Rural Community Investment Program.

(1) The Rural Community Investment Program is created within the department.

(2) As used in this section, the term:

(a) “Affiliate” means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with another entity. For the purposes of this paragraph, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.

(b) “Applicant” means a person who submits or updates an application on behalf of a rural fund.

(c) “Credit certification date” means the first date on which the department provides a certificate under paragraph (4)(e) and each anniversary of such date for a period of 11 years.

(d) “Eligible business” means a business that, at the time a rural fund initially invests in the business:

1. Has fewer than 250 employees;

2. Has its principal business operations located in this state; and

3. Has its principal business operations located in a rural community in this state, unless this requirement is waived by the department pursuant to subsection (8).

(e) “Eligible investment” means any capital or equity investment in an eligible business, or any loan to an eligible business with a stated maturity of at least 1 year after the date of issuance.

(f) “Investment authority” means the total amount of eligible investments which a rural fund intends to make to eligible businesses, which is the amount certified by the department under paragraph (4)(e).

(g) “Investor contribution” means a cash investment in a rural fund. The cash investment must be used to purchase an equity interest in the rural fund or to purchase at par value or premium a debt instrument that has a maturity date at least 5 years after the credit certification date and a repayment schedule that is no greater than level principal amortization over 5 years.

(h) “Jobs retained” means the number of full-time employment positions that existed before the initial eligible investment in an eligible business and for which the eligible business’s chief executive officer or similar officer certifies that the employment positions would have been eliminated but for the initial eligible investment.

(i) “Principal business operations” means the location or locations at which at least 60 percent of a business’s employees work or at which the employees who are paid at least 60 percent of the business’s payroll are located. A business that agrees to relocate or hire new employees using the proceeds of an eligible investment to establish its principal business operations in this state is deemed to have its principal business operations in the new location, provided that the business satisfies this definition within 180 days after receiving the eligible investment.

(j) “Rural community” means a rural community as defined in s. 288.0656 or a designated rural area of opportunity as defined in s. 288.0656(2).

(k) “Rural fund” means an entity certified by the department under paragraph (4)(e).

(l) “State tax” means a tax due under chapter 220 or s. 624.509(1).

(m) “Taxpayer” means a person who makes an investor contribution and is a taxpayer as defined in s. 220.03(1)(z) or a person with tax liability under s. 624.509.

(n) “Transferee” means a person who receives a transferred tax credit under paragraph (6)(b).

(3) On or before November 1, 2025, the department shall begin accepting applications, on a form adopted by department rule, for approval as a rural fund. The application must include all of the following:

(a) The investment authority sought by the applicant.

(b) Evidence that the applicant is licensed as a rural business investment company as defined in 7 U.S.C. s. 2009cc or as a small business investment company under 15 U.S.C. s. 681. The applicant must include a certificate executed by an executive officer of the applicant attesting that such license remains in effect and has not been revoked.

(c) Evidence that, as of the date the application is submitted, the applicant has invested at least $100 million in nonpublic companies located in counties within the United States with a population of less than 75,000 as of the United States Decennial Census of 2020.

(d) An estimate of the total number of new annual jobs that will be created and total jobs retained over the life of the program in the state because of the applicant’s proposed eligible investments.

(e) A business plan that includes a revenue impact assessment projecting state and local tax revenues to be generated, as well as state expenditures to be reduced, by the applicant’s proposed eligible investments, which is prepared by a nationally recognized third-party independent economic forecasting firm using a dynamic economic forecasting model that analyzes the applicant’s business plan over the 10 years after the date the application is submitted to the department.

(4)(a) The department shall review applications for approval of the applicant as a rural fund in the order received. The department may ask the applicant for additional information about items contained in the application. Within 60 days after receipt of a completed application, the department shall approve or deny the application.

(b) The department shall deem applications received on the same day as having been received simultaneously. If requests for investment authority exceed the remaining tax credit limitation under paragraph (c), the department must proportionally reduce the investment authority for each approved application received simultaneously to avoid exceeding the limit.

(c) Beginning in fiscal year 2025-2026, the tax credit cap amount is $7 million in each state fiscal year, excluding any credits carried forward pursuant to subsection (6). The department may not approve a cumulative amount of tax credits which may result in the claim of more than $35 million in tax credits during the existence of the program.

(d) The department must deny an application if:

1. The application is incomplete;

2. The applicant does not satisfy the criteria set forth in subsection (3);

3. The revenue impact assessment submitted under paragraph (3)(e) does not demonstrate that the applicant’s business plan will result in a positive revenue impact on the state over a 10-year period which exceeds the cumulative amount of tax credits that would be issued to the applicant’s investors; or

4. The department has already approved the maximum amount of investment authority allowed under paragraph (c).

(e) A tax credit certified under this paragraph may not be taken against state tax liability until a rural fund receives a final order under subsection (5). After approving the application, the department must provide a certification to the applicant which does all of the following:

1. Designates the applicant as a rural fund.

2. Certifies the amount of the rural fund’s investment authority.

3. Certifies the amount of tax credits available to persons who make investor contributions in the rural fund. The certified tax credits must be equal to 25 percent of the rural fund’s investment authority under subparagraph 2.

4. A statement that tax credits may not be taken against state tax liability until the rural fund receives a final order under subsection (5).

(f) Within 90 days after receiving the certification issued under paragraph (e), the rural fund shall collect all investor contributions. The collected investor contributions must equal the investment authority specified in the certification under subparagraph (e)2.

(g) Within 95 days after receiving the certification issued under paragraph (e), the rural fund must send a notification to the department demonstrating that the rural fund has collected investor contributions in an amount equal to the investment authority specified in the certification under subparagraph (e)2. The notification must include all of the following:

1. Evidence that the rural fund collected the total amount required under subparagraph (e)2.

2. The date on which each investor contribution was collected.

3. The identity, including name and tax identification number, of each person who made an investor contribution and the amount of the investor contribution made by each person.

(h) If the rural fund fails to comply with paragraphs (f) and (g), the department must revoke the rural fund’s certification that was made pursuant to paragraph (e). The corresponding investment authority will not count toward the tax credit limitation set forth in paragraph (c).

(i) The department shall first award revoked investment authority pro rata to each rural fund that was awarded less than the investment authority for which it applied. Any remaining investment authority may be awarded by the department to new applicants.

(5) Upon receipt of the notification under paragraph (4)(g), the department must issue a final order approving the taxpayer to receive tax credits under this section. The final order must include the identity, including name and tax identification number, of each taxpayer who is eligible to claim the credit and the amount of credits that may be claimed by each taxpayer. The amount of tax credits that the taxpayer is approved to receive must be equal to 25 percent of the investor contribution specified in the notification under subparagraph (4)(g)3. The department must provide the final order to the rural fund and the Department of Revenue.

(6)(a) Any taxpayer that receives a final order under subsection (5) is vested with an earned credit against state tax liability. The taxpayer must attach a copy of the final order issued under subsection (5) to its return when claiming the credit. The taxpayer may claim the credit as follows:

1. The taxpayer may apply 20 percent of the credit against its state tax liability in the tax years containing the first through fifth credit certification dates.

2. A taxpayer may not claim a tax credit in excess of the taxpayer’s state tax liability. If the credit granted pursuant to this section is not fully used in any single year because of insufficient tax liability on the part of the taxpayer, the unused amount may be carried forward for use in the taxpayer’s subsequent tax years until the tax year containing the 11th credit certification date, after applying the other credits and unused carryovers in the order provided in s. 220.02 for credits taken against the tax in chapter 220 or in the order provided in s. 624.509 for credits taken against the tax in s. 624.509. An insurer claiming a credit against the tax in s. 624.509 under this section is not required to pay any additional retaliatory tax levied under s. 624.5091 as a result of claiming such credit. Section 624.5091 does not limit such credit in any manner. Carryover credit amounts must be treated as unused credits for purposes of the transfer of unused credits pursuant to paragraph (b).

(b) A credit earned under this section may not be refunded, sold on the open market, or transferred, except as provided in this paragraph.

1. Credits earned under this section may be transferred from a taxpayer to affiliates of the rural fund. Credits earned by or allocated to a partnership under chapter 620 or a limited liability company under chapter 605 may be allocated to the partners, members, or shareholders of such entity for their use in accordance with the provisions of any agreement among such partners, members, or shareholders.

2. A taxpayer must notify the department and the Department of Revenue of a transfer. The notification must include the identity of the transferee, tax identification number of the transferee, and tax credit amount allocated to the transferee. The notice of transfer also must state whether unused tax credits are being transferred and the amount of unused tax credits being transferred. Such allocations and transfers may not be considered a sale for the purposes of this section.

3. Notification of a transfer of a tax credit must be submitted to the Department of Revenue on a form adopted by rule of the Department of Revenue. Within 30 days after the transfer, the Department of Revenue shall provide a letter to the rural fund, taxpayer, transferee, and the department acknowledging the transfer, after which time the transferee may claim the transferred credit on its return due on or after the date of the letter. The transferee must attach a copy of the letter to its return when claiming the credit.

(7)(a) Notwithstanding s. 95.091, the department must direct the Department of Revenue to recapture all or a portion of a tax credit under this section if one or more of the following occur with respect to a rural fund before the rural fund exits the program in accordance with subsection (10):

1. The rural fund does not invest 60 percent of its investment authority in eligible businesses before its second credit certification date.

2. The rural fund does not invest 100 percent of its investment authority in eligible businesses before its third credit certification date, with at least 70 percent of such eligible investments made in a rural community.

3. The rural fund, after initially satisfying subparagraph 2., fails to maintain eligible investments equal to 100 percent of its investment authority until exiting the program in accordance with subsection (10), with at least 70 percent of such eligible investments made in a rural community. For purposes of this paragraph, an investment is maintained even if it is sold or repaid, so long as the rural fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other eligible investments in this state within 12 months after the receipt of such capital. Amounts received periodically by a rural fund must be treated as continuously invested in eligible investments if the amounts are reinvested in one or more eligible investments by the end of the following calendar year; however, there is no requirement to reinvest capital after exiting the program in accordance with subsection (10) for purposes of eligibility under this paragraph.

4. The rural fund, before exiting the program in accordance with subsection (10), makes a distribution or payment that results in the rural fund having less than 100 percent of its investment authority invested in eligible businesses.

5. The rural fund invests in an eligible business that directly, or indirectly through an affiliate, owns, has the right to acquire an ownership interest in, makes a loan to, or makes an investment in the rural fund of an affiliate of the rural fund or an investor in the rural fund.

(b) The department must provide notice to the rural fund, taxpayer, transferee as applicable, and the Department of Revenue of a proposed recapture of tax credits. The rural fund has 6 months after the receipt of the notice to cure a deficiency identified in the notice and avoid recapture of a credit. The department must issue a final order of recapture if the rural fund fails to cure a deficiency within the 6-month period. The final order of recapture must be provided to the rural fund, taxpayer, transferee as applicable, and the Department of Revenue. Only one correction is permitted for each rural fund during the 5-year credit period. Recaptured funds shall be deposited into the General Revenue Fund.

(c) A rural fund, taxpayer, or transferee that submits fraudulent information to the department or Department of Revenue is liable for the costs associated with the investigation and prosecution of the fraudulent claim plus a penalty in an amount equal to double the tax credits claimed. This penalty is in addition to any other penalty that may be imposed by law.

(d)1. The department must first provide revoked tax credits on a pro rata basis to each rural fund that was approved for less than the amount for which it applied, as long as the approved credits remain under the tax credit limitation in paragraph (4)(c) for the fiscal year in which the limitation applied.

2. Any remaining tax credits must be approved by the department to new applicants, as long as the approved credits remain under the tax credit limitation in paragraph (4)(c) or the fiscal year in which the cap applied.

(8) The department may, upon a request made pursuant to subsection (9), waive the requirement relating to a rural community under subparagraph (2)(d)3. and allow a business to be considered an eligible business if the department determines that the business is located on land classified as agricultural under s. 193.461 or that the primary residence of a majority of the business’s employees is located in a rural community. This waiver does not allow a rural fund to invest less than 70 percent of eligible investments in a rural community. The department must provide the rural fund and the Department of Revenue with a written notice of the waiver under this subsection.

(9) Before making an eligible investment, a rural fund may request a written opinion from the department as to whether the business in which it proposes to invest satisfies the definition of an eligible business. The department, no later than 15 business days after the date of receipt of the request, shall provide the rural fund with a determination letter providing its opinion. If the department fails to issue a determination letter within that timeframe, the business in which the rural fund proposes to invest must be considered an eligible business.

(10)(a) On or after the sixth anniversary of the credit certification date, a rural fund may apply to the department to exit the program and no longer be subject to regulation. The department shall approve or deny the application within 15 days after receipt. In evaluating the application, the fact that no tax credit certificates have been revoked and that the rural fund has not received a notice of revocation that has not been cured pursuant to subsection (7) is sufficient evidence that the rural fund is eligible for exit. If the application is denied, the notice of denial must include the reasons for the determination.

(b) The department may revoke a tax credit certificate after a rural fund exits the program. The department may take any legal action necessary to recapture the tax credits. The department must deposit any funds from recaptured tax credits into the General Revenue Fund.

(11)(a) Each rural fund shall submit to the department a report on or before the 15th business day after the second and third credit certification date. The report must include all of the following for the year preceding the second or third credit certification date:

1. The time period covered in the report, which is the year preceding the second credit certification date or the year preceding the third credit certification date.

2. The name, address, and county of each eligible business receiving an eligible investment, including either the written determination under subsection (9) or evidence that the business qualified as an eligible business at the time the investment was made, if not previously reported.

3. Financial information that provides documentation for each eligible business that the rural fund has invested the amounts required in paragraph (7)(a).

4. All of the following for each eligible business:

a. The types of industries, identified by the North American Industry Classification System Code, of each eligible business.

b. The number of jobs created during the time period covered in the report.

c. The county in which jobs were created during the time period covered in the report.

d. The number of jobs retained as a result of each eligible investment during the time period covered in the report.

e. The county in which jobs were retained as a result of each eligible investment during the time period covered in the report.

f. The total number of jobs as of the first credit certification date and the last credit certification date which are in the time period covered in the report.

g. The range and average salary of all jobs.

5. Any other information required by the department.

6. A final report containing the items specified under paragraph (b) after exiting the program if requested by the department.

(b) On or before the fourth credit certification date after the final report required in paragraph (a), and annually until its exit from the program in accordance with subsection (10), the rural fund shall submit to the department a report. The report must include all of the following for the year preceding the fourth or subsequent credit certification date:

1. The time period covered in the report, which is the year preceding the credit certification date.

2. The name, address, and county of each eligible business receiving an eligible investment, including either the written determination under subsection (9) or evidence that the business qualified as an eligible business at the time the investment was made, if not previously reported.

3. Evidence for each eligible business that the rural fund has maintained the investment amounts required in paragraph (7)(a).

4. All of the following for each eligible business:

a. The types of industries, identified by the North American Industry Classification System Code, of each eligible business.

b. The number of jobs created during the time period covered in the report.

c. The county in which jobs were created during the time period covered in the report.

d. The number of jobs retained as a result of each eligible investment during the time period covered in the report.

e. The county in which jobs were retained as a result of each eligible investment during the time period covered in the report.

f. The total number of jobs as of the first credit certification date and the last credit certification date which are in the time period covered in the report.

g. The range and average salary of all jobs.

5. Any other information required by the department.

(12)(a) A rural fund that issues an eligible investment approved by the department shall be deemed a recipient of state financial assistance under the Florida Single Audit Act, as provided in s. 215.97. However, an entity that makes an eligible investment or receives an eligible investment is not a subrecipient for the purposes of s. 215.97.

(b) The department and the Department of Revenue may conduct examinations to verify compliance with this section.

(13) The department and the Department of Revenue shall adopt rules to administer this section.

(14) The department may not accept any new applications after December 1, 2029.

(15) This section expires on December 31, 2040.