43-1076

43-1076. Credit for employment by a healthy
forest enterprise

A. For taxable years beginning from and after December 31, 2004 through December
31, 2014, a credit is allowed against the taxes imposed by this title for net increases
in qualified employment positions by a qualified business that is certified by the
department of commerce as a healthy forest enterprise pursuant to section 41-1516.

B. Subject to subsection E of this section, the amount of the credit is equal to:

1. One-fourth of the taxable wages paid to an employee in a qualified employment
position, not to exceed five hundred dollars per qualified employment position, in the
first year or partial year of employment.

2. One-third of the taxable wages paid to an employee in a qualified employment
position, not to exceed one thousand dollars per qualified employment position, in the
second year of continuous employment.

3. One-half of the taxable wages paid to an employee in a qualified employment
position, not to exceed one thousand five hundred dollars per qualified employment
position, in the third year of continuous employment.

C. To qualify for a credit under this section:

1. The business must employ at least three new full-time employees in qualified
employment positions in the first taxable year in which the credit is claimed.

2. All of the employees with respect to whom a credit is claimed must reside in
this state on the date of hire.

3. A qualified employment position must meet all of the following requirements:

(a) The position must be full-time employment for a minimum of one thousand five
hundred fifty hours per year, unless a shorter period of employment is due to forest
closures or weather conditions beyond the taxpayer's control.

(b) The job duties must primarily involve or directly support the harvesting,
transporting or the initial processing of qualifying forest products removed from
qualifying projects as defined in section 41-1516 into a product having commercial value.

(c) The employer must pay compensation at least equal to the wage offer by county
as computed annually by the department of economic security research administration
division.

(d) The employee must have been employed for at least ninety days during the first
taxable year. An employee who is hired during the last ninety days of the taxable year
shall be considered a new employee during the next taxable year. A qualified employment
position that is filled during the last ninety days of the taxable year is considered to
be a new qualified employment position for the next taxable year.

(e) The employee has not been previously employed by the taxpayer within twelve
months before the current date of hire.

4. The employer shall provide health insurance coverage for employees as follows:

(a) The employer shall pay:

(i) At least twenty-five per cent of the premium or membership cost of the
insurance program in the third year the taxpayer claims a credit under this section. If
the taxpayer is self-insured, the taxpayer must pay at least twenty-five per cent of a
predetermined fixed cost per employee for an insurance program that is payable whether or
not the employee has filed claims.

(ii) At least forty per cent of the premium or membership cost in the fourth year
the taxpayer claims a credit under this section. If the taxpayer is self-insured, the
taxpayer must pay at least forty per cent of a predetermined fixed cost per employee for
an insurance program that is payable whether or not the employee has filed claims.

(iii) At least fifty per cent of the premium or membership cost of the insurance
program in the fifth and each subsequent year the taxpayer claims a credit under this
section. If the taxpayer is self-insured, the taxpayer must pay at least fifty per cent
of a predetermined fixed cost per employee for an insurance program that is payable
whether or not the employee has filed claims.

(b) An employer shall not reduce the amount of health insurance coverage provided
to employees before certification by the department of commerce.

D. A credit is allowed for employment in the second and third year only for
qualified employment positions for which a credit was allowed and claimed by the taxpayer
on the original first and second year tax returns.

E. The net increase in the number of qualified employment positions is the lesser
of the total number of filled qualified employment positions created during the taxable
year or the difference between the average number of full-time employees in the current
taxable year and the average number of full-time employees during the immediately
preceding taxable year. The net increase in the number of qualified employment positions
computed under this subsection may not exceed two hundred qualified employment positions
per taxpayer each year.

F. A taxpayer who claims a credit under section 43-1074, 43-1077 or 43-1079 may not
claim a credit under this section with respect to the same employees.

G. If the allowable tax credit exceeds the income taxes otherwise due on the
claimant's income, or if there are no state income taxes due on the claimant's income,
the amount of the claim not used as an offset against income taxes may be carried forward
as a tax credit against subsequent years' income tax liability for the period not to
exceed five taxable years, provided the business maintains its certification under
section 41-1516.

H. Co-owners of a business, including partners in a partnership and shareholders of
an S corporation as defined in section 1361 of the internal revenue code, may each claim
only the pro rata share of the credit allowed under this section based on the ownership
interest. The total of the credits allowed all such owners of the business may not exceed
the amount that would have been allowed for a sole owner of the business.

I. If a qualified business changes ownership through reorganization, stock purchase
or merger, the new taxpayer may claim first year credits only for one or more qualified
employment positions that it created and filled with an eligible employee after the
purchase or reorganization was complete. If a person purchases a business that had
qualified for first or second year credits or changes ownership through reorganization,
stock purchase or merger, the new taxpayer may claim the second or third year credits if
it meets the other eligibility requirements of this section. Credits for which a taxpayer
qualified before the changes described in this subsection are terminated and lost at the
time the changes are implemented.

J. If, within five taxable years after first receiving a credit pursuant to this
section, the certification of qualification of a business is terminated or revoked under
section 41-1516 other than for reasons beyond the control of the business as determined
by the department of commerce, the credits allowed the business pursuant to this section
are subject to recapture pursuant to this subsection. This subsection applies only in the
case of the termination or revocation of a certification of qualification. This
subsection does not apply if, in any taxable year, a taxpayer otherwise does not qualify
for or fails to claim the credit under this section. The recapture of credits under this
subsection is computed by increasing the amount of taxes imposed in the year following
the year in which the qualification of the business was terminated or revoked by an
amount determined by multiplying the full amount of all credits previously allowed under
this section by a percentage determined as follows:

1. If the initial credit under this section was allowed for the taxable year
immediately preceding the taxable year in which the certification of qualification of a
business is terminated or revoked, one hundred per cent.

2. If the initial credit under this section was allowed two taxable years before
the taxable year in which the certification of qualification of a business is terminated
or revoked, eighty per cent.

3. If the initial credit under this section was allowed three taxable years before
the taxable year in which the certification of qualification of a business is terminated
or revoked, sixty per cent.

4. If the initial credit under this section was allowed four taxable years before
the taxable year in which the certification of qualification of a business is terminated
or revoked, forty per cent.

5. If the initial credit under this section was allowed five taxable years before
the taxable year in which the certification of qualification of a business is terminated
or revoked, twenty per cent.