November 24, 2020
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_h1229c1
CS/HB 1229

1
A bill to be entitled
2An act relating to the New Markets Development Program;
3amending s. 288.9913, F.S.; revising the definition of the
4term "qualified active low-income community business" for
5purposes of the New Markets Development Program Act;
6amending s. 288.9920, F.S.; extending the period within
7which a qualified community development entity may cure an
8investment deficiency; limiting the number of corrections
9permitted for qualified equity investments; providing an
10effective date.
11
12Be It Enacted by the Legislature of the State of Florida:
13
14     Section 1.  Subsection (7) of section 288.9913, Florida
15Statutes, is amended to read:
16     288.9913  Definitions.-As used in ss. 288.991-288.9922, the
17term:
18     (7)  "Qualified active low-income community business" means
19a corporation, including a nonprofit corporation, or partnership
20that complies with each of the following:
21     (a)1.  Derives at least 50 percent of its total gross
22income from the active conduct of business within any low-income
23community for any taxable year.;
24     2.  Uses at least 40 percent a substantial portion of its
25tangible property, whether owned or leased, within any low-
26income community for any taxable year, which percentage shall be
27the average value of the tangible property owned or leased and
28used within a low-income community by the corporation or
29partnership divided by the average value of the total tangible
30property owned or leased and used by the corporation or
31partnership during the taxable year. The value assigned to
32leased property by the corporation or partnership must be
33reasonable.;
34     3.  Performs at least 40 percent a substantial portion of
35its services through its employees in a low-income community for
36any taxable year, which percentage shall be the amount paid by
37the corporation or partnership for salaries, wages, and benefits
38to employees in a low-income community divided by the total
39amount paid by the corporation or partnership for salaries,
40wages, and benefits during the taxable year.;
41     4.  Attributes less than 5 percent of the average of the
42aggregate unadjusted bases of the property of the entity to
43collectibles, as defined in 26 U.S.C. s. 408(m)(2), other than
44collectibles that are held primarily for sale to customers in
45the ordinary course of the business for any taxable year.; and
46     5.  Attributes less than 5 percent of the average of the
47aggregate unadjusted bases of the property of the entity to
48nonqualified financial property, as defined in 26 U.S.C. s.
491397C(e), for any taxable year.
50
51A corporation or partnership complies with subparagraph 1. if,
52as calculated in subparagraph 2., it uses at least 50 percent of
53its tangible property, whether owned or leased, within any low-
54income community for any taxable year or if, as calculated in
55subparagraph 3., the corporation or partnership performs at
56least 50 percent of its services through its employees in a low-
57income community for any taxable year.
58     (b)  Is reasonably expected by a qualified community
59development entity at the time of an investment to continue to
60satisfy the requirements of paragraphs (a), (c), and (d) for the
61duration of the investment.
62     (c)  Satisfies the requirements of paragraphs (a) and (b),
63but does not:
64     1.  Derive or project to derive 15 percent or more of its
65annual revenue from the rental or sale of real estate, unless
66the corporation or partnership derives such revenue from the
67rental of real estate and the primary lessee and user of such
68real estate is another qualified active low-income community
69business that is owned or controlled by, or that is under common
70ownership or control with, such corporation or partnership;
71     2.  Engage predominantly in the development or holding of
72intangibles for sale or license;
73     3.  Operate a private or commercial golf course, country
74club, massage parlor, hot tub facility, suntan facility,
75racetrack, gambling facility, or a store the principal business
76of which is the sale of alcoholic beverages for consumption off
77premises; or
78     4.  Engage principally in farming and owns or leases assets
79the sum of the aggregate unadjusted bases or the fair market
80value of which exceeds $500,000.
81     (d)  Will create or retain jobs that pay an average wage of
82at least 115 percent of the federal poverty income guidelines
83for a family of four.
84     Section 2.  Subsection (2) of section 288.9920, Florida
85Statutes, is amended to read:
86     288.9920  Recapture and penalties.-
87     (2)  The office shall provide notice to the qualified
88community development entity and the department of a proposed
89recapture of a tax credit. The entity shall have 6 months 90
90days following the receipt of the notice to cure a deficiency
91identified in the notice and avoid recapture. The office shall
92issue a final order of recapture if the entity fails to cure a
93deficiency within the 6-month 90-day period. The final order of
94recapture shall be provided to the entity, the department, and a
95taxpayer otherwise authorized to claim the tax credit. Only one
96correction is permitted for each qualified equity investment
97during the 7-year credit period. Recaptured funds shall be
98deposited into the General Revenue Fund.
99     Section 3.  This act shall take effect upon becoming a law.


CODING: Words stricken are deletions; words underlined are additions.
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