Bill H.4036 187th (2011 - 2012)

SECTION 1. Chapter 23B of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by adding after section 30, the following section:-

Section 31. The director of the department of housing and community development shall establish a closing costs assistance program for income-eligible first time homebuyers. The department, subject to appropriation, shall issue grants to qualifying homebuyers up to $2,500 for the purpose of assisting in paying closing costs and other similar fees associated with the purchase of a home. Said grant may not exceed greater than 100 percent of the documented closing costs in any transaction. The department shall publish any regulations necessary to achieve the purpose of this section.

Income-eligible first-time homebuyers, for purposes of this section, shall be defined as any person, or persons for those persons purchasing a home jointly, who maintains a first-time home-buying account as designated under section 5B of chapter 26, and then utilizes at minimum $1,000 from said account for such a purchase; provided that said person shall have an income of 90 percent of the median area income as estimated by the U.S. Department of Housing and Urban Development for metropolitan statistical areas or less.

SECTION 2. Chapter 26 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by adding after section 5A, the following new section: -

Section 5B. (a) The commissioner of banks shall establish a first-time home-buying program to be administered by financial institutions licensed to do business in the commonwealth. Such program shall require that new qualifying savings accounts, established by an individual to be designated as a first-time home-buying account, qualify for the benefits prescribed by this section. Individuals with existing qualifying savings accounts shall be entitled to convert and designate such account as a first-time home-buying account. The commissioner shall establish regulations defining a qualifying savings account as such an account suitably chosen by the commissioner from existing forms of savings and retirement accounts for the purpose of this section.

(b) Such program shall allow contributions of up to $4,000 to first-time home-buying accounts, designated as such and regulated by the commissioner; provided, that such contributions shall not be considered taxable income and shall be deducted under subsection (a) of section 3 of chapter 62.

(c) Under said program, balances of up to $5,000 in qualifying savings accounts established prior to being designated as a first-time home-buying account shall be credited in the first taxable year following the designation under subsection (m) of section 6 of chapter 62.

(d) Qualifying distributions to an individual from a first-time home-buying account shall not be considered taxable income under section 2 of chapter 62. Qualifying distributions shall mean distributions for qualified first-time homebuyer expenses as defined by section 72(t)(8) of the Internal Revenue Code, as it may be amended from time to time.

Distributions to an individual that do not qualify under this subsection shall be considered taxable income under section 2 of chapter 62 and shall also subject to a penalty of not more than 10 percent. Penalties shall be administered by the commissioner and shall be available to the closing cost assistance program fund created under section 31 of chapter 23B.

SECTION 3. Subdivision (1) of subsection (d) of section 2 of chapter 62, as so appearing, is hereby amended by adding after the words “section sixty-two” the following:- , two hundred and nineteen

SECTION 4. Subdivision (1) of subsection (d) of section 2 of chapter 62, as so appearing, is hereby amended by striking subparagraph (F) in its entirety.

SECTION 5. Subdivision (3) of subsection (a) of section 2 of chapter 62, as so appearing, is hereby amended by adding at the end thereof the following new subparagraph:-

(D) Effective on and after January 1, 2013, any qualifying distribution from a designated first-time home-buying account, as defined by section 5B of chapter 26, shall not be subject to taxes imposed by this chapter; provided however, that any distribution for expenses not exempt from taxation, as defined by section 5B of chapter 26, shall be considered taxable income under this chapter.

SECTION 6. Subparagraph (B) of section 3 of chapter 62, as so appearing, is hereby amended by adding at the end thereof the following new subdivision:-

(16) Amount expended by an individual for contributions to a qualifying savings account, designated as a first-time home-buying account, pursuant to section 5B of chapter 26, not to exceed $4,000 for the taxable years beginning on or after January 1, 2013.

SECTION 7. Section 6 of chapter 62, as so appearing, is hereby amended by inserting at the end thereof the following new subsection:-

(m) A taxpayer shall be allowed a credit against the taxes imposed by this chapter equal to the taxes paid in any one year prior to January 1, 2013 for contributions up to $5,000 into a qualifying savings account converted and designated as a first-time home-buying account, pursuant to section 5B of chapter 26.

SECTION 8. Section 6 of chapter 62 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after subsection (q) the following new subsection:-

(r) (1) As used in this subsection, the following words shall have the following meanings:--

“Angel investor”, a taxpayer who provides financing for the development, refinement, and commercialization of a product or process and other working capital needs.

“Small business”, a business entity physically located in Massachusetts and employing fewer than 100 workers; provided, not less than 51 per cent of the workers are residents of Massachusetts.

“Start-up expenses”, the expenses for the administration and operation of a business prior to the time the business becomes operational.

(2) An angel investor shall be allowed a credit against the taxes imposed by this chapter equal to 15 per cent of the monetary amount provided to a small business for the start-up expenses associated with the small business; provided, the credit shall be equal to 25 per cent if the small business is physically located in an economic target area pursuant to section 3D of chapter 23A.

(3) Any amount of the credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 3 subsequent taxable years.

(4) The total cumulative amount of credits issued in a calendar year pursuant to this subsection shall not exceed an annual cap equal to $10,000,000; provided, the cap will be equal to $5,000,000 beginning January 1, 2015.

(A) Funding for the credit shall be from any remaining amount of consolidated net surplus after complying with clause (a) of section 5C of chapter 29.

(5) The credit authorized in this subsection shall expire on December 31, 2019.

(6) The commissioner shall promulgate regulations necessary for the administration of this subsection.

SECTION 9. Section 67D of chapter 62C of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after subsection (g) the following new sections:-

(h) when used in section (i)-(n), the following words shall have the following meaning:

“Application year”, the calendar year for which a business submits the information required for a determination as to a jobs incentive credit.

“Business”, a corporation, sole proprietorship, partnership, limited liability company or any other form of business organization.

“Commissioner”, the commissioner of revenue.

“Eligible Jobs”, a number determined by first multiplying each of the local jobs created by a business during a single calendar year by the job qualifier for that job, and then totaling the number for all of the local jobs created.

“Full time employee”, a person who is employed for consideration for at least 35 hours per week and whose salary is subject to withholding as provided in chapter 62B.

“Job qualifier fraction”, in the case of either a full-time employee or a part-time employee of a business, the figure that determines the extent to which that employee is employed in the commonwealth during a single calendar year. The job qualifier fraction for each employer shall be determined by multiplying the following percentages together: (i) the percentage of time that an employee worked while employed by the company expressed as average hours worked per week out of 35 hours, not to exceed 100 per cent; (ii) that employee’s time attributable to work in the commonwealth, as a portion of that employee’s total work for the company; and (iii) the portion of the year the employee worked for the company.

“Jobs incentive credit”, a business employment incentive credit for companies as provided for in this section.

“Local jobs created”, the total number of jobs created by a business during a single calendar year in which the new employees perform qualified services in at least 1 in-state location, including jobs performed by persons that are transferred within the company to work at an in-state location from a location based outside the state.

“Part-time employee”, a person who is employed for consideration for less than 35 hours a week and whose salary is subject to withholding as provided in chapter 62B.

“Credit years”, in the case of a business that is determined to be eligible for a jobs incentive credit, the 3 calendar years following the application year.

“Weighted, average employment”, for a calendar year, the total number of jobs maintained by a business in which the employees performed employment services in at least 1 in-state location. The number is to be determined by first multiplying each of the individual jobs maintained by the company for that year by the job qualifier fraction for that job and then totaling the number for all of these jobs.

(i) A business that creates an eligible job in the commonwealth during its application year shall be entitled to a jobs incentive credit, spread equally over three calendar years, if its weighted average employment for such application year reflects a net increase over the company’s weighted average employment for the prior calendar year. The total jobs incentive credit shall be equal to 50 per cent of the amount paid by the company as salary attributable to eligible jobs created by the company in such year to the extent that the salary was subject to Massachusetts withholding pursuant to chapter 62B for such year, multiplied by the applicable Massachusetts income tax rate for such salary, and such credit shall be applied toward the company’s liability imposed by Chapter 62B, Section 2. A company shall take a jobs incentive credit for no more than 50 jobs created over its weighted average employment for the prior calendar year. For companies creating greater than 50 jobs over the weighted average employment for the prior calendar year, the total tax credit, which will be taken in three equal installments subject to the terms and conditions in the following sections, shall be determined by the salary of the first 50 eligible jobs created. For the purposes of this provision, an eligible job shall be deemed created in the commonwealth on the first day for which Massachusetts withholding is required in connection with the compensation paid to the employee.

(j) The jobs incentive credit shall be taken by a business in 3 equal installments in each of the 3 calendar years commencing with the calendar year subsequent to the application year. If, for the first or second credit year, the company’s weighted average employment falls below its weighted average for the application year, the company shall be disqualified from taking its second installment credit. It may nonetheless take its third installment credit if its weighted average employment for its second credit year is above its weighted average employment for the application year.

(k) A company that seeks a jobs incentive credit shall apply to the commissioner to receive permission to take such a credit on a form prescribed by the commissioner. This form shall reference the necessary information concerning the eligible jobs created by the company in the Commonwealth during the application year and also the company’s weighted average employment for such year and the prior calendar year. The commissioner shall advise the company of the determination in writing.

(l) Not later than March 1 of each calendar year for which a company has been approved to take a job incentives credit , the company shall submit to the commissioner, in a form prescribed by the commissioner, the information necessary to evaluate the company’s prior year weighted employment average.

(m) A company that has previously been approved to take a job incentive credit is entitled to re-apply for an additional credit for a second or third application year. In such cases, the company may be entitled to take a job incentive credit that relates to different application years in the same calendar year. When a company has previously been granted permission to take a jobs incentive credit for 3 application years, it shall not request an additional jobs incentive credit. In no case shall a company take a jobs incentive credit after June 30, 2016, when all provisions in (i)-(m) shall sunset and no longer be in effect.

(n) Following the termination of the job creation tax credit program, the commissioner of the department of revenue, in consultation with one or more institutes of higher learning, shall conduct a cost benefit analysis of said program, which shall take into consideration the total number of permanent in-state jobs created under the program, the total amount of tax credits provided, and any other factors that would be useful in measuring the success of the program. The commissioner shall prepare a report on the findings, which shall be filed with the clerk of the house of representatives and the clerk of the senate, the chairs of the house and senate committees on ways and means, and the house and senate chairs of the joint committee on revenue no later than September 30, 2016. Said report shall include the commissioner’s findings as to the feasibility of extending the job creation tax credit program beyond the sunset date, along with any recommendations for revising the program to make it more effective in enhancing the creation of jobs.

SECTION 10. Subsection (a) of section 2 of chapter 63 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out, in lines 15 through 17, the following language:

; provided, however, that the excise imposed hereunder shall be no less than $456.

SECTION 11. Subsection (b) of Section 2 of said chapter 63, as so appearing, is hereby further amended by striking out, in lines 25 through 27, the following language:-

; provided, however, that in no case shall the excise imposed under this section amount to less than $456.

SECTION 12. Subsection (c) of section 3 of chapter 63B of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking said subsection and inserting in place thereof the following:—

(c) For purposes of this chapter, there shall be four required installments for each taxable year, except as otherwise provided by this chapter. The first installment shall be paid on or before the fifteenth day of the third month of the taxable year; the second installment shall be paid on or before the fifteenth day of the sixth month of the taxable year; the third installment shall be paid on or before the fifteenth day of the ninth month of the taxable year; and the fourth installment shall be paid on or before the fifteenth day of twelfth month of the taxable year. The amount of any installment shall be twenty-five per cent of the required annual payment.

The term “required annual payment” means the lesser of (i) ninety percent of the tax shown on the return for the taxable year or, if no return is filed, ninety percent of the tax for such year, or (ii) one hundred percent of the tax shown on the return of the corporation for the preceding taxable year, or (iii) ninety percent of the tax for the taxable year or, if no return is filed, ninety percent of tax for such year determined by using the income apportionment percentage, if any, applicable for the preceding taxable year in computing its net income subject to tax under chapter sixty-three.

Clause (ii) shall not apply if the preceding taxable year was not a taxable year of twelve months or the corporation did not file a return for such preceding taxable year showing a liability for tax.

Clause (ii) shall not apply in the case of a large corporation, as defined in section sixty-six hundred and fifty-five (g) of the Internal Revenue Code of the United States, as amended on January first, nineteen hundred and eighty-nine and in effect for the taxable year except for purposes of determining the amount of the first required installment for any taxable year; provided, however that any reduction in such first installment by reason of this provision shall be recaptured by increasing the amount of the next required installment by the amount of such reduction.

SECTION 13. Section 4A of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 4, the word “sixty-five” and inserting, in place thereof, the following:-- 50

SECTION 14. Section 4A of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 9, the word “ten” and inserting in place thereof the following:-- 25

SECTION 15. Section 4A of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 14, the word “ninety” and inserting in place thereof the following:-- 25

SECTION 16. Section 4A of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 16, the word “ten” and inserting in place thereof the following:-- 25

SECTION 17. Section 4B of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 7, the word “thirty” and inserting in place thereof the following:-- 25

SECTION 18. Section 4B of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 10, the word “twenty-five” and inserting in place thereof the following:-- 25

SECTION 19. Section 4B of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 13, the word “twenty-five” and inserting in place thereof the following:-- 25

SECTION 20. Section 4B of chapter 63B of the General Laws, as so appearing, is hereby amended by striking, in line 15, the word “twenty” and inserting in place thereof the following:-- 25

SECTION 21. Section 38B of said chapter 63, as so appearing, is hereby amended by striking, in lines 12 through 13, and in lines 25 through 26, the following language:-

or $456, whichever is greater

SECTION 22. Section 5 of Chapter 90 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by adding at the end thereof the following new subsections:

(i) Notwithstanding any general or specific law to the contrary, the registrar shall not increase any individual fee by more than 2.5 percent in a calendar year.

(j) The registrar shall offer a discount for any person registering 5 or more units in a calendar year. For the purposes of this section, a unit shall include: any vehicle subject to a commercial normal, commercial reserved, commercial, vanity, snow removal, hearse, limited use, auto home normal, auto home reserved, auto home vanity, bus normal, bus reserved, bus vanity, livery normal, livery limited use, livery reserved, livery vanity, semi trailer normal, semi trailer reserved, trailer normal, trailer reserved, taxi normal, taxi limited used, taxi reserved, or van pool normal registration. This discount shall be in an amount of no less than 10 percent of each registration fee they would otherwise incur.

(k) The registrar shall issue a report to the legislature within 90 days of the acceptance of this act. This report shall offer recommendations to reduce the cost of operating a commercial vehicle or unit in Massachusetts in order to promote competition with neighboring states. This report shall be submitted to the chairs of the Joint Committee on Transportation.

SECTION 23. Section 12 of chapter 156C of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking subsection (d) and inserting in place thereof the following:-

(d) No fee shall be issued for the filing of the certificate of organization required by subsection (a). The fee for the filing of the annual report required by subsection (c) shall be $125. Said fee shall be paid to the state secretary at the time the annual report is filed.