§ 15-4-3602 — Definitions

As used in this subchapter: (1) "Applicable percentage" means: (A) Zero percent (0%) for the first two (2) credit allowance dates; (B) Twelve percent (12%) for the third, fourth, and fifth credit allowance dates; and (C) Eleven percent (11%) for the sixth and seventh credit allowance dates; (2) "Credit allowance date" means with respect to a qualified equity investment: (A) The date on which the qualified equity investment is initially made; and (B) Each of the subsequent six (6) anniversary dates of the date on which the qualified equity investment was initially made; (3) "Letter ruling" means a written interpretation of law to a specific set of facts provided by an applicant requesting the written interpretation from the Arkansas Economic Development Commission; (4) "Long-term debt security" means a debt instrument issued by a qualified community development entity, at par value or a premium, with an original maturity date of at least seven (7) years from the date of its issuance without acceleration of repayment, amortization, or prepayment features before its original maturity date; (5) "Purchase price" means the amount paid to the issuer of a qualified equity investment for a qualified equity investment; (6) (A) "Qualified active low-income community business" means the same as defined in 26 U.S.C. § 45D and 26 C.F.R. § 1.45D-1 , as they existed on January 1, 2013, if: (i) At the time of the qualified community development entity's investment in or loan to the corporation, limited liability company, association, partnership, or other business entity, the corporation, limited liability company, association, partnership, or other business entity meets the United States Small Business Administration size eligibility standards established in 13 C.F.R. § 121.101-201 , as it existed on January 1, 2013; and (ii) (a) The corporation, limited liability company, association, partnership, or other business entity agrees to retain or create jobs that pay an average wage of at least one hundred fifteen percent (115%) of the federal poverty income guidelines for a family of four (4) for the census tract. (b) The commission may waive the requirement stated in subdivision (6)(A)(ii)( a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community. (B) A corporation, limited liability company, association, partnership, or other business entity will be considered a qualified low-income community business for the duration of the qualified community development entity's investment in or loan to the corporation, limited liability company, association, partnership, or other business entity if the relevant qualified community development entity reasonably expects, at the time it makes an investment or loan, that the corporation, limited liability company, association, partnership, or other business entity will continue to satisfy the requirements for being a qualified active low-income community business other than the requirements stated in subdivision (6)(A)(i) of this section throughout the entire period of the investment or loan. (C) "Qualified active low-income community business" does not include the following: (i) (a) A corporation, limited liability company, association, partnership, or other business entity that is the beneficiary of an incentive under § 15-4-2705 , § 15-4-2706(b) , or § 15-4-2706(c)(2) . (b) However, the commission may waive the requirement stated in subdivision (6)(C)(i)( a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community; (ii) (a) Any industry excluded under a rule of the commission. (b) However, the commission may waive the requirement stated in subdivision (6)(C)(ii)( a ) of this section if the commission determines that an investment in the proposed active qualified low-income community business will have a positive impact on the community; or (iii) (a) A corporation, limited liability company, association, partnership, or other business entity that derives or projects to derive at least fifteen percent (15%) of its annual revenue from the rental or sale of real estate. (b) However, the restriction in subdivision (6)(C)(iii)( a ) of this section does not apply to a corporation, limited liability company, association, partnership, or other business entity that is controlled by or under common control with another corporation, limited liability company, association, partnership, or other business entity that: (1) Does not derive or project to derive at least fifteen percent (15%) of its annual revenue from the rental or sale of real estate; and (2) Is the primary tenant of the real estate leased from the corporation, limited liability company, association, partnership, or other business entity; (7) (A) "Qualified community development entity" means the same as defined in 26 U.S.C. § 45D , as it existed on January 1, 2013, if the corporation, limited liability company, association, partnership, or other business entity has entered into, for the current year or any prior year, an allocation agreement with the Community Development Financial Institutions Fund of the United States Department of the Treasury with respect to credits authorized under 26 U.S.C. § 45D that includes Arkansas within the service area stated in the allocation agreement. (B) "Qualified community development entity" includes a qualified community development entity that is controlled by or under common control with a qualified community development entity described in this subdivision (7); (8) (A) "Qualified equity investment" means an equity investment in or a long-term debt security issued by a qualified community development entity that: (i) Is acquired after April 22, 2013, at its original issue solely in exchange for cash; (ii) Has at least eighty-five percent (85%) of its cash purchase price used by the issuer to make qualified low-income community investments in qualified active low-income community businesses located in Arkansas by the first anniversary of the initial credit allowance date; and (iii) Is designated by the issuer as a qualified equity investment under this subdivision (8) and is certified by the commission as not exceeding the limitation stated in § 15-4-3605(d) . (B) "Qualified equity investment" includes an investment that does not meet the requirements of subdivision (8)(A)(i) of this section if the investment was a qualified equity investment in the hands of a previous holder; (9) "Qualified low-income community investment" means a capital or equity investment in or loan to a qualified active low-income community business; and (10) "State premium tax liability" means: (A) Tax liability incurred by a corporation, limited liability company, association, partnership, or other business entity under §§ 23-63-102 and 26-57-601 - 26-57-605 , excluding any liability for taxes on a health insurance premium; or (B) If the tax liability under subdivision (10)(A) of this section is eliminated or reduced, any tax liability imposed on an insurance company or other person that had premium tax liability under the laws of the state.

Legislative History

Added by Act 2013, No. 1474,§ 1, eff. 4/22/2013.