AN ACT EXTENDING EXISTING ECONOMIC INCENTIVES TO BUSINESSES REBUILDING IN THE COMMONWEALTH AFTER A DISASTER.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. As used in this act, the following words shall have the following meanings:-
"Base period employment level", the number of permanent full-time employees in the commonwealth, as of July 1, 1998, as certified by the economic assistance coordinating council within the Massachusetts office of business development, of a corporation made eligible by this act for a credit pursuant to section 38N of chapter 63 of the General Laws.
"Employment level", the number of permanent full-time employees in the commonwealth in a given taxable year, as certified by the economic assistance coordinating council within the Massachusetts office of business development, of a corporation made eligible by this act for a credit pursuant to section 38N of chapter 63 of the General Laws.
"Jobs commitment level", for taxable years beginning on or after January 1, 1999, but before January 1, 2001, an employment level of 100 per cent of the base period employment level; for taxable years beginning on or after January 1, 2001, but before January 1, 2002, an employment level of 102½ per cent of the base period employment level; for taxable years beginning on or after January 1, 2002, but before January 1, 2003, an employment level of 105 per cent of the base period employment level; for taxable years beginning on or after January 1, 2003, but before January 1, 2004, an employment level of 110 per cent of the base period employment level; for taxable years beginning on or after January 1, 2004, but before January 1, 2005, an employment level of 115 per cent of the base period employment level.
"Permanent full-time employee", shall have the meaning given to that term in section 3A of chapter 23A of the General Laws.
SECTION 2. Notwithstanding the provisions of any general or special law to the contrary, in the case of a corporation which has, within the time period from October 1 to December 31, 1995, inclusive, suffered a casualty and which has satisfied the jobs commitment level defined in section 1, the following credits shall be available subject to the provisions of this act:
(a) Solely for the purposes of calculating the credit authorized by section 38N of chapter 63 of the General Laws: (1) the cost or other basis of qualifying property that replaces property which was involuntarily converted, as determined by Section 1033(a) of the Internal Revenue Code, which shall be determined without any adjustment, notwithstanding the provisions of Section 1033(b) of said Internal Revenue Code, as amended and in effect for the current taxable year; and (2) the cost of the property which qualifies for the credit authorized by said section 38N, shall include costs related to the repair, reconstruction and replacement of the qualifying property that was involuntarily converted that (i) have been incurred by the corporation since the date of the casualty, before or after the effective date of this act, as a result of the casualty and which are directly related to the qualifying property, and (ii) that have been incurred for property that is used exclusively in a certified project as defined in section 3A of chapter 23A of the General Laws; provided, however, that the assessed value of said qualifying property is at least 100 per cent of the replaced property which was involuntarily converted by a casualty from October 1 to December 31, 1995, inclusive, including both real and personal property.
(b) Solely for the purposes of calculating the credit authorized by paragraph (i) of section 31A of chapter 63 of the General Laws, the cost or other basis of qualifying property that replaces property which was involuntarily converted, as determined by Section 1033(a) of the Internal Revenue Code, shall be determined without any adjustment, notwithstanding the provisions of Section 1033(b) of said Internal Revenue Code, as amended and in effect for the current taxable year; provided, however, that the assessed value of said qualifying property is at least 100 per cent of the replaced property which was involuntarily converted by a casualty from October 1 to December 31, 1995, inclusive, including both real and personal property.
SECTION 3. In the case of any corporation made eligible by this act for a tax credit pursuant to section 38N of chapter 63 of the General Laws, if the employment level of such corporation is less than its jobs commitment level in a given taxable year, as determined by the economic assistance coordinating council within the Massachusetts office of business development, any tax credits for which such corporation shall have been made eligible by this act shall be subject to recapture as provided in said section 38N of said chapter 63 and section 4 of this act; provided, however, that the base period employment level shall be reduced in any given year to reflect any reduction in employment level due to a reduction in sales generally affecting the industry, or sector of the industry, in which such corporation does business, as determined by said council within the Massachusetts office of business development; and provided, further, there shall be no reduction in the base period employment level on account of any reduction in employment level due to the relocation of jobs, that had been located in the commonwealth on or after July 1, 1998, to a location outside the commonwealth.
SECTION 4. Notwithstanding the provisions of any general or special law to the contrary, a corporation entitled to a credit under this act may sell, assign, exchange, convey or otherwise transfer such credit to any party or parties, provided, however, that: (a) such corporation continues to satisfy the requirements of this act with respect to the use and ownership of the qualifying property for which the credit is allowed; (b) that an amount at least equal to the amount of the proceeds of such transfer shall, prior to the end of the recapture period specified in subsection (e) of section 31A, or paragraph (a) of section 38N, as the case may be, of chapter 63 of the General Laws, shall be expended by such corporation in the acquisition of qualifying property, as defined in subsection (a) of said section 31A of said chapter 63; and (c) such corporation certifies to the commissioner, concurrently with the submission of its tax return with respect to the tax year in which such transfer occurred, the amount of credits so transferred and the name and the taxpayer number of any such party or parties to which said credits are transferred.
In the event of any recapture under subsection (e) of said section 31A of said chapter 63 of any portion of the credit authorized by this act, any such corporation shall be solely liable for any additional taxes due as a result of such recapture.
In the event that, after an examination of the returns and the books, papers, records and other data of any such corporation, the commissioner determines that the amount of the credits transferred exceeds the amount of the credit to which any such corporation was entitled pursuant to this act, such excess amount shall be assessed solely against any such corporation which shall be solely liable for any such additional taxes, penalties and interest so assessed. Nothing herein shall limit any right any such corporation may otherwise have to seek an abatement of any amount so assessed.
Any amount received as consideration for credits transferred under this section or any amount by which the nominal value of such transferred credits exceeds the amount of such consideration shall be taxable as income under either chapter 62 or chapter 63 of the General Laws. A transfer of credits pursuant to this act shall not alter the entitlement, allocation or attribution to any party of any item of income, gain, loss, deduction or credit other than (i) credits transferred pursuant hereto, and (ii) any taxes, penalties or interest due as a result of recapture of such credit or any assessment against any such corporation as provided herein.
With respect to any party or parties to which said credits are transferred, (i) if such party or parties are subject to the excise imposed by chapter 63 of the General Laws, the credit so transferred shall be a credit against the excise imposed by said chapter 63 ; (ii) if such party or parties are subject to tax under chapter 62 of the General Laws, the credit so transferred shall be a credit against the tax imposed by said chapter 62.
SECTION 5. Notwithstanding the provisions of any general or special law to the contrary, the amount of any and all tax credits received pursuant to paragraphs (a) and (b) of section 2, by a corporation which has suffered a casualty within the time period from October 1 to December 31, 1995, inclusive, shall not exceed an aggregate amount of $7,500,000.