The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: CS/SB 1322
INTRODUCER: Commerce and Tourism Committee and Senator Simon
SUBJECT: Tax Credits for Investment in Rural Communities
DATE: March 31, 2025
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Renner McKay CM Fav/CS
2. FT
3. AP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 1322 creates s. 288.062, F.S., the Florida Rural Jobs Act. The bill allows investors to earn
state premium tax credits equal to their investment in certified rural funds. In turn, the rural funds
will invest in small businesses in rural areas, unless the requirement is waived by the Department
of Commerce (department) when the investment is rural in nature, employs individuals from
rural areas, or provides substantial benefits to rural area residents, and will significantly advance
the economic growth of the state. The bill caps investment at a level that will result in no more
than $7.143 million in tax credits to be taken in any one year, excluding any credits carried
forward.
The department will administer the program by certifying rural funds, granting tax credits to
investors, and if necessary, revoking the fund’s tax credits and authority.
The bill provides ongoing requirements for the rural funds to meet while participating in the
program, allows rural funds to reinvest their rural investments, prohibits tax credits from being
refunded or sold on the open market, and outlines steps for a rural fund to withdraw from the
program or to be transferred to affiliates of a taxpayer.
The Revenue Estimating Conference has not yet determined the fiscal impact of the bill. The bill
will likely impact general revenue.
The bill takes effect July 1, 2025.
REVISED: BILL: CS/SB 1322 Page 2
II. Present Situation:
Economic Development Incentives Targeted to Florida’s Rural Communities
Rural Economic Development Initiative
The Rural Economic Development Initiative (REDI) was established by the Legislature to
encourage and facilitate the location and expansion of major economic development projects of
significant scale in rural communities.
1
Today, the REDI operates as a statewide initiative led by
the department to better serve Florida’s rural communities by providing a more focused and
coordinated effort among state and regional agencies to improve the fiscal, economic, and
community viability of these areas.
2
Regional Rural Development Grants Program
The Regional Rural Development Grants Program was established to provide funding, through
matching grants, to build the professional capacity of regionally based economic development
organizations located in rural communities. An organization may receive up to $50,000 a year or
$250,000 for any three regional economic development organizations that serve an entire rural
area of opportunity
3
(RAO).
4
The department is authorized to spend up to $750,000 each fiscal
year from funds appropriated to the Rural Community Development Revolving Loan Fund to
carry out this program.
5
Rural Infrastructure Fund
The Rural Infrastructure Fund is a grant program created to facilitate the planning, preparing, and
financing of infrastructure projects in rural communities.
6
The program provides access to
federal and state infrastructure funding programs, including, but not limited to, those offered by
the U.S. Departments of Agriculture and Commerce and including those offered by Rural
Economic Development Initiative agencies.
7
The program funds total infrastructure project
grants, infrastructure feasibility grants, and preclearance review grants. A total of $20 million in
funding is available for Fiscal Year 2024-2025. Funding in the amount of $15 million is
available for eligible rural communities statewide and $5 million is available to certain
Panhandle counties.
8
1
Section 288.0656(1)(a), F.S.
2
Section 288.0656(3), F.S.
3
A rural area of opportunity is a rural community, or a region composed of rural communities, designated by the Governor,
which has been adversely affected by an extraordinary economic event, severe or chronic distress, or a natural disaster.
Section 288.0656, F.S.
4
Section 288.018(1)(c), F.S.
5
Section 288.018(4), F.S.
6
See s. 288.0655, F.S.
7
Section 288.0655(2)(b), F.S.
8
Department of Commerce, Rural Infrastructure Fund, available at https://floridajobs.org/community-planning-and-
development/rural-community-programs/rural-infrastructure-fund (last visited March 28, 2025). BILL: CS/SB 1322 Page 3
Federal Rural Business Investment Company and Small Business Investment Programs
9,10
Rural Business Investment Companies (RBIC) and Small Business Investment Companies
(SBIC) are privately owned and managed investment funds that are licensed and regulated by the
U.S. Department of Agriculture and Rural Development
11
and Small Business Administration
(SBA)
12
respectively, that make capital investments in small businesses located in rural
communities or other qualifying businesses.
An RBIC or SBIC program offers incentives for private capital to invest in small businesses,
startups, low-income areas, or regions otherwise under economic distress. These programs often
include special criteria for a certain quantity of the credit to focus on rural or underdeveloped
areas.
Economic Development Incentives that use Tax Credits
Rural Job Tax Credit Program
13
The Florida Rural Job Tax Credit Program offers a tax credit incentive for eligible businesses
located within a designated qualified rural area to create new jobs. The tax credit ranges from
$1,000 to $1,500 per qualified employee and can be taken against either the businesses’
corporate income tax or sales and use tax. A business is limited to no more than $500,000 of tax
credits per year.
14
The department administers this program and may approve up to $5 million in
tax credits per year.
15
Florida New Markets Development Program
In 2009, the Legislature passed the New Markets Development Program Act (NMDP),
16
similar
to the program created in this bill, to use tax credits to spur economic development. The NMDP,
which was modeled after the federal New Markets Tax Credit Program, allowed taxpayers to
earn credits against specified taxes by making qualified investments in qualified community
development entities that, in turn, invested in businesses in low-income communities to create
and retain jobs in such communities.
Taxpayers that made qualified investments in qualified community development entities were
eligible to receive tax credits against the corporate income tax under s. 220.11, F.S., or the
insurance premium tax under s. 624.509, F.S. The taxpayer could not claim the credit in the first
two years after the investment. The credit was worth 7% of the qualified investment in year three
9
7 U.S.C. s. 2009cc et seq.; 7 C.F.R. s. 4290 et seq. (2009).
10
15 U.S.C. s. 681-688.
11
U.S. Department of Agriculture and Rural Development, Rural Business Investment Program, available at
https://www.rd.usda.gov/programs-services/rural-business-investment-program (last visited March 28, 2025).
12
U.S. Small Business Administration, Become an SBIC, available at https://www.sba.gov/partners/sbics/apply-be-sbic (last
visited March 28, 2025).
13
Sections 212.098, and 220.1895, F.S.
14
Section 212.098(6)(d), F.S.
15
Department of Commerce, Rural Job Tax Credit Program, available at https://floridajobs.org/business-growth-and-
partnerships/for-businesses-and-entrepreneurs/business-resource/rural-and-urban-job-tax-credit-programs (last visited March
28, 2025).
16
Chapter 2009-50, Laws of Fla. BILL: CS/SB 1322 Page 4
after the investment, and from the fourth year through the seventh year the credit was worth 8%.
As in the federal program, over seven years the credits totaled 39% of the total qualified
investment in the qualified community development entity. A taxpayer with qualified
investments approved for both federal and state program were about to receive 78% of the
purchase price of the investment in tax credits over seven years. Any unused portion of the tax
credit carried forward for up to five future tax years.
The return on investment for the NMDP was -0.98, indicating that the state lost all of its
investment and incurred additional costs.
17
The NMDP was repealed in 2023.
18
Examples of Similar Rural Jobs Acts in Other States
Utah passed a substantially similar bill, the Utah Rural Jobs Act, which authorizes up to $42
million in tax credits, and caps the total contributions one entity may make under the program at
$24.36 million. Additionally, Utah assesses a $50,000 annual fee that is split between all the
certified growth fund entities.
19
In 2017, Georgia created the Georgia Agribusiness and Rural Jobs Act, which is designed to spur
$100 million in capital investments in rural businesses in the state. Investors may redeem up to
$15 million in tax credits annually for four years (for a total of $60 million tax credits) against
their corporate income tax and premium tax liabilities.
20
III. Effect of Proposed Changes:
The bill creates s. 288.062, F.S., the “Florida Rural Jobs Act.” The bill uses tax credits against
the state premium tax to incentivize investors to give funds to certified rural fund entities that, in
turn, will make capital or equity investments, or loans with a maturity date of at least one year in
eligible businesses located in rural areas. The bill caps the amount of investments at a level that
will result in no more than $7.143 million in tax credits claimed in total each year.
An eligible business is one that has fewer than 250 employees and has its principal business
operations in Florida. The department will administer the program and monitor jobs created and
retained as a result of the eligible investment and the annual salary of each position.
An eligible investment is 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 from the date of issuance, provided
that the eligible business has its principal business operations located in a rural community in
Florida, unless this requirement is waived by the department.
17
Office of Economic and Demographic Research, Economic Evaluation for Select State Economic Development Incentive
Programs, 58 (February 2023), available at
https://edr.state.fl.us/Content/returnoninvestment/ROISELECTPROGRAMS2023final.pdf (last visited March 28, 2025).
18
Chapter 2023-173, Laws of Fla.
19
Utah Code Annotated s. 63N-4-301, et seq. (2017).
20
Ga. Code Annotated s. 33-1-25, et seq. (2017). BILL: CS/SB 1322 Page 5
A rural community is defined as:
• A county with a population of 75,000 or fewer;
• A county with a population of 125,000 or fewer, if the county is contiguous to a county with
a population of 75,000 or fewer;
• Any municipality in a county that meets the above criteria;
• An unincorporated federal enterprise community or an incorporated rural city with a
population of 25,000 or fewer, with an employment base focused on traditional agriculture or
resource-based industries, located in a county not defined as rural, and which has at least
three or more economic distress factors; or
• A designated rural area of opportunity.
21
Tax Credit Application, Approval, and Allocation
On or before November 1, 2025, the department must accept applications for approval as a rural
fund. The application must include all of the following:
• Total investment authority sought by the applicant;
• Evidence that the applicant or an affiliate of the applicant is licensed as a rural business
investment or small business investment company, as defined in federal law;
22
• Evidence that the applicant or its affiliates have invested at least $100 million in nonpublic
companies located in counties within the U.S. with a population of fewer than 75,000 as of
the U.S. Decennial Census of 2010.
• An estimate of the total number of new annual jobs that will be created and jobs retained in
the state as a result of the applicant’s eligible investments;
• A business plan that includes a 10-year revenue impact estimate of the proposed eligible
investments, including the investment’s effect on state and local tax revenues, and state
expenditures. This business plan must be prepared by an independent third-party economic
forecasting firm that uses a dynamic economic forecasting model;
The department must grant or deny an application within 30 days of its receipt. The department
must deny an application if:
• The application is incomplete;
• The applicant does not qualify as a rural fund;
• The business plan does not demonstrate that the positive revenue impact on this state over a
10-year period will be greater than cumulative amount of tax credits that would be issued to
the applicant’s investors;
• The department has already approved the investment authority permitted.
If the department denies an application on certain grounds, the applicant has 15 days to cure the
defect. The department must review the additional filing and issue an ultimate decision within 15
days of the application’s initial submission. Additionally, the department may not approve or
21
A rural area of opportunity is a rural community, or a region composed of rural communities, designated by the Governor,
which has been adversely affected by an extraordinary economic event, severe or chronic distress, or a natural disaster. A
rural area of opportunity may also be a community or communities that present a unique economic development opportunity
of regional impact. Section 288.0656(2), F.S.
22
See 7 U.S.C. s. 2009cc et seq. and 15 U.S.C. s. 681 et seq. BILL: CS/SB 1322 Page 6
deny an application that is submitted after another for which additional information was needed
until it approves or denies the “first” or “initial” application with additional information.
Upon approval of an application, the department must certify the applicant as a rural fund and
the amount of the applicant’s investment authority.
The department may not reduce the rural fund’s investment authority from that requested on its
application unless such an allocation would cause the department to exceed the tax credit
limitation of $7.143 million in tax credits to be taken in any one year. If the department approves
applications received on the same day that seek investment authorities that would collectively
exceed the permitted annual tax credits, the department must approve both applicants, but
proportionately reduce each applicant’s investment authority and investor contributions to
comply with the tax credit limit.
Within 90 days of certification, a rural fund must collect all of its committed investor
contributions and any additional cash investments. The fund must provide proof to the
department that it collected all required contributions and investments within 95 days of
certification. A fund’s certification will be subject to revocation if it fails to perform these duties.
The department must provide tax credit certificates to investors upon notice from a certified fund
that it collected the investor’s contribution.
Tax Credit Established
An investor in a fund is vested with an earned credit against its state tax liability equal to the
value of its contribution to the fund. The investor may not sell, transfer, or allocate the credit to
any entity other than an affiliate of the fund.
An investor may claim 7.4 percent of its credit each taxable year from the year that the fund
collects the investor contributions and any additional investments (defined in the bill as the
“credit allowance date”) through the sixth anniversary of such date. Any amount of the credit
that the investor is unable to claim in a taxable year may carry forward the credit allowance for
up to 10 subsequent taxable years. In order to claim a credit, the investor must submit a copy of
the tax credit certificate with its tax return for each taxable year it claims the credit.
A credit may not be sold or refunded on the open market, but may be transferred to affiliates of a
taxpayer. Credits earned by or allocated to a partnership, limited liability company, or S
corporation may be allocated to the partners, members, or shareholders of such entity. A rural
fund must notify the department of the names of all taxpayers eligible to use credits upon the
allocation, change in allocation, or transfer. Those allocations and transfers may not be
considered a sale.
Revocation of Tax Credit Certificates and Exit From the Program
The department must revoke a tax credit certificate if:
• The fund does not invest 60 percent of its investment authority in eligible investments in
Florida within 3 years after the credit allowance date. BILL: CS/SB 1322 Page 7
• The rural fund does not invest 100 percent of its investment authority in eligible investments
within 3 years after the allowance date, with at least 70 percent of such eligible investments
made in rural areas;
• The rural fund fails to maintain investments equal to 100 percent of its investment authority
until the sixth anniversary of its credit allowance date, with at least 70 percent of such
eligible investments made in rural areas (with a permitted 12 months between receipt of
capital and reinvestment of that capital);
• The rural fund makes a distribution or payment that results in the fund having less than 100
percent of its investment authority invested in state eligible investments, or available for
eligible investments and held in cash or other securities; or
• 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 fund, an affiliate of the fund, or an investor of the fund.
The department, upon request, may waive the requirement that the eligible business have its
principal business operations located in a rural community if the department determines that the
investment is rural in nature, employs individuals from rural areas, or otherwise provides
substantial benefit to residents of rural areas and is likely to significantly advance the economic
growth of the state.
The department must give a rural fund notice of a pending revocation and the fund has 180 days
to cure any violation. If the department revokes tax credits after a rural fund has collected its
investor contribution obligations, then the revoked rural fund’s investment authority and
collected investor contributions may not count toward the program’s limit on investment
authority and investor contributions.
On or after the seventh anniversary of the credit allowance date, a rural fund may apply to the
department to exit the program. The department must approve the request within 15 days if no
tax credit certificates issued to the fund’s investors have been revoked, and the fund’s
certification has not been revoked or is not currently subject to revocation.
The department may not revoke a tax credit certificate after a fund exits the program.
Rural Fund’s Reporting Obligations
Each fund must submit an annual report on or before the 15
th
business day after the second and
third anniversaries of the credit allowance date. The report must include:
• The name and location of each eligible business that receives an eligible investment or
evidence that an eligible business qualified as such at the time the fund made the investment;
• A bank statement evidencing each of the fund’s investments;
• The number of jobs created and retained as a result of the eligible investment and the average
salary of each position; and
• Any other information required by the department.
On or before March 1 of the subsequent calendar year after the third anniversary of the credit
allowance date, and annually until its exit from the program, the rural fund must submit to the
department a report that identifies each eligible investment made by the rural fund and include: BILL: CS/SB 1322 Page 8
• The number of jobs created and retained as a result of the eligible investment and the annual
salary of each position; and
• Any other information required by the department.
Miscellaneous
A fund may request the department issue a written opinion advising whether a potential
investment business qualifies as an eligible business; if the department does not respond within
15 days of the request, the business is deemed eligible.
The department is prohibited from accepting new applications after December 1, 2034.
The bill defines a rural community as:
• A county with a population of 75,000 or fewer;
• A county with a population of 125,000 or fewer, if the county is contiguous to a county with
a population of 75,000 or fewer;
• Any municipality in a county that meets the above criteria; or
• An unincorporated federal enterprise community or an incorporated rural city with a
population of 25,000 or fewer, with an employment base focused on traditional agriculture or
resource-based industries, located in a county not defined as rural, and which has at least
three or more economic distress factors; or
• A designated rural area of opportunity as defined in s. 288.0656(2), F.S.
The bill takes effect July 1, 2025.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None identified. BILL: CS/SB 1322 Page 9
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference has not yet determined the fiscal impact of the bill.
The bill will likely impact general revenue.
B. Private Sector Impact:
Businesses in rural areas may be able to access funding that would not otherwise be
available to them through traditional financing institutions.
A certified rural fund will likely see a positive financial impact as the result of its activity
under the program. Similarly, rural fund investors will see a positive impact on their tax
liabilities as a result of their use of tax credits under the program.
C. Government Sector Impact:
The department may incur administrative costs to implement and operate the program.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill creates section 288.062 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Commerce and Tourism on March 31, 2025:
The CS:
• Revises the definition of "eligible investment" to provide that the eligible business
has its principal business operations located in a rural community, unless the
requirement is waived by the department under certain circumstances.
• Adds a definition for "rural community."
• Prohibits tax credits from being refunded or sold on the open market and specifies
under what circumstances credits may be transferred to affiliates of a taxpayer.
• Authorizes the department to revoke the tax credit certificates if at least 70 percent of
eligible investments are not made in a rural area after a specified time. BILL: CS/SB 1322 Page 10
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.