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2003 Legislative Session: 4th Session, 37th Parliament

FIRST READING

The following electronic version is for informational

purposes only.

The printed version remains the official version.

HONOURABLE RICK THORPE

MINISTER OF COMPETITION, SCIENCE

AND ENTERPRISE

BILL 8 – 2003

EMPLOYEE INVESTMENT AMENDMENT ACT, 2003

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Section 7 of the Employee Investment Act, R.S.B.C. 1996, c.

112, is amended

(

a) in subsection (2) by striking out "Minister of Finance and

Corporate Relations" and substituting "minister responsible for

the administration of the Income Tax Act " , and

(

b) by repealing subsection (3) (f).

Section 9 is amended by adding the following paragraph:

(b.1) is managed by a person who does not manage any other employee venture capital corporation, .

Section 12 is repealed and the following substituted:

Limits on equity capital

(1) The equity capital of an employee venture

capital corporation, including the equity capital referred to in

section 14,

must not exceed $5 million if it is not a reporting issuer as defined in the

Securities Act .

(2) If the Lieutenant Governor in Council considers it to be in the public interest, he or she, by order with or without conditions, may

(

a) exempt an employee venture capital corporation specified in the order from the $5 million limit under subsection (1), and

(

b) specify another limit applicable to that employee venture capital corporation.

Section 17 (1) (

a) is amended by striking out "50% of

the shares" and substituting "50% or more of the shares" .

Section 19 (1) is amended by striking out ",

any other employee venture capital corporations and any venture capital corporations

registered under the Small Business Venture Capital Act ," .

6 Sections 23 (3), 31 (1) and (2) and 40 (3) are amended by striking

out "Minister of Finance and Corporate Relations" and substituting

"Minister of Finance" .

Section 24 (2) is amended by striking out "Minister

of Finance and Corporate Relations" and substituting "minister

responsible for the administration of the Income Tax Act " .

Section 28 is amended

(

a) in subsection (1) by striking out "section 3 or 15 (1) (

a) to (e)" and substituting "section 3 or 9" , and

(

b) in subsection (3) by striking out "2 year period"

and substituting "calendar year" .

Commencement

Section 7 comes into force by regulation of the Lieutenant Governor in Council.

Explanatory Notes

SECTION 1: [Employee Investment Act, amends

section 7] updates

a ministerial reference and eliminates the $10 000 lifetime tax credit limit

for shareholders in registered employee share ownership plans (without altering

the $2 000 annual maximum tax credit).

SECTION 2: [Employee Investment Act, adds

section 9 (b.1)]

expands the eligibility criteria for registration as an employee venture

capital corporation, as shown.

SECTION 3: [Employee Investment Act, re-enacts

section 12] removes

the $20 million limit on the equity capital of an employee venture capital corporation

that is a reporting issuer and, consequentially, narrows the Lieutenant Governor

in Council's

section 12 discretion, for a specified employee venture capital

corporation that is not a reporting issuer, to grant an exemption from the remaining

$5 million limit on equity capital.

SECTION 4: [Employee Investment Act, amends

section 17 (1) (a)]

restricts a labour-sponsored fund to less than 50 per cent ownership in investee

businesses.

SECTION 5: [Employee Investment Act, amends

section 19 (1)] enables

labour-sponsored funds to invest up to $5 million in eligible small businesses

without taking the investment of other venture capital corporations into account.

SECTION 6: [Employee Investment Act, amends sections 23 (3), 31 (1) and

(2) and 40 (3)] updates ministerial references.

SECTION 7: [Employee Investment Act, amends

section 24 (2)] updates

a ministerial reference.

SECTION 8: [Employee Investment Act, amends

section 28 (1) and (3)]

clarifies the process under which a corporation that meets the criteria

for the registration under

Part 1 of the Act of an employee share ownership

plan, or under

Part 2 of the Act for registration as an employee venture corporation,

may share with an employee group in reimbursement by the government of certain

costs relating to the negotiation, evaluation and implementation of an employee

share ownership plan or employee venture capital plan.

Copyright (c) 2003: Queen's Printer, Victoria, British Columbia, Canada