Section 870-RICR-30-00-8.15 - RecaptureA. The Corporation, working in coordination with the Division of Taxation, may recapture, from any entity that claims a credit on a tax return, the credit allowed under the Act or these Rules if: 1. The Small Business Development Fund does not invest one hundred (100%) percent of its Capital Investment authority in Qualified Investments in this State within three (3) years of the first credit allowance date;2. The Small Business Development Fund, after satisfying the requirements of § 8.12(A) of this Part, fails to maintain Qualified Investments equal to one hundred (100%) percent of its Capital Investment authority until the sixth anniversary of the initial credit allowance date. For the purposes of this subsection, a Qualified Investment is considered maintained even if the Qualified Investment was sold or repaid so long as the Small Business Development Fund reinvests an amount equal to the capital returned or recovered by the Small Business Development Fund from the original investment, exclusive of any profits realized, in other Qualified Investments in this State within twelve (12) months of the receipt of the capital. Amounts received periodically by a Small Business Development 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 Small Business Development Fund shall not be required to reinvest capital returned from Qualified Investments after the fifth anniversary of the initial Credit Allowance Date, and the Qualified Investments shall be considered held continuously by the Small Business Development Fund through the sixth anniversary of the initial Credit Allowance Date;3. The Small Business Development Fund, before exiting the Program in accordance with the Act and these Rules, makes a distribution or payment that results in the Small Business Development Fund having less than one hundred percent (100%) 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;4. The Small Business Development Fund, before exiting the Program in accordance with the Act and these Rules, fails to make Qualified Investments in Minority Business Enterprises that when added together equal at least ten percent (10%) of the Small Business Development Fund's Capital Investment authority; or5. The Small Business Development Fund violates § 8.12(D) of this Part.B. Recaptured credits and the related Capital Investment authority revert to the Corporation and shall be reissued pro rata to Applicants whose Capital Investment allocations were reduced pursuant to the Act and these Rules and then in accordance with the Application process.C. Enforcement of each of the recapture provisions of the Act and these Rules shall be subject to a six (6) month cure period. No recapture shall occur until the Small Business Development Fund has been given notice of noncompliance and afforded six (6) months from the date of the notice to cure the noncompliance.D. No Eligible Business that receives a Qualified Investment under the Act or these Rules, or any affiliates of the Eligible Business, may directly or indirectly: 1. Own or have the right to acquire an ownership interest in a Small Business Development Fund or member or affiliate of a Small Business Development Fund, including, but not limited to, a holder of a Capital Investment issued by the Small Business Development Fund; or2. Loan to or invest in a Small Business Development Fund or member or affiliate of a Small Business Development Fund, including, but not limited to, a holder of a Capital Investment issued by a Small Business Development Fund, where the proceeds of the loan or investment are directly or indirectly used to fund or refinance the purchase of a Capital Investment under the Act or these Rules.870 R.I. Code R. 870-RICR-30-00-8.15
Adopted effective 9/27/2019
Amended effective 3/24/2020