§ 105‑129.13. (SeeEditor's note for repeal) Credit for development zone projects.
(a) Credit. Ataxpayer who contributes cash or property to a development zone agency for animprovement project in a development zone is allowed a credit equal to twenty‑fivepercent (25%) of the value of the contribution. A contribution is for animprovement project for the purposes of this section if the agency receivingthe contribution contracts in writing to use the contribution for the projectand agrees in the contract to repay to the taxpayer, with interest, any part ofthe contribution not used for the project. The credit may not be taken for theyear in which the contribution is made but must be taken for the taxable yearbeginning during the calendar year in which the application for the creditbecomes effective as provided in this section.
(b) Definitions. Thefollowing definitions apply in this section:
(1) Communitydevelopment corporation. A nonprofit corporation that meets all of thefollowing conditions:
a. It is charteredpursuant to Chapter 55A of the General Statutes and is tax‑exemptpursuant to section 501(c)(3) of the Code.
b. Its primary missionis to develop and improve low‑income communities and neighborhoodsthrough economic and related development.
c. Its activities anddecisions are initiated, managed, and controlled by the constituents of thoselocal communities.
d. Its primary functionis to act as deal maker and packager of projects and activities that willincrease its constituency's opportunities to become owners, managers, andproducers of small businesses, to obtain affordable housing, and to obtain jobsdesigned to produce positive cash flow and curb blight in the targetedcommunity.
(2) Communitydevelopment purpose. A purpose for which a city is authorized to expend fundsunder G.S. 160A‑456, 160A‑457, and 160A‑457.2.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Development zoneagency. Any of the following agencies that the Department of Commercecertifies will undertake an improvement project in a development zone:
a. A community‑baseddevelopment organization qualified under 24 C.F.R. § 570.204 to receivecommunity development block grant funds under the Housing and CommunityDevelopment Act of 1974, as amended, 42 U.S.C. § 5301, et seq., to carry out aneighborhood revitalization project, a community economic development project,or an energy conservation project.
b. A community actionagency that has been officially designated as such pursuant to section 210 ofthe Economic Opportunity Act of 1964, Public Law 88‑452, 78 Stat. 508 andwhich has not lost its designation as a result of a failure to comply with theprovisions of that act.
c. A communitydevelopment corporation.
d. A communitydevelopment financial institution certified by the United States Department ofthe Treasury under the Community Development Banking and Financial InstitutionsAct of 1994, 12 U.S.C. § 4701, et seq.
e. A community housingdevelopment organization qualified under the HOME Investment Partnerships Act,42 U.S.C. §§ 12701, 12704, and 24 C.F.R. § 92.2.
f. A local housingauthority created under Article 1 of Chapter 157 of the General Statutes.
(5) Improvement project. A project to construct or improve real property for community developmentpurposes or to acquire real property and convert it for community developmentpurposes. Construction or improvement includes services provided by adevelopment zone agency directly related to the construction or improvement,and project development fees charged by a developer for the construction orimprovement.
(c) Certification. Before certifying that a development zone agency will undertake an improvementproject in a development zone, the Secretary of Commerce must require theagency to provide sufficient documentation to establish the identity of theagency, the nature of the project, and that the project is for a communitydevelopment purpose and is located in a development zone. The Secretary ofCommerce shall not certify a development zone agency under this section if theagency, any of the agency's officers or directors, or any partner of the agencyhas ever used any part of a contribution made under this section for anypurpose other than an improvement project.
(d) Limitations. Ataxpayer who claims a credit under this subsection must identify in theapplication the development zone agencies to which the taxpayer madecontributions and the amount contributed to each. No credit is allowed for acontribution if the taxpayer has one of the relationships defined in section267(b) of the Code with the development zone agency or if the taxpayercontrols, is controlled by, or is under common control with an affiliate of thedevelopment zone agency. No credit is allowed to the extent the taxpayerreceives anything of value in exchange for the contribution.
(e) Application. Tobe eligible for the tax credit provided in this section, the taxpayer must filean application for the credit with the Secretary of Revenue on or before April15 of the year following the calendar year in which the contribution was made.The Secretary may grant extensions of this deadline, as the Secretary findsappropriate, upon the request of the taxpayer, except that the application maynot be filed after September 15 of the year following the calendar year inwhich the contribution was made. An application is effective for the year inwhich it is timely filed. The application must be on a form prescribed by theSecretary and must include any supporting documentation that the Secretary mayrequire. If a contribution for which a credit is applied for was of propertyrather than cash, the taxpayer must include with the application a certifiedappraisal of the value of the property contributed. There is no fee for anapplication under this section.
(f) Ceiling. Thetotal amount of all tax credits allowed to taxpayers under this section forcontributions made in a calendar year may not exceed four million dollars($4,000,000). The Secretary of Revenue must calculate the total amount of tax creditsclaimed from the applications filed under this section. If the total amount oftax credits claimed for contributions made in a calendar year exceeds fourmillion dollars ($4,000,000), the Secretary must allow a portion of the creditsclaimed by allocating a total of four million dollars ($4,000,000) in taxcredits in proportion to the size of the credit claimed by each taxpayer. If acredit is reduced pursuant to this subsection, the Secretary must notify thetaxpayer of the amount of the reduction of the credit on or before December 31of the year the application was filed. The Secretary's allocations based onapplications filed pursuant to this section are final and will not be adjustedto account for credits applied for but not claimed.
(g) Forfeiture. Ataxpayer forfeits a credit allowed under this section to the extent thedevelopment zone agency uses the taxpayer's contribution for any purpose otherthan an improvement project. Each development zone agency certified by theDepartment of Commerce must file with the Department of Commerce annualfinancial statements audited in accordance with generally accepted accountingprinciples and in accordance with Government Audit Standards developed by theComptroller General of the United States. The annual statements are requiredeach time the agency receives a contribution eligible for the credit allowedunder this section until the entire contribution has been used for improvementprojects. If the Department of Commerce determines that a development zoneagency has used part or all of a contribution for any purpose other than animprovement project, the Department must notify the Secretary of Revenue of theforfeiture, the taxpayer who made the contribution, and the amount forfeited. (1999‑360, ss. 1, 2;2000‑56, s. 1(b); 2001‑414, s. 9; 2001‑476, s. 14(a).)
§ 105‑129.13. (SeeEditor's note for repeal) Credit for development zone projects.
(a) Credit. Ataxpayer who contributes cash or property to a development zone agency for animprovement project in a development zone is allowed a credit equal to twenty‑fivepercent (25%) of the value of the contribution. A contribution is for animprovement project for the purposes of this section if the agency receivingthe contribution contracts in writing to use the contribution for the projectand agrees in the contract to repay to the taxpayer, with interest, any part ofthe contribution not used for the project. The credit may not be taken for theyear in which the contribution is made but must be taken for the taxable yearbeginning during the calendar year in which the application for the creditbecomes effective as provided in this section.
(b) Definitions. Thefollowing definitions apply in this section:
(1) Communitydevelopment corporation. A nonprofit corporation that meets all of thefollowing conditions:
a. It is charteredpursuant to Chapter 55A of the General Statutes and is tax‑exemptpursuant to section 501(c)(3) of the Code.
b. Its primary missionis to develop and improve low‑income communities and neighborhoodsthrough economic and related development.
c. Its activities anddecisions are initiated, managed, and controlled by the constituents of thoselocal communities.
d. Its primary functionis to act as deal maker and packager of projects and activities that willincrease its constituency's opportunities to become owners, managers, andproducers of small businesses, to obtain affordable housing, and to obtain jobsdesigned to produce positive cash flow and curb blight in the targetedcommunity.
(2) Communitydevelopment purpose. A purpose for which a city is authorized to expend fundsunder G.S. 160A‑456, 160A‑457, and 160A‑457.2.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Development zoneagency. Any of the following agencies that the Department of Commercecertifies will undertake an improvement project in a development zone:
a. A community‑baseddevelopment organization qualified under 24 C.F.R. § 570.204 to receivecommunity development block grant funds under the Housing and CommunityDevelopment Act of 1974, as amended, 42 U.S.C. § 5301, et seq., to carry out aneighborhood revitalization project, a community economic development project,or an energy conservation project.
b. A community actionagency that has been officially designated as such pursuant to section 210 ofthe Economic Opportunity Act of 1964, Public Law 88‑452, 78 Stat. 508 andwhich has not lost its designation as a result of a failure to comply with theprovisions of that act.
c. A communitydevelopment corporation.
d. A communitydevelopment financial institution certified by the United States Department ofthe Treasury under the Community Development Banking and Financial InstitutionsAct of 1994, 12 U.S.C. § 4701, et seq.
e. A community housingdevelopment organization qualified under the HOME Investment Partnerships Act,42 U.S.C. §§ 12701, 12704, and 24 C.F.R. § 92.2.
f. A local housingauthority created under Article 1 of Chapter 157 of the General Statutes.
(5) Improvement project. A project to construct or improve real property for community developmentpurposes or to acquire real property and convert it for community developmentpurposes. Construction or improvement includes services provided by adevelopment zone agency directly related to the construction or improvement,and project development fees charged by a developer for the construction orimprovement.
(c) Certification. Before certifying that a development zone agency will undertake an improvementproject in a development zone, the Secretary of Commerce must require theagency to provide sufficient documentation to establish the identity of theagency, the nature of the project, and that the project is for a communitydevelopment purpose and is located in a development zone. The Secretary ofCommerce shall not certify a development zone agency under this section if theagency, any of the agency's officers or directors, or any partner of the agencyhas ever used any part of a contribution made under this section for anypurpose other than an improvement project.
(d) Limitations. Ataxpayer who claims a credit under this subsection must identify in theapplication the development zone agencies to which the taxpayer madecontributions and the amount contributed to each. No credit is allowed for acontribution if the taxpayer has one of the relationships defined in section267(b) of the Code with the development zone agency or if the taxpayercontrols, is controlled by, or is under common control with an affiliate of thedevelopment zone agency. No credit is allowed to the extent the taxpayerreceives anything of value in exchange for the contribution.
(e) Application. Tobe eligible for the tax credit provided in this section, the taxpayer must filean application for the credit with the Secretary of Revenue on or before April15 of the year following the calendar year in which the contribution was made.The Secretary may grant extensions of this deadline, as the Secretary findsappropriate, upon the request of the taxpayer, except that the application maynot be filed after September 15 of the year following the calendar year inwhich the contribution was made. An application is effective for the year inwhich it is timely filed. The application must be on a form prescribed by theSecretary and must include any supporting documentation that the Secretary mayrequire. If a contribution for which a credit is applied for was of propertyrather than cash, the taxpayer must include with the application a certifiedappraisal of the value of the property contributed. There is no fee for anapplication under this section.
(f) Ceiling. Thetotal amount of all tax credits allowed to taxpayers under this section forcontributions made in a calendar year may not exceed four million dollars($4,000,000). The Secretary of Revenue must calculate the total amount of tax creditsclaimed from the applications filed under this section. If the total amount oftax credits claimed for contributions made in a calendar year exceeds fourmillion dollars ($4,000,000), the Secretary must allow a portion of the creditsclaimed by allocating a total of four million dollars ($4,000,000) in taxcredits in proportion to the size of the credit claimed by each taxpayer. If acredit is reduced pursuant to this subsection, the Secretary must notify thetaxpayer of the amount of the reduction of the credit on or before December 31of the year the application was filed. The Secretary's allocations based onapplications filed pursuant to this section are final and will not be adjustedto account for credits applied for but not claimed.
(g) Forfeiture. Ataxpayer forfeits a credit allowed under this section to the extent thedevelopment zone agency uses the taxpayer's contribution for any purpose otherthan an improvement project. Each development zone agency certified by theDepartment of Commerce must file with the Department of Commerce annualfinancial statements audited in accordance with generally accepted accountingprinciples and in accordance with Government Audit Standards developed by theComptroller General of the United States. The annual statements are requiredeach time the agency receives a contribution eligible for the credit allowedunder this section until the entire contribution has been used for improvementprojects. If the Department of Commerce determines that a development zoneagency has used part or all of a contribution for any purpose other than animprovement project, the Department must notify the Secretary of Revenue of theforfeiture, the taxpayer who made the contribution, and the amount forfeited. (1999‑360, ss. 1, 2;2000‑56, s. 1(b); 2001‑414, s. 9; 2001‑476, s. 14(a).)
§ 105‑129.13. (SeeEditor's note for repeal) Credit for development zone projects.
(a) Credit. Ataxpayer who contributes cash or property to a development zone agency for animprovement project in a development zone is allowed a credit equal to twenty‑fivepercent (25%) of the value of the contribution. A contribution is for animprovement project for the purposes of this section if the agency receivingthe contribution contracts in writing to use the contribution for the projectand agrees in the contract to repay to the taxpayer, with interest, any part ofthe contribution not used for the project. The credit may not be taken for theyear in which the contribution is made but must be taken for the taxable yearbeginning during the calendar year in which the application for the creditbecomes effective as provided in this section.
(b) Definitions. Thefollowing definitions apply in this section:
(1) Communitydevelopment corporation. A nonprofit corporation that meets all of thefollowing conditions:
a. It is charteredpursuant to Chapter 55A of the General Statutes and is tax‑exemptpursuant to section 501(c)(3) of the Code.
b. Its primary missionis to develop and improve low‑income communities and neighborhoodsthrough economic and related development.
c. Its activities anddecisions are initiated, managed, and controlled by the constituents of thoselocal communities.
d. Its primary functionis to act as deal maker and packager of projects and activities that willincrease its constituency's opportunities to become owners, managers, andproducers of small businesses, to obtain affordable housing, and to obtain jobsdesigned to produce positive cash flow and curb blight in the targetedcommunity.
(2) Communitydevelopment purpose. A purpose for which a city is authorized to expend fundsunder G.S. 160A‑456, 160A‑457, and 160A‑457.2.
(3) Control. A personcontrols an entity if the person owns, directly or indirectly, more than tenpercent (10%) of the voting securities of that entity. As used in thissubdivision, the term "voting security" means a security that (i)confers upon the holder the right to vote for the election of members of theboard of directors or similar governing body of the business or (ii) isconvertible into, or entitles the holder to receive upon its exercise, asecurity that confers such a right to vote. A general partnership interest is avoting security.
(4) Development zoneagency. Any of the following agencies that the Department of Commercecertifies will undertake an improvement project in a development zone:
a. A community‑baseddevelopment organization qualified under 24 C.F.R. § 570.204 to receivecommunity development block grant funds under the Housing and CommunityDevelopment Act of 1974, as amended, 42 U.S.C. § 5301, et seq., to carry out aneighborhood revitalization project, a community economic development project,or an energy conservation project.
b. A community actionagency that has been officially designated as such pursuant to section 210 ofthe Economic Opportunity Act of 1964, Public Law 88‑452, 78 Stat. 508 andwhich has not lost its designation as a result of a failure to comply with theprovisions of that act.
c. A communitydevelopment corporation.
d. A communitydevelopment financial institution certified by the United States Department ofthe Treasury under the Community Development Banking and Financial InstitutionsAct of 1994, 12 U.S.C. § 4701, et seq.
e. A community housingdevelopment organization qualified under the HOME Investment Partnerships Act,42 U.S.C. §§ 12701, 12704, and 24 C.F.R. § 92.2.
f. A local housingauthority created under Article 1 of Chapter 157 of the General Statutes.
(5) Improvement project. A project to construct or improve real property for community developmentpurposes or to acquire real property and convert it for community developmentpurposes. Construction or improvement includes services provided by adevelopment zone agency directly related to the construction or improvement,and project development fees charged by a developer for the construction orimprovement.
(c) Certification. Before certifying that a development zone agency will undertake an improvementproject in a development zone, the Secretary of Commerce must require theagency to provide sufficient documentation to establish the identity of theagency, the nature of the project, and that the project is for a communitydevelopment purpose and is located in a development zone. The Secretary ofCommerce shall not certify a development zone agency under this section if theagency, any of the agency's officers or directors, or any partner of the agencyhas ever used any part of a contribution made under this section for anypurpose other than an improvement project.
(d) Limitations. Ataxpayer who claims a credit under this subsection must identify in theapplication the development zone agencies to which the taxpayer madecontributions and the amount contributed to each. No credit is allowed for acontribution if the taxpayer has one of the relationships defined in section267(b) of the Code with the development zone agency or if the taxpayercontrols, is controlled by, or is under common control with an affiliate of thedevelopment zone agency. No credit is allowed to the extent the taxpayerreceives anything of value in exchange for the contribution.
(e) Application. Tobe eligible for the tax credit provided in this section, the taxpayer must filean application for the credit with the Secretary of Revenue on or before April15 of the year following the calendar year in which the contribution was made.The Secretary may grant extensions of this deadline, as the Secretary findsappropriate, upon the request of the taxpayer, except that the application maynot be filed after September 15 of the year following the calendar year inwhich the contribution was made. An application is effective for the year inwhich it is timely filed. The application must be on a form prescribed by theSecretary and must include any supporting documentation that the Secretary mayrequire. If a contribution for which a credit is applied for was of propertyrather than cash, the taxpayer must include with the application a certifiedappraisal of the value of the property contributed. There is no fee for anapplication under this section.
(f) Ceiling. Thetotal amount of all tax credits allowed to taxpayers under this section forcontributions made in a calendar year may not exceed four million dollars($4,000,000). The Secretary of Revenue must calculate the total amount of tax creditsclaimed from the applications filed under this section. If the total amount oftax credits claimed for contributions made in a calendar year exceeds fourmillion dollars ($4,000,000), the Secretary must allow a portion of the creditsclaimed by allocating a total of four million dollars ($4,000,000) in taxcredits in proportion to the size of the credit claimed by each taxpayer. If acredit is reduced pursuant to this subsection, the Secretary must notify thetaxpayer of the amount of the reduction of the credit on or before December 31of the year the application was filed. The Secretary's allocations based onapplications filed pursuant to this section are final and will not be adjustedto account for credits applied for but not claimed.
(g) Forfeiture. Ataxpayer forfeits a credit allowed under this section to the extent thedevelopment zone agency uses the taxpayer's contribution for any purpose otherthan an improvement project. Each development zone agency certified by theDepartment of Commerce must file with the Department of Commerce annualfinancial statements audited in accordance with generally accepted accountingprinciples and in accordance with Government Audit Standards developed by theComptroller General of the United States. The annual statements are requiredeach time the agency receives a contribution eligible for the credit allowedunder this section until the entire contribution has been used for improvementprojects. If the Department of Commerce determines that a development zoneagency has used part or all of a contribution for any purpose other than animprovement project, the Department must notify the Secretary of Revenue of theforfeiture, the taxpayer who made the contribution, and the amount forfeited. (1999‑360, ss. 1, 2;2000‑56, s. 1(b); 2001‑414, s. 9; 2001‑476, s. 14(a).)
