H. B. 3031
(By Mr. Speaker, Mr. Kiss and Delegate Keener)
[Introduced March 28, 2001; Referred to the
Committee on Finance.]
A BILL to amend and reenact sections two and three, article
thirteen-j, chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to further
amend said article by adding thereto a new section, designated
section four-b, all relating to the neighborhood investment
program; setting forth additional Legislative finding; setting
forth definition and specifying that a certain amount of the
credit be used for endowment funding.
Be it enacted by the Legislature of West Virginia:
That sections two and three, article thirteen-j, chapter
eleven of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted; and that said
article be further amended by adding thereto a new section, designated section four-b, all to read as follows:
ARTICLE 13J. NEIGHBORHOOD INVESTMENT PROGRAM.
§11-13J-2. Legislative finding and purpose.
It is the finding of the Legislature that community-based
organizations can be a powerful force in community development.
However, in West Virginia their effectiveness has historically been
weakened by meager resources. Private corporations and individuals
in West Virginia possess the resources to aid community-based
organizations in their efforts to assist neighborhoods and
communities. Due to the lack of clear incentives, the private and
not-for-profit sectors have often not taken advantage of
opportunities to collaborate with community-based organizations to
the full extent possible by investment and participation in local
programs.
Therefore, the neighborhood investment program act is hereby
enacted with the intent that it provide incentives for
contributions to qualifying charitable projects. It is the intent
of the Legislature that this act encourage private sector
businesses and individuals to contribute capital to community-based
organizations which establish projects to assist neighborhoods and
local communities through such services as health care, counseling,
emergency assistance, crime prevention, education, housing, job training and physical and environmental improvements.
The Legislature further finds that endowments play an
important role in providing incentives for contributions to
qualifying charitable projects, and that a proper balance should be
struck among funding endowment projects and other projects. The
Legislature further finds that endowments should be funded in the
aggregate at the beginning of each fiscal year up to a maximum of
thirty per cent of the total available neighborhood investment
credit pool. The Legislature further finds that in March of each
fiscal year, during the re-allocation time for the fiscal year,
endowment projects should participate in the same capacity as other
projects with no cap on endowment projects at this particular time.
§11-13J-3. Definitions.
(a) General. -- When used in this article, or in the
administration of this article, terms defined in subsection (b) of
this section shall have the meanings ascribed to them by this
section, unless a different meaning is clearly required by either
the context in which the term is used, or by specific definition in
this article.
(b) Terms defined.
(1) Affiliate. -- The terms "affiliate" or "affiliates" include all concerns which are affiliates of each other when either
directly or indirectly:
(A) One concern controls or has the power to control the
other; or
(B) A third party or third parties control or have the power
to control both. In determining whether concerns are independently
owned and operated and whether or not affiliation exists,
consideration shall be given to all appropriate factors, including
common ownership, common management and contractual relationships.
(2) Capacity building. -- The term "capacity building" means
to generally enhance the capacity of the community to achieve
improvements and to obtain the community services described in
subparagraphs (i) through (v), inclusive, of the definition of that
term, as set forth in subdivision (4) of this subsection. Capacity
building includes, but is not limited to, improvement of the means,
or capacity, to:
(i) Access, obtain and use private, charitable and
governmental assistance programs, administrative assistance and
private, charitable and governmental resources or funds;
(ii) Fulfill legal, bureaucratic and administrative
requirements and qualifications for accessing assistance, resources
or funds; and
(iii) Attract and direct political and community attention to
needs of the community for the purpose of increasing access to and
use of assistance, resources or funds for a given purpose, goal or
need.
(3) Commissioner or tax commissioner. -- The terms
"commissioner" and "tax commissioner" are used interchangeably
herein and mean the tax commissioner of the state of West Virginia,
or his or her delegate.
(4) Community services. -- "Community services" means
services, provided at no charge whatsoever, of:
(i) Providing any type of health, personal finance,
psychological or behavioral, religious, legal, marital, educational
or housing counseling and advice to economically disadvantaged
citizens or a specifically designated group of economically
disadvantaged citizens or in an economically disadvantaged area; or
(ii) Providing emergency assistance or medical care to
economically disadvantaged citizens or to a specifically designated
group of economically disadvantaged citizens or in an economically
disadvantaged area; or
(iii) Establishing, maintaining or operating recreational
facilities, or housing facilities for economically disadvantaged citizens or a specifically designated group of economically
disadvantaged citizens or in an economically disadvantaged area; or
(iv) Providing economic development assistance to economically
disadvantaged citizens or a specifically designated group of
economically disadvantaged citizens; without regard to whether they
are located in an economically disadvantaged area, or to
individuals, groups or neighborhood or community organizations, in
an economically disadvantaged area; or
(v) Providing community technical assistance and capacity
building to economically disadvantaged citizens or a specifically
designated group of economically disadvantaged citizens, or to
individuals, groups or neighborhood or community organizations in
an economically disadvantaged area.
(5) Compensation. -- The term "compensation" means wages,
salaries, commissions and any other form of remuneration paid to
employees for personal services.
(6) Corporation. -- The term "corporation" means any
corporation, joint-stock company or association and any business
conducted by a trustee or trustees wherein interest or ownership is
evidenced by a certificate of interest or ownership or similar
written instrument.
(7) Crime prevention. -- "Crime prevention" means any activity
which aids in the reduction of crime.
(8) Delegate. -- The term "delegate" in the phrase "or his or
her delegate", when used in reference to the tax commissioner,
means any officer or employee of the tax division of the department
of tax and revenue duly authorized by the tax commissioner
directly, or indirectly by one or more redelegations of authority,
to perform the functions mentioned or described in this article.
(9) Director or director of the West Virginia development
office. -- The term "director" or "director of the West Virginia
development office" means the director of the West Virginia office.
(10) Economically disadvantaged area. -- The term
"economically disadvantaged area" means:
(A) In a municipality -- any area not exceeding fifteen square
miles in West Virginia which contains any portion of an
incorporated municipality and:
(i) In which area the aggregate poverty rate of persons
residing in the area, based upon the most recent decennial census
of population, is at least one hundred twenty-five percent of the
statewide poverty rate; and
(ii) That is certified as an economically disadvantaged area by the West Virginia development office;
(B) In a rural area -- any area not exceeding twenty-five
square miles in West Virginia:
(i) Which area is located in a rural area and which contains
no incorporated municipalities or portions thereof;
(ii) In which area the aggregate poverty rate of persons
residing in the area, based upon the most recent decennial census
of population, is at least one hundred twenty-five percent of the
statewide poverty rate; and
(iii) That is certified as an economically disadvantaged area
by the West Virginia development office;
(C) An economically disadvantaged area shall qualify as such
only pursuant to a certification issued by the West Virginia
development office. Such certifications issued by the West
Virginia development office shall expire after the passage of five
calendar years, unless specifically limited to a shorter time by
specific order of the West Virginia development office, and no area
shall hold the status of a certified economically disadvantaged
area for a period of time greater than ten years, either
consecutively or in the aggregate;
(D) The certification of an economically disadvantaged area
shall be made on the basis of a determination by the development office that an area meets the poverty criteria established in
paragraphs (A) and (B) of this subdivision;
(E) No economically disadvantaged area may be certified within
twenty-five miles of any other certified economically disadvantaged
area. Not more than six economically disadvantaged areas may hold
the status of certified economically disadvantaged areas at any one
time in this state;
(F) At least a majority of all economically disadvantaged
areas holding designations as economically disadvantaged areas at
any one time shall be located in rural areas; and
(G) Such certification shall be filed with the secretary of
state and shall specifically set forth the boundaries of the
economically disadvantaged area by both description and map, the
date of certification of the area as an economically disadvantaged
area, the date on which such certification will terminate and a
statement of the director's findings as to the aggregate poverty
rate of persons living in the certified economically disadvantaged
area.
(11) Economically disadvantaged citizen. -- The term
"economically disadvantaged citizen" means a natural person, who
during the current taxable year has, or during the immediately
preceding taxable year had, an annual gross personal income not exceeding one hundred twenty-five percent of the federal designated
poverty level for personal incomes, and who is a domiciliary and
resident of this state.
(12) Education. -- "Education" means any type of scholastic
instruction to, or scholarship by, an individual that enables such
individual to prepare for better life opportunities. Education
does not include courses in physical training, physical
conditioning, physical education, sports training, sports camps and
similar training or conditioning courses (except for physical
therapy prescribed by a physician or other person licensed to
prescribe courses of medical treatment under West Virginia law).
(13) Eligible contribution. --
(A) An eligible contribution consists of cash, publicly traded
common or preferred stock representing ownership in a corporation
valued at the closing price on the date of transfer, tangible
personal property valued at its fair market value, real property
valued at its fair market value: Provided, That any common or
preferred stock contributed shall be sold by the project transferee
within one hundred eighty days of its receipt; or a contribution of
in kind professional services valued at seventy-five percent of
fair market value;
(B) For purposes of this definition, the value of in kind
professional services will not qualify as an eligible contribution
unless the services are:
(i) Reasonably priced and valued, and reasonably necessary
services customarily and normally provided by the contributor in
the normal course of business to customers, clients or patients
other than those encompassed by the project plan;
(ii) Not reimbursable, in whole or in part, from sources other
than the tax credit provided under this article; and
(iii) Are services which are not available without cost
elsewhere in the community;
(C) The term "professional services" means only those services
provided directly by a physician licensed to practice in this
state, those services provided directly by a dentist licensed to
practice in this state, those services provided directly by a
lawyer licensed to practice in this state, those services provided
directly by a registered nurse, licensed practical nurse, dental
hygienist or other health care professional licensed to practice in
this state and those services provided directly by a certified
public accountant or public accountant licensed to practice in this
state;
(D) Minimum contribution. -- No contribution of cash, stock, property or professional services or any combination thereof
contributed in any tax year by any taxpayer having a fair market
value of less than five hundred dollars qualifies as an eligible
contribution;
(E) Maximum contribution. -- No contribution of cash, stock,
property or professional services or any combination thereof
contributed in any tax year by any taxpayer having a fair market
value in excess of two hundred thousand dollars qualifies as an
eligible contribution; and
(F) Limitations. -- Not more than twenty-five percent of total
eligible contributions to a certified project may be in kind
contributions. Not more than twenty-five percent of total eligible
contributions made by any taxpayer to any certified project may be
in kind contributions.
(14) Eligible taxpayer. --
(A) The term "eligible taxpayer" means any person subject to
the taxes imposed by article twenty-one, twenty-three or
twenty-four of this chapter which makes an eligible contribution to
a qualified charitable organization pursuant to the terms of a
certified project plan for the purpose of providing neighborhood
assistance, community services or crime prevention, or for the purpose of providing job training or education for individuals not
employed by the contributing taxpayer or an affiliate of the
contributing taxpayer or a person related to the contributing
taxpayer;
(B) "Eligible taxpayer" also includes an affiliated group of
taxpayers if such group elects to file a consolidated corporation
net income tax return under article twenty-four of this chapter and
if one or more affiliates included in such affiliated group would
qualify as an eligible taxpayer under paragraph (A) of this
subdivision.
(15) Endowment or endowment project. - - Those projects which
include raising of money for endowment funds.
(15)(16) Includes and including. -- The terms "includes" and
"including", when used in a definition contained in this article,
shall not be considered to exclude other things otherwise within
the meaning of the term defined.
(16)(17) Job training. -- "Job training" means instruction to
an individual that enables the individual to acquire vocational
skills so as to become employable or to be able to seek a higher
grade of employment.
(17)(18) Natural person or individual. -- The term "natural person" and the term "individual" means a human being. The terms
"natural person" and "individual" do not mean, and specifically
exclude any corporation, limited liability company, partnership,
joint venture, trust, organization, association, agency,
governmental subdivision, syndicate, affiliate or affiliation,
group, unit or any entity other than a human being.
(18)(19) Neighborhood assistance. -- "Neighborhood assistance"
means either:
(A) Furnishing financial assistance, labor, material and
technical advice to aid in the physical or economic improvement of
any part or all of an economically disadvantaged area; or
(B) Furnishing technical advice to promote higher employment
in an economically disadvantaged area.
(19)(20) Neighborhood organization. -- "Neighborhood
organization" means any organization:
(A) Which is performing community services, as defined in this
section; and
(B) Which is exempt from income taxation under Section
501(c)(3) of the Internal Revenue Code.
(20)(21) Partnership and partner. -- The term "partnership"
includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any
business, financial operation or venture is carried on, and which
is not a trust or estate, a corporation or a sole proprietorship.
The term "partner" includes a member in such a syndicate, group,
pool, joint venture or organization.
(21)(22) Person. -- The term "person" includes any natural
person, corporation, limited liability company or partnership.
(22)(23) Project transferee. -- The term "project transferee"
means any neighborhood organization, qualified charitable
organization, charitable organization or other organization, entity
or person that receives an eligible contribution or part of an
eligible contribution from an eligible taxpayer for the purpose of
directly or indirectly providing neighborhood assistance, community
services or crime prevention, or for the purpose of providing job
training or education or other services or assistance pursuant to
a project plan. The project transferee is typically the first
entity or person receiving eligible contributions from eligible
taxpayers under a project plan. However, in the case of eligible
contributions of in kind services or other eligible contributions
or portions thereof made pursuant to a certified project plan
directly to indigent, disadvantaged or needy persons, economically disadvantaged citizens or other persons or organizations under the
sponsorship or auspices of any neighborhood organization, qualified
charitable organization, charitable organization or other
organization, entity or person as a certified project participant,
such eligible contributions shall be considered to have been made
to the entity, organization or person under whose sponsorship or
auspices such eligible contributions are made, and that entity,
organization or person is considered to be the project transferee
with relation to those eligible contributions. The project
transferee is the entity, organization or person that is liable
under this article for payment of the project certification fee to
the West Virginia development office. The term "project
transferee" shall mean and include any considered project
transferee, considered as such under the provisions of this
article.
(23)(24) Qualified charitable organization. -- The term
"qualified charitable organization" means a neighborhood
organization, as defined in this section, which is the sponsor of
a project which has received certification by the director of the
West Virginia development office pursuant to the requirements of
this article: Provided, That no organization may qualify as a qualified organization for purposes of this article if the
organization is not registered with this state as required under
the solicitation of charitable funds act.
(24)(25) Related person. -- The term "related person" or
"person related to" a stated taxpayer means:
(A) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof controlled
by the taxpayer; or
(B) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof that is in
control of the taxpayer; or
(C) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof controlled
by an individual, corporation, partnership, affiliate, association
or trust or any combination or group thereof that is in control of
the taxpayer; or
(D) A member of the same controlled group as the taxpayer.
For purposes of this article, "control", with respect to a
corporation means ownership, directly or indirectly, of stock
possessing fifty percent or more of the total combined voting power
of all classes of the stock of the corporation which entitles its
owner to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty percent or more of the
beneficial interest in the principal or income of the trust. The
ownership of stock in a corporation, of a capital or profits
interest in a partnership or association or of a beneficial
interest in a trust shall be determined in accordance with the
rules for constructive ownership of stock provided in Section
267(c), other than paragraph (3) of such section, of the United
States Internal Revenue Code, as amended.
(25)(26) State fiscal year. -- "State fiscal year" means a
twelve-month period beginning on the first day of July and ending
on the thirtieth day of June.
(26)(27) Taxpayer. -- The term "taxpayer" means any person
subject to the tax imposed by article twenty-one, twenty-three or
twenty-four of this chapter (or any one or combination of the
articles of this chapter).
(27)(28) Technical assistance. -- The term "technical
assistance" means:
(A) Assistance in understanding, using and fulfilling the
legal, bureaucratic and administrative requirements and
qualifications which must be negotiated for the purpose of
effectively accessing, obtaining and using private, charitable, not-for-profit or governmental assistance, resources or funds, and
maximizing the value thereof;
(B) Assistance provided by any person holding a license under
West Virginia law to practice any licensed profession or
occupation, whereby the person, in the practice of the profession
or occupation, assists economically disadvantaged citizens or the
persons in an economically disadvantaged area by:
(i) Providing any type of health, personal finance,
psychological or behavioral, religious, legal, marital, educational
or housing counseling and advice to economically disadvantaged
citizens or a specifically designated group of economically
disadvantaged citizens or in an economically disadvantaged area; or
(ii) Providing emergency assistance or medical care to
economically disadvantaged citizens or to a specifically designated
group of economically disadvantaged citizens or in an economically
disadvantaged area; or
(iii) Establishing, maintaining or operating recreational
facilities, or housing facilities for economically disadvantaged
citizens or a specifically designated group of economically
disadvantaged citizens or in an economically disadvantaged area; or
(iv) Providing economic development assistance to economically
disadvantaged citizens or a specifically designated group of economically disadvantaged citizens, without regard to whether they
are located in an economically disadvantaged area, or to
individuals, groups or neighborhood or community organizations, in
an economically disadvantaged area; or
(v) Providing community technical assistance and capacity
building to economically disadvantaged citizens or a specifically
designated group of economically disadvantaged citizens or to
individuals, groups or neighborhood or community organizations in
an economically disadvantaged area.
§11-13J-4b. Required amounts for endowment projects.
At least thirty percent of the total neighborhood investment
program pool at the beginning of a fiscal year shall be used to
fund endowment programs to the extent there are applicants for this
amount. Any endowment project which has issued over seventy-five
percent of the credit it was issued at the beginning of the fiscal
year is eligible to be considered for a supplemental award up to
the amount of credit it requested at the beginning of the fiscal
year, with no percentage cap or limit applying at this time.
NOTE: The purpose of this bill is to mandate that 30% of the
Neighborhood Investment Credit go to endowment funding.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would
be added.
Section 4b is new; therefore strike-throughs and underlining
have been omitted.