Maryland 2023 Regular Session

Maryland House Bill HB398 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	hb0398
6	6
7	7	HOUSE BILL 398
8	8	C8, Q3, Q1 3lr1572
9	9	HB 1096/22 – W&M
10	10	By: Delegate Feldmark
11	11	Introduced and read first time: January 27, 2023
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 2022 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 2022 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	(2022 Replacement Volume) 26
47	47
48	48	BY repealing and reenacting, without amendments, 27 2 HOUSE BILL 398
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	(2022 Replacement Volume) 4
55	55
56	56	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY 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, 2023, 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, 2023, 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 CLAS SIFICATION FOR WHICH 23
89	89	THERE IS A PREVAILING 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 ADVA NCEMENT TRAINING ; 28 HOUSE BILL 398 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 N OT EXCEED 8.5% OF THE 11
114	114	EMPLOYEE’S NET MONTHLY EARNINGS ; 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 398
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 a position that: 24
180	180
181	181	(i) is full–time and of indefinite duration; 25
182	182
183	183	(ii) 1. except as provided in item 2 of this item, for a position in 26
184	184	a facility that is located in an opportunity zone, pays an average annual salary that exceeds 27
185	185	$50,000; or 28
186	186
187	187	2. A. for a position in a facility of a business entity 29
188	188	described under subsection (c)(1)(i) of this section that is provided a certificate under § 30
189	189	6–805 of this subtitle before June 1, 2022, pays at least 120% of the State minimum wage 31
190	190	IF THE POSITION IS F ILLED BEFORE OCTOBER 1, 2023, OR PAYS AT LEAST 150% OF 32
191	191	THE STATE MINIMUM WAGE IF THE POSITION IS FILL ED ON OR AFTER OCTOBER 1, 33 HOUSE BILL 398 5
192	192
193	193
194	194	2023; or 1
195	195
196	196	B. for a position in a facility of a business entity described 2
197	197	under subsection (c)(1)(i) of this section that is provided a certificate under § 6–805 of this 3
198	198	subtitle on or after June 1, 2022, pays at least 150% of the State minimum wage; 4
199	199
200	200	(iii) is located in a facility; 5
201	201
202	202	(iv) is newly created at a single facility in the State; [and] 6
203	203
204	204	(v) is filled; AND 7
205	205
206	206	(VI) IF THE POSITION IS FILLED ON OR AFTER OCTOBER 1, 2023: 8
207	207
208	208	1. PROVIDES CAREER ADVA NCEMENT TRAINING ; 9
209	209
210	210	2. AFFORDS THE EMPLOYEE THE RIGHT TO 10
211	211	COLLECTIVELY BARGAIN FOR WAGES AND BENEFI TS; 11
212	212
213	213	3. PROVIDES PAID LEAVE ; 12
214	214
215	215	4. IS CONSIDERED COVERE D EMPLOYMENT FOR 13
216	216	PURPOSES OF UNEMPLOY MENT INSURANCE BENEFITS IN ACCORDAN CE WITH TITLE 14
217	217	8 OF THE LABOR AND EMPLOYMENT ARTICLE; 15
218	218
219	219	5. ENTITLES THE EMPLOYE E TO WORKERS ’ 16
220	220	COMPENSATION BENEFIT S IN ACCORDANCE WITH TITLE 9 OF THE LABOR AND 17
221	221	EMPLOYMENT ARTICLE; 18
222	222
223	223	6. OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 19
224	224	BENEFITS WITH MONTHLY PRE MIUMS THAT DO NOT EX CEED 8.5% OF THE 20
225	225	EMPLOYEE’S NET MONTHLY EARNIN GS; AND 21
226	226
227	227	7. OFFERS RETIREMENT BE NEFITS. 22
228	228
229	229	(2) “Qualified position” does not include a position that is: 23
230	230
231	231	(i) created when an employment function is shifted from an existing 24
232	232	facility of a business entity in the State to another facility of the same business entity if the 25
233	233	position is not a net new job in the State; 26
234	234
235	235	(ii) created through a change in ownership of a trade or business; 27
236	236
237	237	(iii) created through a consolidation, merger, or restructuring of a 28
238	238	business entity if the position is not a net new job in the State; 29 6 HOUSE BILL 398
239	239
240	240
241	241
242	242	(iv) created when an employment function is contractually shifted 1
243	243	from an existing business entity to another business entity in the State if the position is 2
244	244	not a net new job in the State; or 3
245	245
246	246	(v) filled for a period of less than 12 months. 4
247	247
248	248	6–804. 5
249	249
250	250	(a) (1) Except as provided in paragraph (2) of this subsection, the Program 6
251	251	benefits authorized under this section may be claimed by a qualified business entity for up 7
252	252	to 10 consecutive benefit years. 8
253	253
254	254	(2) In the case of a qualified business entity that is located in a Tier II area 9
255	255	and is provided a certificate under § 6–805 of this subtitle on or after June 1, 2022, the 10
256	256	Program benefits authorized under this section may be claimed by the qualified business 11
257	257	entity for up to 5 consecutive benefit years. 12
258	258
259	259	(b) On enrollment in the Program: 13
260	260
261	261	(1) a new business entity in a Tier I area that is provided a certificate under 14
262	262	§ 6–805 of this subtitle before June 1, 2022, is eligible for: 15
263	263
264	264	(i) a credit against the State income tax, established under § 16
265	265	10–741(b) of the Tax – General Article; 17
266	266
267	267	(ii) a credit against the State property tax, established under § 18
268	268	9–110 of the Tax – Property Article; 19
269	269
270	270	(iii) a refund of sales and use tax paid during the immediately 20
271	271	preceding taxable year, as provided under § 11–411 of the Tax – General Article; and 21
272	272
273	273	(iv) a waiver of fees charged by the State Department of Assessments 22
274	274	and Taxation, established under § 1–203.1 of the Corporations and Associations Article; 23
275	275	and 24
276	276
277	277	(2) except as provided in subsection (c) of this section, a new business entity 25
278	278	not described under item (1) of this subsection or an existing business entity that operates 26
279	279	an eligible project is eligible for a credit against the State income tax, established under § 27
280	280	10–741(b) of the Tax – General Article. 28
281	281
282	282	Article – Tax – General 29
283	283
284	284	10–702. 30
285	285
286	286	(a) (1) In this section the following words have the meanings indicated. 31
287	287	HOUSE BILL 398 7
288	288
289	289
290	290	(2) (i) “Business entity” means: 1
291	291
292	292	1. a person conducting or operating a trade or business; or 2
293	293
294	294	2. an organization that is exempt from taxation under § 3
295	295	501(c)(3) or (4) of the Internal Revenue Code. 4
296	296
297	297	(ii) “Business entity” does not include a person owning, operating, 5
298	298	developing, constructing, or rehabilitating property intended for use primarily as single or 6
299	299	multifamily residential property located within the enterprise zone. 7
300	300
301	301	(3) “Economically disadvantaged individual” means an individual who is 8
302	302	certified by provisions that the Maryland Department of Labor adopts as an individual who, 9
303	303	before becoming employed by a business entity in an enterprise zone: 10
304	304
305	305	(i) was both unemployed for at least 30 consecutive days and 11
306	306	qualified to participate in training activities for the economically disadvantaged under the 12
307	307	federal Workforce Innovation and Opportunity Act or its successor; or 13
308	308
309	309	(ii) in the absence of an applicable federal act, met the criteria for an 14
310	310	economically disadvantaged individual that the Secretary of Labor sets. 15
311	311
312	312	(4) (i) “Enterprise zone” has the meaning stated in § 5–701 of the 16
313	313	Economic Development Article. 17
314	314
315	315	(ii) “Enterprise zone” includes a Regional Institution Strategic 18
316	316	Enterprise zone established under Title 5, Subtitle 14 of the Economic Development Article. 19
317	317
318	318	(5) “Focus area” has the meaning stated in § 5–701 of the Economic 20
319	319	Development Article. 21
320	320
321	321	(6) “Focus area employee” means an individual who: 22
322	322
323	323	(i) is a new employee or an employee rehired after being laid off for 23
324	324	more than 1 year by a business entity; 24
325	325
326	326	(ii) is employed by a business entity at least 35 hours each week for 25
327	327	at least 12 months before or during the taxable year for which the entity claims a credit; 26
328	328
329	329	(iii) spends at least 50% of the hours under item (ii) of this paragraph 27
330	330	either in the focus area or on activities of the business entity resulting directly from its 28
331	331	location in the focus area; 29
332	332
333	333	(iv) is hired by the business entity after the later of: 30
334	334
335	335	1. the date on which the focus area is designated; or 31
336	336	8 HOUSE BILL 398
337	337
338	338
339	339	2. the date on which the business entity located in the focus 1
340	340	area; and 2
341	341
342	342	(v) 1. FOR AN INDIVIDUAL HI RED OR REHIRED BEFOR E 3
343	343	OCTOBER 1, 2023, earns at least 120% of the State minimum wage; OR 4
344	344
345	345	2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 5
346	346	OCTOBER 1, 2023, IS EMPLOYED IN A QUALIF IED POSITION. 6
347	347
348	348	(7) “Qualified employee” means an individual who: 7
349	349
350	350	(i) is hired to fill a newly created position or, if the individual is an 8
351	351	economically disadvantaged individual, is hired to fill a position previously held by another 9
352	352	economically disadvantaged individual; 10
353	353
354	354	(ii) is employed by a business entity at least 35 hours each week for 11
355	355	at least 6 months before or during the taxable year for which the entity claims a credit; 12
356	356
357	357	(iii) spends at least 50% of the hours under item (ii) of this paragraph, 13
358	358	either in the enterprise zone or on activities of the business entity resulting directly from 14
359	359	its location in the enterprise zone; 15
360	360
361	361	(iv) 1. FOR AN INDIVIDUAL HI RED OR REHIRED BEFOR E 16
362	362	OCTOBER 1, 2023, earns at least 120% of the State minimum wage; [and] OR 17
363	363
364	364	2. FOR AN INDIVIDUAL HI RED OR REHIRED ON OR AFTER 18
365	365	OCTOBER 1, 2023, IS EMPLOYED IN A QUA LIFIED POSITION; AND 19
366	366
367	367	(v) is hired by the business entity after the later of: 20
368	368
369	369	1. the date on which the enterprise zone is designated; or 21
370	370
371	371	2. the date on which the business entity locates in the 22
372	372	enterprise zone. 23
373	373
374	374	(8) “QUALIFIED POSITION ” MEANS A POSITION THA T: 24
375	375
376	376	(I) PAYS AT LEAST: 25
377	377
378	378	1. FOR AN EMPLOYEE CLAS SIFICATION FOR WHICH 26
379	379	THERE IS A PREVAILIN G WAGE RATE, AS DEFINED UNDER § 17–201 OF THE STATE 27
380	380	FINANCE AND PROCUREMENT ARTICLE, THE PREVAILING WAGE ; OR 28
381	381
382	382	2. FOR ANY OTHER EMPLOY EE CLASSIFICATION , 150% 29
383	383	OF THE STATE MINIMUM WAGE ; 30 HOUSE BILL 398 9
384	384
385	385
386	386
387	387	(II) PROVIDES CAREER ADVA NCEMENT TRAINING ; 1
388	388
389	389	(III) AFFORDS THE EMPLOYEE THE RIGHT TO COLLECTIVELY 2
390	390	BARGAIN FOR WAGES AN D BENEFITS; 3
391	391
392	392	(IV) PROVIDES PAID LEAVE ; 4
393	393
394	394	(V) IS CONSIDERED COVERE D EMPLOYMENT FOR PUR POSES OF 5
395	395	UNEMPLOYMENT INSURAN CE BENEFITS IN ACCOR DANCE WITH TITLE 8 OF THE 6
396	396	LABOR AND EMPLOYMENT ARTICLE; 7
397	397
398	398	(VI) ENTITLES THE EMPLOYEE TO WORKERS ’ COMPENSATION 8
399	399	BENEFITS IN ACCORDAN CE WITH TITLE 9 OF THE LABOR AND EMPLOYMENT 9
400	400	ARTICLE; 10
401	401
402	402	(VII) OFFERS EMPLOYER –PROVIDED HEALTH INSU RANCE 11
403	403	BENEFITS WITH MONTHL Y PREMIUMS THAT DO N OT EXCEED 8.5% OF THE 12
404	404	EMPLOYEE’S NET MONTHLY EARNIN GS; AND 13
405	405
406	406	(VIII) OFFERS RETIREMENT BE NEFITS. 14
407	407
408	408	(b) (1) Any business entity that is located in an enterprise zone and satisfies 15
409	409	the requirements of § 5–707 of the Economic Development Article may claim a credit only 16
410	410	against the State income tax for the wages specified in subsections (c) and (d) of this section 17
411	411	that are paid in the taxable year for which the entity claims the credit. 18
412	412
413	413	(2) A business entity that is located in a focus area and satisfies the 19
414	414	requirements of § 5–707 of the Economic Development Article may claim a credit only 20
415	415	against the State income tax for the wages specified in subsection (e) of this section that 21
416	416	are paid to a focus area employee in the taxable year for which the entity claims the credit. 22
417	417
418	418	(3) An organization that is exempt from taxation under § 501(c)(3) or (4) of 23
419	419	the Internal Revenue Code may apply the credit under this section as a credit against 24
420	420	income tax due on unrelated business taxable income as provided under §§ 10–304 and 25
421	421	10–812 of this title. 26
422	422
423	423	(c) If a business entity does not claim an enhanced tax credit under subsection (e) 27
424	424	of this section for a focus area employee, for the taxable year in which a business entity 28
425	425	satisfies the requirements of § 5–707 or § 5–1406 of the Economic Development Article, a 29
426	426	credit is allowed that equals: 30
427	427
428	428	(1) up to $3,000 of the wages paid to each qualified employee who: 31
429	429
430	430	(i) is an economically disadvantaged individual; and 32 10 HOUSE BILL 398
431	431
432	432
433	433
434	434	(ii) is not hired to replace an individual whom the business entity 1
435	435	employed in that or any of the 3 preceding taxable years; and 2
436	436
437	437	(2) up to $1,000 of the wages paid to each qualified employee who: 3
438	438
439	439	(i) is not an economically disadvantaged individual; and 4
440	440
441	441	(ii) is not hired to replace an individual whom the business entity 5
442	442	employed in that or any of the 3 preceding taxable years. 6
443	443
444	444	(d) (1) If a business entity does not claim an enhanced tax credit under 7
445	445	subsection (e) of this section for a focus area employee, for each taxable year after the 8
446	446	taxable year described in subsection (c) of this section, while the area is designated an 9
447	447	enterprise zone, a credit is allowed that equals: 10
448	448
449	449	(i) up to $3,000 of the wages paid to each qualified employee who: 11
450	450
451	451	1. is an economically disadvantaged individual; 12
452	452
453	453	2. became a qualified employee during the taxable year to 13
454	454	which the credit applies; and 14
455	455
456	456	3. is not hired to replace an individual whom the business 15
457	457	entity employed in that or any of the 3 preceding taxable years; 16
458	458
459	459	(ii) up to $2,000 of the wages paid to each qualified employee who is 17
460	460	an economically disadvantaged individual, if the business entity received a credit under 18
461	461	subsection (c)(1) of this section for the qualified employee in the immediately preceding 19
462	462	taxable year; and 20
463	463
464	464	(iii) up to $1,000 of the wages paid to each qualified employee who is 21
465	465	not hired to replace an individual whom the business entity employed in that or any of the 22
466	466	3 preceding taxable years if the qualified employee: 23
467	467
468	468	1. is an economically disadvantaged individual for whom the 24
469	469	business entity received a credit under subsection (c)(1) of this section or item (i) of this 25
470	470	paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding 26
471	471	taxable years; or 27
472	472
473	473	2. is not an economically disadvantaged individual but 28
474	474	became a qualified employee during the taxable year to which the credit applies. 29
475	475
476	476	(2) A business entity that hires a qualified employee to replace another 30
477	477	qualified employee for whom the business entity received a credit under subsection (c)(1) of 31
478	478	this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable 32
479	479	year may treat the new qualified employee as the replacement for the other qualified 33 HOUSE BILL 398 11
480	480
481	481
482	482	employee to determine any credit that may be available to the business entity under 1
483	483	paragraph (1)(ii) or (iii) of this subsection. 2
484	484
485	485	(e) (1) For the taxable year in which a business entity satisfies the 3
486	486	requirements of §§ 5–706 and 5–707 or § 5–1406 of the Economic Development Article, a 4
487	487	credit is allowed that equals: 5
488	488
489	489	(i) up to $4,500 of the wages paid to each focus area employee who: 6
490	490
491	491	1. is an economically disadvantaged individual; and 7
492	492
493	493	2. is not hired to replace an individual whom the business 8
494	494	entity employed in that year or any of the 3 preceding taxable years; and 9
495	495
496	496	(ii) up to $1,500 of the wages paid to each focus area employee who: 10
497	497
498	498	1. is not an economically disadvantaged individual; and 11
499	499
500	500	2. is not hired to replace an individual whom the business 12
501	501	entity employed in that year or any of the 3 preceding taxable years. 13
502	502
503	503	(2) For each taxable year after the taxable year described in paragraph (1) 14
504	504	of this subsection, while the area is designated a focus area, a credit is allowed that equals: 15
505	505
506	506	(i) up to $4,500 of the wages paid to each focus area employee who: 16
507	507
508	508	1. is an economically disadvantaged individual; 17
509	509
510	510	2. became a focus area employee during the taxable year to 18
511	511	which the credit applies; and 19
512	512
513	513	3. is not hired to replace an individual whom the business 20
514	514	entity employed in that year or any of the 3 preceding taxable years; 21
515	515
516	516	(ii) up to $3,000 of the wages paid to each focus area employee who 22
517	517	is an economically disadvantaged individual, if the business entity received a credit under 23
518	518	paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding 24
519	519	taxable year; and 25
520	520
521	521	(iii) up to $1,500 of the wages paid to each focus area employee who 26
522	522	is not hired to replace an individual whom the business entity employed in that year or any 27
523	523	of the 3 preceding taxable years if the focus area employee: 28
524	524
525	525	1. is an economically disadvantaged individual for whom the 29
526	526	business entity received a credit under item (ii) of this paragraph in the 2 immediately 30
527	527	preceding taxable years and under: 31
528	528	12 HOUSE BILL 398
529	529
530	530
531	531	A. paragraph (1)(i) of this subsection; or 1
532	532
533	533	B. item (i) of this paragraph; or 2
534	534
535	535	2. is not an economically disadvantaged individual but 3
536	536	became a focus area employee during the taxable year to which the credit applies. 4
537	537
538	538	(3) A business entity that hires a focus area employee to replace another 5
539	539	focus area employee for whom the business entity received a credit under paragraph (1)(i) 6
540	540	of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding 7
541	541	taxable year may treat the focus area employee as the replacement for the other focus area 8
542	542	employee to determine any credit that may be available to the business entity under 9
543	543	paragraph (2)(ii) or (iii) of this subsection. 10
544	544
545	545	(f) If the credit allowed under this section in any taxable year exceeds the State 11
546	546	income tax for that taxable year, a business entity may apply the excess as a credit against 12
547	547	the State income tax for succeeding taxable years until the earlier of: 13
548	548
549	549	(1) the full amount of the excess is used; or 14
550	550
551	551	(2) the expiration of the 5th taxable year from the date on which the 15
552	552	business entity hired the qualified employee to whom the credit first applies. 16
553	553
554	554	(g) If a credit is claimed under this section, the claimant must make the addition 17
555	555	required in § 10–205, § 10–206, or § 10–306 of this title. 18
556	556
557	557	10–741. 19
558	558
559	559	(a) (1) In this section the following words have the meanings indicated. 20
560	560
561	561	(2) “Business entity” has the meaning stated in § 6–801 of the Economic 21
562	562	Development Article. 22
563	563
564	564	(3) “Department” means the Department of Commerce. 23
565	565
566	566	(4) “Eligible project” has the meaning stated in § 6–801 of the Economic 24
567	567	Development Article. 25
568	568
569	569	(5) “Existing business entity” has the meaning stated in § 6–801 of the 26
570	570	Economic Development Article. 27
571	571
572	572	(6) “New business entity” has the meaning stated in § 6–801 of the 28
573	573	Economic Development Article. 29
574	574
575	575	(7) “Qualified business entity” has the meaning stated in § 6–801 of the 30
576	576	Economic Development Article. 31
577	577	HOUSE BILL 398 13
578	578
579	579
580	580	(8) “Qualified position” has the meaning stated in § 6–801 of the Economic 1
581	581	Development Article. 2
582	582
583	583	(9) “Tier I area” has the meaning stated in § 6–801 of the Economic 3
584	584	Development Article. 4
585	585
586	586	(10) “Tier II area” has the meaning stated in § 6–801 of the Economic 5
587	587	Development Article. 6
588	588
589	589	(b) (1) Subject to the limitations of this section, an individual or corporation 7
590	590	that is a new business entity that operates an eligible project in a Tier I area or an existing 8
591	591	business entity that operates an eligible project may claim a credit against the State income 9
592	592	tax equal to the amount stated in the final tax credit certificate approved by the 10
593	593	Department for an eligible project. 11
594	594
595	595	(2) The amount of the credit authorized under paragraph (1) of this 12
596	596	subsection is equal to the product of: 13
597	597
598	598	(i) 1. if the qualified business entity received a certificate under 14
599	599	§ 6–805 of the Economic Development Article before June 1, 2022, 5.75%; or 15
600	600
601	601	2. if the qualified business entity received a certificate under 16
602	602	§ 6–805 of the Economic Development Article on or after June 1, 2022, 4.75%; and 17
603	603
604	604	(ii) the total amount of wages paid for each qualified position at an 18
605	605	eligible project. 19
606	606
607	607	(3) If the tax credit allowed under this section in any taxable year exceeds 20
608	608	the total tax otherwise payable by the qualified business entity for that taxable year, the 21
609	609	qualified business entity may claim a refund in the amount of the excess. 22
610	610
611	611	SECTION 2. AND BE IT FURTHER ENACTED, That thi s Act shall take effect July 23
612	612	1, 2023, and shall be applicable to all taxable years beginning after December 31, 2022. 24
613	613