Section 40-14B-6

Qualified investments. THIS SECTION WAS ASSIGNED BY THE CODE COMMISSIONER. THIS SECTION HAS NOT BEEN CODIFIED BY THE LEGISLATURE.

(a) To continue to be certified, a certified capital company shall make qualified investments according to the following schedule:

(1) Before the third anniversary of its allocation date, a company must have made qualified investments in an amount cumulatively equal to at least 35 percent of its certified capital.

(2) Before the fifth anniversary of its allocation date, a company must have made qualified investments in an amount cumulatively equal to at least 50 percent of its certified capital.

(b) The aggregate cumulative amount of all qualified investments made by the certified capital company after its allocation date shall be considered in the computation of the percentage requirements under this chapter. Any proceeds received from a qualified investment may be invested in another qualified investment and count toward any requirement in this chapter with respect to investments of certified capital.

(c) A business that is classified as a qualified technology business at the time of the first investment in the business by a certified capital company remains classified as a qualified technology business and may receive follow-on investments from any certified capital company. Except as provided by this subsection, a follow-on investment made under this subsection is a qualified investment even though the business may not meet the definition of a qualified technology business at the time of the follow-on investment. A follow-on investment does not qualify as a qualified investment if, at the time of the follow-on investment, the qualified technology business no longer has its headquarters in this state.

(d) A qualified investment may not be made at a cost to a certified capital company greater than 15 percent of the total certified capital of the company.

(e) If, before the 180th day after the date that a certified capital company makes an investment in a qualified technology business, the qualified technology business moves its principal business operations from this state, the investment may not be considered a qualified investment for purposes of the percentage requirements under this chapter.

(f) A certified capital company shall invest any certified capital not invested in qualified investments only as follows:

(1) Cash deposited with a federally insured financial institution.

(2) Certificates of deposit in a federally insured financial institution.

(3) Investment securities that are obligations of the United States or its agencies or instrumentalities or obligations that are guaranteed fully as to principal and interest by the United States.

(4) Debt instruments rated at least "A" or its equivalent by a nationally recognized credit rating organization, or issued by, or guaranteed with respect to payment by, an entity whose unsecured indebtedness is rated at least "A" or its equivalent by a nationally recognized credit rating organization, and which indebtedness is not subordinated to other unsecured indebtedness of the issuer or the guarantor.

(5) Obligations of this state or any municipality or political subdivision of this state.

(6) Any other investments approved in advance and in writing by the Alabama Development Office.

(Act 2002-429, p. 1108, §6.)