Committee adopts H-2 substitutes for HB 5168 and HB 5169; proposed caps on tax credits fail

The House Committee on Economic Competitiveness adopted H-2 substitutes for House Bills 5168 and 5169 and rejected amendments that would have capped the total tax credit a company could receive.

Representative Bonack moved to adopt the H-2 substitute for HB 5168; the substitute was adopted on roll call. Representative Bridal proposed an amendment to cap total tax credits per company or facility, using an example figure that ‘‘the first $50,000,000 will be tax free, but then after that, it won't be.’’ The committee voted against that amendment (roll call: 3 ayes, 6 nays, 1 pass) and the amendment did not prevail. The committee later voted to report HB 5168 with recommendation as substitute H-2 (roll call: 7 ayes, 0 nays, 3 pass).

For House Bill 5169, Representative Harris moved to adopt the H-2 substitute; the roll call was 10 ayes, 0 nays, 0 pass and the substitute was adopted. Representative Bridal offered the same cap amendment to HB 5169; it failed on roll call (3 ayes, 6 nays, 1 pass). The committee reported HB 5169 as H-2 substitute with recommendation (roll call: 7 ayes, 0 nays, 3 pass).

During debate on the amendments members discussed fiscal impacts of large tax credits, the effects on local governments and schools when tax revenues are reduced by incentives, and the need to calibrate incentives to avoid unintended consequences. Representative Bridal said she was "open to ... fine tuning" a cap amount but pressed the committee to consider local fiscal impacts. The committee’s actions adopted substitute language while declining to impose the proposed caps at this stage.

Next steps: both HB 5168 and HB 5169 were reported with recommendation as substitute H-2 and will proceed under the House legislative process.