Maryland 2022 Regular Session

Maryland House Bill HB1096 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1096
6	6
7	7	HOUSE BILL 1096
8	8	C8, Q3, Q1 2lr2496
9	9
10	10	By: Delegate Feldmark
11	11	Introduced and read first time: February 10, 2022
12	12	Assigned to: Ways and Means
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Economic Development Tax Credit Programs – Qualified Position and Qualified 2
19	19	Employee – Definitions 3
20	20
21	21	FOR the purpose of altering the definition of “qualified position” for purposes of eligibility 4
22	22	for and the calculation of benefits under the One Maryland and More Jobs for 5
23	23	Marylanders economic development tax credit programs; altering the definition of 6
24	24	“qualified employee” for purposes of eligibility for and calculation of the credit 7
25	25	against the income tax for certain business entities located in an enterprise zone; 8
26	26	and generally relating to eligibility for benefits under the Enterprise Zone, One 9
27	27	Maryland, and More Jobs for Marylanders economic development tax credit 10
28	28	programs. 11
29	29
30	30	BY repealing and reenacting, without amendments, 12
31	31	Article – Economic Development 13
32	32	Section 6–401(a), 6–403(a) and (b)(1), 6–801(a) and (i), and 6–804(a) and (b) 14
33	33	Annotated Code of Maryland 15
34	34	(2018 Replacement Volume and 2021 Supplement) 16
35	35
36	36	BY repealing and reenacting, with amendments, 17
37	37	Article – Economic Development 18
38	38	Section 6–401(g) and 6–801(k) 19
39	39	Annotated Code of Maryland 20
40	40	(2018 Replacement Volume and 2021 Supplement) 21
41	41
42	42	BY repealing and reenacting, with amendments, 22
43	43	Article – Tax – General 23
44	44	Section 10–702 24
45	45	Annotated Code of Maryland 25
46	46	(2016 Replacement Volume and 2021 Supplement) 26
47	47
48	48	BY repealing and reenacting, without amendments, 27 2 HOUSE BILL 1096
49	49
50	50
51	51	Article – Tax – General 1
52	52	Section 10–741(a) and (b) 2
53	53	Annotated Code of Maryland 3
54	54	(2016 Replacement Volume and 2021 Supplement) 4
55	55
56	56	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEM BLY OF MARYLAND, 5
57	57	That the Laws of Maryland read as follows: 6
58	58
59	59	Article – Economic Development 7
60	60
61	61	6–401. 8
62	62
63	63	(a) In this subtitle the following words have the meanings indicated. 9
64	64
65	65	(g) (1) “Qualified position” means: 10
66	66
67	67	(I) IF THE POSITION IS F ILLED BEFORE OCTOBER 1, 2022, a 11
68	68	position that: 12
69	69
70	70	[(i)] 1. is a full–time position and is of indefinite duration; 13
71	71
72	72	[(ii)] 2. pays at least 120% of the State minimum wage; 14
73	73
74	74	[(iii)] 3. is in a Tier I county; 15
75	75
76	76	[(iv)] 4. is newly created because a business facility begins or 16
77	77	expands in one location in a Tier I county; and 17
78	78
79	79	[(v)] 5. is filled; OR 18
80	80
81	81	(II) IF THE POSITION IS FILLED ON OR AFTER OCTOBER 1, 2022, 19
82	82	A POSITION THAT: 20
83	83
84	84	1. IS FULL–TIME AND OF INDEFINI TE DURATION; 21
85	85
86	86	2. PAYS AT LEAST: 22
87	87
88	88	A. FOR AN EMPLOYEE CLASSIFICAT ION FOR WHICH 23
89	89	THERE IS A PREVAILIN G WAGE RATE, AS DEFINED UNDER § 17–201 OF THE STATE 24
90	90	FINANCE AND PROCUREMENT ARTICLE, THE PREVAILING WAGE ; OR 25
91	91
92	92	B. FOR ANY OTHER EMPLOY EE CLASSIFICATION , 150% 26
93	93	OF THE STATE MINIMUM WAGE ; 27
94	94
95	95	3. PROVIDES CAREER ADVANCEMEN T TRAINING; 28 HOUSE BILL 1096 3
96	96
97	97
98	98
99	99	4. AFFORDS THE EMPLOYEE THE RIGHT TO 1
100	100	COLLECTIVELY BARGAIN FOR WAGES AND BENEFI TS; 2
101	101
102	102	5. PROVIDES PAID LEAVE ; 3
103	103
104	104	6. IS CONSIDERED COVERE D EMPLOYMENT FOR 4
105	105	PURPOSES OF UNEMPLOY MENT INSURANCE BENEF ITS IN ACCORDANCE WI TH TITLE 5
106	106	8 OF THE LABOR AND EMPLOYMENT ARTICLE; 6
107	107
108	108	7. ENTITLES THE EMPLOYE E TO WORKERS ’ 7
109	109	COMPENSATION BENEFIT S IN ACCORDANCE WITH TITLE 9 OF THE LABOR AND 8
110	110	EMPLOYMENT ARTICLE; 9
111	111
112	112	8. OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 10
113	113	BENEFITS WITH MONTHL Y PREMIUMS THAT DO NOT EXCEED 8.5% OF THE 11
114	114	EMPLOYEE’S NET MONTHLY EARNIN GS; 12
115	115
116	116	9. OFFERS RETIREMENT BE NEFITS; 13
117	117
118	118	10. IS IN A TIER I COUNTY; 14
119	119
120	120	11. IS NEWLY CREATED BEC AUSE A BUSINESS FACI LITY 15
121	121	BEGINS OR EXPANDS IN ONE LOCATION IN A TIER I COUNTY; AND 16
122	122
123	123	12. IS FILLED. 17
124	124
125	125	(2) “Qualified position” does not include a position that is: 18
126	126
127	127	(i) created when an employment function is shifted from an existing 19
128	128	business facility of a business entity in the State to another business facility of the same 20
129	129	business entity if the position is not a net new job in the State; 21
130	130
131	131	(ii) created through a change in ownership of a trade or business; 22
132	132
133	133	(iii) created through a consolidation, merger, or restructuring of a 23
134	134	business entity if the position is not a net new job in the State; 24
135	135
136	136	(iv) created when an employment function is contractually shifted 25
137	137	from an existing business entity in the State to another business entity if the position is 26
138	138	not a net new job in the State; or 27
139	139
140	140	(v) filled for a period of less than 12 months. 28
141	141
142	142	6–403. 29 4 HOUSE BILL 1096
143	143
144	144
145	145
146	146	(a) (1) A qualified business entity may claim a project tax credit for the cost of 1
147	147	an eligible economic development project in a Tier I county if the total eligible project cost 2
148	148	for the eligible economic development project is at least $500,000. 3
149	149
150	150	(2) A qualified business entity is not entitled to a project tax credit for a 4
151	151	cost incurred before notifying the Department of its intent to seek certification as qualifying 5
152	152	for the project tax credit. 6
153	153
154	154	(b) (1) (i) Subject to the limitation in paragraph (2) of this subsection, the 7
155	155	project tax credit allowed under this section is the lesser of the maximum amount specified 8
156	156	in subparagraph (ii) of this paragraph and the total eligible project cost for the eligible 9
157	157	economic development project, less the amount of the credit previously taken for the project 10
158	158	in prior taxable years. 11
159	159
160	160	(ii) For purposes of calculation of the credit under subparagraph (i) 12
161	161	of this paragraph, the maximum amount is: 13
162	162
163	163	1. $5,000,000, if the qualified business entity creates at least 14
164	164	50 qualified positions; 15
165	165
166	166	2. $2,500,000, if the qualified business entity creates at least 16
167	167	25 qualified positions but fewer than 50 qualified positions; or 17
168	168
169	169	3. $1,000,000, if the qualified business entity creates at least 18
170	170	10 qualified positions but fewer than 25 qualified positions. 19
171	171
172	172	6–801. 20
173	173
174	174	(a) In this subtitle the following words have the meanings indicated. 21
175	175
176	176	(i) “Program” means the More Jobs for Marylanders Program established under 22
177	177	this subtitle. 23
178	178
179	179	(k) (1) “Qualified position” means: 24
180	180
181	181	(I) IF THE POSITION IS F ILLED BEFORE OCTOBER 1, 2022, a 25
182	182	position that: 26
183	183
184	184	[(i)] 1. is full–time and of indefinite duration; 27
185	185
186	186	[(ii) 1.] 2. A. except as provided in item [2] B of this item, for a 28
187	187	position in a facility that is located in an opportunity zone, pays an average annual salary 29
188	188	that exceeds $50,000; or 30
189	189	HOUSE BILL 1096 5
190	190
191	191
192	192	[2.] B. for a position in a facility of a business entity 1
193	193	described under subsection (c)(1)(i) of this section, pays at least 120% of the State minimum 2
194	194	wage; 3
195	195
196	196	[(iii)] 3. is located in a facility; 4
197	197
198	198	[(iv)] 4. is newly created at a single facility in the State; and 5
199	199
200	200	[(v)] 5. is filled; OR 6
201	201
202	202	(II) IF THE POSITION IS FILLED ON OR AFTER OCTOBER 1, 2022, 7
203	203	A POSITION THAT: 8
204	204
205	205	1. IS FULL–TIME AND OF INDEFINI TE DURATION; 9
206	206
207	207	2. A. EXCEPT AS PROVIDED I N ITEM B OF THIS ITEM, 10
208	208	FOR A POSITION IN A FACILITY THAT IS LOC ATED IN AN OPPORTUNI TY ZONE, PAYS 11
209	209	AN AVERAGE ANNUAL SA LARY THAT EXCEEDS $50,000; OR 12
210	210
211	211	B. FOR A POSITION IN A FACILITY OF A BUSINE SS ENTITY 13
212	212	DESCRIBED UNDER SUBS ECTION (C)(1)(I) OF THIS SECTION , PAYS AT LEAST 150% 14
213	213	OF THE STATE MINIMUM WAGE ; 15
214	214
215	215	3. PROVIDES CAREER ADVA NCEMENT TRAINING ; 16
216	216
217	217	4. AFFORDS THE EMPLOYEE THE RIGHT TO 17
218	218	COLLECTIVELY BARGAIN FOR WAGES AND BENEFI TS; 18
219	219
220	220	5. PROVIDES PAID LEAVE ; 19
221	221
222	222	6. IS CONSIDERED COVERED EMPLOYMENT F OR 20
223	223	PURPOSES OF UNEMPLOY MENT INSURANCE BENEF ITS IN ACCORDANCE WI TH TITLE 21
224	224	8 OF THE LABOR AND EMPLOYMENT ARTICLE; 22
225	225
226	226	7. ENTITLES THE EMPLOYE E TO WORKERS ’ 23
227	227	COMPENSATION BENEFIT S IN ACCORDANCE WITH TITLE 9 OF THE LABOR AND 24
228	228	EMPLOYMENT ARTICLE; 25
229	229
230	230	8. OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 26
231	231	BENEFITS WITH MONTHL Y PREMIUMS THAT DO N OT EXCEED 8.5% OF THE 27
232	232	EMPLOYEE’S NET MONTHLY EARNIN GS; 28
233	233
234	234	9. OFFERS RETIREMENT BE NEFITS; 29
235	235	6 HOUSE BILL 1096
236	236
237	237
238	238	10. IS LOCATED IN A FACI LITY; 1
239	239
240	240	11. IS NEWLY CREATED AT A SINGLE FACILITY IN THE 2
241	241	STATE; AND 3
242	242
243	243	12. IS FILLED. 4
244	244
245	245	(2) “Qualified position” does not include a position that is: 5
246	246
247	247	(i) created when an employment function is shifted from an existing 6
248	248	facility of a business entity in the State to another facility of the same business entity if the 7
249	249	position is not a net new job in the State; 8
250	250
251	251	(ii) created through a change in ownership of a trade or business; 9
252	252
253	253	(iii) created through a consolidation, merger, or restructuring of a 10
254	254	business entity if the position is not a net new job in the State; 11
255	255
256	256	(iv) created when an employment function is contractually shifted 12
257	257	from an existing business entity to another business entity in the State if the position is 13
258	258	not a net new job in the State; or 14
259	259
260	260	(v) filled for a period of less than 12 months. 15
261	261
262	262	6–804. 16
263	263
264	264	(a) The Program benefits authorized under this section may be claimed by a 17
265	265	qualified business entity for up to 10 consecutive benefit years. 18
266	266
267	267	(b) On enrollment in the Program: 19
268	268
269	269	(1) a new business entity in a Tier I area is eligible for: 20
270	270
271	271	(i) a credit against the State income tax, established under § 21
272	272	10–741(b) of the Tax – General Article; 22
273	273
274	274	(ii) a credit against the State property tax, established under § 23
275	275	9–110 of the Tax – Property Article; 24
276	276
277	277	(iii) a refund of sales and use tax paid during the immediately 25
278	278	preceding taxable year, as provided under § 11–411 of the Tax – General Article; and 26
279	279
280	280	(iv) a waiver of fees charged by the State Department of Assessments 27
281	281	and Taxation, established under § 1–203.1 of the Corporations and Associations Article; 28
282	282	and 29
283	283	HOUSE BILL 1096 7
284	284
285	285
286	286	(2) except as provided in subsection (c) of this section, an existing business 1
287	287	entity that operates an eligible project is eligible for a credit against the State income tax, 2
288	288	established under § 10–741(b) of the Tax – General Article. 3
289	289
290	290	Article – Tax – General 4
291	291
292	292	10–702. 5
293	293
294	294	(a) (1) In this section the following words have the meanings indicated. 6
295	295
296	296	(2) (i) “Business entity” means: 7
297	297
298	298	1. a person conducting or operating a trade or business; or 8
299	299
300	300	2. an organization that is exempt from taxation under § 9
301	301	501(c)(3) or (4) of the Internal Revenue Code. 10
302	302
303	303	(ii) “Business entity” does not include a person owning, operating, 11
304	304	developing, constructing, or rehabilitating property intended for use primarily as single or 12
305	305	multifamily residential property located within the enterprise zone. 13
306	306
307	307	(3) “Economically disadvantaged individual” means an individual who is 14
308	308	certified by provisions that the Maryland Department of Labor adopts as an individual who, 15
309	309	before becoming employed by a business entity in an enterprise zone: 16
310	310
311	311	(i) was both unemployed for at least 30 consecutive days and 17
312	312	qualified to participate in training activities for the economically disadvantaged under the 18
313	313	federal Workforce Innovation and Opportunity Act or its successor; or 19
314	314
315	315	(ii) in the absence of an applicable federal act, met the criteria for an 20
316	316	economically disadvantaged individual that the Secretary of Labor sets. 21
317	317
318	318	(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the 22
319	319	Economic Development Article. 23
320	320
321	321	(ii) “Enterprise zone” includes a Regional Institution Strategic 24
322	322	Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article. 25
323	323
324	324	(5) “Focus area” has the meaning stated in § 5–701 of the Economic 26
325	325	Development Article. 27
326	326
327	327	(6) “Focus area employee” means an individual who: 28
328	328
329	329	(i) is a new employee or an employee rehired after being laid off for 29
330	330	more than 1 year by a business entity; 30
331	331	8 HOUSE BILL 1096
332	332
333	333
334	334	(ii) is employed by a business entity at least 35 hours each week for 1
335	335	at least 12 months before or during the taxable year for which the entity claims a credit; 2
336	336
337	337	(iii) spends at least 50 percent of the hours under item (ii) of this 3
338	338	paragraph either in the focus area or on activities of the business entity resulting directly 4
339	339	from its location in the focus area; 5
340	340
341	341	(iv) is hired by the business entity after the later of: 6
342	342
343	343	1. the date on which the focus area is designated; or 7
344	344
345	345	2. the date on which the business entity located in the focus 8
346	346	area; and 9
347	347
348	348	(v) 1. FOR AN INDIVIDUAL HI RED OR REHIRED BEFORE 10
349	349	OCTOBER 1, 2022, earns at least [150 percent] 150% of the federal minimum wage; OR 11
350	350
351	351	2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 12
352	352	OCTOBER 1, 2022, IS EMPLOYED IN A QUA LIFIED POSITION. 13
353	353
354	354	(7) “Qualified employee” means an individual who: 14
355	355
356	356	(i) is a new employee or an employee rehired after being laid off for 15
357	357	more than 1 year by a business entity; 16
358	358
359	359	(ii) is employed by a business entity at least 35 hours each week for 17
360	360	at least 6 months before or during the taxable year for which the entity claims a credit; 18
361	361
362	362	(iii) spends at least 50% of the hours under item (ii) of this paragraph, 19
363	363	either in the enterprise zone or on activities of the business entity resulting directly from 20
364	364	its location in the enterprise zone; 21
365	365
366	366	(iv) 1. FOR AN IN DIVIDUAL HIRED OR RE HIRED BEFORE 22
367	367	OCTOBER 1, 2022, earns at least 150% of the federal minimum wage; [and] OR 23
368	368
369	369	2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 24
370	370	OCTOBER 1, 2022, IS EMPLOYED IN A QUA LIFIED POSITION; AND 25
371	371
372	372	(v) is hired by the business entity after the later of: 26
373	373
374	374	1. the date on which the enterprise zone is designated; or 27
375	375
376	376	2. the date on which the business entity locates in the 28
377	377	enterprise zone. 29
378	378
379	379	(8) “QUALIFIED POSITION ” MEANS A POSITION THA T: 30 HOUSE BILL 1096 9
380	380
381	381
382	382
383	383	(I) PAYS AT LEAST: 1
384	384
385	385	1. FOR AN EMPLOYEE CLASSIFIC ATION FOR WHICH 2
386	386	THERE IS A PREVAILIN G WAGE RATE, AS DEFINED UNDER § 17–201 OF THE STATE 3
387	387	FINANCE AND PROCUREMENT ARTICLE, THE PREVAILING WAGE ; OR 4
388	388
389	389	2. FOR ANY OTHER EMPLOY EE CLASSIFICATION , 150% 5
390	390	OF THE STATE MINIMUM WAGE ; 6
391	391
392	392	(II) PROVIDES CAREER ADVANCE MENT TRAINING ; 7
393	393
394	394	(III) AFFORDS THE EMPLOYEE THE RIGHT TO COLLECT IVELY 8
395	395	BARGAIN FOR WAGES AN D BENEFITS; 9
396	396
397	397	(IV) PROVIDES PAID LEAVE ; 10
398	398
399	399	(V) IS CONSIDERED COVERE D EMPLOYMENT FOR PUR POSES OF 11
400	400	UNEMPLOYMENT INSURAN CE BENEFITS IN ACCOR DANCE WITH TITLE 8 OF THE 12
401	401	LABOR AND EMPLOYMENT ARTICLE; 13
402	402
403	403	(VI) ENTITLES THE EMPLOYE E TO WORKERS ’ COMPENSATION 14
404	404	BENEFITS IN ACCORDAN CE WITH TITLE 9 OF THE LABOR AND EMPLOYMENT 15
405	405	ARTICLE; 16
406	406
407	407	(VII) OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 17
408	408	BENEFITS WITH MONTHL Y PREMIUMS THAT DO NOT E XCEED 8.5% OF THE 18
409	409	EMPLOYEE’S NET MONTHLY EARNIN GS; AND 19
410	410
411	411	(VIII) OFFERS RETIREMENT BE NEFITS. 20
412	412
413	413	(b) (1) Any business entity that is located in an enterprise zone and satisfies 21
414	414	the requirements of § 5–707 of the Economic Development Article may claim a credit only 22
415	415	against the State income tax for the wages specified in subsections (c) and (d) of this section 23
416	416	that are paid in the taxable year for which the entity claims the credit. 24
417	417
418	418	(2) A business entity that is located in a focus area and satisfies the 25
419	419	requirements of § 5–707 of the Economic Development Article may claim a credit only 26
420	420	against the State income tax for the wages specified in subsection (e) of this section that 27
421	421	are paid to a focus area employee in the taxable year for which the entity claims the credit. 28
422	422
423	423	(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of 29
424	424	the Internal Revenue Code may apply the credit under this section as a credit against 30 10 HOUSE BILL 1096
425	425
426	426
427	427	income tax due on unrelated business taxable income as provided under §§ 10–304 and 1
428	428	10–812 of this title. 2
429	429
430	430	(c) If a business entity does not claim an enhanced tax credit under subsection (e) 3
431	431	of this section for a focus area employee, for the taxable year in which a business entity 4
432	432	satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a 5
433	433	credit is allowed that equals: 6
434	434
435	435	(1) up to $3,000 of the wages paid to each qualified employee who: 7
436	436
437	437	(i) is an economically disadvantaged individual; and 8
438	438
439	439	(ii) is not hired to replace an individual whom the business entity 9
440	440	employed in that or any of the 3 preceding taxable years; and 10
441	441
442	442	(2) up to $1,000 of the wages paid to each qualified employee who: 11
443	443
444	444	(i) is not an economically disadvantaged individual; and 12
445	445
446	446	(ii) is not hired to replace an individual whom the business entity 13
447	447	employed in that or any of the 3 preceding taxable years. 14
448	448
449	449	(d) (1) If a business entity does not claim an enhanced tax credit under 15
450	450	subsection (e) of this section for a focus area employee, for each taxable year after the 16
451	451	taxable year described in subsection (c) of this section, while the area is designated an 17
452	452	enterprise zone, a credit is allowed that equals: 18
453	453
454	454	(i) up to $3,000 of the wages paid to each qualified employee who: 19
455	455
456	456	1. is an economically disadvantaged individual; 20
457	457
458	458	2. became a qualified employee during the taxable year to 21
459	459	which the credit applies; and 22
460	460
461	461	3. is not hired to replace an individual whom the business 23
462	462	entity employed in that or any of the 3 preceding taxable years; 24
463	463
464	464	(ii) up to $2,000 of the wages paid to each qualified employee who is 25
465	465	an economically disadvantaged individual, if the business entity received a credit under 26
466	466	subsection (c)(1) of this section for the qualified employee in the immediately preceding 27
467	467	taxable year; and 28
468	468
469	469	(iii) up to $1,000 of the wages paid to each qualified employee who is 29
470	470	not hired to replace an individual whom the business entity employed in that or any of the 30
471	471	3 preceding taxable years if the qualified employee: 31
472	472	HOUSE BILL 1096 11
473	473
474	474
475	475	1. is an economically disadvantaged individual for whom the 1
476	476	business entity received a credit under subsection (c)(1) of this section or item (i) of this 2
477	477	paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding 3
478	478	taxable years; or 4
479	479
480	480	2. is not an economically disadvantaged individual but 5
481	481	became a qualified employee during the taxable year to which the credit applies. 6
482	482
483	483	(2) A business entity that hires a qualified employee to replace another 7
484	484	qualified employee for whom the business entity received a credit under subsection (c)(1) of 8
485	485	this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable 9
486	486	year may treat the new qualified employee as the replacement for the other qualified 10
487	487	employee to determine any credit that may be available to the business entity under 11
488	488	paragraph (1)(ii) or (iii) of this subsection. 12
489	489
490	490	(e) (1) For the taxable year in which a business entity satisfies the 13
491	491	requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a 14
492	492	credit is allowed that equals: 15
493	493
494	494	(i) up to $4,500 of the wages paid to each focus area employee who: 16
495	495
496	496	1. is an economically disadvantaged individual; and 17
497	497
498	498	2. is not hired to replace an individual whom the business 18
499	499	entity employed in that year or any of the 3 preceding taxable years; and 19
500	500
501	501	(ii) up to $1,500 of the wages paid to each focus area employee who: 20
502	502
503	503	1. is not an economically disadvantaged individual; and 21
504	504
505	505	2. is not hired to replace an individual whom the business 22
506	506	entity employed in that year or any of the 3 preceding taxable years. 23
507	507
508	508	(2) For each taxable year after the taxable year described in paragraph (1) 24
509	509	of this subsection, while the area is designated a focus area, a credit is allowed that equals: 25
510	510
511	511	(i) up to $4,500 of the wages paid to each focus area employee who: 26
512	512
513	513	1. is an economically disadvantaged individual; 27
514	514
515	515	2. became a focus area employee during the taxable year to 28
516	516	which the credit applies; and 29
517	517
518	518	3. is not hired to replace an individual whom the business 30
519	519	entity employed in that year or any of the 3 preceding taxable years; 31
520	520	12 HOUSE BILL 1096
521	521
522	522
523	523	(ii) up to $3,000 of the wages paid to each focus area employee who 1
524	524	is an economically disadvantaged individual, if the business entity received a credit under 2
525	525	paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding 3
526	526	taxable year; and 4
527	527
528	528	(iii) up to $1,500 of the wages paid to each focus area employee who 5
529	529	is not hired to replace an individual whom the business entity employed in that year or any 6
530	530	of the 3 preceding taxable years if the focus area employee: 7
531	531
532	532	1. is an economically disadvantaged individual for whom the 8
533	533	business entity received a credit under item (ii) of this paragraph in the 2 immediately 9
534	534	preceding taxable years and under: 10
535	535
536	536	A. paragraph (1)(i) of this subsection; or 11
537	537
538	538	B. item (i) of this paragraph; or 12
539	539
540	540	2. is not an economically disadvantaged individual but 13
541	541	became a focus area employee during the taxable year to which the credit applies. 14
542	542
543	543	(3) A business entity that hires a focus area employee to replace another 15
544	544	focus area employee for whom the business entity received a credit under paragraph (1)(i) 16
545	545	of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding 17
546	546	taxable year may treat the focus area employee as the replacement for the other focus area 18
547	547	employee to determine any credit that may be available to the business entity under 19
548	548	paragraph (2)(ii) or (iii) of this subsection. 20
549	549
550	550	(f) If the credit allowed under this section in any taxable year exceeds the State 21
551	551	income tax for that taxable year, a business entity may apply the excess as a credit against 22
552	552	the State income tax for succeeding taxable years until the earlier of: 23
553	553
554	554	(1) the full amount of the excess is used; or 24
555	555
556	556	(2) the expiration of the 5th taxable year from the date on which the 25
557	557	business entity hired the qualified employee to whom the credit first applies. 26
558	558
559	559	(g) If a credit is claimed under this section, the claimant must make the addition 27
560	560	required in § 10–205, § 10–206, or § 10–306 of this title. 28
561	561
562	562	10–741. 29
563	563
564	564	(a) (1) In this section the following words have the meanings indicated. 30
565	565
566	566	(2) “Business entity” has the meaning stated in § 6–801 of the Economic 31
567	567	Development Article. 32
568	568
569	569	(3) “Department” means the Department of Commerce. 33 HOUSE BILL 1096 13
570	570
571	571
572	572
573	573	(4) “Eligible project” has the meaning stated in § 6–801 of the Economic 1
574	574	Development Article. 2
575	575
576	576	(5) “Existing business entity” has the meaning stated in § 6–801 of the 3
577	577	Economic Development Article. 4
578	578
579	579	(6) “New business entity” has the meaning stated in § 6–801 of the 5
580	580	Economic Development Article. 6
581	581
582	582	(7) “Qualified business entity” has the meaning stated in § 6–801 of the 7
583	583	Economic Development Article. 8
584	584
585	585	(8) “Qualified position” has the meaning stated in § 6–801 of the Economic 9
586	586	Development Article. 10
587	587
588	588	(9) “Tier I area” has the meaning stated in § 6–801 of the Economic 11
589	589	Development Article. 12
590	590
591	591	(10) “Tier II area” has the meaning stated in § 6–801 of the Economic 13
592	592	Development Article. 14
593	593
594	594	(b) (1) Subject to the limitations of this section, an individual or corporation 15
595	595	that is a new business entity that operates an eligible project in a Tier I area or an existing 16
596	596	business entity that operates an eligible project may claim a credit against the State income 17
597	597	tax equal to the amount stated in the final tax credit certificate approved by the 18
598	598	Department for an eligible project. 19
599	599
600	600	(2) The amount of the credit authorized under paragraph (1) of this 20
601	601	subsection is equal to the product of: 21
602	602
603	603	(i) the State employer withholding amount, which is equal to the 22
604	604	highest tax rate listed in § 10–105(a) of this title; and 23
605	605
606	606	(ii) the total amount of wages paid for each qualified position at an 24
607	607	eligible project. 25
608	608
609	609	(3) If the tax credit allowed under this section in any taxable year exceeds 26
610	610	the total tax otherwise payable by the qualified business entity for that taxable year, the 27
611	611	qualified business entity may claim a refund in the amount of the excess. 28
612	612
613	613	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 29
614	614	1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021. 30