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SPONSOR: |
Sanchez |
DATE TYPED: |
|
HB |
|
||
SHORT TITLE: |
School-to-Career Job Program Tax Credit |
SB |
357 |
||||
|
ANALYST: |
Neel |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
($375.0) |
($912.0) |
Recurring |
General Fund |
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
NO
Responses Received From:
Taxation
and Revenue Department (TRD)
Responses
Received From:
State
Department of Education (SDE)
Economic Development Dept.
Synopsis
of Bill
Senate Bill 357 amends the Income Tax Act to
provide income and corporate income tax credits for the employment of youth
participating in career preparation education programs. The business claiming the credit can claim up
to 50 percent of the gross wages paid to qualified students during any one-tax
year. The business is limited to a
maximum of ten students employed for up to 320 hours per year for three years
per students. The credit has a ceiling
of $12.0 in any one-tax year.
TRD is required to issue job mentorship tax
credit certificates upon request by any accredited
Significant
Issues
FISCAL IMPLICATIONS
According to TRD’s
fiscal impact of HB 92 from the 2002 session, which has similar provisions to
SB 357:
TRD cites personal
income statistics for tax year 2000 show job mentorship tax credits totaled
$36.4 (Report TR-11, run on
$25.6 in claims. Statistics
are not available on corporate income tax claims, although they are likely to
be large compared with personal income tax claims because of the larger base of
employees to tax liability
The
TRD estimate makes the following assumptions:
(1) Job
mentorship credits claimed against corporate income tax equal five times claims
against personal income tax;
(2) Total
claims would increase by a factor of four in the short run if the limit on the
number of program participants is removed.
Using these assumptions and the personal income tax claims from tax year 2000 as the base, total claims were about $216 thousand in that year and would increase to about $864 thousand if the program limit is removed. The FY 2003 estimate assumes there will be a gradual ramp-up of the program during that year, while the full year estimate assumes a fully phased-in program with some growth over the TY 2000 levels.
OTHER SUBSTANTIVE ISSUES
The Job Mentorship Tax Credit was signed
into law in the spring of 1999 as a three-year pilot project, beginning in the
summer 2000, to encourage New Mexico employers to partner with educators to
provide high-quality work-based learning experiences through summer employment
for youth participating in certified school-to-careers programs. Implementation highlights included:
The proposed legislation carries forward
these elements except for the limit on the number of annual participants.
The bill limits
participation to students attending secondary schools. Businesses participating in work-based
learning opportunities that employ students who attend the state’s
postsecondary institutions would not be eligible for this credit.
SN/njw