(a)

(1)

(A) To maintain its certification, a qualified TNInvestco shall make qualified investments, as follows:

(i) 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;

(ii) Within three (3) years after the allocation date, a qualified TNInvestco shall have invested an amount equal to at least seventy percent (70%) of its base investment amount in qualified investments;

(iii) Within four (4) years after the allocation date, a qualified TNInvestco shall have invested an amount equal to at least eighty percent (80%) of its base investment amount in qualified investments; and

(iv) Within six (6) years or any year thereafter the allocation date, a qualified TNInvestco shall have invested an amount equal to at least ninety percent (90%) of its base investment amount in qualified investments.

(B) Not more than twenty-five percent (25%) of the investment amounts required by subdivisions (a)(1)(A)(i)-(iv) shall be attributable to the three-hundred-percent (300%) seed or early-stage multiplier.

(2) Failure to meet the performance measures set out in subdivision (a)(1) during any calendar year shall result in a two-hundred-fifty-thousand-dollar penalty fee against the qualified TNInvestco. The proceeds from any such penalty fee shall be deposited into the Tennessee rural opportunity fund to further the state's economic development efforts. Funds related to the investment tax credit shall not be used to pay the penalty fee imposed under this subdivision (a)(2).

(b) Prior to making a proposed qualified investment in a specific business, a qualified TNInvestco must request from the department of economic and community development a written determination that the proposed investment will qualify as a qualified investment in a qualified business or, if applicable, a seed or early stage investment. The department shall notify a qualified TNInvestco within ten (10) business days from the receipt of a request of its determination. If the department fails to notify the qualified TNInvestco of its determination within ten (10) business days, the proposed investment will be deemed to be a qualified investment in a qualified business and, if applicable, a seed or early stage investment. If the department determines that the proposed investment does not meet the definition of a qualified investment, qualified business, or seed or early stage investment, the department may nevertheless consider the proposed investment a qualified investment, or a seed or early stage investment, and if necessary, the business a qualified business, if the department determines that the proposed investment will further state economic development.

(c) All designated capital not invested in qualified investments by a qualified TNInvestco shall be held in an escrow account maintained by the state and administered through the department of economic and community development.

(d) A qualified TNInvestco may not invest more than fifteen percent (15%) of its designated capital in any one qualified business without the specific approval of the department of economic and community development.

(e) Any amounts that have not been invested by the TNInvestco at the end of the investment period shall be forfeited and paid to the state to support the Tennessee rural opportunity fund. Investment returns, profits and the portion of the base investment amount, may be reinvested until the seventh anniversary of the fund. If a TNInvestco elects to reinvest returns, the TNInvestco shall reinvest the state's and the TNInvestco's returns in equal portions.

(f) No qualified TNInvestco shall sell any interest in a qualified business to an affiliate unless the TNInvestco has first obtained written authorization for the sale from the department of economic and community development.

(g)

(1) All qualified TNInvestcos, and the qualified businesses in which they invest, shall strive to maximize the participation of minority-owned businesses and woman-owned businesses to reflect the racial, ethnic and gender diversity of Tennessee's population.

(2) The department of economic and community development shall promote awareness of the program established by this chapter among minority-owned businesses and woman-owned businesses.

(3) The department of economic and community development shall undertake training programs and other educational activities to increase diversity of participation by encouraging minority-owned businesses and woman-owned businesses to apply, compete and qualify for investments under this chapter.

(4) Each TNInvestco shall coordinate its efforts to strive to maximize participation in minority-owned businesses and woman-owned businesses with the efforts of the department of economic and community development.

(5) Each TNInvestco shall provide information on its web site concerning this program and the availability of capital to businesses including minority-owned businesses and woman-owned businesses.