§ 2011 — Investment and employment credit against corporation income tax

(a) Any taxpayer (other than a public utility as defined in Chapter 1 of Title 26, unless such public utility is a provider of telecommunications services as described in § 2010(3)i. of this title) that:

(1) During any consecutive 12-month period has placed in service a qualified facility in which such taxpayer has during such period made a qualified investment in an amount equal to or exceeding $200,000 except that, in the case of a new or expanded facility placed in service to conduct the qualified activity described in § 2010(3)k. of this title, the qualified investment during such period must be in an amount equal to or exceeding $40 million;

(2) During the consecutive 12-month period referred to in paragraph (a)(1) of this section employs 5 or more qualified employees;

(3) Within 36 months after the date on which a qualified facility is placed in service (which 36-month period shall include the month in which the qualified facility is placed in service) applies for written approval from the Secretary or the Secretary’s designee confirming the taxpayer’s qualification for the tax credits and license reductions set forth in this subchapter;

shall (except as otherwise provided in subsection (e) of this section) be allowed a credit against the tax imposed by Chapter 19 of this title for the taxable year in which all conditions set forth in this subsection shall be met and for any of the 9 following taxable years in which such facility is a qualified facility with respect to the taxpayer on the last business day thereof. The amount of such credit for any such year shall be the amount determined under subsection (b) of this section.

(b) Subject to the limitations contained in subsections (c) and (d) of this section, the amount of the credit allowable under subsection (a) of this section with respect to any qualified facility for each of the taxable years falling within the 10-year life of such credit shall be the sum of:

(1) Five hundred dollars multiplied by that number that is the greater of:

a. The difference between:

1. The number of qualified employees employed by the taxpayer on a date 1 year after the date on which the qualified facility is placed in service; and

2. The sum of the number of qualified employees, if any, that were employed by the taxpayer and by any related person on the day immediately preceding the date on which such qualified facility is placed in service by the taxpayer; and

b. The difference between:

1. The number of qualified employees employed by the taxpayer on a date 1 year after the date on which occurs the event described in paragraph (a)(2) of this section; and

2. The sum of the number of qualified employees, if any, that were employed by the taxpayer and by any related person on the day immediately preceding the date on which occurs the event described in paragraph (a)(2) of this section;

provided, in either case, that no credit shall be allowable under this paragraph (b)(1) with respect to any qualified employee, except to the extent that the qualified investment in such qualified facility equals or exceeds $40,000 per qualified employee; and provided further, that no credit shall be allowable under this paragraph (b)(1) with respect to any qualified employee to the extent a credit was claimed by the taxpayer or any related person under this paragraph (b)(1) for such qualified employee with respect to any other qualified facility placed in service in the same or a prior taxable year; plus

(2) Five hundred dollars multiplied by each $100,000 (or major fraction thereof) of qualified investment in such qualified facility.

(3) In the case of a qualified facility used in connection with the qualified activity described in § 2010(3)i. of this title, the amount of the credit allowable under subsection (a) of this section with respect to such a facility for each of the taxable years falling within the 10-year life of such credit shall be determined by the application of paragraphs (b)(1) and (2) of this section, except that:

a. The amount of investment required per qualified employee for purposes of credits determined under paragraph (b)(1) of this section shall be $15,000 rather than $40,000, and the amount of minimum required investment determined under subsection (a) of this section shall be $750,000 rather than $200,000;

b. No amount of investment may be included in any of the calculations required under paragraph (b)(2) or (3) of this section unless the taxpayer has elected that any such amount of investment shall not be also considered in determining the extent to which the taxpayer has satisfied any obligation it might have under § 711 of Title 26 [repealed]; and

c. The minimum number of qualified employees required for purposes of credits determined under paragraph (b)(1) of this section shall be 50 rather than 5, provided further, that such 50 qualified employees shall be in addition to the number of qualified employees employed by the taxpayer within this State as of December 31, 1996, and no credit shall be allowed under paragraph (b)(2) of this section until the taxpayer shall have employed at least 50 qualified employees in addition to the number of qualified employees employed within this State as of December 31, 1996.

(c) If the number of qualified employees employed by the taxpayer during any taxable year of the taxpayer later than the taxable year in which such qualified facility was placed in service by the taxpayer shall be less than 90 percent of the number of qualified employees that were taken into account under subsection (b) of this section, the amount of the credit otherwise allowable under subsection (b) of this section for such later taxable year shall be reduced by 1 percent for each full percentage point that the number of such qualified employees in such later taxable year is less than the number of qualified employees that were taken into account under subsection (b) of this section.

(d) The amount of the credit allowable under this section for any taxable year shall not exceed 50 percent of the amount of tax imposed upon the taxpayer by Chapter 19 of this title for such taxable year (computed without regard to this section).

(e) No credit shall be allowable under subsection (a) of this section unless at least 25 percent of all qualified employees employed by the taxpayer on the date a qualified facility is placed in service by the taxpayer are residents of this State on such date.

(f) The amount of the credit determined under subsections (b) and (c) of this section for any taxable year that is not allowable for such taxable year solely as a result of the limitation contained in subsection (d) of this section shall be a credit carryover to each of the following taxable years that fall within the 10-year life of the credit specified in subsection (a) of this section. The entire amount of the credit that is not so allowable shall be carried to the earliest of the taxable years to which such credit may be carried, and the portion of such credit that shall be carried to each of the other taxable years to which such credit may be carried shall be the excess, if any, of such credit over the sum of the credits allowable under this section (including subsection (d) of this section) for each of the prior taxable years to which such credit may be carried. In applying the limitation contained in subsection (d) of this section to any taxable year to which a credit may be carried under this subsection, any credit carryovers to such taxable year shall be considered to be applied in reduction of the tax imposed by Chapter 19 of this title for such taxable year in the order of the taxable years from which such credits are carried over, beginning with the credit carryover from the earliest taxable year, and only after all such credit carryovers to such taxable year have been allowed in full shall any credit that would be allowable in such taxable year without regard to this subsection be allowed.

(g) If any facility for which a credit was allowable to the taxpayer under subsection (a) of this section is not a qualified facility with respect to the taxpayer on the last business day of any taxable year during the 10-year life of the credit specified in subsection (a) of this section and if on the last business day of any later taxable year ending after the expiration of such 10-year life such facility again constitutes a qualified facility with respect to the taxpayer (whether as a result of the same qualified activity or a different qualified activity), the Secretary may, upon application of the taxpayer filed on or before the first day of the fourth month following the close of such later taxable year (and filed in such form and manner as may be prescribed in regulations by the Secretary), allow a credit for such later taxable year and for each of that number of the following taxable years as shall be equal to the difference between 9 and the number of prior taxable years for which a credit was allowable to the taxpayer for such qualified facility. The amount of the credit, for such later taxable year and for each such following taxable year, shall be the amount of the credit determined under subsection (b) of this section for the taxable year such qualified facility was first placed in service by the taxpayer, but subject in such later taxable year and in each such following taxable year to the limitations contained in subsections (c) and (d) of this section. The Secretary shall allow such credit if the Secretary determines that the resumption of a qualified activity with respect to such qualified facility will provide increased opportunities for employment in this State and will result in a meaningful contribution to the economy of this State.

(h)-(j) [Repealed.]

(k) Any taxpayer (other than a public utility as defined in Chapter 1 of Title 26) that for any taxable year has a qualified investment in a qualified facility that is placed in service by the taxpayer during such taxable year shall be allowed a credit under this section irrespective of the limitations contained in subsection (a)(2), (b) or (c) of this section; provided, however, as follows:

(1) Such investment must equal or exceed the greater of:

a. $1 million; or

b. 15% of the unadjusted basis in such facility at the close of the taxable year preceding the date on which installation or construction of the investment described in this paragraph commenced;

(2) Substantially all the use of the qualified facility by the taxpayer occurs in the activity of aviation services, manufacturing or wholesaling as defined respectively in § 2010(3)j., § 2701(2) or § 2901(21)a. of this title;

(3) The amount of the credit allowed under this subsection shall be 75% of the credit allowable if the taxpayer were eligible for credit under subsection (a) of this section, subject, however, to limitation and carryover provisions under subsections (d) and (f) of this section. Credits claimed in any tax year (including amounts carried over from previous tax years) shall not exceed the difference between $500,000 and the amount of credits claimed under § 2012 of this title for the 12 months comprising said tax year. Amounts of credit not used by virtue of the preceding sentence may be carried forward as if such unused credits arose by virtue of § 2011(d) of this title;

(4) No facility may be eligible for credits under both this subsection and subsection (a) of this section;

(5) Should the qualified facility be an expanded facility, total wages paid during the taxable year by the taxpayer to qualified employees employed at the qualified facility must equal or exceed 85% of the wages paid by the taxpayer to qualified employees at the same facility during the 12 months preceding the date on which the qualified facility was placed in service; and

(6) Construction of the qualified facility was commenced after February 6, 1992. For purposes of this paragraph (k)(6), construction of a facility shall commence on the date on which site alteration first occurs.

(l) Except as otherwise provided in § 2021(d) of this title, in the case of a qualified facility located on a brownfield, this section shall be applied with respect to such qualified facility by:

(1) Treating as a qualified activity any business, trade, commerce, profession or vocation carried on in or in connection with such qualified facility,

(2) Treating as additional qualified investment all amounts expended by the taxpayer for environmental investigation and remediation of the brownfield, and

(3) Substituting “$650” for “$500” in each of subsections (b)(1) and (b)(2) of this section.

The total incremental credits allowable to the taxpayer under this subsection (l) shall not exceed the aggregate amount expended by the taxpayer for environmental investigation and remediation of the brownfield.