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UTAH STATE SENATE
UTAH STATE CAPITOL COMPLEX * 320 STATE CAPITOL
P.O. BOX 145115 * SALT LAKE CITY, UTAH 84114-5115 * (801) 538-1035
February 25, 2014
Mr. President:
The Business and Labor Committee reports a favorable recommendation on S.B. 233,
UTAH SMALL BUSINESS JOBS ACT, by Senator J. Valentine, with the following
amendments:
1. Page
2, Lines 31 through 32
:
31
Other Special Clauses:
32
This bill takes effect on
{
July 1
}
September 2
, 2014.
2. Page
4, Lines 105 through 107
:
105
(2) An entity may claim a nonrefundable tax credit against a tax liability under this
106
chapter in accordance with this section if the entity is issued a tax credit certificate by the
office
107
under Subsection
63M-1-3403
(11).
The office shall issue a tax credit certificate to an
entity that is allocated tax credits under Subsection 63M-1-3403(11)(e).
3. Page
4, Lines 114 through 116
:
114
(5) An entity required to pay a retaliatory tax levied under this chapter for a reason
115
other than claiming the tax credit may claim the tax credit after the retaliatory tax amount
is
116
calculated
, and the tax credit may be used to offset retaliatory tax liability
.
4. Page
8, Lines 223 through 227
:
223
(4) "Credit allowance date" means with respect to a qualified equity investment:
224
{
(a) the January 1 immediately following the date on which the qualified
equity
225
investment is initially made; and
226
(b) the January 1 immediately following each of the six anniversary dates of the
date
227
on which the qualified equity investment is initially made.
(a) the date on
which the qualified equity investment is initially made; and
(b) each of the six anniversary dates of the date described in Subsection (4)(a).
5. Page
8, Lines 236 through 238
:
236
{
(7) "Pass-through entity" is as defined in Section
59-10-1402
.
237
(8) "Pass-through entity taxpayer" is as defined in Section
59-10-1402
.
238
{
(9)
}
(7)
"Purchase price" means the amount paid to the qualified
community development
6. Page
8, Line 242
:
242
{
(10)
}
(8)
(a) "Qualified active low-income community business" is as
defined in Section
7. Page
9, Line 247
:
247
(b) Notwithstanding Subsection
{
(10)
}
(8)
(a), "qualified active
low-income community
8. Page
9, Line 260
:
260
{
(11)
}
(9)
(a) "Qualified community development entity" is as defined in
Section 45D,
9. Page
9, Line 270
:
270
{
(12)
}
(10)
(a) "Qualified equity investment" means an equity investment
in, or long-term
10. Page
9, Lines 272 through 273
:
272
(i) is acquired on or after
{
July 1,
}
September 2,
2014, at its original
issuance solely in exchange for
273
cash;
11. Page
10, Lines 280 through 282
:
280
(b) Notwithstanding Subsection
{
(12)
}
(10)
(a), "qualified equity
investment" includes a
281
qualified equity investment that does not meet the provisions of Subsection
{
(12)
}
(10)
(a) if the
282
investment was a qualified equity investment in the hands of a prior holder.
12. Page
10, Line 283
:
283
{
(13)
}
(11)
"Qualified low-income community investment" means a capital
or equity
13. Page
10, Line 292
:
292
{
(14)
}
(12)
"Tax credit certificate" is a certificate issued by the office
under Subsection
14. Page
10, Lines 302 through 306
:
302
(1) A qualified community development entity that seeks to have an equity
investment
303
or long-term debt security certified as a qualified equity investment and as eligible for tax
304
credits under Section
59-9-107
shall apply to the office. The office shall begin accepting
305
applications on
{
July 1
}
September 2
, 2014. The qualified community
development entity shall include the
306
following in the qualified community development entity's application:
15. Page
11, Lines 311 through 315
:
311
{
(c) a certificate executed by an executive officer of the applicant attesting
that:
312
(i) the allocation agreement remains in effect and has not been revoked or
cancelled by
313
the Community Development Financial Institutions Fund; and
314
(ii) the applicant is not subject to, or controlled by an entity subject to the
requirements
315
of 12 U.S.C. Sec. 2901 et seq.;
(c) a certificate executed by an executive officer
of the applicant attesting that the allocation agreement remains in effect and has not
been revoked or cancelled by the Community Development Financial Institutions
Fund.
16. Page
11, Lines 328 through 329
:
328
(g) a nonrefundable application fee of $5,000 paid to the office for each application
329
submitted
, which is deposited into the General Fund and $2,500 of which is a
dedicated credit for the office to cover the administrative costs related to this part
;
and
17. Page
12, Lines 346 through 356
:
346
(3) (a)
{
Subject to Subsection (3)(b), if
}
If
the application is complete,
the office shall
347
certify the proposed equity investment or long-term debt security as a qualified equity
348
investment, subject to the limitations contained in Subsection (6).
349
{
(b) The office may not certify qualified equity investments for an applicant,
on a
350
combined basis with all of its affiliates, in excess of $50,000,000 unless the applicant
has:
351
(i) already had qualified equity investments certified under this section;
352
(ii) satisfied the requirements of Subsection (8) with respect to the qualified
equity
353
investments that have been certified; and
354
(iii) filed a new application after satisfying the requirements of Subsections
(3)(b)(i)
355
and (ii).
356
{
(c)
}
(b)
The office shall provide written notice of the certification to the
qualified
18. Page
13, Lines 376 through 379
:
376
(6) (a) The office shall certify
{
$100,000,000
}
$50,000,000
in qualified
equity investments pursuant to
377
this section. If a pending request cannot be fully certified due to this limit, the office shall
378
certify the portion that may be certified unless the qualified community development
entity
379
elects to withdraw its request rather than receive partial certification.
19. Page
15, Lines 439 through 440
:
439
(b) For each calendar year
beginning with calendar year 2016
an entity is
eligible for a tax credit under this section and
440
Section
59-9-107
, the office shall issue to the entity a tax credit certificate
for use after
January 1, 2017 and provide the State Tax Commission a copy of the tax credit
certificate
.
20. Page
15, Lines 445 through 453
:
445
{
(d) The tax credit amount is equal to an amount calculated by the office as
follows, the
446
office shall:
447
(i) multiply the applicable percentage for the credit allowance date by the
purchase
448
price paid to the qualified community development entity for the qualified equity
investment;
449
and
450
(ii) if the entity that makes a qualified equity investment is a pass-through
entity,
451
allocate the amount calculated under Subsection (11)(d)(i) to the pass-through entity
taxpayers
452
in accordance with the agreement among the pass-through entity taxpayers as
provided in
453
Subsection (11)(e).
The office shall calculate the tax credit amount and the tax
credit amount shall be equal to the applicable percentage for the credit allowance
date multiplied by the purchase price paid to the qualified community development
entity for the qualified equity investment.
21. Page
15, Lines 454 through 456
:
454
{
(e) A tax credit claimed by a pass-through entity shall be allocated to a
pass-through
455
entity taxpayer in accordance with the agreement among the pass-through entity
taxpayers. An
456
allocation under this Subsection (11)(e) is not considered a violation of Subsection
(11)(f).
(e) A tax credit earned by a partnership, limited liability company, or
S-corporation may be allocated to the partners, members, or shareholders of the
partnership, limited liability company, or S-corporation for the partners',
members', or shareholders' direct use in accordance with the provisions of any
agreement among the partners, members, or shareholders.
22. Page
15, Line 457
:
457
(f) An entity may not sell a tax credit allowed under this section on the open market.
(12)(a) An entity that claims a tax credit under Section 59-9-107 and this section
shall provide the office with a document that expressly directs and authorizes the State
Tax Commission to disclose the entity's tax returns and other information concerning
the entity that are required by the office and that would otherwise be subject to
confidentiality under Section 59-1-403 or Section 6103, Internal Revenue Code, to the
office.
(b) The office shall submit the document described in Subsection (12)(a) to the State
Tax Commission.
(c) Upon receipt of the document described in Subsection (12)(a), the State Tax
Commission shall provide the office with the information requested by the office that
the entity authorized the State Tax Commission to provide to the office in the
document described in Subsection (12)(a).
23. Page
16, Line 492
:
492
(d) If a qualified community development entity
{
engages in
}
makes
a
distribution or debt
24. Page
18, Lines 550 through 553
:
550
{
(3) The office may not require a deposit from an applicant that:
551
(a) has had proposed qualified equity investments certified under Section
63M-1-3403
;
552
and
553
(b) has not forfeited a deposit made under this section.
}
25. Page
22, Lines 651 through 654
:
651
63M-1-3411. Scope of part.
652
This part applies only to a return or report originally due on or after
{
July
1
}
September 2
, 2014.
653
Section 16. Effective date.
654
This bill takes effect on
{
July 1
}
September 2
, 2014.
Respectfully,
Curtis S. Bramble
Committee Chair
Voting: 6-0-1
3 SB0233.SC1.wpd bhowe/BRH PO/BRH 2/25/14 5:54 pm
Bill NumberAction Class
Action Code
*SB0233**S*
*SCRAMD*
SB0233S