SB0135

SENATE BILL 135

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Sue Wilson Beffort

AN ACT

RELATING TO TAXATION; PROVIDING STATE TAX CREDITS FOR PRIVATE SECTOR EMPLOYERS QUALIFIED TO CLAIM FEDERAL WORK OPPORTUNITY TAX CREDITS FOR EMPLOYING LONG-TERM FAMILY ASSISTANCE RECIPIENTS LOCATED IN HIGH-UNEMPLOYMENT COUNTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 7-2-18.5 NMSA 1978 (being Laws 1998, Chapter 97, Section 2) is amended to read:

"7-2-18.5. [WELFARE-TO-WORK] WORK OPPORTUNITY INCOME TAX CREDIT.--

A. Any taxpayer who files an individual New Mexico income tax return and is not a dependent of another taxpayer and is entitled to claim the federal [welfare-to-work] work opportunity tax credit provided by 26 U.S.C. Section [51A] 51 with respect to a state-qualified employee in a state-qualified job may take a tax credit equal to fifty percent of the amount of the [welfare-to-work] work opportunity tax credit claimed and allowed under 26 U.S.C. Section [51A] 51 with respect to that employee in that job. The tax credit provided in this section may be referred to as the "work opportunity income tax credit".

B. The purposes of the work opportunity income tax credit provided in this section are to supplement federal work opportunity tax credits claimed by employers in high- unemployment counties of New Mexico and to encourage employment of persons who are long-term family assistance recipients, identified as qualified IV-A recipients in Title 26, Section 51(d)(1)(A) of the Internal Revenue Code.

[B.] C. To be eligible for the work opportunity income tax credit [provided by this section], a taxpayer must be in compliance with the following provisions:

(1) the hiring of any state-qualified employee shall not result in the displacement of any currently employed worker or position, including partial displacement such as a reduction in the hours of non-overtime work, wages or employment benefits, or in any infringement of the promotional opportunities of any currently employed individual;

(2) the hiring of any state-qualified employee shall not impair existing contracts for services or collective bargaining agreements, and no employment under the terms of this [act] section shall be inconsistent with the terms of a collective bargaining agreement or involve the performance of duties covered under a collective bargaining agreement unless the employer and the labor organization concur in writing;

(3) a state-qualified employee may fill or perform the duties of an employment position only in a manner that is consistent with existing laws, personnel procedures and collective bargaining contracts;

(4) no state-qualified employee shall be employed or assigned:

(a) when any other individual is on layoff from the same or any substantially equivalent job;

(b) if the employer has terminated the employment of any regular employee or otherwise caused an involuntary reduction of its work force with the effect of filling the vacancy so created with a state-qualified employee; or

(5) state-qualified employees shall be paid a wage that is substantially like the wage paid for similar jobs with the employer with appropriate adjustments for experience and training but not less than the federal minimum hourly wage; and

(6) employers shall:

(a) maintain health, safety and working conditions not less than those of comparable jobs offered by the employer; and

(b) maintain standard and customary entry-level wages and benefits and apply historical and normal increases in wages and benefits appropriate for experience and training of the state-qualified employee.

[C. For the purposes of this section:

(1) "high-unemployment county" means a county in which the unemployment rate as reported by the labor department exceeds ten percent in six or more months of the calendar year preceding the year for which the tax credit provided by this section is claimed;

(2) "state-qualified employee" means a "long-term family assistance recipient", as that term is defined in 26 U.S.C. Section 51A(c), who resides in a high-unemployment county during the period of employment for which the welfare-to-work credit provided by 26 U.S.C. Section 51A applies with respect to that employee; and

(3) "state-qualified job" means a job established by the taxpayer that:

(a) when first occupied by a state-qualified employee results in the total number of the taxpayer's employees exceeding the average number of the taxpayer's employees during the taxpayer's preceding tax year; or

(b) was a position previously filled by a state-qualified employee and was vacant prior to the hiring of the new state-qualified employee in that position.] D. The [labor] workforce solutions department shall determine whether the employee is a state-qualified employee and whether the job is a state-qualified job and, if the employee is a state-qualified employee and the job is a state-qualified job, certify that fact to the employer. The taxpayer claiming the work opportunity income tax credit [provided by this section] shall provide a copy of the certification with respect to each employee for which the tax credit is claimed.

E. By [July 1, 1998 and by] January 31 of each [subsequent] year, the [labor] workforce solutions department shall certify to the taxation and revenue department the high-unemployment counties for the preceding calendar year.

F. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the work opportunity income tax credit [provided by this section] that would have been allowed on a joint return.

G. A taxpayer who otherwise qualifies may claim [his] the taxpayer's pro rata share of the work opportunity income tax credit [provided by this section] with respect to state-qualified employees employed by a partnership or other business association of which the taxpayer is a member. The total tax credit claimed by all members of the partnership or association shall not exceed the amount of tax credit provided pursuant to Subsection A of this section with respect to each state-qualified employee for which the credit is allowed.

H. The tax credit provided by this section may only be deducted from the taxpayer's income tax liability. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

I. The department shall compile an annual report that includes the number of taxpayers approved to receive a work opportunity income tax credit and the aggregate amount of those credits approved by the department. The report shall be submitted to the revenue stabilization and tax policy committee no later than October 30 of each year beginning in 2012.

J. The revenue stabilization and tax policy committee shall review the effectiveness of the work opportunity income tax credit allowed pursuant to this section every five years beginning in 2013.

K. Acceptance by a taxpayer of a work opportunity income tax credit pursuant to this section is authorization by the taxpayer receiving the credit for the department to reveal to the legislature for reporting and analysis purposes the information deemed necessary by the department to allow the legislature to determine the effectiveness of the tax credit.

L. A taxpayer claiming a work opportunity income tax credit pursuant to the Income Tax Act shall not also claim a work opportunity corporate income tax credit pursuant to the Corporate Income and Franchise Tax Act.

M. As used in this section:

(1) "high-unemployment county" means a county in which the unemployment rate as reported by the workforce solutions department exceeds ten percent in six or more months of the calendar year preceding the year for which the tax credit provided by this section is claimed;

(2) "state-qualified employee" means a "qualified IV-A recipient", as that term is defined in 26 U.S.C. Section 51, who resides in a high-unemployment county during the period of employment for which the work opportunity tax credit provided by 26 U.S.C. Section 51 applies with respect to that employee; and

(3) "state-qualified job" means a job established by the taxpayer that:

(b) was a position previously filled by a state-qualified employee and was vacant prior to the hiring of the new state-qualified employee in that position."

SECTION 2. Section 7-2A-8.8 NMSA 1978 (being Laws 1998, Chapter 97, Section 3) is amended to read:

"7-2A-8.8. [WELFARE-TO-WORK] WORK OPPORTUNITY CORPORATE INCOME TAX CREDIT.--

A. Any taxpayer [who] that files a New Mexico corporate income tax return and [who] that is entitled to claim the federal [welfare-to-work] work opportunity tax credit provided by 26 U.S.C. Section [51A] 51 with respect to a state-qualified employee in a state-qualified job may take against the taxpayer's corporate income tax liability a tax credit equal to fifty percent of the amount of the [welfare-to-work] work opportunity tax credit claimed and allowed under 26 U.S.C. Section [51A] 51 with respect to that employee in that job. The tax credit provided in this section may be referred to as the "work opportunity corporate income tax credit".

B. The purposes of the work opportunity corporate income tax credit provided in this section are to supplement federal work opportunity tax credits claimed by employers in high-unemployment counties of New Mexico and to encourage employers to employ persons who are long-term family assistance recipients, identified as qualified IV-A recipients in Title 26, Section 51(d)(1)(A) of the Internal Revenue Code.

[B.] C. To be eligible for the work opportunity corporate income tax credit [provided by this section], a taxpayer must be in compliance with the following provisions:

(4) no state-qualified employee shall be employed or assigned:

(a) when any other individual is on layoff from the same or any substantially equivalent job;

(6) employers shall:

(a) maintain health, safety and working conditions not less than those of comparable jobs offered by the employer; and

[C. For the purposes of this section:

(3) "state-qualified job" means a job established by the taxpayer that:

(b) was a position previously filled by a state-qualified employee and was vacant prior to the hiring of the new state-qualified employee in that position.]

D. The [labor] workforce solutions department shall determine whether the employee is a state-qualified employee and whether the job is a state-qualified job and, if the employee is a state-qualified employee and the job is a state-qualified job, certify that fact to the employer. The taxpayer claiming the work opportunity corporate income tax credit [provided by this section] shall provide a copy of the certification with respect to each employee for which the tax credit is claimed.

F. The work opportunity corporate income tax credit [provided in this section] may only be deducted from the taxpayer's corporate income tax liability. Any portion of the work opportunity corporate income tax credit [provided by this section] that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

G. The department shall compile an annual report that includes the number of taxpayers approved to receive a work opportunity corporate income tax credit and the aggregate amount of those credits approved by the department. The report shall be submitted to the revenue stabilization and tax policy committee no later than October 30 of each year beginning in 2012.

H. The revenue stabilization and tax policy committee shall review the effectiveness of the work opportunity corporate income tax credit allowed pursuant to this section every five years beginning in 2013.

I. Acceptance by a taxpayer of a work opportunity corporate income tax credit pursuant to this section is authorization by the taxpayer receiving the credit for the department to reveal to the legislature for reporting and analysis purposes the information deemed necessary by the department to allow the legislature to determine the effectiveness of the work opportunity corporate income tax credit.

J. A taxpayer claiming a work opportunity corporate income tax credit pursuant to the Corporate Income and Franchise Tax Act shall not also claim a work opportunity income tax credit pursuant to the Income Tax Act.

K. As used in this section:

(3) "state-qualified job" means a job established by the taxpayer that:

(b) was a position previously filled by a state-qualified employee and was vacant prior to the hiring of the new state-qualified employee in that position."

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