‘‘(E) carries an interest rate or dividend 
that is not tied to any income received by the 
qualified community development financial in-
stitution, and 
‘‘(F) has an indeterminate maturity. 
‘‘(c) QUALIFIED COMMUNITY DEVELOPMENT FINAN-
CIAL INSTITUTION.—For purposes of this section, the 
term ‘qualified community development financial institu-
tion’ means— 
‘‘(1) any community development financial in-
stitution (as defined in section 103 of the Commu-
nity Development Banking and Financial Institu-
tions Act of 1994 (12 U.S.C. 4702)), or 
‘‘(2) any partnership that is controlled, for pur-
poses of section 482, or any investment vehicle the 
investment activities of which are otherwise substan-
tially entirely managed and directed, by one or more 
community development financial institutions (as so 
defined). 
‘‘(d) NATIONAL LIMITATION ON AMOUNT OF INVEST-
MENTS DESIGNATED.— 
‘‘(1) IN GENERAL.—There is an investment tax 
credit limitation for each calendar year. Such a limi-
tation is— 
‘‘(A) $1,000,000,000 for 2023, 
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‘‘(B) $1,500,000,000 for 2024, and 
‘‘(C) $2,000,000,000 for each year there-
after. 
‘‘(2) INFLATION ADJUSTMENT.— 
‘‘(A) IN GENERAL.—In the case of any cal-
endar year after 2025, the $2,000,000,000 in 
paragraph (1)(C) shall be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2024’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—If any increase deter-
mined under subparagraph (A) is not a multiple 
of $1,000,000, such increase shall be rounded 
to the nearest multiple of $1,000,000. 
‘‘(3) ALLOCATION OF LIMITATION.— 
‘‘(A) IN GENERAL.—The limitation under 
paragraph (1) shall be allocated by the Sec-
retary among qualified community development 
financial institutions selected by the Secretary 
based on the following criteria: 
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‘‘(i) Financial and compliance per-
formance. 
‘‘(ii) Demonstrated ability to attract 
private capital. 
‘‘(iii) The diversity of business model 
types. 
‘‘(iv) The diversity of population den-
sity served. 
‘‘(v) Impact generation capacity. 
‘‘(vi) The information contained in the 
investment plan described in subparagraph 
(B). 
‘‘(vii) Whether the investment term 
will exceed 10 years. 
‘‘(viii) Such other criteria as deter-
mined appropriate by the Secretary. 
‘‘(B) REQUIREMENT TO PROVIDE AN IN-
VESTMENT PLAN.—An application submitted to 
the Secretary under subparagraph (A) shall in-
clude a plan that— 
‘‘(i) describes how the qualified com-
munity development financial institution 
will expand or maintain its lending and in-
vesting activity in its target market as a 
result of qualified CDFI investments, and 
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‘‘(ii) includes such other information 
as required by the Secretary. 
‘‘(4) CARRYOVER OF UNUSED LIMITATION.—If 
the new investment tax credit limitation for any cal-
endar year exceeds the aggregate amount allocated 
under paragraph (2) for such year, such limitation 
for the succeeding calendar year shall be increased 
by the amount of such excess. 
‘‘(5) AUTHORIZATION OF USER FEES.— 
‘‘(A) IN
GENERAL.—The Secretary may 
charge a user fee for a request for an allocation 
of the limitation under paragraph (3). 
‘‘(B) USE OF FEES.—Any fees collected by 
the Secretary pursuant to subparagraph (A) 
may be used to contract with third parties to 
verify information relating to the qualification 
of an entity as a qualified community develop-
ment financial institution. 
‘‘(C) LIMITATION.—The fee charged under 
subparagraph (A) shall not exceed 0.05 percent 
of the amount of the allocation requested. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be appropriate to carry out this 
section, including regulations— 
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‘‘(1) which limit the credit under this section 
for investments which directly or indirectly receive a 
Federal tax benefit (including a credit under section 
42 or an exclusion from gross income under section 
103), 
‘‘(2) which prevent the abuse of the purposes of 
this section, 
‘‘(3) which impose appropriate reporting re-
quirements, and 
‘‘(4) which provide rules for allocations under 
subsection (d)(3) to persons that have been certified 
as emerging community development financial insti-
tutions under section 105 of the Community Devel-
opment Banking and Financial Institutions Act of 
1994.’’. 
(b) PART OF GENERAL BUSINESS CREDIT.—Section 
38(b) of such Code is amended by striking ‘‘plus’’ at the 
end of paragraph (40), by striking the period at the end 
of paragraph (41) and inserting ‘‘, plus’’, and by adding 
at the end the following new paragraph: 
‘‘(42) the CDFI investment credit determined 
under section 45BB(a).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 45D(b)(1) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
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end of subparagraph (B), by striking the period at 
the end of subparagraph (C) and inserting ‘‘, and’’, 
and by adding at the end the following new subpara-
graph: 
‘‘(D) such investment has not been des-
ignated as a qualified CDFI investment for 
purposes of section 45BB.’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘45BB. Community development financial institution investment tax credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to investments made after the date 
of the enactment of this Act. 
SEC. 3. COMMUNITY DEVELOPMENT EQUITY FUNDS. 
Section 105 of the Community Development Banking 
and Financial Institutions Act of 1994 (12 U.S.C. 4704) 
is amended by adding at the end the following: 
‘‘(d) COMMUNITY DEVELOPMENT EQUITY FUNDS.— 
‘‘(1) DEFINITION.—In this subsection, the term 
‘community development equity fund’ means a com-
munity development financial institution with a 
management entity that manages 1 or more invest-
ment funds where a majority of both the number 
and dollar volume of financial products are equity or 
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near equity investments in small businesses located 
in an investment area or small businesses majority 
owned by a targeted population. 
‘‘(2) QUALIFICATIONS.—In an application for 
assistance under this subtitle, an applicant that is a 
community development equity fund shall dem-
onstrate, to the satisfaction of the Secretary, that 
the current or proposed management team of the 
fund is qualified and has the knowledge, experience, 
and capability necessary for investing in the types of 
businesses contemplated by this Act, regulations im-
plementing this Act, and the business plan of the 
fund. 
‘‘(3) TREATMENT.—The management entity of 
the community development equity fund and all of 
its current and future managed investment funds 
shall be treated as one community development fi-
nancial institution, regardless of the separation of 
the corporate structures, if the management entity 
maintains control over the investment decisions of 
the managed funds and has not made changes to its 
management team without approval of the Sec-
retary.’’. 
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SEC. 4. EMERGING CDFIS. 
Section 105 of the Community Development Banking 
and Financial Institutions Act of 1994 (12 U.S.C. 4704), 
as amended by section 3 of this Act, is amended by adding 
at the end the following: 
‘‘(e) EMERGING COMMUNITY DEVELOPMENT FINAN-
CIAL INSTITUTIONS.— 
‘‘(1) IN GENERAL.—An entity may submit to 
the Fund an application to be certified as an emerg-
ing community development financial institution. 
‘‘(2) BUSINESS
PLAN.—The application de-
scribed in paragraph (1) shall include a business 
plan that demonstrates that, during the 18-month 
period beginning on the date on which the business 
plan is approved, the entity will meet the require-
ments of subparagraph (A) of section 103(5) or sub-
section (d) of this section.’’. 
Æ 
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