General Assembly Substitute Bill No. 6746
January Session, 2017 *_____HB06746FIN___042817____*
General Assembly
Substitute Bill No. 6746
January Session, 2017
*_____HB06746FIN___042817____*
AN ACT CONCERNING A BIOSCIENCE AND BIOTECHNOLOGY INVESTMENT TAX CREDIT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2017, and applicable to taxable and income years commencing on or after January 1, 2017) (a) As used in this section:
(1) "Qualified investor" means an accredited investor, as defined by the Securities and Exchange Commission, or network of accredited investors who review new or proposed businesses for potential investment and who may seek active involvement, such as consulting and mentoring, in a Connecticut bioscience or biotechnology business. "Qualified investor" does not include (A) any person controlling fifty per cent or more of the Connecticut bioscience or biotechnology business invested in by the qualified investor, or (B) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of such bank's, company's or association's normal course of business;
(2) "Cash investment" means the contribution of cash, at a risk of loss, to a Connecticut bioscience or biotechnology business in exchange for qualified securities;
(3) "Connecticut bioscience or biotechnology business" means any business with its principal place of business in Connecticut that (A) is engaged in bioscience or biotechnology, and (B) qualifies for a credit under section 12-217j of the general statutes for the income year a cash investment is made in such business by a qualified investor;
(4) "Bioscience" means (A) the manufacture of pharmaceuticals, medicines, medical equipment, medical devices or analytical laboratory instruments, (B) the operation of medical or diagnostic testing laboratories, or (C) the conducting of pure research and development in life sciences;
(5) "Biotechnology" means the application of technologies, such as recombinant DNA techniques, biochemistry, molecular and cellular biology, genetics and genetic engineering, biological cell fusion techniques and new bioprocesses, using living organisms, or parts of organisms, to produce or modify products, to improve plants or animals, to identify targets for small molecule pharmaceutical development, to transform biological systems into useful processes and products or to develop microorganisms for specific uses; and
(6) "Qualified securities" means any form of equity, including a general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position that must be convertible into common stock.
(b) (1) In the case of a qualified investor that is subject to the tax imposed under chapter 229 of the general statutes, there shall be allowed a credit against the tax imposed under said chapter, other than the liability imposed by section 12-707 of the general statutes, for a cash investment in the qualified securities of a Connecticut bioscience or biotechnology business by such qualified investor. The credit shall be in an amount equal to fifty per cent of such investor's cash investment, provided (A) the total amount of tax credits allowed to any such qualified investor that is a venture capital fund, as defined in 17 CFR 275.203(l)-1, shall not exceed two hundred fifty thousand dollars, and (B) the total amount of tax credits allowed to any other such qualified investor shall not exceed fifty thousand dollars. The credit shall be claimed in the taxable year in which such cash investment is made by the qualified investor. The credit may be sold, assigned or otherwise transferred, in whole or in part. If the qualified investor is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the qualified investor. If the qualified investor is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by such limited liability company's owner, provided such owner is a person subject to the tax imposed under chapter 229 of the general statutes.
(2) In the case of a qualified investor that is subject to the tax imposed under chapter 208 of the general statutes, there shall be allowed a credit against the tax imposed under chapter 208 of the general statutes for a cash investment in the qualified securities of a Connecticut bioscience or biotechnology business by such qualified investor. The credit shall be in an amount equal to fifty per cent of such investor's cash investment, provided the total amount of tax credits allowed to any such qualified investor shall not exceed two hundred fifty thousand dollars. The credit shall be claimed in the income year in which such cash investment is made by the qualified investor. The credit may be sold, assigned or otherwise transferred, in whole or in part.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2017, and applicable to taxable and income years commencing on or after January 1, 2017 New section
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2017, and applicable to taxable and income years commencing on or after January 1, 2017
New section
Statement of Legislative Commissioners:
In Subdiv. (1) of Subsec. (a), technical changes were made for adherence to standard drafting conventions and for clarity; and in Subdiv. (1) of Subsec. (b), "17" was inserted before "CFR" for accuracy.
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