H. B. 3189
(By Delegates Doyle, Leach, Hall, Proudfoot,
Boggs, Cann and Ashley)
(Originating in the Committee on Finance)
[February 24, 2003]
A BILL to amend and reenact section eight, article one, chapter
five-e of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, relating to reducing the total tax
credits available under the capital company act during the
fiscal year beginning on the first day of July, two thousand
three.
Be it enacted by the Legislature of West Virginia:
That section eight, article one, chapter five-e of the code of
West Virginia, one thousand nine hundred thirty-one, 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.
Capitalization of the company may be increased pursuant to rule of
the authority.
(b)(1) 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-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 the capital base
of any 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 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. 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. 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 thirty 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. Any credits which have not been allocated to qualified
companies meeting the requirements of this subdivision relating to
small business investment companies during the first thirty 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.
(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. 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 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 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.