                                 CODE OF VIRGINIA

ELIGIBILITY (§ 59.1-279)

A. Any business firm may be designated a &#8220;qualified business firm&#8221;
for purposes of this chapter if:

   1. (i) It establishes within an enterprise zone a trade or business not
   previously conducted in the Commonwealth by such taxpayer and (ii) 25 percent
   or more of the employees employed at the business firm&#8217;s establishment
   or establishments located within the enterprise zone either have incomes below
   80 percent of the median income for the jurisdiction prior to employment or
   are residents of an enterprise zone.

   2. It (i) is actively engaged in the conduct of a trade or business in an area
   immediately prior to such an area being designated as an enterprise zone and
   (ii) increases the average number of full-time employees employed at the
   business firm&#8217;s establishment or establishments located within the
   enterprise zone by at least 10 percent over the lower of the preceding two
   years&#8217; employment with no less than 25 percent of such increase being
   employees who either have incomes below 80 percent of the median income for
   the jurisdiction prior to employment or are residents of an enterprise zone.
   Current employees of the business firm that are transferred directly to the
   enterprise zone facility from another site within the state resulting in a net
   loss of employment at that site shall not be included in calculating the
   increase in the average number of full-time employees employed by the business
   firm within the enterprise zone.

   3. It (i) is actively engaged in the conduct of a trade or business in the
   Commonwealth and relocates to begin operation of a trade or business within an
   enterprise zone and (ii) increases the average number of full-time employees
   employed at the business firm&#8217;s establishment or establishments within
   the enterprise zone by at least ten percent over the lower of the preceding
   two years&#8217; employment of the business firm prior to relocation with no
   less than 25 percent of such increase being employees who either have incomes
   below eighty percent of the median income for the jurisdiction prior to
   employment or are residents of an enterprise zone. Current employees of the
   business firm that are transferred directly to the enterprise zone facility
   from another site within the state resulting in a net loss of employment at
   that site shall not be included in calculating the increase in the average
   number of full-time employees employed by the business firm within the
   enterprise zone.

   4. For the purposes of this section, the term &#8220;full-time employee&#8221;
   means (i) an individual employed by a business firm and who works the normal
   number of hours a week as required by the firm or (ii) two or more individuals
   who together share the same job position and together work the normal number
   of hours a week as required by the business firm for that one position. For
   the purposes of this section, the term &#8220;jurisdiction&#8221; means the
   county, city or town which made the application under &#xA7; 59.1-274 to have
   the enterprise zone. In the case of a joint application, jurisdiction means
   all parties making such application.

B. After designation as a qualified business firm pursuant to this section, each
business firm in an enterprise zone shall submit annually to the Department a
statement requesting one or more of the tax incentives provided in &#xA7;
59.1-280 or 59.1-282. Such a statement shall be accompanied by an approved form
supplied by the Department and completed by an independent certified public
accountant licensed by the Commonwealth which states that the business firm met
the definition of a &#8220;qualified business firm&#8221; and continues to meet
the requirements for eligibility as a qualified business firm in effect at the
time of its designation. A copy of the statement submitted by each business firm
to the Department shall be forwarded to the zone administrator.

C. The form referred to in subsection B of this section, prepared by an
independent certified public accountant licensed by the Commonwealth, shall be
prima facie evidence of the eligibility of a business firm for the purposes of
this section, but the evidence of eligibility shall be subject to rebuttal. The
Department or the Department of Taxation or State Corporation Commission, as
applicable, may at its discretion require any business firm to provide
supplemental information regarding the firm&#8217;s eligibility (i) as a
qualified business firm or (ii) for a tax credit claimed pursuant to this
chapter.

D. The provisions of this section shall apply only as follows:

   1. To those qualified business firms that have initiated use of enterprise
   zone tax credits pursuant to this section on or before July 1, 2005;

   2. To those small qualified business firms and large qualified business firms
   that have signed agreements with the Commonwealth regarding the use of
   enterprise zone tax credits in accordance with this section on or before July
   1, 2005; provided that in the case of small qualified business firms, the
   signed agreements must be based on proposals developed by the Commonwealth
   prior to November 1, 2004.

HISTORY: 1982, c. 275; 1983, c. 572; 1988, cc. 236, 374; 1995, c. 792; 1997, cc.
497, 517, 808; 2005, cc. 863, 884.