Revision: Jan. 14, 2020, 1:09 p.m.
SB 661-FN - AS INTRODUCED
2020 SESSION
20-2819
10/05
SENATE BILL 661-FN
AN ACT relative to economic revitalization zone tax credits.
SPONSORS: Sen. Birdsell, Dist 19; Sen. Ward, Dist 8; Sen. Bradley, Dist 3; Sen. D'Allesandro, Dist 20; Sen. Dietsch, Dist 9
COMMITTEE: Ways and Means
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ANALYSIS
This bill requires the commissioner of business and economic affairs to certify each application for an economic revitalization zone tax credit. This bill modifies the calculation of the credits which may be issued to a taxpayer by the commissioner of business and economic affairs. The bill also extends the prospective repeal of the economic revitalization zone tax credit program to January 1, 2028.
This bill is a request of the department of business and economic affairs.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20-2819
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
AN ACT relative to economic revitalization zone tax credits.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Eligibility Requirements for Business Tax Credits. Amend RSA 162-N:3 to read as follows:
162-N:3 Eligibility Requirements for Business Tax Credits. No economic revitalization zone tax credits shall be allowed to any taxpayer unless the taxpayer's project receives written certification in accordance with RSA 162-N:4, I from the commissioner of business and economic affairs that it [will expand] has expanded the commercial or industrial base in a designated economic revitalization zone and [will create] created new jobs in the state.
2 Economic Revitalization Zone Tax Credit Letter of Certification. Amend RSA 162-N:4 to read as follows:
162-N:4 Economic Revitalization Zone Tax Credit [Agreement] Letter of Certification.
I. The commissioner of business and economic affairs shall [enter into a written] certify each application for an economic revitalization zone tax credit [agreement] with each taxpayer[; such agreement to be certified by the commissioner of business and economic affairs under this section].
II. The [agreement] commissioner, upon satisfaction of the requirements in RSA 162-N:3, shall [contain] issue a letter of certification containing such provisions as the commissioner of business and economic affairs determines to be in the public interest, which shall include, but not be limited to:
(a) Quality and quantity of full-time jobs to be created.
(b) Duration of the taxpayer's commitments with respect to the economic revitalization zone.
(c) The amount of the taxpayer's investment in the project.
(d) A precise definition of the location of the facility eligible for the credit.
[(e) The maximum amount of the economic revitalization zone tax credit that will be allowed to the business under this agreement for jobs created and for construction or reconstruction expenses.]
[II.] III. The [agreement] letter of certification shall contain a determination of the final amount of the credit awarded and shall be provided to the commissioner of revenue administration and the taxpayer claiming the credit no later than March [10] 31 of each year.
3 Determination of Credit. Amend RSA 162-N:6 to read as follows:
162-N:6 Determination of Economic Revitalization Zone Tax Credits Eligible Amount. For the purpose of determining the economic revitalization zone tax credit that the taxpayer is eligible to receive, the amount of the credit to be taken shall be [the lesser of the following:
I. The maximum amount of the economic revitalization zone tax credit as stated in the agreement as specified by RSA 162-N:4, I(e); or
II.] the sum of the following:
[(a)] I. 4 percent of the salary for each new full-time job created in the calendar year with a wage less than or equal to 1.75 times the then current state minimum wage.
[(b)] II. 5 percent of the salary for each new full-time job created in the calendar year with a wage greater than 1.75 times the then current state minimum wage and less than or equal to 2.5 times the then current state minimum wage.
[(c)] III. 6 percent of the salary for each new full-time job created in the calendar year with a wage greater than 2.5 times the then current state minimum wage.
[(d)] IV. 4 percent of the lesser of the following:
[(1)] (a) The actual cost incurred in the calendar year of creating a new facility or renovating an existing facility, and expenditures for machinery, equipment, or other materials, except inventory.
[(2)] (b) $20,000 for each new full-time job created in the calendar year.
4 Extension of Prospective Repeal of RSA 162-N. Amend 2007, 263:176, X, as amended by 2010, 311:1 and 2014, 139:1 to read as follows:
X. Section 123 of this act shall take effect[ July 1, 2020] January 1, 2028.
5 Extension of Prospective Repeal of RSA 162-N:2-a. Amend 2015, 265:9 to read as follows:
I. Section 7 of this act shall take effect [July 1, 2020] January 1, 2028.
I. Sections 4 and 5 of this act shall take effect June 30, 2020.
II. The remainder of this act shall take effect July 1, 2020.
20-2819
12/18/19
SB 661-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to economic revitalization zone tax credits.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ X ] General [ X ] Education [ ] Highway [ ] Other | |||
METHODOLOGY:
This bill modifies the method in which economic revitalization zone tax credits are awarded by the Department of Business and Economic Affairs (DBEA) and it extends the repeal date for such credits from July 1, 2020 to January 1, 2028.
DBEA states the proposed language clarifies the certification process with no resulting cost to the Department. The extension of the program date also has no fiscal impact on the Department's operations.
The Department of Revenue Administration (DRA) states any fiscal impact would begin in FY 2021. DRA is unable to project to what extent any procedural changes would affect the number of taxpayers who would receive the credit or the amount of such credits to be issued as result of the procedural changes. The $825,000 aggregate limit for the credits issued in any calendar year is unchanged. Amounts carried forward do not count against the $825,000 cap. The amount of these credits used against the Business Profits Tax, Business Enterprise Tax, or both, was $609,000 in FY 2019, $938,000 in FY 2018 and $823,000 in FY 2017. Any credits against the Business Profits Tax or Business Enterprise Tax will decrease revenue to the General Fund and Education Trust Fund.
AGENCIES CONTACTED:
Department of Business and Economic Affairs and Department of Revenue Administration