Enacts new Article 3M to GS Chapter 105 entitled Life Sciences Investments.
New GS 105-129.106 defines certain terms, including life sciences company, which is a company engaged in any of the following: biotechnology, including agricultural and industrial uses, pharmaceuticals, biologic products, medical devices, diagnostic devices, and service laboratories or facilities providing support services to the foregoing companies.
New GS 129-106A directs the Secretary of Commerce and the President of the North Carolina Biotechnology Center to establish a nonprofit corporation whose primary purpose is to foster the development of the life science industry in NC. Specifies certain provisions that must be included in the articles of incorporation, including that North Carolina must be the sole voting member of the nonprofit corporation. Directs the Governor and the State Treasurer to jointly vote the state’s interest in the nonprofit corporation. Specifies the members of the initial board of directors of the nonprofit corporation and authorizes them to organize its affairs, including adopting bylaws providing for the subsequent election of additional directors.
New GS 105-129.107 sets forth detailed criteria that a business entity must satisfy to be a qualified entity, including (1) that the entity be established as a for-profit limited liability company whose sole purpose is to foster economic development in the state by making certain loans to life science companies, (2) that the entity has as its sole managing member the nonprofit corporation; and (3) that the entity raises funds for making loans to life science companies by issuing equity certificates for investments made by designated investors with a specified rate of return. Requires the Secretary of Revenue to issue a statement of qualification within 30 days of receiving a certification from an entity under oath that each of the statutory criteria have been met if the Secretary finds the certification to be satisfactory. Specifies that neither a qualifying entity nor the nonprofit corporation that is the sole managing member of a qualifying entity has any power to pledge the credit or taxing power of the state or any of its local governments, or to make debts payable out of any monies or resources except those of the qualifying entity or the nonprofit corporation.
New GS 105-129.108 provides as follows: (1) requires a qualifying entity that determines it will be unable to make a payment required under an equity certificate to comply with specified notice requirements to the investor and the Secretary of Revenue; (2) directs the Secretary of Revenue to deliver to the qualifying entity a tax credit certificate for each designated investor in the amount certified by the qualifying entity to be due within 30 days after receiving notification that a qualifying entity will be unable to make a payment required under an equity certificate; (3) specify that a taxpayer that presents a tax credit certificate is allowed a tax credit equal to 100% of the amount specified in the certificate against the franchise tax levied in Article 3, the income taxes levied in Article 4, or the gross premiums tax levied in Article 8B of GS Chapter 105; (4) specify that the tax credit is refundable; and (5) provides that a pass-through entity is considered the taxpayer for purposes of claiming the credit.
New GS 105-129.109 requires a taxpayer to provide any information required by the Secretary of Revenue to determine the validity of a claim for the credit. Places burden of proving eligibility for credit and the amount of the credit on the taxpayer.
New GS 105-129.110 adds additional information that the Department of Revenue must include in the economic incentives report required by GS 105-256.
Effective for taxable years beginning on or after January 1, 2011.