ST. GEORGE — Under a new law that became effective May 13, businesses may receive tax credits for hiring homeless people. The law allows for tax credits to businesses up to $2,000 per homeless person employed per year with a cap at 50 such employees.
As one of 486 bills passed during the 2014 General Session of the Utah Legislature, House Bill 140, the “Tax Credit Amendments” bill, looks to provide incentives for employers to hire homeless people.
As defined by the law, in order for the employer to qualify for tax credits, the employed homeless person must meet all of the following criteria:
- have a primary nighttime residence on the date of hire
- be hired as an employee, not an independent contractor
- be legally eligible to work in the United States
- have not worked for the employer for more than 40 hours during a 60-day period immediately preceding the date of hire
The employer must abide by specific requirements, such as complying with all state, federal and local employment requirements related to the person who is homeless. The employer cannot be a government entity and must file an application for each homeless individual to receive a “tax credit certificate.”
The idea of this law is to help people who are trying to help themselves and to help employers who want to help people help themselves, Rep. Michael Noel said. For many homeless people, finding a job is extremely difficult without having a home and the security it provides. Often times homeless people become addicted to alcohol and drugs because of this lack of security and responsibility.
“I work a lot with the jail programs in my district, especially in working to obtain funding that will help people succeed. In many cases, you have people ending up back in the system,” Noel said. “Any area I can help with people who have substance abuse problems I feel the need to. It’s a very human thing to help other people in need. It changes not just one life, it changes the lives of the friends and families, too.”
Some of the concerns prior to enrolling HB 140 pertained to the identification and verification of homeless people, Rep. Jon Stanard said. Stanard voted against the bill.
After reading the bill multiple times throughout the past several years, Stanard found flaws with the technicalities of it and whether the law could work in the real world. There is a chance that some businesses could take advantage of the law by hiring on homeless people for the tax credits. If the homeless person found a home, would the employer keep that person employed long-term or just hire another homeless person to receive the tax credits?
“I wasn’t against the concept of this bill,” Stanard said. “My concern is whether it has been well thought out and can work in practice. How do you prove who is, or isn’t homeless? How will it work to benefit the person who needs it? Once a homeless person is hired and finds a place to live, are they still considered homeless?”
Under Utah Code Section 35A-5-302, a homeless person is defined as:
An individual whose primary nighttime residence is a permanent housing, permanent supportive or transitional facility — which are in turn defined as — a facility located within the state that provides supervision of residents of the facility and that is a publicly or privately operated shelter.
“It’s been a bill that’s been in the Legislature for a couple years. I think there is finally that appetite around to try it out,” Sen. Evan Vickers said. “The main incentive for it is to get people off the streets, especially on the Wasatch Front. There is a group of employers in Salt Lake City who were for the bill.”
According to the fiscal notes on the bill, beginning in 2015, this law may decrease the state’s education fund by $100,000 annually and cost $23,300 in federal funds annually for tax credit certification.
HB 140 passed the house in a 38-36 vote on March 10 with one representative not voting. The bill passed the senate 15-9 on March 13 with five senators not voting.
The bill was signed by the governor on April 1 and enrolled in the Utah Code as Sections 35A-5-301-306, known as the “Tax Credit for Employment of Persons Who are Homeless Act,” and 59-7-616, 901-903, known as the “Tax Credit Administration Act.”
From Southern Utah: Reps. V. Lowry Snow and Michael Noel voted for the bill, they were also co-sponsors of the bill; Reps. Brad Last, John Westwood, Don Ipson and Jon Stanard voted against the bill. Sens. David Hinkins and Steve Urquhart voted for the bill; Sen. Evan Vickers opposed it; and Sen. Ralph Ockerland did not vote.
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