Requires the secretary of the Dept. of Revenue to uniformly reduce the amount of tax credits in a year of a budget deficit (OR SEE FISC NOTE GF RV)
Summary
House Bill 712, introduced by Representative Katrina Jackson, mandates the uniform reduction of certain tax credits in the event of a projected state budget deficit. Starting July 1, 2013, if the state reveals a budget deficit, the secretary of the Department of Revenue is required to decrease the statutory income and corporation franchise tax credits proportionately. The proposed law specifies reduction rates based on the deficit size, allowing adjustments of 5%, 10%, or 15% depending on whether the deficit exceeds certain thresholds.</s> The primary objective of HB 712 is to allow the state to mitigate the effects of budget shortfalls by reducing its liabilities in tax credits. This measure is a proactive approach that aims to ensure that the state's financial management is more resilient and adaptable in cases of fiscal emergency, thereby potentially enhancing the availability of state resources for essential services during financially challenging times.</s> Discussions surrounding the bill reflect a mixed sentiment among lawmakers and stakeholders. Supporters argue that HB 712 is a necessary tool to provide the state flexibility in managing its finances and addressing budgetary imbalances. Conversely, critics express concerns about the implications of reducing tax credits for businesses and individuals, fearing it may discourage investment and hinder economic growth. The debate reveals a deep division on how to balance fiscal responsibility with support for taxpayers and local businesses.</s> Notable points of contention include the perception that uniform reductions might disproportionately impact certain sectors or communities reliant on tax credits for economic stability. While the bill is framed as a fiscal management strategy, opponents highlight that it risks eroding the support system that tax credits provide, particularly during times of economic downturn. The discussions indicate a broader ideological divide related to state government intervention, fiscal policy, and the prioritization of budgetary measures over individual economic incentives.
Provides relative to the disposition of certain state revenues through repeal of the Revenue Stabilization Trust Fund and dedication of certain revenues to the Budget Stabilization Fund. (EG SEE FISC NOTE GF RV See Note)
Reduces the amount of certain tax credits beginning January 1, 2014, for income tax credits and January 1, 2015, for corporate franchise credits (RE INCREASE GF RV See Note)
Reduces the annual cap on the amount of motion picture production tax credits awarded, the cap on the amount of credits claimed on tax returns, and reduces the per project cap (OR +$80,000,000 GF RV See Note)
Provides with regard to dedications of certain excess mineral revenues and deposits into the Budget Stabilization Fund (RE1 SEE FISC NOTE GF RV See Note)