Alabama

• The applying entity needs to be a community development entity (CDE) for federal purposes and needs to be authorized to serve businesses in Alabama.
• The CDE shall submit an application to the Department of Commerce to certify a proposed investment as a qualified investment.
• The CDE must issue the qualified investment in exchange for cash within 180 days after it receives certification approving an investment as a qualified investment (this includes a 90‐day cure period), otherwise the certification is void.
• The application for certification as a qualified CDE must include the amount of qualified equity investment (QEI) authority the applicant agrees to designate as a federal qualified equity investment under Internal Revenue Code Section 45D. 

50% of the taxpayer's equity investment

Same as federal;

QALICBs are any for‐profit or nonprofit corporation or partnership if:

• At least 50% of the total gross income of that business is derived from the active conduct of its business within any qualified low-income community (LIC),
• A substantial portion (defined as at least 40%) of the use of the tangible property of that business (whether owned or leased) is within any qualified LIC,
• Substantial portion (defined as at least 40%) of the services performed by that business' employees are performed in any qualified LIC; the business is not primarily holding collectibles. If (ii) or (iii) are 50% or more than (i) is deemed to have been met.
• A business shall be considered a QALICB for the duration of the qualified CDE’s investment in, or loan to, the business if the entity reasonably expects, at the time the qualified CDE entity makes the investment or loan, that the business may continue to satisfy the requirements for being a QALICB throughout the entire period of the investment or loan.
• No qualified active LIC business that receives a QLICI from a qualified CDE that issues QEI may directly or indirectly (i) own or have the right to acquire an ownership interest in a qualified CDE or member or affiliate of a qualified CDE or (ii) loan to or invest in a qualified CDE or member or affiliate of a qualified CDE.

Recapture can occur if:

• the federal new market tax credits associated with a QEI are recaptured (recapture amount proportionate to the federal recapture)  
• the CDE fails to issue the QEI in the amount of the certified amount within 90 days after receiving notice of certification, (recapture amount equal to all credits claimed); 180 days reinvestment period permitted after which the certification shall lapse;
• the qualified CDE fails to invest at least 85% of the purchase price in QLICIs within 12 months after the issuance of a qualified investment;
• the CDE redeems or makes a principal payment with respect to a QEI before the seventh anniversary of a QEI (recapture amount proportionate to the amount of redemption or repayment);  
• the CDE fails to provide the office with information, reports, or documentation required by the New Markets Development Program Act;
• the department determines that a taxpayer received tax credits to which the taxpayer was not entitled;  or  
• the qualified CDE fails to maintain 85% of the purchase price in QLICIs until the last credit allowance date for a qualified investment

• Qualified investment into CDE can be an equity investment or a long-term debt security instrument (and in the case of a long-term debt security QEI, a qualified CDE may not make cash interest payments on a long‐term debt security that is a qualified investment in excess of the entity’s operating income for six years following the issuance of the security).
• An insurance company that is subject to the insurance premium tax must apply the tax credit against the insurance premium tax.
• The Alabama statute indicates that the QEI is deemed to be state financial assistance and therefore the CDE is subject to auditing, testing and reporting of compliance and internal controls.  
• The amount of the tax credit claimed may not exceed the amount of the taxpayer's state tax liability for the tax year for which the tax credit is claimed; however, the excess tax credits available can be carried forward to any of the taxpayer's subsequent taxable years.
• Tax credits claimed under this act are not saleable or transferable.
• Tax credits earned by a "pass‐through" entity may be allocated to the partners, members, or shareholders of that entity.
• Any business that derives or expects to derive 15% or more of its annual revenue from the rental or sale of real estate is not considered a QALICB.

Gregory Clements
 

Linda Swann
(334) 353-0221
[email protected]

Alaska

AIDEA’s program has two components:
1.   Loan guarantee
2.   Direct loan

Loan Guarantee

The applicant must have been awarded a NMTC allocation from a community development entity (CDE), or be in the process of securing that allocation from one or more CDEs.  The applicant may then apply to AIDEA for a guarantee of the leveraged loan portion of the NMTC transaction. If, and when, AIDEA issues a letter of commitment, the applicant can use it to secure a commercial loan to the transaction from an eligible financial institution. If a loan is secured, AIDEA will work with the lender to ensure the terms and conditions of the guarantee and the loan are compatible and acceptable to both parties. The guarantee will be executed at the closing of the NMTC transaction.

Direct Loan

AIDEA may make a loan under this program only if it determines that the applicant was unable to use AIDEA’s letter of commitment to obtain a loan from a financial institution under commercially reasonable terms. In this case, the applicant will be required to submit documentation demonstrating that at least two financial institutions have reviewed and rejected a loan application or that the application was approved but subject to terms AIDEA determines are commercially unreasonable.

The application will undergo a comprehensive underwriting process in which AIDEA will determine:

• if the borrower is creditworthy
• the financially and economically feasibility of the business plan
• the viability of any collateral
• the projected revenues are sufficient to cover operations, maintenance and debt service
• if there is any other information required to determine the strength of the project.

Any corporation or partnership (including nonprofits) engaged in the active conduct of a qualified business that meets all five requirements:

1. Gross income (50% low-income community [LIC])
2. Tangible property (40% LIC)
3. Services performed (40% LIC)
4. Collectibles (< 5% property)
5. Nonqualified financial property (< 5% property)

Not applicable

Only projects in qualified census tracts (QCT) are eligible for the NMTCs. QCTs are those that meet at least one of the following requirements:

• Poverty rate greater than 20%; or
• Median income less than 80% of the state/metropolitan median; or
• Targeted populations
• Population is less than 2,000 people, contiguous to a LIC and in an empowerment zone, or
• High migration rural counties (85% median income)

Gregory Clements

(907) 771-3060
 

Arkansas

• A community development entity (CDE) must submit an application and requisite fees to the Arkansas Economic Development Commission seeking certification of the proposed equity investment or long-term debt security as a qualified equity investment (QEI).
• Within 30 days after receipt of a completed application, the Commission will grant or deny the application in full or in part. If any part of the application is denied, the Commission will inform the applicant of the grounds for denial. 
• If the application is denied as incomplete, and the applicant provides the additional information or documentation required, or otherwise completes its application within 15 days of the notice of denial, the application shall be considered completed as of the original date of submission. If the applicant fails to do so, the application will be denied and must be resubmitted in full with a new submission date.

Not applicable

Same as federal

Same as federal

Hunter Hauk
Incentives Manager
[email protected]

Florida

A qualified community development entity (CDE) must submit an application to the department to approve a proposed investment as a qualified investment. The application must include:

• The name, address, and tax identification number of the qualified CDE.
• Proof of certification as a qualified CDE under 26 U.S.C. s. 45D.
• A copy of an allocation agreement executed by the entity, or its controlling entity, and the Community Development Financial Institutions (CDFI) Fund, which authorizes the entity to serve businesses in this state.
• A verified statement by the chief executive officer of the entity that the allocation agreement remains in effect.
• A description of the proposed amount, structure, and purchaser of an equity investment or long-term debt security.
• The name and tax identification number of any person authorized to claim a tax credit earned as a result of the purchase of the proposed qualified investment.
• A detailed explanation of the proposed use of the proceeds from a proposed qualified investment.
• A nonrefundable application fee of $1,000, payable to the department.
• A statement that the entity will invest only in the industries designated by the department.
• The entity’s plans for the development of relationships with community-based organizations, local community development offices and organizations, and economic development organizations. The entity must also explain steps it has taken to implement its plans to develop these relationships.
• A statement that the entity will not invest in a qualified active low-income community business (QALICB) unless the business will create or retain jobs that pay an average wage of at least 115% of the federal poverty income guidelines for a family of four.

The department, in consultation with Enterprise Florida, Inc., shall designate industries using the North American Industry Classification System which are eligible to receive low-income community investments. The designated industries must be those industries that have the greatest potential to create strong positive impacts on or benefits to the state, regional, and local economies.

A qualified CDE may not make a qualified low-income community investment (QLICI) in a business unless the principal activities of the business are within an eligible industry. The department may waive this limitation if the department determines that the investment will have a positive impact on a community.

Notwithstanding s. 95.091, the department shall direct the Department of Revenue, at any time before Dec. 31, 2022, to recapture all or a portion of a tax credit authorized pursuant to the New Markets Development Program Act if one or more of the following occur:

• The federal government recaptures any portion of the federal NMTC. The recapture by the Department of Revenue shall equal the recapture by the federal government.
• The qualified CDE redeems or makes a principal repayment on a qualified investment before the final allowance date. The recapture by the Department of Revenue shall equal the redemption or principal repayment divided by the purchase price and multiplied by the tax credit authorized to a taxpayer for the qualified investment.
• The qualified CDE fails to invest at least 85% of the purchase price in qualified low-income community investments (QLICIs) within 12 months after the issuance of a qualified investment; or
• The qualified CDE fails to maintain 85% of the purchase price in QLICIs until the last credit allowance date for a qualified investment.

Christina Apostolidis

Karl Blischke
[email protected]

Georgia

Georgia Agribusiness and Rural Jobs Act Program

(1) All applications shall be received on forms promulgated by the Department, with all attachments and supporting documentation required in order to be deemed complete.

(2) Applications shall contain all elements required for statutory compliance, as well as any other elements required by the Department.

(3) Applications will be deemed received when a paper-copy of the application is received by the Department. Applications received after 5 p.m. ET will be deemed to be received on the following business day.

(4) Eligible applicants under the Georgia Agribusiness and Rural Jobs Act must apply in a format and manner prescribed by the Department. Applications must be submitted in paper-copy format to the Department at:

Georgia Department of Community Affairs Georgia Agribusiness and Rural Jobs Act Program Community Development & Finance Division 60 Executive Park South, NE Atlanta, Georgia 30329-2231  

(1) Upon making a capital investment in a rural fund, a rural investor earns a vested right to a credit against such entity’s Georgia state tax liability that may be used on each credit allowance date of such capital investment in an amount equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the rural fund for the capital investment. The applicable percentages that may be claimed are: Years 1 and 2, 0%; Years 3-6, 15%.

 (2) The amount of the credit claimed by an allocatee shall not exceed the amount of such entity’s Georgia state tax liability for the tax year for which the credit is claimed. Any amount of credit that an allocatee is prohibited from claiming in a taxable year as a result of this Code section may be carried forward for use in any subsequent taxable year. 

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

Georgia Chapter 110-35; Eligible counties for qualified investment in Georgia; GARJA rules

Brad Elphick

[email protected]

Illinois

• Needs to be a community development entity (CDE) for federal purposes that has entered into an allocation agreement with the CDFI Fund pursuant to which Illinois is included in the CDE's service area.
• Need to submit an application to the Illinois Department of Commerce and Economic Opportunity (DCEO) to approve a proposed investment as a qualified equity investment (QEI).
• Must issue QEI within 30 days of DCEO approval, and must provide evidence of DCEO of receipt of cash investment within 10 days of QEI issuance.

The following events cause recapture:

• The federal NMTCs get recaptured
• The CDE redeems or makes a principal payment with respect to a QEI before the seventh anniversary of a QEI (recapture amount proportionate to the amount of redemption or repayment)
• The CDE fails to invest 85% of a QEI within 12 months and maintain such level of investment until the last credit allowance date for such QEI (recapture amount equal to all credits claimed)

NMTC Program Guidelines; Annual Report Form

• QEI into CDE can be an equity investment or a long-term debt security instrument (minimum seven-year term, no acceleration, amortization, or prepayment features, but no limitation on acceleration for default on covenants designed to ensure compliance with Illinois NMTC Act or Section 45D).
• Insurance companies that are subject to the insurance premium tax and claims the credit against the insurance premium tax is not require to pay any additional retaliatory tax imposed pursuant to the Illinois Insurance Code.
• Any business that derives or expects to derive 15% or more of its annual revenue from the rental or sale of real estate is not considered a qualified active low-income community business (QALICB), except this restriction does not apply to a business that is controlled by or under common control with another business if the second business (i) does not derive or expects to derive 15% or more of its annual revenue from the rental or sale of real estate, and (ii) is the primary tenant of the real estate leased from the initial business.
• Can be used irrespective of use of federal NMTCs in same transaction.
• Credit is not refundable or saleable on the open market; may be allocated through pass-through entities. Five year carry forward permitted if credit cannot be used in a taxable year.
• Sunsets at end of fiscal year 2024 unless General Assembly grants authority following fiscal year 2024.

Annette Stevenson

[email protected]

Indiana (Proposed)

Kentucky

• A community development entity (CDE) that seeks to have an equity investment or long-term debt security certified by the department as a qualified equity investment (QEI)  eligible for the tax credit permitted by KRS 141.434 shall file an application with the department.
• The department shall notify the CDE within 30 days after receipt of the application whether the application is approved or denied.
• If the department intends to deny the application, the CDE shall be notified in writing by the department of the reason for the denial, and the CDE may correct the application as provided by KRS 141.433(2).
• If the department finds that the application is in compliance with KRS 141.432 to 141.434, a copy of the application shall be returned to the CDE with written notice of the department’s approval.

The department will:

• Accept an application via hand-delivery, mail, express mail, or courier; and
• Not accept an application received via facsimile, CD-Rom, CD, or electronic means.
• The date that the application is stamped received by the Office of Income Taxation, Division of Corporation Tax, Tax Credits Section, shall be the date that the application is recorded as received pursuant to the provisions of KRS 141.133.

If there is an event as provided by KRS 141.433(6) that would result in the recapture of any portion of the tax credit previously approved:

• The CDE shall notify the department upon discovery of the event; or
• The department, upon discovery of the event or after receiving notice from the CDE of the event, shall provide written notice of the proposed recapture to the CDE as provided by KRS 141.433(6)(b).
• If the entity fails or is unable to cure the deficiency within 90 days after receiving the department’s notice of proposed recapture as provided by KRS 141.433(6)(b), the department shall notify the CDE and each taxpayer of the amount of recapture or the balance of the tax credit on a notice of recapture.
• If the taxpayer is a pass-through entity, a notice of recapture shall also be sent to each partner, member, or shareholder showing the amount of recapture or the balance of the tax credit.

$5 million in NMTCs will be available for approval beginning with applications submitted on or after July 15, 2019.

Any NMTC approved may be claimed against corporation income tax, individual income tax, limited liability entity tax, and insurance premiums tax.

Any business that derives or expects to derive 15% or more of its annual revenue from the rental or sale of real estate is not considered a qualified active low-income community business (QALICB), except this restriction does not apply to a business that is controlled by or under common control with another business if the second business does not derive or expects to derive 15% or more of its annual revenue from the rental or sale of real estate, and is the primary tenant of the real estate leased from the initial business.

Gregory Clements

Cabinet for Economic Development
(800) 626-2930
[email protected]

Louisiana

Seven years

Recapture will occur if:

• Any amount of a federal NMTC available with respect to a QEI that is eligible for a credit under this Section is recaptured under IRC Section 45D. In such case, the Department of Insurance's recapture shall be proportionate to the federal recapture with respect to such QEI.
• The issuer fails to invest an amount equal to 100% of the purchase price of the QEI in qualified low-income community investments (QLICIs) in Louisiana within 12 months of the issuance of the QEI and maintain such level of investment in QLICIs in Louisiana until the last credit allowance date for the qualified equity investment. 

Gregory Clements

Department of Revenue
Policy Services Division
(225) 219-2780
E-Mail

Maine

$10 million (Title 10, section 1100-Z, subsection 3, paragraph G)

$40 million for a qualified active low-income community business (QALICB) that is a manufacturing or value-added production enterprise.

Tony Grappone

FAME General Counsel Christopher Roney
Christopher Roney
(207) 620-3520

Minnesota (Proposed)

Mississippi

• The qualified community development entity (CDE) shall apply for credits with the Mississippi Development Authority on forms prescribed by the Mississippi Development Authority.
• The qualified CDE  must pay an application fee of $1,000 to the Mississippi Development Authority at the time the application is submitted.
• In the application the qualified CDE shall certify to the Mississippi Development Authority the dollar amount of the qualified equity investments (QEI) made or to be made in this state, including in any federal Indian reservation located within the state's geographical boundary, during the first 12-month period following the initial credit allowance date.
• The Mississippi Development Authority shall allocate credits based on the dollar amount of QEIs as certified in the application.

Credits are based on a Mississippi investment being maintained for a minimum of seven years. If all state and federal program requirements are not met, all credits may be recaptured by the Mississippi Department of Revenue. Annual program reporting requirements must be maintained as well.

• Year 1-3: 8% per year
• Upon approval, MDA will issue to the CDE a tax credit incentive certificate allocating credits based on the anticipated investment amount certified in its application, and the CDE will have 60 days from the allocation date to issue the QEIs.
• Failure to timely issue the QEIs will result in cancellation of the allocation, which must be returned to MDA.

Same as federal

• The Department of Revenue may recapture all of the credit allowed under this section if:
• (a) Any amount of federal tax credits available with respect to a QEI that is eligible for a tax credit under this section is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended; or
• (b) The qualified CDE redeems or makes any principal repayment with respect to a QEI before the seventh anniversary of the issuance of the QEI; or
• (c) The qualified CDE fails to maintain at least 85% of the proceeds of the QEI in qualified low-income community investments (QLICIs) in Mississippi at any time before the seventh anniversary of the issuance of the QEI.
• Any credits that are subject to recapture under this subsection shall be recaptured from the taxpayer that actually claimed the credit.

Sunsets July 1, 2024

Mississippi Equity Investment Tax Credits must be awarded and certified by the Mississippi Development Authority before funding. Use of credits is administered by the Mississippi Department of Revenue.

Mississippi Development Authority
(601) 359-3449

Nebraska

A community development entity (CDE) must file a Nebraska Application for Certification of Qualified Equity Investments Eligible for the New Markets Job Growth Investment Tax Credit (application) with the department to receive cash investments that qualify for the NMTC. The application must include the following:

• Evidence of the entity’s certification as a CDE
• Evidence that the service area of the CDE includes Nebraska; 
• A copy of an allocation agreement between the CDE or its controlling entity and the CDFI Fund;
• A certificate completed by an executive officer of the CDE stating that the federal allocation agreement has not been revoked or cancelled
• A description of the proposed amount, structure, and purchaser of the equity investment or long-term debt security; 
• Information identifying all taxpayers eligible to use the NMTC; 
• Identification of the proposed use of the proceeds from the qualified equity investment (QEI); and 
• A $5,000 nonrefundable application fee.

• On each credit allowance date of such qualified equity investment such acquirer, or subsequent holder of the qualified equity investment, shall be entitled to use a portion of such tax credit during the taxable year that includes such credit allowance date;
• The tax credit amount shall be equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the issuer of such qualified equity investment; and
• The amount of the tax credit claimed shall not exceed the amount of the taxpayer's tax liability for the tax year for which the tax credit is claimed.
• Qualifying small business can receive a maximum investment of $10 million.

Year 1, 2: 0%, Year 3: 7%, Years 4-7: 8%. 

Use at least 85% of the proceeds from QEI to make QLICIs in a qualified active low-income community business (QALICB) in Nebraska.

Credits used will be recaptured from the taxpayer that claimed the NMTC if:

• Any amount of the federal QEI credit is recaptured;
• The amount recaptured will be proportionate to the federal recapture. 
• The CDE redeems or repays some or all the principal of the qualified equity investment before the last credit allowance date; or 
• The amount recaptured will be proportionate to the amount of redemption or repayment of the qualified equity investment. 
• The CDE fails to invest and satisfy the requirements of Neb. Rev. Stat. Section 77-1110(1)(b) and maintain its investment in a QLICI in Nebraska until the last credit allowance date. 
• In this case, the entire amount of the NMTC will be recaptured.
• The CDE must inform the Department and investors that a recapture event has occurred. 

Tom Milburn
Revenue Tax Specialist, Policy Section
(402) 471-5814 

Nevada

Community development entities (CDEs) that have been certified by the federal NMTC program and Nevada is in their certified area are eligible to apply for the state NMTC program. The state application will be a two-part process:

• The CDE submits an application to the Department of Business and Industry.
• Once eligibility is determined, B&I will send a written notice of certification to the applicant CDE, which will include an allocated amount of NMTC contingent upon qualified investments being made within 30 days of the date of the preliminary approval letter.
• If an approved CDE is not successful in gaining proof of the investment, the CDE will be required to reapply and will be required to obtain a commitment that secures the investment in the amount of the application to accompany the new submittal.

Years 1-2: 0%, Years 3-5: 12%, Years 6-7: 11%

• A CDE may make an investment (loan or equity) into a qualified active low-income community business (QALICB), which is any corporation, including a nonprofit corporation, or partnership which meets the following criteria for any taxable year:
• At least 50% of total gross income of the QALICB is derived within any low-income community.
• A substantial portion of the use of the tangible property of the QALICB by its employees are performed in any low-income community.
• A substantial portion of the use of the tangible property of the QALICB (whether owned or leased) is within any low-income community
• Less than 5% of the average of the aggregate unadjusted basis of the property of the QALICB is attributable to collectibles, other than collectibles that are held primarily for sale to customers in the ordinary course of such business and;
• Less than 5% of the average of the aggregate unadjusted basis of the property of the QALICB is attributed to nonqualified financial property. Any business that projects to derive 15% or more of its annual revenue from the rental or sale of real estate shall not be considered a QALICB.

The following events cause recapture:

• The issuer redeems or makes principal repayments with respect to a QEI before the seventh anniversary
• The federal NMTCs get recaptured
• The CDE fails to invest in a QALICB in Nevada

 Program Overview; Program Allocatees

Ohio

• The same events that trigger federal recapture
• The Ohio Director of Development determines that an investment is not a qualified equity investment (QEI) or that the proceeds of an investment for which tax credit is claimed are used to make qualified low-income community investments (QLICIs) other than in qualified active low-income community businesses (QALICBs).

Overview, Introduction to Ohio New Markets Tax Credits

• Tax credits can be carried forward four years. Tax credits can be transferred.
• The credit can only apply against state franchise taxes paid by domestic companies, as well as some taxes imposed on foreign insurance companies.

Novogradac Contact

John Werkman
Tax Incentives Manager
Office of Strategic Business Investments
(614) 466-6791

Utah

• A community development entity (CDE) must submit an application to the Utah Governor's Office of Economic Development seeking certification of the proposed qualified equity investment (QEI) or long-term debt security.
• Applicants must also submit a deposit equal 0.5% of the QEI with their application, which is refunded at the end of the compliance period, if the CDE does not initiate recapture during the compliance period.
• Within 30 days of receipt of a completed application, the office shall grant or deny the application in full or in part.
• If the application is denied in any part, the applicant may provide additional information and documentation to correct or complete its application within 15 days of the notice of denial, the application shall be considered completed as the original date of submission. If the applicant fails to do so, the application is denied, and the applicant may reapply with a full application and a new submission date

$4 million

58% of QEI.

Year 0-2: 0%, Year 3-5: 12% annually, Year 6-7: 11% annually

For the purposes of recapture, the office interprets the requirement to invest 85% of the purchase price of the qualified equity investment as follows:

• If the qualified CDE does not transfer or assign any of its certification, then the qualified CDE must invest and maintain invested an amount equal to 85% or more of the original amount of the QEI certified by the Office and for which cash was received within 45 days.
• If the qualified CDE transfers all or a portion of its certified QEI authority to a controlling entity or subsidiary, then:
• The qualified CDE (the transferor) must invest and maintain invested an amount equal to or greater than 85% of the portion of the certified QEI authority it retained, and for which it received cash investment within 45 days, AND
• The controlling entity or subsidiary (the transferee) must invest and maintain invested and amount equal to or greater than 85% of the portion of the certified QEI authority it received, and for which it received cash investment within 45 days.
• The 85% investment requirement shall be defined in a manner consistent with the "substantially all" standard set forth in IRC Section 45D and the rules and regulations promulgated thereunder. The Department shall be notified of any transaction fees paid by the qualified active low-income community business (QALICB) that are in excess of a total of $50,000 for the entire time period of the investment, up to seven years.
• Notice of transaction fees that are in excess of $50,000 to be paid by the QALICB must be requested in writing within 15 days of closing the investment with the QALICB and must include an explanation for the necessity of the excess fees including highlighting the impact to the state and how the fees and impact for the particular deal compares to the customary industry practice across both the federal NMTC program and other states' NMTC programs.
• If after the six-month cure period, the action or omission upon which the recapture is based is not cured, the Office shall issue a final notice of Agency Action for Recapture.
• The Final Notice of Agency Action for Recapture shall also be sent to the Utah Tax Commission.

• New capital requirement: QALICB cannot own, or have the right to acquire ownership in the CDE issuing the QEIs. Additionally, the QALICB cannot loan or invest the QEI back into the CDE issuing the QEIs.
• 150% investment requirement: A QEI is certified until the seventh credit allowance date, or when the CDE has used the proceeds from the initial QEI to invest in QALICBs such that the new QEIs exceed 150% of the original QEI.

Brad Elphick

Governor's Office of Economic Development
60 East South Temple, 3rd Floor
Salt Lake City, UT 84111
Phone: 801-538-8680
Toll Free: 855-204-9046

West Virginia (Proposed)