H-3960.1 _______________________________________________
HOUSE BILL 2751
_______________________________________________
State of Washington 55th Legislature 1998 Regular Session
By Representatives Veloria, Dickerson, Conway, Anderson, Gardner and Chopp
Read first time 01/19/98. Referred to Committee on Trade & Economic Development.
AN ACT Relating to community development financial institutions; adding a new section to chapter 82.04 RCW; adding a new section to chapter 48.14 RCW; providing an effective date; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:
(1) There may be credited against the tax imposed by this chapter, an amount equal to twenty percent of the amount of each qualified deposit made by a person or company during the taxable year into a community development financial institution.
(2) No credit shall be allowed under this section unless the department of financial institutions certifies that the deposit described in this section qualifies for the credit under this section and certifies the total amount of the credit allocated to the person or company. The person or company must provide information on the proposed qualified deposit that includes, but is not limited to a description of terms and conditions of the deposit or equity investment.
(3)(a) If a qualified deposit is withdrawn before the end of the sixty-month period and not redeposited or reinvested in another community development financial institution within thirty days, the entire amount of the tax credit allowed under this section shall be due and payable to the department of revenue within thirty days of the withdrawal.
(b) If the qualified deposit is reduced before the end of the sixty-month period, but not below fifty thousand dollars, the amount of the tax credit attributed to the portion withdrawn shall be due and payable to the department of revenue within thirty days of the withdrawal.
(c) If the qualified deposit is reduced before the end of the sixty-month period, below fifty thousand dollars, the entire amount of the tax credit allowed under this section shall be due and payable to the department of revenue within thirty days of the withdrawal.
(4) The credit allowed under this section shall be limited to the amount of tax imposed by this chapter. Any unused excess credit in a reporting period may be carried forward to future reporting periods for a maximum of two years. The department of revenue shall not approve any qualified deposit that causes the total credits allowed under this section to exceed five million dollars per calendar year.
(5) This section applies only to qualified deposits in community development financial institutions that are approved by the department of revenue after July 1, 1998.
(6) For the purposes of this section:
(a) "Community development financial institution" means a private financial institution located in the state of Washington that is certified by the department of financial institutions, that has community development as its primary mission, and that lends in a designated area in the state. A community development financial institution may include a community development bank, a community development loan fund, a community development credit union, a microenterprise fund, a community development corporation-based lender, and a community development venture fund;
(b) "Designated area" means:
(i) A community empowerment zone under RCW 43.63A.710;
(ii) A distressed area under RCW 43.168.020; or
(iii) A rural natural resources impact area under RCW 43.31.601; and
(c) "Qualified deposit" means a deposit that does not earn interest, or an equity investment, that is equal to or greater than fifty thousand dollars and is made for a minimum duration of sixty months.
NEW SECTION. Sec. 2. A new section is added to chapter 48.14 RCW to read as follows:
(1) There may be credited against the tax imposed by RCW 48.14.020, an amount equal to twenty percent of the amount of each qualified deposit made by a person or company during the taxable year into a community development financial institution.
(2) No credit shall be allowed under this section unless the department of financial institutions certifies that the deposit described in this section qualifies for the credit under this section and certifies the total amount of the credit allocated to the person or company. The person or company must provide information on the proposed qualified deposit that includes, but is not limited to a description of terms and conditions of the deposit or equity investment.
(3)(a) If a qualified deposit is withdrawn before the end of the sixty-month period and not redeposited or reinvested in another community development financial institution within thirty days, the entire amount of the tax credit allowed under this section shall be due and payable to the department of revenue within thirty days of the withdrawal.
(b) If the qualified deposit is reduced before the end of the sixty-month period, but not below fifty thousand dollars, the amount of the tax credit attributed to the portion withdrawn shall be due and payable to the department of revenue within thirty days of the withdrawal.
(c) If the qualified deposit is reduced before the end of the sixty-month period, below fifty thousand dollars, the entire amount of the tax credit allowed under this section shall be due and payable to the department of revenue within thirty days of the withdrawal.
(4) The credit allowed under this section shall be limited to the amount of tax imposed by this chapter. Any unused excess credit in a reporting period may be carried forward to future reporting periods for a maximum of two years. The department of revenue shall not approve any qualified deposit that causes the total credits allowed under this section to exceed five million dollars per calendar year.
(5) This section applies only to qualified deposits in community development financial institutions that are approved by the department of revenue after July 1, 1998.
(6) For the purposes of this section:
(a) "Community development financial institution" has the same meaning as in section 1 of this act;
(b) "Designated area" has the same meaning as in section 1 of this act; and
(c) "Qualified deposit" has the same meaning as in section 1 of this act.
NEW SECTION. Sec. 3. This act takes effect July 1, 1998.
NEW SECTION. Sec. 4. This act expires July 1, 2002.
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