H. B. 2413
(By Mr. Speaker, Mr. Kiss)
[Introduced February 16, 2005; referred to the
Committee on Finance.]
A BILL to amend and reenact §5E-1-8 of the Code of West Virginia,
1931, as amended, relating generally to the administration of
tax credits available under the Capital Company Act; and
authorizing the allocation of tax credits allowed for economic
development and technology advancement centers during the
remainder of the fiscal year beginning on the first day of
July, 2004.
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 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 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, 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, all of the credits allowed under subdivision (1) of
this subsection 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, 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:
Provided, That solely for the fiscal year
beginning on the first day of July, two thousand four, the
authority may allocate the tax credits allowed for economic
development and technology advancement centers at any time during
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,
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, 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 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.
NOTE: The purpose of this bill is to authorize the allocation
of tax credits allowed for economic development and technology
advancement centers during the remainder of the fiscal year
beginning on the first day of July, two thousand four.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.