Ga. Comp. R. & Regs. R. 110-35-1-.08 - Recaptured Credits

(1) The Department may recapture, from an allocatee, the credit allowed under O.C.G.A. § 33-1-25if:

(a) The rural fund does not invest 100 percent of its capital investment authority in qualified investments in the state of Georgia within two years of the closing date, with at least 10 percent of its capital investment authority initially invested in eligible businesses engaged in agribusiness as defined by the Department and at least 10 percent of such investment in agribusiness shall be equity investments;

(b) The rural fund, after satisfying the agribusiness and equity investment requirements above, fails to maintain qualified investments equal to 100 percent of its capital investment authority until the fifth anniversary of the credit allowance date. Qualified investments are considered maintained if the qualified investment was sold or repaid if the rural fund reinvests an amount equal to the capital returned or recovered by the rural fund from the original investment, exclusive of any profits realized, in other qualified investments in the state of Georgia within 12 months of the receipt of such capital. Amounts received periodically by a rural fund shall be treated as continually invested in qualified investments if the amounts are reinvested in one or more qualified investments by the end of the following calendar year. A rural fund is not required to reinvest capital returned from qualified investments after the fourth anniversary of the credit allowance date, and such qualified investments shall be considered held continuously by the rural fund through the fifth anniversary of the credit allowance date;

(c) Should the rural fund fail to meet the conditions of sections (a) and (b) until the fifth anniversary of the credit allowance date, the Department shall recapture credits based upon the following schedule:

(i) If the rural fund fails to invest, or fails to maintain said qualified investments at a percentage of at least 90 percent, all credits will be subject to recapture.

(ii) If the rural fund fails to invest, or fails to maintain said qualified investments at a percentage above 90 percent, but below 100 percent, the percentage subject to recapture will be equal to the amount by which the rural fund failed to achieve 100 percent investment.

(d) The rural fund, before exiting the program in accordance with Section 110-35-1-.11, makes a distribution or payment that results in the rural fund having less than 100 percent of its capital investment authority invested in qualified investments in this state or available for investment in qualified investments and held in cash and other marketable securities; or

(e) The rural fund makes an investment in a business that directly or indirectly owns or has the right to acquire an ownership interest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by the rural fund; or loan to or invest in a rural fund or member or affiliate of a rural fund, including, but not limited to, a holder of a capital investment issued by a rural fund, where the proceeds of such loan or investment are directly or indirectly used to fund or refinance the purchase of a capital investment under O.C.G.A. § 33-1-25.

(2) Enforcement of the recapture provisions of subsections (a), (b), (c), and (d) of Section 1 herein shall be subject to a six-month cure period. No recapture shall occur until the rural fund has received notice of noncompliance and has been afforded six months from the date of receipt of such notice to cure the noncompliance.

(a) In the event that losses occur due to an eligible business' inability to meet their investment obligation, the rural fund shall satisfy the 100% investment requirements by reinvesting any capital that is recovered, exclusive of any profits realized. Investment amounts not recovered will not have to be reinvested to satisfy the 100% investment requirements.

Notes

Ga. Comp. R. & Regs. R. 110-35-1-.08

O.C.G.A. § 33-1-25.

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