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15-4-3611. Decertification.
Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-3611. Decertification.
(a)(1) If a qualified equity investment is certified under § 15-4-3605, the qualified equity investment shall not be decertified unless the requirements of subsection (b) of this section are met.
(2) Until all qualified equity investments issued by a qualified community development entity are decertified under this section, the qualified community development entity shall not distribute to its equity holders or make cash payments on long-term debt securities that have been designated as qualified equity investments in an amount that exceeds the sum of:
(A) The cumulative operating income, as determined under 26 C.F.R. § 1.45D-1, as it existed on January 1, 2013, earned by the qualified community development entity since issuance of the qualified equity investment, before giving effect to any expense from interest on long-term debt securities designated as qualified equity investments; and
(B) Fifty percent (50%) of the purchase price of the qualified equity investments issued by the qualified community development entity.
(b) To be decertified, a qualified equity investment shall:
(1) Be beyond its seventh credit allowance date;
(2)(A) Have been in compliance with § 15-4-3607 up through its seventh credit allowance date, including any cures under § 15-4-3608.
(B) The requirement under subdivision (b)(2)(A) of this section is satisfied if no recapture action has been commenced by the Arkansas Economic Development Commission as of the seventh credit allowance date; and
(3) Have invested its proceeds in qualified active low-income community investments such that the total qualified active low-income community investments made, cumulatively including reinvestments, exceeds one hundred fifty percent (150%) of all qualified equity
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-3611
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:15-4-3611
Source file: gov.ar.code.title.15.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 85e95b17d01a33a78e6ed89eae5fe0ef420b64481df36c9965d0badfc86c5225
Source location: content.xml paragraph 6456
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15-4-3611. Decertification.
(a)(1) If a qualified equity investment is certified under § 15-4-3605, the qualified equity investment shall not be decertified unless the requirements of subsection (b) of this section are met.
(2) Until all qualified equity investments issued by a qualified community development entity are decertified under this section, the qualified community development entity shall not distribute to its equity holders or make cash payments on long-term debt securities that have been designated as qualified equity investments in an amount that exceeds the sum of:
(A) The cumulative operating income, as determined under 26 C.F.R. § 1.45D-1, as it existed on January 1, 2013, earned by the qualified community development entity since issuance of the qualified equity investment, before giving effect to any expense from interest on long-term debt securities designated as qualified equity investments; and
(B) Fifty percent (50%) of the purchase price of the qualified equity investments issued by the qualified community development entity.
(b) To be decertified, a qualified equity investment shall:
(1) Be beyond its seventh credit allowance date;
(2)(A) Have been in compliance with § 15-4-3607 up through its seventh credit allowance date, including any cures under § 15-4-3608.
(B) The requirement under subdivision (b)(2)(A) of this section is satisfied if no recapture action has been commenced by the Arkansas Economic Development Commission as of the seventh credit allowance date; and
(3) Have invested its proceeds in qualified active low-income community investments such that the total qualified active low-income community investments made, cumulatively including reinvestments, exceeds one hundred fifty percent (150%) of all qualified equity investments issued by the issuer.
(c)(1) A qualified community development entity that seeks to have a qualified equity investment decertified under this section shall send notice to the commission of its request for decertification along with evidence supporting the request.
(2)(A) A request under subdivision (c)(1) of this section shall not be unreasonably denied and shall be responded to within thirty (30) days of receiving the request.
(B) If the request is denied for any reason, the burden of proof shall be on the commission in any administrative or legal proceeding that follows to establish that the request was not unreasonably denied.
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Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-3605. Certification of qualified equity investments.
(a)(1)(A)(i) A qualified community development entity that seeks to have an equity investment or a long-term debt security designated as a qualified equity investment eligible for a tax credit under this subchapter shall apply to the Arkansas Economic Development Commission.
(ii) The commission shall begin accepting applications on July 15, 2013.
(B)(i) If the qualified community development entity seeks to have a long-term debt security designated as a qualified equity investment under this section, the qualified community development entity shall not make cash interest payments on the long-term debt security during the period beginning on the date of issuance and ending on the final credit allowance date in an amount that exceeds the cumulative operating income, as determined under 26 C.F.R. § 1.45D-1, as it existed on January 1, 2013, of the qualified community development entity for that period before giving effect to interest expense on the long-term debt security.
(ii) However, the holder's ability to accelerate payments on the long-term debt security instrument in situations in which the issuer has defaulted on covenants designed to ensure compliance with this subchapter or 26 U.S.C. § 45D, as it existed on January 1, 2013, shall not be affected by this subchapter.
(2)(A) A qualified community development entity seeking certification of a qualified equity investment shall submit an application to the commission.
(B) The application submitted under subdivision (a)(2)(A) of this section shall include the following:
(i) Evidence of the applicant's certification as a qualified community development entity, including evidence that the service area of the applicant includes Arkansas;
(ii) A copy
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-3605
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 15-4-3605. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-3607. Recapture.
The Arkansas Economic Development Commission shall recapture the tax credit allowed under this subchapter from the taxpayer that claimed the tax credit if:
(1)(A) Any amount of a federal tax credit available with respect to a qualified equity investment that is eligible for a tax credit under this subchapter is recaptured under 26 U.S.C. § 45D, as it existed on January 1, 2013.
(B) If a recapture occurs under subdivision (1)(A) of this section, the commission's recapture shall be proportionate to the federal recapture with respect to the qualified equity investment;
(2)(A) The issuer redeems or makes principal repayment with respect to a qualified equity investment before the seventh anniversary of the issuance of the qualified equity investment.
(B) If a recapture occurs under subdivision (2)(A) of this section, the commission's recapture shall be proportionate to the amount of the redemption or repayment with respect to the qualified equity investment;
(3)(A) The issuer fails to:
(i) Invest an amount equal to eighty-five percent (85%) of the purchase price of the qualified equity investment in qualified low-income community investments in Arkansas within twelve (12) months of the issuance of the qualified equity investment; and
(ii) Maintain the minimum investment level required under subdivision (3)(A)(i) of this section until the last credit allowance date for the qualified equity investment.
(B)(i) A qualified equity investment shall be considered held by an issuer even if a qualified low-income community investment has been sold or repaid if the issuer reinvests an amount equal to the capital returned to or recovered by the issuer from the original qualified low-income community investment, exclusive of any profits realized,
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-3607
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 15-4-3607. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-3608. Cure period — Notice of noncompliance.
(a) Enforcement of each of the recapture provisions under § 15-4-3607 is subject to a six-month cure period.
(b) Recapture shall not occur until the Arkansas Economic Development Commission has given the qualified community development entity written notice of its noncompliance and has afforded the qualified community development entity six (6) months from the date of the notice to cure the noncompliance.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-3608
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 15-4-3608. This identifies an authority to review, not proof of applicability.