ENROLLED
Senate Bill No. 368
(By Senators Craigo, Anderson, Bailey, Chafin, Helmick, Jackson,
Love, Macnaughtan, Plymale, Prezioso, Sharpe, Walker, Boley, Dugan,
McKenzie, Minear and Sprouse)
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[Passed April 20, 1997; in effect from passage.]
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AN ACT to amend and reenact sections eight and twenty, article one,
chapter five-e of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, all relating generally to the
West Virginia capital company act; reducing for one fiscal
year the total tax credits to all companies, which the West
Virginia economic development authority may authorize;
allowing officers, employees or directors of a financial
institution owning part of any capital company to serve on
the capital company's board; and prohibiting capital company
board members from a financial institution owning a part of
the capital company from voting on an issue relating to that
institution.
Be it enacted by the Legislature of West Virginia:
That sections eight and twenty, article one, chapter five-e of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted, all 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.
Capitalization of the company may be increased pursuant to rule of
the authority.
(b) The total credits authorized by the authority for all
companies 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-seven, the total
credits authorized for all companies may not exceed a total of five
and one-half million dollars. The authority shall, for the first
one hundred eighty days of the fiscal year, accept applications
only from companies who certify in their application that the
investment of its entire capital base will be in one or more small
business investment corporations organized under the small business
investment act: Provided, however, That the capital base of any
such qualified company shall be invested in accordance with the
provisions of this article. The authority shall allocate these
credits to qualified companies in the order that said companies are
qualified.
(c) Any investor, including an individual, partnership or
corporation 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. 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 or by a
corporation electing to be treated as a Subchapter S corporation
may be divided pursuant to election of partners or shareholders.
(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 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 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 shall be 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;
(6) More than $1,000,000.
§5E-1-20. Limitation on financial institutions.
Not more than forty-nine percent of the total capital base of
any capital company may be owned by banks, savings and loan
associations, savings banks or other financial institutions, or any
affiliate thereof, as investors. No officer, employee or director
of any such financial institution may vote as a member of the board
of any capital company formed under the provisions of this article
if the matter being voted upon affects the financial institution
for which the board member serves as an officer, employee or
director.