First Regular Session
Sixty-second General Assembly
LLS NO. 99-0426.01 Jane Ard-Smith SENATE BILL 99-077
STATE OF COLORADO
BY SENATOR Hillman;
also REPRESENTATIVE Young.
LOCAL GOVERNMENT
APPROPRIATIONS
A BILL FOR AN ACT
101 CONCERNING THE CREATION OF ENHANCED RURAL ENTERPRISE ZONES IN
102 COUNTIES THAT MEET SPECIFIED CRITERIA, AND, IN CONNECTION
103 THEREWITH, ESTABLISHING STATE INCOME TAX CREDITS FOR
104 TAXPAYERS WHO ESTABLISH NEW BUSINESS FACILITIES IN SUCH
105 ENHANCED RURAL ENTERPRISE ZONES.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
Requires that the portion of any county within a designated
enterprise zone be designated as an enhanced rural enterprise zone if the
county that contains the area to be designated meets certain criteria.
Requires the executive director of the department of local affairs to
determine whether each county meets the criteria based on the most
recent statistics available to the state demographer. Requires the
executive director to provide each enterprise zone administrator a list of
eligible counties.
Allows for the continuation of tax credits in enhanced rural
enterprise zones that are terminated in certain situations.
For income tax years commencing on or after January 1, 2000,
allows an additional $500 income tax credit for new business facility
employees for taxpayers who establish new business facilities in an
enhanced rural enterprise zone. Allows an additional $100 income tax
credit per employee for a maximum of 20 employees for providing health
insurance to new business facility employees, and increases the period
within which to claim such credits from 2 years to 4 years in enhanced
rural enterprise zones.
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 39-30-102 (1), Colorado Revised Statutes, is
3 amended to read:
4 39-30-102. Legislative declaration. (1) The general assembly
5 hereby finds and declares:
6 (a) That the health, safety, and welfare of the people of this state
7 are dependent upon the continued encouragement, development, and
8 expansion of opportunities for employment in the private sector in this
9 state; and
10 (b) That there currently exist in this state both rural and urban
11 areas which require new employment opportunities to overcome
12 conditions of unemployment, underemployment, net out-migration of the
13 population, chronic economic distress, deterioration of main street
14 business districts, or sudden and severe economic dislocations and that
15 such conditions may well exist, from time to time, in other areas of the
16 state; AND
17 (c) THAT CERTAIN AREAS OF THE STATE, ESPECIALLY RURAL
18 COUNTIES, CONTINUE TO HAVE DIFFICULTY IN ENCOURAGING AND
19 ATTRACTING GROWTH DESPITE THE EXISTENCE OF ENTERPRISE ZONES AND
20 THEIR ASSOCIATED TAX CREDITS.
21 SECTION 2. 39-30-103 (4) (c) and (6), Colorado Revised
22 Statutes, are amended to read:
23 39-30-103. Zones established - termination. (4) (c) The state
24 auditor shall submit a report to the governor and the general assembly no
25 later than March 1, 1998, and every two years thereafter evaluating the
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1 implementation of the program and its effect on the employment,
2 unemployment rate, investment, overall growth rate, economic diversity,
3 and per capita income in each enterprise zone AND ENHANCED RURAL
4 ENTERPRISE ZONE or county containing an enterprise zone OR ENHANCED
5 RURAL ENTERPRISE ZONE, making recommendations for statutory changes,
6 if any, and including any other information requested by the governor or
7 the general assembly. The evaluation shall be based upon objective
8 verifiable data maintained by the department of local affairs, local
9 governments, and zone administrators and shall include information
10 concerning the amounts of tax credits claimed and allowed under the
11 enterprise zone program. For purposes of preparing the report required
12 by this paragraph (c), the state auditor shall have access to all records and
13 documents applicable to the enterprise zone program, whether maintained
14 by the department of local affairs, local governments, or enterprise zone
15 administrators.
16 (6) When the termination of an enterprise zone or portion of an
17 enterprise zone would prevent a taxpayer from qualifying for tax benefits
18 under this article and the taxpayer can identify job creation or capital
19 expansion activities that were planned prior to the termination
20 announcement and that would have otherwise entitled the taxpayer to
21 claim tax benefits under section 39-30-103.5, 39-30-104, or 39-30-105,
22 the enterprise zone administrator and the taxpayer shall jointly certify the
23 circumstances and detailed plan information to the Colorado economic
24 development commission prior to the effective date of the termination.
25 Within six months after receiving such information, the commission shall
26 certify an extension of SUCH CERTIFICATION MAY BE FILED WITH THE
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1 TAXPAYER'S INCOME TAX RETURN TO EXTEND the period within which the
2 taxpayer may claim such tax benefits, not to exceed the five tax years
3 following the year of the termination, and the amount of each benefit that
4 the taxpayer may claim during the extension period, based on the plan
5 information received by the commission FILED WITH THE TAX RETURN. It
6 is the intent of this subsection (6) only to permit taxpayers to claim tax
7 benefits on which they demonstrably relied in making business planning
8 decisions, and, except as specifically provided in this subsection (6),
9 nothing in this subsection (6) shall be construed to authorize the
10 commission or any enterprise zone administrator to grant tax benefits that
11 have been repealed by the general assembly or to grant tax benefits in
12 excess of the limits established by law.
13 SECTION 3. Article 30 of title 39, Colorado Revised Statutes,
14 is amended BY THE ADDITION OF A NEW SECTION to read:
15 39-30-103.1. Enhanced rural enterprise zones - criteria -
16 termination. (1) THE PORTION OF ANY COUNTY WITHIN AN ENTERPRISE
17 ZONE DESIGNATED PURSUANT TO SECTION 39-30-103 SHALL BE
18 DESIGNATED AS AN ENHANCED RURAL ENTERPRISE ZONE IF THE COUNTY
19 THAT CONTAINS THE AREA TO BE SO DESIGNATED MEETS TWO OR MORE OF
20 THE FOLLOWING CRITERIA:
21 (a) THE COUNTY TO BE DESIGNATED HAS AN UNEMPLOYMENT RATE
22 AT LEAST FIFTY PERCENT ABOVE THE STATE AVERAGE UNEMPLOYMENT
23 RATE FOR THE MOST RECENT PERIOD OF TWELVE CONSECUTIVE MONTHS
24 FOR WHICH DATA ARE AVAILABLE FROM THE DEPARTMENT OF LABOR AND
25 EMPLOYMENT;
26 (b) THE COUNTY TO BE DESIGNATED HAS A POPULATION GROWTH
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1 RATE LESS THAN TWENTY-FIVE PERCENT OF THE STATE AVERAGE
2 POPULATION GROWTH RATE FOR THE MOST RECENT FIVE-YEAR PERIOD FOR
3 WHICH DATA ARE AVAILABLE FROM THE UNITED STATES CENSUS BUREAU
4 OR THE DEPARTMENT OF LOCAL AFFAIRS, OR IF SUCH DATA ARE NOT
5 AVAILABLE FOR ANY FIVE-YEAR PERIOD, FOR THE MOST RECENT PERIOD OF
6 NOT LESS THAN FIVE NOR MORE THAT TEN YEARS FOR WHICH SUCH DATA
7 ARE AVAILABLE;
8 (c) THE COUNTY TO BE DESIGNATED HAS AN AVERAGE PER CAPITA
9 INCOME LESS THAN SEVENTY-FIVE PERCENT OF THE STATE AVERAGE PER
10 CAPITA INCOME FOR THE MOST RECENT PERIOD FOR WHICH DATA ARE
11 AVAILABLE FROM THE UNITED STATE CENSUS BUREAU OR THE
12 DEPARTMENT OF LOCAL AFFAIRS;
13 (d) THE TOTAL ASSESSED VALUE OF ALL NONRESIDENTIAL
14 PROPERTY WITHIN THE COUNTY TO BE DESIGNATED RANKS IN THE LOWER
15 ONE-HALF OF ALL COUNTIES BASED ON THE TOTAL VALUES OF
16 NONRESIDENTIAL PROPERTY FOR THE MOST RECENT YEAR FOR WHICH SUCH
17 DATA ARE AVAILABLE FROM THE DEPARTMENT OF LOCAL AFFAIRS;
18 (e) THE COUNTY TO BE DESIGNATED HAS A POPULATION OF FIVE
19 THOUSAND OR LESS AS ESTIMATED BY THE DEPARTMENT OF LOCAL
20 AFFAIRS.
21 (2) BY DECEMBER 1, 1999, AND EVERY TWO YEARS THEREAFTER,
22 THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF LOCAL AFFAIRS SHALL
23 DETERMINE WHETHER EACH COUNTY MEETS TWO OR MORE OF THE
24 CRITERIA SPECIFIED IN SUBSECTION (1) OF THIS SECTION. SUCH
25 DETERMINATION SHALL BE BASED ON THE MOST RECENT STATISTICS
26 AVAILABLE TO THE STATE DEMOGRAPHER APPOINTED BY THE EXECUTIVE
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1 DIRECTOR. THE EXECUTIVE DIRECTOR SHALL PROVIDE TO EACH
2 ENTERPRISE ZONE ADMINISTRATOR AND TO THE BOARD OF COUNTY
3 COMMISSIONERS OF EACH ELIGIBLE COUNTY A LIST OF THE COUNTIES THAT
4 MEET TWO OR MORE OF THE CRITERIA SPECIFIED IN SUBSECTION (1) OF THIS
5 SECTION.
6 (3) IF A COUNTY PREVIOUSLY ELIGIBLE FOR DESIGNATION DOES
7 NOT APPEAR ON THE BIENNIAL LIST OF ELIGIBLE COUNTIES PROVIDED BY
8 THE EXECUTIVE DIRECTOR, SUCH COUNTY SHALL NO LONGER BE ELIGIBLE
9 FOR DESIGNATION AS AN ENHANCED RURAL ENTERPRISE ZONE FOR THE
10 PERIOD COVERED BY THE BIENNIAL LIST. THE EXECUTIVE DIRECTOR'S
11 BIENNIAL LIST SHALL NOT RESTRICT, CURTAIL, TERMINATE, OR OTHERWISE
12 CUTOFF ANY TAX CREDITS THAT ARE BASED ON A COUNTY'S ENHANCED
13 RURAL ENTERPRISE ZONE STATUS AND THAT HAVE ALREADY BEEN EARNED
14 BY TAXPAYERS UNDER CRITERIA EXISTING WHEN THE QUALIFYING
15 TRANSACTIONS WERE COMPLETED. IN ADDITION, THE EXECUTIVE
16 DIRECTOR SHALL ESTABLISH PROCEDURES FOR RECOGNIZING AND
17 ALLOWING CREDITS TO TAXPAYERS WHO HAVE TAKEN ACTIONS IN
18 RELIANCE ON AGREEMENTS REACHED WITH ENHANCED RURAL ENTERPRISE
19 ZONE ADMINISTRATORS OR LOCAL GOVERNMENTS FOR LONG-TERM
20 INVESTMENTS.
21 (4) IF THE TERMINATION OF AN ENHANCED RURAL ENTERPRISE
22 ZONE WOULD PREVENT A TAXPAYER FROM QUALIFYING FOR TAX BENEFITS
23 UNDER THIS ARTICLE AND THE TAXPAYER CAN IDENTIFY JOB CREATION OR
24 CAPITAL EXPANSION ACTIVITIES THAT WERE PLANNED PRIOR TO THE TIME
25 THE EXECUTIVE DIRECTOR ISSUED THE LIST OF ELIGIBLE COUNTIES AND
26 THAT WOULD HAVE OTHERWISE ENTITLED THE TAXPAYER TO CLAIM TAX
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1 BENEFITS UNDER SECTION 39-30-105, THE ENTERPRISE ZONE
2 ADMINISTRATOR AND THE TAXPAYER SHALL JOINTLY CERTIFY THE
3 CIRCUMSTANCES AND DETAILED PLAN INFORMATION PRIOR TO THE
4 EFFECTIVE DATE OF SUCH TERMINATION. SUCH CERTIFICATION MAY BE
5 FILED WITH THE TAXPAYER'S STATE INCOME TAX RETURN TO EXTEND THE
6 PERIOD WITHIN WHICH THE TAXPAYER MAY CLAIM SUCH TAX BENEFITS,
7 NOT TO EXCEED THE FIVE TAX YEARS FOLLOWING THE YEAR OF THE
8 TERMINATION, AND THE AMOUNT OF EACH BENEFIT THAT THE TAXPAYER
9 MAY CLAIM DURING THE EXTENSION PERIOD BASED ON THE PLAN
10 INFORMATION FILED WITH THE TAX RETURN. IT IS THE INTENT OF THIS
11 SUBSECTION (4) TO PERMIT TAXPAYERS TO CLAIM ONLY THOSE TAX
12 BENEFITS ON WHICH THEY DEMONSTRABLY RELIED IN MAKING BUSINESS
13 PLANNING DECISIONS, AND, EXCEPT AS SPECIFICALLY PROVIDED IN THIS
14 SUBSECTION (4), NOTHING IN THIS SUBSECTION (4) SHALL BE CONSTRUED
15 TO AUTHORIZE ANY ENTERPRISE ZONE ADMINISTRATOR TO GRANT TAX
16 BENEFITS THAT HAVE BEEN REPEALED BY THE GENERAL ASSEMBLY OR TO
17 GRANT TAX BENEFITS IN EXCESS OF THE LIMITS ESTABLISHED BY LAW.
18 SECTION 4. 39-30-105 (1), (2), (3), and (5), Colorado Revised
19 Statutes, are amended to read:
20 39-30-105. Credit for new business facility employees.
21 (1) (a) (I) For any income tax year commencing on or after January 1,
22 1993, any taxpayer who establishes a new business facility in an
23 enterprise zone, as defined in section 39-22-508.2 (3) but excluding the
24 requirements of paragraph (b) of that subsection, shall be allowed a credit
25 against the income tax imposed by article 22 of this title in an amount
26 equal to five hundred dollars per income tax year for each new business
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1 facility employee, as determined under section 39-22-508.2, who is
2 working within the zone, prorated according to the number of months the
3 new business facility employee was employed by the taxpayer during the
4 income tax year. FOR ANY INCOME TAX YEAR COMMENCING ON OR AFTER
5 JANUARY 1, 2000, ANY TAXPAYER WHO ESTABLISHES A NEW BUSINESS
6 FACILITY IN AN ENHANCED RURAL ENTERPRISE ZONE SHALL BE ALLOWED
7 AN ADDITIONAL CREDIT AGAINST THE INCOME TAX IMPOSED BY ARTICLE 22
8 OF THIS TITLE IN AN AMOUNT EQUAL TO FIVE HUNDRED DOLLARS PER
9 INCOME TAX YEAR FOR EACH NEW BUSINESS FACILITY EMPLOYEE WHO IS
10 WORKING WITHIN THE ENHANCED RURAL ENTERPRISE ZONE, PRORATED
11 ACCORDING TO THE NUMBER OF MONTHS SUCH EMPLOYEE WAS EMPLOYED
12 BY THE TAXPAYER DURING THE INCOME TAX YEAR. A new business
13 facility employee whose primary duties consist of operating a commercial
14 motor vehicle with a commercial driver's license shall be deemed to be
15 working one hundred percent within the zone if the employee spends no
16 more than five percent of his or her total time at any facility of the
17 employer other than the facility within the zone. A new business facility
18 qualifying for credit shall be allowed the credit for each subsequent tax
19 year for each additional new business facility employee where the
20 employee or employees exceed the maximum number employed in any
21 prior tax year. Any credit shall be allowed for a maximum of twelve
22 consecutive months for each new business facility employee employed
23 by the taxpayer. Any special tax credit for new business facility
24 employees allowed pursuant to this subsection (1) shall be in lieu of any
25 credit that the taxpayer might otherwise obtain pursuant to section
26 39-22-508.3 for the same income tax year.
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1 (II) This paragraph (a) is effective for income tax years
2 commencing on or after January 1, 1993, EXCEPT AS OTHERWISE
3 PROVIDED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (a).
4 (b) (I) EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (II) OF
5 THIS PARAGRAPH (b), in addition to the five-hundred-dollar credit
6 available under paragraph (a) of this subsection (1), a taxpayer qualified
7 under said paragraph (a) shall be allowed for the first two full income tax
8 years while located in an enterprise zone a credit in an amount equal to
9 two hundred dollars for each new business facility employee who is
10 insured under a health insurance plan or program provided through his or
11 her employer. To be eligible for such credit, the employer must
12 contribute fifty percent or more of the total cost of a health insurance plan
13 or program, and such plan or program must be in accordance with the
14 provisions of article 8 or part 1, 2, 3, or 4 of article 16 of title 10, C.R.S.,
15 or be a self-insurance program and include partial or complete coverage
16 for hospital and physician services.
17 (II) IF A TAXPAYER QUALIFIES FOR THE INCOME TAX CREDIT
18 AVAILABLE IN AN ENHANCED RURAL ENTERPRISE ZONE UNDER PARAGRAPH
19 (a) OF THIS SUBSECTION (1), IN ADDITION TO THE CREDIT AVAILABLE
20 UNDER SAID PARAGRAPH (a), THE TAXPAYER SHALL BE ALLOWED FOR THE
21 FIRST FOUR FULL INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY
22 1, 2000, WHILE LOCATED IN AN ENHANCED RURAL ENTERPRISE ZONE A
23 CREDIT IN AN AMOUNT EQUAL TO THREE HUNDRED DOLLARS FOR EACH
24 NEW BUSINESS FACILITY EMPLOYEE, NOT TO EXCEED TWENTY NEW
25 BUSINESS FACILITY EMPLOYEES, WHO IS INSURED UNDER A HEALTH
26 INSURANCE PLAN OR PROGRAM PROVIDED THROUGH HIS OR HER
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1 EMPLOYER. TO BE ELIGIBLE FOR SUCH CREDIT, THE EMPLOYER MUST
2 CONTRIBUTE FIFTY PERCENT OR MORE OF THE TOTAL COST OF A HEALTH
3 INSURANCE PLAN OR PROGRAM, AND SUCH PLAN OR PROGRAM MUST BE IN
4 ACCORDANCE WITH THE PROVISIONS OF ARTICLE 8 OR PART 1, 2, 3, OR 4 OF
5 ARTICLE 16 OF TITLE 10, C.R.S., OR BE A SELF-INSURANCE PROGRAM AND
6 INCLUDE PARTIAL OR COMPLETE COVERAGE FOR HOSPITAL AND PHYSICIAN
7 SERVICES. THE TAX CREDIT ALLOWED PURSUANT TO THIS SUBPARAGRAPH
8 (II) SHALL BE IN LIEU OF ANY CREDIT THAT THE TAXPAYER MIGHT
9 OTHERWISE OBTAIN PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH
10 (b).
11 (2) For such new business facilities in enterprise zones OR
12 ENHANCED RURAL ENTERPRISE ZONES, the number of new business facility
13 employees engaged or maintained in employment at the new business
14 facility for each taxable year for which the credit is claimed must equal
15 or exceed one person, section 39-22-508.3 (1) notwithstanding.
16 (3) Any taxpayer who operates a business within an enterprise
17 zone which THAT adds value through manufacturing or processing to
18 agricultural commodities shall be allowed in lieu of the credit under
19 section 39-22-508.3 but in addition to the credit allowed under subsection
20 (1) of this section, while located in such enterprise zone, a credit against
21 the income tax imposed by article 22 of this title in an amount equal to
22 five hundred dollars for each additional new business facility employee
23 where such employee or employees exceed the maximum number
24 employed in any prior tax year. FOR ANY INCOME TAX YEAR
25 COMMENCING ON OR AFTER JANUARY 1, 2000, ANY TAXPAYER WHO
26 OPERATES A BUSINESS WITHIN AN ENHANCED RURAL ENTERPRISE ZONE
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1 THAT ADDS VALUE THROUGH MANUFACTURING OR PROCESSING TO
2 AGRICULTURAL COMMODITIES SHALL BE ALLOWED IN ADDITION TO THE
3 CREDIT ALLOWED UNDER THIS SECTION A CREDIT AGAINST THE INCOME
4 TAX IMPOSED BY ARTICLE 22 OF THIS TITLE IN AN AMOUNT EQUAL TO FIVE
5 HUNDRED DOLLARS FOR EACH ADDITIONAL NEW BUSINESS FACILITY
6 EMPLOYEE WHERE SUCH EMPLOYEE OR EMPLOYEES EXCEED THE MAXIMUM
7 NUMBER EMPLOYED IN ANY PRIOR TAX YEAR.
8 (5) (a) (I) EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (II)
9 OF THIS PARAGRAPH (a), for taxable years beginning on or after January
10 1, 1993, if the amount of the credit provided for pursuant to the
11 provisions of subparagraph (I) of paragraph (a) of subsection (1),
12 SUBPARAGRAPH (I) OF paragraph (b) of subsection (1), or PARAGRAPH (a)
13 OF subsection (3) of this section exceeds the amount of income taxes due
14 on the income of the taxpayer in the income tax year for which the credit
15 is being claimed, the amount of the credit not used as an offset against
16 income taxes in said income tax year shall not be allowed as a refund but
17 may be carried forward as a credit against subsequent years' tax liability
18 for a period not exceeding five years and shall be applied first to the
19 earliest income tax years possible. Any amount of the credit which is not
20 used during said period shall not be refundable to the taxpayer.
21 (II) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY 1,
22 2000, IF THE TAXPAYER QUALIFIES FOR A CREDIT UNDER SUBPARAGRAPH
23 (I) OF PARAGRAPH (a) OF SUBSECTION (1) OF THIS SECTION AND IF THE
24 AMOUNT OF THE CREDIT PROVIDED FOR PURSUANT TO THE PROVISIONS OF
25 SAID SUBPARAGRAPH (I), SUBPARAGRAPH (II) OF PARAGRAPH (b) OF
26 SUBSECTION (1), OR PARAGRAPH (b) OF SUBSECTION (3) OF THIS SECTION
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1 EXCEEDS THE AMOUNT OF INCOME TAXES DUE ON THE INCOME OF THE
2 TAXPAYER IN THE INCOME TAX YEAR FOR WHICH THE CREDIT IS BEING
3 CLAIMED, THE AMOUNT OF THE CREDIT NOT USED AS AN OFFSET AGAINST
4 INCOME TAXES IN SAID INCOME TAX YEAR SHALL NOT BE ALLOWED AS A
5 REFUND BUT MAY BE CARRIED FORWARD AS A CREDIT AGAINST
6 SUBSEQUENT YEARS' TAX LIABILITY FOR A PERIOD NOT EXCEEDING SEVEN
7 YEARS AND SHALL BE APPLIED FIRST TO THE EARLIEST INCOME TAX YEARS
8 POSSIBLE. ANY AMOUNT OF THE CREDIT WHICH IS NOT USED DURING SAID
9 PERIOD SHALL NOT BE REFUNDABLE TO THE TAXPAYER.
10 (b) (I) SUBPARAGRAPH (I) OF PARAGRAPH (a) OF this subsection (5)
11 is effective for income tax years commencing on or after January 1, 1993;
12 except that application of SUBPARAGRAPH (I) OF PARAGRAPH (a) OF this
13 subsection (5) to the credit described in SUBPARAGRAPH (I) OF paragraph
14 (b) of subsection (1) of this section shall be effective for income tax years
15 commencing on or after January 1, 1996.
16 (II) SUBPARAGRAPH (II) OF PARAGRAPH (a) OF THIS SUBSECTION(5)
17 IS EFFECTIVE FOR INCOME TAX YEARS COMMENCING ON OR AFTER
18 JANUARY 1, 2000.
19 SECTION 5. Safety clause. The general assembly hereby finds,
20 determines, and declares that this act is necessary for the|~ immediate
|~ 21 preservation of the public peace, health, and safety.