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2010 SESSION
10104165DBe it enacted by the General Assembly of Virginia:
1. That §§ 2.2-2309 and 58.1-439 of the Code of Virginia are amended and reenacted as follows:
§ 2.2-2309. Creation, administration, and management of Virginia Export Fund.
A. In addition to any other fund or account the Authority may create pursuant to subdivision 23 of § 2.2-2285, there shall be a permanent fund known as the Virginia Export Fund (the Fund). The Fund shall be comprised of (i) sums appropriated to it by the General Assembly, (ii) receipts by the Fund from loans or loan guarantees made against it, (iii) all income from the investment of moneys held by the Fund, and (iv) any other sums designated for deposit to the Fund from any source, public or private. The Fund shall be administered and managed by the Authority, and all moneys in the Fund shall be used to provide loans or loan guarantees as provided in subsection D. Any balances remaining in the Fund shall not revert to the general fund but shall be retained in order to make additional loans or loan guarantees.
B. All moneys belonging to the Fund shall be deposited to the credit of the State Treasurer and recorded on the books of the State Comptroller. Earnings from investments and interest shall be returned to the Fund.
C. The Authority, or its designated agent, may collect moneys due to the Fund. Proceedings to recover moneys due to the Fund may be instituted by the Authority in the name of the Fund in any appropriate court.
D. The Fund shall be used to make loans or to provide a guarantee for up to ninety percent of the principal amount of any commercial loan or line of credit made by a lender for the purpose of facilitating the sale of goods, products, or services outside of the United States by persons, firms, or corporations utilizing a Virginia air, land, or sea port to ship such goods, products, or services. Such guarantee shall not exceed one million dollars.
E. The Authority shall determine the terms and conditions of
any loans or loan guarantee made against the Fund and may allow for use of the
Fund in single or multiple transactions. No loan shall exceed a term of twelve
months, nor shall a loan guarantee exceed a term of eighteen months. In the
case of loans, the Authority shall charge an annual interest rate. In the case
of guarantees, the Authority shall charge an annual guarantee fee. However, the
Authority may waive such guarantee fees in an economically distressed area as defined in § 58.1-439. An area shall qualify as economically distressed
if it is a locality with an unemployment
rate for the preceding year of at least 0.5 percent higher than the average
statewide unemployment rate for such year. In connection
with applications for loans or loan guarantees made against the Fund, the
Authority may require the production of any document, instrument, certificate,
legal opinion, or other information it deems necessary or convenient.
F. All loans or loan guarantees made against the Fund shall be approved by the Board or an authorized committee or subcommittee thereof.
§ 58.1-439. Major business facility job tax credit.
A. For taxable years beginning on and after January 1, 1995, but before January 1, 2020, a taxpayer shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1 (§ 58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et seq.) of Chapter 26 of this title as set forth in this section.
B. For purposes of this section, the amount of any credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entities.
C. A "major business facility" is a company that satisfies the following criteria:
1. Subject
to the provisions of subsections K or L, the The
establishment or expansion of the company shall result in the creation of at
least 100
25 jobs for qualified full-time
employees; the first such 100
25 jobs shall be referred to as
the "threshold amount"; and
2. The company is engaged in any business in the Commonwealth, except a retail trade business if such trade is the principal activity of an individual facility in the Commonwealth. Examples of types of major business facilities that are eligible for the credit provided under this section include, but are not limited to, a headquarters, or portion of such a facility, where company employees are physically employed, and where the majority of the company's financial, personnel, legal or planning functions are handled either on a regional or national basis. A company primarily engaged in the Commonwealth in the business of manufacturing or mining; agriculture, forestry or fishing; transportation or communications; or a public utility subject to the corporation income tax shall be deemed to have established or expanded a major business facility in the Commonwealth if it meets the requirements of subdivision 1 during a single taxable year and such facilities are not retail establishments. A major business facility shall also include facilities that perform central management or administrative activities, whether operated as a separate trade or business, or as a separate support operation of another business. Central management or administrative activities include, but are not limited to, general management; accounting; computing; tabulating; purchasing; transportation or shipping; engineering and systems planning; advertising; technical sales and support operations; central administrative offices and warehouses; research, development and testing laboratories; computer-programming, data-processing and other computer-related services facilities; and legal, financial, insurance, and real estate services. The terms used in this subdivision to refer to various types of businesses shall have the same meanings as those terms are commonly defined in the Standard Industrial Classification Manual.
D. For purposes of this section, the "credit year" is the first taxable year following the taxable year in which the major business facility commenced or expanded operations.
E. The Department of Taxation shall make all determinations as to the classification of a major business facility in accordance with the provisions of this section.
F. A "qualified full-time employee" means an employee filling a new, permanent full-time position in a major business facility in the Commonwealth. A "new, permanent full-time position" is a job of an indefinite duration, created by the company as a result of the establishment or expansion of a major 2business facility in the Commonwealth, requiring a minimum of 35 hours of an employee's time a week for the entire normal year of the company's operations, which "normal year" shall consist of at least 48 weeks, or a position of indefinite duration which requires a minimum of 35 hours of an employee's time a week for the portion of the taxable year in which the employee was initially hired for, or transferred to, the major business facility in the Commonwealth. Seasonal or temporary positions, or a job created when a job function is shifted from an existing location in the Commonwealth to the new major business facility and positions in building and grounds maintenance, security, and other such positions which are ancillary to the principal activities performed by the employees at a major business facility shall not qualify as new, permanent full-time positions.
G. For any major business facility, the amount of credit
earned pursuant to this section shall be equal to $1,000 $10,000
per qualified full-time employee, over the threshold amount, employed during the
credit year. The credit shall be allowed ratably, with one-third
of the credit amount $2,000
allowed annually for three
five years beginning with the
credit year. However, for taxable years beginning January 1, 2009, through
December 31, 2010, one-half of the credit amount shall be allowed each year for
two years. The portion of the $1,000 $10,000
credit earned with respect to any qualified full-time employee who is employed
in the Commonwealth for less than 12 full months during the credit year will be
determined by multiplying the credit amount by a fraction, the numerator of
which is the number of full months that the qualified full-time employee worked
for the major business facility in the Commonwealth during the credit year, and
the denominator of which is 12. A separate credit year and a
three-year allowance period shall exist for each distinct
major business facility of a single taxpayer,
except for credits allowed for taxable years beginning January 1, 2009, through
December 31, 2010, when a two-year allowance period shall exist for each
distinct major business facility of a single taxpayer.
H. The amount of credit allowed pursuant to this section shall not exceed the tax imposed for such taxable year. Any credit not usable for the taxable year the credit was allowed may be, to the extent usable, carried over for the next 10 succeeding taxable years. No credit shall be carried back to a preceding taxable year. In the event that a taxpayer who is subject to the tax limitation imposed pursuant to this subsection is allowed another credit pursuant to any other section of the Code of Virginia, or has a credit carryover from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit allowed which does not have a carryover provision, and then any credit which is carried forward from a preceding taxable year, prior to the utilization of any credit allowed pursuant to this section.
I. No credit shall be earned pursuant to this section for any employee (i) for whom a credit under this section was previously earned by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (ii) who was previously employed in the same job function in Virginia by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b); or (iv) whose job function previously qualified for a credit under this section at a different major business facility on behalf of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b).
J. Subject to the
provisions of subsections K or L, recaptureRecapture of this credit, under
the following circumstances, shall be accomplished by increasing the tax in any
of the five years succeeding the taxable year in which a credit has been earned
pursuant to this section if the number of qualified full-time employees
decreases below the average number of qualified full-time employees employed
during the credit year. Such tax increase amount shall be determined by (i)
recomputing the credit which would have been earned for the original credit
year using the decreased number of qualified full-time employees and (ii)
subtracting such recomputed credit from the amount of credit previously earned.
In the event that the average number of qualifying full-time employees employed
at a major business facility falls below the threshold amount in any of the
five taxable years succeeding the credit year, all credits earned with respect
to such major business facility shall be recaptured. No credit amount will be
recaptured more than once pursuant to this subsection. Any recapture pursuant
to this section shall reduce credits earned but not yet allowed, and credits
allowed but carried forward, before the taxpayer's tax liability may be
increased.
K. In the event that
a major business facility is located in an economically distressed area or in
an enterprise zone as defined in § 59.1-271 or in Chapter 49 (§ 59.1-538 et
seq.) of Title 59.1 during a credit year, the threshold amount required to
qualify for a credit pursuant to this section and to avoid full recapture shall
be reduced from 100 to 50 for purposes of subdivision C 1 and subsection J. An
area shall qualify as economically distressed if it is a city or county with an
unemployment rate for the preceding year of at least 0.5 percent higher than the
average statewide unemployment rate for such year. The Virginia Economic
Development Partnership shall identify and publish a list of all economically
distressed areas at least annually.
L. For taxable years
beginning on or after January 1, 2004, but before January 1, 2006, in the event
that a major business facility is located in a severely economically distressed
area, the threshold amount required to qualify for a credit pursuant to this
section and to avoid full recapture shall be reduced from 100 to 25 for
purposes of subdivision C 1 and subsection J. However, the total amount of
credit allowable under this subsection shall not exceed $100,000 in aggregate.
An area shall qualify as severely economically distressed if it is a city or
county with an unemployment rate for the preceding year of at least twice the
average statewide unemployment rate for such year. The Virginia Economic
Development Partnership shall identify and publish a list of all severely
economically distressed areas at least annually.
MK.
The Tax Commissioner shall promulgate regulations, in accordance with the Administrative
Process Act (§ 2.2-4000 et seq.), relating to (i) the computation, carryover,
and recapture of the credit provided under this section; (ii) defining criteria
for (a) a major business facility, (b) qualifying full-time employees at such
facility, and (c) economically distressed areas; and (iii) the computation,
carryover, recapture, and redemption of the credit by affiliated companies
pursuant to subsection S Q.
NL. The provisions of this
section shall apply only in instances where an announcement of intent to
establish or expand a major business facility is made on or after January 1,
1994. An announcement of intent to establish or expand a major business
facility includes, but is not limited to, a press conference or extensive press
coverage, providing information with respect to the impact of the project on
the economy of the area where the major business facility is to be established
or expanded and the Commonwealth as a whole.
OM. The credit allowed pursuant to
this section shall be granted to the person who pays taxes for the qualified
full-time employees pursuant to Chapter 5 (§ 60.2-500 et seq.) of Title 60.2.
PN. No person shall claim a
credit allowed pursuant to this section and the credit allowed pursuant to §
58.1-439.2.
QO. No person operating a
business in the Commonwealth pursuant to Chapter 29 (§ 59.1-364 et seq.) of
Title 59.1 shall claim a credit pursuant to this section.
RP. Notwithstanding subsection OM,
a taxpayer may, for the purpose of determining the number of qualified
full-time employees at a major business facility, include the employees of a
contractor or a subcontractor if such employees are permanently assigned to the
taxpayer's major business facility. If the taxpayer includes the employees of a
contractor or subcontractor in its total of qualified full-time employees, it
shall enter into a contractual agreement with the contractor or subcontractor
prohibiting the contractor or subcontractor from also claiming these employees
in order to receive a credit given under this section. The taxpayer shall
provide evidence satisfactory to the Department of Taxation that it has entered
into such a contract.
SQ. For purposes of satisfying
the criteria of subdivision C 1, two or more affiliated companies may elect to
aggregate the number of jobs created for qualified full-time employees as the
result of the establishment or expansion by the individual companies in order
to qualify for the credit allowed pursuant to this section. For purposes of this
subsection, "affiliated companies" means two or more companies
related to each other such that (i) one company owns at least 80 percent of the
voting power of the other or others or (ii) at least 80 percent of the voting
power of two or more companies is owned by the same interests.
TR. The General Assembly of
Virginia finds that modern business infrastructure allows businesses to locate
their administrative or manufacturing facilities with minimal regard to the
location of markets or the transportation of raw materials and finished goods,
and that the economic vitality of the Commonwealth would be enhanced if such
facilities were established in Virginia. Accordingly, the provisions of this
section targeting the credit to major business facilities and limiting the
credit to those companies which establish a major business facility in Virginia
are integral to the purpose of the credit earned pursuant to this section and
shall not be deemed severable.
2. That the tax credits pursuant to this act shall only be allowed for qualified full-time employees, as defined in § 58.1-439 of the Code of Virginia, first hired on or after January 1, 2010.