0001| HOUSE BILL 17 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| TED HOBBS | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO TAXATION; PROVIDING INCOME TAX CREDITS FOR | 0012| EMPLOYMENT OF YOUTH PARTICIPATING IN CERTAIN SUMMER JOB | 0013| PROGRAMS. | 0014| | 0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0016| Section 1. A new section of the Income Tax Act is | 0017| enacted to read: | 0018| "[NEW MATERIAL] JOB MENTORSHIP TAX CREDIT.-- | 0019| A. To encourage New Mexico businesses to hire | 0020| youth participating in certified school-to-work programs, any | 0021| taxpayer who is the owner of a New Mexico business, who files | 0022| an individual New Mexico income tax return and who is not a | 0023| dependent of another individual may claim a credit in an | 0024| amount equal to fifty percent of gross wages paid to qualified | 0025| students who are participants in a certified school-to-work | - 1 - 0001| program and who are employed by the taxpayer during the | 0002| taxable year for which the return is filed. The tax credit | 0003| may be known as the "job mentorship tax credit". | 0004| B. A taxpayer who is the owner of a New Mexico | 0005| business may claim the credit provided in this section for | 0006| each taxable year in which the business employs one or more | 0007| qualified students who are participants in a certified school- | 0008| to-work program. The maximum aggregate credit allowable shall | 0009| not exceed fifty percent of the gross wages paid to not more | 0010| than ten qualified students employed by the taxpayer for up to | 0011| three hundred twenty hours of employment of each qualified | 0012| student in each taxable year for a maximum of three taxable | 0013| years for each qualified student. In no event shall a | 0014| taxpayer claim a credit in excess of twelve thousand dollars | 0015| ($12,000) in any taxable year. The employer shall certify | 0016| that hiring the qualified student does not displace or replace | 0017| a current employee. | 0018| C. The number of qualified students whose | 0019| employment qualifies for a job mentorship tax credit pursuant | 0020| to this section or Section 2 of this act shall be limited to a | 0021| pilot program of one thousand qualified students. The | 0022| department shall allocate annually to the superintendent of | 0023| public instruction one thousand certificates that shall be | 0024| distributed by the superintendent to administrators of | 0025| qualifying school-to-work programs. The certificates, when | - 2 - 0001| properly executed, shall serve as evidence of the taxpayer's | 0002| eligibility for the job mentorship tax credit. The maximum | 0003| number of certificates that may be issued to a single school- | 0004| to-work program administrator is equal to the number of | 0005| qualified school-to-work participants in that program on May 1 | 0006| of the current calendar year. The certificates shall be | 0007| issued in the order in which they are requested. To claim the | 0008| credit under this section, the taxpayer must submit, with his | 0009| claim, certification from the superintendent of public | 0010| instruction, in a manner and form determined by the secretary, | 0011| that the employees for whom the credit is being claimed are | 0012| qualified students who are participants in the pilot program | 0013| and information required by the secretary with respect to the | 0014| students' employment by the taxpayer during the taxable year | 0015| for which the credit is claimed. | 0016| D. The credit provided under this section may only | 0017| be deducted from the taxpayer's New Mexico income tax | 0018| liability for the taxable year. Any portion of the maximum | 0019| tax credit provided by this section that remains unused at the | 0020| end of the taxpayer's taxable year may be carried forward for | 0021| three consecutive taxable years; provided the total tax | 0022| credits claimed under this section shall not exceed the | 0023| maximum allowable under Subsection B of this section. | 0024| E. A husband and wife who file separate returns | 0025| for a taxable year in which they could have filed a joint | - 3 - 0001| return may each claim only one-half of the credit that would | 0002| have been allowed on a joint return. | 0003| F. A taxpayer who otherwise qualifies and claims a | 0004| job mentorship tax credit for employment of qualified students | 0005| by a partnership, limited partnership, limited liability | 0006| company, S corporation or other business association of which | 0007| the taxpayer is a member may claim a credit only in proportion | 0008| to his interest in the partnership, limited partnership, | 0009| limited liability company, S corporation or association. The | 0010| total credit claimed by all members of the business shall not | 0011| exceed the maximum tax credit allowable under Subsection B of | 0012| this section. | 0013| G. As used in this section: | 0014| (1) "certified school-to-work program" means | 0015| a summer employment program certified by the state department | 0016| of public education as a school-to-work program designed for | 0017| secondary school students to create academic and career goals | 0018| and objectives and find employment in a job meeting those | 0019| goals and objectives; | 0020| (2) "New Mexico business" means a | 0021| partnership, limited partnership, limited liability company | 0022| treated as a partnership for federal income tax purposes, S | 0023| corporation or sole proprietorship that carries on a trade or | 0024| business in New Mexico and that employs in New Mexico less | 0025| than three hundred full-time employees at any one time during | - 4 - 0001| the taxable year; and | 0002| (3) "qualified student" means an individual | 0003| who is at least fourteen years of age but not more than | 0004| twenty-one years of age who is attending full time an | 0005| accredited New Mexico secondary school and who is a | 0006| participant in a certified school-to-work program." | 0007| Section 2. A new section of the Corporate Income and | 0008| Franchise Tax Act is enacted to read: | 0009| "[NEW MATERIAL] JOB MENTORSHIP TAX CREDIT.-- | 0010| A. To encourage New Mexico businesses to hire | 0011| youth participating in certified school-to-work programs, any | 0012| taxpayer who is a New Mexico business and who files a | 0013| corporate income tax return may claim a credit in an amount | 0014| equal to fifty percent of gross wages paid to qualified | 0015| students who are participants in a certified school-to-work | 0016| program and who are employed by the taxpayer during the | 0017| taxable year for which the return is filed. The tax credit | 0018| may be known as the "job mentorship tax credit". | 0019| B. A taxpayer may claim the credit provided in | 0020| this section for each taxable year in which the taxpayer | 0021| employs one or more qualified students who are participants in | 0022| a certified school-to-work program. The maximum aggregate | 0023| credit allowable shall not exceed fifty percent of the gross | 0024| wages paid to not more than ten qualified students employed by | 0025| the taxpayer for up to three hundred twenty hours of | - 5 - 0001| employment of each qualified student in each taxable year for | 0002| a maximum of three taxable years for each qualified student. | 0003| In no event shall a taxpayer claim a credit in excess of | 0004| twelve thousand dollars ($12,000) in any taxable year. The | 0005| employer shall certify that hiring the qualified student does | 0006| not displace or replace a current employee. | 0007| C. The number of qualified students whose | 0008| employment qualifies for a job mentorship tax credit pursuant | 0009| to this section or Section 1 of this act shall be limited to a | 0010| pilot program of one thousand qualified students. The | 0011| department shall allocate annually to the superintendent of | 0012| public instruction one thousand certificates that shall be | 0013| distributed by the superintendent to administrators of | 0014| qualifying school-to-work programs. The certificates, when | 0015| properly executed, shall serve as evidence of the taxpayer's | 0016| eligibility for the job mentorship tax credit. The maximum | 0017| number of certificates that may be issued to a single school- | 0018| to-work program administrator is equal to the number of | 0019| qualified school-to-work participants in that program on May 1 | 0020| of the current calendar year. The certificates shall be | 0021| issued in the order in which they are requested. To claim the | 0022| credit under this section, the taxpayer must submit, with his | 0023| claim, certification from the superintendent of public | 0024| instruction, in a manner and form determined by the secretary, | 0025| that the employees for whom the credit is being claimed are | - 6 - 0001| qualified students who are participants in the pilot program | 0002| and information required by the secretary with respect to the | 0003| students' employment by the taxpayer during the taxable year | 0004| for which the credit is claimed. | 0005| D. The credit provided under this section may only | 0006| be deducted from the taxpayer's corporate income tax liability | 0007| for the taxable year. Any portion of the maximum tax credit | 0008| provided by this section that remains unused at the end of the | 0009| taxpayer's taxable year may be carried forward for three | 0010| consecutive taxable years; provided the total tax credits | 0011| claimed under this section shall not exceed the maximum | 0012| allowable under Subsection B of this section. | 0013| E. As used in this section: | 0014| (1) "certified school-to-work program" means | 0015| a summer employment program certified by the state department | 0016| of public education as a school-to-work program designed for | 0017| secondary school students to create academic and career goals | 0018| and objectives and find employment in a job meeting those | 0019| goals and objectives; | 0020| (2) "New Mexico business" means a corporation | 0021| that carries on a trade or business in New Mexico and that | 0022| employs in New Mexico less than three hundred full-time | 0023| employees during the taxable year; and | 0024| (3) "qualified student" means an individual | 0025| who is at least fourteen years of age but not more than | - 7 - 0001| twenty-one years of age who is attending full time an | 0002| accredited New Mexico secondary school and who is a | 0003| participant in a certified school-to-work program." | 0004| Section 3. TEMPORARY PROVISION--EXHAUSTION OF CREDIT.-- | 0005| If an income tax or corporate income tax taxpayer has been | 0006| allowed a credit pursuant to Section 1 or 2 of this act and | 0007| any portion of the credit allowed is unused on the date the | 0008| sections are repealed, the unused amount may be carried | 0009| forward regardless of the repeal to any taxable year within | 0010| the three consecutive taxable years following the first | 0011| taxable year for which the claim was allowed. | 0012| Section 4. DELAYED REPEAL.--Sections 1 and 2 of this act | 0013| are repealed effective January 1, 2001. | 0014| Section 5. APPLICABILITY.--The provisions of this act | 0015| apply to taxable years beginning on or after January 1, 1998. | 0016| - 8 - |