§ 4-28-101. Short Title
This chapter shall be known and may be cited as the “Tennessee Small Business Investment Company Credit Act.”
§ 4-28-102. Chapter Definitions
As used in this chapter: “Affiliate” means: Any person who, directly or indirectly, beneficially owns, controls or holds the power to vote fifteen percent (15%) or more of the outstanding voting securities or other voting ownership interest of a TNInvestco or insurance company; or Any person, fifteen percent (15%) or more of whose outstanding voting […]
§ 4-28-103. Participating Investor’s Investment Tax Credit — Limits — Payment of Retaliatory Tax Not Required — Credits Against Other Taxes
A participating investor shall earn an investment tax credit against its state premium tax liability equal to one hundred percent (100%) of the investment tax credit allocated to the participating investor under § 4-28-105. The participating investor’s investment tax credit shall be earned and vested upon making its investment in the qualified TNInvestco. Beginning January […]
§ 4-28-104. Standardized Format for Qualification — Qualification Requirements — Determination of Satisfaction of Requirements — Issuance of Certification or Refusal — Submission of Applications
The department of economic and community development, in consultation with the department of revenue, shall provide a standardized format for persons attempting to qualify as a TNInvestco. An applicant for qualification is required to: File an application with the department of economic and community development; Pay a nonrefundable application fee of seven thousand five hundred […]
§ 4-28-105. Standardized Format for Tninvestco to Apply for Investment Tax Credits — Information Required in Applications — Submission of Irrevocable Investment Commitments — Penalty for Failure to Perform — Review of Applications — Criteria — Aggregate Amount of Investment Tax Credits to Be Allocated — Deadline for Approval
The department of economic and community development, in consultation with the department of revenue must provide a standardized format for a TNInvestco to apply for the investment tax credits. Applications shall contain such information as required by the department of revenue and the department of economic and community development, including statements regarding the ability to […]
§ 4-28-106. Maintaining Certification — Penalty for Failure to Meet Performance Measures — Request for Written Determination That Proposed Investment Will Qualify as a Qualified Investment in a Qualified Business or a Seed or Early Stage Investment
To maintain its certification, a qualified TNInvestco shall make qualified investments, as follows: Within two (2) years after the allocation date, a qualified TNInvestco shall have invested an amount equal to at least fifty percent (50%) of its base investment amount in qualified investments; Within three (3) years after the allocation date, a qualified TNInvestco […]
§ 4-28-107. Restrictions on Insurance Companies and Their Affiliates
An insurance company or affiliate of an insurance company shall not, directly or indirectly: Beneficially own, whether through rights, options, convertible interest or otherwise, fifteen percent (15%) or more of the voting securities or other voting ownership interest of a TNInvestco; Manage a TNInvestco, other than exercising remedies for default; or Control the direction of […]
§ 4-28-108. Distributions From Qualified Tninvestco
Qualified distributions from a qualified TNInvestco may be made at any time. Distributions other than qualified distributions from a qualified TNInvestco may be paid out annually or upon designated liquidity events as established by the qualified TNInvestco. Any such distributions other than qualified distributions may not reduce the base investment amount during any calendar year. […]
§ 4-28-109. Payment of Profit Share Percentage — Transfers From the General Fund to the Tennessee Rural Opportunity Fund and the Small and Minority Owned Business Assistance Program Fund — Distribution of Investment Returns — Minimizing Any Related Federal Tax Obligation
At any time that the TNInvestco makes distributions, other than qualified distributions or distributions representing repayments of capital contributions, to its equity investors, the qualified TNInvestco shall pay to the state the profit share percentage. Any such payments shall be deposited into the general fund until such time as the department of finance and administration […]
§ 4-28-110. Report by Tninvestco — Annual, Nonrefundable Certification Fee — Satisfaction of the Requirements of § 4-28-106(a)(1) — Key Persons
Each qualified TNInvestco shall report the following to the department of economic and community development: As soon as practicable, but no later than thirty (30) days after the receipt of designated capital: The name of each participating investor from which the designated capital was received, including such participating investor’s insurance tax identification number; The amount […]
§ 4-28-111. Annual Review — Summary of Findings — Curing Noncompliance
The department shall conduct an annual review of each qualified TNInvestco to determine if the qualified TNInvestco is abiding by the requirements of the program and to ensure that no investments have been made in violation of this chapter. This review shall include the use of the scorecard data received from each qualified TNInvestco as […]
§ 4-28-112. Annual Report
The department of economic and community development shall make an annual report to the governor, the comptroller of the treasury, the state treasurer, and the chairs and ranking minority members of the committees having jurisdiction over taxes and economic development. The report must include: The number of qualified TNInvestcos holding designated capital; The amount of […]
§ 4-28-113. Investment Stategy Scorecard — Annual Review — Compliance — Written Findings
Within ninety (90) days after the department of economic and community development provides notice to a TNInvestco, the commissioner of economic and community development and the commissioner of revenue, in consultation with the state treasurer, working with the TNInvestco, shall cause to be created an investment strategy “scorecard” for the TNInvestco. The “scorecard” shall contain […]
§ 4-28-114. Maintenance of Website
Any qualified TNInvestco that has received an allocation of investment tax credits pursuant to this chapter shall be required to maintain a website that provides information to the general public about the biographical and professional background of each member of the executive management team of the TNInvestco and of each member of the board or […]
§ 4-28-115. Liquidation of Remaining State Ownership Interests — Method — Approval by Treasurer
Beginning on December 31, 2021, the department shall liquidate any remaining ownership interests owned by the state. Methods to liquidate remaining ownership interests include the sale of interests to a third party. The sale of any ownership interests shall be approved by the treasurer.