Verification of employment numbers; audits; return of unearned credit amounts; liability of incentivized companies.

(a) The Department of Labor shall periodically verify the actual number of eligible employees employed at the qualifying project and the wages of the eligible employees during the relevant year. If the Department of Labor is not able to provide the verification utilizing all available resources, it may request any additional information from the incentivized company as may be necessary. The Department of Revenue may periodically audit any incentivized company to monitor compliance by the incentivized company with this article. Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess an incentivized company. The Department of Insurance shall have similar audit rights over any incentivized company that is subject to the insurance premium tax.

(b) The project agreement shall include provisions for the incentivized company to return any unearned credit amounts.

(c)(1) An incentivized company shall be liable for any unearned portion of the jobs credit or investment credit it claims or transfers pursuant to this article. The jobs credit will be considered unearned when the incentivized company fails to pay the full amount of wages or create the full number of jobs upon which the credit was based and claimed. The investment credit will be considered unearned when the incentivized company fails to make the full capital investment upon which the credit was based and claimed or upon which the credit was valued and then transferred. The incentivized company shall be liable for only that portion of the jobs credit or investment credit that was unearned. Any credit claimed by an owner of an incentivized company is deemed to have been claimed by the incentivized company for purposes of this subsection.

(2) The Secretary of Commerce may report to the Department of Revenue any failure of an incentivized company to meet the jobs, wage, or investment requirements specified in the project agreement. The report will be made by March 31 of the year following the calendar year in which the failure occurs and shall contain sufficient information for the Department of Revenue to calculate the unearned portion of the jobs credit or investment credit. The underpayment of the applicable tax will be deemed to have occurred upon the filing of the report. The report shall be treated as the filing of a return by the incentivized company for purposes of any applicable period of limitation.

(3) The Department of Revenue may assess an incentivized company for any unearned portion of the investment credit or jobs credit, with allowed interest and penalties, pursuant to the terms of Chapter 2A or 29. The liability shall be considered an underpayment of the tax against which the respective credit was applied or refunded.

(4) If more than one company is considered the incentivized company under the terms of the project agreement, each such company will be jointly and severally liable for any liability associated with the unearned credit.

(Act 2015-27, §3.)