§ 6-513. Tax credit certificate

   (a) Committed designated capital to be paid in installments. -- Designated capital committed by a purchaser shall be paid to the Enterprise Fund of the Department in three equal yearly installments due on June 1 of 2012, 2013, and 2014.

(b) Issuance. -- On receipt of each installment of designated capital, the Department shall issue to each purchaser a tax credit certificate representing a fully vested credit against insurance premium tax liability equal to one-third of the total premium tax credits allocated to the purchaser.

(c) Certificate issued in accordance with bidding process. -- The Department shall issue tax credit certificates to purchasers in accordance with the bidding process selected by the independent third party on behalf of the Authority under § 6-512 of this subtitle.

(d) Contents. -- The tax credit certificate shall state:

   (1) the total amount of premium tax credits that the purchaser may claim;

   (2) the amount of designated capital that the purchaser has contributed in return for the issuance of the tax credit certificate;

   (3) the dates on which the tax credits will be available for use by the purchaser;

   (4) any penalties or other remedies for noncompliance;

   (5) the procedures to be used for transferring the tax credits; and

   (6) any other requirements the Department considers necessary.

(e) Failure to make contribution of designated capital. --

   (1) A tax credit certificate may not be issued to any purchaser that fails to make a contribution of designated capital within the time the Department specifies.

   (2) A purchaser that fails to make a contribution of designated capital within the time the Department specifies shall be subject to a penalty equal to 10% of the amount of designated capital that remains unpaid, payable to the Department within 30 days after demand by the Department.

   (3) The Department may offer to reallocate the defaulted designated capital among the other purchasers, so that the result after reallocation is the same as if the initial allocation had been performed without considering the premium tax credit allocation to the defaulting purchaser.

   (4) If the reallocation of designated capital results in the contribution by another purchaser or purchasers of the amount of designated capital not contributed by the defaulting purchaser, then the Department may waive the penalty provided under this subsection.

   (5) (i) A purchaser that fails to make a contribution of designated capital within the time specified may avoid the imposition of the penalty by transferring the allocation of tax credits to a new or existing purchaser within 30 days after the due date of the defaulted installment.

      (ii) Any transferee of an allocation of tax credits of a defaulting purchaser under this section shall agree to make the required contribution of designated capital within 30 days after the date of the transfer.

   (6) (i) The Department in its sole discretion may purchase insurance or make other financial arrangements in order to ensure the availability of the full amount of designated capital committed by purchasers.

      (ii) The Department shall disclose any purchase of insurance or other similar financial arrangement under this paragraph in the annual report required under § 6-529 of this subtitle.

HISTORY: 2011, ch. 409.