(1) For tax years commencing on or after January 1, 2005, but no later than January 1, 2014, and subject to the requirements and limitations of this section, there shall be allowed to any qualified taxpayer a venture capital tax credit to be used against the taxpayer's premium tax liability. The authority shall issue tax credit certificates to qualified taxpayers with a total value of fifty million dollars to be taken by one or more qualified taxpayers at the rate of up to five million dollars per year for each of the calendar years from 2005 through 2014; except that if H.B. 041206 is enacted at the second regular session of the sixty-fourth general assembly, becomes law, and is subsequently declared to be unconstitutional by a final judgment that invalidates the tax credits enacted by such bill, the authority shall issue tax credit certificates to qualified taxpayers with a total value of one hundred million dollars to be taken by one or more qualified taxpayers at the rate of up to ten million dollars per year for each of the remaining calendar years through 2014. A qualified taxpayer shall submit the tax credit certificate with the taxpayer's tax return.
Upon completion of the authority's competitive selection process for fund managerspursuant to section 24-46-203, but no earlier than January 31, 2004, and no later than December 1 of each year from 2005 until 2014, the authority shall issue a tax credit certificate to a qualified taxpayer pursuant to subsection (5) of this section and shall allocate certified capital contributed to the authority by the qualified taxpayer to one or more fund managers selected by the authority in accordance with section 24-46-203 (2).
If the amount of the tax credit claimed by a qualified taxpayer exceeds the amountdue on its premium tax liability in the tax year for which the tax credit is being claimed, the amount of the tax credit not used to offset taxes may be carried forward for up to ten years as tax credits against the qualified taxpayer's subsequent years' premium tax liability.
A qualified taxpayer claiming a tax credit against premium tax liability earned through a contribution of certified capital to the authority shall not be required to pay any additional or retaliatory tax as a result of claiming the credit.
(a) An insurance company shall become a qualified taxpayer if all of the conditions of the tax credit certificate and the following conditions are met:
Pursuant to a form established by the authority, the insurance company shall make atimely and irrevocable offer, contingent only upon the authority's issuance to the insurance company of a tax credit certificate, to make a specified contribution of certified capital to the authority on dates specified by the authority. The offer shall include the requested amount of tax credits, the year for which the tax credits are requested, the insurance company's specified contribution for each tax credit dollar requested, which contribution shall be no less than eighty percent of the requested amount of tax credits, and any other information required by the authority.
The authority shall issue a tax credit certificate to the insurance company. The taxcredit certificate shall state the date by which cash contributions shall be made by the qualified taxpayer, the date by which tax credits shall be available for use by the qualified taxpayer, penalties and any other remedies for noncompliance, and any other requirements deemed necessary by the authority as a condition of issuing the tax credit certificate.
Pursuant to subsection (7) of this section, the insurance company timely makes thecontribution of certified capital to the authority specified in subparagraph (I) of this paragraph (a).
(b) The authority shall establish and publicize to insurance companies:
Deadlines for submitting irrevocable offers for contributions and for issuing tax creditcertificates;
Forms and requirements for offers and the content requirements of such offers; and(III) Any other requirement determined to be necessary by the authority.
(c) (I) A tax credit certificate shall specify:
An amount of money that a qualified taxpayer may claim as a tax credit pursuant tothis section;
The amount of certified capital that the qualified taxpayer has contributed or willcontribute by the dates specified in the tax credit certificate;
The calendar year in which the tax credits may be used against the qualified taxpayer's premium tax liability;
Penalties and remedies in the event of noncompliance by the qualified taxpayer; and(E) Other conditions deemed necessary by the authority.
(II) The authority shall continue to issue tax credit certificates in the order of the insurance companies that have offered to contribute the next highest value per tax credit dollar requested until the authority has issued five million dollars of tax credit certificates per year, or if H.B. 04-1206 is enacted at the second regular session of the sixty-fourth general assembly, becomes law, and is subsequently declared to be unconstitutional, until the authority has issued ten million dollars of tax credit certificates per year; except that the authority may issue tax credit certificates on an annual basis, a multi-year basis, or periodically as it deems necessary.
On or before January 31, 2006, and on or before each succeeding January 31 untilJanuary 31, 2015, the authority shall provide a report to the division of insurance in the department of regulatory agencies. The report shall identify each qualified taxpayer for the tax year that ended during the prior calendar year by name and identifying number issued by the national association of insurance commissioners, or any analogous successor organization, and shall list the amount of the tax credits allowed to the qualified taxpayer.
(a) To become a qualified taxpayer, an insurance company shall pay the specified amount of certified capital to the authority when due.
(b) (I) If an insurance company fails to make a payment of certified capital to the authority when due, the authority shall provide the insurance company with a notice by certified mail that the insurance company has fifteen working days to cure the defect. The fifteen-day period shall begin on the date the notice is postmarked.
Failure by an insurance company to make the payment of certified capital by the endof the fifteenth working day shall result in an immediate forfeiture of any right to claim the tax credits. The authority shall be authorized to reallocate such tax credits to other qualified taxpayers as deemed necessary by the authority. Reallocation shall not diminish the authority's ability to use penalties and remedies as stated in the tax certificate.
The authority shall assess penalties against a qualified taxpayer that fails to makethe payment of certified capital by the end of the fifteenth working day as stated in the tax credit certificate and may pursue other remedies and actions as stated in the tax certificate.
Source: L. 2004: Entire part added, p. 40, § 8, effective March 4.
Editor's note: House Bill 04-1206 referenced in subsections (1) and (5)(b)(II) was signed by the governor and became effective March 3, 2004.