SB 4

Under current law, the Department of Commerce (Commerce) may designate

an area as an enterprise zone. Commerce must consider a number of factors related

to the area prior to designating the area as an enterprise zone, including indicators

of the area's economic need and whether designation as an enterprise zone would

promote the retention of jobs in the area. A taxpayer who creates or retains jobs in

an enterprise zone may claim certain credits against state income and franchise

taxes. Currently, Commerce may designate no more than 12 enterprise zones. This

bill permits Commerce to designate a total of 16 enterprise zones.

In determining whether to designate an area an enterprise zone, current law

requires Commerce to consider specified indicators of the area's economic need and

specified indicators of the effect of designation on other initiatives and programs to

promote economic and community development in the area. Current law also

requires Commerce to give preference to the greatest economic need. This bill

requires Commerce to designate two additional enterprise zones in political

subdivisions with populations of less than 5,000 and two additional enterprise zones

in political subdivisions with populations between 5,000 and 29,999 (rural zones),

notwithstanding the current factors Commerce must consider.

Currently, a business that retains jobs in an enterprise zone is eligible for tax

credits if the business makes a significant capital investment in property located in

the enterprise zone and at least one of the following applies: 1) the business is an

original equipment manufacturer with a significant supply chain in the state; or 2)

the business has more than 500 full-time employees in the enterprise zone. Under

the bill, a business that retains jobs in a rural zone and makes a significant capital

investment in property located in the rural zone is eligible for tax credits; no

additional showing is required.