DEPARTMENT OF ECONOMIC OPPORTUNITY
Division of Community Development
Final Order No. DEO-16-136
STATE OF FLORIDA
DEPARTMENT OF ECONOMIC OPPORTUNITY
______________________________________________________________________________
FINAL ORDER
DIRECTING RECAPTURE OF TAX CREDITS
UNDER THE NEW MARKETS DEVELOPMENT PROGRAM
The Department of Economic Opportunity (“DEO”) hereby issues its Final Order, pursuant to section 288.9920, Florida Statutes (F.S.), recapturing tax credits previously authorized under section 288.9914, F.S.
FINDINGS OF FACT
1. On February 12, 2013, the Community Development Financial Institutions Fund of the United States Department of the Treasury (“CDFI Fund”) issued a notice of certification to CCG Community Partners, LLC (“CCG”) informing CCG that CCG and its subsidiaries were certified as Community Development Entities (“CDE”).
2. On August 1, 2014, DEO issued a final order (“Initial Final Order”) approving CCG’s proposed investment amount of $6,417,094 as a qualified investment under the Florida New Markets Development Program (“FLNMDP”). Based on the qualified investment, DEO approved up to $2,502,666 in credits against taxes under section 220.11, F.S., or section 624.509, F.S. In the Initial Final Order, CCG was designated as the entity eligible to claim the tax credits. The Initial Final Order was sent to CCG and the Florida Department of Revenue (“DOR”).
3. Pursuant to the requirements of the FLNMDP, CCG was required to issue the qualified investment within 60 days of receipt of the Initial Final Order, and provide DEO with evidence of cash given in exchange for the qualified investment within 30 business days after receipt of the Initial Final Order. CCG was also required to invest at least 85 percent of the purchase price of the qualified investment within 12 months of issuance of the qualified investment.
4. On September 15, 2014, CCG sought a modification to the Initial Final Order. CCG requested a transfer of 100 percent of CCG’s qualified investment authority under the FLNMDP to one of its subsidiaries, CCG Sub-CDE 32, LLC. CCG also proposed to change the taxpayer eligible to claim the tax credits to USBCDC Investment Fund 89, LLC, an equity investment fund.
5. On September 18, 2014, DEO issued two letters in response to CCG’s September 15 request. One letter approved the transfer of qualified investment authority to CCG Sub-CDE 32, LLC. The other letter approved the designation of USBCDC Investment Fund 89, LLC as the taxpayer eligible to claim the tax credits. These letters were sent to CCG and DOR.
6. On September 25, 2014, CCG issued a qualified investment in the amount of $6,417,094.
7. On September 15, 2015, CCG notified DEO that CCG would not be able to invest at least 85 percent of the purchase price of the qualified investment within the initial 12 month period after the credit allowance date. CCG requested that DEO give CCG an opportunity to cure to allow CCG to invest at least 85 percent of the purchase price of the qualified investment.
8. On September 22, 2015, DEO issued a notice and opportunity to cure, which gave CCG an additional six months to invest at least 85 percent of the purchase price of the qualified investment. The six month period began on September 25, 2015, which was the twelve month anniversary date that CCG issued the qualified investment. The notice was sent to CCG and DOR.
9. The six month opportunity to cure period expired on March 25, 2016.
10. CCG failed to successfully invest at least 85 percent of the purchase price in one or more qualified low-income community investments before the expiration of the six month cure period.
CONCLUSIONS OF LAW
1. Subparagraph 288.9920(1)(c)1, F.S., provides that DEO shall direct DOR to recapture all or a portion of a tax credit authorized pursuant to the FLNMDP if the CDE fails to invest at least 85 percent of the purchase price in one or more qualified low-income community investments within 12 months after the issuance of a qualified investment.
2. Paragraph 288.9920(2), F.S., provides that DEO shall give notice to the CDE and DOR of a proposed recapture of a tax credit.
3. Paragraph 288.9920(2), F.S., provides that the CDE shall have six months following the receipt of the notice to cure the deficiency identified in the notice and avoid recapture.
4. Paragraph 288.9920(2), F.S., provides that if the entity fails to cure the deficiency within the six month period, then DEO shall issue a final order of recapture, and that order shall be provided to the CDE, DOR, and the taxpayer authorized to claim the tax credit.
5. CCG, through its properly designated subsidiary CCG Sub-CDE 32, failed to invest at least 85 percent of the purchase price of a qualified low income community investment within 12 months after issuance of the qualified investment, as required by subparagraph 288.9920(1)(c)1, F.S. CCG was given notice and a six month opportunity to cure, which began on September 25, 2015 and expired on March 25, 2016. CCG failed to cure the deficiency identified in the notice within the six month period.
WHEREFORE, IT IS ORDERED that DOR recapture the $2,502,666 in tax credits previously authorized by DEO.
This Order becomes effective 21 days after publication in the Florida Administrative Register unless a petition is timely filed as described in the Notice of Administrative Rights below.
DONE AND ORDERED in Tallahassee, Florida.
/s/_______________________________
Taylor Teepell, Director
Division of Community Development
Department of Economic Opportunity
NOTICE of administrative rights
Any person whose substantial interests are affected by this order has the opportunity for an administrative proceeding pursuant to section 120.569, Florida statutes.
For the required contents of a petition challenging agency action, refer to Rules 28-106.104(2), 28-106.201(2), and 28-106.301, Florida Administrative Code.
Depending on whether or not material facts are disputed in the petition, a hearing will be conducted pursuant to either sections 120.569 and 120.57(1), Florida statutes, or Sections 120.569 and 120.57(2), Florida statutes.
Any petition must be filed with the agency clerk of the department of economic opportunity within 21 calendar days of the final order being published in the florida administrative register. A petition is filed when it is received by:
Agency Clerk
Department of Economic Opportunity
Office of the general Counsel
107 East Madison St., MSC 110
Tallahassee, Florida 32399-4128
Fax (850)921-3230
You waive the right to any administrative proceeding if you do not file a petition with the agency clerk within 21 calendar days of the final order being published in the florida administrative register.
CERTIFICATE OF FILING AND SERVICE
I HEREBY CERTIFY that the original of the foregoing Final Order has been filed with the undersigned designated Agency Clerk, and that true and correct copies have been furnished to the following persons by the methods indicated this 28th day of July, 2016.
/s/___________________________________
Agency Clerk
Department of Economic Opportunity
107 East Madison Street, MSC 110
Tallahassee, FL 32399-4128
By Certified U.S. Mail:
Mr. William F. Hoffman
CCG Community Partners, LLC
116 Village Blvd., Ste. 200
Princeton, NJ 08540-5700
Tracey Gunn Lowell
Vice President
Business Development Officer - New Markets & Historic Tax Credit Investments
U.S. Bancorp Community Development Corporation
1307 Washington Ave., Suite 300
St. Louis, MO 63103
Robert DuCasse, Revenue Program Administrator
Florida Department of Revenue
Technical Assistance and Dispute Resolution
P.O. Box 7443
Tallahassee, Florida 32314-7443
