| 1 | 1 | | 23 LC 43 2635 |
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| 2 | 2 | | H. B. 413 |
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| 3 | 3 | | - 1 - |
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| 4 | 4 | | House Bill 413 |
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| 5 | 5 | | By: Representatives Williams of the 148 |
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| 6 | 6 | | th |
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| 7 | 7 | | , Meeks of the 178 |
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| 8 | 8 | | th |
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| 9 | 9 | | , Rhodes of the 124 |
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| 10 | 10 | | th |
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| 11 | 11 | | , Dickey |
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| 12 | 12 | | of the 145 |
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| 13 | 13 | | th |
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| 14 | 14 | | , Blackmon of the 146 |
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| 15 | 15 | | th |
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| 16 | 16 | | , and others |
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| 17 | 17 | | A BILL TO BE ENTITLED |
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| 18 | 18 | | AN ACT |
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| 19 | 19 | | To amend Code Section 33-1-25 of the Official Code of Georgia Annotated, relating to the |
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| 20 | 20 | | 1 |
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| 21 | 21 | | "Georgia Agribusiness and Rural Jobs Act," so as to provide for a second round of funding2 |
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| 22 | 22 | | and period for applications; to increase an application fee and provide for an annual3 |
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| 23 | 23 | | maintenance fee; to change certain reporting requirements; to revise and provide for4 |
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| 24 | 24 | | definitions; to provide for related matters; to provide for an effective date; to repeal5 |
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| 25 | 25 | | conflicting laws; and for other purposes.6 |
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| 26 | 26 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:7 |
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| 27 | 27 | | SECTION 1.8 |
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| 28 | 28 | | Code Section 33-1-25 of the Official Code of Georgia Annotated, relating to the "Georgia9 |
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| 29 | 29 | | Agribusiness and Rural Jobs Act," is amended in subsection (b) by revising paragraphs (3)10 |
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| 30 | 30 | | and (6) and adding a new paragraph to read as follows:11 |
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| 31 | 31 | | "(.1) '2023 allocation' means the second round of funding provided for in paragraph (6.1) |
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| 32 | 32 | | 12 |
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| 33 | 33 | | of subsection (e) of this Code section."13 |
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| 34 | 34 | | "(3) 'Capital investment' means any equity investment in a rural fund by a rural investor14 |
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| 35 | 35 | | that:15 |
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| 36 | 36 | | (A) Is acquired after July 1, 2017, at its original issuance solely in exchange for cash;16 23 LC 43 2635 |
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| 37 | 37 | | H. B. 413 |
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| 38 | 38 | | - 2 - |
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| 39 | 39 | | (B) Has 100 percent of its cash purchase price used by the rural fund to make qualified |
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| 40 | 40 | | 17 |
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| 41 | 41 | | investments in eligible businesses located in this state by the second anniversary of the18 |
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| 42 | 42 | | initial credit allowance date; and19 |
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| 43 | 43 | | (C) Is designated by the rural fund as a capital investment under this Code section and20 |
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| 44 | 44 | | is certified by the department pursuant to subsection (e) of this Code section. This21 |
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| 45 | 45 | | term shall include any capital investment that does not meet the provisions of22 |
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| 46 | 46 | | subsection (e)(1)(A) |
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| 47 | 47 | | subparagraph (e)(1.3)(A) of this Code section if such investment23 |
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| 48 | 48 | | was a capital investment in the hands of a prior holder."24 |
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| 49 | 49 | | "(6) 'Eligible business' means a business that, at the time of the initial qualified25 |
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| 50 | 50 | | investment in the company, has less than 250 employees and its principal business26 |
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| 51 | 51 | | operations are located in one or more rural areas or qualified areas in this state, provided27 |
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| 52 | 52 | | that such business:28 |
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| 53 | 53 | | (A) Has less than 250 employees; and29 |
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| 54 | 54 | | (B)(i) Has its principal business operations in one or more rural areas in this state;30 |
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| 55 | 55 | | and31 |
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| 56 | 56 | | (ii)(A) Produces or provides any goods or services produced in Georgia normally used32 |
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| 57 | 57 | | by farmers, ranchers, or producers and harvesters of aquatic products in their business33 |
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| 58 | 58 | | operations, or to improve the welfare or livelihood of such persons;, or is34 |
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| 59 | 59 | | (B) Is involved in the processing and marketing of agricultural products, farm supplies,35 |
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| 60 | 60 | | and input suppliers;, or is 36 |
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| 61 | 61 | | (C) Is engaged in agribusiness as defined by the United States Department of37 |
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| 62 | 62 | | Agriculture;, or is 38 |
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| 63 | 63 | | (D) Is engaged in manufacturing, health care, technology, transportation, or related39 |
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| 64 | 64 | | services;, or40 |
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| 65 | 65 | | (E) Is determined by the department to be an if not engaged in such industries, the41 |
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| 66 | 66 | | department determines that such investment that will be beneficial to the rural area and42 |
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| 67 | 67 | | the economic growth of the state.43 23 LC 43 2635 |
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| 68 | 68 | | H. B. 413 |
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| 69 | 69 | | - 3 - |
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| 70 | 70 | | Any business which is classified as an eligible business at the time of the initial |
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| 71 | 71 | | 44 |
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| 72 | 72 | | investment in said business by a rural fund shall remain classified as an eligible business45 |
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| 73 | 73 | | and may receive follow-on investments from any rural fund, and such follow-on46 |
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| 74 | 74 | | investments shall be qualified investments even though such business may not meet the47 |
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| 75 | 75 | | definition of an eligible business at the time of such follow-on investments."48 |
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| 76 | 76 | | SECTION 2.49 |
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| 77 | 77 | | Said Code section is further amended by revising subsections (e) and (k) and by adding a50 |
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| 78 | 78 | | new subsection (l) to read as follows:51 |
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| 79 | 79 | | "(e)(1) A rural fund that seeks to have an equity investment certified as a capital52 |
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| 80 | 80 | | investment and eligible for credits under this Code section shall apply to the department.53 |
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| 81 | 81 | | (1.1) For the first round of funding provided for in paragraph (6) of this subsection, the |
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| 82 | 82 | | 54 |
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| 83 | 83 | | The department shall begin accepting applications within 90 days of July 1, 2017, and55 |
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| 84 | 84 | | shall cease accepting applications on June 30, 2023.56 |
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| 85 | 85 | | (1.2) For the second round of funding provided for in paragraph (6.1) of this subsection,57 |
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| 86 | 86 | | the department shall begin accepting applications on August 1, 2023, and shall cease58 |
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| 87 | 87 | | accepting applications after such second round of funding is exhausted.59 |
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| 88 | 88 | | (1.3) The rural fund shall include the following in its application:60 |
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| 89 | 89 | | (A) The amount of capital investment requested;61 |
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| 90 | 90 | | (B) A copy of the applicant's or an affiliate of the applicant's license as a rural business62 |
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| 91 | 91 | | investment company under 7 U.S.C. Section 2009cc or as a small business investment63 |
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| 92 | 92 | | company under 15 U.S.C. Section 681 and a certificate executed by an executive officer64 |
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| 93 | 93 | | of the applicant attesting that such license remains in effect and has not been revoked;65 |
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| 94 | 94 | | (C) Evidence that, as of the date the application is submitted, the applicant or affiliates66 |
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| 95 | 95 | | of the applicant have invested at least $100 million in nonpublic companies located in67 |
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| 96 | 96 | | rural areas within the United States;68 23 LC 43 2635 |
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| 97 | 97 | | H. B. 413 |
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| 98 | 98 | | - 4 - |
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| 99 | 99 | | (D) An estimate of the number of jobs that will be created or retained in this state as |
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| 100 | 100 | | 69 |
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| 101 | 101 | | a result of the applicant's qualified investments;70 |
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| 102 | 102 | | (E) A business plan that includes a revenue impact assessment projecting state and71 |
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| 103 | 103 | | local tax revenue to be generated by the applicant's proposed qualified investments72 |
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| 104 | 104 | | prepared by a nationally recognized, third-party, independent economic forecasting firm73 |
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| 105 | 105 | | using a dynamic economic forecasting model that analyzes the applicant's business plan74 |
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| 106 | 106 | | over the ten years following the date the application is submitted to the department; and75 |
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| 107 | 107 | | (F) A nonrefundable application fee of $5,000.00 for the first round of funding |
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| 108 | 108 | | 76 |
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| 109 | 109 | | provided for in paragraph (6) of this subsection and $25,000.00 for the second round77 |
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| 110 | 110 | | of funding provided for in paragraph (6.1) of this subsection, payable to the department.78 |
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| 111 | 111 | | (2) Within 30 days after receipt of a completed application, the department shall grant79 |
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| 112 | 112 | | or deny the application in full or in part. The department shall deny the application if:80 |
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| 113 | 113 | | (A) The applicant does not satisfy all of the criteria described in paragraph (1) (1.3)81 |
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| 114 | 114 | | of this subsection;82 |
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| 115 | 115 | | (B) The revenue impact assessment submitted with the application does not83 |
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| 116 | 116 | | demonstrate that the applicant's business plan will result in a positive economic impact84 |
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| 117 | 117 | | on this state over a ten-year period that exceeds the cumulative amount of tax credits85 |
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| 118 | 118 | | that would be issued to the applicant if the application were approved; or86 |
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| 119 | 119 | | (C) The department has already approved the maximum amount of capital investment87 |
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| 120 | 120 | | authority under paragraph (6) or paragraph (6.1) of this subsection, whichever88 |
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| 121 | 121 | | paragraph is applicable.89 |
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| 122 | 122 | | If the department denies any part of the application, it shall inform the applicant of the90 |
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| 123 | 123 | | grounds for the denial. If the applicant provides any additional information required by91 |
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| 124 | 124 | | the department or otherwise completes its application within 15 days of the notice of92 |
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| 125 | 125 | | denial, the application shall be considered completed as of the original date of93 |
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| 126 | 126 | | submission. If the applicant fails to provide the information or fails to complete its94 23 LC 43 2635 |
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| 127 | 127 | | H. B. 413 |
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| 128 | 128 | | - 5 - |
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| 129 | 129 | | application within the 15 day period, the application remains denied and must be |
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| 130 | 130 | | 95 |
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| 131 | 131 | | resubmitted in full with a new submission date.96 |
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| 132 | 132 | | (3) If the application is complete, the department shall certify the proposed equity97 |
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| 133 | 133 | | investment as a capital investment that is eligible for credits under this Code section,98 |
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| 134 | 134 | | subject to the limitations contained in paragraph (6) or paragraph (6.1) |
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| 135 | 135 | | of this subsection,99 |
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| 136 | 136 | | whichever paragraph is applicable. The department shall provide written notice of the100 |
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| 137 | 137 | | certification to the rural fund.101 |
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| 138 | 138 | | (4) The department shall certify capital investments in the order that the applications102 |
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| 139 | 139 | | were received by the department. Applications received on the same day shall be deemed103 |
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| 140 | 140 | | to have been received simultaneously.104 |
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| 141 | 141 | | (5) For applications that are complete and received on the same day, the department105 |
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| 142 | 142 | | shall certify applications in proportionate percentages based upon the ratio of the amount106 |
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| 143 | 143 | | of capital investments requested in an application to the total amount of capital107 |
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| 144 | 144 | | investments requested in all applications.108 |
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| 145 | 145 | | (6) For the first round of funding, the The department shall certify $100 million in capital109 |
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| 146 | 146 | | investments pursuant to this Code section until the earlier of the date that such funds are110 |
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| 147 | 147 | | exhausted, or June 30, 2023.111 |
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| 148 | 148 | | (6.1) For the second round of funding, beginning on August 1, 2023, the department112 |
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| 149 | 149 | | shall certify $100 million in capital investments pursuant to this Code section until such113 |
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| 150 | 150 | | funds are exhausted.114 |
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| 151 | 151 | | (7) Within 60 days of the applicant receiving notice of certification, the rural fund shall115 |
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| 152 | 152 | | issue the capital investment to and receive cash in the amount of the certified amount116 |
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| 153 | 153 | | from a rural investor. At least 50 percent of the rural investor's capital investment shall117 |
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| 154 | 154 | | be composed of capital raised by the rural investor from sources, including directors,118 |
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| 155 | 155 | | members, employees, officers, and affiliates of the rural investor, other than the amount119 |
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| 156 | 156 | | of capital invested by the allocatee claiming the tax credits in exchange for such120 |
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| 157 | 157 | | allocation of tax credits. The rural fund shall provide the department with evidence of121 23 LC 43 2635 |
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| 158 | 158 | | H. B. 413 |
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| 159 | 159 | | - 6 - |
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| 160 | 160 | | the receipt of the cash investment within 65 days of the applicant receiving notice of |
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| 161 | 161 | | 122 |
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| 162 | 162 | | certification. If the rural fund does not receive the cash investment and issue the capital123 |
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| 163 | 163 | | investment within such time period following receipt of the certification notice, the124 |
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| 164 | 164 | | certification shall lapse and the rural fund shall not issue the capital investment without125 |
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| 165 | 165 | | reapplying to the department for certification. Lapsed certifications revert to the126 |
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| 166 | 166 | | authority and shall be reissued pro rata to applicants whose capital investment allocations127 |
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| 167 | 167 | | were reduced pursuant to paragraph (5) of this subsection and then in accordance with the128 |
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| 168 | 168 | | application process."129 |
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| 169 | 169 | | "(k)(1) Rural funds shall submit a report to the department within the first |
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| 170 | 170 | | 15 business130 |
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| 171 | 171 | | days after the second anniversary of the initial credit allowance date each capital131 |
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| 172 | 172 | | investment that provides documentation of: as to the investment of 100 percent of the132 |
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| 173 | 173 | | purchase price of such capital investment in qualified investments. Such report shall133 |
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| 174 | 174 | | include:134 |
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| 175 | 175 | | (A) The location of each eligible business receiving a qualified investment;135 |
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| 176 | 176 | | (B) Bank statements of such rural fund evidencing each qualified investment;136 |
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| 177 | 177 | | (C) A copy of the written opinion of the department set forth in subsection (j) of this137 |
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| 178 | 178 | | Code section or evidence that such business was an eligible business at the time of such138 |
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| 179 | 179 | | qualified investment, as applicable;139 |
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| 180 | 180 | | (D) The number of employment positions created and retained as a result of qualified140 |
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| 181 | 181 | | investments;141 |
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| 182 | 182 | | (E) The average annual salary of positions described in subparagraph (D) of this142 |
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| 183 | 183 | | paragraph; and143 |
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| 184 | 184 | | (F) Such other information required by the department.144 |
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| 185 | 185 | | (2) Thereafter, rural funds shall submit an annual report to the department within 45145 |
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| 186 | 186 | | days of the beginning of the calendar year during the compliance period. The report shall146 |
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| 187 | 187 | | include but is not limited to the following:147 23 LC 43 2635 |
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| 188 | 188 | | H. B. 413 |
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| 189 | 189 | | - 7 - |
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| 190 | 190 | | (A) The number of employment positions created and retained as a result of qualified |
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| 191 | 191 | | 148 |
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| 192 | 192 | | investments; and |
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| 193 | 193 | | 149 |
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| 194 | 194 | | (B) The average annual salary of positions described in subparagraph (A) of this150 |
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| 195 | 195 | | paragraph; and151 |
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| 196 | 196 | | (C) The rural fund's total eligible capital investments as a percentage of its total capital152 |
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| 197 | 197 | | investments.153 |
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| 198 | 198 | | (l) With respect to the second round of funding provided for in paragraph (6.1) of154 |
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| 199 | 199 | | subsection (e) of this Code section, each rural fund shall pay an annual maintenance fee155 |
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| 200 | 200 | | of $7,500.00 to the department, beginning one year after the date of the initial credit156 |
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| 201 | 201 | | allowance and annually thereafter for five years."157 |
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| 202 | 202 | | SECTION 3.158 |
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| 203 | 203 | | This Act shall become effective upon its approval by the Governor or upon its becoming law159 |
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| 204 | 204 | | without such approval.160 |
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| 205 | 205 | | SECTION 4.161 |
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| 206 | 206 | | All laws and parts of laws in conflict with this Act are repealed.162 |
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