SB 120

Under this bill, the Department of Commerce (Commerce) may certify a person

who makes a qualified investment in a registered community development financial

institution (CDFI) to receive a credit against state income and franchise taxes and

against license fees paid by insurers. The bill defines a CDFI as an entity that is

organized under the laws of this state and has been certified by the Community

Development Financial Institutions Fund established under federal law (fund) as

meeting certain eligibility requirements. The bill permits Commerce to register a

CDFI that applies to Commerce and complies with annual reporting requirements.

The bill defines a "qualified investment" as a loan or deposit that pays no interest of

at least $10,000 that is made for a minimum of 60 months and over which the CDFI

retains complete control for the duration of the investment period.

Commerce may revoke the registration of a CDFI that fails to comply with

annual reporting requirements or that no longer meets the eligibility requirement

for certification by the fund. Commerce may certify up to $500,000 in tax credits in

any calendar year.

A person certified to receive tax credits may claim 10 percent of the person's

qualified investment, if the investment is at least $10,000, but not more than

$150,000, or 12 percent of the person's qualified investment, if the investment is

more than $150,000, but not more than $500,000. If the person withdraws the

qualified investment from the CDFI before the end of the investment period and does

not reinvest the qualified investment in another CDFI, the person must repay a

portion of the credit amounts that the person received by adding the portion to the

person's tax or fee liability in a subsequent year. However, the portion that the

person must repay depends on when the person withdraws the investment during

the investment period. The portion that the person must repay decreases the longer

the person holds the investment during the investment period.

Under current law, the maximum amount of dairy manufacturing facility

investment credits that may be claimed by all taxpayers, other than members of

dairy cooperatives, in a fiscal year is $700,000 and the maximum amount of dairy

manufacturing facility investment credits that may be claimed by members of dairy

cooperatives in a fiscal year is $700,000.

Under the bill, the maximum amount of dairy manufacturing facility

investment credits that may be claimed by all taxpayers, other than members of

dairy cooperatives, in a fiscal year is $1,000,000 and the maximum amount of dairy

manufacturing facility investment credits that may be claimed by members of dairy

cooperatives in a fiscal year is $1,000,000.

Under current law, the maximum amount of meat processing facility

investment credits that may be claimed by all taxpayers in a fiscal year is $700,000.

The bill increases the maximum amount of meat processing facility investment

credits that may be claimed by all taxpayers in a fiscal year to $1,200,000.