BILL 57

An Act to Amend the Small Business Investor Tax Credit Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Section 1 of the Small Business Investor Tax Credit Act, chapter S-9.05 of the Acts of New Brunswick, 2003, is amended by repealing the definition “eligible share” and substituting the following:

“eligible share” means a newly issued share of the capital stock of a corporation that is registered under this Act if the share is issued as part of a specified issue but does not include a replacement share; (« action admissible »)

2 Paragraph 10(e) of the Act is amended by striking out “$25,000,000” and substituting “$40,000,000”.

3 Paragraph 11(e)(ii) of the Act is repealed and the following is substituted:

(ii) will include the rights to receive dividends declared by the corporation and to participate in the distribution of the remaining property of the corporation on dissolution,

4 Subsection 14(4) of the Act is amended by striking out “$50,000” and substituting “$80,000”.

5 Paragraph 15(2)(e) of the Act is amended by striking out “$15,000” and substituting “$24,000”.

CONSEQUENTIAL AMENDMENTS

Amendment to the New Brunswick Income Tax Act

6 Paragraph 50.1(2)(b) of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is repealed and the following is substituted:

(b)  $24,000.

COMMENCEMENT

7 This Act shall be deemed to have come into force on March 13, 2007.

EXPLANATORY NOTES

Section 1

The existing definition is as follows:

“eligible share” means a newly issued voting common share of the capital stock of a corporation that is registered under this Act if the share is issued as part of a specified issue but does not include a replacement share; (« action admissible »)

Section 2

The existing provision is as follows:

10 The following are the criteria referred to in section 6 for eligibility of a corporation for registration:....

(e)  the total assets of the corporation, including the assets of its associated corporations, do not exceed $25,000,000, calculated in the manner prescribed by regulation, at the time of registration under this Act;

Section 3

The existing provision is as follows:

11 Every investment plan shall contain or make provision for the following:

(e)  that shares to be issued as part of a specified issue under the plan

(ii) will include the rights to vote at any meeting of shareholders, to receive dividends declared by the corporation and to participate in the distribution of the remaining property of the corporation on dissolution after the obligations of the corporation with respect to other classes of shareholders, if any, are satisfied,

Section 4

The existing provision is as follows:

14(4) The amount of the tax credit referred to in subsection (1) that may be claimed each year by an eligible investor is equal to 30% of all amounts not exceeding $50,000 paid by the eligible investor or paid by a qualifying trust of the eligible investor to the corporation during the time period referred to in subsection (1) in consideration for eligible shares issued by the corporation as part of a specified issue.

Section 5

The existing provision is as follows:

15(2) The Minister shall not issue a tax credit certificate under subsection (1) unless the Minister is satisfied that....

(e)  the aggregate of all entitlements in respect of the eligible investor for all tax credit certificates applied for in the year does not exceed $15,000, and

Section 6

The existing provision is as follows:

50.1(2) Where, in respect of a taxation year, an individual has been issued a tax credit certificate under section 15 of the Small Business Investor Tax Credit Act, there may be deducted from the tax otherwise payable by the individual under this Act in respect of that taxation year the lesser of

(a)  the total of

(i) the individual’s small business investor tax credit allowed for that taxation year under subsection 14(4) of the Small Business Investor Tax Credit Act, and

(ii) the amount, if any, of the individual’s unused balance applied in accordance with subsection (5), and

(b)  $15,000.

Section 7

Commencement provision.