Source: http://www.leg.state.vt.us/DOCS/2004/ACTS/act067.htm
Timestamp: 2017-12-13 01:43:44
Document Index: 144691143

Matched Legal Cases: ['§ 216', '§ 216', '§ 219', '§ 234', '§ 374', '§ 374', '§ 374', '§ 374', '§ 262', '§ 262', '§ 4302', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5404', '§ 5930', '§ 5930', '§ 5930', '§ 163', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5930', '§ 5811', '§ 5930', '§ 5930', '§ 41', '§ 5930', '§ 5930', '§ 384']

NO. 67. AN ACT RELATING TO JOB CREATION AND DEVELOPMENT.
Sec. 1. 10 V.S.A. § 216(14) is amended to read:
(14) To incorporate one or more nonprofit corporations in Vermont to fulfill the goals of chapter 12 of this title. Such corporation shall be empowered to borrow money and to receive and accept gifts, grants, or contributions from any source, provided that such gifts, grants, or contributions are not less than $5,000.00 from any one source for the period of one year and provided that such nonprofit corporation provides business loans of not less than $2,500.00 to any particular entity or individual. The voting members of the authority shall be directors of the corporation. The corporation shall be organized and operate under the nonprofit corporation laws of the state of Vermont. The authority may contract with the corporation to provide staff and management needs of the company. The authority may contribute no more than $50,000.00 $1,050,000.00 to the capital of the corporation.
Sec. 2. 10 V.S.A. § 216(16) is added to read:
(16) To cause to be formed in Vermont a for-profit limited partnership, the purpose of which shall be to invest funds in commercial and agricultural enterprises that create job opportunities and support economic development. The authority’s investment in the partnership may not exceed $2,000,000.00. To manage the operations of and attract investors to the partnership, the authority is further authorized to cause to be formed in Vermont a for-profit limited liability company. The authority’s investment in the limited liability company shall be determined by the authority.
Sec. 3. 10 V.S.A. § 219(d) is amended to read:
(d) In order to assure the maintenance of the debt service reserve requirement in each debt service reserve fund established by the authority, there may be appropriated annually and paid to the authority for deposit in each such fund, such sum as shall be certified by the chair of the authority, to the governor or the governor-elect, the president of the senate, and the speaker of the house, as is necessary to restore each such debt service reserve fund to an amount equal to the debt service reserve requirement for such fund. The chair shall annually, on or about February 1, make, execute, and deliver to the governor or the governor-elect, the president of the senate, and the speaker of the house, a certificate stating the sum required to restore each such debt service reserve fund to the amount aforesaid, and the sum so certified may be appropriated, and if appropriated, shall be paid to the authority during the then current state fiscal year. The principal amount of bonds or notes outstanding at any one time and secured in whole or in part by a debt service reserve fund to which state funds may be appropriated pursuant to this subsection shall not exceed $25,000,000.00 $70,000,000.00, provided that the foregoing shall not impair the obligation of any contract or contracts entered into by the authority in contravention of the Constitution of the United States.
Sec. 4. 10 V.S.A. § 234(c) is added to read:
(c) Monies in the fund may be loaned at interest rates and on terms and conditions to be set by the authority to establish a line of credit in an amount not to exceed $3,000,000.00 to be advanced to the Vermont small business development corporation to support its lending operations as established pursuant to subdivision 216(14) of this title.
Sec. 5. 10 V.S.A. § 374a(b) is amended to read:
§ 374a. CREATION OF THE VERMONT AGRICULTURAL CREDIT PROGRAM
Sec. 6. 10 V.S.A. § 374b is amended to read:
(4) “Asset acquisition loan” means a loan to purchase land, to purchase, improve, enlarge, construct or reconstruct buildings and structures, to purchase or install machinery, equipment and fixtures, and to purchase livestock to be used in a farm operation or an agricultural facility, together with professional fees and other expenses reasonably related to those activities or undertakings. “Farm ownership loan” means a loan to acquire or enlarge a farm or agricultural facility, to make capital improvements including construction, purchase, and improvement of farm and agricultural facility buildings that can be made fixtures to the real estate, to promote soil and water conservation and protection, and to refinance indebtedness incurred for farm ownership or operating loan purposes, or both.
(10) “Loan” means an operating loan or an asset acquisition farm ownership loan, including a financing lease, provided that such lease transfers the ownership of the leased property to each lessee following the payment of all required lease payments as specified in each lease agreement.
(11) “Operating loan” shall mean a loan to finance or refinance seed, feed, fertilizer, horticultural and silvicultural supplies, and other annual operating expenses of an agricultural facility or farm operation, or to refinance machinery, equipment or livestock means a loan to purchase livestock, farm equipment, or fixtures to pay annual operating expenses of a farm operation or agricultural facility, to pay loan closing costs, and to refinance indebtedness incurred for farm ownership or operating loan purposes, or both.
Sec. 7. 10 V.S.A. § 374h is amended to read:
(a) Asset acquisition loan. A farmer, or a limited liability company, partnership, corporation or other business entity the majority ownership of which is vested in one or more farmers, shall be eligible to apply for an asset acquisition loan a farm ownership or operating loan, provided the applicant is:
(b) Operating loan. A farmer, or a limited liability company, partnership, corporation or other business entity the majority ownership of which is vested in one or more farmers, shall be eligible to apply for an operating loan, provided the applicant can satisfy the criteria specified in subdivisions (a)(1) through (14) of this section and is further able to demonstrate that the loan applied for will improve the cash flow of the agricultural facility or farm operation, or that the loan will result in a positive cash flow for the applicant’s agricultural facility and farm operation within a reasonable time after the making of the loan, and there is a reasonable probability that the cash flow from the agriculture facility or farm operation will remain positive through the original term of the loan.
Sec. 7a. 10 V.S.A. § 262 is amended to read:
§ 262. FINDINGS
Before making any loan, the authority shall receive from an applicant a loan application in such form as the authority may by regulation prescribe, and the authority, or the authority’s loan officer pursuant to the provisions of section subdivision 216(15) of this title, shall determine and incorporate findings in its minutes that:
(5) The principal obligation of the authority’s mortgage does not exceed $1,300,000.00 of which no more than $800,000.00 may be secured by land and buildings and no more than $500,000.00 may be secured by machinery and equipment; unless an integral element of the project consists of the generation of heat or electricity employing biomass, geothermal, methane, solar, or wind energy resources to be primarily consumed at the project, in which case the principal obligation of the authority’s mortgage does not exceed $2,000,000.00, of which no more than $1,500,000.00 may be secured by land and by buildings, and no more than $500,000.00 may be secured by machinery and equipment; such principal obligation does not exceed forty 40 percent of the cost of the project; and the mortgagor is able to obtain financing for the balance of the cost of the project from other sources as provided in the following section;
Sec. 7b. 24 V.S.A. § 4302(c)(13) is added to read:
(13) To ensure the availability of safe and affordable child care and to integrate child care issues into the planning process, including child care financing, infrastructure, business assistance for child care providers, and child care work force development.
Sec. 8. 32 V.S.A. § 5930a(a) is amended to read:
(a) There is created a Vermont economic progress council which shall be attached to the department of economic development for administrative support, including an executive director who shall be appointed by the council, knowledgeable in subject areas of the council’s jurisdiction, and hold the status of an exempt state employee, and a staff assistant who shall be an employee administrative staff employed in the state classified service, whose positions shall both come from currently vacant state employee positions and not add any new positions to the state. The council shall consist of nine citizens of the state appointed by the governor. The governor shall appoint citizens to the council who are knowledgeable and experienced in the subjects of community development and planning, education funding requirements, economic development, state fiscal affairs, property taxation, or entrepreneurial ventures, and shall make appointments to the council insofar as possible as to provide representation to the various geographical areas of the state and municipalities of various sizes. Members of the council shall serve initial staggered terms with three members serving three-year terms, three members serving two-year terms, and three members serving one-year terms. All council members’ terms shall be three-year terms upon the expiration of their initial terms and council members may be reappointed to serve successive terms. The governor shall select a chair from among the council’s members. In addition to the nine members appointed by the governor, there shall also be two regional members from each region of the state; one shall be designated by the regional development corporation of the region and one shall be designated by the regional planning commission of the region. Regional members shall be nonvoting members and shall serve during consideration by the council of applications from their respective regions. For attendance at meetings and for other official duties all appointed members, including regional members, shall be entitled to compensation for services and reimbursement of expenses as provided in section 1010 of this title. A regional member who does not otherwise receive compensation and reimbursement for expenses from his or her regional development or planning organization shall also be entitled to compensation and reimbursement of expenses for attendance at meetings and for other official duties as provided in section 1010 of this title.
Sec. 9. 32 V.S.A. § 5930a(b)(2) is amended to read:
(2) the economic advancement tax incentives set forth in this subchapter section 5930b of this title, the high-tech growth incentives set out in section 5930k of this title, and the sustainable technology incentives set out in sections 5930w and 5930x of this title;
Sec. 10. 32 V.S.A. § 5930a(c)(1) is amended to read:
Sec. 11. 32 V.S.A. § 5930a(e) is amended to read:
(e) A business or municipality may apply to the economic progress council to receive the economic incentives available under subsection (b) of this section, except that only a municipality may apply for approval of a tax stabilization agreement as allowed under 32 V.S.A. § subdivision 5404a(a)(2) and (e) and for of this title, education fund revenue sharing under 32 V.S.A. § 5404a(a)(2) subsection 5404a(e) of this title, and tax increment financing districts under subsection 5404a(f) of this title.
Sec. 12. 32 V.S.A. § 5930a(j) is amended to read:
(j) By February 15 April 1 of each year, the council, in consultation with the commissioner of economic development, shall report and the department of taxes shall file a joint report on economic advancement tax incentives to with the chairs of the house committee on ways and means, the house committee on commerce, the senate committee on finance, the senate committee on economic development, housing and general affairs, the house and senate committees on appropriations, and the joint fiscal committee of the general assembly and provide notice of the report to the members of those committees on. The joint report shall contain the gross and net value of incentives granted pursuant to subdivisions (b)(1), (4), and (5) of this section and pursuant to subdivisions (b)(2) and (3) of this section during the preceding year. The joint report shall include an account of each incentive granted under subsection (b) of this section, from inception of the program to the date of the report, including the date and amount of the award, the expected calendar year or years in which the award will be exercised, whether the award is currently available, the date the award will expire, and the amount and date of all incentives exercised. The council’s joint report shall also describe the extent to which the tax credits allowed by the department of taxes in the previous calendar year supported economic activity that complied with the performance expectations in the written notification of approval under subsection (k) of this section. The joint report shall summarize all credits awarded and earned, applied for, and carried forward by entities participating in the economic advancement tax incentives program authorized by this subchapter through the end of the preceding calendar year. The joint report shall include the claims by specific type of credit, number of participating entities, and tax type against which the credit is applied. The joint report shall also include information on award recaptures. The joint report shall also include information on economic activity, benefits to the state, and recipient performance in the fiscal year in which the credit was applied. The department of taxes shall develop the capacity to report by fiscal year the amount of total credits applied by tax type against the tax liabilities for the prior fiscal year and any award recaptures. The joint report shall also address the council’s conformance with the annual authorizations established in subsection (i) of this section. The council and department may use measures to protect confidential financial information, such as reporting information in an aggregate form or masking the identity of the tax award recipient.
Sec. 12a. 32 V.S.A. § 5930a(k) is amended to read:
(k) The council shall provide written notification to the applicant of its approval of economic incentives under subsection (b) of this section. The written notification shall include both an assessment of the probability that the economic development activity would not occur or would occur in a significantly different and significantly less desirable manner but for the approval of incentives under this section, and an assessment of the application’s consistency with the guidelines set forth in subsection (c) of this section. The written notification shall also specify performance expectations on which approval has been granted and continuing approval shall be conditioned. In the written notification, the council shall set out the performance expectations upon which an award is based in clear and quantifiable benchmarks, sufficient to enable the department of taxes, pursuant to subdivision (1)(B) of subsection (l) of this section, to determine whether performance expectations have been met. The council shall forward a copy of the written notification, including its assessment and the performance expectations, with the certificate of eligibility that it provides to the department of taxes.
Sec. 13. 32 V.S.A. § 5930a(l)(1)(A) and (B) are amended to read:
(A) To claim an incentive under subdivisions (b)(2) and (b)(3) of this section, an award recipient shall file a report with the department of taxes and with the council within 60 days of the close of the applicant’s fiscal year in which the economic activity occurred On or before the date, including the date of any extensions, that an award recipient is required to file its return under the provisions of sections 5861, 5862, 5914, or 5920 of this title, an award recipient shall file a report with the department of taxes and with the council for each tax year for which the award is authorized by the council. The report shall respond directly to the performance expectations in the written notification of approval issued under subsection (k) of this section, and shall include a description of the economic activity, including the total number of jobs created, the number of new jobs filled by Vermont residents, the wages for the new jobs, investments made according to the categories of incentives awarded, the nature and extent to which the economic activity was consistent with the guidelines in subsection (c) of this section, and any other information required by the council or the department of taxes to assess the performance of the award recipient.
(B) The department of taxes shall compare the award recipient’s report with the performance expectations in the written notification of approval. Upon determining that an award recipient has met all of the performance expectations the department of taxes shall allow the tax credit and shall provide the council with a report of the credit amount allowed and the basis for allowing the credit. If the department of taxes is unable to determine full compliance with the performance expectations, the department shall request that the council conduct a more detailed review. If the department requests the council to conduct a more detailed review, the council shall assess whether the taxpayer’s actual performance meets the goals of the overall performance expectations and all factors upon which the authorization was originally based. The council shall conduct the review in a manner consistent with the original authorization, including examination of consistency with guidelines, and, if necessary, application of the cost-benefit model. At the conclusion of its review, the council shall submit a written report to the commissioner of taxes, setting out the factors and bases for the council’s reassessment, if any, and recommending that the credit be approved, in full or in part, or disallowed. Upon receiving the council’s reassessment and recommendation, the commissioner of taxes shall decide whether the credit shall be approved, in full or in part, or disallowed.
Sec. 13a. [deleted]
Sec. 13b. TRACKING AND REPORTING TAX CREDITS; COST
ESTIMATES; IMPLEMENTATION PLAN
The department of taxes shall develop cost estimates and an implementation plan for electronic data processing of information relating to tracking and reporting of tax credits, including all economic advancement tax incentives awarded under subchapter 11E of chapter 151 of Title 32. The cost estimates and implementation plan shall be reported to the secretary of administration and the legislative joint fiscal committee at the meeting of the committee in September 2003.
Sec. 13c. 32 V.S.A. § 163(12) is amended to read:
(12) Biennially audit the economic advancement tax incentives program established under chapter 151, subchapter 11E of this title to determine compliance with that subchapter and all other applicable statutes and regulations. The auditor’s report shall be made available to the general assembly during the fourth quarter of the second year of each biennium. The auditor shall include in this biennial audit verifications of any of the inspections done by the tax department of awardees of economic advancement tax incentives to determine the relationship between performance and credits claimed.
Sec. 14. 32 V.S.A. § 5930a(m) is amended to read:
(m)(1) Recapture for failure to meet performance expectations. The value of any economic incentives taken by an applicant that has obtained the council’s approval under this section shall be refunded to the state, and any economic incentives remaining to be exercised shall be disallowed in the event that:
(1)(A) the applicant fails to comply with all performance expectations upon which the award was conditioned as set out in the notification provided in subsection (k) of this section and determined by the department of taxes under subsection (l) of this section;
(2)(B) the applicant knowingly fails to supply any information required under this section or knowingly files false or misleading information; or
(3)(C) the applicant fails to file the report required in subsection (l) of this section.
(2) The commissioner may assess amounts payable under this subsection any time within the time period provided in section 5882 of this title for adjustments to the returns on which the credit is applied or within three years of the date that the required report or information was due or the false or misleading information was supplied. The award recipient shall pay the amount required by this subsection within 30 days of the commissioner’s assessment.
Sec. 15. 32 V.S.A. § 5930b is amended to read:
A business may request approval of not more than three of the five economic incentives provided in sections 5930c, 5930d, 5930e, 5930f, and 5930g of this subchapter title. A high-tech business may, in the alternative, request approval of not more than three of the five economic incentives as provided in section 5930k of this subchapter title. A sustainable technology business may, in the alternative, request approval of the sustainable technology research and development tax credit in section 5930w of this title in lieu of the research and development tax credit in section 5930d of this title, or request approval of the sustainable technology export tax credit in section 5930x in lieu of the export tax credit in section 5930f of this title. Approval of the Vermont economic progress council pursuant to this subchapter may be for up to five years.
Sec. 16. 32 V.S.A. § 5930c is amended to read:
A person, upon obtaining the approval of the Vermont economic progress council pursuant to section 5930a of this title, may receive a credit against income tax liability imposed under this chapter equal to a percentage of its increased payroll costs, defined as salaries and wages, excluding any payroll costs attributed to an employee with more than 10 percent ownership interest including attribution of ownership interests of the employee’s spouse, parents, spouse’s parents, siblings, and children, within the state of Vermont in the tax year for which the credit is claimed above its costs of salaries and wages from the preceding tax year according to the following schedule:
Sec. 17. [deleted]
Sec. 18. 32 V.S.A. § 5930e is amended to read:
(a) A person, upon obtaining the approval of the Vermont economic progress council pursuant to section 5930a of this title, may receive a credit against its income tax imposed by this chapter in the amount of ten 20 percent of its qualified training, education and workforce development expenditures within the state of Vermont in the tax year that such expenditures were made.
(c) A person that has obtained the approval of the Vermont economic progress council, may receive a credit against its income tax imposed by this chapter in the amount of twenty 25 percent of its qualified training, education and workforce development expenditures for the benefit of welfare-to-work participants in the tax year for which the credit is claimed individuals receiving public assistance who are participants in “reach-up” or other programs designed to help them achieve economic self-sufficiency.
Sec. 19. 32 V.S.A. § 5930f(1) is amended to read:
(1) For a C corporation, the credit is in an amount equal to the difference between a calculation of its income tax under the formula for apportionment provided in section 5833 of this title and a calculation of its income tax under the formula for apportionment provided in section 5833, except that such calculation shall be determined (i) without regard to that portion of subdivision 5833(a)(3) which provides that sales of property shipped from this state are sales of tangible personal property made in this state; and (ii) by doubling double-weighting the sales factor in subdivision 5833(a)(3).
Sec. 20. 32 V.S.A. § 5930g is amended to read:
§ 5930g. Small business Capital investment tax credit
(4) A person is not required to acquire an ownership interest with its investment to be eligible to receive an income tax credit under this section, provided the Vermont Economic Progress Council economic progress council has approved a long-term capital lease as an investment eligible to receive an income tax credit, and the person’s investment has been made in the form of a long-term capital lease that meets the lease accounting criteria established by Financial Accounting Standard No. 13 as promulgated by the Financial Accounting Standards Board. The person’s investment shall be the present value, at the time the lease is executed, of the minimum lease payments over the period of the lease, excluding executory costs, as outlined in the Financial Accounting Standard No. 13. Any credit based upon a long-term capital lease shall be disallowed or, if used, then repaid, if the taxpayer terminates the lease prior to the end of the lease term originally approved by the Vermont Economic Progress Council.
Sec. 21. 32 V.S.A. § 5930h is amended to read:
§ 5930h. Carry-forward, carry-back, and recapture FOR
SUBSTANTIAL CURTAILMENT OF TRADE OR BUSINESS
(a) A five-year carry-forward is allowed for each economic incentive under this subchapter. The carry-forward period shall run for no more than five years after the last year of the term approved by the council for the receipt of incentives. Carry-forward. A credit not otherwise useable in the year earned may be carried forward to any subsequent year for which an approval exists, or to any of the next five succeeding years following the last year of the term approved by the council for the receipt of incentives.
(b) Carry-back. Carry-backs are not allowed for the economic incentives under this subchapter.
(c) In the event a person that obtained the approval of the Vermont economic progress council under section 5930a of this title ceases to employ in Vermont, for a period of 120 consecutive days, at least 75 percent of the number of employees it employed in Vermont as of the year in which a credit was utilized under this subchapter Recapture amounts.
(1) In the event that a person has substantially curtailed its trade or business, then for any such year and all succeeding years, any unused credit economic incentives, including any amount of economic incentive carried forward, shall be disallowed. Furthermore, there shall be imposed upon each such employer a recapture penalty, and any economic incentives used shall be recaptured in an amount equal to a percentage of the total credit economic incentive used, computed in accordance with the following table:
Years between close of tax year Percent of credit
when credit became available economic incentives
economic incentive was recaptured
earned and year when
business became ineligible
(2) The recapture shall be reported on the taxpayer’s income tax return of the taxpayer claiming the incentive for the tax year in which the 120 consecutive-day threshold occurred.
(d) Curtailment of trade or business. A person who has obtained an economic incentive under this subchapter shall file with the council and the commissioner of taxes each year until the sixth year following the last year for which an incentive was authorized a statement of the average number of full‑time employees during that year and the lowest number of full-time employees for any 120‑consecutive‑day period ending during that year. For the purposes of this section, “full‑time employee” means an employee who works no less than 37 hours each week. A person shall be deemed to have substantially curtailed its trade or business if the average number of full-time employees in any period of 120 consecutive days is less than 75 percent of the highest average number of full-time employees for any year in a period of six years after the initial authorization of an incentive by the council.
(e) Notifications; hearing; written determination. A person that has obtained an economic incentive shall notify the council in writing within 60 days of a substantial curtailment of its trade or business. The council shall notify the commissioner of taxes of a substantial curtailment of trade or business and the amount of economic incentive authorized to the person required to report under this subsection. The council shall provide the taxpayer and the commissioner of taxes with a written determination of the amount of the economic incentive that shall be recaptured or disallowed as computed according to the table in subdivision (c)(1) of this section.
(f) Deferral and mitigation of disallowance and recapture. Within 90 days of receipt of written determination of recapture or disallowance under subsection (e) of this section, a person may apply to the council for a deferral of the disallowance or recapture for a nonrenewable period of 12 months.
(1) The deferral may be granted by the council upon its determination that there is a reasonable likelihood that the trade or business will restore its employment level above the minimum recapture level within the deferral period.
(2) Mitigation of disallowance or recapture may be granted or denied by the council in accordance with the following:
(A) If the taxpayer restores its employment level above the minimum recapture level, the council shall waive disallowance and recapture.
(B) If the taxpayer fails to restore its employment level to eliminate the substantial curtailment by the end of the deferral period and has failed to substantially complete all other goals upon which the incentive was based, any unused economic incentives shall be disallowed, and the amount of recapture shall be the amount as determined under subsection (c) of this section.
(C) If the taxpayer fails to restore its employment level to eliminate the substantial curtailment by the end of the deferral period but has substantially completed all other goals upon which the incentive was based, the council shall recalculate the costs and benefits of the taxpayer’s actual job creation and performance related to the factors upon which the award was based. The council shall then determine and recommend to the commissioner of taxes a mitigated amount of disallowance or recapture based on the difference between the amount of credits already applied by the taxpayer and the amount of credits that is otherwise determined through the recalculation of the taxpayer’s actual performance under the cost-benefit model.
Sec. 21a. 32 V.S.A. § 5930i is amended to read:
(a) Credit as calculated in this subchapter to a person who is a partnership, limited liability company, subchapter S corporation, or trust, shall be available to a partner, member, shareholder, or beneficiary required to pay Vermont income tax in the same proportion as the income of the person is distributed allocated to the shareholder, partner, member or beneficiary.
(b) The amount of credit available to such partner, member, shareholder or beneficiary shall be no more than 80 percent of the person’s precredit Vermont income tax attributable to the allocated income from the business eligible for the credit.
(c) Any credits available to a corporation pursuant to subsection 5930h(a) of this title shall be transferred to the shareholders of the corporation in the first year in which the corporation elects to file as an S corporation. The credits shall be available to the shareholders in the year of the election and shall be available for the same years as the credits would have been available to the corporation.
Sec. 22. 32 V.S.A. § 5930j(b) is amended to read:
(b) The economic progress council shall advise the governor and the general assembly on long-term economic development planning.
(2) The council shall submit a biennial report to the governor and the general assembly on or before December 15 of each year, beginning in the year 2004, with its recommendations for implementing the state’s long-term economic development planning agenda. Such recommendations shall contain goals, anticipated budgets, evaluation mechanisms, and proposals for legislation where necessary.
Sec. 23. 32 V.S.A. § 5930k(a) is amended to read:
(a) For purposes of this section, “high-tech business” means a business whose activity in Vermont is certified by the commissioner of economic development to be exclusively in design, development and, or manufacture of:
Sec. 23a. HIGH-TECH GROWTH INCENTIVES; SUSTAINABLE
TECHNOLOGY TAX CREDITS; REVIEW AND SUNSET
(a) On or before January 1, 2007, the Vermont Economic Progress Council and the tax department shall report to the joint fiscal committee and the legislative council on the amount, application, and use of high-tech growth tax incentives and credits awarded and claimed under 32 V.S.A. § 5930k, the sustainable technology research and development tax credit awarded and claimed under 32 V.S.A. § 5930w, and the sustainable technology export tax credit awarded and claimed under 32 V.S.A. § 5930x.
(b) Unless otherwise extended by act of the General Assembly, section 5930k of Title 32 enacted in Sec. 4 of No. 138 of the 2001 Adj. Sess. (2002), establishing high-tech growth tax incentives, section 5930w of Title 32 enacted in Sec. 24b of this act, establishing a sustainable technology research and development tax credit, and section 5930x of Title 32 enacted in Sec. 24c of this act, establishing a sustainable technology export tax credit, are repealed effective January 1, 2008. Any incentives or credits awarded under those sections prior to January 1, 2008 may be claimed by a taxpayer during any remaining award period approved by the Vermont Economic Progress Council.
Sec. 23b. AUTHORIZATION; VERMONT ECONOMIC PROGRESS
(a) The sum of the net fiscal costs of economic incentives that the Vermont Economic Progress Council may approve under 32 V.S.A. § 5930a(b)(1), (4), and (5) for all projects that are net‑negative under the cost-benefit model in 32 V.S.A. § 5930a(d) shall not exceed $300,000.00 in fiscal year 2004, $300,000.00 in fiscal year 2005, and $300,000.00 in fiscal year 2006.
(b) The sum of the net fiscal costs of economic incentives that the Vermont Economic Progress Council may approve under 32 V.S.A. § 5930a(b)(2) and (3) for all projects that are net‑negative under the cost-benefit model in 32 V.S.A. § 5930a(d) shall not exceed $1,000,000.00 in fiscal year 2004, $1,000,000.00 in fiscal year 2005, and $1,000,000.00 in fiscal year 2006.
(c) The annual authorizations in subsections (a) and (b) of this section are for the year specified only. Any unused balance of authorizations shall not be carried forward into future years.
Sec. 24. 32 V.S.A. § 5930v is added to read:
(a) A qualified taxpayer of this state shall be eligible for taxation of capital gain income under subdivision 5811(21) of this title resulting from eligible venture capital investment under this section made by the taxpayer during the taxable year. If the taxpayer is a partnership, limited liability company, or S corporation, the treatment of capital gain income under this section shall be allocated ratably among the partners, members, or shareholders of the entity.
(1) “Advanced technologies” means any technology that may be used to perform a new function or an existing function in an improved fashion and which is significantly different from currently commonly used technologies.
(2) “At-risk debt” means debt which is not secured, is not guaranteed by a substantial owner of the business, will not be repaid for at least five years, or bears a reasonable rate of interest.
(3) “Eligible venture capital investment” means up to $200,000.00 of total investment by one person, which is equity or at-risk debt investment in one qualified business, for expenditure by the qualified business on the plant, equipment, research, and development or as working capital in Vermont.
(4) “Qualified business” means a business which:
(A) has its principal place of business in this state;
(B) had in the year preceding the investment annual gross sales of $3,000,000.00 or less; and
(i) is primarily engaged in the creation or production of tangible personal property for sale;
(ii) is primarily engaged in development or application of advanced technologies; or
(iii) provides a product or service that is or will be sold or provided predominantly outside the state.
(5) “Qualified taxpayer” means a taxpayer who is not a substantial owner of the qualified business.
(6) “Substantial owner” means a person who, after the investment, has greater than 25 percent ownership interest in the qualified business, including attribution of ownership interests of the individual’s spouse, parents, spouse’s parents, siblings, and children; or is a person who is controlled by, or has actual control of, the qualified business through any combination of ownership and management.
Sec. 24a. 32 V.S.A. § 5811(21) is amended to read:
(ii) forty 40 percent of adjusted net capital gain income as defined in Section 1(h) of the Internal Revenue Code;
Sec. 24b. 32 V.S.A. § 5930w is added to read:
§ 5930w. ECONOMIC ADVANCEMENT SUSTAINABLE TECHNOLOGY
(a) For the purposes of this section, a “sustainable technology business” means a business whose activity in Vermont is primarily in design, development, or manufacture of computer software, machinery, or equipment used by an industry to generate electricity using biomass, geothermal, methane, solar, or wind energy resources; or to produce heat for residential or commercial structures using biomass, geothermal, methane, solar, or wind energy resources.
(b) A sustainable technology business, upon obtaining approval of the Vermont economic progress council pursuant to section 5930a of this title, may receive a credit against the income tax liability imposed under this chapter in the amount of 30 percent of qualified sustainable research and development expenditures made by the taxpayer in the taxable year.
(c) “Qualified sustainable research and development expenditures” means research and development expenditures that are:
(1) “qualified research expenses” as defined in the Internal Revenue Code at 26 U.S.C. § 41(b);
(2) made within the state of Vermont, for the purpose of design, development, or manufacture of computer software, machinery, or equipment used by an industry to generate electricity using biomass, geothermal, methane, solar, or wind energy resources; or to produce heat for residential or commercial structures using biomass, geothermal, methane, solar, or wind energy resources.
Sec. 24c. 32 V.S.A. § 5930x is added to read:
§ 5930x. ECONOMIC ADVANCEMENT SUSTAINABLE TECHNOLOGY
(b) A sustainable technology business, after obtaining the approval of the Vermont economic progress council pursuant to section 5930a of this title, may receive a credit against its income taxes imposed by this chapter.
(1) For a C corporation, the credit is in an amount equal to the difference between a calculation of its income tax under the formula for apportionment provided in section 5833 of this title and a calculation of its income tax under the formula for apportionment provided in section 5833, except that such calculation shall be determined without regard to that portion of subdivision 5833(a)(3) which provides that sales of property shipped from this state are sales of tangible personal property made in this state, and by triple‑weighting the sales factor in subdivision 5833(a)(3).
(2) For persons other than C corporations, the credit is equal to the difference between the amount computed by applying the corporate income tax rates provided in section 5832 of this chapter to the income attributable to Vermont determined using the two apportionment methods set out in subdivision (1) of this subsection as if the income attributable to Vermont were taxed at the entity level.
(c) A person shall be eligible for the credit in this section if the business entity is engaged, as its primary source of business, in the design, development, or manufacture of computer software, machinery, or equipment used by an industry to generate electricity using biomass, geothermal, methane, solar, or wind energy resources; or to produce heat for residential or commercial structures using biomass, geothermal, methane, solar, or wind energy resources.
Sec. 25. SALES TAX HOLIDAY FOR COMPUTER PURCHASES
It is the policy of the state to encourage the youth of Vermont to acquire and become skilled with modern technology, especially personal computers, and to facilitate their acquisition of basic computers for this purpose. Notwithstanding the provisions of chapter 233 of Title 32, no sales or use tax shall be imposed or collected on sales from August 9 through 11, 2003, of personal computers to individuals for personal use. Consistent with the purpose of this section, the commissioner of taxes shall publish a list of personal computers and components thereof that are to be exempt from the sales and use tax under this section.
Sec. 25a. 21 V.S.A. § 384(a) is amended to read:
(a) An employer shall not employ an employee at a rate less than $5.75 an hour, and after December 31, 2000, at a rate less than $6.25 an hour, beginning on January 1, 2004 at a rate less than $6.75 an hour, and beginning on January 1, 2005 at a rate less than $7.00 an hour. An employer in the hotel, motel, tourist place, and restaurant industry shall not employ a service or tipped employee beginning on January 1, 2004 at a basic wage rate less than $3.58 an hour, beginning on January 1, 2005 at a basic wage rate less than $3.65 an hour and thereafter at a rate to be determined when the minimum wage is increased. For the purposes of this subdivision “a service or tipped employee” means all those, in either hotels, motels, tourist places, and restaurants who customarily and regularly receives more than $30.00 per month in tips for direct and personal customer service. If the minimum wage rate established by the United States government is greater than the rate established for Vermont for any year, the minimum wage rate for that year shall be the rate established by the United States government.
Sec. 25b. REPEAL
Sec. 2 of No. 4 of the Acts of 1997 (Rule Change; Minimum Wage Order; Tip Credit Rate) is repealed effective January 1, 2004.
(a) Secs. 1 through 7a of this act, relating to the activities of the Vermont Economic Development Authority, and this Sec. 26 shall take effect from passage.
(b) Secs. 8 through 23b, relating to the procedures and authority of the Vermont Economic Progress Council (VEPC), shall take effect July 1, 2003, except the provisions of Sec. 21, amending subsection 5930h(a) of Title 32, relating to carry-forwards, and Sec. 21a, adding subsection 5930i(c) of Title 32, relating to credit allocations of S corporations, shall take effect from passage and apply retroactively to January 1, 1998.
(c) Secs. 24 and 24a of this act, relating to the venture capital investments, shall take effect July 1, 2003 and apply to investments made on or after that date.
(d) Secs. 24b and 24c, relating to tax credits for sustainable technology research and development and exports, shall take effect upon passage and shall apply to taxable years beginning on and after January 1, 2003.
(e) Sec. 25, relating to sales tax holiday for computer purchases, shall take
effect July 1, 2003.