H. B. 2880
(By Delegates Cann, Frederick, Keener,
Williams, Fletcher, Fahey and Webb)
[Introduced March 16, 2001; referred to the
Committee on Industry and Labor, Economic Development and
Small Business then Finance.]
A BILL to amend chapter five-e of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article two, relating to the
issuance of tax credits to persons making investments in funds
authorized by the West Virginia economic development authority
for the investment of capital in the West Virginia economy.
Be it enacted by the Legislature of West Virginia:
That chapter five-e of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended by adding thereto
a new article, designated article two, to read as follow:
ARTICLE 2. WEST VIRGINIA VENTURE CAPITAL ACT.
§5E-2-1. Short title.
This article may be cited as the "West Virginia Venture
Capital Act."
§5E-2-2. Definitions.
As used in this article, the following terms shall have the
meanings ascribed to them in this section, unless the context in
which the term is used clearly requires another meaning or a
specific different definition is provided:
(a) "Authority" means the West Virginia economic development
authority, provided for in article fifteen, chapter thirty-one of
this code.
(b) "State" means the state of West Virginia.
§5E-2-3. Rules.
The authority shall promulgate rules in accordance with
article three, chapter twenty-nine-a of this code, to carry out the
policy and purposes of this article, to provide any necessary
clarification of the provisions fo this article, and to efficiently
provide for the general administration of this article.
§5E-2-4. Tax credits.
(a) The total amount of tax credits which may be allocated by
the authority pursuant to this article during any fiscal year shall
be ten million dollars: Provided, That the total amount of tax
credits which may be allocated by the authority pursuant to this
article during any fiscal year shall be eight million dollars
unless increased by an additional amount, which may not exceed two
million dollars, equal to the tax credits authorized by section
eight, article one of this chapter but unallocated by the authority
to qualified West Virginia capital companies during the first two hundred forty days of the fiscal year.
(b) Any investor, including an individual, partnership,
limited liability company, corporation or other entity, who makes
an investment in a fund authorized by the authority for the
investment of capital in the West Virginia economy and which fund
is independently operated by qualified managers and is not directly
or indirectly operated or managed by the investors, is entitled to
a tax credit equal to no more than seventy-five percent of the
investment in the fund, which said percentage and other terms and
conditions of the credit shall be established by the authority
pursuant to rules promulgated in accordance with section three of
this article.
(c) The tax credits 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 subsection (c) through (i), inclusive, section five,
article thirteen-c, chapter eleven of this code. The credit for
investments by a partnership, a 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 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 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 occurs after the first day
of July, two thousand one.
(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) The West Virginia economic development authority shall
report annually to the Legislature concerning the applications made
to the fund and the payments made from the fund and the impact of
the payments on job creation in the state. The authority shall
also report quarterly to the joint committee on government and
finance and the legislative auditor on the use of the moneys in the
fund, including information regarding to whom payments were made,
in what amounts, and for what purposes.
(h) 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 one dollar, but no more than fifty thousand
dollars;
(2) More than fifty thousand dollars, but no more than one
hundred thousand dollars;
(3) More than one hundred thousand dollars; but no more than
two hundred fifty thousand dollars;
(4) More than two hundred fifty thousand dollars, but no more
than five hundred thousand dollars;
(5) More than five hundred thousand dollars, but no more than
one million dollars;
(6) More than one million dollars.
NOTE: The purpose of this bill is to attract investments of
capital into the West Virginia economy by offering tax credits.
This article is new; therefore, strike-throughs and
underscoring have been omitted.