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HB 421

An Act protecting workers from training repayment agreement provisions; conferring powers and imposing duties on the Department of Labor and Industry; and imposing penalties.

2025-2026 Regular Session Introduced by Elizabeth Fiedler and 18 co-sponsors

The bill creates a temporary 25% discount rebate for security equipment/services with a $25,000 per-business annual cap, paired with a permanent GRT deduction for certified vendors

Referred to Labor & Industry
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WeVote Research Nonpartisan
Bill Summary · HB 421

HB 421 — Business Security Assistance Act (summary)

Status: Action postponed indefinitely (introduced Nov. 12, 2024)
Subject areas: Business & industry; taxation — gross receipts & compensating tax

Purpose

The bill creates a short-term rebate program to encourage businesses to purchase and install security equipment and services and pairs that rebate program with a permanent gross‑receipts tax (GRT) deduction for certified vendors’ sales of discounted security equipment/services. The stated goals are to improve business security and to incentivize private investment in security systems.

Key provisions

  • Appropriations

    • $100 million (General Fund) to a new Business Security Assistance Fund for rebate payments (nonreverting through FY28; remaining balances revert July 1, 2028).
    • $4 million (General Fund) to the Regulation & Licensing Department (RLD) to implement/administer the program.

  • Rebate program (sunsets)

    • RLD certifies participating vendors.
    • A certified vendor that sells security equipment/services at a 25% discount may apply for a rebate equal to that 25% discount.
    • Aggregate rebate paid for sales to the same business in a calendar year is capped at $25,000 (per business).
    • Vendor rebate applications due to RLD by September 1 each year; subject to available funding, rebates paid by December 1.
    • Rebate program sections sunset July 1, 2028; installations must be completed/processed in the program window (implementation compressed if RLD starts July 1, 2025).

  • GRT tax treatment (permanent)

    • Certified vendors may deduct gross receipts from sales of the discounted security equipment/services from their gross receipts tax base.
    • Deduction must be reported separately to the Taxation & Revenue Department (TRD) and included in the TRD tax‑expenditure budget. The deduction is not sunset.

  • Administration & reporting

    • RLD to certify vendors, review rebate claims, and produce annual reports to the Legislative Finance Committee (by Dec. 1) listing number of businesses receiving discounts and fund status.
    • RLD needs contracting and staffing (professional services and FTE) to run certification and rebate operations.

Fiscal impact & concerns (as analyzed by Legislative Finance Committee)

  • Direct appropriations: $104 million (one‑time) from the General Fund ($100M rebates + $4M implementation).
  • Administrative costs for RLD and TRD (recurring and nonrecurring) estimated (nonrecurring costs ~ $560k; recurring admin ~ $920k; TRD up to $50k).
  • The new GRT deduction creates an ongoing tax expenditure of uncertain but potentially significant size. LFC flagged major uncertainties:
    • “Discount” is not defined — vendors might restructure pricing to maximize deductions.
    • The rebate cap ($25k) doesn’t limit the GRT deduction amount — the deduction could apply to full sale price.
    • Using the $100M rebate appropriation as a base estimate implies up to ~$400M of deductible sales during the rebate window, potentially creating multi‑million dollar annual revenue losses (LFC estimated annual revenue impacts in the low millions; exact amount uncertain).
  • LFC raised concerns about revenue volatility and risks to the General Fund.

Who is affected

  • Certified security equipment and service vendors (new certification pathway, potential tax benefit).
  • Businesses purchasing qualifying discounted security systems (eligible for rebates via vendor).
  • RLD and TRD (administration, certification, tax reporting).
  • State General Fund and possibly local revenue streams (via GRT revenue loss).

Implementation / timeline

  • Effective date specified as July 1, 2025 (program startup expected to need ~3 months for vendor certification and systems).
  • Rebate program sunsets July 1, 2028; GRT deduction remains permanent.

Notes / legislative posture

  • The substitute version appropriates funds and creates the permanent GRT deduction while sunsetting the rebate after FY28.
  • Fiscal and policy analyses emphasize implementation costs, administrative requirements, and the open-ended nature of the tax expenditure as primary concerns.

If you want, I can draft a short, plain‑language explainer for businesses or a one‑page fiscal brief focusing just on revenue impacts and risks.

Compiled from official sources — confirm details with the bill’s official record.

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