Ga. Comp. R. & Regs. R. 110-35-1-.02 - Definitions

(1) 'Affiliate' means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another entity. For the purposes of this Code section, 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 by contract or by law.

(2) 'Allocatee' means a taxpayer who claims the tax credits on its Georgia tax return.

(3) 'Applicable percentage' means 0 percent for the first two credit allowance dates and 15 percent for the next four credit allowance dates.

(4) 'Capital investment' means any equity investment in a rural fund by a rural investor that:

(a) Is acquired after the effective date of this Code section at itsOriginal issuance solely in exchange for cash;

(b) Has 100 percent of its cash purchase price used by the rural fund to make qualified investments in eligible businesses located in this state by the second anniversary of the initial credit allowance date; and

(c) Is designated by the rural fund as a capital investment under this Code section and is certified by the Department. This term shall include any capital investment that does not meet the provisions of Rule 110-35-1-.05 if such investment was a capital investment in the hands of a prior holder.

(5) 'Capital investment authority' means the amount of capital investment approved by the Department for the rural fund.

(6) 'Certification' means approval by the Department of the rural fund's application for capital investment authority.

(7) 'Certification date' means the date the Department approves the rural fund's application for capital investment authority.

(8) 'Closing date' means the date the Department validates the rural fund's receipt of capital investment.

(9) 'Credit allowance date' means the date on which a capital investment is made and each of the five anniversary dates of such date thereafter.

(10) 'Days' means calendar days.

(11) 'Department' means the Georgia Department of Community Affairs.

(12) 'Eligible business' means a business that, at the time of the initial qualified investment in the company:

(a) Has less than 250 employees;

(b) Has its principal business operations in one or more rural areas in this state; and

(c) Produces or provides any goods or services produced in Georgia normally used by farmers, ranchers, or producers and harvesters of aquatic products in their business operations, or to improve the welfare or livelihood of such persons, or is involved in the processing and marketing of agricultural products, farm supplies, and input suppliers, or is engaged in agribusiness as defined by the Department, or is engaged in manufacturing, health care, technology, transportation, or related services, or if not engaged in such industries, the Department determines that such investment will be beneficial to the rural area and the economic growth of the state. Any business which is classified as an eligible business at the time of the initial qualified investment in said business by a rural fund shall remain classified as an eligible business and may receive follow-on investments from any rural fund, and such follow-on investments shall be qualified investments even though such business may not meet the definition of an eligible business at the time of such follow-on investments.

(13) 'Eligible distribution' means:

(a) A distribution of cash to one or more equity owners of a rural investor to fully or partially offset a projected increase in the owner's federal or state tax liability, including any penalties and interest, related to the owner's ownership, management, or operation of the rural investor;

(b) A distribution of cash as payment of interest and principal on the debt of the rural investor or rural fund; and

(c) A distribution of cash related to the reasonable costs and expenses of forming, syndicating, managing, and operating the rural investor or the rural fund, or a return of equity to affiliates of a rural investor or rural fund. Such distributions may include reasonable and necessary fees paid for professional services, including legal and accounting services, related to the formation and operation of the rural fund and an annual management fee that shall not exceed 2 percent of the rural fund's capital investment authority.

(14) 'Financial institution' means an independent company engaged in the business of dealing with monetary transactions.

(15) 'Jobs' means jobs created or jobs retained, as defined below.

(16) 'Jobs, created' means any created jobs, requiring a minimum of 35 hours worked each week, directly attributable to initial qualified investment in an eligible business by a rural fund, but does not include any transferred job or replacement job. Jobs created may be counted from the time of the initial qualified investment until the rural fund's petition to exit the program. Part-time jobs may be aggregated to establish full-time equivalents. Full-time equivalents shall be calculated by utilizing the weekly average worked by part-time employees and aggregated to determine the number of full-time equivalent jobs working at least 35 hours per week.

(17) 'Jobs, retained' means jobs, requiring a minimum of 35 hours worked each week, in Georgia that existed prior to the qualified investment and would otherwise have been eliminated within 180 days of the date of the qualified investment into the business without such injection by a rural fund, but does not include any new job or replacement job. Part-time jobs may be aggregated to establish full-time job equivalents. Full-time equivalents shall be calculated by utilizing the weekly average worked by part-time employees and aggregated to determine the number of full-time equivalent jobs working at least 35 hours per week.

(18) 'Principal business operations' means the location where at least 60 percent of a business's employees work or where employees who are paid at least 60 percent of such business's payroll work. A business that has agreed to relocate employees using the proceeds of a qualified investment to establish its principal business operations in a new location shall be deemed to have its principal business operations in such new location if it satisfies these requirements no later than 180 days after receiving a qualified investment.

(19) 'Purchase price' means the amount paid to the rural fund that issues a capital investment which shall not exceed the amount of capital investment authority certified by the Department.

(20) 'Qualified investment' means any investment in an eligible business or any loan to an eligible business. Revolving lines of credit and senior secured debt may be eligible when the eligible business has a credit refusal letter or similar correspondence from a depository institution or a referral letter or similar correspondence from a depository institution referring the business to a rural fund. With respect to any one eligible business, the maximum amount of investments made in such business by one or more rural funds, on a collective basis with all of the businesses' affiliates, with the proceeds of capital investments shall be the greater of 20 percent of the rural fund's capital investment authority or $6.5 million, exclusive of investments made with repaid or redeemed investments or interest or profits realized thereon. The minimum term on any extension of credit shall be at least one year after the date of issuance.

(21) 'Rural area' means any county, or county equivalent, that has a population of less than 50,000 according to the latest decennial census of the United States.

(22) 'Rural fund' means an entity certified by the Department.

(23) 'Rural investor' means an entity that makes a capital investment in a rural fund.

(24) 'Senior secured debt' means debt that has the benefit of a 1^st lien security interest or mortgage on assets of an eligible business and takes priority over other junior obligations owed by the business.

(25) 'State tax liability' means any liability incurred by any entity under Code Sections 33-3-26 and 33-8-4 or Code Sections 48-7-21 and 48-7-27, or, if such taxes are eliminated or reduced, the term shall also mean any tax liability imposed on an entity or other person that had tax liability under the laws of this state.

Notes

Ga. Comp. R. & Regs. R. 110-35-1-.02

O.C.G.A. § 33-1-25.

Original Rule entitled "Definitions" adopted. F. Feb. 16, 2018; eff. Mar. 9, 2018, as specified by Agency.