Section 457-307-4 - Issuance of CertificatesThe Chief Executive Officer shall administer the program and may issue certificates upon a determination that the requirements of this rule are met, subject to the following limitations:
A. Subject to Section 3- A(F), a certificate may be issued in an amount not more than 30% of the amount of cash actually invested in the business or fund for any investment made in a business prior to July 1, 2000; not more than 40% for investments made after July 1, 2000 (August 11, 2000 for investments in funds) but prior to July 1, 2002; not more than 60% of the amount of cash actually invested after July 1, 2002 but before January 1, 2012 in a business located in an high unemployment area; not more than 40% of the amount of cash actually invested after July 1, 2002 but before January 1, 2012 in all other businesses; not more than 60% for all investments in eligible businesses (including investments made through flow-through entities, but not including investments via a private venture capital fund) on or after January 1, 2012 but before January 1, 2014; not more than 50% for all investments in eligible businesses via a private venture capital fund on or after January 1, 2012 but before April 1, 2020; not more than 50% for all investments made by investors other than private venture capital fund on or after January 1, 2014 but before April 1, 2020; and not more than 40% for all investments made on or after April 1, 2020.B. An investor may apply for a tax credit for an investment of no more than an aggregate of $500,000 in any one business (whether directly or via a flow-through entity, fund or private venture capital fund) in any consecutive three (3) - year period, provided that the investor may invest more than $500,000 in the business or fund in any consecutive three (3) - year period, but shall not be entitled to a certificate with respect to any investment in excess of an aggregate of $500,000 in such period. A private venture capital fund applying for a tax credit shall be limited to a $500,000 maximum total investment per company in any consecutive three (3) - year period, unless it certifies that it is a flow-through entity (as defined in section 1(E-2) of this rule, but without giving effect to the last sentence of such section), that the aggregate investment of such private venture capital fund when divided by the number of members, partners, stockholders, equity owners or beneficiaries, results in a number which is $500,000 or less, that no such parties shall be distributed credits or the benefits of credits attributable to more than $500,000 per company, and that no more than $3,500,000 of investments made in any eligible company by a private venture capital fund shall be entitled to credits. No investor is entitled to a certificate for an investment already made in any business or fund prior to the date an application or notice that an application is being prepared is received by the Authority.C. Certificates issued with respect to investments in any one business may not exceed an aggregate of $3,500,000 in investment(s), regardless of whether said investments are made directly or via a fund, flow-through entity or Private Venture Capital Fund. Certificates issued with respect to investments in any one business may not exceed $2,000,000 in investment for any calendar year.D. Except as provided below for applications attributable to certain 2014 and 2015 investments made by certain funds, applications will be processed in the order received. The Authority will not issue certificates aggregating more than the amount of tax credit certificates authorized by applicable law. Applications received on the same day shall, if approved, be awarded credits on a pro rata basis if there are insufficient credits remaining available to award the full amount requested to all approved applications received on such day. Beginning on January 1, 2014, only investments made in a calendar year are eligible for credits authorized for such year, provided however, for credits authorized for calendar year 2014, only investments made on or after the effective date of PL 2013 Ch.438 (the "2014 Effective Date"), but on or before December 31, 2014 shall be eligible for credits for such year, unless such investments are made by a fund that received a partial Program credit under Section 3- A(F) prior to January 1, 2014 ("Grandfathered Funds"), in which case the investment can be made at any time during calendar year 2014. For credits authorized for calendar year 2014 and calendar year 2015, Grandfathered Funds shall have priority for the remainder of their Program credit over all other applications for credits for such year. $310,000 of credits authorized for 2014 shall be reserved for Grandfathered Funds by the Authority, with the reserved amounts being available first to Grandfathered Funds that meet all the requirements of this Rule, and who provide proof of required investments to the Authority within 30 days of the investment. The reserved amount for 2014 shall be reduced by any credits awarded to such Grandfathered Funds on or after January 1, 2014, and absent proof of eligible 2014 investments by such Grandfathered Funds by January 31, 2015, any remainder of the 2014 reservation shall lapse and be available for other eligible 2014 investments, to be awarded on a first-come, first-served basis, provided however, no applications for 2014 credits will be accepted by the Authority other than those of Grandfathered Funds, prior to the 2014 Effective Date. The Authority shall reserve the lesser of (a) $310,000 less the amount of credits awarded to Grandfathered Funds for 2014, or (b) $235,000, for credits authorized for 2015 with the reserved amounts being available first to Grandfathered Funds that meet all the requirements of this Rule, and who provide proof of required investments to the Authority within 30 days of the investment. The reserved amount for 2015 shall be reduced by any credits awarded to such Grandfathered Funds for investments made on or after January 1, 2015, and absent proof of eligible 2015 investments by such Grandfathered Funds by March 31, 2015, any remainder of the 2015 reservation shall lapse and be available for other eligible 2015 investments, to be awarded on a first come first served basis. For investors other than Grandfathered Funds, the Authority will accept applications for 2015 tax credits in calendar year 2014 (but following the Effective Date), and will reserve up to $1,000,000 in 2015 tax credits for investments that meet the following criteria:
(a) the investment is made in the form of a convertible loan (convertible to equity) funded in 2014; (b) the loan is converted to an eligible equity investment on or after January 1, 2015, and on or before January 31, 2015;(c) proof of the conversion is provided to the Authority on or before February 28, 2015. Completed applications for this specific reservation of 2015 credits will be accepted on a first-come, first-served basis, but will not be deemed complete and will not be considered eligible for a reservation until proof of funding of the convertible loan is provided to the Authority. Any 2015 credits so reserved, but not awarded to investors meeting the requirements of this paragraph shall lapse, and be available to other 2015 investments on a first-come, first-served basis.E. In no event shall issuance of a certificate be deemed to be an endorsement of the business, flow-through entity or fund receiving the investment or the prudence of the investment, nor shall the Authority be responsible to investors for any losses on such investments. The Authority is not obligated to review the financial or business prospects of any business, flow-through entity or fund or to review or approve any materials used by the business, flow-through entity or fund to solicit investment.F. With respect to certificates issued on account of investments made by flow-through entities where certificates are requested in the names of the individual owners of the entity and not the name of the flow-through entity, the entity must designate the taxpayer to receive the credit(s) and demonstrate that one of the following is true: (i) the percentage of credits issued or to be issued to such taxpayer, out of the total credits issued on account of the flow-through entity's investment for which the credit is sought, is equal to or less than such taxpayers percentage ownership or rights in the flow-through entity; or(ii) such taxpayer directly contributed to the flow-through entity, for the purpose of making the eligible investment, an amount which would have entitled such taxpayer to receive the credit had such contribution been used as an investment directly in the eligible business. Where separate certificates are issued for one investment in an eligible business via a flow-through entity, each request for a certificate shall be made with a separate application and shall be accompanied by the applicable application fee.94-457 C.M.R. ch. 307, § 4