1     
TARGETED BUSINESS INCOME TAX CREDIT

2     
AMENDMENTS

3     
2022 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Daniel McCay

6     
House Sponsor: Robert M. Spendlove

7     

8     LONG TITLE
9     General Description:
10          This bill repeals the Targeted Business Income Tax Credit in an Enterprise Zone.
11     Highlighted Provisions:
12          This bill:
13          ▸     provides that a business applicant may claim the Targeted Business Income Tax
14     Credit in an Enterprise Zone (the income tax credit) for a taxable year that begins
15     before January 1, 2023;
16          ▸     schedules the repeal of provisions of code that reference the income tax credit; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          59-7-159, as last amended by Laws of Utah 2021, Chapters 282 and 367
25          59-7-624, as last amended by Laws of Utah 2021, Chapter 282
26          59-10-137, as last amended by Laws of Utah 2021, Chapters 282 and 367
27          59-10-1112, as last amended by Laws of Utah 2021, Chapter 282
28          63I-2-259, as last amended by Laws of Utah 2021, Chapter 370
29          63I-2-263, as last amended by Laws of Utah 2021, First Special Session, Chapter 4
30          63N-2-304, as last amended by Laws of Utah 2019, Chapter 247
31     

32     Be it enacted by the Legislature of the state of Utah:
33          Section 1. Section 59-7-159 is amended to read:
34          59-7-159. Review of credits allowed under this chapter.
35          (1) As used in this section, "committee" means the Revenue and Taxation Interim
36     Committee.
37          (2) (a) The committee shall review the tax credits described in this chapter as provided
38     in Subsection (3) and make recommendations concerning whether the tax credits should be
39     continued, modified, or repealed.
40          (b) In conducting the review required under Subsection (2)(a), the committee shall:
41          (i) schedule time on at least one committee agenda to conduct the review;
42          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
43     under review to provide testimony;
44          (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
45     and analysis of the information for each tax credit regarding which the Governor's Office of
46     Economic Opportunity is required to make a report under this chapter; and
47          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
48     analysis of the information for each tax credit regarding which the Office of the Legislative
49     Fiscal Analyst is required to make a report under this chapter;
50          (iv) ensure that the committee's recommendations described in this section include an
51     evaluation of:
52          (A) the cost of the tax credit to the state;
53          (B) the purpose and effectiveness of the tax credit; and
54          (C) the extent to which the state benefits from the tax credit; and
55          (v) undertake other review efforts as determined by the committee chairs or as
56     otherwise required by law.
57          (3) (a) On or before November 30, 2017, and every three years after 2017, the
58     committee shall conduct the review required under Subsection (2) of the tax credits allowed
59     under the following sections:
60          (i) Section 59-7-601;
61          (ii) Section 59-7-607;
62          (iii) Section 59-7-612;
63          (iv) Section 59-7-614.1; and
64          (v) Section 59-7-614.5.
65          (b) On or before November 30, 2018, and every three years after 2018, the committee
66     shall conduct the review required under Subsection (2) of the tax credits allowed under the
67     following sections:
68          (i) Section 59-7-609;
69          (ii) Section 59-7-614.2;
70          (iii) Section 59-7-614.10;
71          (iv) Section 59-7-619; and
72          (v) Section 59-7-620[; and].
73          [(vi) Section 59-7-624.]
74          (c) On or before November 30, 2019, and every three years after 2019, the committee
75     shall conduct the review required under Subsection (2) of the tax credits allowed under the
76     following sections:
77          (i) Section 59-7-610;
78          (ii) Section 59-7-614; and
79          (iii) Section 59-7-614.7.
80          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
81     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
82     2017.
83          (ii) The committee shall complete a review described in this Subsection (3)(d) three
84     years after the effective date of the tax credit and every three years after the initial review date.
85          Section 2. Section 59-7-624 is amended to read:
86          59-7-624. Targeted business income tax credit.
87          (1) As used in this section, "business applicant" means the same as that term is defined
88     in Section 63N-2-302.
89          (2) [A] For a taxable year that begins before January 1, 2023, a business applicant that
90     is certified and issued a targeted business income tax eligibility certificate by the Governor's
91     Office of Economic Opportunity under Section 63N-2-304 may claim a refundable tax credit in
92     the amount specified on the targeted business income tax eligibility certificate.
93          (3) For a taxable year for which a business applicant claims a targeted business income
94     tax credit under this section, the business applicant may not claim or carry forward a tax credit
95     under Section 59-7-610, Section 59-10-1007, or Title 63N, Chapter 2, Part 2, Enterprise Zone
96     Act.
97          Section 3. Section 59-10-137 is amended to read:
98          59-10-137. Review of credits allowed under this chapter.
99          (1) As used in this section, "committee" means the Revenue and Taxation Interim
100     Committee.
101          (2) (a) The committee shall review the tax credits described in this chapter as provided
102     in Subsection (3) and make recommendations concerning whether the tax credits should be
103     continued, modified, or repealed.
104          (b) In conducting the review required under Subsection (2)(a), the committee shall:
105          (i) schedule time on at least one committee agenda to conduct the review;
106          (ii) invite state agencies, individuals, and organizations concerned with the tax credit
107     under review to provide testimony;
108          (iii) (A) invite the Governor's Office of Economic Opportunity to present a summary
109     and analysis of the information for each tax credit regarding which the Governor's Office of
110     Economic Opportunity is required to make a report under this chapter; and
111          (B) invite the Office of the Legislative Fiscal Analyst to present a summary and
112     analysis of the information for each tax credit regarding which the Office of the Legislative
113     Fiscal Analyst is required to make a report under this chapter;
114          (iv) ensure that the committee's recommendations described in this section include an
115     evaluation of:
116          (A) the cost of the tax credit to the state;
117          (B) the purpose and effectiveness of the tax credit; and
118          (C) the extent to which the state benefits from the tax credit; and
119          (v) undertake other review efforts as determined by the committee chairs or as
120     otherwise required by law.
121          (3) (a) On or before November 30, 2017, and every three years after 2017, the
122     committee shall conduct the review required under Subsection (2) of the tax credits allowed
123     under the following sections:
124          (i) Section 59-10-1004;
125          (ii) Section 59-10-1010;
126          (iii) Section 59-10-1015;
127          (iv) Section 59-10-1025;
128          (v) Section 59-10-1027;
129          (vi) Section 59-10-1031;
130          (vii) Section 59-10-1032;
131          (viii) Section 59-10-1035;
132          (ix) Section 59-10-1104;
133          (x) Section 59-10-1105; and
134          (xi) Section 59-10-1108.
135          (b) On or before November 30, 2018, and every three years after 2018, the committee
136     shall conduct the review required under Subsection (2) of the tax credits allowed under the
137     following sections:
138          (i) Section 59-10-1005;
139          (ii) Section 59-10-1006;
140          (iii) Section 59-10-1012;
141          (iv) Section 59-10-1022;
142          (v) Section 59-10-1023;
143          (vi) Section 59-10-1028;
144          (vii) Section 59-10-1034;
145          (viii) Section 59-10-1037; and
146          (ix) Section 59-10-1107[; and].
147          [(x) Section 59-10-1112.]
148          (c) On or before November 30, 2019, and every three years after 2019, the committee
149     shall conduct the review required under Subsection (2) of the tax credits allowed under the
150     following sections:
151          (i) Section 59-10-1007;
152          (ii) Section 59-10-1014;
153          (iii) Section 59-10-1017;
154          (iv) Section 59-10-1018;
155          (v) Section 59-10-1019;
156          (vi) Section 59-10-1024;
157          (vii) Section 59-10-1029;
158          (viii) Section 59-10-1036;
159          (ix) Section 59-10-1106; and
160          (x) Section 59-10-1111.
161          (d) (i) In addition to the reviews described in this Subsection (3), the committee shall
162     conduct a review of a tax credit described in this chapter that is enacted on or after January 1,
163     2017.
164          (ii) The committee shall complete a review described in this Subsection (3)(d) three
165     years after the effective date of the tax credit and every three years after the initial review date.
166          Section 4. Section 59-10-1112 is amended to read:
167          59-10-1112. Targeted business income tax credit.
168          (1) As used in this section, "business applicant" means the same as that term is defined
169     in Section 63N-2-302.
170          (2) [A] For a taxable year that begins before January 1, 2023, a business applicant that
171     is certified and issued a targeted business income tax eligibility certificate by the Governor's
172     Office of Economic Opportunity under Section 63N-2-304 may claim a refundable tax credit in
173     the amount specified on the targeted business income tax eligibility certificate.
174          (3) For a taxable year for which a business applicant claims a targeted business income
175     tax credit under this section, the business applicant may not claim or carry forward a tax credit
176     under Section 59-7-610, Section 59-10-1007, or Title 63N, Chapter 2, Part 2, Enterprise Zone
177     Act.
178          Section 5. Section 63I-2-259 is amended to read:
179          63I-2-259. Repeal dates -- Title 59.
180          (1) In Section 59-2-926, the language that states "applicable" and "or 53F-2-301.5" is
181     repealed July 1, 2023.
182          [(2) Subsection 59-7-106(1)(w) is repealed December 31, 2021.]
183          [(3) Section 59-7-620 is repealed December 31, 2021.]
184          [(4) Subsection 59-10-114(2)(j) is repealed December 31, 2021.]
185          (2) Subsection 59-7-610(8), relating to claiming a tax credit in the same taxable year as
186     the targeted business income tax credit, is repealed December 31, 2024.
187          (3) Subsection 59-7-614.10(5), relating to claiming a tax credit in the same taxable
188     year as the targeted business income tax credit, is repealed December 31, 2024.
189          (4) Section 59-7-624 is repealed December 31, 2024.
190          (5) Subsection 59-10-210(2)(b)(vi) is repealed December 31, 2024.
191          (6) Subsection 59-10-1007(8), relating to claiming a tax credit in the same taxable year
192     as the targeted business income tax credit, is repealed December 31, 2024.
193          (7) Subsection 59-10-1037(5), relating to claiming a tax credit in the same taxable year
194     as the targeted business income tax credit, is repealed December 31, 2024.
195          (8) Section 59-10-1112 is repealed December 31, 2024.
196          Section 6. Section 63I-2-263 is amended to read:
197          63I-2-263. Repeal dates, Title 63A to Title 63N.
198          [(1) Section 63A-3-111 is repealed June 30, 2021.]
199          [(2) Title 63C, Chapter 19, Higher Education Strategic Planning Commission is
200     repealed July 1, 2021.]
201          [(3)] (1) Title 63C, Chapter 22, Digital Wellness, Citizenship, and Safe Technology
202     Commission is repealed July 1, 2023.
203          [(4)] (2) Section 63G-1-502 is repealed July 1, 2022.
204          [(5)] (3) The following sections regarding the World War II Memorial Commission are
205     repealed [on] July 1, 2022:
206          (a) Section 63G-1-801;
207          (b) Section 63G-1-802;
208          (c) Section 63G-1-803; and
209          (d) Section 63G-1-804.
210          [(6)] (4) Section 63H-7a-303 is repealed July 1, 2024.
211          [(7) Subsection 63J-1-206(3)(c), relating to coronavirus, is repealed July 1, 2021.]
212          [(8)] (5) Sections 63M-7-213 and 63M-7-213.5 are repealed [on] January 1, 2023.
213          [(9)] (6) Section 63M-7-217 is repealed [on] July 1, 2022.
214          [(10)] (7) Title 63N, Chapter 13, Part 3, Facilitating Public-private Partnerships Act, is
215     repealed January 1, 2024.
216          [(11) Title 63N, Chapter 15, COVID-19 Economic Recovery Programs, is repealed
217     December 31, 2021.]
218          (8) Subsection 63N-2-213(12)(a), relating to claiming a tax credit in the same taxable
219     year as the targeted business income tax credit, is repealed December 31, 2024.
220          (9) Title 63N, Chapter 2, Part 3, Targeted Business Income Tax Credit in an Enterprise
221     Zone, is repealed December 31, 2024.
222          Section 7. Section 63N-2-304 is amended to read:
223          63N-2-304. Application for targeted business income tax credit.
224          (1) (a) [A] For a taxable year that begins before January 1, 2023, a business applicant
225     may apply to the office for a targeted business income tax credit eligibility certificate under this
226     part if the business applicant:
227          (i) is located in:
228          (A) an enterprise zone; and
229          (B) a county with a population of less than 25,000;
230          (ii) meets the requirements of Section 63N-2-212;
231          (iii) provides a community investment project within the enterprise zone; and
232          (iv) is not engaged in the following:
233          (A) construction;
234          (B) retail trade; or
235          (C) public utility activities.
236          (b) For a taxable year for which a business applicant claims a targeted business income
237     tax credit available under this part, the business applicant may not claim or carry forward a tax
238     credit available under Section 59-7-610, 59-10-1007, or 63N-2-213.
239          (2) (a) A business applicant seeking to claim a targeted business income tax credit
240     under this part shall submit an application to the office by no later than June 1 of the taxable
241     year in which the business applicant is seeking to claim the targeted business income tax credit.
242          (b) The application described in Subsection (2)(a) shall include:
243          (i) any documentation required by the office to demonstrate that the business applicant
244     meets the requirements of Subsection (1);
245          (ii) a plan developed by the business applicant that describes:
246          (A) if the community investment project includes significant new employment, the
247     projected number and anticipated wage level of the jobs that the business applicant plans to
248     create as the basis for qualifying for a targeted business income tax credit;
249          (B) if the community investment project includes significant new capital development,
250     the capital development the business applicant plans to make as the basis for qualifying for a
251     targeted business income tax credit;
252          (C) how the business applicant's plan coordinates with the goals of the enterprise zone
253     in which the business applicant is providing a community investment project;
254          (D) how the business applicant's plan coordinates with the overall economic
255     development goals of the county or municipality in which the business applicant is providing a
256     community investment project;
257          (E) any matching funds that will be used for the community investment project;
258          (F) how any targeted business income tax credit incentives that were awarded in a
259     previous year have been used for the community investment project by the business applicant;
260     and
261          (G) the requested amount of the targeted business income tax credit; and
262          (iii) any additional information required by the office.
263          (3) (a) The office shall:
264          (i) evaluate an application filed under Subsection (2);
265          (ii) determine whether the business applicant is potentially eligible for a targeted
266     business income tax credit; and
267          (iii) if the business applicant is potentially eligible for a targeted business income tax
268     credit, determine performance benchmarks and the deadline for meeting those benchmarks that
269     the business applicant must achieve before the office awards a targeted business income tax
270     credit to the business applicant.
271          (b) If the office determines that the business applicant is potentially eligible for a
272     targeted business income tax credit, the office shall:
273          (i) notify the business applicant that the business applicant is eligible for a targeted
274     business income tax credit if the business applicant meets the performance benchmarks by the
275     deadline as determined by the office as described in Subsection (3)(a)(iii);
276          (ii) notify the business applicant of the potential amount of the targeted business
277     income tax credit that may be awarded to the business applicant, which amount may be no
278     more than $100,000 for the business applicant in a taxable year; and
279          (iii) monitor a business applicant to ensure compliance with this section and to
280     measure the business applicant's progress in meeting performance benchmarks.
281          (c) If the business applicant provides evidence to the office, in a form prescribed by the
282     office, that the business applicant has achieved the performance benchmarks by the deadline as
283     determined by the office as described in Subsection (3)(a)(iii), the office shall:
284          (i) certify that the business applicant is eligible for a targeted business income tax
285     credit;
286          (ii) issue a targeted business income tax credit eligibility certificate to the business
287     applicant in accordance with:
288          (A) for a business applicant that files a return under Title 59, Chapter 7, Corporate
289     Franchise and Income Taxes, Section 59-7-624; or
290          (B) for a business applicant that files a return under Title 59, Chapter 10, Individual
291     Income Tax Act, Section 59-10-1112; and
292          (iii) provide a duplicate copy of the targeted business income tax credit eligibility
293     certificate to the State Tax Commission.
294          (4) The total amount of the targeted business income tax credit eligibility certificates
295     that the office issues under this part for all business applicants may not exceed $300,000 in any
296     fiscal year.
297          (5) (a) A business applicant shall retain the targeted business income tax credit
298     eligibility certificate as issued under Subsection (3) for the same time period that a person is
299     required to keep books and records under Section 59-1-1406.
300          (b) The office may audit a business applicant to ensure:
301          (i) eligibility for a targeted business income tax credit; and
302          (ii) compliance with this section.