Florida Senate - 2025 CS for SB 1322 By the Committee on Commerce and Tourism; and Senators Simon and Yarborough 577-03060-25 20251322c1 1 A bill to be entitled 2 An act relating to tax credits for investment in rural 3 communities; creating s. 288.062, F.S.; providing a 4 short title; defining terms; requiring the Department 5 of Commerce to accept applications for approval as 6 rural funds in a specified manner; requiring that 7 certain information be submitted in an application; 8 requiring the department to approve or deny 9 applications within a specified timeframe; prohibiting 10 the department from approving more than a certain 11 amount of investment authority; requiring the 12 department to deny applications under certain 13 circumstances; authorizing an applicant whose 14 application was denied to provide additional 15 information within a certain timeframe to cure defects 16 in the application; requiring the department to review 17 and reconsider such applications within a certain 18 timeframe; prohibiting the department from reducing 19 the investment authority of an application or denying 20 an application unless certain conditions are met; 21 requiring the department to certify approved 22 applications; providing requirements for certified 23 rural funds; requiring the department to provide a tax 24 credit certificate to certain taxpayers; requiring the 25 department to revoke a rural funds certification 26 under specified conditions; requiring the department 27 to distribute revoked investment authority among 28 certain rural funds; authorizing rural funds to 29 allocate associated investor contribution authority to 30 certain taxpayers; granting a credit against state tax 31 liability for specified investors; providing 32 restrictions on the credit; requiring taxpayers 33 claiming a credit to submit a copy of the tax credit 34 certificate with their tax return; requiring the 35 department to revoke a tax credit certificate under 36 certain circumstances; authorizing the department to 37 waive certain requirements relating to an eligible 38 business or rural area under certain circumstances; 39 authorizing rural funds to request certain 40 determinations from the department; specifying a 41 timeframe within which rural funds may correct 42 violations to avoid revocation of a tax credit 43 certificate; authorizing the department to distribute 44 reverted investment authority among certain rural 45 funds; authorizing rural funds to submit an exit 46 application; providing a timeframe and procedures for 47 the department to use in handling exit applications; 48 prohibiting the department from revoking a rural 49 funds tax credit certificate after it exits the 50 program; requiring rural funds to submit an annual 51 report to the department beginning on a date certain; 52 requiring that the annual report include certain 53 information; prohibiting applications from being 54 accepted after a date certain; providing an effective 55 date. 56 57 Be It Enacted by the Legislature of the State of Florida: 58 59 Section 1.Section 288.062, Florida Statutes, is created to 60 read: 61 288.062Florida Rural Jobs Act. 62 (1)This section may be cited as the Florida Rural Jobs 63 Act. 64 (2)As used in this section, the term: 65 (a)Affiliate means an entity that directly, or 66 indirectly through one or more intermediaries, controls, is 67 controlled by, or is under common control with another entity. 68 For the purposes of this paragraph, an entity is controlled by 69 another entity if the controlling entity holds, directly or 70 indirectly, the majority voting or ownership interest in the 71 controlled entity or has control over the day-to-day operations 72 of the controlled entity. 73 (b)Credit allowance date means the date on which the 74 department provides a tax credit certificate under paragraph 75 (8)(b). 76 (c)Department means the Department of Commerce. 77 (d)Eligible business means a business that, at the time 78 a rural fund initially invests in the business: 79 1.Has fewer than 250 employees; and 80 2.Has its principal business operations located in this 81 state. 82 (e)Eligible investment means any capital or equity 83 investment in an eligible business, or any loan to an eligible 84 business with a stated maturity of at least 1 year from the date 85 of issuance, provided that the eligible business has its 86 principal business operations located in a rural community in 87 this state, unless this requirement is waived by the department 88 pursuant to subsection (11). 89 (f)Investment authority means the amount certified by 90 the department under paragraph (7)(b). 91 (g)Investor contribution means a cash investment in a 92 rural fund. The cash investment must be used to purchase an 93 equity interest in the rural fund or purchase at par value or 94 premium a debt instrument that has a maturity date at least 7 95 years after the credit allowance date and a repayment schedule 96 that is no greater than level principal amortization over 7 97 years. 98 (h)Jobs retained means the number of full-time 99 employment positions that existed before the initial eligible 100 investment in an eligible business and for which the eligible 101 businesss chief executive officer or similar officer certifies 102 that the employment positions would have been eliminated but for 103 the initial eligible investment. 104 (i)Principal business operations means the location or 105 locations at which at least 60 percent of a businesss employees 106 work or at which the employees who are paid at least 60 percent 107 of the businesss payroll are located. A business that agrees to 108 relocate or hire new employees using the proceeds of an eligible 109 investment to establish its principal business operations in 110 this state is deemed to have its principal business operations 111 in the new location, provided the business satisfies this 112 definition within 180 days after receiving the eligible 113 investment. 114 (j)Rural community means: 115 1.A county with a population of 75,000 or less; 116 2.A county with a population of 125,000 or less, if the 117 county is contiguous to a county with a population of 75,000 or 118 less; 119 3.Any municipality in a county that meets the above 120 criteria; 121 4.An unincorporated federal enterprise community or an 122 incorporated rural city with a population of 25,000 or less and 123 with an employment base focused on traditional agriculture or 124 resource-based industries, which community or city is located in 125 a county not defined as rural and has at least three or more 126 economic distress factors; or 127 5.A designated rural area of opportunity as defined in s. 128 288.0656(2). 129 (k)Rural fund means an entity certified by the 130 department under paragraph (7)(a). 131 (l)State tax means a tax identified in s. 624.509 or s. 132 624.5091. 133 (3)On or before November 1, 2025, the department shall 134 accept applications for approval as a rural fund on a form 135 adopted by the department. The application must include all of 136 the following: 137 (a)The total investment authority sought by the applicant. 138 (b)Evidence that the applicant or an affiliate of the 139 applicant is licensed as a rural business investment company as 140 defined in 7 U.S.C. s. 2009cc or as a small business investment 141 company under 15 U.S.C. s. 681. The applicant or the affiliate 142 must include a certificate executed by an executive officer of 143 the applicant attesting that such license remains in effect and 144 has not been revoked. 145 (c)Evidence that, as of the date the application is 146 submitted, the applicant or affiliates of the applicant have 147 invested at least $100 million in nonpublic companies located in 148 counties within the United States with a population of less than 149 75,000 as of the United States Decennial Census of 2010. 150 (d)An estimate of the total number of new annual jobs that 151 will be created and total jobs retained over the life of the 152 program in this state because of the applicants proposed 153 eligible investments. 154 (e)A business plan that includes a revenue impact 155 assessment projecting state and local tax revenues to be 156 generated, as well as state expenditures to be reduced, by the 157 applicants proposed eligible investments, which is prepared by 158 a nationally recognized third-party independent economic 159 forecasting firm using a dynamic economic forecasting model that 160 analyzes the applicants business plan over the 10 years after 161 the date the application is submitted to the department. 162 (4)(a)Within 30 days after receipt of a completed 163 application, the department shall approve or deny the 164 application. 165 (b)The department shall deem applications received on the 166 same day as having been received simultaneously. If requests for 167 investment authority exceed the remaining tax credit limitation 168 under paragraph (c), the department must proportionally reduce 169 the investment authority and the investor contributions for each 170 approved application that day to avoid exceeding the limit. 171 (c)The department shall approve investment authority up to 172 an amount that would allow no more than $7.143 million in tax 173 credits to be taken in any 1 year, excluding any credits carried 174 forward pursuant to paragraph (10)(a). 175 (5)The department must deny an application if: 176 (a)The application is incomplete; 177 (b)The applicant does not satisfy the criteria set forth 178 in subsection (3); 179 (c)The revenue impact assessment submitted under paragraph 180 (3)(e) does not demonstrate that the applicants business plan 181 will result in a positive revenue impact on this state over a 182 10-year period which exceeds the cumulative amount of tax 183 credits that would be issued to the applicants investors; or 184 (d)The department has already approved the maximum amount 185 of investment authority and investor contributions allowed under 186 subsection (4). 187 (6)If the department denies an application, the applicant 188 may, within 15 days after the denial, provide additional 189 information to the department to cure any defects in the 190 application as identified by the department. The department 191 shall review and reconsider such applications within 15 days 192 after receipt and before approving any pending applications 193 submitted after the original submission date of the reconsidered 194 application. 195 (7)The department may not reduce the requested investment 196 authority or deny a rural fund application for reasons other 197 than those described in subsection (4) or subsection (5). After 198 approving an application, the department shall certify: 199 (a)The applicant as a rural fund. 200 (b)The amount of the applicants investment authority. 201 (8)(a)Within 90 days after receiving the certification 202 issued under subsection (7), the rural fund shall collect all 203 investor contributions and collect additional investments of 204 cash which, when added to the investor contributions, at least 205 equal the rural funds investment authority. Within 95 days 206 after receiving the certification issued under subsection (7), 207 the rural fund shall send to the department documentation that 208 the rural fund has collected the amounts described in this 209 subsection. At least 10 percent of the rural funds investment 210 authority must consist of equity investments contributed by 211 affiliates of the rural fund. The rural fund shall report to the 212 department the date on which the investor contributions and 213 additional investments of cash were collected. 214 (b)Upon receipt of the documentation required by paragraph 215 (a), the department shall provide to each taxpayer who has made 216 an investor contribution in the amount of the investor 217 contribution a tax credit certificate. 218 (9)If the rural fund fails to comply with paragraph 219 (8)(a), the department must revoke the rural funds 220 certification, and the corresponding investment authority and 221 investor contributions will not count toward the limits on the 222 program size set forth in subsection (4). The department shall 223 first award revoked investment authority pro rata to each rural 224 fund that was awarded less than the investment authority for 225 which it applied, and a rural fund may allocate the associated 226 investor contribution authority to any taxpayer with state tax 227 liability in its discretion. Any remaining investment authority 228 may be awarded by the department to new applicants. 229 (10)(a)Any entity that makes an investor contribution is 230 vested with an earned credit against state tax liability equal 231 to that investors investor contribution. The credit may be used 232 over 7 years such that 7.14 percent of the credit is applied in 233 each of the taxable years that include the year of the credit 234 allowance date through the sixth anniversary of the credit 235 allowance date. Any amount of the credit which the entity is 236 unable to claim in a taxable year may be carried forward for use 237 in an entitys 10 subsequent taxable years. 238 (b)A credit earned pursuant to paragraph (a) may not be 239 refunded or sold on the open market. Credits earned pursuant to 240 paragraph (a) may be transferred to affiliates of a taxpayer. 241 Credits earned by or allocated to a partnership, limited 242 liability company, or S corporation may be allocated to the 243 partners, members, or shareholders of such entity for their use 244 in accordance with the provisions of any agreement among such 245 partners, members, or shareholders. A rural fund shall notify 246 the department of the names of all taxpayers eligible to use 247 credits upon any allocation, change in allocation, or transfer. 248 Such allocations and transfers may not be considered a sale for 249 the purposes of this section. 250 (c)The amount of the credit claimed by a taxpayer may not 251 exceed the amount of such taxpayers state tax liability for the 252 tax year for which the credit is claimed. 253 (d)A taxpayer claiming a credit under this section must 254 submit a copy of the tax credit certificate with the taxpayers 255 return for each taxable year for which the credit is claimed. 256 (11)The department must revoke the tax credit certificates 257 issued under paragraph (8)(b) if a any of the following occurs 258 with respect to a rural fund before the rural fund exits the 259 program in accordance with subsection (15): 260 (a)The rural fund does not invest 60 percent of its 261 investment authority in eligible investments in this state 262 within 2 years after the credit allowance date. 263 (b)The rural fund does not invest 100 percent of its 264 investment authority in eligible investments in this state 265 within 3 years after the credit allowance date, with at least 70 266 percent of such eligible investments made in a rural area. 267 (c)The rural fund, after initially satisfying paragraph 268 (b), fails to maintain eligible investments equal to 100 percent 269 of its investment authority until the sixth anniversary of the 270 credit allowance date, with at least 70 percent of such eligible 271 investments made in a rural area. For purposes of this 272 paragraph, an investment is maintained even if it is sold or 273 repaid, so long as the rural fund reinvests an amount equal to 274 the capital returned or recovered from the original investment, 275 exclusive of any profits realized, in other eligible investments 276 in this state within 12 months after the receipt of such 277 capital. Amounts received periodically by a rural fund must be 278 treated as continuously invested in eligible investments if the 279 amounts are reinvested in one or more eligible investments by 280 the end of the following calendar year; however, there is no 281 requirement to reinvest capital after the sixth anniversary for 282 purposes of eligibility under this paragraph. 283 (d)The rural fund, before exiting the program in 284 accordance with subsection (15) or 30 days after the seventh 285 anniversary of the credit allowance date, makes a distribution 286 or payment that results in the rural fund having less than 100 287 percent of its investment authority invested in eligible 288 investments in this state or available for investment in 289 eligible investments and held in cash and other marketable 290 securities. 291 (e)The rural fund invests in an eligible business that 292 directly, or indirectly through an affiliate, owns, has the 293 right to acquire an ownership interest in, makes a loan to, or 294 makes an investment in the rural fund of an affiliate of the 295 rural fund or an investor in the rural fund. 296 297 The department may, upon a request made pursuant to subsection 298 (12), waive the requirements relating to an eligible business or 299 rural area and permit the investment to count toward the 300 satisfaction of paragraphs (a), (b), and (c), if the department 301 determines that the investment is rural in nature, employs 302 individuals from rural areas, or otherwise provides substantial 303 benefit to residents of rural areas and is likely to 304 significantly advance the economic growth of the state. 305 (12)Before making an eligible investment, a rural fund may 306 request a written opinion from the department as to whether the 307 business in which it proposes to invest satisfies the definition 308 of an eligible business. The department, no later than 15 309 business days after the date of receipt of the request, shall 310 provide the rural fund with a determination letter providing its 311 opinion. If the department fails to issue a determination letter 312 within that timeframe, the business in which the rural fund 313 proposes to invest must be considered an eligible business. 314 (13)Before revoking a tax credit certificate under 315 subsection (11), the department shall notify the rural fund of 316 the reasons for the pending revocation. The rural fund shall 317 have 180 days after the date the notice was received to correct 318 any violation outlined in the notice to the satisfaction of the 319 department and avoid revocation of the tax credit certificate. 320 (14)If the department revokes any tax credit certificates 321 under subsection (11), the associated investment authority and 322 investor contributions may not be counted toward the limit on 323 total investment authority and investor contributions described 324 in subsection (4). The department shall award any remaining 325 investment authority to restore any reduction under paragraph 326 (4)(b). 327 (15)On or after the seventh anniversary of the credit 328 allowance date, a rural fund may apply to the department to exit 329 the program and no longer be subject to regulation. The 330 department shall approve or deny the application within 15 days 331 after receipt. In evaluating the application, the fact that no 332 tax credit certificates have been revoked and that the rural 333 fund has not received a notice of revocation that has not been 334 cured pursuant to subsection (13) is sufficient evidence that 335 the rural fund is eligible for exit. The department may not 336 unreasonably deny an application submitted under this 337 subsection. If the application is denied, the notice of denial 338 must include the reasons for the determination. 339 (16)The department may not revoke a tax credit certificate 340 after a rural fund exits the program. 341 (17)(a)Each rural fund shall submit to the department a 342 report on or before the 15th business day after the second and 343 third anniversaries of the credit allowance date which provides 344 documentation that the rural fund has invested the amounts 345 required in paragraphs (11)(a) and (b). Such report must also 346 include all of the following: 347 1.The name and location of each eligible business 348 receiving an eligible investment, including either the written 349 determination under subsection (12) or evidence that the 350 business qualified as an eligible business at the time the 351 investment was made, if not previously reported. 352 2.A bank statement evidencing each eligible investment, if 353 not previously reported. 354 3.The number of jobs created and the number of jobs 355 retained as a result of each eligible investment, and the 356 average salary of each position. 357 4.Any other information required by the department. 358 (b)On or before March 1 of the subsequent calendar year 359 after the final report required in paragraph (a), and annually 360 until its exit from the program in accordance with subsection 361 (15), the rural fund shall submit to the department a report 362 that identifies each eligible investment made by the rural fund, 363 which must include: 364 1.The number of jobs created and the number of jobs 365 retained as a result of the eligible investment, and the annual 366 salary of each position. 367 2.Any other information required by the department. 368 (18)The department may not accept any new applications 369 after December 1, 2034. 370 Section 2.This act shall take effect July 1, 2025.