Under current law, the department of economic development is required to limit the monetary amount of qualified equity investments to a level necessary to limit tax credit utilization to no more than fifteen million dollars annually. Following fiscal year 2010, no equity investments may be made unless re-authorization is provided by enactment of a general law by the general assembly. This act would require the department to limit the monetary amount of qualified equity investments to a level necessary to limit tax credit utilization to no more than twenty-seven million five hundred thousand dollars annually. The requirement for re-authorization by enactment of a general law by the general assembly is moved back two fiscal years to fiscal years following fiscal year 2012.

The act specifies that, under certain conditions, an out-of-state wholesale drug distributor, that is a drug manufacturer which produces and distributes from a facility inspected and approved by the federal Food and Drug Administration, will not be required to be licensed but must register its business name and address with the Board of Pharmacy within the Department of Insurance, Financial Institutions and Professional Registration and pay a ten dollar filing fee. Such requirement will also apply to wholesale drug distributors located in a foreign country, as long as they are authorized and in good standing to operate as drug manufacturers within such jurisdiction.

Currently, no tax credits for qualified research expenses can be approved, awarded, or issued. The act removes such restrictions and allows a tax credit equal to no more than six and one-half percent of a taxpayer's qualified research expenses. No more than ten million dollars in qualified research expense tax credits may be authorized annually by the department. Qualified research expenses will be limited to those incurred in the research and development of agricultural biotechnology, plant genomics products, diagnostic and therapeutic medical devices, prescription pharmaceuticals consumed by humans or animals, and electronic patient health record technology. Expenses incurred in the research, development, or manufacturing of power system technology for aerospace; space; defense; implantable or wearable medical devices; or gears, speed changers, and industrial high-speed drivers utilized in the wind turbine industry are also permitted. The Director of the Department of Economic Development may allow a taxpayer to transfer up to forty percent of the tax credits issued, but not yet claimed, between January 1, 2010, and December 31, 2016. The act requires the department director to act between August 1 and August 15 on tax credit applications filed between January 1 and July 1 for claims from the previous year. A formula is established, by which tax credits will be issued if the eligible claims for the credits exceed the annual cap. No one taxpayer can be issued more than thirty percent of the total amount of tax credits authorized in any calendar year.

A new type of project is created within the Quality Jobs Act known as premium employment projects. Such projects are defined as a qualified company that, within two years of commencing operations, creates at least one hundred new jobs and meets all of the following requirements:

(1) The company and project qualify for the act;

(2) The company offers all new employees health insurance and pays at least eighty percent of the premiums; and

(3) The wage for at least one hundred of the new jobs is equal to or greater than one hundred eighty percent of the county average wage.

A qualified company with a premium employment project may retain four percent of withholding taxes for five years if the average wage of the new payroll equals or exceeds one hundred eighty percent of the county average wage. Five percent of withholdings taxes may be retained by a qualified company, if local incentives equal between ten and twenty-four percent of new direct local revenue; six percent of such taxes may be retained if the local incentives are between twenty-five and forty-nine percent of new direct local revenue; and eight percent of such taxes may be retained if local incentives equal fifty percent or more of new direct local revenue. If the withholding taxes are not sufficient to provide the entire benefit due to the company, the department will issue a refundable tax credit for the difference. Tax credits issued for premium employment projects will not be considered when issuing tax credits for technology business projects or high-impact projects, nor will they be counted toward the total amount of tax credits issued for the act as a whole. If the qualified company does not pay at least one hundred new employees wages equal to at least one hundred eighty percent of the county average wage, the qualified company will not receive tax credits for the balance of the benefit period but may continue to keep the withholding taxes if it otherwise meets the requirements of a quality jobs small and expanding business or a high-impact project.

The Quality Jobs Act definition of "technology business project" is modified to include certain clinical molecular diagnostic laboratories. The annual cap on the amount of Quality Jobs Act tax credits that can be issued annually is increased from sixty million to one hundred million dollars. The definition of "project facility" is modified to include separate buildings located within 15 miles of each other. Currently, the buildings must be within one mile of each other. The act specifies how the department must apply certain definitions when a business that has already received an approved notice of intent later files another notice of intent.

JASON ZAMKUS