EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*hb0478*
HOUSE BILL 478
C8 (2lr1470)
ENROLLED BILL
— Ways and Means/Budget and Taxation —
Introduced by Delegate Palakovich Carr
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
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 2 HOUSE BILL 478
under certain circumstances; requiring the Department of Commerce to develop 1
certain metrics and a framework for analyzing certain matters; altering the 2
definitions of certain employees for purposes of determining eligibility for a certain 3
credit against the State income tax; limiting the amount of a certain credit against 4
the State income tax that may be claimed by a business entity each taxable year; 5
limiting the total amount of credits against the State income tax that certain 6
business entities may claim each taxable year; providing that, for any taxable year, 7
the amount of a certain credit against the property tax imposed on certain qualified 8
property may not exceed a certain amount; providing for the termination of the 9
Enterprise Zone Program and, except under certain circumstances, eligibility for 10
certain tax credits provided under the Program; and generally relating to the 11
Enterprise Zone Program. 12
BY repealing and reenacting, with amendments, 13
Article – Economic Development 14
Section 5–702, 5–704(a)(2) and (4) and (b) 5–704(a)(4), 5–705, 5–706, 5–707(d), and 15
5–709 16
Annotated Code of Maryland 17
(2018 Replacement Volume and 2021 Supplement) 18
BY repealing and reenacting, without amendments, 19
Article – Economic Development 20
Section 5–704(a)(1) and 5–707(a) and (d) and (d) 21
Annotated Code of Maryland 22
(2018 Replacement Volume and 2021 Supplement) 23
BY adding to 24
Article – Economic Development 25
Section 5–710 26
Annotated Code of Maryland 27
(2018 Replacement Volume and 2021 Supplement) 28
BY repealing and reenacting, with amendments, 29
Article – Tax – General 30
Section 10–702 31
Annotated Code of Maryland 32
(2016 Replacement Volume and 2021 Supplement) 33
BY repealing and reenacting, without amendments, 34
Article – Tax – Property 35
Section 9–103(b)(1) 36
Annotated Code of Maryland 37
(2019 Replacement Volume and 2021 Supplement) 38
BY repealing and reenacting, with amendments, 39
Article – Tax – Property 40
Section 9–103(d) 41 HOUSE BILL 478 3
Annotated Code of Maryland 1
(2019 Replacement Volume and 2021 Supplement) 2
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
That the Laws of Maryland read as follows: 4
Article – Economic Development 5
5–702. 6
(A) THE PURPOSE OF THE EN TERPRISE ZONES AUTHO RIZED UNDER THIS 7
SUBTITLE IS TO ATTRA CT, RETAIN, AND ENCOURAGE COMMER CIAL DEVELOPMENT 8
IN ECONOMICALLY DIST RESSED AREAS OF THE STATE, IN PARTNERSHIP WITH 9
POLITICAL SUBDIVISIO NS, BY INCENTIVIZING CAP ITAL INVESTMENT AND JOB 10
CREATION THROUGH REA L PROPERTY AND INCOM E TAX CREDITS. 11
(B) Subject to § 9–103 of the Tax – Property Article, a business entity that owns, 12
operates, develops, constructs, or rehabilitates property intended for use primarily as single 13
or multifamily residential property located in an enterprise zone may not benefit from an 14
incentive or initiative under this subtitle. 15
5–704. 16
(a) (1) The Secretary may only designate an area as an enterprise zone if the 17
area: 18
(i) in a priority funding area or in a qualified opportunity zone 19
under § 1400Z–1 of the Internal Revenue Code in Allegany County, Garrett County, 20
Somerset County, or Wicomico County or meets an exception under Title 5, Subtitle 7B of 21
the State Finance and Procurement Article; and 22
(ii) satisfies at least one of the requirements specified in paragraph 23
(2) of this subsection. 24
(2) An area may be designated as an enterprise zone if: 25
(i) the average rate of unemployment in EACH CENSUS TRACT 26
WITHIN the area, or within a reasonable proximity to the area but in the same county IF 27
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , for the most recent 28
18–month period for which data are available is at least 150% of the greater of the average 29
rate of unemployment in either the State or the United States during that period; 30
(ii) the population in EACH CENSUS TRACT WI THIN the area, or 31
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500 32
INDIVIDUALS RESIDE IN THE CEN SUS TRACT, qualifies the area as a low–income poverty 33
area; 34 4 HOUSE BILL 478
(iii) at least 70% of the families in EACH CENSUS TRACT WI THIN 1
the area, or within a reasonable proximity to the area but in the same county IF FEWER 2
THAN 1,500 INDIVIDUALS RESIDE IN THE CENSUS TRACT, have incomes that are less 3
than 80% of the median family income in the political subdivision that contains the area; 4
or 5
(iv) the population in EACH CENSUS TRACT WI THIN the area, or 6
within a reasonable proximity to the area but in the same county IF FEWER THAN 1,500 7
INDIVIDUALS RESIDE I N THE CENSUS TRACT , decreased by 10% between the most recent 8
two censuses, and the political subdivision can demonstrate to the Secretary’s satisfaction 9
that: 10
1. chronic abandonment or demolition of property is 11
occurring in the area; or 12
2. substantial property tax arrearages exist in the area. 13
(4) The Secretary: 14
(I) SHALL ADOPT REGULATI ONS GOVERNING THE EV ALUATION 15
AND PRIORITIZATION O F APPLICATIONS FOR T HE DESIGNATION OF NE W 16
ENTERPRISE ZONES UND ER THIS SECTION AND THE EXPANSION OF EXI STING 17
ENTERPRISE ZONES UND ER § 5–705 OF THIS SUBTITLE; AND 18
(II) may [establish by regulation any other requirements] ADOPT 19
REGULATIONS necessary and appropriate to carry out this subtitle. 20
(b) (1) Within 60 days after a submission date, the Secretary may designate 21
one or more enterprise zones from among the areas described in the applications timely 22
submitted. 23
(2) The designation of an area as an enterprise zone is effective for 10 24
years. 25
(3) The Secretary may not designate more than six enterprise zones in a 26
calendar year. 27
(4) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE 28
AGGREGATE AMOUNT OF PROPERTY TAX CREDITS CLAIMED UNDER § 9–103 OF THE 29
TAX – PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FISCAL YEAR MAY 30
EXCEED $60,000,000, THE SECRETARY MAY NOT DES IGNATE A NEW ENTERPR ISE 31
ZONE DURING THE CURR ENT FISCAL YEAR . 32
HOUSE BILL 478 5
[(4)] (5) A county may not receive more than two enterprise zones in a 1
calendar year. 2
5–705. 3
(a) (1) A political subdivision may apply to the Secretary to expand an existing 4
enterprise zone in the same manner as the political subdivision would apply to designate a 5
new enterprise zone. 6
(2) [The] EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, 7
THE Secretary may grant an expansion of an enterprise zone into an area that meets the 8
requirements of § 5–704 of this subtitle. 9
(3) For purposes of § 5–704(b) of this subtitle, an expansion of an enterprise 10
zone that does not exceed [50%] 25% of the existing geographic area of the enterprise zone 11
does not count towards the limit on the number of enterprise zones that: 12
(i) the Secretary may designate in a calendar year; or 13
(ii) a county may receive in a calendar year. 14
(b) (1) The Secretary may grant one extraordinary expansion of an enterprise 15
zone in the State each calendar year for an area that: 16
(i) meets the requirements of § 5–704 of this subtitle; and 17
(ii) in the determination of the Secretary, has suffered a significant 18
loss of economic base OR MERITS INCLUSION IN AN ENTERPRISE ZON E FOR A 19
COMPELLING ECONOMIC REASON. 20
(2) For purposes of § 5–704(b) of this subtitle, an extraordinary expansion 21
of an enterprise zone IS NOT SUBJECT TO TH E LIMITATION UNDER S UBSECTION (C) OF 22
THIS SECTION AND does not count towards the limit on the number of enterprise zones 23
that: 24
(i) the Secretary may designate in a calendar year; or 25
(ii) a county may receive in a calendar year. 26
(C) IF THE SECRETARY REASONABLY ANTICIPATES THAT THE AGGREGATE 27
AMOUNT OF PROPERTY T AX CREDITS CLAIMED U NDER § 9–103 OF THE TAX – 28
PROPERTY ARTICLE FOR THE IMMED IATELY PRECEDING FIS CAL YEAR MAY EXCEED 29
$60,000,000, THE SECRETARY MAY NOT GRA NT AN EXPANSION OF A N EXISTING 30
ENTERPRISE ZONE DURI NG THE CURRENT FISCA L YEAR. 31
5–706. 32 6 HOUSE BILL 478
(a) A political subdivision may request the Secretary to designate all or part of an 1
enterprise zone as a focus area for the lesser of: 2
(1) 5 years; or 3
(2) the remainder of the 10–year term of the applicable enterprise zone. 4
(b) The request may be made on or before a submission date when the political 5
subdivision applies for the designation of a new enterprise zone or after the Secretary has 6
designated an enterprise zone. 7
(c) The Secretary may grant the request if the area is located in an enterprise 8
zone and meets at least three of the following criteria: 9
(1) the average unemployment rate in EACH CENSUS TRACT WI THIN the 10
area, or within a reasonable proximity to the area but in the same county IF FEWER THAN 11
1,500 INDIVIDUALS RESID E IN THE CENSUS TRAC T, for the most recent 18–month 12
period for which data are available is at least 150% of the greater of the average rate of 13
unemployment in either the State or the United States during that same period; 14
(2) the population in EACH CENSUS TRACT WITHIN the area, or within a 15
reasonable proximity to the area but in the same county IF FEWER THAN 1,500 16
INDIVIDUALS RESIDE I N THE CENSUS TRACT , has an incidence of poverty that is at least 17
150% of the national average; 18
(3) the crime rate in EACH CENSUS TRACT WITH IN the area, or within a 19
reasonable proximity to the area but in the same county IF FEWER THAN 1,500 20
INDIVIDUALS RESIDE I N THE CENSUS TRACT , is at least 150% of the crime rate in the 21
political subdivision where the area is located; 22
(4) the percentage of substandard housing in EACH CENSUS TRACT 23
WITHIN the area, or within a reasonable proximity to the area but in the same county IF 24
FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , is at least 200% of 25
the percentage of housing units in the State that are substandard, according to data from 26
the United States Bureau of the Census or other State or federal government data the 27
Secretary considers appropriate; or 28
(5) at least 20% of the square footage of commercial property in EACH 29
CENSUS TRACT WITHIN the area, or within a reasonable proximity to the area but within 30
the same county IF FEWER THAN 1,500 INDIVIDUALS RESIDE I N THE CENSUS TRACT , 31
is vacant, according to data from the United States Bureau of the Census or other State or 32
federal government data the Secretary considers appropriate. 33
5–707. 34 HOUSE BILL 478 7
(a) To the extent provided for in this section, a business entity is entitled to: 1
(1) the special property tax credit in § 9–103 of the Tax – Property Article; 2
(2) the income tax credits in § 10–702 of the Tax – General Article; and 3
(3) consideration for financial assistance from programs in Subtitle 1 of 4
this title. 5
(d) (1) Except as provided in § 10–702 of the Tax – General Article and § 6
9–103 of the Tax – Property Article, the incentives and initiatives set forth in this section 7
are available for 10 years after the date that an area is designated an enterprise zone. 8
(2) (I) A law enacted after the enactment of this section that eliminates 9
or reduces the benefits available to a business entity under this section does not apply to a 10
business entity that was in an enterprise zone before the effective date of the law. 11
(II) A BUSINESS ENTITY THAT LOCATES IN AN ENTERP RISE 12
ZONE BEFORE THE TERM INATION DATE OF THIS SUBTITLE PROV IDED UNDER § 13
5–710 OF THIS SUBTITLE REM AINS ELIGIBLE FOR TH E BENEFITS AVAILABLE TO A 14
BUSINESS ENTITY UNDE R THIS SECTION , PROVIDED THAT THE BU SINESS ENTITY 15
MEETS THE REQUIREMEN TS AND CONDITIONS OF THE CODE SECTION APPLICAB LE 16
TO THE BENEFIT . 17
5–709. 18
(a) The Department [and the Comptroller jointly] shall assess each year the 19
effectiveness of the tax credits provided to business entities in enterprise zones and focus 20
areas in enterprise zones, including: 21
(1) the number and amounts of credits granted each year; and 22
(2) the success of the tax credits in attracting and retaining business 23
entities in enterprise zones and focus areas. 24
(B) (1) ON OR BEFORE SEPTEMBER 15 EACH YEAR , THE STATE 25
DEPARTMENT OF ASSESSMENTS AND TAXATION SHALL SUBMIT TO THE 26
DEPARTME NT A REPORT THAT INC LUDES THE FOLLOWING INFORMATION FOR THE 27
IMMEDIATELY PRECEDIN G TAXABLE YEAR : 28
(I) THE NUMBER OF PROPER TIES CLAIMING A PROP ERTY TAX 29
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN 30
ACCORDANCE WITH § 9–103(D)(1) OF THE TAX – PROPERTY ARTICLE; 31
8 HOUSE BILL 478
(II) THE NUMBER OF PROPER TIES CLAIMING A PROP ERTY TAX 1
CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE CALCULATED IN 2
ACCORDANCE WITH § 9–103(D)(4) OF THE TAX – PROPERTY ARTICLE; 3
(III) THE NUMBER OF PROPER TIES NEWLY CERTIFIE D AS 4
QUALIFIED PROPERTIES BY THE STATE DEPARTMENT OF ASSESSMENTS AND 5
TAXATION AS ELIGIBLE FOR THE PRO PERTY TAX CREDIT UND ER § 9–103 OF THE TAX 6
– PROPERTY ARTICLE; AND 7
(IV) FOR EACH TAXPAYER CL AIMING OR RECEIVING A PROPERTY 8
TAX CREDIT UNDER § 9–103 OF THE TAX – PROPERTY ARTICLE : 9
1. THE NAME OF THE TAXP AYER; 10
2. THE LOCATION OF THE QUALIFIED PROPERTY F OR 11
WHICH THE CREDIT WAS CLAIMED; AND 12
3. THE AMOUNT OF TAX SA VINGS RECEIVED BY EA CH 13
QUALIFIED PROPERTY . 14
(2) ON OR BEFORE SEPTEMBER 15 EACH YEAR, THE COMPTROLLER 15
SHALL SUBMIT TO THE DEPARTMENT A REPORT T HAT INCLUDES THE FOL LOWING 16
INFORMATION FOR THE IMMEDIATELY PRECEDIN G TAXABLE YEAR : 17
(I) THE NAME AND ADDRESS OF EACH BUSINESS ENT ITY THAT 18
CLAIMED AN INCOME TA X CREDIT UNDER § 10–702 OF THE TAX – GENERAL 19
ARTICLE; 20
(II) THE BUSINESS ACTIVIT Y CODE OR NORTH AMERICAN 21
INDUSTRY CLASSIFICATION SYSTEM (NAICS) CODE OF THE BUSINESS ENTITY; 22
(III) THE NUMBER OF QUALIF IED EMPLOYEES AND FO CUS AREA 23
EMPLOYEES EMPLOYED B Y THE BUSINESS ENTIT Y; 24
(IV) THE NUMBER OF ECONOMI CALLY DISADVANTAGED 25
INDIVIDUALS EMPLOYED BY THE BUSINESS ENTI TY AND THE NUMBER OF YEARS FOR 26
WHICH THOSE ECONOMIC ALLY DISADVANTAGED I NDIVIDUALS HAVE BEEN 27
EMPLOYED BY THE BUSI NESS ENTITY; AND 28
(V) THE TOTAL AMOUNT OF THE INCOME TAX CRE DIT CLAIMED 29
BY THE BUSINESS ENTI TY. 30
(C) (1) (I) ON OR BEFORE SEPTEMBER 15 EACH YEAR, EACH COUNTY 31
WITHIN WHICH AN ENTE RPRISE ZONE IS LOCAT ED SHALL SUBMIT TO T HE 32 HOUSE BILL 478 9
DEPARTMENT A DETAILED REPORT ON EACH ENTER PRISE ZONE IN THE CO UNTY TO 1
ASSIST THE DEPARTMENT IN THE ASSESSMENT REQUI RED UNDER SUBSECTION (A) 2
OF THIS SECTION. 3
(II) THE COUNTY SHALL INCL UDE IN THE REPORT RE QUIRED 4
UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH TH E FOLLOWING INFORMAT ION 5
FOR THE IMMEDIATELY PRECEDING FISCAL YEA R: 6
1. THE NUMBER OF PROP ERTIES NEWLY CERTIFI ED AS 7
QUALIFIED PROPERTIES ; 8
1. 2. NOTABLE EXAMPLES OF REDEVELOPMENT OR NEW 9
BUSINESSES RELOCATIN G OR EXPANDING IN TH E ENTERPRISE ZONE DU E TO THE 10
TAX CREDITS PROVIDED UNDER THIS SUBTITLE ; AND 11
2. 3. A DESCRIPTION OF FUT URE ECONOMIC 12
DEVELOPMENT PROJECTS THAT MIGHT CLAIM A T AX CREDIT PROVIDED U NDER THIS 13
SUBTITLE, INCLUDING WITH RESPE CT TO EACH PROJECT : 14
A. WHETHER THE PROJECT IS LOCATED WITHIN A FOCUS 15
AREA; 16
B. WHETHER THE PROJECT MAY QUALIFY FOR A CR EDIT 17
UNDER THIS SU BTITLE AGAINST THE T AX IMPOSED ON REAL P ROPERTY, PERSONAL 18
PROPERTY, OR INCOME; AND 19
C. ANTICIPATED CAPITAL OR PERSONAL PROPERTY 20
EXPENDITURES FOR THE PROJECT. 21
(2) (I) IF A COUNTY FAILS TO PROVIDE THE REPORT R EQUIRED 22
UNDER PARAGRAPH (1) OF THIS SUBSECTION, THE DEPARTMENT SHALL NOTI FY 23
THE COUNTY THAT THE REPORT IS DUE. 24
(II) IF, AFTER THE DEPARTMENT HAS PROVID ED A COUNTY THE 25
NOTICE DESCRIBED UND ER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE COUNTY 26
FAILS TO PROMPTLY PR OVIDE THE OVERDUE RE PORT, THE SECRETARY MAY NOT 27
DESIGNATE A NEW ENTE RPRISE ZONE IN THE C OUNTY OR GRANT THE E XPANSION OF 28
AN EXISTING ENTERPRI SE ZONE IN THE COUNT Y UNTIL THE REPORT I S RECEIVED 29
BY THE DEPARTMENT . 30
(D) THE DEPARTMENT SHALL DEVE LOP FORMAL METRICS A ND A 31
FRAMEWORK FOR ANALYZ ING: 32
(1) THE COST–EFFECTIVENESS OF EAC H ENTERPRISE ZONE ; AND 33 10 HOUSE BILL 478
(2) THE EFFECTIVENESS OF EACH ENTERPRISE ZONE IN ATTRACTING 1
BUSINESSES AND INCRE ASING EMPLOYMENT . 2
[(b)] (E) On or before December 15 [of] each year, the Department [and the 3
Comptroller] shall submit to the Governor and, in accordance with § 2–1257 of the State 4
Government Article, the General Assembly a report outlining the findings of the 5
Department [and the Comptroller] and any other information of value in determining the 6
effectiveness of the tax credits provided under § 5–707(b) of this subtitle. 7
5–710. 8
THIS SUBTITLE AND , EXCEPT AS PROVIDED I N § 5–707(D)(2) OF THIS 9
SUBTITLE, ELIGIBILITY FOR THE TAX CREDITS PROVIDED UNDER § 5–707(A) OF THIS 10
SUBTITLE SHALL TERMI NATE ON JANUARY 1, 2030. 11
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 12
as follows: 13
Article – Tax – General 14
10–702. 15
(a) (1) In this section the following words have the meanings indicated. 16
(2) (i) “Business entity” means: 17
1. a person conducting or operating a trade or business; or 18
2. an organization that is exempt from taxation under § 19
501(c)(3) or (4) of the Internal Revenue Code. 20
(ii) “Business entity” does not include a person owning, operating, 21
developing, constructing, or rehabilitating property intended for use primarily as single or 22
multifamily residential property located within the enterprise zone. 23
(3) “Economically disadvantaged individual” means an individual who is 24
certified by provisions that the Maryland Department of Labor adopts as an individual who, 25
before becoming employed by a business entity in an enterprise zone: 26
(i) was both unemployed for at least 30 consecutive days and 27
qualified to participate in training activities for the economically disadvantaged under the 28
federal Workforce Innovation and Opportunity Act or its successor; or 29
(ii) in the absence of an applicable federal act, met the criteria for an 30
economically disadvantaged individual that the Secretary of Labor sets. 31 HOUSE BILL 478 11
(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the 1
Economic Development Article. 2
(ii) “Enterprise zone” includes a Regional Institution Strategic 3
Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article. 4
(5) “Focus area” has the meaning stated in § 5–701 of the Economic 5
Development Article. 6
(6) “Focus area employee” means an individual who: 7
(i) is a new employee or an employee rehired after being laid off for 8
more than 1 year by a business entity; 9
(ii) is employed by a business entity at least 35 hours each week for 10
at least 12 months before or during the taxable year for which the entity claims a credit; 11
(iii) spends at least [50 percent] 50% of the hours under item (ii) of 12
this paragraph either in the focus area or on activities of the business entity resulting 13
directly from its location in the focus area; 14
(iv) is hired by the business entity after the later of: 15
1. the date on which the focus area is designated; or 16
2. The date on which the business entity located in the focus 17
area; and 18
(v) earns at least [150 percent] 120% of the [federal] STATE 19
minimum wage. 20
(7) “Qualified employee” means an individual who: 21
(i) is [a new employee] HIRED TO FILL A NEWL Y CREATED 22
POSITION or [an employee rehired after being laid off for more than 1 year by a business 23
entity], IF THE INDIVIDUAL IS AN ECONOMICALLY DISA DVANTAGED INDIVIDUAL , IS 24
HIRED TO FILL A POSI TION PREVIOUSLY HELD BY ANOTHER ECONOMICALLY 25
DISADVANTAGED INDIVI DUAL; 26
(ii) is employed by a business entity at least 35 hours each week for 27
at least 6 months before or during the taxable year for which the entity claims a credit; 28
(iii) spends at least 50% of the hours under item (ii) of this paragraph, 29
either in the enterprise zone or on activities of the business entity resulting directly from 30
its location in the enterprise zone; 31 12 HOUSE BILL 478
(iv) earns at least [150%] 120% of the [federal] STATE minimum 1
wage; and 2
(v) is hired by the business entity after the later of: 3
1. the date on which the enterprise zone is designated; or 4
2. the date on which the business entity locates in the 5
enterprise zone. 6
(b) (1) [Any] SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, ANY 7
business entity that is located in an enterprise zone and satisfies the requirements of § 8
5–707 of the Economic Development Article may claim a credit only against the State 9
income tax for the wages specified in subsections (c) and (d) of this section that are paid in 10
the taxable year for which the entity claims the credit. 11
(2) [A] SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, A business 12
entity that is located in a focus area and satisfies the requirements of § 5–707 of the 13
Economic Development Article may claim a credit only against the State income tax for the 14
wages specified in subsection (e) of this section that are paid to a focus area employee in 15
the taxable year for which the entity claims the credit. 16
(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of 17
the Internal Revenue Code may apply the credit under this section as a credit against 18
income tax due on unrelated business taxable income as provided under §§ 10–304 and 19
10–812 of this title. 20
(c) If a business entity does not claim an enhanced tax credit under subsection (e) 21
of this section for a focus area employee, for the taxable year in which a business entity 22
satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a 23
credit is allowed that equals: 24
(1) up to $3,000 of the wages paid to each qualified employee who: 25
(i) is an economically disadvantaged individual; and 26
(ii) is not hired to replace an individual whom the business entity 27
employed in that or any of the 3 preceding taxable years; and 28
(2) up to $1,000 of the wages paid to each qualified employee who: 29
(i) is not an economically disadvantaged individual; and 30
(ii) is not hired to replace an individual whom the business entity 31
employed in that or any of the 3 preceding taxable years. 32 HOUSE BILL 478 13
(d) (1) If a business entity does not claim an enhanced tax credit under 1
subsection (e) of this section for a focus area employee, for each taxable year after the 2
taxable year described in subsection (c) of this section, while the area is designated an 3
enterprise zone, a credit is allowed that equals: 4
(i) up to $3,000 of the wages paid to each qualified employee who: 5
1. is an economically disadvantaged individual; 6
2. became a qualified employee during the taxable year to 7
which the credit applies; and 8
3. is not hired to replace an individual whom the business 9
entity employed in that or any of the 3 preceding taxable years; 10
(ii) up to $2,000 of the wages paid to each qualified employee who is 11
an economically disadvantaged individual, if the business entity received a credit under 12
subsection (c)(1) of this section for the qualified employee in the immediately preceding 13
taxable year; and 14
(iii) up to $1,000 of the wages paid to each qualified employee who is 15
not hired to replace an individual whom the business entity employed in that or any of the 16
3 preceding taxable years if the qualified employee: 17
1. is an economically disadvantaged individual for whom the 18
business entity received a credit under subsection (c)(1) of this section or item (i) of this 19
paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding 20
taxable years; or 21
2. is not an economically disadvantaged individual but 22
became a qualified employee during the taxable year to which the credit applies. 23
(2) A business entity that hires a qualified employee to replace another 24
qualified employee for whom the business entity received a credit under subsection (c)(1) of 25
this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable 26
year may treat the new qualified employee as the replacement for the other qualified 27
employee to determine any credit that may be available to the business entity under 28
paragraph (1)(ii) or (iii) of this subsection. 29
(e) (1) For the taxable year in which a business entity satisfies the 30
requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a 31
credit is allowed that equals: 32
(i) up to $4,500 of the wages paid to each focus area employee who: 33
1. is an economically disadvantaged individual; and 34 14 HOUSE BILL 478
2. is not hired to replace an individual whom the business 1
entity employed in that year or any of the 3 preceding taxable years; and 2
(ii) up to $1,500 of the wages paid to each focus area employee who: 3
1. is not an economically disadvantaged individual; and 4
2. is not hired to replace an individual whom the business 5
entity employed in that year or any of the 3 preceding taxable years. 6
(2) For each taxable year after the taxable year described in paragraph (1) 7
of this subsection, while the area is designated a focus area, a credit is allowed that equals: 8
(i) up to $4,500 of the wages paid to each focus area employee who: 9
1. is an economically disadvantaged individual; 10
2. became a focus area employee during the taxable year to 11
which the credit applies; and 12
3. is not hired to replace an individual whom the business 13
entity employed in that year or any of the 3 preceding taxable years; 14
(ii) up to $3,000 of the wages paid to each focus area employee who 15
is an economically disadvantaged individual, if the business entity received a credit under 16
paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding 17
taxable year; and 18
(iii) up to $1,500 of the wages paid to each focus area employee who 19
is not hired to replace an individual whom the business entity employed in that year or any 20
of the 3 preceding taxable years if the focus area employee: 21
1. is an economically disadvantaged individual for whom the 22
business entity received a credit under item (ii) of this paragraph in the 2 immediately 23
preceding taxable years and under: 24
A. paragraph (1)(i) of this subsection; or 25
B. item (i) of this paragraph; or 26
2. is not an economically disadvantaged individual but 27
became a focus area employee during the taxable year to which the credit applies. 28
(3) A business entity that hires a focus area employee to replace another 29
focus area employee for whom the business entity received a credit under paragraph (1)(i) 30
of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding 31 HOUSE BILL 478 15
taxable year may treat the focus area employee as the replacement for the other focus area 1
employee to determine any credit that may be available to the business entity under 2
paragraph (2)(ii) or (iii) of this subsection. 3
(F) (1) THE CREDIT ALLOWED UN DER THIS SECTION SHALL BE CLAIME D 4
ON A FIRST–COME, FIRST–SERVED BASIS. 5
(2) FOR ANY TAXABLE YEAR : 6
(I) THE CREDIT ALLOWED U NDER THIS SECTION MA Y NOT 7
EXCEED $250,000; AND 8
(II) THE TOTAL AMOUNT OF CREDITS CLAIMED BY B USINESS 9
ENTITIES MAY NOT EXC EED $2,000,000. 10
[(f)] (G) If the credit allowed under this section in any taxable year exceeds the 11
State income tax for that taxable year, a business entity may apply the excess as a credit 12
against the State income tax for succeeding taxable years until the earlier of: 13
(1) the full amount of the excess is used; or 14
(2) the expiration of the 5th taxable year from the date on which the 15
business entity hired the qualified employee to whom the credit first applies. 16
[(g)] (H) If a credit is claimed under this section, the claimant must make the 17
addition required in § 10–205, § 10–206, or § 10–306 of this title. 18
SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 19
as follows: 20
Article – Tax – Property 21
9–103. 22
(b) (1) The governing body of a county or of a municipal corporation shall grant 23
a tax credit under this section against the property tax imposed on the eligible assessment 24
of qualified property. 25
(d) (1) [The] SUBJECT TO THE LIMITA TION UNDER PARAGRAPH (5) OF 26
THIS SUBSECTION , THE appropriate governing body shall calculate the amount of the tax 27
credit under this section equal to a percentage of the amount of property tax imposed on 28
the eligible assessment of the qualified property, as follows: 29
(i) 80% in each of the 1st 5 taxable years following the calendar year 30
in which the property initially becomes a qualified property; 31
16 HOUSE BILL 478
(ii) 70% in the 6th taxable year; 1
(iii) 60% in the 7th taxable year; 2
(iv) 50% in the 8th taxable year; 3
(v) 40% in the 9th taxable year; and 4
(vi) 30% in the 10th taxable year. 5
(2) The Department shall allocate the eligible assessment to the 6
nonresidential part of the qualified property at the same percentage as the square footage 7
of the nonresidential part is to the total square footage of the building. 8
(3) For purposes of calculating the amount of the credit allowed under this 9
section, the amount of property tax imposed on the eligible assessment shall be calculated 10
without reduction for any credits allowed under this title. 11
(4) For qualified property located in a focus area, the appropriate governing 12
body shall calculate the amount of the tax credit under this section equal to 80% of the 13
amount of property tax imposed on the eligible assessment of the qualified property for 14
each of the 10 taxable years following the calendar year in which the property initially 15
becomes a qualified property. 16
(5) FOR ANY TAXABLE YEAR , THE AMOUNT OF A PROP ERTY TAX 17
CREDIT GRANTED UNDER THIS SECTION TO A QU ALIFIED PROPERTY MAY NOT 18
EXCEED $500,000. 19
SECTION 4. 3. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall 20
be applicable to all taxable years beginning after December 31, 2021. 21
SECTION 5. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall be 22
applicable to all taxable years beginning after June 30, 2022. 23
SECTION 6. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 24
June 1, 2022. 25