate under this section:
             145          (a) shall list the amount of tax credit allowable for the taxable year in an amount that
             146      does not exceed $2,000;
             147          (b) shall list the name and taxpayer identification number of the employer;
             148          (c) shall list the name, taxpayer identification number, and current address of the
             149      person who is homeless with respect to whom the employer has met the wage requirement; and
             150          (d) may include any other information required by the department.
             151          (5) Subject to Subsections (6) and (7), the department shall issue tax credit certificates


             152      under this section in the order that the department receives the written notice described in
             153      Subsection (1).
             154          (6) The department may not issue tax credit certificates that total more than $100,000
             155      in a fiscal year.
             156          (7) (a) Subject to Subsection (7)(b), if the department would have issued tax credit
             157      certificates that total more than $100,000 in a fiscal year but for the limit provided in
             158      Subsection (6), the department shall issue the tax credit certificates that exceed $100,000 in the
             159      next fiscal year.
             160          (b) If the department issues tax credit certificates in accordance with Subsection (7)(a):
             161          (i) the tax credit certificates may not total more than $100,000; and
             162          (ii) the department may not issue tax credit certificates for an amount that exceeds the
             163      limit described in Subsection (7)(b)(i) in a future fiscal year.
             164          (8) The department shall provide a copy of a tax credit certificate the department issues
             165      under this section to the State Tax Commission.
             166          Section 6. Section 35A-5-306 is enacted to read:
             167          35A-5-306. Report to the Legislature.
             168          Beginning with the 2016 interim, the department shall report annually to the Economic
             169      Development and Workforce Services Interim Committee and the Revenue and Taxation
             170      Interim Committee:
             171          (1) on or before the November interim meeting; and
             172          (2) on the amount of tax credits the department grants under this part.
             173          Section 7. Section 59-7-616 is enacted to read:
             174          59-7-616. Nonrefundable tax credit for employment of a person who is homeless.
             175          (1) As used in this section:
             176          (a) "Eligible employer" means a person who receives a tax credit certificate from the
             177      Department of Workforce Services in accordance with Title 35A, Chapter 5, Part 3, Tax Credit
             178      for Employment of Persons Who Are Homeless Act.
             179          (b) "Person who is homeless" is as defined in Section 35A-5-302 .
             180          (2) Subject to the other provisions of this section, an eligible employer that is a
             181      corporation may claim a nonrefundable tax credit as provided in this section against a tax under
             182      this chapter.


             183          (3) The tax credit under this section is the amount of tax credit listed on a tax credit
             184      certificate that the Department of Workforce Services issues to an employer for a taxable year
             185      under Title 35A, Chapter 5, Part 3, Tax Credit for Employment of Persons Who Are Homeless
             186      Act.
             187          (4) An eligible employer may carry forward a tax credit under this section for a period
             188      that does not exceed the next five taxable years if:
             189          (a) the eligible employer is allowed to claim a tax credit under this section; and
             190          (b) the amount of the tax credit exceeds the eligible employer's tax liability under this
             191      chapter for that taxable year.
             192          (5) An eligible employer shall retain a tax credit certificate the eligible employer
             193      receives from the Department of Workforce Services for the same time period a person is
             194      required to keep books and records under Section 59-1-1406 .
             195          Section 8. Section 59-7-901 is enacted to read:
             196     
Part 9. Tax Credit Administration Act

             197          59-7-901. Title.
             198          This part is known as the "Tax Credit Administration Act."
             199          Section 9. Section 59-7-902 is enacted to read:
             200          59-7-902. Definitions.
             201          As used in this part:
             202          (1) "Tax credit" means a nonrefundable tax credit listed on a tax return.
             203          (2) "Tax return" means:
             204          (i) a corporate return as defined in Section 59-7-101 filed in accordance with this
             205      chapter; or
             206          (ii) a tax return filed in accordance with Chapter 8, Gross Receipts Tax on Certain
             207      Corporations Not Required to Pay Corporate Franchise or Income Tax Act.
             208          Section 10. Section 59-7-903 is enacted to read:
             209          59-7-903. Removal of tax credit from tax return -- Prohibition on claiming or
             210      carrying forward a tax credit -- Commission reporting requirements.
             211          (1) Subject to Subsection (2), the commission shall remove a tax credit from a tax
             212      return and a person filing a tax return may not claim or carry forward the tax credit if:
             213          (a) the total amount of tax credit claimed or carried forward by all persons who file a


             214      tax return is less than $10,000 per taxable year for three consecutive taxable years; and
             215          (b) less than 10 persons per year for the three consecutive taxable years described in
             216      Subsection (1)(a) file a tax return claiming or carrying forward the tax credit.
             217          (2) If the commission determines the requirements of Subsection (1) are met, the
             218      commission shall remove a tax credit from a tax return and a person filing a tax return may not
             219      claim or carry forward the tax credit beginning two taxable years after the January 1
             220      immediately following the date the commission determines the requirements of Subsection (1)
             221      are met.
             222          (3) The commission shall, on or before the November interim meeting of the year after
             223      the taxable year in which the commission determines the requirements of Subsection (1) are
             224      met:
             225          (a) report to the Revenue and Taxation Interim Committee that, in accordance with this
             226      section:
             227          (i) the commission is required to remove a tax credit from a return on which the tax
             228      credit appears; and
             229          (ii) a person filing a tax return may not claim or carry forward the tax credit; and
             230          (b) notify each state agency required by statute to assist in the administration of the tax
             231      credit that, in accordance with this section:
             232          (i) the commission is required to remove a tax credit from a return on which the tax
             233      credit appears; and
             234          (ii) a person filing a tax return may not claim or carry forward the tax credit.
             235          Section 11. Section 59-10-1032 is enacted to read:
             236          59-10-1032. Nonrefundable tax credit for employment of a person who is
             237      homeless.
             238          (1) As used in this section:
             239          (a) "Eligible employer" means a person who receives a tax credit certificate from the
             240      Department of Workforce Services in accordance with Title 35A, Chapter 5, Part 3, Tax Credit
             241      for Employment of Persons Who Are Homeless Act.
             242          (b) "Person who is homeless" is as defined in Section 35A-5-302 .
             243          (2) Subject to the other provisions of this section, an eligible employer that is a
             244      claimant, estate, or trust may claim a nonrefundable tax credit as provided in this section


             245      against a tax under this chapter.
             246          (3) The tax credit under this section is the amount of tax credit listed on a tax credit
             247      certificate that the Department of Workforce Services issues to an employer for a taxable year
             248      under Title 35A, Chapter 5, Part 3, Tax Credit for Employment of Persons Who Are Homeless
             249      Act.
             250          (4) An eligible employer may carry forward a tax credit under this section for a period
             251      that does not exceed the next five taxable years if:
             252          (a) the eligible employer is allowed to claim a tax credit under this section; and
             253          (b) the amount of the tax credit exceeds the eligible employer's tax liability under this
             254      chapter for that taxable year.
             255          (5) An eligible employer shall retain a tax credit certificate the eligible employer
             256      receives from the Department of Workforce Services for the same time period a person is
             257      required to keep books and records under Section 59-1-1406 .
             258          Section 12. Effective dates.
             259          (1) Except as provided in Subsection (2), this bill takes effect on May 13, 2014.
             260          (2) The actions affecting the following sections take effect for a taxable year beginning
             261      on or after January 1, 2015:
             262          (a) Section 59-7-616 ;
             263          (b) Section 59-7-901 ;
             264          (c) Section 59-7-902 ;
             265          (d) Section 59-7-903 ; and
             266          (e) Section 59-10-1032 .
             267          Section 13. Repealer.
             268          This bill repeals:
             269          Section 59-7-615 , Removal of tax credit from tax form and prohibition on claiming
             270      or carrying forward a tax credit -- Conditions for removal and prohibition on claiming or
             271      carrying forward a tax credit -- Commission reporting requirements.





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    as of 2-14-14 5:18 PM


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