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ENGROSSED
Senate Bill No. 3014
(By Senator McCabe)
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[Introduced November 16, 2004.]
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A BILL to amend and reenact §5E-1-8 of the code of West Virginia,
1931, as amended, relating to modifying the total tax credits
available under the capital company act during the fiscal year
beginning on the first day of July, two thousand four;
limiting the availability of certain tax credits to qualified
economic development and technology advancement centers; 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 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,
no credits are authorized 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, 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, 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 the 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: 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 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.