Amends TCA Title 56 and Title 67.

This bill creates certain insurance premium tax credits for a person or entity that makes a qualified equity investment, as follows: (1) On each credit allowance date of the qualified equity investment, the purchaser of the qualified equity investment, or subsequent holder of the qualified equity investment, is entitled to a tax credit during the taxable year including that credit allowance date. "Credit allowance date" means, with respect to any qualified equity investment: the date on which the investment is initially made; and each of the six anniversary dates of that date thereafter; (2) The tax credit amount is equal to the applicable percentage for such credit allowance date multiplied by the purchase price paid to the qualified community development entity for the qualified equity investment. "Applicable percentage" means 0 percent for each of the first two credit allowance dates and 10 percent for the next five credit allowance dates; and (3) The amount of the tax credit claimed must not exceed the amount of the state tax liability of the holder, or the person or entity to whom the tax credit is allocated for use, for the tax year for which the tax credit is claimed. The state tax liability for purposes of this bill is the liability for insurance-related taxes, such as the tax on gross premiums, the "retaliatory tax, and other related taxes. For purposes of the credit described above, a "qualified equity investment" means any equity investment in a qualified community development entity that is: acquired after the effective date of this bill at its original issuance solely in exchange for cash; has at least 100 percent of the cash purchase price used by the qualified community development entity to make qualified low-income community investments in qualified active low-income community businesses that have their principal business operations in this state, either directly or indirectly through a federal qualified community development entity; is designated by the qualified community development entity as a qualified equity investment under this bill and is designated by the qualified community development entity as a qualified equity investment under federal law regarding new markets tax credits or the qualified community development entity makes such designation in accordance this bill; and is certified by the department of revenue as not exceeding the limitation contained in this bill (discussed below in item (ii)); and includes any qualified equity investment that does not meet the criteria of "acquired after the effective date of this bill at its original issuance solely in exchange for cash," if the investment was a qualified equity investment in the hands of a prior holder. This bill provides the following in regard to the tax: (A) A taxpayer will not pay any additional retaliatory tax related to utilization of a tax credit; (B) A tax credit claimed under this bill is not refundable or saleable on the open market; (C) Tax credits earned by or allocated to a partnership, limited liability company, or S corporation may be allocated to the partners, members, or shareholders of that entity for their direct use in accordance with the provisions of any agreement among the partners, members, or shareholders. Such allocation will not be considered as a sale for any purpose under state law; and (D) Any amount of tax credit that the taxpayer, or a partner, member, or shareholder of a partnership, limited liability company, or S corporation, respectively, is prohibited from claiming in a taxable year may be carried forward for use in a taxpayer's subsequent taxable years. This bill sets out in detail provisions governing the following: (i) Applying for the credit, including information that must be included on the application. The required information includes a description of the proposed amount, structure, and purchaser of the equity investment; (ii) The process for the department certifying qualified equity investments. This bill provides that once the department has certified qualified equity investments of an amount that would allow a maximum of $20 million of tax credits in any given tax year, exclusive of tax credits carried forward, the department will not certify any additional qualified equity investments. If a pending request cannot be fully certified, the department will certify the portion that may be certified unless the qualified community development entity elects to withdraw its request rather than receive a partial award of qualified equity investment authority. After receiving notice of certification, the applicant must: issue qualified equity investments in an amount equal to the total amount of certified qualified equity investment authority; receive cash in the amount of the certified qualified equity investment; and designate all of such qualified equity investment authority as a qualified equity investment under federal law, or complete a federal match structure with respect to the proceeds of such qualified equity investment. If the qualified community development entity does not comply with these requirements, the certification will lapse. A certification that lapses reverts back to the department and must first be awarded pro rata to applicants that received awards of qualified equity investment authority and were compliant with these requirements; (iii) The process and basis for the department recapturing tax credits. This bill specifies circumstances under which credits must be forfeited; (iv) Matching federal designations of qualified equity investments; (v) The authority for the department to conduct examinations to verify that the tax credits have been received and applied according to the requirements of this bill; and (vi) Annual reports due from each qualified community development entity. Information to be contain in the report includes the name and address of each qualified active low-income community business funded by the qualified community development entity, the number of persons employed by such business at the time of the initial qualified low-income community investment, and a brief description of the business and the financing. A "qualified low-income community investment" under this bill is any capital or equity investment in, or loan to, any qualified active low-income community business; provided, that with respect to any one qualified active low-income community business, the maximum amount of qualified low-income community investments made in that business, on a collective basis with all of its affiliates that may be considered for purposes of meeting this bill's criteria is $10 million, whether made by one or several qualified community development entities; For purposes of promulgating rules and creating forms and applications, this bill will take effect upon becoming a law. For all other purposes, this bill will take effect January 1, 2022.