Community Development - Maryland New Markets Development Program - Establishment

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0005*

HOUSE BILL 5
C9, Q7, C4 6lr1551
(PRE–FILED) CF 6lr0998
By: Delegates Fair and Patterson
Requested: October 31, 2025
Introduced and read first time: January 14, 2026
Assigned to: Economic Matters and Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Community Development – Maryland New Markets Development Program – 2
Establishment 3

FOR the purpose of establishing the Maryland New Markets Development Program; 4
requiring the Department of Housing and Community Development to administer 5
the Program; authorizing a credit against the State insurance premium receipts tax 6
and certain State insurance retaliatory taxes, fees, charges, and penalties for certain 7
equity investments in certain community development entities; authorizing the 8
Department to recapture a credit under certain circumstances; and generally 9
relating to the Maryland New Markets Development Program. 10

BY adding to 11
Article – Housing and Community Development 12
Section 4–3101 through 4–3111 to be under the new subtitle “Subtitle 31. Maryland 13
New Markets Development Program” 14
Annotated Code of Maryland 15
(2019 Replacement Volume and 2025 Supplement) 16

BY adding to 17
Article – Insurance 18
Section 6–123 and 6–306 19
Annotated Code of Maryland 20
(2017 Replacement Volume and 2025 Supplement) 21

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23

Article – Housing and Community Development 24

2 HOUSE BILL 5

SUBTITLE 31. MARYLAND NEW MARKETS DEVELOPMENT PROGRAM. 1

4–3101. 2

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4

(B) “MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY” MEANS A 5
QUALIFIED COMMUNITY DEVELOPMENT ENTITY HEADQUARTERED IN THE STATE OR 6
OWNED OR CONTROLLED BY A BUSINESS ENTITY HEADQUARTERED IN THE STATE 7
THAT: 8

(1) FORMED ON OR AFTER JULY 1, 2021; AND 9

(2) HAS NOT ENTERED INTO AN ALLOCATION AGREEMENT UNDER THE 10
FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 11

(C) “PRINCIPAL BUSINESS OPERATIONS” MEANS THE PLACE OR P LACES 12
WHERE: 13

(1) AT LEAST 60% OF A QUALIFIED ACTIVE LOW–INCOME COMMUNITY 14
BUSINESS’S EMPLOYEES WORK; OR 15

(2) EMPLOYEES WHO ARE PAID AT LEAST 60% OF A QUALIFIED ACTIVE 16
LOW–INCOME COMMUNITY BUSINESS’S PAYROLL WORK. 17

(D) “PROGRAM” MEANS THE MARYLAND NEW MARKETS DEVELOPMENT 18
PROGRAM. 19

(E) (1) “QUALIFIED ACTIVE LOW –INCOME COMMUNITY BUS INESS” 20
MEANS A BUSINESS ENTITY THAT: 21

(I) HAS ITS PRINCIPAL BU SINESS OPERATIONS IN THE STATE; 22
AND 23

(II) MEETS THE DEFINITION OF A QUALIF IED ACTIVE 24
LOW–INCOME COMMUNITY BUS INESS UNDER § 45D OF THE INTERNAL REVENUE 25
CODE. 26

(2) “QUALIFIED ACTIVE LOW–INCOME COMMUNITY BUSINESS” DOES 27
NOT INCLUDE: 28

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(I) A NONPROFIT ORGANIZA TION EXEMPT FROM TAX ATION 1
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE; OR 2

(II) A BUSINESS ENTITY TH AT DERIVES OR PROJEC TS TO 3
DERIVE AT LEAST 15% OF ANNUAL REVENUE FROM THE RENTAL OR SALE OF REAL 4
ESTATE, UNLESS THE BUSINESS ENTITY OWNS OR CONTR OLS A SUBSIDIARY 5
BUSINESS ENTITY THAT: 6

1. DERIVES OR PROJECTS TO DERIVE LESS THAN 15% OF 7
ANNUAL REVENUE FROM THE RENTAL OR SALE OF REAL ESTATE; AND 8

2. IS THE PRIMARY TENANT OF REAL ESTATE OWNED BY 9
THE PARENT ENTITY. 10

(F) “QUALIFIED COMMUNITY D EVELOPMENT ENTITY” MEANS A BUSINESS 11
ENTITY THAT HAS ENTE RED INTO AN ALLOCATI ON AGREEMENT UNDER THE 12
FEDERAL NEW MARKETS TAX CREDIT PROGRAM THAT INCLUDES THE STATE 13
WITHIN THE SERVICE AREA OF THE AGREEMENT. 14

(G) “QUALIFIED EQUITY INVESTMENT” MEANS AN EQUITY INVE STMENT IN 15
A QUALIFIED COMMUNITY DEVELOPMENT ENTITY THAT: 16

(1) (I) IS ORIGINALLY ISSUED AND ACQUIRED ON OR AFTER JULY 17
1, 2026, IN EXCHANGE FOR CASH; OR 18

(II) IS ORIGINALLY ISSUED AND ACQUIRED BEFORE JULY 1, 19
2026, IN EXCHANGE FOR CASH AND, ON OR AFTER JULY 1, 2026, IS TRANSFERRED 20
OR SOLD; 21

(2) THE QUALIFIED COMMUN ITY DEVELOPMENT ENTITY USES IN AN 22
AMOUNT EQUAL TO 100% OF THE CASH PURCHASE PRICE TO MAKE QUALIF IED 23
LOW–INCOME COMMUNITY INV ESTMENTS IN QUALIFIE D ACTIVE LOW –INCOME 24
COMMUNITY BUSINESSES; 25

(3) DOES NOT EXCEED DOUB LE THE QUALIFIED COM MUNITY 26
DEVELOPMENT ENTITY ’S EQUI TY INVESTMENT AUTHOR ITY UNDER THE FEDERA L 27
NEW MARKETS TAX CREDIT PROGRAM UNLESS THE QU ALIFIED COMMUNITY 28
DEVELOPMENT ENTITY I S A MARYLAND QUALIFIED CO MMUNITY DEVELOPMENT 29
ENTITY; 30

(4) IS DESIGNATED AS A QUALIFIED EQUITY INVESTMENT UNDER THE 31
FEDERAL NEW MARKETS TAX CREDIT PROGRAM BY THE QUALIF IED COMMUNITY 32
DEVELOPMENT ENTITY I N AN AMOUNT EQUAL TO AT LEAST 50% OF THE CASH 33
4 HOUSE BILL 5

PURCHASE PRICE UNLESS THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY IS A 1
MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY; 2

(5) IS DESIGNATED AS A QUALIFIED EQUIT Y INVESTMENT UNDER 3
THIS SUBTITLE BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY; AND 4

(6) IS JOINTLY CERTIFIED AS A QUALIFIED EQUIT Y INVESTMENT 5
UNDER THIS SUBTITLE BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY AND 6
THE DEPARTMENT. 7

(H) “QUALIFIED LOW –INCOME COMMUNITY INV ESTMENT” MEANS A 8
CAPITAL OR EQUITY INVESTMENT IN OR LOAN TO A QUALIFIED ACTIVE LOW–INCOME 9
COMMUNITY BUSINESS. 10

4–3102. 11

(A) THERE IS A MARYLAND NEW MARKETS DEVELOPMENT PROGRAM. 12

(B) THE DEPARTMENT SHALL ADMINISTER THE PROGRAM. 13

4–3103. 14

(A) A BUSINESS ENTITY THAT DOES NOT MEET THE RE QUIREMENTS TO BE 15
CONSIDERED A QUALIFI ED ACTIVE LOW –INCOME COMMUNITY BUS INESS UNDER 16
THIS SUBTITLE BECAUS E THE BUSINESS ENTIT Y’S PRINCIPAL BUSINESS 17
OPERATIONS ARE NOT I N THE STATE MAY BE CONSIDER ED A QUALIFIED ACTIV E 18
LOW–INCOME COMMUNITY BUS INESS UNDER THIS SUB TITLE IF THE BUSINES S 19
ENTITY AGREES TO: 20

(1) RELOCATE OR HIRE EMP LOYEES TO ESTABLISH PRINCIPAL 21
BUSINESS OPERATIONS IN THE STATE; 22

(2) USE THE PROCEEDS OF A QUALIFIED LOW –INCOME COMMUNITY 23
INVESTMENT TO HIRE OR RELOCATE THE EMPLOYEES; AND 24

(3) HIRE OR RELOCATE THE EMPLOYEES WITHIN 180 DAYS AFTER 25
RECEIVING THE QUALIFIED LOW–INCOME COMMUNITY INVESTMENT, OR ON A LATER 26
DATE AGREED TO BY THE DEPARTMENT. 27

(B) A BUSINESS ENTITY SHAL L BE CONSIDERED A QU ALIFIED ACT IVE 28
LOW–INCOME COMMUNITY BUS INESS UNDER THIS SUB TITLE IF THE QUALIFI ED 29
COMMUNITY DEVELOPMEN T ENTITY REASONABLY EXPECTS AT THE TIME OF AN 30
APPLICATION UNDER § 4–3105 OF THIS SUBTITLE THAT THE BUSINESS ENTITY WILL 31
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MEET THE DEFINITION OF A QUALIFIED ACTIV E LO W–INCOME COMMUNITY 1
BUSINESS FOR THE ENT IRE DURATION OF THE QUALIFIED LOW –INCOME 2
COMMUNITY INVESTMENT. 3

4–3104. 4

(A) A PERSON MAY CLAIM A CREDIT FOR A QUALIFIED EQUITY INVESTMENT 5
IN ACCORDANCE WITH T HIS SUBTITLE AGAINST ANY PREMIUM RECEIPTS TAX OR 6
INSURANCE RETALIATORY TAX, FEE, CHARGE, OR PENALTY IMPOSED BY THE STATE, 7
INCLUDING ANY TAX, FEE, CHARGE, OR PENALTY UNDER: 8

(1) § 3–324 OF THE INSURANCE ARTICLE; 9

(2) § 4–209 OF THE INSURANCE ARTICLE; 10

(3) § 4–211 OF THE INSURANCE ARTICLE; 11

(4) § 4–211.1 OF THE INSURANCE ARTICLE; 12

(5) § 6–102 OF THE INSURANCE ARTICLE; AND 13

(6) TITLE 6, SUBTITLE 3 OF THE INSURANCE ARTICLE. 14

(B) SUBJECT TO SUBSECTION (C) OF THIS SECTION, A PERSON MAY CLAIM 15
THE CREDIT ALLOWED UNDER THIS SECTION: 16

(1) FOR THE TAXABLE YEAR DURING WHICH THE QUALIFIED EQUITY 17
INVESTMENT IS MADE; AND 18

(2) FOR THE NEXT 6 TAXABLE YEARS. 19

(C) THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION EQUALS: 20

(1) FOR THE FIRST 3 TAXABLE YEARS UNDER SUBSECTION (B) OF THIS 21
SECTION, THE PURCHASE PR ICE PAID FOR THE QUA LIFIED EQUITY INVEST MENT 22
MULTIPLIED BY 0%; AND 23

(2) FOR THE FINAL 4 TAXABLE YEARS UNDER SUBSECTION (B) OF 24
THIS SECTION , THE PURCHASE PRICE P AID FOR THE QUALIFIE D EQUITY 25
INVESTMENT MULTIPLIED BY 12.5%. 26

6 HOUSE BILL 5

(D) THE MARYLAND INSURANCE ADMINISTRATION MAY NOT I MPOSE ANY 1
ADDITIONAL PREMIUM R ECEIPTS TAX OR INSUR ANCE RETALIATORY TAX , FEE, 2
CHARGE, OR PENALTY OR ANY OTHER TAX OR FEE ON A PERSON: 3

(1) IN ORDER FOR THE PERSON TO CLAIM A CREDIT ALLOWED UNDER 4
THIS SECTION; OR 5

(2) AS A RESULT OF CLAIMING A CREDIT AL LOWED UNDER THIS 6
SECTION. 7

(E) THE CREDIT ALLOWED UNDER THIS SECTION: 8

(1) (I) MAY NOT BE SOLD; BUT 9

(II) MAY BE TRANSFERRED T O AN AFFILIATED BUSI NESS 10
ENTITY; AND 11

(2) MAY BE ALLOCATED AMO NG THE PARTNERS , MEMBERS, OR 12
SHAREHOLDERS OF A BUSINESS ENTI TY IN ANY MANNER AGR EED TO BY THE 13
PARTNERS, MEMBERS, OR SHAREHOLDERS IN WRITING. 14

(F) IF THE CREDIT ALLOWED UNDER THIS SECTION IN ANY TAXABLE YEAR 15
EXCEEDS THE STATE PREMIUM RECEIPT S TAX OR INSURANCE R ETALIATORY TAX, 16
FEE, CHARGE, OR PEN ALTY OWED OR IS OTHE RWISE PROHIBITED FOR THAT 17
TAXABLE YEAR, ANY UNUSED CREDIT MAY BE CARRIED FORWARD AND APPLIED FOR 18
SUCCEEDING TAXABLE YEARS UNTIL THE EARLIER OF: 19

(1) THE DATE ON WHICH THE FULL AMOUNT OF THE CREDIT IS USED; 20
OR 21

(2) THE DATE OF THE EXPIRATION OF THE 5TH YEAR AFTER THE 22
TAXABLE YEAR FOR WHICH THE CREDIT WAS ALLOWED. 23

4–3105. 24

(A) TO DESIGNATE AN EQUIT Y INVESTMENT AS A QU ALIFIED EQUITY 25
INVESTMENT ELIGIBLE FOR A CREDIT UNDER THIS SUBTITLE AND OBTAIN A CREDIT 26
CERTIFICATE, A QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL SUBMIT AN 27
APPLICATION TO THE DEPARTMENT, USING A FORM ESTABLI SHED BY THE 28
DEPARTMENT, THAT INCLUDES: 29

(1) THE NAME, ADDRESS, AND TAX IDENTIFICATION NUMBER OF THE 30
APPLICANT; 31
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(2) THE FOLLOWING INFORM ATION IF THE APPLICA NT IS NOT A 1
MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY: 2

(I) EVIDENCE OF THE APPL ICANT’S CERTIFICATION AS A 3
QUALIFIED COMMUNITY DEVELOPMENT ENTITY U NDER THE FEDERAL NEW 4
MARKETS TAX CREDIT PROGRAM; 5

(II) A COPY OF THE APPLIC ANT’S ALLOCATION AGREEME NT 6
ESTABLISHED UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM; 7

(III) A STATEMENT ATTESTIN G THAT THE APPLICANT ’S 8
ALLOCATION AGREEMENT ESTABLISHED UNDER THE FEDERAL NEW MARKETS TAX 9
CREDIT PROGRAM IS VALID AND HAS NOT BEEN REVOKED OR CANCELED; AND 10

(IV) THE AMOUNT AND EVIDE NCE OF THE APPLICANT ’S 11
QUALIFIED EQUITY INVESTMENT AUTHORITY UNDER THE FEDERAL NEW MARKETS 12
TAX CREDIT PROGRAM; 13

(3) A DESCRIPTION OF THE PROPOSED AMOUNT , STRUCTURE, AND 14
PURCHASER OF THE EQUITY INVESTMENT; 15

(4) WHETHER THE APPLICA NT ELECTS TO RECEIVE ADDITIONAL 16
ALLOCATIONS OF REDIS TRIBUTED CREDITS THA T MAY BECOME AVAILAB LE IN 17
ACCORDANCE WITH § 4–3106(C) OF THIS SUBTITLE; AND 18

(5) ANY OTHER INFORMATION THAT THE DEPARTMENT REQUIRES. 19

(B) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL PAY THE 20
DEPARTMENT AN APPLICATION FEE OF $5,000 FOR EACH APPLICATION SUBMITTED 21
UNDER THIS SECTION. 22

(C) (1) THE DEPARTMENT SHALL PROC ESS APPLICATIONS UND ER THIS 23
SECTION DURING APPLICATION PERIODS IN ACCORDANCE WITH THIS SUBSECTION. 24

(2) THE DEPARTMENT SHALL OPEN AN INITIAL APPLICATION PERIOD 25
ON SEPTEMBER 1, 2026. 26

(3) THE DEPARTMENT SHALL OPEN ADDITIONAL APPLICATI ON 27
PERIODS ON SEPTEMBER 1, 2028, AND EACH SEPTEMBER 1 EVERY 2 YEARS 28
THEREAFTER. 29

8 HOUSE BILL 5

(4) SUBJECT TO PARAGRAPH (5) OF THIS SUBSECTION A ND 1
FOLLOWING PUBLICATION IN THE FEDERAL REGISTER OF A NOTICE OF FUNDING 2
AVAILABILITY UNDER T HE FEDERAL NEW MARKETS TAX CREDIT PROGRAM 3
DURING A YEAR IN WHICH AN APPLICATION PERIOD IS SCHEDULED TO OCCUR, THE 4
DEPARTMENT MAY ADVANC E OR DELAY THE START DATE OF AN APPLICATION 5
PERIOD UNDER THIS SU BSECTION BY NOT LONG ER THAN 60 DAYS TO ALIGN WITH 6
THE NOTICE OF FUNDING AVAILABILITY. 7

(5) THE DEPARTMENT SHALL COMP LETE EACH APPLICATIO N 8
PERIOD AND JOINTLY C ERTIFY EACH QUALIFIE D EQUITY INVESTMENT ELIGIBLE 9
FOR A CREDIT UN DER THIS SUBTITLE IN ACCORDANCE WITH § 4–3106 OF THIS 10
SUBTITLE IN THE CALE NDAR YEAR THE APPLIC ATION PERIOD IS SCHE DULED TO 11
OCCUR UNDER THIS SUBSECTION. 12

(6) THE DEPARTMENT SHALL PUBLISH NOTICE OF AN APP LICATION 13
PERIOD AT LEAST 30 DAYS PRIOR TO THE START OF THE APPLICATION PERIOD. 14

(D) (1) THE DEPARTMENT SHALL: 15

(I) EVALUATE EACH APPLICATION BASED ON THE A MOUNT OF 16
THE EQUITY INVESTMENT IN THE APPLICATION COMPARED TO THE TOTAL AMOUNT 17
OF EQUITY INVESTMENTS IN ALL APPLICATIONS RECEIVED ON THE SAME DAY; AND 18

(II) APPROVE OR DENY EACH APPLICATION UNDER TH IS 19
SECTION EITHER IN FU LL OR IN PART WITHIN 30 DAYS AFTER RECEIPT O F THE 20
APPLICATION. 21

(2) IF THE DEPARTMENT DENIES ANY PART OF AN APPLICATION, THE 22
DEPARTMENT SHALL INFORM THE APPLICANT OF THE GROUNDS FOR THE DENIAL 23
IN WRITING. 24

(3) IF THE APPLICANT PROVIDES ADDITIONAL INFORMATION WITHIN 25
15 DAYS AFTER RECEIVING A NOTICE AND EXPLANA TION OF A DENIAL , THE 26
DEPARTMENT SHALL RECONSIDER THE APPLICATION. 27

(4) IF THE APPLICANT FAILS TO PROVIDE ADDITIONAL INFORMATION 28
WITHIN 15 DAYS AFTER RECEIVING A NOTICE AND EXPLANATION OF A DENIAL, THE 29
DEPARTMENT MAY NOT RECONSIDER THE APPLICATION. 30

(5) IF THE DEPARTMENT APPROVES A N APPLICATION , THE 31
DEPARTMENT SHALL PROV IDE WRITTEN NOTICE O F THE DESIGNATION OF THE 32
QUALIFIED EQUITY INVESTMENT TO THE QUALIFIED COM MUNITY DEVELOPMENT 33
ENTITY. 34
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(E) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY M AY WITHDRAW AN 1
APPLICATION AT ANY TIME BY NOTIFYING THE DEPARTMENT IN WRITING. 2

4–3106. 3

(A) (1) WHEN A QUALIFIED COMMUNITY DEVELOPMENT ENTITY OBTAINS 4
APPROVAL OF AN APPLI CATION AND A DESIGNA TION OF A QUALIFIED EQUITY 5
INVESTMENT, THE DEPARTMENT AND THE QUALIFIED COMMUNITY DEVELOPMENT 6
ENTITY SHALL JOINTLY CERTIFY ALL OR PART OF EACH QUALIFIED EQ UITY 7
INVESTMENT ELIGIBLE FOR A CREDIT UNDER THIS SUBTITLE, INCLUDING: 8

(I) THE ELIGIBLE TAXPAYER; 9

(II) THE ELIGIBLE AMOUNT OF THE CREDIT; AND 10

(III) THE ELIGIBLE TAXABLE YEARS. 11

(2) ON CERTIFICATION , THE DEPARTMENT SHALL ISSU E EACH 12
TAXPAYER ELIGIBLE FO R A CREDIT A CREDIT CERTIFICATE FOR EA CH TAXABLE 13
YEAR FOR WHICH THE TAXPAYER IS ELIGIBLE. 14

(3) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY MAY TRANSFER 15
A QUALIFIED EQUITY I NVESTMENT’S CERTIFICATION TO A N AFFILIATED BUSINESS 16
ENTITY IF THE AFFILIATED BUSINESS ENTITY MEETS THE REQUIREMENTS OF THIS 17
SUBTITLE. 18

(4) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY H AS AN 19
ONGOING DUTY TO INFO RM THE DEPARTMENT OF ANY CHA NGE MADE TO A 20
QUALIFIED EQUITY INVESTMENT CERTIFIED UNDER THIS SUBSECTION. 21

(B) (1) WITHIN 30 DAYS AFTER CERTIFICATION UNDER SUBSECTION (A) 22
OF THIS SECTION, THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL: 23

(I) ISSUE THE QUALIFIED EQUITY INVESTMENT; AND 24

(II) DESIGNATE THE EQUITY INVESTMENT IN AN AMO UNT 25
EQUAL TO AT LEAST 50% OF THE CASH PURCHASE PRICE AS A QUALIFIED EQUITY 26
INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM, UNLESS 27
THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY IS A MARYLAND QUALIFIED 28
COMMUNITY DEVELOPMENT ENTITY. 29

10 HOUSE BILL 5

(2) WITHIN 35 DAYS AFTER CERTIFICATION UNDER SUBSECTION (A) 1
OF THIS SECTION , THE QUALIFIED COMMUN ITY DEVELOPMENT ENTITY SHALL 2
PROVIDE THE DEPARTMENT WITH EVIDENCE OF: 3

(I) THE RECEIPT OF CASH PAYMENT FOR THE QUAL IFIED 4
EQUITY INVESTMENT; AND 5

(II) DESIGNATION OF THE EQUITY INVESTMENT IN AN AMOUNT 6
EQUAL TO AT LEAST 50% OF THE CASH PURCHASE PRICE AS A QUALIFIED EQUITY 7
INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM UNLESS 8
THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY IS A MARYLAND QUALIFIED 9
COMMUNITY DEVELOPMENT ENTITY. 10

(3) IF A QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY FAILS TO 11
SATISFY A REQUIREMENT OF THIS SUBSECTION: 12

(I) THE CERTIFICATION UN DER SUBSECTION (A) OF THIS 13
SECTION SHALL LAPSE; AND 14

(II) THE DEPARTMENT SHALL REDI STRIBUTE THE CREDIT 15
AMONG APPROVED APPLICANTS ON A PRO RATA BASIS. 16

(C) IF THE DEPARTMENT DOES NOT C ERTIFY THE M AXIMUM AGGREGATE 17
AVAILABLE CREDIT UNDER § 4–3107 OF THIS SUBTITLE, THE DEPARTMENT SHALL: 18

(1) REDISTRIBUTE THE CRE DIT AMONG APPROVED A PPLICANTS 19
THAT HAVE ELECTED TO RECEIVE ADDITIONAL ALLOCATIONS ON A PRO RATA BASIS; 20
AND 21

(2) WAIVE THE REQUIREMEN T, IF APPLICABLE, THAT A QUALIFIED 22
EQUITY INVESTMENT UN DER THIS SUBTITLE BE DESIGNATED AS A QUAL IFIED 23
EQUITY INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 24

(D) IF, AFTER A RECONSIDERATION OF APPLICATIONS UNDER SUBSECTION 25
(C) OF THIS SECTION , THE DEPARTMENT DOES NOT C ERTIFY THE MAXIMUM 26
AGGREGATE AVAILABLE CREDIT UNDER § 4–3107 OF THIS SUBTITLE , THE 27
DEPARTMENT SHALL: 28

(1) ACCEPT NEW APPLICATI ONS FOR THE SAME CAL ENDAR YEAR IN 29
ACCORDANCE WITH § 4–3105 OF THIS SUBTITLE; AND 30

(2) WAIVE: 31

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(I) THE REQUIREMENT, IF APPLICABLE , THAT A QUALIFIED 1
EQUITY INVESTMENT UNDER THIS SUBTITLE NOT EXCEED DOUBLE THE QUALIFIED 2
COMMUNITY DEVELOPMENT ENTITY’S EQUITY INVESTMENT AUTHORITY UNDER THE 3
FEDERAL NEW MARKETS TAX CREDIT PROGRAM; AND 4

(II) THE REQUIREMENT , IF APPLICABLE, THAT A QUALIFIED 5
EQUITY INVESTMENT UN DER THIS SUBTITLE BE DESIGNATED AS A QUAL IFIED 6
EQUITY INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 7

4–3107. 8

(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, THE DEPARTMENT MAY 9
NOT ISSUE CREDIT CERTIFICATES FOR CREDIT AMOUNTS THAT IN THE AGGREGATE 10
TOTAL MORE THAN $18,750,000 FOR ANY TAXABLE YEAR. 11

(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 12
THE DEPARTMENT MAY NOT ISSUE CREDIT CERTIFICATES THAT IN THE AGGREGATE 13
TOTAL MORE THAN $9,375,000 FOR EACH SCHEDULED APPLICATION PERIOD UNDER 14
§ 4–3105 OF THIS SUBTITLE. 15

(2) ANY PART OF THE AGGREGATE CREDIT AMOUNTS AVAILABLE FOR 16
ANY SCHEDULED APPLICATION PERIOD THAT IS NOT ISSUED BY THE DEPARTMENT 17
IN THAT APPLICATION PERIOD MAY BE CARRIED OVER AND ISS UED DURING ANY 18
SUBSEQUENT APPLICATION PERIOD. 19

4–3108. 20

(A) THE COMPLIANCE AND RE CAPTURE PROVISIONS O F THIS SECTION 21
APPLY SEPARATELY WITH RESPECT TO EACH CR EDIT CERTIFICATE ISSUED UNDER 22
THIS SUBTITLE. 23

(B) THE DEPARTMENT SHALL RECAPTURE ALL OR A PORTION OF A CREDIT 24
ISSUED UNDER THIS SUBTITLE AND ANY FUTURE CREDIT SHALL BE FORFEITED IF: 25

(1) SUBJECT TO SUBSECTION (C) OF THIS SECTION, ANY AMOUNT OF 26
A FEDERAL TAX CREDIT ISSUED FOR A QUALIFIED EQUITY INVESTMENT UNDER THE 27
FEDERAL NEW MARKETS TAX CREDIT PROGRAM IS RECAPTURED; 28

(2) SUBJECT TO SUBSECTIO N (C) OF THIS SECTION , A QUALIFIED 29
COMMUNITY DEVELOPMENT ENTITY REDEEMS OR REPAYS THE PRINCIPAL AMOUNT 30
OF THE QUALIFIED EQUITY INVESTMENT PRIOR TO THE EXPIRATION OF THE CREDIT 31
ISSUED UNDER THIS SUBTITLE; 32

12 HOUSE BILL 5

(3) A QUALIFIED COMMUNIT Y DEVELOPMENT ENTITY FAILS TO 1
INVEST 100% OF THE CASH PURCHASE PRICE OF THE QUALIFI ED EQUITY 2
INVESTMENT IN QUALIF IED LOW –INCOME COMMUNITY INV ESTMENTS WITHIN 1 3
YEAR AFTER RECEIPT OF THE QUALIFIED EQUITY INVESTMENT; 4

(4) A QUALIFIED COMMUNIT Y DEVELOPMENT ENTITY VIOLATES 5
SUBSECTION (D) OF THIS SECTION; OR 6

(5) SUBJECT TO SUBSECTIO N (E) OF THIS SECTION , A QUALIFIED 7
COMMUNITY DEVELOPMENT ENTITY FAILS TO MAINTAIN A QUALIFIED LOW–INCOME 8
COMMUNITY INVESTMENT EQUAL TO 100% OF THE CASH PURCHASE PRICE OF THE 9
QUALIFIED EQUITY INVESTMENT. 10

(C) (1) IF THE DEPARTMENT RECAPTURES A CREDIT UNDER 11
SUBSECTION (B)(1) OF THIS SECTION , THE DEPARTMENT SHALL RECA PTURE AN 12
AMOUNT PROPORTIONAL TO THE AMOUNT OF THE FEDERAL TAX CREDIT 13
RECAPTURED. 14

(2) IF THE DEPARTMENT RECAPTURES A CREDIT UNDER 15
SUBSECTION (B)(2) OF THIS SECTION , THE DEPARTMENT SHALL RECA PTURE AN 16
AMOUNT PROPORTIONAL TO THE AMOUNT OF THE REDEMPTION OR PAYMENT. 17

(D) (1) THE MAXIMUM AGGREGATE AMOUNT OF QUALIFIED LOW–INCOME 18
COMMUNITY INVESTMENT S MADE IN A QUALIFIE D ACTIVE LOW –INCOME 19
COMMUNITY BUSINESS A ND ANY AFFILIATED BU SINESS ENTITY EQUALS 20
$15,000,000, INCLUDING $7,500,000 FOR ANY INDIVIDUAL QUALIFIED LOW–INCOME 21
COMMUNITY INVESTMENT. 22

(2) THE MAXIMUM AMOUNT UN DER PARAGRA PH (1) OF THIS 23
SUBSECTION IS EXCLUS IVE OF ANY PORTION O F A QUALIFIED LOW –INCOME 24
COMMUNITY INVESTMENT REDEEMED OR REPAID B Y A QUALIFIED ACTIVE 25
LOW–INCOME COMMUNITY BUSINESS. 26

(E) (1) A QUALIFIED LOW–INCOME COMMUNITY INV ESTMENT SHALL BE 27
CONSIDERED MAINTAINED BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY 28
EVEN IF THE INVESTME NT HAS BEEN TRANSFER RED, SOLD, OR REPAID IF THE 29
QUALIFIED COMMUNITY DEVELOPMENT ENTITY REINVESTS AN AMOUNT EQUAL TO 30
THE CAPITAL OR EQUIT Y RETURNED OR RECOVE RED FROM THE ORIGINA L 31
INVESTMENT EXCLUSIVE OF ANY P ROFIT REALIZED IN AN OTHER QUALIFIED 32
LOW–INCOME COMMUNITY INVESTMENT IN THE STATE WITHIN 1 YEAR AFTER THE 33
RECEIPT OF THE CAPITAL OR EQUITY. 34

HOUSE BILL 5 13

(2) A QUALIFIED LOW–INCOME COMMUNITY INV ESTMENT SHALL BE 1
CONSIDERED MAINTAINED BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY 2
IF THE QUALIFIED COM MUNITY DEVELOPMENT E NTITY RECEIVES PERIO DIC LOAN 3
REPAYMENTS FROM A QUALIFIED ACTIVE LOW–INCOME COMMUNITY BUSINESS AND 4
THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY REINVESTS THE AMOUNT IN A 5
QUALIFIED LOW –INCOME COMMUNITY INVEST MENT BY THE END OF T HE NEXT 6
CALENDAR YEAR. 7

(F) NOTHING IN THIS SECTI ON MAY BE CONSTRUED TO REQUIRE A 8
QUALIFIED COMMUNITY DEVELOPMENT ENTITY TO REINVEST CAPITAL O R EQUITY 9
RETURNED FROM A LOW –INCOME COMMUNITY INV ESTMENT AFTER THE SI XTH 10
TAXABLE YEAR IN WHICH THE QUALIFIED EQUI TY INVESTMENT IS ELI GIBLE FOR A 11
CREDIT UNDER THIS SUBTITLE. 12

(G) (1) THE DEPARTMENT SHALL PROV IDE WRITTEN NOTICE T O A 13
QUALIFIED COMMUNITY DEVELOPMENT ENTITY OF ANY PROPOSED RECAPTURE OF 14
A CREDIT UNDER THIS SECTION. 15

(2) THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL CURE 16
ANY DEFICIENCY IDENT IFIED IN A NOTICE PR OVIDED UNDER PARAGRA PH (1) OF 17
THIS SUBSECTION WITHIN 90 DAYS AFTER RECEIPT OF THE NOTICE. 18

(3) IF THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY FAILS TO 19
CURE A DEFICIENCY IDENTIFIED IN A NOTICE PROVIDED UNDER PARAGRAPH (1) OF 20
THIS SUBSECTION WITH IN 90 DAYS AFTER RECEIPT O F THE NOTICE , THE 21
DEPARTMENT SHALL: 22

(I) PROVIDE A FINAL WRITTEN ORDER OF RECAPTURE TO THE 23
QUALIFIED COMMUNITY DEVELOPMENT ENTITY; AND 24

(II) RECAPTURE THE CREDIT. 25

(4) THE DEPARTMENT SHALL REAL LOCATE A CREDIT RECA PTURED 26
UNDER THIS SUBSECTIO N IN ACCORDANCE WITH § 4–3106(C) AND (D) OF THIS 27
SUBTITLE. 28

4–3109. 29

ON OR BEFORE MAY 1, 2027, AND EACH MAY 1 THEREAFTER, A QUALIFIED 30
COMMUNITY DEV ELOPMENT ENTITY , FOR EACH CREDIT CERT IFICATE ISSUED 31
UNDER THIS SUBTITLE FOR A QUALIFIED EQUITY INVESTMENT THAT HAS NOT BEEN 32
REDEEMED OR REPAID , SHALL REPORT TO THE DEPARTMENT FOR THE 33
IMMEDIATELY PRECEDING TAXABLE YEAR INFOR MATION ABOUT EACH QU ALIFIED 34
14 HOUSE BILL 5

LOW–INCOME COMMUNITY INVE STMENT MADE BY THE Q UALIFIED COMMUNITY 1
DEVELOPMENT ENTITY, INCLUDING: 2

(1) THE DATE , AMOUNT, AND EVIDENCE OF THE QUALIFIED 3
LOW–INCOME COMMUNITY INVESTMENT; 4

(2) THE NAME AND ADDRESS OF EACH QUALIFIED AC TIVE 5
LOW–INCOME COMMUNITY BUSINESS FUNDED BY T HE QUALIFIED COMMUNI TY 6
DEVELOPMENT ENTITY; 7

(3) FOR EACH QUALIFIED A CTIVE LOW –INCOME COMMUNITY 8
BUSINESS FUNDED BY T HE QUALIFIED COMMUNI TY DEVELOPMENT ENTIT Y, THE 9
NUMBER AND AVERAGE ANNUAL SALARY OF EMPLOYEES WHO WERE: 10

(I) EMPLOYED PRIOR TO THE QUALIFI ED LOW –INCOME 11
COMMUNITY INVESTMENT; 12

(II) EMPLOYED AT THE END OF THE IMMEDIATELY PRECEDING 13
CALENDAR YEAR; AND 14

(III) NEWLY HIRED AND RETA INED AS A RESULT OF THE 15
QUALIFIED LOW–INCOME COMMUNITY INVESTMENT; 16

(4) A BRIEF DESCRIPTION OF THE BUSINESS AND FINANCING OF EACH 17
QUALIFIED ACTIVE LOW –INCOME COMMUNITY BUS INESS FUNDED BY THE 18
QUALIFIED COMMUNITY DEVELOPMENT ENTITY; 19

(5) A CERTIFICATION THAT THE QUALIFIED COMMUN ITY 20
DEVELOPMENT ENTITY H AS UPDATED THE DEPARTMENT REGARDING ANY 21
CHANGES TO A QUALIFIED EQUITY INVESTMENT CE RTIFIED UNDER § 4–3106 OF 22
THIS SUBTITLE , INCLUDING ANY TRANSF ER OF A CERTIFICATIO N OR A CREDIT 23
CERTIFICATE IN ACCORDANCE WITH THIS SUBTITLE; AND 24

(6) A CERTIFICATION THAT NO CREDIT ISSUED UNDER THIS SUBTITLE 25
MEETS THE REQUIREMENTS FOR RECAPTURE UNDER § 4–3108 OF THIS SUBTITLE. 26

4–3110. 27

(A) THE DEPARTMENT MAY: 28

(1) CONDUCT PERIODIC EXAMINATIONS TO ENFORCE THIS SUBTITLE 29
AND TO VERIFY WHETHE R AN EVENT HAS OCCUR RED THAT WOULD RESUL T IN 30
RECAPTURE OF A CREDIT ISSUED UNDER THIS SUBTITLE; AND 31
HOUSE BILL 5 15

(2) ISSUE, ON REQUEST , AN ADVISORY LETTER T O A QUALIFIED 1
COMMUNITY DEVELOPMENT ENTITY ABOUT THE REQUIREMENTS OF THIS SUBTITLE 2
THAT: 3

(I) SHALL BIND THE DEPARTMENT AND THE MARYLAND 4
INSURANCE ADMINISTRATION; AND 5

(II) MAY NOT APPLY TO ANY PERSON OTHER THAN THE 6
QUALIFIED COMMUNITY DEVELOPMENT ENTITY T HAT REQUESTED THE AD VISORY 7
LETTER. 8

(B) WHEN CONDUCTING ENFOR CEMENT ACTIVITIES AN D ADMINISTERING 9
THE PROGRAM, THE DEPARTMENT SHALL CONSIDER GUIDANCE ISSUED UNDER THE 10
FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 11

4–3111. 12

THE DEPARTMENT SHALL ADOP T REGULATIONS TO CAR RY OUT THE 13
PROVISIONS OF THIS SUBTITLE. 14

Article – Insurance 15

6–123. 16

A PERSON MAY CLAIM A C REDIT FOR A QUALIFIE D EQUITY INVESTMENT AS 17
PROVIDED UNDER TITLE 4, SUBTITLE 31 OF THE HOUSING AND COMMUNITY 18
DEVELOPMENT ARTICLE. 19

6–306. 20

A PERSON MAY CLAIM A C REDIT FOR A QUALIFIE D EQUITY INVESTMENT AS 21
PROVIDED UNDER TITLE 4, SUBTITLE 31 OF THE HOUSING AND COMMUNITY 22
DEVELOPMENT ARTICLE. 23

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 24
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 25