Text: SF00155 Text: SF00157 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 15E.175 DEFINITIONS. 1 2 As used in this section and sections 15E.176 and 15E.177: 1 3 1. "Iowa business" means a business or industry, 1 4 incorporated or unincorporated, which meets all the following 1 5 criteria: 1 6 a. Has or will have, within thirty days after a loan or 1 7 investment is made by a qualified venture capital company, at 1 8 least fifty percent of its employees or assets located in Iowa 1 9 and agrees to maintain at least fifty percent of its employees 1 10 or assets in Iowa following investment in the business by a 1 11 qualified venture capital company. 1 12 b. A business which is unable to raise equity capital or 1 13 obtain financing from conventional sources in order to remain 1 14 viable or to commence or expand its ability to provide goods 1 15 or services. 1 16 2. "Qualified venture capital company" means a 1 17 corporation, limited liability company, or a general or 1 18 limited partnership with its principal place of business 1 19 located within this state, which meets all of the following 1 20 requirements: 1 21 a. Has an initial private capitalization of not less than 1 22 twenty million dollars. 1 23 b. Is organized by the Iowa business investment 1 24 corporation, organized under division XV of this chapter, to 1 25 directly or indirectly through its subsidiaries or affiliates 1 26 invest in debt and equity securities of Iowa businesses. 1 27 c. Seeks approval from the federal small business 1 28 administration to establish a small business investment 1 29 company that is incorporated in Iowa and maintains its 1 30 principal place of business in this state the purpose of which 1 31 includes increasing the availability of funds for investment 1 32 in and loans to Iowa businesses. 1 33 d. Will provide or arrange for managerial and other 1 34 advice, assistance, and support for Iowa businesses. 1 35 e. Does not invest funds under this division for the 2 1 expansion of operations of an Iowa business in another state. 2 2 3. "Taxpayer" means an entity subject to tax under chapter 2 3 422, division III, chapter 422, division V, or chapter 432. 2 4 4. "Tax year" means for entities subject to the state 2 5 corporate income tax or the state franchise tax under chapter 2 6 422, division III or V, respectively, the tax year as defined 2 7 for those divisions or means for insurance companies subject 2 8 to the gross premiums tax under chapter 432, the calendar year 2 9 for which the premiums are taxed. 2 10 Sec. 2. NEW SECTION. 15E.176 TAX CREDITS. 2 11 1. For tax years beginning on or after January 1, 1996, 2 12 there is allowed a credit against that tax imposed under the 2 13 corporate income tax in chapter 422, division III, the 2 14 franchise tax in chapter 422, division V, or the gross 2 15 premiums tax in chapter 432, for investments made by the 2 16 taxpayer in a qualified venture capital company whose purpose 2 17 includes establishing or expanding Iowa business. 2 18 2. The amount of credit allowed under subsection 1, 2 19 subject to subsection 4, is computed as follows: 2 20 a. The amount of the qualified venture capital company's 2 21 investment in Iowa businesses is divided by the amount of new 2 22 cash invested in the qualified venture capital company. 2 23 b. The resulting percentage, which shall not exceed fifty 2 24 percent, is multiplied by the amount of the taxpayer's 2 25 investment in the qualified venture capital company. 2 26 c. The amount of the credit is equal to ten percent of the 2 27 product determined in paragraph "b". 2 28 d. The qualified venture capital company shall compute as 2 29 of the end of the qualified venture capital company's tax year 2 30 the amounts under paragraph "c" for each tax year the 2 31 qualified venture capital company is entitled to the credit. 2 32 3. The qualified venture capital company is allowed the 2 33 credit as computed each year in subsection 2 for up to ten 2 34 consecutive years beginning with the first year for which the 2 35 credit is taken. 3 1 If the amount of the credit exceeds the qualified venture 3 2 capital company's tax liability for the tax year, the excess 3 3 may be credited to the tax liability for the following five 3 4 tax years or until depleted, whichever is the earlier, and is 3 5 in addition to any other credit allowed under this section. 3 6 4. Notwithstanding the amount of credit computed in 3 7 subsection 2, the total amount of credits for all qualified 3 8 venture capital companies that shall be allowed under 3 9 subsection 1 for any fiscal year of the qualified venture 3 10 capital company shall not exceed one million two hundred fifty 3 11 thousand dollars and for all fiscal years of the qualified 3 12 venture capital company shall not exceed twelve million five 3 13 hundred thousand dollars. In determining if the credit 3 14 allowed has exceeded the fiscal year limit, credits carried 3 15 over from a previous tax year are not counted. 3 16 5. The credit provided for in subsection 2, to the extent 3 17 not previously utilized, shall be freely transferable to and 3 18 by subsequent transferees for a period of ten years from the 3 19 date the credit is first available to the qualified venture 3 20 capital company. 3 21 Sec. 3. NEW SECTION. 15E.177 COORDINATION OF RESOURCES. 3 22 If a qualified venture capital company is organized by the 3 23 Iowa business investment corporation on or before December 31, 3 24 1996, within ninety days following its organization, the 3 25 qualified venture capital company shall develop and submit a 3 26 written proposal to the shareholders of each business 3 27 development finance corporation organized pursuant to division 3 28 XIII of this chapter, calling for the investment of all the 3 29 assets of each business development finance corporation in 3 30 securities of the qualified venture capital company. A notice 3 31 of a special meeting of the shareholders of the business 3 32 development finance corporation and the written proposal made 3 33 to the business development finance corporation by the 3 34 qualified venture capital company shall be delivered to the 3 35 shareholders of each business development finance corporation 4 1 entitled to vote at the special shareholders meeting not less 4 2 than ten nor more than sixty days before the meeting date 4 3 given by the qualified venture capital company. Action on the 4 4 written proposal by the board of directors of the business 4 5 development finance corporation or any other person shall not 4 6 be required to call the special meeting or authorize voting on 4 7 the written proposal by the shareholders of the business 4 8 development finance corporation. If at the special meeting of 4 9 shareholders of the business development finance corporation 4 10 or any recesses thereof, a majority of the shareholders 4 11 present or represented at the special meeting approve the 4 12 investment proposed by the qualified venture capital company, 4 13 the business development finance corporation shall immediately 4 14 make such an investment of all of its assets. The investment 4 15 by a business development finance corporation of all of its 4 16 assets in the qualified venture capital corporation shall not 4 17 be considered a sale of assets other than in the usual and 4 18 regular course of business and division XIII of the Iowa 4 19 business development finance Act shall not apply to the 4 20 transaction. The qualified venture capital company may make 4 21 additional proposals as often as it desires to the 4 22 shareholders of each business development finance corporation 4 23 that did not approve the initial investment proposal. Except 4 24 for the requirement that a written proposal be presented to 4 25 the shareholders within ninety days of the organization of the 4 26 qualified venture capital company, the provisions of this 4 27 section shall apply to all additional proposals. 4 28 Sec. 4. Section 422.33, Code 1995, is amended by adding 4 29 the following new subsection: 4 30 NEW SUBSECTION. 9. There is allowed as a credit against 4 31 the tax determined in subsection 1 for a tax year an amount 4 32 equal to the qualified venture capital credit as provided in 4 33 section 15E.176. Notwithstanding any other provision, the 4 34 credit allowed for in this subsection shall be applied prior 4 35 to all other credits allowed the taxpayer. The taxpayer shall 5 1 not receive for the same investment a credit under subsection 5 2 8 and this subsection. 5 3 Sec. 5. Section 422.60, Code 1995, is amended by adding 5 4 the following new subsection: 5 5 NEW SUBSECTION. 4. There is allowed as a credit against 5 6 the tax determined in this division for a tax year an amount 5 7 equal to the qualified venture capital credit as provided in 5 8 section 15E.176. Notwithstanding any other provision, the 5 9 credit allowed for in this subsection shall be applied prior 5 10 to all other credits allowed the taxpayer. The allocation of 5 11 revenues to a city or county under section 422.65 shall be 5 12 determined as if the credit under this subsection had not been 5 13 taken. 5 14 Sec. 6. Section 432.1, Code 1995, is amended by adding the 5 15 following new subsection: 5 16 NEW SUBSECTION. 5. There is allowed as a credit against 5 17 the tax determined in subsection 1 or 2 for a tax year an 5 18 amount equal to the qualified venture capital credit as 5 19 provided in section 15E.176. Notwithstanding any other 5 20 provision, the credit allowed for in this subsection shall be 5 21 applied prior to all other credits allowed the taxpayer. 5 22 Sec. 7. 1992 Iowa Acts, chapter 1244, section 1, 5 23 subsection 2, paragraph e, unnumbered paragraph 1, as amended 5 24 by 1993 Iowa Acts, chapter 180, section 46, as amended by 1994 5 25 Iowa Acts, chapter 1201, section 29, is amended to read as 5 26 follows: 5 27 For transfer to the treasurer of state for the purpose of 5 28 facilitating the organization and private capitalization of 5 29 the small business investment company or other entity under 5 30 sections 15E.169 through 15E.171. If the small business 5 31 investment company or another entity for which the funds are 5 32 to be used is not organizedwithin thirty-six months of the5 33effective date of this Act, unused funds shall revert to the 5 34 general fund of the state, however, if such an entity is 5 35 organized, the unused funds shall be transferred irrevocably 6 1 to the qualified venture capital company or other entity for 6 2 which the funds are to be used: 6 3 .................................................. $ 200,000 6 4 Sec. 8. APPLICABILITY. This Act applies for tax years of 6 5 entities subject to the state corporate income tax or 6 6 franchise tax which begin on or after January 1, 1996. This 6 7 Act applies for calendar years beginning on or after January 6 8 1, 1996, for entities subject to the gross premiums tax under 6 9 chapter 432. 6 10 SF 156 6 11 mk/cc/26
Text: SF00155 Text: SF00157 Text: SF00100 - SF00199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
Iowa General Assembly
Search: Senate Bills and Amendments (76th General Assembly)
© 1996 Cornell College and League of Women Voters of Iowa
Comments? webmaster@legis.iowa.gov.
Last update: Mon Mar 4 09:39:45 CST 1996
URL: /DOCS/GA/76GA/Legislation/SF/00100/SF00156/950308.html
jhf