EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0478*
HOUSE BILL 478
C8 2lr1470
HB 805/21 – W&M
By: Delegate Palakovich Carr
Introduced and read first time: January 21, 2022
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Economic Development – Enterprise Zone Program – Alterations 2
FOR the purpose of establishing the purpose of the Enterprise Zone Program; altering the 3
circumstances under which the Secretary of Commerce may designate an area as an 4
enterprise zone or a focus area; prohibiting the Secretary from designating a new 5
enterprise zone or granting an expansion of an existing enterprise zone under certain 6
circumstances; altering a certain limitation on the expansion of an existing 7
enterprise zone during a single calendar year; altering the circumstances under 8
which the Secretary may grant an extraordinary expansion of an enterprise zone; 9
altering the State agencies responsible for assessing the effectiveness of certain tax 10
credits provided to certain business entities in enterprise zones; requiring the State 11
Department of Assessments and Taxation and the Comptroller to submit to the 12
Department of Commerce a certain report; requiring each county within which an 13
enterprise zone is located to submit to the Department of Commerce a certain report; 14
requiring the Department of Commerce to provide certain notification to a county 15
under certain circumstances; requiring the Department of Commerce to develop 16
certain metrics and a framework for analyzing certain matters; altering the 17
definitions of certain employees for purposes of determining eligibility for a certain 18
credit against the State income tax; limiting the amount of a certain credit against 19
the State income tax that may be claimed by a business entity each taxable year; 20
limiting the total amount of credits against the State income tax that certain 21
business entities may claim each taxable year; providing that, for any taxable year, 22
the amount of a certain credit against the property tax imposed on certain qualified 23
property may not exceed a certain amount; providing for the termination of the 24
Enterprise Zone Program and, except under certain circumstances, eligibility for 25
certain tax credits provided under the Program; and generally relating to the 26
Enterprise Zone Program. 27
BY repealing and reenacting, with amendments, 28
Article – Economic Development 29
Section 5–702, 5–704(a)(2) and (4) and (b), 5–705, 5–706, and 5–709 30 2 HOUSE BILL 478
Annotated Code of Maryland 1
(2018 Replacement Volume and 2021 Supplement) 2
BY repealing and reenacting, without amendments, 3
Article – Economic Development 4
Section 5–704(a)(1) and 5–707(a) and (d) 5
Annotated Code of Maryland 6
(2018 Replacement Volume and 2021 Supplement) 7
BY adding to 8
Article – Economic Development 9
Section 5–710 10
Annotated Code of Maryland 11
(2018 Replacement Volume and 2021 Supplement) 12
BY repealing and reenacting, with amendments, 13
Article – Tax – General 14
Section 10–702 15
Annotated Code of Maryland 16
(2016 Replacement Volume and 2021 Supplement) 17
BY repealing and reenacting, without amendments, 18
Article – Tax – Property 19
Section 9–103(b)(1) 20
Annotated Code of Maryland 21
(2019 Replacement Volume and 2021 Supplement) 22
BY repealing and reenacting, with amendments, 23
Article – Tax – Property 24
Section 9–103(d) 25
Annotated Code of Maryland 26
(2019 Replacement Volume and 2021 Supplement) 27
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 28
That the Laws of Maryland read as follows: 29
Article – Economic Development 30
5–702. 31
(A) THE PURPOSE OF THE ENTERPRISE ZONES AUTHORIZED UNDER THIS 32
SUBTITLE IS TO ATTRA CT, RETAIN, AND ENCOURAGE COMMER CIAL DEVELOPMENT 33
IN ECONOMICALLY DIST RESSED AREAS OF THE STATE, IN PARTNERSHIP WITH 34
POLITICAL SUBDIVISIONS, BY INCENTIVIZING CAP ITAL INVESTMENT AND JOB 35
CREATION THROUGH REA L PROPERTY AND INCOM E TAX CREDITS. 36
HOUSE BILL 478 3
(B) Subject to § 9–103 of the Tax – Property Article, a business entity that owns, 1
operates, develops, constructs, or rehabilitates property intended for use primarily as single 2
or multifamily residential property located in an enterprise zone may not benefit from an 3
incentive or initiative under this subtitle. 4
5–704. 5
(a) (1) The Secretary may only designate an area as an enterprise zone if the 6
area: 7
(i) in a priority funding area or in a qualified opportunity zone 8
under § 1400Z–1 of the Internal Revenue Code in Allegany County, Garrett County, 9
Somerset County, or Wicomico County or meets an exception under Title 5, Subtitle 7B of 10
the State Finance and Procurement Article; and 11
(ii) satisfies at least one of the requirements specified in paragraph 12
(2) of this subsection. 13
(2) An area may be designated as an enterprise zone if: 14
(i) the average rate of unemployment in EACH CENSUS TR ACT 15
WITHIN the area, or within a reasonable proximity to the area but in the same county IF 16
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , for the most recent 17
18–month period for which data are available is at least 150% of the greater of the average 18
rate of unemployment in either the State or the United States during that period; 19
(ii) the population in EACH CENSUS TRACT WI THIN the area, or 20
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500 21
INDIVIDUALS RESIDE IN THE CENSUS TRACT , qualifies the area as a low–income poverty 22
area; 23
(iii) at least 70% of the families in EACH CENSUS TRACT WI THIN 24
the area, or within a reasonable proximity to the area but in the same county IF FEWER 25
THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , have incomes that are less 26
than 80% of the median family income in the political subdivision that contains the area; 27
or 28
(iv) the population in EACH CENSUS TRACT WI THIN the area, or 29
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500 30
INDIVIDUALS RESIDE I N THE CENSUS TRACT , decreased by 10% between the most recent 31
two censuses, and the political subdivision can demonstrate to the Secretary’s satisfaction 32
that: 33
1. chronic abandonment or demolition of property is 34
occurring in the area; or 35
4 HOUSE BILL 478
2. substantial property tax arrearages exist in the area. 1
(4) The Secretary: 2
(I) SHALL ADOPT REGULATI ONS GOVERNING THE EV ALUATION 3
AND PRIORITIZATION O F APPLICATIONS FOR T HE DESIGNATION OF NE W 4
ENTERPRISE ZO NES UNDER THIS SECTI ON AND THE EXPANSION OF EXISTING 5
ENTERPRISE ZONES UND ER § 5–705 OF THIS SUBTITLE; AND 6
(II) may [establish by regulation any other requirements] ADOPT 7
REGULATIONS necessary and appropriate to carry out this subtitle. 8
(b) (1) Within 60 days after a submission date, the Secretary may designate 9
one or more enterprise zones from among the areas described in the applications timely 10
submitted. 11
(2) The designation of an area as an enterprise zone is effective for 10 12
years. 13
(3) The Secretary may not designate more than six enterprise zones in a 14
calendar year. 15
(4) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE 16
AGGREGATE AMOUNT OF PROPERTY TAX CREDITS CLAIMED UNDER § 9–103 OF THE 17
TAX – PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FISCAL YEAR MAY 18
EXCEED $60,000,000, THE SECRETARY MAY NOT DES IGNATE A NEW ENTERPR ISE 19
ZONE DURING THE CURR ENT FISCAL YEAR . 20
[(4)] (5) A county may not receive more than two enterprise zones in a 21
calendar year. 22
5–705. 23
(a) (1) A political subdivision may apply to the Secretary to expand an existing 24
enterprise zone in the same manner as the political subdivision would apply to designate a 25
new enterprise zone. 26
(2) [The] EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, 27
THE Secretary may grant an expansion of an enterprise zone into an area that meets the 28
requirements of § 5–704 of this subtitle. 29
(3) For purposes of § 5–704(b) of this subtitle, an expansion of an enterprise 30
zone that does not exceed [50%] 25% of the existing geographic area of the enterprise zone 31
does not count towards the limit on the number of enterprise zones that: 32
(i) the Secretary may designate in a calendar year; or 33 HOUSE BILL 478 5
(ii) a county may receive in a calendar year. 1
(b) (1) The Secretary may grant one extraordinary expansion of an enterprise 2
zone in the State each calendar year for an area that: 3
(i) meets the requirements of § 5–704 of this subtitle; and 4
(ii) in the determination of the Secretary, has suffered a significant 5
loss of economic base OR MERITS INCLUSION IN AN ENTE RPRISE ZONE FOR A 6
COMPELLING ECONOMIC REASON. 7
(2) For purposes of § 5–704(b) of this subtitle, an extraordinary expansion 8
of an enterprise zone IS NOT SUBJECT TO TH E LIMITATION UNDER SUBSECTION (C) OF 9
THIS SECTION AND does not count towards the limit on the number of enterprise zones 10
that: 11
(i) the Secretary may designate in a calendar year; or 12
(ii) a county may receive in a calendar year. 13
(C) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE AGGREGATE 14
AMOUNT OF PROPERTY T AX CREDITS CLAIMED U NDER § 9–103 OF THE TAX – 15
PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FIS CAL YEAR MAY EXCEED 16
$60,000,000, THE SECRETARY MAY NOT GRA NT AN EXPANSION OF A N EXISTING 17
ENTERPRISE ZONE DURI NG THE CURRENT FISCA L YEAR. 18
5–706. 19
(a) A political subdivision may request the Secretary to designate all or part of an 20
enterprise zone as a focus area for the lesser of: 21
(1) 5 years; or 22
(2) the remainder of the 10–year term of the applicable enterprise zone. 23
(b) The request may be made on or before a submission date when the political 24
subdivision applies for the designation of a new enterprise zone or after the Secretary has 25
designated an enterprise zone. 26
(c) The Secretary may grant the request if the area is located in an enterprise 27
zone and meets at least three of the following criteria: 28
(1) the average unemployment rate in EACH CENSUS TRACT WI THIN the 29
area, or within a reasonable proximity to the area but in the same county IF FEWER THAN 30
1,500 INDIVIDUALS RES IDE IN THE CENSUS TR ACT, for the most recent 18–month 31 6 HOUSE BILL 478
period for which data are available is at least 150% of the greater of the average rate of 1
unemployment in either the State or the United States during that same period; 2
(2) the population in EACH CENSUS TRACT WITHIN the area, or within a 3
reasonable proximity to the area but in the same county IF FEWER THAN 1,500 4
INDIVIDUALS RESIDE I N THE CENSUS TRACT , has an incidence of poverty that is at least 5
150% of the national average; 6
(3) the crime rate in EACH CENSUS TRACT WI THIN the area, or within a 7
reasonable proximity to the area but in the same county IF FEWER THAN 1,500 8
INDIVIDUALS RESIDE I N THE CENSUS TRACT , is at least 150% of the crime rate in the 9
political subdivision where the area is located; 10
(4) the percentage of substandard housing in EACH CENSUS TRACT 11
WITHIN the area, or within a reasonable proximity to the area but in the same county IF 12
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , is at least 200% of 13
the percentage of housing units in the State that are substandard, according to data from 14
the United States Bureau of the Census or other State or federal government data the 15
Secretary considers appropriate; or 16
(5) at least 20% of the square footage of commercial property in EACH 17
CENSUS TRACT WITHIN the area, or within a reasonable proximity to the area but within 18
the same county IF FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , 19
is vacant, according to data from the United States Bureau of the Census or other State or 20
federal government data the Secretary considers appropriate. 21
5–707. 22
(a) To the extent provided for in this section, a business entity is entitled to: 23
(1) the special property tax credit in § 9–103 of the Tax – Property Article; 24
(2) the income tax credits in § 10–702 of the Tax – General Article; and 25
(3) consideration for financial assistance from programs in Subtitle 1 of 26
this title. 27
(d) (1) Except as provided in § 10–702 of the Tax – General Article and § 28
9–103 of the Tax – Property Article, the incentives and initiatives set forth in this section 29
are available for 10 years after the date that an area is designated an enterprise zone. 30
(2) A law enacted after the enactment of this section that eliminates or 31
reduces the benefits available to a business entity under this section does not apply to a 32
business entity that was in an enterprise zone before the effective date of the law. 33
5–709. 34 HOUSE BILL 478 7
(a) The Department [and the Comptroller jointly] shall assess each year the 1
effectiveness of the tax credits provided to business entities in enterprise zones and focus 2
areas in enterprise zones, including: 3
(1) the number and amounts of credits granted each year; and 4
(2) the success of the tax credits in attracting and retaining business 5
entities in enterprise zones and focus areas. 6
(B) (1) ON OR BEFORE SEPTEMBER 15 EACH YEAR , THE STATE 7
DEPARTMENT OF ASSESSMENTS AND TAXATION SHALL SUBMIT TO THE 8
DEPARTMENT A REPORT T HAT INCLUDES THE FOL LOWING INFORMATION FOR THE 9
IMMEDIATELY PRECEDIN G TAXABLE YEAR: 10
(I) THE NUMBER OF PROPER TIES CLAIMING A PROP ERTY TAX 11
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN 12
ACCORDANCE WITH § 9–103(D)(1) OF THE TAX – PROPERTY ARTICLE; 13
(II) THE NUMBER OF PROPER TIES CLAIMING A PROP ERTY TAX 14
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN 15
ACCORDANCE WITH § 9–103(D)(4) OF THE TAX – PROPERTY ARTICLE; 16
(III) THE NUMBER OF PROPERTIES NEWLY CER TIFIED AS 17
QUALIFIED PROPERTIES BY THE STATE DEPARTMENT OF ASSESSMENTS AND 18
TAXATION AS ELIGIBLE FOR THE PROPERTY TAX CREDIT UNDER § 9–103 OF THE TAX 19
– PROPERTY ARTICLE; AND 20
(IV) FOR EACH TAXPAYER CL AIMING OR RECEIVING A PROPERTY 21
TAX CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE : 22
1. THE NAME OF THE TAXP AYER; 23
2. THE LOCATION OF THE QUALIFIED PROPERTY FO R 24
WHICH THE CREDIT WAS CLAIMED; AND 25
3. THE AMOUNT OF TAX SA VINGS RECEIVED BY EA CH 26
QUALIFIED PROPERTY . 27
(2) ON OR BEFORE SEPTEMBER 15 EACH YEAR, THE COMPTROLLER 28
SHALL SUBMIT TO THE DEPARTMENT A REPORT THAT INCLUD ES THE FOLLOWING 29
INFORMATION FOR THE I MMEDIATELY PRECEDING TAXABLE YEAR : 30
(I) THE NAME AND ADDRESS OF EACH BUSINESS ENTITY THAT 31 8 HOUSE BILL 478
CLAIMED AN INCOME TA X CREDIT UNDER § 10–702 OF THE TAX – GENERAL 1
ARTICLE; 2
(II) THE BUSINESS ACTIVIT Y CODE OR NORTH AMERICAN 3
INDUSTRY CLASSIFICATION SYSTEM (NAICS) CODE OF THE BUSINESS ENTI TY; 4
(III) THE NUMBER OF QUALIF IED EMPLOYEES AND FO CUS AREA 5
EMPLOYEES EMPLOYED B Y THE BUSINESS ENTIT Y; 6
(IV) THE NUMBER OF ECONOM ICALLY DISAD VANTAGED 7
INDIVIDUALS EMPLOYED BY THE BUSINESS ENTI TY AND THE NUMBER OF YE ARS FOR 8
WHICH THOSE ECONOMIC ALLY DISADVANTAGED I NDIVIDUALS HAVE BEEN 9
EMPLOYED BY THE BUSI NESS ENTITY; AND 10
(V) THE TOTAL AMOUNT OF THE INCOME TAX CREDI T CLAIMED 11
BY THE BUSINESS ENTITY. 12
(C) (1) (I) ON OR BEFORE SEPTEMBER 15 EACH YEAR, EACH COUNTY 13
WITHIN WHICH AN ENTE RPRISE ZONE IS LOCAT ED SHALL SUBMIT TO T HE 14
DEPARTMENT A DETAILED REPORT ON EACH ENTER PRISE ZONE IN THE CO UNTY TO 15
ASSIST THE DEPARTMENT IN THE ASS ESSMENT REQUIRED UND ER SUBSECTION (A) 16
OF THIS SECTION. 17
(II) THE COUNTY SHALL INCL UDE IN THE REPORT RE QUIRED 18
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH TH E FOLLOWING INFORMAT ION 19
FOR THE IMMEDIATELY PRECEDING FISCAL YEA R: 20
1. NOTABLE EXAMPLES OF REDEVELOPMENT OR NEW 21
BUSINESSES RELOCATIN G OR EXPANDING IN TH E ENTERPRISE ZONE DU E TO THE 22
TAX CREDITS PROVIDED UNDER THIS SUBTITLE ; AND 23
2. A DESCRIPTION OF FUT URE ECONOMIC 24
DEVELOPMENT PROJECTS THAT MIGHT CLAIM A TAX CREDIT PROVIDED UNDER THIS 25
SUBTITLE, INCLUDING WITH RESPECT TO EACH PROJECT: 26
A. WHETHER THE PROJECT IS LOCATED WITHIN A FOCUS 27
AREA; 28
B. WHETHER THE PROJECT MAY QUALIFY FOR A CREDIT 29
UNDER THIS SUBTITLE AGAINST THE TAX IMPO SED ON REAL PROPERTY , PERSONAL 30
PROPERTY, OR INCOME; AND 31
C. ANTICIPATED CAPITAL OR PERSONAL PROPERTY 32 HOUSE BILL 478 9
EXPENDITURES FOR THE PROJECT. 1
(2) (I) IF A COUNTY FAILS TO PROVIDE THE REPORT R EQUIRED 2
UNDER PARAGRAPH (1) OF THIS SUBSECTION , THE DEPARTMENT SHALL NOTI FY 3
THE COUNTY THAT THE REPORT IS DUE. 4
(II) IF, AFTER THE DEPARTMENT HAS PROVID ED A COUNTY THE 5
NOTICE DESCRIBED UND ER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE COUNTY 6
FAILS TO PROMPTLY PR OVIDE THE OVERDUE RE PORT, THE SECRETARY MAY NOT 7
DESIGNATE A NEW ENTE RPRISE ZONE IN THE C OUNTY OR GRANT TH E EXPANSION OF 8
AN EXISTING ENTERPRI SE ZONE IN THE COUNT Y UNTIL THE REPORT I S RECEIVED 9
BY THE DEPARTMENT . 10
(D) THE DEPARTMENT SHALL DEVE LOP FORMAL METRICS A ND A 11
FRAMEWORK FOR ANALYZ ING: 12
(1) THE COST–EFFECTIVENESS OF EAC H ENTERPRISE ZONE ; AND 13
(2) THE EFFECTIVENESS OF EAC H ENTERPRISE ZONE IN ATTRACTING 14
BUSINESSES AND INCRE ASING EMPLOYMENT . 15
[(b)] (E) On or before December 15 [of] each year, the Department [and the 16
Comptroller] shall submit to the Governor and, in accordance with § 2–1257 of the State 17
Government Article, the General Assembly a report outlining the findings of the 18
Department [and the Comptroller] and any other information of value in determining the 19
effectiveness of the tax credits provided under § 5–707(b) of this subtitle. 20
5–710. 21
THIS SUBTITLE AND , EXCEPT AS PROVIDED I N § 5–707(D)(2) OF THIS 22
SUBTITLE, ELIGIBILITY FOR THE TAX CREDITS PROVIDED UNDER § 5–707(A) OF THIS 23
SUBTITLE SHALL TERMI NATE ON JANUARY 1, 2030. 24
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 25
as follows: 26
Article – Tax – General 27
10–702. 28
(a) (1) In this section the following words have the meanings indicated. 29
(2) (i) “Business entity” means: 30
1. a person conducting or operating a trade or business; or 31 10 HOUSE BILL 478
2. an organization that is exempt from taxation under § 1
501(c)(3) or (4) of the Internal Revenue Code. 2
(ii) “Business entity” does not include a person owning, operating, 3
developing, constructing, or rehabilitating property intended for use primarily as single or 4
multifamily residential property located within the enterprise zone. 5
(3) “Economically disadvantaged individual” means an individual who is 6
certified by provisions that the Maryland Department of Labor adopts as an individual who, 7
before becoming employed by a business entity in an enterprise zone: 8
(i) was both unemployed for at least 30 consecutive days and 9
qualified to participate in training activities for the economically disadvantaged under the 10
federal Workforce Innovation and Opportunity Act or its successor; or 11
(ii) in the absence of an applicable federal act, met the criteria for an 12
economically disadvantaged individual that the Secretary of Labor sets. 13
(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the 14
Economic Development Article. 15
(ii) “Enterprise zone” includes a Regional Institution Strategic 16
Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article. 17
(5) “Focus area” has the meaning stated in § 5–701 of the Economic 18
Development Article. 19
(6) “Focus area employee” means an individual who: 20
(i) is a new employee or an employee rehired after being laid off for 21
more than 1 year by a business entity; 22
(ii) is employed by a business entity at least 35 hours each week for 23
at least 12 months before or during the taxable year for which the entity claims a credit; 24
(iii) spends at least [50 percent] 50% of the hours under item (ii) of 25
this paragraph either in the focus area or on activities of the business entity resulting 26
directly from its location in the focus area; 27
(iv) is hired by the business entity after the later of: 28
1. the date on which the focus area is designated; or 29
2. The date on which the business entity located in the focus 30
area; and 31
HOUSE BILL 478 11
(v) earns at least [150 percent] 120% of the [federal] STATE 1
minimum wage. 2
(7) “Qualified employee” means an individual who: 3
(i) is [a new employee] HIRED TO FILL A NEWL Y CREATED 4
POSITION or [an employee rehired after being laid off for more than 1 year by a business 5
entity], IF THE INDIVIDUAL IS AN ECONOMICALLY DISA DVANTAGED INDIVIDUAL , IS 6
HIRED TO FILL A POSI TION PREVIOUSLY HELD BY ANOTHER ECONOMICALLY 7
DISADVANTAGED INDIVI DUAL; 8
(ii) is employed by a business entity at least 35 hours each week for 9
at least 6 months before or during the taxable year for which the entity claims a credit; 10
(iii) spends at least 50% of the hours under item (ii) of this paragraph, 11
either in the enterprise zone or on activities of the business entity resulting directly from 12
its location in the enterprise zone; 13
(iv) earns at least [150%] 120% of the [federal] STATE minimum 14
wage; and 15
(v) is hired by the business entity after the later of: 16
1. the date on which the enterprise zone is designated; or 17
2. the date on which the business entity locates in the 18
enterprise zone. 19
(b) (1) [Any] SUBJECT TO THE LIMITA TIONS OF THIS SECTION , ANY 20
business entity that is located in an enterprise zone and satisfies the requirements of § 21
5–707 of the Economic Development Article may claim a credit only against the State 22
income tax for the wages specified in subsections (c) and (d) of this section that are paid in 23
the taxable year for which the entity claims the credit. 24
(2) [A] SUBJECT TO THE LIMITA TIONS OF THIS SECTION , A business 25
entity that is located in a focus area and satisfies the requirements of § 5–707 of the 26
Economic Development Article may claim a credit only against the State income tax for the 27
wages specified in subsection (e) of this section that are paid to a focus area employee in 28
the taxable year for which the entity claims the credit. 29
(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of 30
the Internal Revenue Code may apply the credit under this section as a credit against 31
income tax due on unrelated business taxable income as provided under §§ 10–304 and 32
10–812 of this title. 33
(c) If a business entity does not claim an enhanced tax credit under subsection (e) 34 12 HOUSE BILL 478
of this section for a focus area employee, for the taxable year in which a business entity 1
satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a 2
credit is allowed that equals: 3
(1) up to $3,000 of the wages paid to each qualified employee who: 4
(i) is an economically disadvantaged individual; and 5
(ii) is not hired to replace an individual whom the business entity 6
employed in that or any of the 3 preceding taxable years; and 7
(2) up to $1,000 of the wages paid to each qualified employee who: 8
(i) is not an economically disadvantaged individual; and 9
(ii) is not hired to replace an individual whom the business entity 10
employed in that or any of the 3 preceding taxable years. 11
(d) (1) If a business entity does not claim an enhanced tax credit under 12
subsection (e) of this section for a focus area employee, for each taxable year after the 13
taxable year described in subsection (c) of this section, while the area is designated an 14
enterprise zone, a credit is allowed that equals: 15
(i) up to $3,000 of the wages paid to each qualified employee who: 16
1. is an economically disadvantaged individual; 17
2. became a qualified employee during the taxable year to 18
which the credit applies; and 19
3. is not hired to replace an individual whom the business 20
entity employed in that or any of the 3 preceding taxable years; 21
(ii) up to $2,000 of the wages paid to each qualified employee who is 22
an economically disadvantaged individual, if the business entity received a credit under 23
subsection (c)(1) of this section for the qualified employee in the immediately preceding 24
taxable year; and 25
(iii) up to $1,000 of the wages paid to each qualified employee who is 26
not hired to replace an individual whom the business entity employed in that or any of the 27
3 preceding taxable years if the qualified employee: 28
1. is an economically disadvantaged individual for whom the 29
business entity received a credit under subsection (c)(1) of this section or item (i) of this 30
paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding 31
taxable years; or 32
HOUSE BILL 478 13
2. is not an economically disadvantaged individual but 1
became a qualified employee during the taxable year to which the credit applies. 2
(2) A business entity that hires a qualified employee to replace another 3
qualified employee for whom the business entity received a credit under subsection (c)(1) of 4
this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable 5
year may treat the new qualified employee as the replacement for the other qualified 6
employee to determine any credit that may be available to the business entity under 7
paragraph (1)(ii) or (iii) of this subsection. 8
(e) (1) For the taxable year in which a business entity satisfies the 9
requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a 10
credit is allowed that equals: 11
(i) up to $4,500 of the wages paid to each focus area employee who: 12
1. is an economically disadvantaged individual; and 13
2. is not hired to replace an individual whom the business 14
entity employed in that year or any of the 3 preceding taxable years; and 15
(ii) up to $1,500 of the wages paid to each focus area employee who: 16
1. is not 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. 19
(2) For each taxable year after the taxable year described in paragraph (1) 20
of this subsection, while the area is designated a focus area, a credit is allowed that equals: 21
(i) up to $4,500 of the wages paid to each focus area employee who: 22
1. is an economically disadvantaged individual; 23
2. became a focus area employee during the taxable year to 24
which the credit applies; and 25
3. is not hired to replace an individual whom the business 26
entity employed in that year or any of the 3 preceding taxable years; 27
(ii) up to $3,000 of the wages paid to each focus area employee who 28
is an economically disadvantaged individual, if the business entity received a credit under 29
paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding 30
taxable year; and 31
(iii) up to $1,500 of the wages paid to each focus area employee who 32 14 HOUSE BILL 478
is not hired to replace an individual whom the business entity employed in that year or any 1
of the 3 preceding taxable years if the focus area employee: 2
1. is an economically disadvantaged individual for whom the 3
business entity received a credit under item (ii) of this paragraph in the 2 immediately 4
preceding taxable years and under: 5
A. paragraph (1)(i) of this subsection; or 6
B. item (i) of this paragraph; or 7
2. is not an economically disadvantaged individual but 8
became a focus area employee during the taxable year to which the credit applies. 9
(3) A business entity that hires a focus area employee to replace another 10
focus area employee for whom the business entity received a credit under paragraph (1)(i) 11
of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding 12
taxable year may treat the focus area employee as the replacement for the other focus area 13
employee to determine any credit that may be available to the business entity under 14
paragraph (2)(ii) or (iii) of this subsection. 15
(F) (1) THE CREDIT ALLOWED UN DER THIS SECTION SHA LL BE CLAIMED 16
ON A FIRST–COME, FIRST–SERVED BASIS. 17
(2) FOR ANY TAXABLE YEAR : 18
(I) THE CREDIT ALLOWED U NDER THIS SECTION MAY NOT 19
EXCEED $250,000; AND 20
(II) THE TOTAL AMOUNT OF CREDITS CLAIMED BY B USINESS 21
ENTITIES MAY NOT EXC EED $2,000,000. 22
[(f)] (G) If the credit allowed under this section in any taxable year exceeds the 23
State income tax for that taxable year, a business entity may apply the excess as a credit 24
against the State income tax for succeeding taxable years until the earlier of: 25
(1) the full amount of the excess is used; or 26
(2) the expiration of the 5th taxable year from the date on which the 27
business entity hired the qualified employee to whom the credit first applies. 28
[(g)] (H) If a credit is claimed under this section, the claimant must make the 29
addition required in § 10–205, § 10–206, or § 10–306 of this title. 30
SECTION 3. AND BE IT FUR THER ENACTED, That the Laws of Maryland read 31
as follows: 32 HOUSE BILL 478 15
Article – Tax – Property 1
9–103. 2
(b) (1) The governing body of a county or of a municipal corporation shall grant 3
a tax credit under this section against the property tax imposed on the eligible assessment 4
of qualified property. 5
(d) (1) [The] SUBJECT TO THE LIMITA TION UNDER PARAGRAPH (5) OF 6
THIS SUBSECTION , THE appropriate governing body shall calculate the amount of the tax 7
credit under this section equal to a percentage of the amount of property tax imposed on 8
the eligible assessment of the qualified property, as follows: 9
(i) 80% in each of the 1st 5 taxable years following the calendar year 10
in which the property initially becomes a qualified property; 11
(ii) 70% in the 6th taxable year; 12
(iii) 60% in the 7th taxable year; 13
(iv) 50% in the 8th taxable year; 14
(v) 40% in the 9th taxable year; and 15
(vi) 30% in the 10th taxable year. 16
(2) The Department shall allocate the eligible assessment to the 17
nonresidential part of the qualified property at the same percentage as the square footage 18
of the nonresidential part is to the total square footage of the building. 19
(3) For purposes of calculating the amount of the credit allowed under this 20
section, the amount of property tax imposed on the eligible assessment shall be calculated 21
without reduction for any credits allowed under this title. 22
(4) For qualified property located in a focus area, the appropriate governing 23
body shall calculate the amount of the tax credit under this section equal to 80% of the 24
amount of property tax imposed on the eligible assessment of the qualified property for 25
each of the 10 taxable years following the calendar year in which the property initially 26
becomes a qualified property. 27
(5) FOR ANY TAXABLE YEAR , THE AMOUNT OF A PROP ERTY TAX 28
CREDIT GRANTED UNDER THIS SECTION TO A QUALIFIED PROPE RTY MAY NOT 29
EXCEED $500,000. 30
SECTION 4. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall be 31
applicable to all taxable years beginning after December 31, 2021. 32 16 HOUSE BILL 478
SECTION 5. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall be 1
applicable to all taxable years beginning after June 30, 2022. 2
SECTION 6. AND BE IT FURTHER ENACTED, That this Act shall take effect June 3
1, 2022. 4