Enrolled Version - Final Version
Senate Bill 243 History
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Committee Substitute (1)
SB243 SUB1 ENR
Senate Bill No. 243
(By Senators Kessler (Acting President) and Hall,
By Request of the Executive)
[Passed March 12, 2011; to take effect July 1, 2011.]
Be it enacted by the Legislature of West Virginia:
AN ACT to amend and reenact §11-13J-4a, §11-13J-6, §11-13J-8 and
§11-13J-12 of the Code of West Virginia, 1931, as amended, all
relating to the Neighborhood Investment Program Act;
specifying that board members who are affiliated, directly or
indirectly, with an applicant may not discuss or vote on the
applicant's proposal; increasing total maximum aggregate tax
credits certified in any state fiscal year; specifying total
maximum aggregate tax credits allowed in any state fiscal
year; extending the date for termination of the Neighborhood
Investment Program; and providing technical and clerical
That §11-13J-4a, §11-13J-6, §11-13J-8 and §11-13J-12 of the
Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 13J. NEIGHBORHOOD INVESTMENT PROGRAM
§11-13J-4a. Neighborhood investment program advisory board
(a) There is hereby created a neighborhood investment program
advisory board, which shall consist of twelve voting members and
(b) Chairperson. --
(1) The Director of the West Virginia Development Office, or
the designee of the Director of the West Virginia Development
Office, shall be the ex officio chairperson of the neighborhood
investment program advisory board.
(2) The chairperson shall vote on actions of the board only in
the event of a tie vote, in which case the chairperson's vote shall
be the deciding vote.
(c) Board members
(1) Four members shall be officers or members of the boards of
directors of unrelated corporations which are not affiliated with
one another and which are currently licensed to do business in West
(2) Four members shall be executive directors, officers or
members of the boards of directors of unrelated not-for-profit
organizations which are not affiliated with one another which
currently hold charitable organization status under Section
501(c)(3) of the Internal Revenue Code and which are currently licensed to do business in West Virginia.
(3) Four members shall be economically disadvantaged citizens
of the state that, for the taxable year immediately preceding the
year of appointment to the board, had an annual gross personal
income that was not more than one hundred twenty-five percent of
the federal designated poverty level for personal incomes, and who
has been a domiciliary and resident of this state for at least one
year at the time of appointment.
A member appointed under this subdivision is not disqualified
from completion of his or her term if his or her income in the year
of appointment or in any year subsequent to the year of appointment
exceeds one hundred twenty-five percent of the federal designated
poverty level. A member shall not be eligible for reappointment
under this subdivision unless he or she meets the original
qualifications for appointment: Provided,
That such member may be
reappointed pursuant to qualification under subdivision (1) or (2)
of this subsection if the member meets the requirements of
subdivision (1) or (2), respectively.
(d) Limitations; terms of members; appointments
(1) Not more than four members, exclusive of the chairperson,
shall be appointed from any one congressional district. Not more
than seven of the members, exclusive of the chairperson, may belong
to the same political party. Members shall be eligible for
reappointment. However, no member may serve for more than three consecutive terms.
(2) Appointment terms
(A) Except for initial appointments described under
subdivision (3) of this subsection, and except for midterm special
appointments made to fill irregular vacancies on the board, members
shall be appointed for terms of three years each.
(B) Except for midterm special appointments made to fill
irregular vacancies on the board, appointment terms shall begin on
July 1, of the beginning year. All appointment terms, special and
regular, shall end on June 30 of the ending year.
(3) Selection of members
(A) For the initial appointment of members under this
subdivision, members shall be selected by the Director of the West
Virginia Development Office.
(B) At the end of a member's term, the chairperson shall
solicit new member nominations from the board and appoint the most
appropriate person to serve, in compliance with the requirements
set forth in this section.
(C) Vacancies on the board shall be filled in the same manner
as the original appointments for the duration of the unexpired
(e) Quorum; meetings; funding
(1) The presence of a majority of the members of the board
constitutes a quorum for the transaction of business. The board shall elect from among its members a vice chairperson and such
other officers as are necessary.
(2) The board shall meet not less than four times during the
fiscal year, and additional meetings may be held upon a call of the
chairperson or of a majority of the members: Provided,
meeting of the board shall be required if the total amount of tax
credits available for the fiscal year have been allotted.
(3) Board members shall be reimbursed by the West Virginia
Development Office for sums necessary to carry out responsibilities
of the board and for reasonable travel expenses to attend board
(f) Annual report
. -- The board shall make a report to the
Governor and the Legislature within thirty days of the close of
each fiscal year. The report shall include summaries of all
meetings of the board, an analysis of the overall progress of the
program, fiscal concerns, the relative impact the program is having
on the state and any suggestions and policy recommendations that
the board may have. The report shall be public information made
available to the general public for examination and copying. The
board is authorized to publish the annual report, should the board
elect to do so.
(g) Duties of the board. --
(1) Administrative duties. --
The board shall be responsible
for advising the West Virginia Development Office concerning the administrative obligations of the program.
(2) Project evaluation and approval; prohibition on project
(A) The board shall select and approve projects, which may
then be certified by the director of the West Virginia Development
Office pursuant to section four of this article.
(B) Only projects sponsored by qualified charitable
organizations, as defined in section three of this article, may be
approved by the board or certified by the Director of the West
Virginia Development Office. An applicant that does not hold
current status as a charitable organization under Section 501(c)(3)
of the Internal Revenue Code may not receive project approval from
the board, or project certification from the Director of the West
Virginia Development Office, for any proposed project. Failure of
any applicant to provide convincing documentation proving such
status as a charitable organization under Section 501(c)(3) of the
Internal Revenue Code shall result in automatic denial of project
approval and denial of project certification under this article.
(3) Criteria for evaluation
. -- In evaluating projects for
approval, the board shall give priority to projects based upon the
following criteria. A proposed project shall be favored if:
(A) The project is community based. A project is community
(i) The project is to be managed locally, without national, state, multistate or international affiliations;
(ii) The project will benefit local citizens in the immediate
geographic area where the project is to operate; and
(iii) The sponsor of the project is a local entity, rather
than a statewide, national or international organization or an
affiliate of a statewide, national or international organization.
(B) The proposed project will primarily serve low income
(C) The proposed project will serve highly distressed
neighborhoods or communities.
(D) The project plan incorporates collaborative partnerships
among nonprofit groups, businesses, government organizations and
other community organizations.
(E) The applicant or sponsor of the project has demonstrated
a proven capacity to deliver the proposed services.
(F) The applicant or sponsor of the project historically
maintains low administrative costs.
(G) The applicant produces a strong showing of need for the
services which the proposed project would provide, and produces
convincing documentation of that need.
(H) The proposed project is innovative, novel, creative or
unique in program approach.
(4) If an applicant is directly or indirectly affiliated with
one or more board members, those members shall not discuss the proposals with one or more board members, and shall not have a vote
when that project is considered for final approval or disapproval.
(5) Project approval by the board
. -- Proposed projects shall
be approved or denied approval by a majority vote of the board
after competitive comparison with proposed projects of other
(h) Project certification by the Director of the West Virginia
Development Office. --
(1) Upon issuance of approval for a project by the board, the
approved project shall be certified by the Director of the West
Virginia Development Office: Provided,
That no certification may
issue for any project, even though the project may have been
approved by the board, if the issuance of certification for such
project will cause the aggregate amount of tax credits certified to
exceed the limitation set forth in this article. No certification
may be issued by the Director of the West Virginia Development
Office for any project which has not been approved by the board.
(2) The West Virginia Development Office shall promptly notify
applicants of the issuance of certification for their projects, and
shall issue tax credit vouchers to certified project applicants in
the amount of the tax credit represented by the project.
(3) The West Virginia Development Office may provide
incidental technical support and guidance to projects certified
under this article and may monitor the progress of the projects. The West Virginia Development Office shall make a quarterly report
to the board on the progress of certified projects and the program
§11-13J-6. Application of annual credit allowance
(a) In general
. -- The aggregate annual credit allowance for
a current tax year is an amount equal to the sum of the following:
(1) The portion allowed under section five of this article for
an eligible contribution placed into service or use during a prior
tax year; plus
(2) The portion allowed under section five of this article for
an eligible contribution placed into service or use during the
current tax year.
(b) Application of credit allowance
. -- The amount determined
under subsection (a) of this section shall be allowed as a credit
for tax years ending on and after July 1, 1996, as follows:
(1) Business franchise taxes
The amount determined under subsection (a) of this section
shall be applied to reduce up to fifty percent of the taxes imposed
by article twenty-three of this chapter for the tax year determined
after application of the credits against tax provided in section
seventeen of said article, but before application of any other
allowable credits against tax.
(2) Corporation net income taxes
. -- After application of
subdivision (1) of this subsection, any unused credit shall next be applied to reduce up to fifty percent of the taxes imposed by
article twenty-four of this chapter, for the tax year determined
before application of allowable credits against tax.
(3) Personal income taxes
(A) If the eligible taxpayer is an electing small business
corporation as defined in Section 1361 of the United States
Internal Revenue Code, a limited liability company treated as a
partnership for purposes of the federal income tax, a partnership
or a sole proprietorship, then any unused credit, after application
of subdivisions (1) and (2) of this subsection, shall be allowed as
a credit against up to fifty percent of the taxes imposed by
article twenty-one of this chapter on income of proprietors,
partners or shareholders, subject to the limitations set forth in
paragraphs (B) and (C) of this subdivision.
(B) Electing small business corporations, partnerships and
other unincorporated organizations shall allocate the credit
allowed by this article among the members thereof in the same
manner as profits and losses are allocated for the tax year.
(C) Any taxpayer subject to the personal income tax under
article twenty-one of this chapter, who makes an eligible
contribution to a qualified charitable organization, and receives
back from that organization a properly completed neighborhood
investment program tax credit voucher, is eligible to claim the
credit. The credit shall be allowed without regard to the source of that income, whether it is from wages, passive investment or
retirement income, income from a trade or business or any other
(c) Unused credit forfeited
. -- If any credit to an eligible
taxpayer remains after application of subsections (a) and (b) of
this section, the amount thereof may be carried forward no more
than four years from the tax year in which the contribution was
made. Unused credits of an eligible taxpayer may not be carried
forward beyond the time limits imposed under section five of this
article and the total maximum aggregate tax credits certified in
any state fiscal year may not exceed $3,000,000.
(d) Addition of deductions, decreasing adjustments or
decreasing modifications taken in determining taxable income for
which credit is taken
. -- Any deduction, decreasing adjustment or
decreasing modification taken by any taxpayer in determining
federal taxable income which affects West Virginia taxable income
or in determining West Virginia taxable income under article
twenty-one or twenty-four of this chapter for the taxable year for
any charitable contribution, or payment or portion thereof, which
qualifies as an eligible contribution under this article and for
which credit is claimed, shall be added to West Virginia taxable
income in determining the tax liability of the taxpayer under
article twenty-one or twenty-four of this chapter, as appropriate,
before application of the credit allowed under this article for the taxable year.
(e) Annual limit
. -- The aggregate annual credit allowance to
any taxpayer may not exceed $100,000 in any tax year.
§11-13J-8. Total maximum aggregate tax credit amount
(a) The amount of tax credits allowed under this article may
not exceed $3,000,000 in any state fiscal year.
(b) Applications for project certification shall be filed with
the West Virginia Development Office. The West Virginia
Development Office shall record the date each application is filed.
All complete and valid applications shall be considered for
approval or disapproval in a timely manner by the neighborhood
assistance advisory board. The board may, in its discretion,
consider applications for approval or disapproval at special or
interim meetings for expedited processing.
(c) When the total amount of tax credits certified under this
article equals the maximum amount of tax credits allowed, as
specified in subsection (a) of this section, in any state fiscal
year, no further certifications shall be issued in that same fiscal
year. Upon approval of a project by the board, the Director of the
West Virginia Development Office shall certify the approved project
unless certification is prohibited by the limitations and
requirements set forth in this article.
(d) All applications filed in any state fiscal year and not
certified during the state fiscal year in which they are filed shall be null and void by operation of law on the last day of the
state fiscal year in which they are filed, and all applicants which
elect to seek certification of a project plan shall file anew on
and after the first day of the succeeding state fiscal year.
§11-13J-12. Program evaluation; expiration of credit;
preservation of entitlement
Beginning on December 15, 2005, and every second year
thereafter, the director shall secure an independent review of the
neighborhood investment program created by this article and present
the findings to the Joint Committee on Government and Finance.
Unless sooner terminated by law, the Neighborhood Investment
Program Act terminates on July 1, 2016. There is no entitlement to
the tax credit under this article for a contribution made to a
certified project after July 1, 2016, and no credit is available to
any taxpayer for any contribution made after that date. Taxpayers
which have gained entitlement to the credit pursuant to eligible
contributions made to certified projects prior to July 1, 2016,
shall retain that entitlement and apply the credit in due course
pursuant to the requirements and limitations of this article.