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1995 SESSION

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SB 761 Enterprise Zone Act.

Introduced by: Elmo G. Cross, Jr. | all patrons    ...    notes | add to my profiles

SUMMARY:

Enterprise Zone Act. Increases the number of authorized zones from 25 to 50. The existing sales tax exemption for firms in the zones would continue only for firms designated as “qualified business firms” prior to July 1, 1995. Any locality may have up to three zones, except rural localities which may have two zones, one of which can be divided into two areas.

Eligibility for the business income tax credit is based on (i) establishing a new business within an enterprise zone or (ii) an existing business increasing the average number of full-time employees by at least 10 percent over the higher of the preceding two years' employment levels. Forty percent of a business firm's employees must either have incomes below 80 percent of the median income for the jurisdiction or be residents of the zone. Effective for taxable years 1996 through 2005, a 30 percent refundable tax credit (up to $125,000) is available to qualified zone residents for certain improvements to real property made in enterprise zones. The maximum amount available for both credits per fiscal year is $5 million.

Business firms which invest over $100 million and create at least 200 full-time permanent positions are eligible for a five percent investment tax credit in lieu of the other available credits. The maximum amount available for this credit per fiscal year is $3 million.

A grant incentive program is established for business firms creating new permanent full-time positions in enterprise zones. The job creation incentive gives a firm a grant for each permanent full-time position in excess of 110 percent of the number of positions that a firm had in either of the two preceding years. Firms will be eligible for job creation grants in three-year periods. After a three-year grant eligibility period expires, a firm may qualify for additional three-year grant periods, though the threshold limit increases to 120 percent of the base number. A firm must have at least five full-time employees to qualify for the hiring grants. The grants will be for $1,000 for each employee who is a resident of the enterprise zone, and $500 for each nonresident employee. A firm will not be eligible for more than $100,000 of job creation grants in any year. Job creation grants will be paid from a new Enterprise Zone Grant Fund, which will be funded by appropriations from the General Assembly.

An enterprise zone designation shall be terminated if no business firms in such zone have qualified for benefits within a five-year period.


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