| 1 | A bill to be entitled |
| 2 | An act relating to the New Markets Development Program; |
| 3 | amending s. 288.9913, F.S.; revising the definition of the |
| 4 | term "qualified active low-income community business" for |
| 5 | purposes of the New Markets Development Program Act; |
| 6 | amending s. 288.9920, F.S.; extending the period within |
| 7 | which a qualified community development entity may cure an |
| 8 | investment deficiency; limiting the number of corrections |
| 9 | permitted for qualified equity investments; providing an |
| 10 | effective date. |
| 11 |
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| 12 | Be It Enacted by the Legislature of the State of Florida: |
| 13 |
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| 14 | Section 1. Subsection (7) of section 288.9913, Florida |
| 15 | Statutes, is amended to read: |
| 16 | 288.9913 Definitions.-As used in ss. 288.991-288.9922, the |
| 17 | term: |
| 18 | (7) "Qualified active low-income community business" means |
| 19 | a corporation, including a nonprofit corporation, or partnership |
| 20 | that complies with each of the following: |
| 21 | (a)1. Derives at least 50 percent of its total gross |
| 22 | income from the active conduct of business within any low-income |
| 23 | community for any taxable year.; |
| 24 | 2. Uses at least 40 percent a substantial portion of its |
| 25 | tangible property, whether owned or leased, within any low- |
| 26 | income community for any taxable year, which percentage shall be |
| 27 | the average value of the tangible property owned or leased and |
| 28 | used within a low-income community by the corporation or |
| 29 | partnership divided by the average value of the total tangible |
| 30 | property owned or leased and used by the corporation or |
| 31 | partnership during the taxable year. The value assigned to |
| 32 | leased property by the corporation or partnership must be |
| 33 | reasonable.; |
| 34 | 3. Performs at least 40 percent a substantial portion of |
| 35 | its services through its employees in a low-income community for |
| 36 | any taxable year, which percentage shall be the amount paid by |
| 37 | the corporation or partnership for salaries, wages, and benefits |
| 38 | to employees in a low-income community divided by the total |
| 39 | amount paid by the corporation or partnership for salaries, |
| 40 | wages, and benefits during the taxable year.; |
| 41 | 4. Attributes less than 5 percent of the average of the |
| 42 | aggregate unadjusted bases of the property of the entity to |
| 43 | collectibles, as defined in 26 U.S.C. s. 408(m)(2), other than |
| 44 | collectibles that are held primarily for sale to customers in |
| 45 | the ordinary course of the business for any taxable year.; and |
| 46 | 5. Attributes less than 5 percent of the average of the |
| 47 | aggregate unadjusted bases of the property of the entity to |
| 48 | nonqualified financial property, as defined in 26 U.S.C. s. |
| 49 | 1397C(e), for any taxable year. |
| 50 |
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| 51 | A corporation or partnership complies with subparagraph 1. if, |
| 52 | as calculated in subparagraph 2., it uses at least 50 percent of |
| 53 | its tangible property, whether owned or leased, within any low- |
| 54 | income community for any taxable year or if, as calculated in |
| 55 | subparagraph 3., the corporation or partnership performs at |
| 56 | least 50 percent of its services through its employees in a low- |
| 57 | income community for any taxable year. |
| 58 | (b) Is reasonably expected by a qualified community |
| 59 | development entity at the time of an investment to continue to |
| 60 | satisfy the requirements of paragraphs (a), (c), and (d) for the |
| 61 | duration of the investment. |
| 62 | (c) Satisfies the requirements of paragraphs (a) and (b), |
| 63 | but does not: |
| 64 | 1. Derive or project to derive 15 percent or more of its |
| 65 | annual revenue from the rental or sale of real estate, unless |
| 66 | the corporation or partnership derives such revenue from the |
| 67 | rental of real estate and the primary lessee and user of such |
| 68 | real estate is another qualified active low-income community |
| 69 | business that is owned or controlled by, or that is under common |
| 70 | ownership or control with, such corporation or partnership; |
| 71 | 2. Engage predominantly in the development or holding of |
| 72 | intangibles for sale or license; |
| 73 | 3. Operate a private or commercial golf course, country |
| 74 | club, massage parlor, hot tub facility, suntan facility, |
| 75 | racetrack, gambling facility, or a store the principal business |
| 76 | of which is the sale of alcoholic beverages for consumption off |
| 77 | premises; or |
| 78 | 4. Engage principally in farming and owns or leases assets |
| 79 | the sum of the aggregate unadjusted bases or the fair market |
| 80 | value of which exceeds $500,000. |
| 81 | (d) Will create or retain jobs that pay an average wage of |
| 82 | at least 115 percent of the federal poverty income guidelines |
| 83 | for a family of four. |
| 84 | Section 2. Subsection (2) of section 288.9920, Florida |
| 85 | Statutes, is amended to read: |
| 86 | 288.9920 Recapture and penalties.- |
| 87 | (2) The office shall provide notice to the qualified |
| 88 | community development entity and the department of a proposed |
| 89 | recapture of a tax credit. The entity shall have 6 months 90 |
| 90 | days following the receipt of the notice to cure a deficiency |
| 91 | identified in the notice and avoid recapture. The office shall |
| 92 | issue a final order of recapture if the entity fails to cure a |
| 93 | deficiency within the 6-month 90-day period. The final order of |
| 94 | recapture shall be provided to the entity, the department, and a |
| 95 | taxpayer otherwise authorized to claim the tax credit. Only one |
| 96 | correction is permitted for each qualified equity investment |
| 97 | during the 7-year credit period. Recaptured funds shall be |
| 98 | deposited into the General Revenue Fund. |
| 99 | Section 3. This act shall take effect upon becoming a law. |