EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1096*
HOUSE BILL 1096
C8, Q3, Q1 2lr2496
By: Delegate Feldmark
Introduced and read first time: February 10, 2022
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Economic Development Tax Credit Programs – Qualified Position and Qualified 2
Employee – Definitions 3
FOR the purpose of altering the definition of “qualified position” for purposes of eligibility 4
for and the calculation of benefits under the One Maryland and More Jobs for 5
Marylanders economic development tax credit programs; altering the definition of 6
“qualified employee” for purposes of eligibility for and calculation of the credit 7
against the income tax for certain business entities located in an enterprise zone; 8
and generally relating to eligibility for benefits under the Enterprise Zone, One 9
Maryland, and More Jobs for Marylanders economic development tax credit 10
programs. 11
BY repealing and reenacting, without amendments, 12
Article – Economic Development 13
Section 6–401(a), 6–403(a) and (b)(1), 6–801(a) and (i), and 6–804(a) and (b) 14
Annotated Code of Maryland 15
(2018 Replacement Volume and 2021 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – Economic Development 18
Section 6–401(g) and 6–801(k) 19
Annotated Code of Maryland 20
(2018 Replacement Volume and 2021 Supplement) 21
BY repealing and reenacting, with amendments, 22
Article – Tax – General 23
Section 10–702 24
Annotated Code of Maryland 25
(2016 Replacement Volume and 2021 Supplement) 26
BY repealing and reenacting, without amendments, 27 2 HOUSE BILL 1096
Article – Tax – General 1
Section 10–741(a) and (b) 2
Annotated Code of Maryland 3
(2016 Replacement Volume and 2021 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEM BLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Economic Development 7
6–401. 8
(a) In this subtitle the following words have the meanings indicated. 9
(g) (1) “Qualified position” means: 10
(I) IF THE POSITION IS F ILLED BEFORE OCTOBER 1, 2022, a 11
position that: 12
[(i)] 1. is a full–time position and is of indefinite duration; 13
[(ii)] 2. pays at least 120% of the State minimum wage; 14
[(iii)] 3. is in a Tier I county; 15
[(iv)] 4. is newly created because a business facility begins or 16
expands in one location in a Tier I county; and 17
[(v)] 5. is filled; OR 18
(II) IF THE POSITION IS FILLED ON OR AFTER OCTOBER 1, 2022, 19
A POSITION THAT: 20
1. IS FULL–TIME AND OF INDEFINI TE DURATION; 21
2. PAYS AT LEAST: 22
A. FOR AN EMPLOYEE CLASSIFICAT ION FOR WHICH 23
THERE IS A PREVAILIN G WAGE RATE, AS DEFINED UNDER § 17–201 OF THE STATE 24
FINANCE AND PROCUREMENT ARTICLE, THE PREVAILING WAGE ; OR 25
B. FOR ANY OTHER EMPLOY EE CLASSIFICATION , 150% 26
OF THE STATE MINIMUM WAGE ; 27
3. PROVIDES CAREER ADVANCEMEN T TRAINING; 28 HOUSE BILL 1096 3
4. AFFORDS THE EMPLOYEE THE RIGHT TO 1
COLLECTIVELY BARGAIN FOR WAGES AND BENEFI TS; 2
5. PROVIDES PAID LEAVE ; 3
6. IS CONSIDERED COVERE D EMPLOYMENT FOR 4
PURPOSES OF UNEMPLOY MENT INSURANCE BENEF ITS IN ACCORDANCE WI TH TITLE 5
8 OF THE LABOR AND EMPLOYMENT ARTICLE; 6
7. ENTITLES THE EMPLOYE E TO WORKERS ’ 7
COMPENSATION BENEFIT S IN ACCORDANCE WITH TITLE 9 OF THE LABOR AND 8
EMPLOYMENT ARTICLE; 9
8. OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 10
BENEFITS WITH MONTHL Y PREMIUMS THAT DO NOT EXCEED 8.5% OF THE 11
EMPLOYEE’S NET MONTHLY EARNIN GS; 12
9. OFFERS RETIREMENT BE NEFITS; 13
10. IS IN A TIER I COUNTY; 14
11. IS NEWLY CREATED BEC AUSE A BUSINESS FACI LITY 15
BEGINS OR EXPANDS IN ONE LOCATION IN A TIER I COUNTY; AND 16
12. IS FILLED. 17
(2) “Qualified position” does not include a position that is: 18
(i) created when an employment function is shifted from an existing 19
business facility of a business entity in the State to another business facility of the same 20
business entity if the position is not a net new job in the State; 21
(ii) created through a change in ownership of a trade or business; 22
(iii) created through a consolidation, merger, or restructuring of a 23
business entity if the position is not a net new job in the State; 24
(iv) created when an employment function is contractually shifted 25
from an existing business entity in the State to another business entity if the position is 26
not a net new job in the State; or 27
(v) filled for a period of less than 12 months. 28
6–403. 29 4 HOUSE BILL 1096
(a) (1) A qualified business entity may claim a project tax credit for the cost of 1
an eligible economic development project in a Tier I county if the total eligible project cost 2
for the eligible economic development project is at least $500,000. 3
(2) A qualified business entity is not entitled to a project tax credit for a 4
cost incurred before notifying the Department of its intent to seek certification as qualifying 5
for the project tax credit. 6
(b) (1) (i) Subject to the limitation in paragraph (2) of this subsection, the 7
project tax credit allowed under this section is the lesser of the maximum amount specified 8
in subparagraph (ii) of this paragraph and the total eligible project cost for the eligible 9
economic development project, less the amount of the credit previously taken for the project 10
in prior taxable years. 11
(ii) For purposes of calculation of the credit under subparagraph (i) 12
of this paragraph, the maximum amount is: 13
1. $5,000,000, if the qualified business entity creates at least 14
50 qualified positions; 15
2. $2,500,000, if the qualified business entity creates at least 16
25 qualified positions but fewer than 50 qualified positions; or 17
3. $1,000,000, if the qualified business entity creates at least 18
10 qualified positions but fewer than 25 qualified positions. 19
6–801. 20
(a) In this subtitle the following words have the meanings indicated. 21
(i) “Program” means the More Jobs for Marylanders Program established under 22
this subtitle. 23
(k) (1) “Qualified position” means: 24
(I) IF THE POSITION IS F ILLED BEFORE OCTOBER 1, 2022, a 25
position that: 26
[(i)] 1. is full–time and of indefinite duration; 27
[(ii) 1.] 2. A. except as provided in item [2] B of this item, for a 28
position in a facility that is located in an opportunity zone, pays an average annual salary 29
that exceeds $50,000; or 30
HOUSE BILL 1096 5
[2.] B. for a position in a facility of a business entity 1
described under subsection (c)(1)(i) of this section, pays at least 120% of the State minimum 2
wage; 3
[(iii)] 3. is located in a facility; 4
[(iv)] 4. is newly created at a single facility in the State; and 5
[(v)] 5. is filled; OR 6
(II) IF THE POSITION IS FILLED ON OR AFTER OCTOBER 1, 2022, 7
A POSITION THAT: 8
1. IS FULL–TIME AND OF INDEFINI TE DURATION; 9
2. A. EXCEPT AS PROVIDED I N ITEM B OF THIS ITEM, 10
FOR A POSITION IN A FACILITY THAT IS LOC ATED IN AN OPPORTUNI TY ZONE, PAYS 11
AN AVERAGE ANNUAL SA LARY THAT EXCEEDS $50,000; OR 12
B. FOR A POSITION IN A FACILITY OF A BUSINE SS ENTITY 13
DESCRIBED UNDER SUBS ECTION (C)(1)(I) OF THIS SECTION , PAYS AT LEAST 150% 14
OF THE STATE MINIMUM WAGE ; 15
3. PROVIDES CAREER ADVA NCEMENT TRAINING ; 16
4. AFFORDS THE EMPLOYEE THE RIGHT TO 17
COLLECTIVELY BARGAIN FOR WAGES AND BENEFI TS; 18
5. PROVIDES PAID LEAVE ; 19
6. IS CONSIDERED COVERED EMPLOYMENT F OR 20
PURPOSES OF UNEMPLOY MENT INSURANCE BENEF ITS IN ACCORDANCE WI TH TITLE 21
8 OF THE LABOR AND EMPLOYMENT ARTICLE; 22
7. ENTITLES THE EMPLOYE E TO WORKERS ’ 23
COMPENSATION BENEFIT S IN ACCORDANCE WITH TITLE 9 OF THE LABOR AND 24
EMPLOYMENT ARTICLE; 25
8. OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 26
BENEFITS WITH MONTHL Y PREMIUMS THAT DO N OT EXCEED 8.5% OF THE 27
EMPLOYEE’S NET MONTHLY EARNIN GS; 28
9. OFFERS RETIREMENT BE NEFITS; 29
6 HOUSE BILL 1096
10. IS LOCATED IN A FACI LITY; 1
11. IS NEWLY CREATED AT A SINGLE FACILITY IN THE 2
STATE; AND 3
12. IS FILLED. 4
(2) “Qualified position” does not include a position that is: 5
(i) created when an employment function is shifted from an existing 6
facility of a business entity in the State to another facility of the same business entity if the 7
position is not a net new job in the State; 8
(ii) created through a change in ownership of a trade or business; 9
(iii) created through a consolidation, merger, or restructuring of a 10
business entity if the position is not a net new job in the State; 11
(iv) created when an employment function is contractually shifted 12
from an existing business entity to another business entity in the State if the position is 13
not a net new job in the State; or 14
(v) filled for a period of less than 12 months. 15
6–804. 16
(a) The Program benefits authorized under this section may be claimed by a 17
qualified business entity for up to 10 consecutive benefit years. 18
(b) On enrollment in the Program: 19
(1) a new business entity in a Tier I area is eligible for: 20
(i) a credit against the State income tax, established under § 21
10–741(b) of the Tax – General Article; 22
(ii) a credit against the State property tax, established under § 23
9–110 of the Tax – Property Article; 24
(iii) a refund of sales and use tax paid during the immediately 25
preceding taxable year, as provided under § 11–411 of the Tax – General Article; and 26
(iv) a waiver of fees charged by the State Department of Assessments 27
and Taxation, established under § 1–203.1 of the Corporations and Associations Article; 28
and 29
HOUSE BILL 1096 7
(2) except as provided in subsection (c) of this section, an existing business 1
entity that operates an eligible project is eligible for a credit against the State income tax, 2
established under § 10–741(b) of the Tax – General Article. 3
Article – Tax – General 4
10–702. 5
(a) (1) In this section the following words have the meanings indicated. 6
(2) (i) “Business entity” means: 7
1. a person conducting or operating a trade or business; or 8
2. an organization that is exempt from taxation under § 9
501(c)(3) or (4) of the Internal Revenue Code. 10
(ii) “Business entity” does not include a person owning, operating, 11
developing, constructing, or rehabilitating property intended for use primarily as single or 12
multifamily residential property located within the enterprise zone. 13
(3) “Economically disadvantaged individual” means an individual who is 14
certified by provisions that the Maryland Department of Labor adopts as an individual who, 15
before becoming employed by a business entity in an enterprise zone: 16
(i) was both unemployed for at least 30 consecutive days and 17
qualified to participate in training activities for the economically disadvantaged under the 18
federal Workforce Innovation and Opportunity Act or its successor; or 19
(ii) in the absence of an applicable federal act, met the criteria for an 20
economically disadvantaged individual that the Secretary of Labor sets. 21
(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the 22
Economic Development Article. 23
(ii) “Enterprise zone” includes a Regional Institution Strategic 24
Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article. 25
(5) “Focus area” has the meaning stated in § 5–701 of the Economic 26
Development Article. 27
(6) “Focus area employee” means an individual who: 28
(i) is a new employee or an employee rehired after being laid off for 29
more than 1 year by a business entity; 30
8 HOUSE BILL 1096
(ii) is employed by a business entity at least 35 hours each week for 1
at least 12 months before or during the taxable year for which the entity claims a credit; 2
(iii) spends at least 50 percent of the hours under item (ii) of this 3
paragraph either in the focus area or on activities of the business entity resulting directly 4
from its location in the focus area; 5
(iv) is hired by the business entity after the later of: 6
1. the date on which the focus area is designated; or 7
2. the date on which the business entity located in the focus 8
area; and 9
(v) 1. FOR AN INDIVIDUAL HI RED OR REHIRED BEFORE 10
OCTOBER 1, 2022, earns at least [150 percent] 150% of the federal minimum wage; OR 11
2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 12
OCTOBER 1, 2022, IS EMPLOYED IN A QUA LIFIED POSITION. 13
(7) “Qualified employee” means an individual who: 14
(i) is a new employee or an employee rehired after being laid off for 15
more than 1 year by a business entity; 16
(ii) is employed by a business entity at least 35 hours each week for 17
at least 6 months before or during the taxable year for which the entity claims a credit; 18
(iii) spends at least 50% of the hours under item (ii) of this paragraph, 19
either in the enterprise zone or on activities of the business entity resulting directly from 20
its location in the enterprise zone; 21
(iv) 1. FOR AN IN DIVIDUAL HIRED OR RE HIRED BEFORE 22
OCTOBER 1, 2022, earns at least 150% of the federal minimum wage; [and] OR 23
2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 24
OCTOBER 1, 2022, IS EMPLOYED IN A QUA LIFIED POSITION; AND 25
(v) is hired by the business entity after the later of: 26
1. the date on which the enterprise zone is designated; or 27
2. the date on which the business entity locates in the 28
enterprise zone. 29
(8) “QUALIFIED POSITION ” MEANS A POSITION THA T: 30 HOUSE BILL 1096 9
(I) PAYS AT LEAST: 1
1. FOR AN EMPLOYEE CLASSIFIC ATION FOR WHICH 2
THERE IS A PREVAILIN G WAGE RATE, AS DEFINED UNDER § 17–201 OF THE STATE 3
FINANCE AND PROCUREMENT ARTICLE, THE PREVAILING WAGE ; OR 4
2. FOR ANY OTHER EMPLOY EE CLASSIFICATION , 150% 5
OF THE STATE MINIMUM WAGE ; 6
(II) PROVIDES CAREER ADVANCE MENT TRAINING ; 7
(III) AFFORDS THE EMPLOYEE THE RIGHT TO COLLECT IVELY 8
BARGAIN FOR WAGES AN D BENEFITS; 9
(IV) PROVIDES PAID LEAVE ; 10
(V) IS CONSIDERED COVERE D EMPLOYMENT FOR PUR POSES OF 11
UNEMPLOYMENT INSURAN CE BENEFITS IN ACCOR DANCE WITH TITLE 8 OF THE 12
LABOR AND EMPLOYMENT ARTICLE; 13
(VI) ENTITLES THE EMPLOYE E TO WORKERS ’ COMPENSATION 14
BENEFITS IN ACCORDAN CE WITH TITLE 9 OF THE LABOR AND EMPLOYMENT 15
ARTICLE; 16
(VII) OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 17
BENEFITS WITH MONTHL Y PREMIUMS THAT DO NOT E XCEED 8.5% OF THE 18
EMPLOYEE’S NET MONTHLY EARNIN GS; AND 19
(VIII) OFFERS RETIREMENT BE NEFITS. 20
(b) (1) Any business entity that is located in an enterprise zone and satisfies 21
the requirements of § 5–707 of the Economic Development Article may claim a credit only 22
against the State income tax for the wages specified in subsections (c) and (d) of this section 23
that are paid in the taxable year for which the entity claims the credit. 24
(2) A business entity that is located in a focus area and satisfies the 25
requirements of § 5–707 of the Economic Development Article may claim a credit only 26
against the State income tax for the wages specified in subsection (e) of this section that 27
are paid to a focus area employee in the taxable year for which the entity claims the credit. 28
(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of 29
the Internal Revenue Code may apply the credit under this section as a credit against 30 10 HOUSE BILL 1096
income tax due on unrelated business taxable income as provided under §§ 10–304 and 1
10–812 of this title. 2
(c) If a business entity does not claim an enhanced tax credit under subsection (e) 3
of this section for a focus area employee, for the taxable year in which a business entity 4
satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a 5
credit is allowed that equals: 6
(1) up to $3,000 of the wages paid to each qualified employee who: 7
(i) is an economically disadvantaged individual; and 8
(ii) is not hired to replace an individual whom the business entity 9
employed in that or any of the 3 preceding taxable years; and 10
(2) up to $1,000 of the wages paid to each qualified employee who: 11
(i) is not an economically disadvantaged individual; and 12
(ii) is not hired to replace an individual whom the business entity 13
employed in that or any of the 3 preceding taxable years. 14
(d) (1) If a business entity does not claim an enhanced tax credit under 15
subsection (e) of this section for a focus area employee, for each taxable year after the 16
taxable year described in subsection (c) of this section, while the area is designated an 17
enterprise zone, a credit is allowed that equals: 18
(i) up to $3,000 of the wages paid to each qualified employee who: 19
1. is an economically disadvantaged individual; 20
2. became a qualified employee during the taxable year to 21
which the credit applies; and 22
3. is not hired to replace an individual whom the business 23
entity employed in that or any of the 3 preceding taxable years; 24
(ii) up to $2,000 of the wages paid to each qualified employee who is 25
an economically disadvantaged individual, if the business entity received a credit under 26
subsection (c)(1) of this section for the qualified employee in the immediately preceding 27
taxable year; and 28
(iii) up to $1,000 of the wages paid to each qualified employee who is 29
not hired to replace an individual whom the business entity employed in that or any of the 30
3 preceding taxable years if the qualified employee: 31
HOUSE BILL 1096 11
1. is an economically disadvantaged individual for whom the 1
business entity received a credit under subsection (c)(1) of this section or item (i) of this 2
paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding 3
taxable years; or 4
2. is not an economically disadvantaged individual but 5
became a qualified employee during the taxable year to which the credit applies. 6
(2) A business entity that hires a qualified employee to replace another 7
qualified employee for whom the business entity received a credit under subsection (c)(1) of 8
this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable 9
year may treat the new qualified employee as the replacement for the other qualified 10
employee to determine any credit that may be available to the business entity under 11
paragraph (1)(ii) or (iii) of this subsection. 12
(e) (1) For the taxable year in which a business entity satisfies the 13
requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a 14
credit is allowed that equals: 15
(i) up to $4,500 of the wages paid to each focus area employee who: 16
1. is an economically disadvantaged individual; and 17
2. is not hired to replace an individual whom the business 18
entity employed in that year or any of the 3 preceding taxable years; and 19
(ii) up to $1,500 of the wages paid to each focus area employee who: 20
1. is not an economically disadvantaged individual; and 21
2. is not hired to replace an individual whom the business 22
entity employed in that year or any of the 3 preceding taxable years. 23
(2) For each taxable year after the taxable year described in paragraph (1) 24
of this subsection, while the area is designated a focus area, a credit is allowed that equals: 25
(i) up to $4,500 of the wages paid to each focus area employee who: 26
1. is an economically disadvantaged individual; 27
2. became a focus area employee during the taxable year to 28
which the credit applies; and 29
3. is not hired to replace an individual whom the business 30
entity employed in that year or any of the 3 preceding taxable years; 31
12 HOUSE BILL 1096
(ii) up to $3,000 of the wages paid to each focus area employee who 1
is an economically disadvantaged individual, if the business entity received a credit under 2
paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding 3
taxable year; and 4
(iii) up to $1,500 of the wages paid to each focus area employee who 5
is not hired to replace an individual whom the business entity employed in that year or any 6
of the 3 preceding taxable years if the focus area employee: 7
1. is an economically disadvantaged individual for whom the 8
business entity received a credit under item (ii) of this paragraph in the 2 immediately 9
preceding taxable years and under: 10
A. paragraph (1)(i) of this subsection; or 11
B. item (i) of this paragraph; or 12
2. is not an economically disadvantaged individual but 13
became a focus area employee during the taxable year to which the credit applies. 14
(3) A business entity that hires a focus area employee to replace another 15
focus area employee for whom the business entity received a credit under paragraph (1)(i) 16
of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding 17
taxable year may treat the focus area employee as the replacement for the other focus area 18
employee to determine any credit that may be available to the business entity under 19
paragraph (2)(ii) or (iii) of this subsection. 20
(f) If the credit allowed under this section in any taxable year exceeds the State 21
income tax for that taxable year, a business entity may apply the excess as a credit against 22
the State income tax for succeeding taxable years until the earlier of: 23
(1) the full amount of the excess is used; or 24
(2) the expiration of the 5th taxable year from the date on which the 25
business entity hired the qualified employee to whom the credit first applies. 26
(g) If a credit is claimed under this section, the claimant must make the addition 27
required in § 10–205, § 10–206, or § 10–306 of this title. 28
10–741. 29
(a) (1) In this section the following words have the meanings indicated. 30
(2) “Business entity” has the meaning stated in § 6–801 of the Economic 31
Development Article. 32
(3) “Department” means the Department of Commerce. 33 HOUSE BILL 1096 13
(4) “Eligible project” has the meaning stated in § 6–801 of the Economic 1
Development Article. 2
(5) “Existing business entity” has the meaning stated in § 6–801 of the 3
Economic Development Article. 4
(6) “New business entity” has the meaning stated in § 6–801 of the 5
Economic Development Article. 6
(7) “Qualified business entity” has the meaning stated in § 6–801 of the 7
Economic Development Article. 8
(8) “Qualified position” has the meaning stated in § 6–801 of the Economic 9
Development Article. 10
(9) “Tier I area” has the meaning stated in § 6–801 of the Economic 11
Development Article. 12
(10) “Tier II area” has the meaning stated in § 6–801 of the Economic 13
Development Article. 14
(b) (1) Subject to the limitations of this section, an individual or corporation 15
that is a new business entity that operates an eligible project in a Tier I area or an existing 16
business entity that operates an eligible project may claim a credit against the State income 17
tax equal to the amount stated in the final tax credit certificate approved by the 18
Department for an eligible project. 19
(2) The amount of the credit authorized under paragraph (1) of this 20
subsection is equal to the product of: 21
(i) the State employer withholding amount, which is equal to the 22
highest tax rate listed in § 10–105(a) of this title; and 23
(ii) the total amount of wages paid for each qualified position at an 24
eligible project. 25
(3) If the tax credit allowed under this section in any taxable year exceeds 26
the total tax otherwise payable by the qualified business entity for that taxable year, the 27
qualified business entity may claim a refund in the amount of the excess. 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 29
1, 2022, and shall be applicable to all taxable years beginning after December 31, 2021. 30