Bill Text: IA HSB232 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A study bill relating to a tax credit for investments through rural business growth funds for small rural businesses, providing for a fee, and including applicability provisions.
Spectrum: Unknown
Status: (Introduced - Dead) 2015-04-21 - 8:30AM; House Lounge Ways and Means. [HSB232 Detail]
Download: Iowa-2015-HSB232-Introduced.html
House
Study
Bill
232
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
SANDS)
A
BILL
FOR
An
Act
relating
to
a
tax
credit
for
investments
through
rural
1
business
growth
funds
for
small
rural
businesses,
providing
2
for
a
fee,
and
including
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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_____
Section
1.
NEW
SECTION
.
15E.81
Definitions.
1
As
used
in
this
part,
unless
the
context
otherwise
requires:
2
1.
“Affiliate”
means
the
same
as
defined
in
section
423.1.
3
2.
“Cumulative
operating
income”
means
the
sum
of
the
4
following:
5
a.
The
rural
business
growth
fund’s
taxable
income
as
6
determined
under
Internal
Revenue
Code
section
703
except
that
7
the
items
described
in
Internal
Revenue
Code
section
703(a)(1)
8
shall
be
aggregated
with
the
tax
items
of
the
rural
business
9
growth
fund
that
are
not
required
to
be
stated
separately
for
10
tax
purposes,
and
any
gain
resulting
from
the
sale
of
a
capital
11
asset
under
Internal
Revenue
Code
section
1221(a)
or
property
12
described
in
Internal
Revenue
Code
section
1231
shall
not
be
13
included
in
taxable
income.
14
b.
Deductions
under
Internal
Revenue
Code
section
165
to
the
15
extent
the
losses
were
realized
from
eligible
rural
business
16
growth
investments.
17
c.
Deductions
under
Internal
Revenue
Code
sections
167
and
18
168,
including
the
additional
first-year
depreciation
under
19
Internal
Revenue
Code
section
167(k)
and
any
other
depreciation
20
and
amortization
deductions
allowed
under
the
Internal
Revenue
21
Code.
22
d.
Start-up
expenditures
amortized
under
Internal
Revenue
23
Code
section
195.
24
e.
Organizational
expenses
amortized
under
Internal
Revenue
25
Code
section
709.
26
3.
“Eligible
investment”
means
an
equity
investment
in
a
27
rural
business
growth
fund
that
meets
all
of
the
following
28
conditions:
29
a.
The
taxpayer’s
equity
investment
is
made
in
cash
to
the
30
rural
business
growth
fund
after
the
effective
date
of
this
31
Act.
32
b.
The
equity
investment
is
used
by
the
rural
business
33
growth
fund
to
make
rural
business
growth
investments
in
rural
34
business
concerns
located
in
Iowa
within
twenty-four
months
of
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_____
the
equity
investment
in
a
rural
business
growth
fund.
1
c.
The
equity
investment
is
designated
by
the
rural
business
2
growth
fund
as
an
eligible
investment
and
is
qualified
by
the
3
authority
pursuant
to
section
15E.83,
subsection
1.
4
d.
The
rural
business
growth
fund
manager
invests
at
5
least
ten
percent
of
the
equity
investment
in
the
eligible
6
investment.
7
4.
“Internal
Revenue
Code”
means
the
same
as
defined
in
8
section
422.3.
9
5.
“Operating
company”
means
any
business
other
than
a
10
country
club,
racetrack,
or
other
facility
used
for
gambling,
11
a
store
whose
principal
purpose
is
the
sale
of
alcoholic
12
beverages
for
consumption
off
premises,
a
massage
parlor,
a
hot
13
tub
facility,
a
tanning
facility,
a
business
engaged
in
the
14
development
or
holding
of
intangibles
for
sale,
a
private
or
15
commercial
golf
course,
farming
operation,
or
an
entity
that
16
derives
or
projects
to
derive
fifteen
percent
or
more
of
its
17
annual
revenue
from
the
rental
or
sale
of
real
estate
unless
18
such
entity
is
controlled
by
or
under
common
control
with
19
another
business
and
the
other
business
does
not
derive
or
20
project
to
derive
fifteen
percent
or
more
of
its
annual
revenue
21
from
the
rental
or
sale
of
real
estate
and
is
the
primary
22
tenant
of
the
real
estate
leased
from
the
entity.
23
6.
“Rural
area”
means
an
area
outside
a
standard
24
metropolitan
statistical
area,
an
area
within
a
community
with
25
a
population
of
fifty
thousand
people
or
less
based
on
the
most
26
recent
decennial
census,
or
an
area
that
has
been
determined
27
to
be
rural
in
character
as
determined
by
the
undersecretary
28
for
rural
development
of
the
United
States
department
of
29
agriculture.
30
7.
“Rural
business
concern”
means
an
operating
company
that,
31
at
the
time
a
rural
business
growth
investment
is
made,
meets
32
the
following
criteria:
33
a.
Has
its
principal
business
operations
in
Iowa.
34
b.
Employs
fewer
than
two
hundred
fifty
employees.
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c.
The
majority
of
the
operating
company’s
employees
perform
1
work
in
a
rural
area,
except
if
the
operating
company’s
primary
2
function
is
in
the
service
industry
or
construction
industry,
3
the
performance
of
work
determination
excludes
employees
who
4
perform
the
majority
of
the
work
at
job
sites
that
are
not
5
located
in
a
rural
area.
6
8.
“Rural
business
growth
fund”
means
an
entity
licensed
7
under
the
federal
small
business
investment
program,
as
8
provided
in
15
U.S.C.
ch.
14B,
or
the
rural
business
investment
9
program
as
provided
in
7
C.F.R.
pt.
4290,
that,
with
its
10
affiliates,
has
made
investments
in
operating
businesses
in
11
excess
of
one
hundred
million
dollars
in
the
aggregate,
of
12
which
at
least
fifty
million
dollars
was
invested
in
operating
13
companies
located
in
rural
areas.
14
9.
“Rural
business
growth
investment”
means
any
capital
15
or
equity
investment
in,
or
loan
to,
any
rural
business
16
concern.
To
qualify
as
a
“rural
business
growth
investment”
,
17
the
investment
or
loan
to
a
rural
business
concern
shall
be
at
18
least
one
year
in
duration.
The
rural
business
concern
and
its
19
affiliates
shall
not
receive
more
than
a
total
of
five
million
20
dollars
in
any
two-year
period
from
the
proceeds
of
eligible
21
investments
qualified
under
section
15E.83.
22
Sec.
2.
NEW
SECTION
.
15E.82
Rural
business
investment
tax
23
credit.
24
1.
a.
A
tax
credit
shall
be
allowed
against
the
taxes
25
imposed
in
chapter
422,
divisions
II,
III,
and
V,
chapter
432,
26
and
against
the
moneys
and
credits
tax
imposed
in
section
27
533.329,
for
a
portion
of
a
taxpayer’s
equity
investment
in
a
28
rural
business
growth
fund.
29
b.
An
individual
may
claim
a
tax
credit
under
this
paragraph
30
of
a
partnership,
limited
liability
company,
S
corporation,
31
estate,
or
trust
electing
to
have
income
taxed
directly
to
the
32
individual.
Unless
otherwise
provided
under
subsection
8,
the
33
amount
claimed
by
the
individual
shall
be
based
upon
the
pro
34
rata
share
of
the
individual’s
earnings
from
the
partnership,
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limited
liability
company,
S
corporation,
estate,
or
trust.
1
2.
a.
For
an
investor
in
a
rural
business
growth
fund
2
to
receive
a
tax
credit,
the
rural
business
growth
fund
3
shall
submit
an
application
to
the
authority
to
qualify
the
4
investor’s
investment
in
the
rural
business
growth
fund.
The
5
authority
shall
issue
certificates
for
eligible
investments
6
under
this
section
after
the
twenty-four
month
reporting
by
7
the
rural
business
growth
fund
has
been
verified
pursuant
to
8
section
15E.83,
subsection
3.
9
b.
The
authority
shall
issue
such
certificates
so
that
not
10
more
than
eight
million
dollars
may
be
claimed
in
a
single
tax
11
year.
12
c.
The
authority
shall
not
issue
a
tax
credit
certificate
13
for
investments
under
this
section
until
verifying
the
report
14
filed
by
a
rural
business
growth
fund
pertaining
to
a
qualified
15
eligible
investment
pursuant
to
section
15E.83,
subsection
3.
16
3.
a.
To
claim
a
rural
business
investment
tax
credit
under
17
this
section,
a
taxpayer
must
include
one
or
more
tax
credit
18
certificates
with
the
taxpayer’s
tax
return.
A
taxpayer
shall
19
not
include
a
tax
credit
certificate
with
a
return
filed
for
20
a
taxable
year
beginning
prior
to
the
tax
year
listed
on
the
21
certificate.
The
tax
credit
is
not
transferable
except
as
22
provided
in
subsection
8.
23
b.
The
tax
credit
certificate
shall
contain
the
taxpayer’s
24
name,
address,
tax
identification
number,
the
amount
of
25
the
credit,
the
name
of
the
qualifying
investor,
any
other
26
information
required
by
the
department
of
revenue,
and
a
place
27
for
the
name
and
tax
identification
number
of
a
transferee
and
28
the
amount
of
the
tax
credit
being
transferred.
29
c.
The
tax
credit
certificate,
unless
rescinded
by
the
30
authority,
shall
be
accepted
by
the
department
of
revenue
as
31
payment
for
taxes
imposed
pursuant
to
chapter
422,
divisions
32
II,
III,
and
V,
chapter
432,
and
for
the
moneys
and
credits
33
tax
imposed
in
section
533.329,
subject
to
any
conditions
or
34
restrictions
placed
by
the
authority
upon
the
face
of
the
tax
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credit
certificate
and
subject
to
the
limitations
of
this
1
section.
2
4.
The
tax
credit
shall
equal
a
total
of
sixty
percent
3
of
an
eligible
investment,
one-third
of
which
may
be
claimed
4
each
year
for
three
years
upon
meeting
the
requirements
of
5
section
15E.83.
The
taxpayer
shall
not
claim
the
credit
until
6
twenty-four
months
after
the
date
of
making
an
investment
in
7
a
rural
business
growth
fund.
8
5.
Any
tax
credit
in
excess
of
the
taxpayer’s
liability
9
for
the
tax
year
may
be
credited
to
the
tax
liability
for
the
10
following
five
years
or
until
depleted,
whichever
is
earlier.
11
A
tax
credit
is
not
refundable
and
shall
not
be
carried
back
to
12
a
tax
year
prior
to
the
tax
year
in
which
the
taxpayer
first
13
claims
the
tax
credit.
14
6.
An
entity
claiming
a
rural
business
investment
tax
credit
15
is
not
required
to
pay
any
additional
tax
levied
under
section
16
505.14
or
any
other
provision
as
a
result
of
claiming
the
rural
17
business
investment
tax
credit.
18
7.
After
receiving
the
report
filed
by
the
rural
business
19
growth
fund
pursuant
to
section
15E.83,
subsection
3,
to
verify
20
continuing
eligibility
for
the
tax
credit,
the
authority
21
shall
issue
a
tax
credit
certificate
to
be
included
with
the
22
taxpayer’s
tax
return
pursuant
to
this
section.
23
8.
a.
A
tax
credit
certificate
issued
pursuant
to
this
24
section
is
not
transferable
except
as
provided
in
this
25
subsection.
26
b.
Notwithstanding
subsection
1,
paragraph
“b”
,
if
issued
27
to
a
partnership,
limited
liability
company,
or
S
corporation,
28
a
tax
credit
certificate
may
be
transferred
to
the
partners,
29
members,
or
shareholders
of
such
entity
for
their
direct
use,
30
and
in
any
proportion,
in
accordance
with
the
provisions
of
any
31
agreement
among
the
partners,
members,
or
shareholders,
which
32
agreement
shall
be
included
with
each
return
filed.
33
Sec.
3.
NEW
SECTION
.
15E.83
Application
——
qualification
34
——
report.
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1.
a.
A
rural
business
growth
fund
shall
submit
to
the
1
economic
development
authority
an
application
for
a
finding
2
of
eligibility
for
an
investment
between
January
1,
2016,
3
and
January
30,
2016,
on
a
form
prescribed
by
the
authority.
4
The
rural
business
growth
fund
shall
include
a
nonrefundable
5
application
fee
of
five
thousand
dollars
with
the
application.
6
b.
The
authority
shall
approve,
deny,
or
deny
in
part
the
7
application
within
sixty
days
of
receiving
the
application.
8
c.
(1)
If
the
approved
applications
exceed
the
limitation
9
of
forty
million
dollars
in
aggregate
investments
of
all
10
applications,
the
authority
shall
reduce
the
portion
that
may
11
be
qualified
on
a
pro
rata
basis
of
the
amount
of
a
claim
to
the
12
total
of
all
claims
on
applications
approved.
13
(2)
If
the
approved
applications
received
between
January
14
1,
2016,
and
January
30,
2016,
do
not
meet
or
exceed
the
dollar
15
amount
limitation
provided
in
section
15E.82,
subsection
16
2,
paragraph
“b”
,
the
authority
may
continue
to
accept
17
applications
after
that
date
on
a
first-come,
first-served
18
basis.
19
d.
The
rural
business
growth
fund
shall
collect
and
provide
20
the
information
required
in
this
subsection,
in
the
manner
and
21
form
prescribed
by
the
authority.
22
2.
a.
Within
one
hundred
eighty
days
of
receiving
notice
23
of
qualification,
the
rural
business
growth
fund
shall
issue
24
the
eligible
investment
and
receive
cash
in
the
amount
of
the
25
qualified
amount
provided
by
the
authority.
The
rural
business
26
growth
fund
shall
provide
the
authority
with
evidence
of
the
27
receipt
of
the
cash
investment
within
one
hundred
eighty-five
28
days
of
receiving
the
authority’s
notice
of
qualification.
The
29
rural
business
growth
fund
shall
provide
the
authority
the
30
names
of
the
investors
that
are
eligible
for
tax
credits.
31
b.
If
the
rural
business
growth
fund
fails
to
receive
the
32
cash
investment
within
one
hundred
eighty
days
of
the
receipt
33
of
the
notice
of
qualification
from
the
authority,
the
eligible
34
investment
is
no
longer
qualified.
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c.
A
rural
business
growth
fund
may
transfer
all
or
a
1
portion
of
its
qualified
eligible
investment
to
an
affiliate
2
prior
to
the
expiration
of
the
one
hundred
eighty
days
to
3
obtain
the
eligible
investments
in
the
amount
qualified
if
4
the
rural
business
growth
fund
and
the
affiliate
receiving
5
the
qualified
eligible
investment
notify
the
authority
of
the
6
transfer
within
one
hundred
eighty
days
of
receiving
notice
7
that
the
eligible
investment
is
qualified
and
if
the
affiliate
8
includes
any
information
required
in
the
application
submitted
9
pursuant
to
subsection
1.
10
3.
a.
A
rural
business
growth
fund
shall
report
to
the
11
authority
concerning
qualified
eligible
investments
to
verify
12
the
investment’s
continuing
qualification
on
a
form
prescribed
13
by
the
authority.
14
b.
After
submission
of
the
initial
report
pursuant
to
15
paragraph
“a”
,
the
rural
business
growth
fund
shall
submit
an
16
annual
report
to
the
authority
on
a
form
prescribed
by
the
17
authority.
18
4.
An
investor
shall
forfeit
the
qualified
status
of
an
19
investment
and
the
authority
shall
not
issue
a
tax
credit
20
certificate,
or
shall
rescind
a
tax
credit
certificate,
upon
21
occurrence
of
any
of
the
following:
22
a.
The
rural
business
growth
fund
redeems
an
eligible
23
investment
prior
to
the
fifth
year
after
the
investor’s
24
investment
in
the
rural
business
growth
fund.
25
b.
The
rural
business
growth
fund
distributes
to
equity
26
holders
an
amount
that
exceeds
the
sum
of
the
rural
business
27
growth
fund’s
cumulative
operating
income
earned
by
the
rural
28
business
growth
fund
since
issuing
the
eligible
investment
29
and
fifty
percent
of
the
eligible
investments
issued
by
the
30
rural
business
growth
fund
prior
to
the
fifth
year
after
the
31
investor’s
investment
in
the
rural
business
growth
fund.
32
c.
The
rural
business
growth
fund
fails
to
invest
one
33
hundred
percent
of
the
eligible
investment
in
rural
business
34
growth
investments
in
Iowa
within
twenty-four
months
of
the
35
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eligible
investment
being
made
in
the
rural
business
growth
1
fund.
2
d.
(1)
The
rural
business
growth
fund
fails
to
maintain
at
3
least
one
hundred
percent
of
the
eligible
investment
in
rural
4
business
growth
investments
in
Iowa
for
at
least
five
years
5
after
the
investor’s
investment
in
a
rural
business
growth
6
fund.
7
(2)
An
investment
shall
be
considered
maintained
by
a
8
rural
business
growth
fund,
even
if
the
rural
business
growth
9
investment
has
been
sold
or
repaid,
if
the
rural
business
10
growth
fund
reinvests
an
amount
equal
to
the
capital
returned
11
to
or
recovered
by
the
rural
business
growth
fund
from
the
12
original
rural
business
growth
investment,
exclusive
of
13
profits,
in
another
eligible
rural
business
growth
investment
14
within
twelve
months
of
the
receipt
of
such
capital
returned
or
15
recovered.
Periodic
amounts
received
as
repayment
of
principal
16
pursuant
to
regularly
scheduled
amortization
payments
on
a
loan
17
that
is
an
eligible
rural
business
growth
investment
shall
be
18
treated
as
continuously
invested
in
an
eligible
rural
business
19
growth
investment
if
the
amounts
are
reinvested
in
one
or
more
20
eligible
rural
business
growth
investments
by
the
end
of
the
21
following
calendar
year.
22
e.
A
rural
business
growth
fund
or
investor
of
an
eligible
23
investment
pays
the
rural
business
growth
fund
or
an
affiliate
24
a
fee
in
connection
with
the
eligible
investment
or
the
rural
25
business
growth
investment
prior
to
the
fifth
year
after
26
the
investor’s
investment
in
a
rural
business
growth
fund.
27
However,
the
rural
business
growth
fund
or
investor
of
an
28
eligible
investment
may
allocate
or
distribute
income
earned
to
29
the
equity
owners
or
payment
of
reasonable
interest
on
amounts
30
lent
to
a
rural
business
growth
fund
or
investor
of
an
eligible
31
investment.
32
f.
A
rural
business
concern
receiving
a
rural
business
33
growth
investment
from
a
rural
business
growth
fund,
or
any
34
affiliates
of
a
rural
business
concern,
directly
or
indirectly
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does
any
of
the
following:
1
(1)
Owns
an
ownership
interest
in
a
rural
business
growth
2
fund
or
affiliate
of
a
rural
business
growth
fund
that
is
3
providing
the
rural
business
growth
investment.
4
(2)
Loans
to
or
invests
in
a
rural
business
growth
fund
or
5
affiliate
of
a
rural
business
growth
fund
where
the
proceeds
of
6
the
loan
or
investment
are
directly
or
indirectly
used
to
fund
7
or
refinance
an
eligible
investment.
8
(3)
For
purposes
of
this
paragraph,
a
rural
business
growth
9
fund
is
not
an
affiliate
of
a
rural
business
concern
solely
as
10
a
result
of
its
rural
business
growth
investment
in
the
rural
11
business
concern.
12
5.
If
the
status
of
the
eligible
investment
is
no
longer
13
qualified
pursuant
to
subsection
4,
all
or
a
portion
of
the
14
tax
credit
claimed
by
a
taxpayer
is
subject
to
disallowance,
15
recapture,
or
immediate
repayment.
16
Sec.
4.
APPLICABILITY.
This
Act
applies
to
tax
years
17
beginning
on
or
after
January
1,
2016,
and
to
eligible
18
investments
made
on
or
after
that
date.
19
EXPLANATION
20
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
21
the
explanation’s
substance
by
the
members
of
the
general
assembly.
22
This
bill
creates
a
tax
credit
against
state
individual
and
23
corporate
income
tax,
and
against
taxes
imposed
on
financial
24
institutions,
insurance
companies,
and
credit
unions
for
an
25
investor’s
equity
investments
through
small
business
investment
26
companies
identified
as
rural
business
growth
funds
for
27
investments
in
rural
businesses.
28
The
bill
provides
definitions
for
“affiliate”,
“cumulative
29
operating
income”,
“eligible
investment”,
“operating
company”,
30
“rural
area”,
“rural
business
concern”,
“rural
business
growth
31
fund”,
and
“rural
business
growth
investment”,
as
those
terms
32
are
used
in
the
bill.
33
The
bill
requires
a
rural
business
growth
fund
to
apply
to
34
the
economic
development
authority
(authority)
between
January
35
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1,
2016,
and
January
30,
2016,
on
behalf
of
investors
in
the
1
rural
business
growth
fund
to
qualify
the
investment
and
the
2
amount
of
the
investment
for
which
the
investor
may
receive
3
a
tax
credit.
The
bill
requires
the
applicant
to
include
a
4
$5,000
nonrefundable
application
fee
with
the
application.
5
The
authority
shall
issue
a
tax
credit
certificate
to
the
6
investors
upon
receiving
verification
from
the
rural
business
7
growth
fund
that
a
qualified
eligible
investment
has
been
used
8
as
required
in
the
bill
to
invest
in
rural
business
concerns
9
in
the
state.
The
bill
defines
an
“eligible
investment”
as
10
an
equity
investment
in
a
rural
business
growth
fund
that
is
11
acquired
after
the
effective
date
of
the
bill
in
exchange
for
12
cash,
has
100
percent
used
by
the
rural
business
growth
fund
13
to
make
investments
in
rural
business
concerns
located
in
Iowa
14
within
24
months
of
the
investment
in
a
rural
business
growth
15
fund,
is
designated
by
the
rural
business
growth
fund
as
an
16
eligible
investment
and
is
qualified
by
the
authority
pursuant
17
to
the
bill,
and
an
investment
in
which
the
rural
business
18
growth
fund
manager
invests
at
least
10
percent
of
the
equity
19
investment.
The
amount
of
the
tax
credit
is
an
amount
equal
to
20
20
percent
of
an
eligible
investment
each
year
for
three
years.
21
A
taxpayer
may
not
claim
the
credit
until
24
months
after
the
22
date
of
making
an
investment
in
a
rural
business
growth
fund.
23
The
bill
states
the
total
maximum
aggregate
tax
credit
amount
24
the
authority
may
allow
per
year
is
$8
million.
25
A
tax
credit
certificate
issued
under
the
bill
is
not
26
refundable
and
cannot
be
carried
back
to
a
tax
year
prior
to
27
the
tax
year
in
which
the
taxpayer
first
redeems
the
credit.
28
A
tax
credit
may
be
carried
forward
for
five
years
or
until
29
depleted.
A
tax
credit
received
under
the
bill
is
only
30
transferable
when
issued
to
a
partnership,
limited
liability
31
company,
or
S
corporation
and
transferred
to
partners,
members,
32
or
shareholders
of
such
entities,
as
agreed
to
by
the
partners,
33
members,
or
shareholders.
34
The
bill
states
that
an
entity
receiving
a
rural
business
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investment
tax
credit
under
the
bill
is
not
required
to
pay
1
any
additional
tax
as
a
result
of
claiming
the
rural
business
2
investment
tax
credit.
3
The
bill
requires
rural
business
growth
funds
to
submit
4
applications
on
behalf
of
investors
to
qualify
an
eligible
5
investment
and
receive
an
amount
of
tax
credit
for
which
the
6
investors
are
qualified
between
January
1,
2016,
and
January
7
30,
2016.
The
bill
requires
the
authority
to
grant,
deny,
8
or
deny
in
part
an
application
within
60
days
of
receipt
of
9
the
application.
If
the
authority
receives
applications
in
10
this
time
frame
that
would
exceed
$40
million
in
aggregate
11
investments
of
all
applicants
to
the
program,
the
authority
12
shall
qualify
the
portion
for
which
the
eligible
investment
is
13
qualified
on
a
pro
rata
basis
of
the
approved
applications.
14
If
the
authority
does
not
meet
or
exceed
the
$40
million
cap
15
in
aggregate
investments
of
all
applications
between
January
16
1
and
January
30,
2016,
the
authority
may
continue
to
receive
17
applications
until
meeting
the
$8
million
tax
credit
cap,
on
a
18
first-come,
first-served
basis.
19
The
bill
requires
a
rural
business
growth
fund
receiving
20
notice
of
the
qualification
of
an
eligible
investment
to
issue
21
the
eligible
investment
and
receive
the
cash
investment
from
22
the
investors
for
the
amount
qualified
by
the
authority
within
23
180
days
of
receipt
of
the
notice.
The
rural
business
growth
24
fund
shall
provide
the
authority
the
names
of
the
investors
25
that
are
eligible
to
receive
tax
credits
within
185
days
of
26
receipt
of
the
qualified
notice
from
the
authority.
If
a
rural
27
business
growth
fund
fails
to
receive
the
cash
investment
28
for
which
it
received
qualification
by
the
authority,
the
29
eligible
investment
is
no
longer
qualified
for
a
tax
credit.
30
Also,
during
this
180
days,
the
rural
business
growth
fund
31
may
transfer
all
or
a
portion
of
its
qualified
eligible
32
investment
to
an
affiliate
as
long
as
the
affiliate
receiving
33
the
qualified
eligible
investment
notifies
the
authority
of
the
34
transfer
within
180
days
of
receiving
the
qualified
notice
from
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the
authority.
1
The
bill
requires
a
rural
business
growth
fund
with
a
2
qualified
eligible
investment
to
report
to
the
authority
about
3
the
qualified
eligible
investment
to
verify
the
investment’s
4
eligibility.
After
submitting
this
initial
report,
the
rural
5
business
growth
fund
shall
submit
a
report
annually
to
the
6
authority.
7
The
bill
states
that
an
eligible
investment
is
no
longer
8
qualified
and
the
authority
shall
not
issue
or
shall
rescind
a
9
tax
credit
certificate
in
circumstances
provided
in
the
bill,
10
including
redemption
of
the
investment
prior
to
the
five-year
11
anniversary
of
the
investor’s
investment,
improper
distribution
12
of
the
investment,
failure
to
invest
100
percent
of
the
13
eligible
investment
as
a
rural
business
growth
investment
or
14
failure
to
maintain
100
percent
of
the
eligible
investment
in
a
15
rural
business
growth
investment,
a
rural
business
growth
fund
16
or
an
investor
pays
the
rural
business
growth
fund
or
affiliate
17
a
fee
in
connection
with
the
eligible
investment
or
the
rural
18
business
growth
investment
before
the
five-year
anniversary
of
19
the
investor’s
investment
in
the
rural
business
growth
fund
20
pursuant
to
the
bill,
or
a
rural
business
concern
receiving
21
a
rural
business
growth
investment
has
improper
ties
to
the
22
rural
business
growth
fund.
The
bill
allows
for
recapture,
23
disallowance,
or
immediate
repayment
of
all
or
a
portion
of
the
24
tax
credit
in
the
above
circumstances.
25
The
bill
applies
to
tax
years
beginning
on
or
after
January
26
1,
2016.
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