Community Development - Maryland New Markets Development Program - Establishment

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0372*

SENATE BILL 372
C9, Q3, Q7 6lr0998
CF HB 5
By: Senator McCray
Introduced and read first time: January 27, 2026
Assigned to: Budget and Taxation

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 income tax, the State insurance 6
premium receipts tax, and certain State insurance retaliatory taxes, fees, charges, 7
and penalties for certain equity investments in certain community developm ent 8
entities; making the credit refundable; authorizing the Department to recapture a 9
credit under certain circumstances; and generally relating to the Maryland New 10
Markets Development Program. 11

BY adding to 12
Article – Housing and Community Development 13
Section 4–3101 through 4–3111 to be under the new subtitle “Subtitle 31. Maryland 14
New Markets Development Program” 15
Annotated Code of Maryland 16
(2019 Replacement Volume and 2025 Supplement) 17

BY adding to 18
Article – Insurance 19
Section 6–123 and 6–306 20
Annotated Code of Maryland 21
(2017 Replacement Volume and 2025 Supplement) 22

BY adding to 23
Article – Tax – General 24
Section 10–758 25
Annotated Code of Maryland 26
(2022 Replacement Volume and 2025 Supplement) 27

2 SENATE BILL 372

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYL AND, 1
That the Laws of Maryland read as follows: 2

Article – Housing and Community Development 3

SUBTITLE 31. MARYLAND NEW MARKETS DEVELOPMENT PROGRAM. 4

4–3101. 5

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 6
INDICATED. 7

(B) “MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY” MEANS A 8
QUALIFIED COMMUNITY DEVELOPMENT ENTITY HEADQUARTERED IN THE STATE OR 9
OWNED OR CONTROLLED BY A BUSINESS ENTITY HEADQUARTERED IN THE STATE. 10

(C) “PRINCIPAL BUSINESS OP ERATIONS” MEANS THE PLACE OR P LACES 11
WHERE: 12

(1) AT LEAST 60% OF A QUALIFIED ACTIVE LOW–INCOME COMMUNITY 13
BUSINESS’S EMPLOYEES WORK; OR 14

(2) EMPLOYEES WHO ARE PAID AT LEAST 60% OF A QUALIFIED ACTIVE 15
LOW–INCOME COMMUNITY BUSINESS’S PAYROLL WORK. 16

(D) “PROGRAM” MEANS THE MARYLAND NEW MARKETS DEVELOPMENT 17
PROGRAM. 18

(E) (1) “QUALIFIED ACTIVE LOW –INCOME COMMUNITY BUS INESS” 19
MEANS A BUSINESS ENTITY THAT: 20

(I) HAS ITS PRINCIPAL BU SINESS OPERATIONS IN THE STATE; 21
AND 22

(II) MEETS THE DEFINITION OF A QUALIFIED ACTIV E 23
LOW–INCOME COMMUNITY BUS INESS UNDER § 45D OF THE INTERNAL REVENUE 24
CODE. 25

(2) “QUALIFIED ACTIVE LOW–INCOME COMMUNITY BUSINESS” DOES 26
NOT INCLUDE A BUSINESS ENTITY THAT DERIVES OR PROJECTS TO DERIVE AT LEAST 27
15% OF ANNUAL REVENUE FR OM THE RENTAL OR SAL E OF REAL ESTATE , UNLESS 28
THE BUSINESS ENTITY OWNS OR CONTROLS A SUBSIDIARY BUSINESS ENTITY THAT: 29

SENATE BILL 372 3

(I) DERIVES OR PROJECTS TO DERIVE LESS THAN 15% OF 1
ANNUAL REVENUE FROM THE RENTAL OR SALE OF REAL ESTATE; AND 2

(II) IS THE PRIMARY TENAN T OF REAL ESTATE OWN ED BY THE 3
PARENT ENTITY. 4

(F) “QUALIFIED COMMUNITY DEVELOPMENT ENTITY” MEANS A BUSINESS 5
ENTITY THAT HAS ENTE RED INTO AN ALLOCATI ON AGREEMENT UNDER T HE 6
FEDERAL NEW MARKETS TAX CREDIT PROGRAM THAT INCLUDES THE STATE 7
WITHIN THE SERVICE AREA OF THE AGREEMENT. 8

(G) “QUALIFIED EQUITY INVESTMENT” MEANS AN EQUITY INVESTMENT IN 9
A QUALIFIED COMMUNITY DEVELOPMENT ENTITY THAT: 10

(1) (I) IS ORIGINALLY ISSUED AND ACQUIRED ON OR A FTER JULY 11
1, 2026, IN EXCHANGE FOR CASH; OR 12

(II) IS ORIGINALLY ISSUED AND ACQUIRED BEFORE JULY 1, 13
2026, IN EXCHANGE FOR CASH AND, ON OR AFTER JULY 1, 2026, IS TRANSFERRED 14
OR SOLD; 15

(2) THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY USES IN AN 16
AMOUNT EQUAL TO 100% OF THE CASH PURCHASE PRICE TO MAKE QUALIF IED 17
LOW–INCOME COMMUNITY INV ESTMENTS IN QUALIFIE D ACTIVE LOW –INCOME 18
COMMUNITY BUSINESSES; 19

(3) DOES NOT EXCEED DOUB LE THE QUALIFIED COM MUNITY 20
DEVELOPMENT ENTITY ’S EQUITY INVESTMENT AUTHORITY UNDER THE FEDERAL 21
NEW MARKETS TAX CREDIT PROGRAM UNLESS THE QU ALIFIED COMMUNITY 22
DEVELOPMENT ENTITY I S A MARYLAND QUALIFIED CO MMUNITY DEVELOP MENT 23
ENTITY; 24

(4) IS DESIGNATED AS A QUALIFIED EQUITY INVESTMENT UNDER THE 25
FEDERAL NEW MARKETS TAX CREDIT PROGRAM BY THE QUALIF IED COMMUNITY 26
DEVELOPMENT ENTITY I N AN AMOUNT EQUAL TO AT LEAST 50% OF THE CASH 27
PURCHASE PRICE UNLESS THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY IS A 28
MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY; 29

(5) IS DESIGNATED AS A Q UALIFIED EQUITY INVE STMENT UNDER 30
THIS SUBTITLE BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY; AND 31

4 SENATE BILL 372

(6) IS JOINTLY CERTIFIED AS A QUALIFIED EQUIT Y INVESTMEN T 1
UNDER THIS SUBTITLE BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY AND 2
THE DEPARTMENT. 3

(H) “QUALIFIED LOW –INCOME COMMUNITY INV ESTMENT” MEANS A 4
CAPITAL OR EQUITY INVESTMENT IN OR LOAN TO A QUALIFIED ACTIVE LOW–INCOME 5
COMMUNITY BUSINESS. 6

4–3102. 7

(A) THERE IS A MARYLAND NEW MARKETS DEVELOPMENT PROGRAM. 8

(B) THE DEPARTMENT SHALL ADMINISTER THE PROGRAM. 9

(C) THE PURPOSE OF THE PROGRAM IS TO INCENTI VIZE ECONOMIC 10
INVESTMENT AND JOB C REATION IN LOW –INCOME COMMUNITIES T HAT HAVE 11
HISTORICALLY LACKED PRIVATE IN VESTMENT, PARTICULARLY WITH TH E 12
ASSISTANCE OF COMMUN ITY DEVELOPMENT ENTI TIES HEADQUARTERED I N THE 13
STATE WITH PROVEN EXP ERIENCE IN THE FEDER AL NEW MARKETS TAX CREDIT 14
PROGRAM. 15

4–3103. 16

(A) A BUSINESS ENTITY THAT DOES NOT MEET THE RE QUIREMENTS TO BE 17
CONSIDERED A QUALIFI ED ACTIVE LOW –INCOME COMMUNITY BUS INESS UNDER 18
THIS SUBTITLE BECAUS E THE BUSINESS ENTIT Y’S PRINCIPAL BUSINESS 19
OPERATIONS ARE NOT I N THE STATE MAY BE CONSIDER ED A QUALIFIED ACTIV E 20
LOW–INCOME COMMUNITY BUS INESS UNDER THIS SUB TITLE IF THE BUSINES S 21
ENTITY AGREES TO: 22

(1) RELOCATE OR HIRE EMP LOYEES TO ESTABLISH PRINCIPAL 23
BUSINESS OPERATIONS IN THE STATE; 24

(2) USE THE PROCEEDS OF A QUALIFIED LOW –INCOME COMMUNITY 25
INVESTMENT TO HIRE OR RELOCATE THE EMPLOYEES; AND 26

(3) HIRE OR RELOCATE THE EMPLOYEES WITHIN 180 DAYS AFTER 27
RECEIVING THE QUALIFIED LOW–INCOME COMMUNITY INVESTMENT, OR ON A LATER 28
DATE AGREED TO BY THE DEPARTMENT. 29

(B) A BUSINESS ENTITY SHAL L BE CONSIDERED A QU ALIFIED ACT IVE 30
LOW–INCOME COMMUNITY BUS INESS UNDER THIS SUB TITLE IF THE QUALIFI ED 31
COMMUNITY DEVELOPMEN T ENTITY REASONABLY EXPECTS AT THE TIME OF AN 32
SENATE BILL 372 5

APPLICATION UNDER § 4–3105 OF THIS SUBTITLE THAT THE BUSINESS ENTITY WILL 1
MEET THE DEFINITION OF A QUALIFIED ACTIV E LO W–INCOME COMMUNITY 2
BUSINESS FOR THE ENT IRE DURATION OF THE QUALIFIED LOW –INCOME 3
COMMUNITY INVESTMENT. 4

4–3104. 5

(A) A PERSON MAY CLAIM A CREDIT FOR A QUALIFIED EQUITY INVESTMENT 6
IN ACCORDANCE WITH THIS SUBTITLE AGAINST: 7

(1) THE STATE INCOME TAX; OR 8

(2) ANY PREMIUM RECEIPTS TAX OR INSURANCE RET ALIATORY TAX, 9
FEE, CHARGE, OR PENALTY IMPOSED B Y THE STATE, INCLUDING ANY TAX , FEE, 10
CHARGE, OR PENALTY UNDER: 11

(I) § 3–324 OF THE INSURANCE ARTICLE; 12

(II) § 4–209 OF THE INSURANCE ARTICLE; 13

(III) § 4–211 OF THE INSURANCE ARTICLE; 14

(IV) § 4–211.1 OF THE INSURANCE ARTICLE; 15

(V) § 6–102 OF THE INSURANCE ARTICLE; AND 16

(VI) TITLE 6, SUBTITLE 3 OF THE INSURANCE ARTICLE. 17

(B) SUBJECT TO SUBSECTION (C) OF THIS SECTION, A PERSON MAY CLAIM 18
THE CREDIT ALLOWED UNDER THIS SECTION: 19

(1) FOR THE TAXABLE YEAR DURING WHICH THE QUALIFIED EQUITY 20
INVESTMENT IS MADE; AND 21

(2) FOR THE NEXT 6 TAXABLE YEARS. 22

(C) THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION EQUALS: 23

(1) FOR THE FIRST 3 TAXABLE YEARS UNDER SUBSECTION (B) OF THIS 24
SECTION, THE PURCHASE PRICE P AID FOR THE QUALIFIE D EQUITY INVESTMENT 25
MULTIPLIED BY 5%; AND 26

6 SENATE BILL 372

(2) FOR THE FINAL 4 TAXABLE YEARS UNDER SUBSECTION (B) OF 1
THIS SECTION , THE PURCHASE PRICE P AID FOR THE QUALIFIE D EQUITY 2
INVESTMENT MULTIPLIED BY 8.75%. 3

(D) THE COMPTROLLER OR THE MARYLAND INSURANCE ADMINISTRATION 4
MAY NOT IMPOSE ANY A DDITIONAL INCOME TAX , PREMIUM RECEIPTS TAX , OR 5
INSURANCE RETALIATORY TAX, FEE, CHARGE, OR PENALTY, AS APPLICABLE, OR ANY 6
OTHER TAX OR FEE ON A PERSON: 7

(1) IN ORDER FOR THE PERSON TO CLAIM A CREDIT ALLOWED UNDER 8
THIS SECTION; OR 9

(2) AS A RESULT OF CLAIM ING A CREDIT ALLOWED UNDER THIS 10
SECTION. 11

(E) THE CREDIT ALLOWED UNDER THIS SECTION: 12

(1) (I) MAY NOT BE SOLD; BUT 13

(II) MAY BE TRANSFERRED T O AN AFFILIATED BUSINESS 14
ENTITY; AND 15

(2) MAY BE ALLOCATED AMO NG THE PARTNERS , MEMBERS, OR 16
SHAREHOLDERS OF A BU SINESS ENTITY IN ANY MANNER AGREED TO BY THE 17
PARTNERS, MEMBERS, OR SHAREHOLDERS IN WRITING. 18

(F) IF THE CREDIT ALLOWED UNDER THIS SECTION IN ANY TAXABLE YEAR 19
EXCEEDS THE STATE INCOME TAX , THE STATE PREMIUM RECEIPT S TAX , OR THE 20
STATE INSURANCE RETALIATORY TAX, FEE, CHARGE, OR PENALTY OWED FOR THAT 21
TAXABLE YEAR , THE PERSON MAY CLAIM A REFUND FOR THE AMO UNT OF THE 22
EXCESS. 23

(G) IF THE CREDIT ALLOWED UNDER THIS SECTION IN ANY TAXABLE YEAR 24
IS PROHIBITED FOR TH AT TAXABLE YEAR , ANY UNUSED CREDIT MA Y BE CARRIED 25
FORWARD AND APPLIED FOR SUCCEEDING TAXABLE YEARS UNTIL THE EARLIER OF: 26

(1) THE DATE ON WHICH THE FULL AMOUNT OF THE CREDIT IS USED; 27
OR 28

(2) THE DATE OF THE EXPIRATI ON OF THE 5TH YEAR AFTER THE 29
TAXABLE YEAR FOR WHICH THE CREDIT WAS ALLOWED. 30

4–3105. 31
SENATE BILL 372 7

(A) TO DESIGNATE AN EQUIT Y INVESTMENT AS A QU ALIFIED EQUITY 1
INVESTMENT ELIGIBLE FOR A CREDIT UNDER THIS SUBTITLE AND OBTAIN A CREDIT 2
CERTIFICATE, A QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL SUBMIT AN 3
APPLICATION TO THE DEPARTMENT, USING A FORM ESTABLI SHED BY THE 4
DEPARTMENT, THAT INCLUDES: 5

(1) THE NAME, ADDRESS, AND TAX IDENTIFICATION NUMBER OF THE 6
APPLICANT; 7

(2) THE FOLLOWING INFORM ATION IF T HE APPLICANT IS NOT A 8
MARYLAND QUALIFIED COMMUNITY DEVELOPMENT ENTITY: 9

(I) EVIDENCE OF THE APPL ICANT’S CERTIFICATION AS A 10
QUALIFIED COMMUNITY DEVELOPMENT ENTITY U NDER THE FEDERAL NEW 11
MARKETS TAX CREDIT PROGRAM; 12

(II) A COPY OF THE APPLIC ANT’S ALLOCA TION AGREEMENT 13
ESTABLISHED UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM; 14

(III) A STATEMENT ATTESTIN G THAT THE APPLICANT ’S 15
ALLOCATION AGREEMENT ESTABLISHED UNDER THE FEDERAL NEW MARKETS TAX 16
CREDIT PROGRAM IS VALID AND HAS NOT BEEN REVOKED OR CANCELED; AND 17

(IV) THE AMOUNT AND EVIDE NCE OF THE APPLICANT ’S 18
QUALIFIED EQUITY INVESTMENT AUTHORITY UNDER THE FEDERAL NEW MARKETS 19
TAX CREDIT PROGRAM; 20

(3) A DESCRIPTION OF THE PROPOSED AMOUNT , STRUCTURE, AND 21
PURCHASER OF THE EQUITY INVESTMENT; 22

(4) IF THE APPLICANT IS A MARYLAND QUALIFIED CO MMUNITY 23
DEVELOPMENT ENTITY , WHETHER THE APPLICAN T ELECTS TO RECEIVE 24
ADDITIONAL ALLOCATIO NS OF REDISTRIBUTED CREDITS THAT MAY BEC OME 25
AVAILABLE IN ACCORDANCE WITH § 4–3106(C) OF THIS SUBTITLE; AND 26

(5) ANY OTHER INFORMATION THAT THE DEPARTMENT REQUIRES. 27

(B) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY S HALL PAY THE 28
DEPARTMENT AN APPLICATION FEE OF $5,000 FOR EACH APPLICATION SUBMITTED 29
UNDER THIS SECTION. 30

8 SENATE BILL 372

(C) (1) THE DEPARTMENT SHALL PROC ESS APPLICATIONS UND ER THIS 1
SECTION DURING APPLICATION PERIODS IN ACCORDANCE WITH THIS SUBSECTION. 2

(2) THE DEPARTMENT SHALL OPEN AN INITIAL APPLICATION PERIOD 3
ON SEPTEMBER 1, 2026. 4

(3) THE DEPARTMENT SHALL OPEN ADDITIONAL APPLICATI ON 5
PERIODS ON SEPTEMBER 1, 2028, AND EACH SEPTEMBER 1 EVERY 2 YEARS 6
THEREAFTER. 7

(4) SUBJECT TO PARAGRAPH (5) OF THIS SUBSECTION A ND 8
FOLLOWING PUBLICATION IN THE FEDERAL REGISTER OF A NOTICE OF FUNDING 9
AVAILABILITY UNDER T HE FEDERAL NEW MARKETS TAX CREDIT PROGRAM 10
DURING A YEAR IN WHICH AN APPLICATION PERIOD IS SCHEDULED TO OCCUR, THE 11
DEPARTMENT MAY ADVANC E OR DELAY THE START DATE OF AN APPLICATI ON 12
PERIOD UNDER THIS SU BSECTION BY NOT LONG ER THAN 60 DAYS TO ALIGN WITH 13
THE NOTICE OF FUNDING AVAILABILITY. 14

(5) THE DEPARTMENT SHALL COMP LETE EACH APPLICATIO N 15
PERIOD AND JOINTLY CER TIFY EACH QUALIFIED EQUITY INVESTMENT EL IGIBLE 16
FOR A CREDIT UNDER T HIS SUBTITLE IN ACCO RDANCE WITH § 4–3106 OF THIS 17
SUBTITLE IN THE CALE NDAR YEAR THE APPLIC ATION PERIOD IS SCHE DULED TO 18
OCCUR UNDER THIS SUBSECTION. 19

(6) THE DEPARTMENT SHALL PUBLISH NOTICE OF AN APPLICATION 20
PERIOD AT LEAST 30 DAYS PRIOR TO THE START OF THE APPLICATION PERIOD. 21

(D) (1) THE DEPARTMENT SHALL: 22

(I) EVALUATE EACH APPLICATION BASED ON THE A MOUNT OF 23
THE EQUITY INVESTMENT IN THE APPLICATION COMPARED TO THE TOTAL AMOUNT 24
OF EQUITY INVESTMENTS IN ALL APPLICATIONS RECEIVED ON THE SAME DAY; AND 25

(II) APPROVE OR DENY EACH APPLICATION UNDER TH IS 26
SECTION EITHER IN FU LL OR IN PART WITHIN 30 DAYS AFTER RECEIPT O F THE 27
APPLICATION. 28

(2) IF THE DEPARTMENT DENIES ANY PART OF AN APPLICATION, THE 29
DEPARTMENT SHALL INFORM THE APPLICANT OF THE GROUNDS FOR THE DENIAL 30
IN WRITING. 31

SENATE BILL 372 9

(3) IF THE APPLICANT PROVIDES ADDITIONAL INFORMATION WITHIN 1
15 DAYS AFTER RECEIVING A NOTICE AND EXPLANA TION OF A DENIAL , THE 2
DEPARTMENT SHALL RECONSIDER THE APPLICATION. 3

(4) IF THE APPLICANT FAILS TO PROVIDE ADDITIONAL INFORMATION 4
WITHIN 15 DAYS AFTER RECEIVING A NOTICE AND EXPLANATION OF A DENIAL, THE 5
DEPARTMENT MAY NOT RECONSIDER THE APPLICATION. 6

(5) IF THE DEPARTMENT APPROVES A N APPLICA TION, THE 7
DEPARTMENT SHALL PROV IDE WRITTEN NOTICE O F THE DESIGNATION OF THE 8
QUALIFIED EQUITY INV ESTMENT TO THE QUALI FIED COMMUNITY DEVEL OPMENT 9
ENTITY. 10

(E) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY M AY WITHDRAW AN 11
APPLICATION AT ANY TIME BY NOTIFYING THE DEPARTMENT IN WRITING. 12

4–3106. 13

(A) (1) WHEN A QUALIFIED COMMUNITY DEVELOPMENT ENTITY OBTAINS 14
APPROVAL OF AN APPLI CATION AND A DESIGNA TION OF A QUALIFIED EQUITY 15
INVESTMENT, THE DEPARTMENT AND THE QUALIFIED COMMUNITY DEVELOPMENT 16
ENTITY SHALL JOINTLY CERTIFY ALL OR PART OF EAC H QUALIFIED EQUITY 17
INVESTMENT ELIGIBLE FOR A CREDIT UNDER THIS SUBTITLE, INCLUDING: 18

(I) THE ELIGIBLE TAXPAYER; 19

(II) THE ELIGIBLE AMOUNT OF THE CREDIT; AND 20

(III) THE ELIGIBLE TAXABLE YEARS. 21

(2) ON CERTIFICATION , THE DEPARTMENT SHALL ISSUE EAC H 22
TAXPAYER ELIGIBLE FO R A CREDIT A CREDIT CERTIFICATE FOR EACH TAXABLE 23
YEAR FOR WHICH THE TAXPAYER IS ELIGIBLE. 24

(3) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY MAY TRANSFER 25
A QUALIFIED EQUITY I NVESTMENT’S CERTIFICATION TO A N AFFILIATED BUSINESS 26
ENTITY IF THE AFFILIATED BUSINESS ENTITY MEETS THE REQUIREMENTS OF THIS 27
SUBTITLE. 28

(4) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY H AS AN 29
ONGOING DUTY TO INFO RM THE DEPARTMENT OF ANY CHA NGE MADE TO A 30
QUALIFIED EQUITY INVESTMENT CERTIFIED UNDER THIS SUBSECTION. 31

10 SENATE BILL 372

(B) (1) WITHIN 60 DAYS AFTER CERTIFICATION UNDER SUBSECTION (A) 1
OF THIS SECTION, THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL: 2

(I) ISSUE THE QUALIFIED EQUITY INVESTMENT; AND 3

(II) DESIGNATE THE EQUITY INVESTMENT IN AN AMO UNT 4
EQUAL TO AT LEAST 50% OF THE CASH PURCHASE PRICE AS A QUALIFIED EQUITY 5
INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM, UNLESS 6
THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY IS A MARYLAND QUALIFIED 7
COMMUNITY DEVELOPMENT ENTITY. 8

(2) WITHIN 90 DAYS AFTER CERTIFICATION UNDER SUBSECTION (A) 9
OF THIS SECTION , THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY SHALL 10
PROVIDE THE DEPARTMENT WITH EVIDENCE OF: 11

(I) THE RECEIPT OF CASH PAYMENT FOR THE QUAL IFIED 12
EQUITY INVESTMENT; AND 13

(II) DESIGNATION OF THE EQUITY INVESTMENT IN AN AMOUNT 14
EQUAL TO AT LEAST 50% OF THE CASH PURCHASE PRICE AS A QUALIFIED EQUITY 15
INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM, UNLESS 16
THE QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY IS A MARYLAND QUALIFIED 17
COMMUNITY DEVELOPMENT ENTITY. 18

(3) IF A QUALIFIED COMMUN ITY DEVELOPMENT ENTI TY FAILS TO 19
SATISFY A REQUIREMENT OF THIS SUBSECTION: 20

(I) THE CERTIFICATION UN DER SUBSECTION (A) OF THIS 21
SECTION SHALL LAPSE; AND 22

(II) THE DEPARTMENT SHALL REDI STRIBUTE THE CREDIT 23
AMONG APPROVED APPLICANTS THAT ARE MARYLAND QUALIFIED CO MMUNITY 24
DEVELOPMENT ENTITIES ON A PRO RATA BASIS. 25

(C) IF THE DEPARTMENT DOES NOT C ERTIFY THE MAXIMUM A GGREGATE 26
AVAILABLE CREDIT UNDER § 4–3107 OF THIS SUBTITLE, THE DEPARTMENT SHALL 27
REDISTRIBUTE THE CREDIT AMONG APPROVED APPLICANTS THAT ARE MARYLAND 28
QUALIFIED COMMUNITY DEVELOPMENT ENTITIES THAT HAVE ELECTED TO RECEIVE 29
ADDITIONAL ALLOCATIONS ON A PRO RATA BASIS. 30

(D) IF, AFTER A RECONSIDERATION OF APPLICATIONS UNDER SUBSECTION 31
(C) OF THIS SECTION , THE DEPARTMENT DO ES NOT CERTIFY THE M AXIMUM 32
SENATE BILL 372 11

AGGREGATE AVAILABLE CREDIT UNDER § 4–3107 OF THIS SUBTITLE , THE 1
DEPARTMENT SHALL: 2

(1) ACCEPT NEW APPLICATI ONS FOR THE SAME CAL ENDAR YEAR IN 3
ACCORDANCE WITH § 4–3105 OF THIS SUBTITLE; AND 4

(2) WAIVE: 5

(I) THE REQUIREMENT , IF APPLICABLE , THAT A QUALIFIED 6
EQUITY INVESTMENT UNDER THIS SUBTITLE NOT EXCEED DOUBLE THE QUALIFIED 7
COMMUNITY DEVELOPMENT ENTITY’S EQUITY INVESTMENT AUTHORITY UNDER THE 8
FEDERAL NEW MARKETS TAX CREDIT PROGRAM; AND 9

(II) THE REQUIREMENT , IF APPLICABLE , THAT A QUALIFIED 10
EQUITY INVESTMENT UN DER THIS SUBTITLE BE DESIGNATED AS A QUAL IFIED 11
EQUITY INVESTMENT UNDER THE FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 12

4–3107. 13

(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, THE DEPARTMENT MAY 14
NOT ISSUE CREDIT CERTIFICATES FOR CREDIT AMOUNTS THAT IN THE AGGREGATE 15
TOTAL MORE THAN $18,750,000 FOR ANY TAXABLE YEAR. 16

(B) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 17
THE DEPARTMENT MAY NOT ISSUE CREDIT CERTIFICATES THAT IN THE AGGREGATE 18
TOTAL MORE THAN $9,375,000 FOR EACH SCHEDULED APPLICATION PERIOD UNDER 19
§ 4–3105 OF THIS SUBTITLE. 20

(2) ANY PART OF THE AGGREGATE CREDIT AMOUNTS AVAILABLE FOR 21
ANY SCHEDULED APPLICATION PERIOD THAT IS NOT ISSUED BY THE DEPARTMENT 22
IN THAT APPLICATION PERIOD MAY BE CARRIE D OVER AND ISSUED DURI NG ANY 23
SUBSEQUENT APPLICATION PERIOD. 24

4–3108. 25

(A) THE COMPLIANCE AND RE CAPTURE PROVISIONS O F THIS SECTION 26
APPLY SEPARATELY WITH RESPECT TO EACH CR EDIT CERTIFICATE ISSUED UNDER 27
THIS SUBTITLE. 28

(B) THE DEPARTMENT SHALL RECAPTURE ALL OR A PORTION OF A CREDIT 29
ISSUED UNDER THIS SUBTITLE AND ANY FUTURE CREDIT SHALL BE FORFEITED IF: 30

12 SENATE BILL 372

(1) SUBJECT TO SUBSECTION (C) OF THIS SECTION, ANY AMOUNT OF 1
A FEDERAL TAX CREDIT ISSUED FOR A QUALIFIED EQUITY INVESTMENT UNDER THE 2
FEDERAL NEW MARKETS TAX CREDIT PROGRAM IS RECAPTURED; 3

(2) SUBJECT TO SUBSECTIO N (C) OF THIS SECTION , A QUALIFIED 4
COMMUNITY DEVELOPMENT ENTITY REDEEMS OR REPAYS THE PRINCIPAL AMOUNT 5
OF THE QUALIFIED EQUITY INVESTMENT PRIOR TO THE EXPIRATION OF THE CREDIT 6
ISSUED UNDER THIS SUBTITLE; 7

(3) A QUALIFIED COMMUNIT Y DEVELOPMENT ENTITY FAILS TO 8
INVEST 100% OF THE CASH PURCHASE PRICE OF THE QUALIFI ED EQUITY 9
INVESTMENT IN QUALIF IED LOW –INCOME COMMUNITY INV ESTMENTS WITHIN 1 10
YEAR AFTER RECEIPT OF THE QUALIFIED EQUITY INVESTMENT; 11

(4) A QUALIFIED COMMUNITY DEVELOPMENT ENTITY V IOLATES 12
SUBSECTION (D) OF THIS SECTION; OR 13

(5) SUBJECT TO SUBSECTIO N (E) OF THIS SECTION , A QUALIFIED 14
COMMUNITY DEVELOPMENT ENTITY FAILS TO MAINTAIN A QUALIFIED LOW–INCOME 15
COMMUNITY INVESTMENT EQUAL TO 100% OF THE CASH PURCHASE PRICE OF THE 16
QUALIFIED EQUITY INVESTMENT. 17

(C) (1) IF THE DEPARTMENT RECAPTURES A CREDIT UNDER 18
SUBSECTION (B)(1) OF THIS SECTION , THE DEPARTMENT SHALL RECA PTURE AN 19
AMOUNT PROPORTIONAL TO THE AMOUNT OF THE FEDERAL TAX CREDIT 20
RECAPTURED. 21

(2) IF THE DEPARTMENT RECAPTURES A CREDIT UNDER 22
SUBSECTION (B)(2) OF THIS SECTION , THE DEPARTMENT SHALL RECA PTURE AN 23
AMOUNT PROPORTIONAL TO THE AMOUNT OF THE REDEMPTION OR PAYMENT. 24

(D) (1) THE MAXIMUM AGGREGATE AMOUNT OF QUALIFIED LOW–INCOME 25
COMMUNITY INVESTMENTS MADE IN A QUALIFIED ACTIVE L OW–INCOME 26
COMMUNITY BUSINESS A ND ANY AFFILIATED BU SINESS ENTITY EQUALS 27
$15,000,000, INCLUDING $7,500,000 FOR ANY INDIVIDUAL QUALIFIED LOW–INCOME 28
COMMUNITY INVESTMENT. 29

(2) THE MAXIMUM AMOUNT UN DER PARAGRAPH (1) OF THIS 30
SUBSECTION IS EXCLUS IVE OF ANY PORTION O F A QUALIFIED LOW –INCOME 31
COMMUNITY INVESTMENT REDEEMED OR REPAID B Y A QUALIFIED ACTIVE 32
LOW–INCOME COMMUNITY BUSINESS. 33

SENATE BILL 372 13

(E) (1) A QUALIFIED LOW–INCOME COMMUNITY INV ESTMENT SHALL BE 1
CONSIDERED MAINTAINED BY THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY 2
EVEN IF THE INVESTME NT HAS BEEN TRANSFER RED, SOLD, OR REPAID IF THE 3
QUALIFIED COMMUNITY DEVELOPMENT ENTITY REINVESTS AN AMOUNT EQUAL TO 4
THE CAPITAL OR EQUIT Y RETURNED OR RECOVE RED FROM THE ORIGINA L 5
INVESTMENT EXCLUSIV E OF ANY PROFIT REAL IZED IN ANOTHER QUAL IFIED 6
LOW–INCOME COMMUNITY INVESTMENT IN THE STATE WITHIN 1 YEAR AFTER THE 7
RECEIPT OF THE CAPITAL OR EQUITY. 8

(2) A QUALIFIED LOW–INCOME COMMUNITY INV ESTMENT SHALL BE 9
CONSIDERED MAINTAINED BY THE QUALIFIED C OMMUNITY DEVELOPMENT ENTITY 10
IF THE QUALIFIED COM MUNITY DEVELOPMENT E NTITY RECEIVES PERIO DIC LOAN 11
REPAYMENTS FROM A QUALIFIED ACTIVE LOW–INCOME COMMUNITY BUSINESS AND 12
THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY REINVESTS THE AMOUNT IN A 13
QUALIFIED LOW –INCOME COMMUN ITY INVESTMENT BY TH E END OF THE NEXT 14
CALENDAR YEAR. 15

(F) NOTHING IN THIS SECTI ON MAY BE CONSTRUED TO REQUIRE A 16
QUALIFIED COMMUNITY DEVELOPMENT ENTITY TO REINVEST CAPITAL O R EQUITY 17
RETURNED FROM A LOW –INCOME COMMUNITY INV ESTMENT AFTER THE SI XTH 18
TAXABLE YEAR IN WHICH THE QUAL IFIED EQUITY INVESTMENT IS ELIGIBLE FOR A 19
CREDIT UNDER THIS SUBTITLE. 20

(G) (1) THE DEPARTMENT SHALL PROV IDE WRITTEN NOTICE T O A 21
QUALIFIED COMMUNITY DEVELOPMENT ENTITY OF ANY PROPOSED RECAPTURE OF 22
A CREDIT UNDER THIS SECTION. 23

(2) THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY SHALL CURE 24
ANY DEFICIENCY IDENT IFIED IN A NOTICE PR OVIDED UNDER PARAGRA PH (1) OF 25
THIS SUBSECTION WITHIN 90 DAYS AFTER RECEIPT OF THE NOTICE. 26

(3) IF THE QUALIFIED COMMUNITY DEVELOPMENT ENTITY FAILS TO 27
CURE A DEFICIENCY IDENTIFIED IN A NOTICE PROVIDED UNDER PARAGRAPH (1) OF 28
THIS SUBSECTION WITH IN 90 DAYS AFTER RECEIPT O F THE NOTICE , THE 29
DEPARTMENT SHALL: 30

(I) PROVIDE A FINAL WRITTEN ORDER OF RECAPTURE TO THE 31
QUALIFIED COMMUNITY DEVELOPMENT ENTITY; AND 32

(II) RECAPTURE THE CREDIT. 33

14 SENATE BILL 372

(4) THE DEPARTMENT SHALL REAL LOCATE A CREDIT RECA PTURED 1
UNDER THIS SUBSECTIO N IN ACCORDANCE WITH § 4–3106(C) AND (D) OF THIS 2
SUBTITLE. 3

4–3109. 4

ON OR BEFORE MAY 1, 2027, AND EACH MAY 1 THEREAFTER, A QUALIFIED 5
COMMUNITY DEVELOPMEN T E NTITY, FOR EACH CREDIT CERT IFICATE ISSUED 6
UNDER THIS SUBTITLE FOR A QUALIFIED EQUITY INVESTMENT THAT HAS NOT BEEN 7
REDEEMED OR REPAID , SHALL REPORT TO THE DEPARTMENT FOR THE 8
IMMEDIATELY PRECEDING TAXABLE YEAR INFOR MATION ABOUT EACH QU ALIFIED 9
LOW–INCOME COMM UNITY INVESTMENT MAD E BY THE QUALIFIED C OMMUNITY 10
DEVELOPMENT ENTITY, INCLUDING: 11

(1) THE DATE , AMOUNT, AND EVIDENCE OF THE QUALIFIED 12
LOW–INCOME COMMUNITY INVESTMENT; 13

(2) THE NAME AND ADDRESS OF EACH QUALIFIED AC TIVE 14
LOW–INCOME COMMUNITY BUS INESS FUNDED BY THE QUALIF IED COMMUNITY 15
DEVELOPMENT ENTITY; 16

(3) FOR EACH QUALIFIED A CTIVE LOW –INCOME COMMUNITY 17
BUSINESS FUNDED BY T HE QUALIFIED COMMUNI TY DEVELOPMENT ENTIT Y, THE 18
NUMBER AND AVERAGE ANNUAL SALARY OF EMPLOYEES WHO WERE: 19

(I) EMPLOYED PRIOR TO THE QUALIFIED LOW –INCOME 20
COMMUNITY INVESTMENT; 21

(II) EMPLOYED AT THE END OF THE IMMEDIATELY PRECEDING 22
CALENDAR YEAR; AND 23

(III) NEWLY HIRED AND RETA INED AS A RESULT OF THE 24
QUALIFIED LOW–INCOME COMMUNITY INVESTMENT; 25

(4) A BRIEF DESCRIPTION OF THE BUSINESS AND FINANCING OF EACH 26
QUALIFIED ACTIVE LOW –INCOME COMMUNITY BUS INESS FUNDED BY THE 27
QUALIFIED COMMUNITY DEVELOPMENT ENTITY; 28

(5) A CERTIFICATION THAT THE QUALIFIED COMMUN ITY 29
DEVELOPMENT ENTITY H AS UPDATED THE DEPARTMENT REGARDING ANY 30
CHANGES TO A QUALIFIED EQUITY INV ESTMENT CERTIFIED UN DER § 4–3106 OF 31
THIS SUBTITLE , INCLUDING ANY TRANSF ER OF A CERTIFICATIO N OR A CREDIT 32
CERTIFICATE IN ACCORDANCE WITH THIS SUBTITLE; AND 33
SENATE BILL 372 15

(6) A CERTIFICATION THAT NO CREDIT ISSUED UNDER THIS SUBTITLE 1
MEETS THE REQUIREMENTS FOR RECAPTURE UNDER § 4–3108 OF THIS SUBTITLE. 2

4–3110. 3

(A) THE DEPARTMENT MAY: 4

(1) CONDUCT PERIODIC EXAMINATIONS TO ENFORCE THIS SUBTITLE 5
AND TO VERIFY WHETHE R AN EVENT HAS OCCUR RED THAT WOULD RESUL T IN 6
RECAPTURE OF A CREDIT ISSUED UNDER THIS SUBTITLE; AND 7

(2) ISSUE, ON REQUEST , AN ADVISORY LETTER T O A QUALIFIED 8
COMMUNITY DEVELOPMENT ENTITY ABOUT THE REQUIREMENTS OF THIS SUBTITLE 9
THAT: 10

(I) SHALL BIND THE DEPARTMENT, THE COMPTROLLER, AND 11
THE MARYLAND INSURANCE ADMINISTRATION; AND 12

(II) MAY NOT APPLY TO ANY PERSON OTHER THAN TH E 13
QUALIFIED COMMUNITY DEVELOPMENT ENTITY T HAT REQUESTED THE AD VISORY 14
LETTER. 15

(B) WHEN CONDUCTING ENFOR CEMENT ACTIVITIES AN D ADMINISTERING 16
THE PROGRAM, THE DEPARTMENT SHALL CONSIDER GUIDANCE ISSUED UNDER THE 17
FEDERAL NEW MARKETS TAX CREDIT PROGRAM. 18

4–3111. 19

THE DEPARTMENT SHALL ADOP T REGULATIONS TO CAR RY OUT THE 20
PROVISIONS OF THIS SUBTITLE. 21

Article – Insurance 22

6–123. 23

A PERSON MAY CLAIM A C REDIT FOR A QUALIFIE D EQUITY INVESTMENT AS 24
PROVIDED UNDER TITLE 4, SUBTITLE 31 OF THE HOUSING AND COMMUNITY 25
DEVELOPMENT ARTICLE. 26

6–306. 27

16 SENATE BILL 372

A PERSON MAY CLAIM A C REDIT FOR A QUALIFIE D EQUITY INVESTMENT AS 1
PROVIDED UNDER TITLE 4, SUBTITLE 31 OF THE HOUSING AND COMMUNITY 2
DEVELOPMENT ARTICLE. 3

Article – Tax – General 4

10–758. 5

A PERSON MAY CLAIM A C REDIT FOR A QUALIFIE D EQUITY INVESTMENT AS 6
PROVIDED UNDER TITLE 4, SUBTITLE 31 OF THE HOUSING AND COMMUNITY 7
DEVELOPMENT ARTICLE. 8

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 10