HB1085: HB1085 Income tax; various tax credits for forestry manufacturing facilities; provide

26 LC 44 3536S The Senate Committee on Finance offered the following substitute to HB 1085: A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to imposition, rate, computation, exemptions, and credits relative to income taxes,2 so as to provide for various tax credits for forestry manufactu ring facilities; to provide for3 transfer of tax credits and conditions; to provide for reportin g; to provide for aggregate4 maximum amounts of tax credits; to require approval of future amendments by a two-thirds'5 vote of each chamber of the General Assembly; to provide for effective dates and automatic6 repeals; to provide for definitions; to provide for a short title; to provide for related matters;7 to provide for an effective date and applicability; to repeal c onflicting laws; and for other8 purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 This Act shall be known and may be cited as the "Keep Georgia Forested Act."12 SECTION 2.13 Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to14 imposition, rate, computation, exemptions, and credits relative to income taxes, is amended15 - 1 - 26 LC 44 3536S in Code Section 48-7-40, relating to designation of counties as less developed areas and tax16 credits for certain business enterprises, by revising paragraph (2) of subsection (a) and adding17 new paragraphs, revising paragraph (2) of subsection (e), and a dding a new subsection to18 read as follows:19 "(2) 'Business enterprise' means any business or the headquarters of any such business20 which is engaged in manufacturing, including, but not limited to, the manufacturing of21 alternative energy products for use in solar, wind, battery, bioenergy, biofuel, and electric22 vehicle enterprises, warehousing and distribution, processing, telecommunications,23 broadcasting, tourism, research and development industries, biomedical manufacturing,24 forestry manufacturing, and services for the elderly and persons with disabilities. Such25 term shall not include retail businesses. Businesses are eligible for the tax credit provided26 by this Code section at an individual establishment of the busi ness based on the27 classification of the individual establishment under the North American Industry28 Classification System. For purposes of this Code section, the term 'establishment' means29 an economic unit at a single physical location where business i s conducted or where30 services or industrial operations are performed. If more than one business activity is31 conducted at the establishment, then only those jobs engaged in the qualifying activity32 will be eligible for the tax credit provided by this Code section."33 "(3.1) 'Establishment' means an economic unit at a single physi cal location where34 business is conducted or where services or industrial operations are performed. If more35 than one business activity is conducted at the establishment, then only those jobs engaged36 in the qualifying activity shall be eligible for the tax credit provided by this Code37 section."38 "(4.1) 'Forestry manufacturing' or 'forestry manufacturer' mean s any business or the39 headquarters of such business with an establishment in this state:40 (A) Classified under 2022 North American Industry Classification System Subsectors41 321, wood product manufacturing; 322, paper manufacturing or No rth American42 - 2 - 26 LC 44 3536S Industrial Classification industry code 33711, wood kitchen cab inet and countertop43 manufacturing or specific code 221117, biomass electric power g eneration 325193,44 ethyl alcohol manufacturing; 325194, cyclic crude, intermediate , and gum and wood45 chemical manufacturing; 325199, all other basic organic chemica l manufacturing;46 337211, wood office furniture manufacturing; and 337212, custom architectural47 woodwork and millwork manufacturing; or48 (B) That utilizes wood fiber, forest-derived biomass, wood res iduals, or forestry49 by-products as a primary feedstock in the manufacture of forest products, renewable50 fuels, bio-based chemicals, bioenergy, or other value-added pro ducts that support or51 derive economic value from the forest products supply chain, re gardless of the52 establishment's primary North American Industry Classification System code."53 "(2) Existing business enterprises and, for taxable years beginning on or after January 1,54 2026, and prior to January 1, 2031, forestry manufacturers shall be allowed an additional55 tax credit for taxes imposed under this article equal to $500.00 per eligible new full-time56 employee job the first year in which the new full-time employee job is created. The57 additional credit shall be claimed in the first taxable year in which the new full-time58 employee job is created. The number of new full-time employee jobs shall be determined59 by comparing the monthly average number of full-time employees subject to Georgia60 income tax withholding for the taxable year with the correspond ing period of the prior61 taxable year. In tier 1 counties, those existing business ente rprises and forestry62 manufacturers that increase employment by five or more shall be eligible for the credit. 63 In tier 2 counties, only those existing business enterprises and forestry manufacturers that64 increase employment by ten or more shall be eligible for the cr edit. In tier 3 counties,65 only those existing business enterprises and forestry manufactu rers that increase66 employment by 15 or more shall be eligible for the credit. In tier 4 counties, only those67 existing business enterprises and forestry manufacturers that increase employment by 2568 or more shall be eligible for the credit. The average wage of the new jobs created must69 - 3 - 26 LC 44 3536S be above the average wage of the county that has the lowest average wage of any county70 in the state to qualify as reported in the most recently availa ble annual issue of the71 Georgia Employment and Wages Averages Report of the Department of Labor. To72 qualify for a credit under this paragraph, the employer must ma ke health insurance73 coverage available to the employee filling the new full-time job; provided, however, that74 nothing in this paragraph shall be construed to require the employer to pay for all or any75 part of health insurance coverage for such an employee in order to claim the credit76 provided for in this paragraph if such employer does not pay for all or any part of health77 insurance coverage for other employees. Credit shall not be allowed during a year if the78 net employment increase falls below the number required in such tier. Any credit79 generated and utilized for years prior to the year in which the net employment increase80 falls below the number required in such tier shall not be affec ted. The state revenue81 commissioner shall adjust the credit allowed each year for net new employment82 fluctuations above the minimum level of the number required in s u c h t i e r . T h i s83 paragraph shall apply only to new eligible full-time jobs creat ed in taxable years84 beginning on or after January 1, 2006, and ending no later than taxable years beginning85 prior to January 1, 2011."86 "(n)(1) Any credits earned under this Code section by a forestry manufacturer for taxable87 years beginning on or after January 1, 2026, and prior to January 1, 2031, and before and88 previously claimed but not used by such forestry manufacturer against its income tax or89 as credit against quarterly or monthly payment under Code Section 48-7-103 as provided90 within this Code section, and in addition to the assignability provisions of Code91 Section 48-7-42, may be transferred or sold in whole or in part by such forestry92 manufacturer to another Georgia taxpayer, subject to the following conditions:93 (A) Such forestry manufacturer may make only a single transfer or sale of tax credits94 earned in a taxable year; however, the transfer or sale may inv olve one or more95 transferees; and96 - 4 - 26 LC 44 3536S (B) Such forestry manufacturer shall submit to the department a written notification97 of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax98 credits. The notification shall include such forestry manufacturer's tax credit balance99 prior to the transfer, the remaining balance after transfer, all tax identification numbers100 for each transferee, the date of the transfer, the amount trans ferred, and any other101 information required by the department.102 (2) Failure to comply with this subsection shall result in disallowance of the tax credit103 until the forestry manufacturer is in full compliance.104 (3) The transfer or sale of this tax credit shall not extend t he time in which such tax105 credit can be used. The carry-forward period for a tax credit that is transferred or sold106 shall begin on the date in which the tax credit was originally earned.107 (4) A transferee shall have only such rights to claim and use the tax credit as were108 available to the transferor at the time of the transfer. To the extent that such transferor109 did not have rights to claim or use the tax credit at the time of the transfer, the department110 shall either disallow the tax credit claimed by the transferee or recapture the tax credit111 from the transferee. The transferee's recourse is against the transferor.112 (5) The department shall prepare an annual report of the total amount of credits113 transferred by forestry manufacturers pursuant to this Code sec tion for the prior year. 114 The report required under this paragraph shall be completed no later than December 31115 of each year and presented to each member of the House Committee on Ways and Means116 and the Senate Finance Committee.117 (6) This subsection shall stand repealed by operation of law o n the last moment of118 December 31, 2030. The automatic repeal of this subsection on December 31, 2030, shall119 not impair or affect a forestry manufacturer's ability to trans fer an unused credit after120 January 1, 2031, that such taxpayer accrued pursuant to this Co de section for taxable121 years before December 31, 2030."122 - 5 - 26 LC 44 3536S SECTION 3.123 Said article is further is amended in Code Section 48-7-40.1, r elating to tax credits for124 business enterprises in less developed areas, by revising subse ction (a) and adding a new125 subsection to read as follows:126 "(a) As used in this Code section, the term:127 (1) 'Broadcasting' means the transmission or licensing of audi o, video, text, or other128 programming content to the general public, subscribers, or to t hird parties via radio,129 television, cable, satellite, or t he internet or IP and include s motion picture and sound130 recording, editing, production, postproduction, and distribution. Such term is limited to131 establishments classified under the 2007 North American Industry Classification System132 Codes 515, broadcasting; 519, internet publishing and broadcast ing; 517,133 telecommunications; and 512, motion picture and sound recording industries.134 (2) 'Business enterprise' means any business or the headquarte rs of any such business135 which is engaged in manufacturing, including, but not limited to, the manufacturing of136 alternative energy products for use in solar, wind, battery, bioenergy, biofuel, and electric137 vehicle enterprises, warehousing and distribution, processing, telecommunications,138 broadcasting, tourism, biomedical manufacturing, forestry manufacturing, and research139 and development industries. Such term shall not include retail businesses. Businesses140 are eligible for the tax credit provided by this Code section at an individual establishment141 of the business based on the classification of the individual establishment under the North142 American Industry Classification System. For purposes of this Code section, the term143 'establishment'144 (2.1) 'Establishment' means an economic unit at a single physical location where145 business is conducted or where services or industrial operations are performed. If more146 than one business activity is conducted at the establishment, then only those jobs engaged147 in the qualifying activity will be eligible for the tax credit provided by this Code section.148 - 6 - 26 LC 44 3536S (2.2) 'Forestry manufacturing' means any business or the headquarters of such business149 with an establishment in this state:150 (A) Classified under 2022 North American Industry Classificati on System151 Subsectors 321, wood product manufacturing; 322, paper manufact uring or North152 American Industrial Classification industry code 33711, wood ki tchen cabinet and153 countertop manufacturing or specific code 221117, biomass elect ric power154 generation 325193, ethyl alcohol manufacturing; 325194, cyclic crude, intermediate,155 and gum and wood chemical manufacturing; 325199, all other basic organic chemical156 manufacturing; 337211, wood office furniture manufacturing; and 337212, custom157 architectural woodwork and millwork manufacturing; or158 (B) That utilizes wood fiber, forest-derived biomass, wood res iduals, or forestry159 by-products as a primary feedstock in the manufacture of forest products, renewable160 fuels, bio-based chemicals, bioenergy, or other value-added pro ducts that support or161 derive economic value from the forest products supply chain, re gardless of the162 establishment's primary North American Industry Classification System code.163 (3) 'New full-time employee job' means a newly created position of employment that was164 not previously located in this state, requires a minimum of 35 hours a week, and pays at165 or above the average wage earned in the county with the lowest average wage earned in166 this state, as reported in the most recently available annual i ssue of the Georgia167 Employment and Wages Averages Report of the Department of Labor."168 "(l)(1) Any credits earned under this Code section by a forestry manufacturer for taxable169 years beginning on or after January 1, 2026, and prior to January 1, 2031, and before and170 previously claimed but not used by such forestry manufacturer against its income tax or171 as credit against quarterly or monthly payment under Code Section 48-7-103 as provided172 within this Code section, and in addition to the assignability provisions of Code173 Section 48-7-42, may be transferred or sold in whole or in part by such forestry174 manufacturer to another Georgia taxpayer, subject to the following conditions:175 - 7 - 26 LC 44 3536S (A) Such forestry manufacturer may make only a single transfer or sale of tax credits176 earned in a taxable year; however, the transfer or sale may inv olve one or more177 transferees; and178 (B) Such forestry manufacturer shall submit to the department a written notification179 of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax180 credits. The notification shall include such forestry manufacturer's tax credit balance181 prior to the transfer, the remaining balance after transfer, all tax identification numbers182 for each transferee, the date of the transfer, the amount trans ferred, and any other183 information required by the department.184 (2) Failure to comply with this subsection shall result in disallowance of the tax credit185 until the forestry manufacturer is in full compliance.186 (3) The transfer or sale of this tax credit shall not extend t he time in which such tax187 credit can be used. The carry-forward period for a tax credit that is transferred or sold188 shall begin on the date in which the tax credit was originally earned.189 (4) A transferee shall have only such rights to claim and use the tax credit as were190 available to the transferor at the time of the transfer. To the extent that such transferor191 did not have rights to claim or use the tax credit at the time of the transfer, the department192 shall either disallow the tax credit claimed by the transferee or recapture the tax credit193 from the transferee. The transferee's recourse is against the transferor.194 (5) The department shall prepare an annual report of the total amount of credits195 transferred by forestry manufacturers pursuant to this Code sec tion for the prior year. 196 The report required under this paragraph shall be completed no later than December 31197 of each year and presented to each member of the House Committee on Ways and Means198 and the Senate Finance Committee.199 (6) This subsection shall stand repealed by operation of law o n the last moment of200 December 31, 2030. The automatic repeal of this subsection on December 31, 2030, shall201 not impair or affect a forestry manufacturer's ability to trans fer an unused credit after202 - 8 - 26 LC 44 3536S January 1, 2031, that such taxpayer accrued pursuant to this Co de section for taxable203 years before December 31, 2030."204 SECTION 4.205 Said article is further amended in Code Section 48-7-40.2, relating to tax credits for existing206 manufacturing and telecommunications facilities in tier 1 count ies, by adding a new207 paragraph to subsection (a), revising subsection (b), and adding a new subsection to read as208 follows:209 "(0.5) 'Forestry manufacturing' means any business or the headquarters of such business210 with an establishment in this state:211 (A) Classified under 2022 North American Industry Classificati on System212 Subsectors 321, wood product manufacturing; 322, paper manufact uring or North213 American Industrial Classification industry code 33711, wood ki tchen cabinet and214 countertop manufacturing or specific code 221117, biomass elect ric power215 generation 325193, ethyl alcohol manufacturing; 325194, cyclic crude, intermediate,216 and gum and wood chemical manufacturing; 325199, all other basic organic chemical217 manufacturing; 337211, wood office furniture manufacturing; and 337212, custom218 architectural woodwork and millwork manufacturing; or219 (B) That utilizes wood fiber, forest-derived biomass, wood res iduals, or forestry220 by-products as a primary feedstock in the manufacture of forest products, renewable221 fuels, bio-based chemicals, bioenergy, or other value-added pro ducts that support or222 derive economic value from the forest products supply chain, re gardless of the223 establishment's primary North American Industry Classification System code."224 "(b)(1) In the case of a taxpayer which has operated for the immediately preceding three225 years an existing manufacturing or telecommunications facility or a manufacturing or226 telecommunications support facility in this state in a tier 1 county designated pursuant to227 Code Section 48-7-40, there shall be allowed a credit against the tax imposed under this228 - 9 - 26 LC 44 3536S article in an amount equal to 5 percent of the cost of all qual ified investment property229 purchased or acquired by the taxpayer in such year, subject to the conditions and230 limitations set forth in this Code section. In the event such qualified investment property231 purchased or acquired by the taxpayer in such year consists of recycling machinery or232 equipment, a recycling manufacturing facility, pollution control or prevention machinery233 or equipment, a pollution control or prevention facility, or the conversion from defense234 to domestic production, the amount of such credit shall be equal to 8 percent.235 (2) In the case of a taxpayer which operates a forestry manufacturing facility in this state236 in a tier 1 county designated pursuant to Code Section 48-7-40, there shall be allowed a237 credit against the tax imposed under this article for taxable y ears beginning on or after238 January 1, 2026, and prior to January 1, 2031, in an amount equ al to 15 percent of the239 cost of all qualified investment property purchased or acquired by the taxpayer in such240 year, subject to the conditions and limitations set forth in this Code section."241 "(e)(1) Any credits earned under this Code section by a forestry manufacturer for taxable242 years beginning on or after January 1, 2026, and prior to January 1, 2031, and before and243 previously claimed but not used by such forestry manufacturer against its income tax or244 as credit against quarterly or monthly payment under Code Section 48-7-103 as provided245 within this Code s ection, and in addition to the assignability provisions of Code246 Section 48-7-42, may be transferred or sold in whole or in part by such forestry247 manufacturer to another Georgia taxpayer, subject to the following conditions:248 (A) Such forestry manufacturer may make only a single transfer or sale of tax credits249 earned in a taxable year; however, the transfer or sale may inv olve one or more250 transferees; and251 (B) Such forestry manufacturer shall submit to the department a written notification252 of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax253 credits. The notification shall include such forestry manufacturer's tax credit balance254 prior to the transfer, the remaining balance after transfer, all tax identification numbers255 - 10 - 26 LC 44 3536S for each transferee, the date of the transfer, the amount trans ferred, and any other256 information required by the department.257 (2) Failure to comply with this subsection shall result in disallowance of the tax credit258 until the forestry manufacturer is in full compliance.259 (3) The transfer or sale of this tax credit shall not extend t he time in which such tax260 credit can be used. The carry-forward period for a tax credit that is transferred or sold261 shall begin on the date in which the tax credit was originally earned.262 (4) A transferee shall have only such rights to claim and use the tax credit as were263 available to the transferor at the time of the transfer. To the extent that such transferor264 did not have rights to claim or use the tax credit at the time of the transfer, the department265 shall either disallow the tax credit claimed by the transferee or recapture the tax credit266 from the transferee. The transferee's recourse is against the transferor.267 (5) The department shall prepare an annual report of the total amount of credits268 transferred by forestry manufacturers pursuant to this Code sec tion for the prior year. 269 The report required under this paragraph shall be completed no later than December 31270 of each year and presented to each member of the House Committee on Ways and Means271 and the Senate Finance Committee.272 (6) This subsection shall stand repealed by operation of law o n the last moment of273 December 31, 2030. The automatic repeal of this subsection on December 31, 2030, shall274 not impair or affect a forestr y manufacturer's ability to trans fer an unused credit after275 January 1, 2031, that s uch taxpayer accrued pursuant to this Co de section for taxable276 years before December 31, 2030."277 SECTION 5.278 Said article is further is amended in Code Section 48-7-40.3, r elating to tax credits for279 existing manufacturing and telecommunications facilities in tier 2 counties, by adding a new280 - 11 - 26 LC 44 3536S paragraph to subsection (a), revising subsection (b), and adding a new subsection to read as281 follows:282 "(0.5) 'Forestry manufacturing' means any business or the headquarters of such business283 with an establishment in this state:284 (A) Classified under 2022 North American Industry Classificati on System285 Subsectors 321, wood product manufacturing; 322, paper manufact uring or North286 American Industrial Classification industry code 33711, wood ki tchen cabinet and287 countertop manufacturing or specific code 221117, biomass elect ric power288 generation 325193, ethyl alcohol manufacturing; 325194, cyclic crude, intermediate,289 and gum and wood chemical manufacturing; 325199, all other basic organic chemical290 manufacturing; 337211, wood office furniture manufacturing; and 337212, custom291 architectural woodwork and millwork manufacturing; or292 (B) That utilizes wood fiber, forest-derived biomass, wood res iduals, or forestry293 by-products as a primary feedstock in the manufacture of forest products, renewable294 fuels, bio-based chemicals, bioenergy, or other value-added pro ducts that support or295 derive economic value from the forest products supply chain, re gardless of the296 establishment's primary North American Industry Classification System code."297 "(b)(1) In the case of a taxpayer which has operated for the immediately preceding three298 years an existing manufacturing or telecommunications facility or manufacturing or299 telecommunications support facility in this state in a tier 2 county designated pursuant to300 Code Section 48-7-40, there shall be allowed a credit against the tax imposed under this301 article in an amount equal to 3 percent of the cost of all qual ified investment property302 purchased or acquired by the taxpayer in such year, subject to the conditions and303 limitations set forth in this Code section. In the event such qualified investment property304 purchased or acquired by the taxpayer in such year consists of recycling machinery or305 equipment, a recycling manufacturing facility, pollution control or prevention machinery306 - 12 - 26 LC 44 3536S or equipment, a pollution control or prevention facility, or the conversion from defense307 to domestic production, the amount of such credit shall be equal to 5 percent.308 (2) In the case of a taxpayer which has operated a forestry manufacturing facility in this309 state in a tier 2 county designated pursuant to Code Section 48 -7-40, there shall be310 allowed a credit against the tax imposed under this article in an amount equal311 to 10 percent of the cost of all qualified investment property purchased or acquired by the312 taxpayer in such year, subject to the conditions and limitation s set forth in this Code313 section."314 "(e)(1) Any credits earned under this Code section by a forestry manufacturer for taxable315 years beginning on or after January 1, 2026, and prior to January 1, 2031, and before and316 previously claimed but not used by such forestry manufacturer against its income tax or317 as credit against quarterly or monthly payment under Code Section 48-7-103 as provided318 within this Code section, and in addition to the assignability provisions of Code319 Section 48-7-42, may be transferred or sold in whole or in part by such forestry320 manufacturer to another Georgia taxpayer, subject to the following conditions:321 (A) Such forestry manufacturer may make only a single transfer or sale of tax credits322 earned in a taxable year; however, the transfer or sale may inv olve one or more323 transferees; and324 (B) Such forestry manufacturer shall submit to the department a written notification325 of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax326 credits. The notification shall include such forestry manufacturer's tax credit balance327 prior to the transfer, the remaining balance after transfer, all tax identification numbers328 for each transferee, the date of the transfer, the amount trans ferred, and any other329 information required by the department.330 (2) Failure to comply with this subsection shall result in disallowance of the tax credit331 until the forestry manufacturer is in full compliance.332 - 13 - 26 LC 44 3536S (3) The transfer or sale of this tax credit shall not extend t he time in which such tax333 credit can be used. The carry-forward period for a tax credit that is transferred or sold334 shall begin on the date in which the tax credit was originally earned.335 (4) A transferee shall have only such rights to claim and use the tax credit as were336 available to the transferor at the time of the transfer. To the extent that such transferor337 did not have rights to claim or use the tax credit at the time of the transfer, the department338 shall either disallow the tax credit claimed by the transferee or recapture the tax credit339 from the transferee. The transferee's recourse is against the transferor.340 (5) The department shall prepare an annual report of the total amount of credits341 transferred by forestry manufacturers pursuant to this Code sec tion for the prior year. 342 The report required under this paragraph shall be completed no later than December 31343 of each year and presented to each member of the House Committee on Ways and Means344 and the Senate Finance Committee.345 (6) This subsection shall stand repealed by operation of law o n the last moment of346 December 31, 2030. The automatic repeal of this subsection on December 31, 2030, shall347 not impair or affect a forestry manufacturer's ability to trans fer an unused credit after348 January 1, 2031, that such taxpayer accrued pursuant to this Co de section for taxable349 years before December 31, 2030."350 SECTION 6.351 Said article is further is amended in Code Section 48-7-40.4, r elating to tax credits for352 existing manufacturing and telecommunications facilities or man ufacturing and353 telecommunications support facilities in tier 3 or 4 counties, by adding a new paragraph to354 subsection (a), revising subsection (b), and adding a new subsection to read as follows:355 "(0.5) 'Forestry manufacturing' means any business or the headquarters of such business356 with an establishment in this state:357 - 14 - 26 LC 44 3536S (A) Classified under 2022 North American Industry Classificati on System358 Subsectors 321, wood product manufacturing; 322, paper manufact uring or North359 American Industrial Classification industry code 33711, wood ki tchen cabinet and360 countertop manufacturing or specific code 221117, biomass elect ric power361 generation 325193, ethyl alcohol manufacturing; 325194, cyclic crude, intermediate,362 and gum and wood chemical manufacturing; 325199, all other basic organic chemical363 manufacturing; 337211, wood office furniture manufacturing; and 337212, custom364 architectural woodwork and millwork manufacturing; or365 (B) That utilizes wood fiber, forest-derived biomass, wood res iduals, or forestry366 by-products as a primary feedstock in the manufacture of forest products, renewable367 fuels, bio-based chemicals, bioenergy, or other value-added pro ducts that support or368 derive economic value from the forest products supply chain, re gardless of the369 establishment's primary North American Industry Classification System code."370 "(b)(1) In the case of a taxpayer which has operated for the immediately preceding three371 years an existing manufacturing or telecommunications facility or manufacturing or372 telecommunications support facility in this state in a tier 3 or a tier 4 county designated373 pursuant to Code Section 48-7-40, there shall be allowed a credit against the tax imposed374 under this article in an amount equal to 1 percent of the cost of all qualified investment375 property purchased or acquired by the taxpayer in such year, subject to the conditions and376 limitations set forth in this Code section. In the event such qualified investment property377 purchased or acquired by the taxpayer in such year consists of recycling machinery or378 equipment, a recycling manufacturing facility, pollution control or prevention machinery379 or equipment, a pollution control or prevention facility, or the conversion from defense380 to domestic production, the amount of such credit shall be equal to 3 percent.381 (2) In the case of a taxpayer which has operated a forestry manufacturer facility in this382 state in a tier 3 or a tier 4 county designated pursuant to Code Section 48-7-40, there shall383 be allowed a credit against the tax imposed under this article in an amount equal to 3384 - 15 - 26 LC 44 3536S percent of the cost of all qualified investment property purcha sed or acquired by the385 taxpayer in such year, subject to the conditions and limitation s set forth in this Code386 section."387 "(e)(1) Any credits earned under this Code section by a forestry manufacturer for taxable388 years beginning on or after January 1, 2026, and prior to January 1, 2031, and before and389 previously claimed but not used by such forestry manufacturer against its income tax or390 as credit against quarterly or monthly payment under Code Section 48-7-103 as provided391 within this Code section, and in addition to the assignability provisions of Code392 Section 48-7-42, may be transferred or sold in whole or in part by such forestry393 manufacturer to another Georgia taxpayer, subject to the following conditions:394 (A) Such forestry manufacturer may make only a single transfer or sale of tax credits395 earned in a taxable year; however, the transfer or sale may inv olve one or more396 transferees; and397 (B) Such forestry manufacturer shall submit to the department a written notification398 of any transfer or sale of tax credits within 30 days after the transfer or sale of such tax399 credits. The notification shall include such forestry manufacturer's tax credit balance400 prior to the transfer, the remaining balance after transfer, all tax identification numbers401 for each transferee, the date of the transfer, the amount trans ferred, and any other402 information required by the department.403 (2) Failure to comply with this subsection shall result in disallowance of the tax credit404 until the forestry manufacturer is in full compliance.405 (3) The transfer or sale of this tax credit shall not extend t he time in which such tax406 credit can be used. The carry-forward period for a tax credit that is transferred or sold407 shall begin on the date in which the tax credit was originally earned.408 (4) A transferee shall have only such rights to claim and use the tax credit as were409 available to the transferor at the time of the transfer. To the extent that such transferor410 did not have rights to claim or use the tax credit at the time of the transfer, the department411 - 16 - 26 LC 44 3536S shall either disallow the tax credit claimed by the transferee or recapture the tax credit412 from the transferee. The transferee's recourse is against the transferor.413 (5) The department shall prepare an annual report of the total amount of credits414 transferred by forestry manufacturers pursuant to this Code sec tion for the prior year. 415 The report required under this paragraph shall be completed no later than December 31416 of each year and presented to each member of the House Committee on Ways and Means417 and the Senate Finance Committee.418 (6) This subsection shall stand repealed by operation of law o n the last moment of419 December 31, 2030. The automatic repeal of this subsection on December 31, 2030, shall420 not impair or affect a forestry manufacturer's ability to trans fer an unused credit after421 January 1, 2031, that such taxpayer accrued pursuant to this Co de section for taxable422 years before December 31, 2030."423 SECTION 7.424 Said article is further amended by adding a new Code section to read as follows:425 "48-7-40.4A.426 (a) Except as otherwise provided in subsection (b) of this Cod e section, the aggregate427 amount of tax credits allowed to forestry manufacturers pursuant to Code Sections 48-7-40,428 48-7-40.1, 48-7-40.2, 48-7-40.3, and 48-7-40.4 shall not exceed $250 million per year.429 (b) The aggregate amount of tax credits allowed to forestry ma nufacturers in tier 3 and430 tier 4 counties pursuant to Code Sections 48-7-40 and 48-7-40.4 shall not exceed $100431 million per year.432 (c) No renewal or extension of tax credits allowed to forestry manufacturers pursuant to433 Code Sections 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, and 48- 7-40.4 shall become434 effective unless approved by two-thirds of the members elected to each chamber of the435 General Assembly in a roll-call vote."436 - 17 - 26 LC 44 3536S SECTION 8.437 This Act shall become effective on July 1, 2026, and shall be a pplicable to taxable years438 beginning on or after January 1, 2026.439 SECTION 9.440 All laws and parts of laws in conflict with this Act are repealed.441 - 18 -