hb361_LC_18_6237_a_2.html
07 LC 18 6237
House Bill 361
By: Representative O`Neal of the 146th

A BILL TO BE ENTITLED
AN ACT


To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to imposition, rate, computation, and exemptions regarding income tax, so as to change certain provisions regarding certain state income tax credits; to provide for procedures, conditions, and limitations; to provide an effective date; to provide for applicability; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to imposition, rate, computation, and exemptions regarding income tax, is amended by revising Code Section 48-7-40.5, relating to tax credits for employers providing approved retraining programs, as follows:
"48-7-40.5.
(a) As used in this Code section, the term:
(1) 'Approved retraining' means employer retraining that is provided or employer sponsored retraining by a business enterprise that meets the following conditions:
(A) It enhances the functional skills of employees otherwise unable to function effectively on the job due to skill deficiencies or who would otherwise be displaced because such skill deficiencies would inhibit their utilization of new technology;
(B) It is approved and certified by the Department of Technical and Adult Education; and
(C) The employer business enterprise does not require the employee to make any payment for the retraining, either directly or indirectly through use of forfeiture of leave time, vacation time, or other compensable time; and
(D) The retraining is offered:
(i) On the premises of the business enterprise or on premises approved by the Department of Technical and Adult Education by instructors hired by or employed by the business enterprise; or
(ii) Pursuant to a contractual arrangement with a school, university, college, or other instructional facility which offers approved retraining that is paid for by the business enterprise.
(2) 'Business enterprise' means any business or the headquarters of any such business which is engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, and research and development industries. Such term shall not include retail businesses.
(2)(3) 'Cost of retraining' means direct instructional costs as defined by the Department of Technical and Adult Education including instructor salaries, materials, supplies, and textbooks but specifically excluding costs associated with renting or otherwise securing space.
(3)(4) 'Employee' means any employee of a business enterprise who is a resident in this state who is employed for at least 25 35 hours a week, and who has been continuously employed by the employer business enterprise for at least 16 consecutive weeks.
(4) 'Employer' means any employer upon whom an income tax is imposed by this chapter.
(5) 'Employer provided' refers to approved retraining offered on the premises of the employer or on premises approved by the Department of Technical and Adult Education by instructors hired by or employed by an employer. 'New technology' means new machinery, equipment, software, and quality assurance programs that significantly change the operational structure of the business enterprise such that current employees cannot continue to function effectively on the job without retraining on such new machinery, equipment, software, or quality assurance programs. The replacement of or enhancements to existing machinery, equipment, software, or quality assurance programs, including, but not limited to, routine upgrades, a change of vendor or service provider, or a new version or model that performs the same basic function as the current version or model are not considered new technology.
(6) 'Employer sponsored' refers to a contractual arrangement with a school, university, college, or other instructional facility which offers approved retraining that is paid for by the employer.
(b) A tax credit shall be granted to an employer who a business enterprise that provides or sponsors an approved retraining program. The amount of the tax credit shall be equal to one-half of the costs of retraining per full-time employee, or $500.00 per full-time employee, whichever is less, for each employee who has successfully completed an approved retraining program, not to exceed $1,000.00 per such employee per year. No employer business enterprise may receive a credit if the employer requires that the employee reimburse or pay the employer business enterprise for the cost of retraining.
(c) Any tax credit claimed under this Code section for any taxable year beginning on or after January 1, 1998, but not used for any such taxable year may be carried forward for ten years from the close of the taxable year in which the tax credit was granted. The tax credit granted to any employer business enterprise pursuant to this Code section shall not exceed 50 percent of the amount of the taxpayer´s income tax liability for the taxable year as computed without regard to this Code section.
(d) To be eligible to claim the credit granted under this Code section, the employer business enterprise must certify to the department the name of the employee, the course work successfully completed by such employee, the name of the provider of the approved retraining, and such other information as may be required by the department to ensure that credits are only granted to employers who business enterprises that provide or sponsor approved retraining pursuant to this Code section and that such credits are only granted to employers business enterprises with respect to employees who successfully complete such approved retraining. The department shall adopt rules and regulations and forms to implement this credit program. The department is expressly authorized and directed to work with the Department of Technical and Adult Education to ensure the proper granting of credits pursuant to this Code section.
(e) The Department of Technical and Adult Education is expressly authorized and directed to establish such standards as it deems necessary and convenient in approving employer retraining programs provided and employer sponsored retraining programs by a business enterprise. In establishing such standards, the Department of Technical and Adult Education shall establish required hours of classroom instruction, required courses, certification of teachers or instructors, progressive levels of instruction, and standardized measures of employee evaluation to determine successful completion of a course of study."

SECTION 2.
Said article is further amended by revising Code Section 48-7-40.12, relating to the income tax credit for qualified research expenses, as follows:
"48-7-40.12.
(a) As used in this Code section, the term:
(1) 'Base amount' means the product of a business enterprise´s Georgia taxable net income in the current taxable year and the average of the ratios of its aggregate qualified research expenses to Georgia taxable net income for the preceding three taxable years or 0.300, whichever is less the sum of the qualified research expenses for the three years in the base period divided by three. If a business enterprise was not doing business in Georgia during one or more of the base period tax years, the business enterprise shall include that year with '0' expenditures when computing the base amount. If a business enterprise is in Georgia for less than a full year during any tax year in the base period, the business enterprise shall annualize the qualified research expenses for that year by multiplying the qualified research expenses by 365 and dividing the result by the number of days taxable in Georgia; the business enterprise shall use this annualized amount when computing the base amount.
(2) 'Base period' means the three taxable years immediately preceding the taxable year for which the credit is being claimed.
(2)(3) 'Business enterprise' means any business or the headquarters of any such business which is engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, and research and development industries. Such term shall not include retail businesses.
(3)(4) 'Qualified research expenses' means qualified research expenses for any business enterprise as that term is defined in Section 41 of the Internal Revenue Code of 1986, as amended, except that all wages paid and all purchases of services and supplies must be for research conducted within the State of Georgia.
(b) A tax credit is allowed a business enterprise which has qualified research expenses in Georgia in a taxable year exceeding a base amount, provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986, as amended.
(c) The tax credit provided in subsection (b) of this Code section shall be 10 6 1/2 percent of the excess of the qualified research expenses incurred for the taxable year for which the credit is being claimed over the base amount referred to in said subsection.
(d) Any unused credit claimed under this Code section may be carried forward ten years from the close of the taxable year in which the qualified research expenses were made. The credit taken in any one taxable year shall not exceed 50 percent of the business enterprise´s remaining Georgia net income tax liability after all other credits have been applied."

SECTION 3.
Said article is further amended by revising paragraph (1) of subsection (a) of Code Section 48-7-40.15, relating to the income tax credit for base year port traffic increases, as follows:

"(1) 'Base year port traffic' means the total amount of net tons, containers, or twenty-foot equivalent units (TEU´s), of product actually transported by way of a waterborne ship or vehicle through a port facility during the period from January 1, 1997 2006, through December 31, 1997 2006, with such base year to advance forward by three years beginning on January 1, 2010, and similarly advancing on the first day of January every three years thereafter; provided, however, that in the event the total amount actually transported during such period was not at least 75 net tons, five containers, or ten twenty-foot equivalent units (TEU´s), then 'base year port traffic' means 75 net tons, five containers, or ten twenty-foot equivalent units (TEU´s)."

SECTION 4.
This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval and shall be applicable to all taxable years beginning on or after January 1, 2007.

SECTION 5.
All laws and parts of laws in conflict with this Act are repealed.