BILL NUMBER: AB 2045 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2012
AMENDED IN ASSEMBLY APRIL 16, 2012
AMENDED IN ASSEMBLY APRIL 9, 2012
INTRODUCED BY Assembly Member Perea
FEBRUARY 23, 2012
An act to add Chapter 4.5 (commencing with Section 13996)
to Part 4.7 of Division 3 of Title 2 of the Government
Section 24416.23 to the Revenue and Taxation Code,
relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 2045, as amended, Perea. Emerging technology and biotechnology
company: income taxes: net operating losses: transfers.
The Personal Income Tax Law and Corporation Tax Law impose taxes
measured by income, and allow individual and corporate taxpayers to
utilize net operating losses as carryovers and carrybacks of those
losses for purposes of offsetting their individual and corporate tax
liabilities.
This bill would require the Treasurer, in cooperation with the
Franchise Tax Board, to establish a corporation business tax benefit
certificate transfer program to allow a qualified
transferor, defined as a new or expanding emerging technology
and biotechnology company in this state with unused net operating
losses , to surrender those net operating losses for use
by a taxpayer subject to the Corporation Tax Law in this state in
exchange for private financial assistance to be provided by that
taxpayer to assist in the funding of costs incurred by the new or
expanding emerging technology and biotechnology company, as provided.
This bill would provide that any net operating losses that are
transferred pursuant to a corporation business tax benefit transfer
certificate issued to a taxpayer is allowed beginning on or after the
first day of the 4th taxable year after the date of issue of that
certificate.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 24416.23 is added to the
Revenue and Taxation Code , to read:
24416.23. (a) For taxable years beginning on or after January 1,
2013, the Treasurer, in cooperation with the Franchise Tax Board,
shall establish a corporation business tax benefit certificate
transfer program to allow a qualified transferor with unused net
operating losses, as described in Section 24416.20, to surrender
those net operating losses for use by other taxpayers subject to tax
under this part in exchange for private financial assistance to be
provided by a qualified transferee that is the recipient of the
qualified transferor's unused net operating loss, as evidenced by a
corporation business tax benefit certificate, to assist the qualified
transferor in the funding of costs incurred by the qualified
transferor.
(b) The transferred net operating losses may be used on the tax
return required to be filed pursuant to Part 10.2 (commencing with
Section 18401) by a taxpayer subject to tax under this part.
(c) (1) The Treasurer, in cooperation with the Franchise Tax
Board, shall review and approve applications by qualified transferors
with unused but otherwise allowable net operating losses to
surrender those net operating losses in exchange for private
financial assistance to be made by the taxpayer that is the recipient
of the corporation business tax benefit certificate in an amount
equal to at least 80 percent of the amount of the surrendered tax net
operating losses.
(2) For purposes of this subdivision, the amount of the tax
benefit of the surrendered net operating losses is an amount equal to
the amount of the net operating loss that is surrendered multiplied
by the rate of tax of the qualified transferee, as imposed by Section
23151 or 23501.
(d) (1) The aggregate amount of the net operating losses that may
be surrendered in any fiscal year pursuant to this section shall be
an amount equal to the sum of sixty million dollars ($60,000,000)
plus the amount of previously surrendered net operating losses that
were recaptured under the provisions of this section.
(2) If the amount of net operating loss surrender applications for
any particular fiscal year exceeds the aggregate amount described in
paragraph (1), that excess shall be treated as having been applied
for on the first day of the subsequent fiscal year.
(3) The Treasurer shall set aside at least twenty-five million
dollars ($25,000,000) of the amount described in paragraph (1) for
unused net operating losses of small qualified transferors.
(e) For purposes of this section:
(1) "Acquire" includes any transfer, whether or not for
consideration.
(2) "Biotechnology" means the continually expanding body of
fundamental knowledge about the functioning of biological systems
from the macro level to the molecular and subatomic levels, as well
as novel products, services, technologies, and subtechnologies
developed as a result of insights gained from research advances that
add to that body of fundamental knowledge.
(3) "Biotechnology company" means a corporation that owns, has
filed for, or has a valid license to use protected, proprietary
intellectual property and that is engaged in the research,
development, production, or provision of biotechnology for the
purpose of developing or providing products or processes for specific
commercial or public purposes, including, but not limited to,
medical, pharmaceutical, nutritional, and other health-related
purposes, agricultural purposes, and environmental purposes.
(4) "Full-time employee" means a person employed by a qualified
transferor for consideration for at least 35 hours a week, or who
renders any other standard service generally accepted by custom or
practice as full-time employment and whose wages are subject to
withholding as required by Division 6 (commencing with Section 13000)
of the Unemployment Insurance Code. To qualify as a "full-time
employee," an employee must also receive from the qualified
transferor health benefits under a group health plan, a health
benefits plan, or a policy or contract of health insurance covering
more than one person issued pursuant to the Insurance Code.
"Full-time employee" shall not include any person who works as an
independent contractor or on a consulting basis for the qualified
transferor.
(5) "Group health plan" means an employee welfare benefit plan, as
defined in Title 1 of Section 3 of the Employee Retirement Income
Security Act of 1974 (Public Law 93-406; 29 U.S.C. Sec. 1002(1)), to
the extent that the plan provides medical care and including items
and services paid for as medical care to employees or their
dependents, as defined under the terms of the plan, directly or
through insurance, reimbursement, or otherwise.
(6) "New or expanding" means a technology or biotechnology company
that, at the end of the calendar year prior to the year in which the
company files an application for surrender of unused but otherwise
allowable net operating losses, on the date which the application is
submitted, and on the date on which the company received the
corporation business tax benefit certificate, has fewer than 225
employees in the United States, that has at least one full-time
employee working in this state if the company has been incorporated
for less than three years, that has at least five full-time employees
in this state if the company has been incorporated for more than
three years but less than five years, and that has at least 10
full-time employees working in this state if the company has been
incorporated for more than five years.
(7) "Qualified transferee" means a corporation subject to tax
imposed by Section 23151 or 23501.
(8) "Qualified transferor" means a new or expanding emerging
technology and biotechnology company in this state that either:
(A) Has not demonstrated positive net operating income in any of
the two previous taxable years consisting of 12 calendar months each
of ongoing operations as determined on its financial statements
issued according to generally accepted accounting standards endorsed
by the Financial Accounting Standards Board.
(B) Is not directly or indirectly at least 50 percent owned or
controlled by another corporation that has demonstrated positive net
operating income in any of two previous taxable years consisting of
12 calendar months each of ongoing operations as determined on its
financial statements issued according to generally accepted
accounting standards endorsed by the Financial Accounting Standards
Board, or is part of a consolidated group of affiliated corporations,
as filed for federal income tax purposes, that in the aggregate has
demonstrated positive net operating income in any of the two previous
full years of ongoing operations as determined on its combined
financial statements issued according to generally accepted
accounting standards endorsed by the Financial Accounting Standards
Board.
(9) "Related person" shall mean any person that is related to the
taxpayer under either Section 267 or 318 of the Internal Revenue
Code.
(10) "Small qualified transferor" means a qualified transferor
with total unused net operating losses, prior to the transfer of any
unused net operating loss pursuant to this section, of less than two
hundred fifty thousand dollars ($250,000).
(11) "Technology company" means an emerging corporation that owns,
has filed for, or has a valid license to use protected, proprietary
intellectual property; and that employs some combination of the
following: highly educated or trained managers and workers, or both,
employed in this state who use sophisticated scientific research
service or production equipment, processes, or knowledge to discover,
develop, test, transfer, or manufacture a product or service.
(f) (1) The maximum lifetime amount, as limited by subdivision (h)
of this section, of net operating losses that a qualified transferee
shall be permitted to surrender pursuant to this section is fifteen
million dollars ($15,000,000).
(2) Applications must be received on or before June 30.
(3) No certificate shall be issued pursuant to this section unless
the qualified transferor provides the Treasurer with the
identification of the specific net operating losses by taxable year
that are included in the application.
(g) For purposes of this section, the Treasurer shall:
(1) In consultation with the Franchise Tax Board, establish rules
for the recapture of all or a portion of the amount of a grant of a
corporation business tax benefit certificate from a qualified
transferee having surrendered tax benefits pursuant to this section,
in the event the qualified transferee fails to use the private
financial assistance received for the surrender of tax benefits as
required by this section.
(2) In cooperation with the Franchise Tax Board, review and
approve applications by taxpayers subject to tax under this part to
acquire surrendered net operating losses pursuant to this section,
which shall be issued in the form of corporation business tax benefit
transfer certificates, in exchange for private financial assistance
to be made by the qualified transferee to the qualified transferor in
an amount equal to at least 80 percent of the amount of the tax
benefit of the surrendered net operating losses.
(3) (A) Issue the corporation business tax benefit transfer
certificate.
(B) A certificate shall not be issued unless the qualified
transferor certifies that as of the date of the exchange of the
corporation business tax benefit certificate it is operating as a new
or expanding emerging technology or biotechnology company and has no
current intention to cease operating as a new or expanding emerging
technology or biotechnology company.
(C) The private financial assistance shall assist in funding
expenses in connection with the operation of the qualified transferor
in the state, including, but not limited to, the expenses of fixed
assets, such as the construction and acquisition and development of
real estate, materials, startup, tenant fitout, working capital,
salaries, research and development expenditures, and any other
similar expenses.
(D) Require a qualified transferee to enter into a written
agreement with the qualified transferor concerning the terms and
conditions of the private financial assistance made in exchange for
the certificate.
(h) For purposes of this section, in determining whether a company
is a qualified transferor, the following shall apply:
(1) (A) In a case where a taxpayer purchases or otherwise acquires
all or any portion of the assets of an existing trade or business,
irrespective of the form of entity, that is doing business in this
state, within the meaning of Section 23101, the trade or business
thereafter conducted by the taxpayer or any related person shall not
be treated as a qualified transferor if the aggregate fair market
value of the acquired assets, including real, personal, tangible, and
intangible property, used by the taxpayer or any related person in
the conduct of its trade or business exceeds 20 percent of the
aggregate fair market value of the total assets of the trade or
business being conducted by the taxpayer or any related person.
(B) For purposes of this paragraph:
(i) The determination of the relative fair market values of the
acquired assets and the total assets shall be made as of the last day
of the first taxable year in which the taxpayer or any related
person first uses any of the acquired trade or business assets in its
business activity.
(ii) Any acquired assets that constituted property described in
Section 1221(1) of the Internal Revenue Code in the hands of the
transferor shall not be treated as assets acquired from an existing
trade or business, unless those assets also constitute property
described in Section 1221(1) of the Internal Revenue Code in the
hands of the acquiring taxpayer or related person.
(2) In any case where the legal form under which a trade or
business activity is being conducted is changed, the change in form
shall be disregarded and the determination of whether the trade or
business activity is a new business shall be made by treating the
taxpayer as having purchased or otherwise acquired all or any portion
of the assets of an existing trade or business under paragraph (1).
(i) (1) Any net operating losses that are transferred pursuant to
a corporation business tax benefit transfer certificate issued to a
taxpayer under this section shall only be allowed beginning on or
after the first day of the fourth taxable year after the date of
issue of that certificate.
(2) The surrender of net operating losses under subdivision (c)
shall be irrevocable once made.
(3) A qualified transferor surrendering net operating losses under
this section shall reduce the amount of its unused net operating
loss by the amount of surrendered net operating losses, as reflected
on the certificate issued under this section, and the amount of the
surrendered net operating loss shall not be available as a deduction
by the qualified transferor in any taxable year, nor shall it
thereafter be included in the amount of any net operating loss
carryover of the qualified transferor.
(4) (A) A qualified transferee, as reflected on the certificate
under this section, may deduct all or any portion of the net
operating loss transferred against the taxable income of the
qualified transferee for the taxable year beginning on or after the
first day of the fourth taxable year after the issue date of the
certificate, or any subsequent taxable year, subject to any carryover
period limitations that apply to the surrendered net operating loss
in the hands of the qualified transferor.
(B) The carryover period under Section 172 of the Internal Revenue
Code, as modified for purposes of this part, for any net operating
loss received under the provisions of this section shall be extended
in the hands of the qualified transferee for three additional taxable
years, but the carryover period for any net operating losses
retained by the qualified transferor shall not be extended under the
rules of this subparagraph.
(5) In no case may the qualified transferee sell, otherwise
transfer, or thereafter assign the certificate to any other taxpayer.
(j) In the event that any consideration is paid by the qualified
transferee to the qualified transferor for a corporation business tax
benefit certificate under this section, then both of the following
shall apply:
(1) No deduction shall be allowed to the qualified transferee
under this part with respect to any amounts so paid.
(2) The amounts so received by the qualified transferor as
financial assistance shall be includable in gross income subject to
tax under this part.
(k) (1) Except as specifically provided in this section, following
a surrender of a net operating loss by a qualified transferor under
this section, the qualified transferee shall be treated as if it
originally generated the net operating loss.
(2) Any limitations on the allowance of any net operating loss
transferred under this section that would apply to the qualified
transferor in the absence of the transfer shall also apply to the
same extent to the allowance of that net operating loss to the
qualified transferee.
(l) Notwithstanding subdivision (d) of Section 24416.20, Section
172(b)(1) of the Internal Revenue Code, relating to years to which
the loss may be carried, is modified to provide that net operating
loss carrybacks shall not be allowed for any net operating losses
received by a qualified transferee pursuant to this section.
(m) (1) The Treasurer, in consultation with the Franchise Tax
Board, shall specify the form and manner in which the surrender
required under this section shall be made, as well as any necessary
information that shall be required to be provided by the qualified
transferor to the qualified transferee and the Franchise Tax Board.
(2) Any taxpayer that surrenders any net operating loss under this
section shall report any information, in the form and manner
specified by the Franchise Tax Board, necessary to substantiate any
net operating loss transferred under this section and verify the
transfer and subsequent application of any surrendered net operating
losses.
(3) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to paragraphs (1) and (2).
(4) The Treasurer and the Franchise Tax Board may each issue
regulations necessary to implement the purposes of this section.
(n) (1) The qualified transferor and the qualified transferee
shall be jointly and severally liable for any tax, addition to tax,
or penalty that results from the disallowance, in whole or in part,
of any net operating loss surrendered under this section.
(2) Nothing in this section shall limit the authority of the
Franchise Tax Board to audit either the qualified transferor or the
qualified transferee with respect to any surrendered net operating
loss under this section.
SECTION 1. Chapter 4.5 (commencing with Section
13996) is added to Part 4.7 of Division 3 of Title 2 of the
Government Code, to read:
CHAPTER 4.5. EMERGING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES
TAX LOSS TRANSFER PROGRAM
13996. (a) The Treasurer, in cooperation with the Franchise Tax
Board, shall establish a corporation business tax benefit certificate
transfer program to allow new or expanding emerging technology and
biotechnology companies in this state with unused net operating
losses, as described in Section 17276.20 or Section 24416.20 of the
Revenue and Taxation Code, to surrender those net operating losses
for use by other taxpayers in this state.
(b) The tax benefits of those net operating losses may be used on
a tax return required to be filed pursuant to Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code by
a taxpayer subject to the Corporation Tax Law (Part 11 (commencing
with Section 23001) of Division 2 of the Revenue and Taxation Code)
in exchange for private financial assistance to be provided by the
taxpayer that is the recipient of the corporation business tax
benefit certificate to assist in the funding of costs incurred by the
new or expanding emerging technology and biotechnology company.
(c) (1) The Treasurer, in cooperation with the Franchise Tax
Board, shall review and approve applications by new or expanding
emerging technology and biotechnology companies in this state with
unused but otherwise allowable net operating losses to surrender
those net operating losses in exchange for private financial
assistance to be made by the taxpayer that is the recipient of the
corporation business tax benefit certificate in an amount equal to at
least 80 percent of the amount of the surrendered tax net operating
losses.
(2) For purposes of this section, "amount of surrendered net
operating losses" means the amount of the net operating loss
multiplied by the new or expanding emerging technology or
biotechnology company's anticipated apportionment factor, as
determined pursuant to Section 25128 or Section 25128.5 of the
Revenue and Taxation Code, for the taxable year in which the net
operating loss is transferred and subsequently multiplied by the rate
of tax imposed by Section 23151 or Section 23501 of the Revenue and
Taxation Code.
(d) The Treasurer shall not approve the transfer of more than
sixty million dollars ($60,000,000) of transferable net operating
losses in a fiscal year. If the total amount of transferable net
operating losses requested to be surrendered by approved applicants
exceeds sixty million dollars ($60,000,000) in a fiscal year, the
Treasurer, in cooperation with the Franchise Tax Board, shall
allocate the transfer of surrendered net operating losses as follows:
(1) An eligible applicant with two hundred fifty thousand dollars
($250,000) or less of transferable net operating losses shall be
authorized to surrender the entire amount of its transferable net
operating losses.
(2) An eligible applicant with more than two hundred fifty
thousand dollars ($250,000) of transferable net operating losses
shall be authorized to surrender a minimum of two hundred fifty
thousand dollars ($250,000) of its transferable net operating losses.
(3) An eligible applicant with more than two hundred fifty
thousand dollars ($250,000) of transferable net operating losses
shall be authorized to surrender additional transferable net
operating losses determined by multiplying the applicant's
transferable net operating losses less the minimum transferable net
operating losses that company is authorized to surrender under
paragraph (2) by a fraction, the numerator of which is the total
amount of transferable net operating losses that the department is
authorized to approve less the total amount of transferable tax
benefit approved under paragraphs (1) and (2), and the denominator of
which is the total amount of transferable net operating losses
requested to be surrendered by all eligible applicants less the total
amount of transferable net operating losses approved under
paragraphs (1) and (2).
(e) If the total amount of transferable net operating losses that
would be authorized using the method in subdivision (d) exceeds sixty
million dollars ($60,000,000) in a fiscal year, then the Treasurer,
in cooperation with the Franchise Tax Board, shall limit the total
amount of net operating losses authorized to be transferred to sixty
million dollars ($60,000,000) by applying the method in subdivision
(d) on an apportioned basis.
(f) For purposes of this section, "transferable tax benefits"
include an eligible applicant's unused but otherwise allowable net
operating losses multiplied by the applicant's anticipated
apportionment factor as determined pursuant to Section 25128 or
Section 25128.5 of the Revenue and Taxation Code for the taxable year
in which the net operating loss is transferred and subsequently
multiplied by the tax imposed by Section 23151 or Section 23501 of
the Revenue and Taxation Code. An eligible applicant's transferable
net operating losses shall be limited to net operating losses that
the applicant requests to surrender in its application to the
department and shall not, in total, exceed the maximum amount of net
operating losses that the applicant is eligible to surrender.
13996.1. No application for a corporation business tax benefit
transfer certificate shall be approved for a new or expanding
emerging technology or biotechnology company that meets either of the
following:
(a) Has demonstrated positive net operating income in any of the
two previous full years of ongoing operations as determined on its
financial statements issued according to generally accepted
accounting standards endorsed by the Financial Accounting Standards
Board.
(b) Is directly or indirectly at least 50 percent owned or
controlled by another corporation that has demonstrated positive net
operating income in any of
the two previous full years of ongoing operations as determined on
its financial statements issued according to generally accepted
accounting standards endorsed by the Financial Accounting Standards
Board or is part of a consolidated group of affiliated corporations,
as filed for federal income tax purposes, that in the aggregate has
demonstrated positive net operating income in any of the two previous
full years of ongoing operations as determined on its combined
financial statements issued according to generally accepted
accounting standards endorsed by the Financial Accounting Standards
Board.
13996.2. (a) The maximum lifetime value of surrendered net
operating losses that a corporation shall be permitted to surrender
pursuant to this chapter is fifteen million dollars ($15,000,000).
(b) Applications must be received on or before June 30 of each
fiscal year.
13996.3. The Treasurer, in consultation with the Franchise Tax
Board, shall establish rules for the recapture of all, or a portion
of, the amount of a grant of a corporation business tax benefit
certificate from the new or expanding emerging technology and
biotechnology company having surrendered tax benefits pursuant to
this chapter in the event the company fails to use the private
financial assistance received for the surrender of tax benefits as
required by this chapter or fails to maintain a headquarters or a
base of operation in this state during the five years following
receipt of the private financial assistance; except if the failure to
maintain a headquarters or a base of operation in this state is due
to the liquidation of the new or expanding emerging technology and
biotechnology company.
13996.4. (a) The Treasurer, in cooperation with the Franchise Tax
Board, shall review and approve applications by taxpayers subject to
the Corporation Tax Law (Part 11 (commencing with Section 23001) of
Division 2 of the Revenue and Taxation Code) to acquire surrendered
tax net operating losses approved pursuant to this chapter, which
shall be issued in the form of corporation business tax benefit
transfer certificates, in exchange for private financial assistance
to be made by the taxpayer in an amount equal to at least 80 percent
of the amount of the surrendered net operating loss of an emerging
technology or biotechnology company in the state.
(b) A corporation business tax benefit transfer certificate shall
not be issued unless the applicant certifies that as of the date of
the exchange of the corporation business tax benefit certificate it
is operating as a new or expanding emerging technology or
biotechnology company and has no current intention to cease operating
as a new or expanding emerging technology or biotechnology company.
(c) The private financial assistance shall assist in funding
expenses incurred in connection with the operation of the new or
expanding emerging technology or biotechnology company in the state,
including, but not limited to, the expenses of fixed assets, such as
the construction and acquisition and development of real estate,
materials, startup, tenant fitout, working capital, salaries,
research and development expenditures, and any other similar
expenses.
(d) The Treasurer shall require a taxpayer that acquires a
corporation business tax benefit certificate to enter into a written
agreement with the new or expanding emerging technology or
biotechnology company concerning the terms and conditions of the
private financial assistance made in exchange for the certificate.
The written agreement may contain terms concerning the maintenance by
the new or expanding emerging technology or biotechnology company of
a headquarters or a base of operation in this state.
13996.5. (a) Any net operating losses that are transferred
pursuant to a corporation business tax benefit transfer certificate
issued to a taxpayer under this chapter shall only be allowed
beginning on or after the first day of the fourth taxable year after
the date of issue of that certificate.
(b) Any net operating losses that are transferred and have reached
the first day of the fourth taxable year after the date of issue of
that certificate can only be used if the company that transferred the
net operating losses is still in business or has been acquired. If
the company is no longer in business or has not been acquired by
another company, the net operating loss that was transferred no
longer has any value.
13996.6. For purposes of this chapter:
(a) "Biotechnology" means the continually expanding body of
fundamental knowledge about the functioning of biological systems
from the macro level to the molecular and subatomic levels, as well
as novel products, services, technologies, and subtechnologies
developed as a result of insights gained from research advances that
add to that body of fundamental knowledge.
(b) "Biotechnology company" means an emerging corporation that has
its headquarters or base of operations in this state; that owns, has
filed for, or has a valid license to use protected, proprietary
intellectual property; and that is engaged in the research,
development, production, or provision of biotechnology for the
purpose of developing or providing products or processes for specific
commercial or public purposes, including, but not limited to,
medical, pharmaceutical, nutritional, and other health-related
purposes, agricultural purposes, and environmental purposes, or a
person whose headquarters or base of operations is located in this
state, engaged in providing services or products necessary for such
research, development, production, or provision.
(c) "Full-time employee" means a person employed by a new or
expanding emerging technology or biotechnology company for
consideration for at least 35 hours a week, or who renders any other
standard of service generally accepted by custom or practice as
full-time employment and whose wages are subject to withholding as
required by Division 6 (commencing with Section 13000) of the
Unemployment Insurance Code, or who is a partner of a new or
expanding emerging technology or biotechnology company who works for
the partnership other than as an employee for at least 35 hours a
week, or who renders any other standard of service generally accepted
by custom or practice as full-time employment, and whose
distributive share of income, gain, loss, or deduction, or whose
guaranteed payments, or any combination thereof, is subject to the
payment of estimated taxes, as required under the Revenue and
Taxation Code. To qualify as a "full-time employee," an employee
shall also receive from the new or expanding emerging technology or
biotechnology company health benefits under a group health plan, a
health benefits plan, or a policy or contract of health insurance
covering more than one person issued pursuant to the Insurance Code.
"Full-time employee" shall not include any person who works as an
independent contractor or on a consulting basis for the new or
expanding emerging technology or biotechnology company.
(d) "Group health plan" means an employee welfare benefit plan, as
defined in Title 1 of Section 3 of the Employee Retirement Income
Security Act of 1974 (Public Law 93-406; 29 U.S.C. Sec.1002(1)), to
the extent that the plan provides medical care and including items
and services paid for as medical care to employees or their
dependents, as defined under the terms of the plan, directly or
through insurance, reimbursement or otherwise.
(e) "New or expanding" means a technology or biotechnology company
that at the end of the calendar year prior to the year in which the
company files an application for surrender of unused but otherwise
allowable tax benefits, on the date on which the application is
submitted, and on the date on which the company receives the
corporation business tax benefit certificate, has fewer than 225
employees in the United States, that has at least one full-time
employee working in this state if the company has been incorporated
for less than three years, that has at least five full-time employees
working in this state if the company has been incorporated for more
than three years but less than five years, and that has at least 10
full-time employees working in this state if the company has been
incorporated for more than five years.
(f) "Technology company" means an emerging corporation that has
its headquarters or base of operations in this state; that owns, has
filed for, or has a valid license to use protected, proprietary
intellectual property; and that employs some combination of the
following: highly educated or trained managers and workers, or both,
employed in this state who use sophisticated scientific research
service or production equipment, processes or knowledge to discover,
develop, test, transfer, or manufacture a product or service.