Senate Bill No. 513
(By Senators McCabe, Plymale, Jenkins, Foster,
Sprouse, Harrison, Sharpe, Dempsey, Barnes and Unger)
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[Introduced March 11, 2005; referred to the Committee
on Economic Development; and then to the Committee on Finance.]
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A BILL to amend and reenact §5E-1-8 of the Code of West Virginia,
1931, as amended, relating to providing the total tax credits
available under the Capital Company Act during the fiscal year
beginning on the first day of July, two thousand five;
limiting the availability of the tax credits to qualified
centers for economic development and technology advancement;
and authorizing the Economic Development Authority to
establish criteria for the determination of the allocation of
certain tax credits by vote of the majority of the Authority.
Be it enacted by the Legislature of West Virginia:
That §5E-1-8 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 1. WEST VIRGINIA CAPITAL COMPANY ACT.
§5E-1-8. Tax credits.
(a) The total amount of tax credits authorized for a single
qualified company may not exceed two million dollars. The total
amount of tax credits authorized for a single
center for economic
development and technology advancement
center may not exceed one million dollars. Capitalization of the company or center may be
increased pursuant to rule of the Authority.
(b)(1) The total credits authorized by the Authority for all
companies and centers may not exceed a total of ten million dollars
each fiscal year:
Provided, That for the fiscal year beginning on
the first day of July, one thousand nine hundred ninety-nine, the
total credits authorized for all companies may not exceed a total
of six million dollars:
Provided, however, That for the fiscal
year beginning on the first day of July, two thousand, the total
credits authorized for all companies may not exceed a total of four
million dollars:
Provided further, That for the fiscal year
beginning on the first day of July, two thousand one, the total
credits authorized for all companies may not exceed a total of four
million dollars:
And provided further, That for the fiscal year
beginning on the first day of July, two thousand two, the total
credits authorized for all companies may not exceed a total of
three million dollars:
And provided further, That for the fiscal
year beginning on the first day of July, two thousand three, the
total credits authorized for all companies may not exceed a total
of three million dollars:
And provided further, That for the
fiscal year beginning on the first day of July, two thousand four,
the total credits authorized for all companies may not exceed a
total of one million dollars:
And provided further, That for the
fiscal year beginning on the first day of July, two thousand five,
the total credits authorized for all companies may not exceed a
total of two million dollars: And provided further, That the
capital base of any qualified company other than an economic development and technology advancement center qualified under the
provisions of article twelve-a, chapter eighteen-b of this code
shall be invested in accordance with the provisions of this
article. The Authority shall allocate these credits to qualified
companies and centers in the order that the companies are
qualified.
(2) Not more than two million dollars of the credits allowed
under subdivision (1) of this subsection may be allocated by the
Authority during each fiscal year to one or more small business
investment companies described in this subdivision:
Provided, That
for the fiscal year beginning on the first day of July, two
thousand four,
and for the fiscal year beginning on the first day
of July, two thousand five, no credits authorized by this section
may be allocated by the Authority to one or more small business
investment companies. After a portion of the credits are allocated
to small business investment companies as provided in this section,
not more than one million dollars of the credits allowed under
subdivision (1) of this subsection may be allocated by the
Authority during each fiscal year to one or more economic
development and technology advancement centers qualified by the
Authority under article twelve-a, chapter eighteen-b of this code:
Provided, however, That for the fiscal year beginning on the first
day of July, two thousand four,
and for the fiscal year beginning
on the first day of July, two thousand five, all of the credits
allowed under subdivision (1) of this subsection,
including credits
in excess of one million dollars, shall be allocated only to one or
more qualified economic development and technology advancement centers. The remainder of the tax credits allowed during the
fiscal year shall be allocated by the Authority under the
provisions of section four, article two of this chapter:
Provided
further, That for the fiscal year beginning on the first day of
July, two thousand four,
and for the fiscal year beginning on the
first day of July, two thousand five, no credits authorized by this
section may be allocated by the Authority to a taxpayer pursuant to
the provisions of section four, article two of this chapter. The
portion of the tax credits allowed for small business investment
companies described in this subdivision shall be allowed only if
allocated by the Authority during the first ninety days of the
fiscal year and may only be allocated to companies that: (A) Were
organized on or after the first day of January, one thousand nine
hundred ninety-nine; (B) are licensed by the small business
administration as a small business investment company under the
small business investment act; and (C) have certified in writing to
the Authority on the application for credits under this act that
the company will diligently seek to obtain and thereafter
diligently seek to invest leverage available to the small business
investment companies under the small business investment act.
These credits shall be allocated by the Authority in the order that
the companies are qualified. The portion of the tax credits
allowed for economic development and technology advancement centers
described in article twelve-a, chapter eighteen-b of this code
shall be similarly allowed only if allocated by the Authority
during the first ninety days of the fiscal year. Any credits which
have not been allocated to qualified companies meeting the requirements of this subdivision relating to small business
investment companies or to qualified economic development and
technology advancement centers during the first ninety days of the
fiscal year shall be made available and allocated by the Authority
under the provisions of section four, article two of this chapter:
And provided further, That for the fiscal year beginning on the
first day of July, two thousand four,
and for the fiscal year
beginning on the first day of July, two thousand five, no credits
authorized by this section may be allocated by the Authority to a
taxpayer pursuant to the provisions of section four, article two of
this chapter.
(3) Notwithstanding any provision of this code or legislative
rule promulgated thereunder to the contrary, for the fiscal year
beginning on the first day of July, two thousand four,
and for the
fiscal year beginning on the first day of July, two thousand five,
the Authority has the sole discretion to allocate or refuse to
allocate tax credits authorized under this section to any qualified
economic development and technology advancement center upon its
determination of the extent to which the center will fulfill the
purposes of this article. The determination shall be based upon
the application of the center, the extent to which the company or
center fulfilled those purposes in prior years after receiving tax
credits authorized under this section, the extent to which the
center is expected to stimulate economic development and high
technology research in the chemical industry and such other
similarly related criteria as the Authority may establish by vote
of the majority of Authority.
(c) Any investor, including an individual, partnership,
limited liability company, corporation or other entity who makes a
capital investment in a qualified West Virginia capital company, is
entitled to a tax credit equal to fifty percent of the investment,
except as otherwise provided in this section or in this article:
Provided, That the tax credit available to investors who make a
capital investment in an economic development and technology
advancement center shall be one hundred percent of the investment.
The credit allowed by this article shall be taken after all other
credits allowed by chapter eleven of this code. It shall be taken
against the same taxes and in the same order as set forth in
subsections (c) through (i), inclusive, section five, article
thirteen-c, chapter eleven of this code. The credit for
investments by a partnership, limited liability company, a
corporation electing to be treated as a subchapter S corporation or
any other entity which is treated as a pass through entity under
federal and state income tax laws may be divided pursuant to
election of the entity's partners, members, shareholders or owners.
(d) The tax credit allowed under this section is to be
credited against the taxpayer's tax liability for the taxable year
in which the investment in a qualified West Virginia capital
company or
center for economic development and technology
advancement
center is made. If the amount of the tax credit
exceeds the taxpayer's tax liability for the taxable year, the
amount of the credit which exceeds the tax liability for the
taxable year may be carried to succeeding taxable years until used
in full or until forfeited:
Provided, That: (i) Tax credits may not be carried forward beyond fifteen years; and (ii) tax credits
may not be carried back to prior taxable years. Any tax credit
remaining after the fifteenth taxable year is forfeited.
(e) The tax credit provided
for in this section is available
only to those taxpayers whose investment in a qualified West
Virginia capital company or economic development and technology
advancement center occurs after the first day of July, one thousand
nine hundred eighty-six.
(f) The tax credit allowed under this section may not be used
against any liability the taxpayer may have for interest, penalties
or additions to tax.
(g) Notwithstanding any provision in this code to the
contrary, the Tax Commissioner shall publish in the state register
the name and address of every taxpayer and the amount, by category,
of any credit asserted under this article. The categories by
dollar amount of credit received are as follows:
(1) More than $1.00, but not more than $50,000;
(2) More than $50,000, but not more than $100,000;
(3) More than $100,000, but not more than $250,000;
(4) More than $250,000, but not more than $500,000;
(5) More than $500,000, but not more than $1,000,000; and
(6) More than $1,000,000.
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(NOTE: The purpose of this bill is to authorize tax credits of
up to two million dollars for qualified economic development and
technology advancement centers during the fiscal year beginning on
July 1, 2005, and to authorize the Economic Development Authority
to adopt criteria to aid in its determination of the extent to
which the applicants for credits will fulfill the purposes of the
Capital Company Act.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)
FINANCE COMMITTEE AMENDMENT
On page
, section eight, line
, by changing the period
to a colon and adding the following proviso:
Provided, however,
That not more than one million dollars of the credits allowed in
this subdivision may be allocated to companies in the same county.