Title 42
State Affairs and Government

Chapter 64.33
The Rhode Island Small Business Development Fund

§ 42-64.33-4. Application, approval and allocations.

(a) A small business development fund that seeks to have an equity or debt investment certified as a capital investment and eligible for credits under this chapter shall apply to the corporation. The corporation shall begin accepting applications within ninety (90) days of July 5, 2019. The small business development fund shall include the following:

(1) The amount of capital investment requested;

(2) A copy of the applicant’s or an affiliate of the applicant’s license as a rural business investment company under 7 U.S.C. § 2009cc, or as a small business investment company under 15 U.S.C. § 681, and a certificate executed by an executive officer of the applicant attesting that the license remains in effect and has not been revoked;

(3) Evidence that, as of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies;

(4) An estimate of the number of jobs that will be created or retained in this state as a result of the applicant’s qualified investments;

(5) A business plan that includes a strategy for reaching out to and investing in minority business enterprises and a revenue impact assessment projecting state and local tax revenue to be generated by the applicant’s proposed qualified investment prepared by a nationally recognized, third-party, independent economic forecasting firm using a dynamic economic forecasting model that analyzes the applicant’s business plan over the ten (10) years following the date the application is submitted to the corporation; and

(6) A nonrefundable application fee of five thousand dollars ($5,000), payable to the corporation.

(b) Within thirty (30) days after receipt of a completed application, the corporation shall grant or deny the application in full or in part. The corporation shall deny the application if:

(1) The applicant does not satisfy all of the criteria described in subsection (a) of this section;

(2) The revenue impact assessment submitted with the application does not demonstrate that the applicant’s business plan will result in a positive economic impact on this state over a ten-year (10) period that exceeds the cumulative amount of tax credits that would be issued to the applicant if the application were approved; or

(3) The corporation has already approved the maximum amount of capital investment authority under subsection (g) of this section.

(c) If the corporation denies any part of the application, it shall inform the applicant of the grounds for the denial. If the applicant provides any additional information required by the corporation or otherwise completes its application within fifteen (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 provide the information or fails to complete its application within the fifteen-day (15) period, the application remains denied and must be resubmitted in full with a new submission date.

(d) If the application is deemed to be complete and the applicant deemed to meet all of the requirements of subsections (a) and (b), the corporation shall certify the proposed equity or debt investment as a capital investment that is eligible for credits under this chapter, subject to the limitations contained in subsection (g) of this section. The corporation shall provide written notice of the certification to the small business development fund.

(e) The corporation shall certify capital investments in the order that the applications were received by the corporation. Applications received on the same day shall be deemed to have been received simultaneously.

(f) For applications that are complete and received on the same day, the corporation shall certify applications in proportionate percentages based upon the ratio of the amount of capital investments requested in an application to the total amount of capital investments requested in all applications.

(g) The corporation shall certify forty million dollars ($40,000,000) in capital investments pursuant to this section; provided that not more than twenty million dollars ($20,000,000) may be allocated to any individual small business development fund certified under this section.

(h) Within sixty (60) days of the applicant receiving notice of certification, the small business development fund shall issue the capital investment to and receive cash in the amount of the certified amount from a small business fund investor. At least forty-five percent (45%) of the small business fund investor’s capital investment shall be composed of capital raised by the small business fund investor from sources, including directors, members, employees, officers, and affiliates of the small business fund investor, other than the amount of capital invested by the allocatee claiming the tax credits in exchange for the allocation of tax credits; provided that at least ten percent (10%) of the capital investment shall be derived from the small business investment fund’s managers. The small business development fund shall provide the corporation with evidence of the receipt of the cash investment within sixty-five (65) days of the applicant receiving notice of certification. If the small business development fund does not receive the cash investment and issue the capital investment within the time period following receipt of the certification notice, the certification shall lapse and the small business development fund shall not issue the capital investment without reapplying to the corporation for certification. Lapsed certifications revert to the authority and shall be reissued pro rata to applicants whose capital investment allocations were reduced pursuant to this chapter and then in accordance with the application process.