Investment by qualified funds.

(a) Any qualified fund may invest at least three percent of its corpus in one or more approved opportunity funds.

(b) The following terms shall have the following meanings:

(1) "ADECA" shall mean the Department of Economic and Community Affairs.

(2) "Approved opportunity fund" shall mean any fund approved by ADECA as meeting all of the following:

a. ADECA determines that the fund has the capacity to improve Alabama's low-income opportunity zone communities by approving an application showing all of the following:

1. The amount of existing committed capital or potential to raise committed capital.

2. The investment track record or strength of the applicant's management team.

3. The existing project pipeline or strategy for developing new pipeline.

4. The fund structure and anticipated returns within that fund structure.

5. The presence of sound legal, accounting, and compliance policies and procedures.

6. A strategy for measuring, tracking, and annual reporting to ADECA on how the approved opportunity fund is achieving investment outcomes set forth in its applications.

7. One or more clear and demonstrable partnerships with local or statewide public or nonprofit entities to ensure community engagement.

b. ADECA determines that the fund has committed to deploying a substantial portion of its capital into qualified opportunity zone property in Alabama within one or more of the following asset classes:

1. Rural areas described in Section 40-18-376.1(a).

2. Technology companies which meet all the criteria in Section 40-18-376.3(c), or facilities to house such companies.

3. Companies or projects described in Section 40-18-372(1), or facilities to house such companies or projects.

4. Workforce training.

5. Affordable housing, in which case the burden shall be on the fund to demonstrate rent levels charged and why those rents are appropriate for a particular geographic area.

6. Remediation of blighted or abandoned property, in which case the burden shall be on the fund to demonstrate why targeted properties qualify as blighted or abandoned.

7. Revitalization of distressed urban neighborhoods, in which case the burden shall be on the fund to demonstrate why a neighborhood is distressed and why its investment strategy will revitalize the neighborhood.

8. Companies or projects that will have substantial, measurable impact on social, environmental, or economic conditions in low-income areas, or facilities to house such companies or projects, in which case the burden shall be on the fund to demonstrate why such companies or projects will have such substantial effects.

c. In addition, ADECA may determine that a fund meets paragraph b. if it can demonstrate that it will create substantial wealth within and for residents of Alabama's low-income and rural communities and will directly track the wealth created.

d. The fund commits to investing at least 75 percent of its committed capital in qualified opportunity zone property located in Alabama. ADECA shall adopt rules for determining whether an investment in a corporation or partnership should be considered to be located in Alabama. For purposes of this paragraph, "qualified opportunity zone property" shall have the meaning given to it in 26 U.S.C. § 1400Z-2(d)(2).

(3) "Qualified funds" are each of the following:

a. The Alabama Trust Fund created by Amendment No. 450 to the Constitution of Alabama of 1901, now appearing as Section 219.02 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

b. The Alabama Game and Fish Fund created by Section 9-2-20, the Alabama Game and Fish Endowment Fund created by Section 9-2-20.1, and the Alabama Nongame Wildlife Endowment created by Section 9-2-20.2.

c. The Alabama Marine Resources Endowment Fund created by Section 9-11-23 and the Marine Resources Fund referred to in that section.

d. The Alabama Corrections Institution Finance Authority funds referred to in Chapter 2 of Title 14.

e. The Public Health Finance Authority funds described in Chapter 3A of Title 22.

f. The Public Road and Bridge funds described in Chapter 6 of Title 23.

g. The Unemployment Compensation Trust Fund created by Section 25-4-30.

h. The Mental Health Finance Authority funds described in Article 11 of Chapter 10 of Title 41.

i. The Incentives Financing Authority funds described in Division 1 of Article 16 of Chapter 10 of Title 41.

j. The Alabama Senior Services Trust Fund created by Section 41-15C-1.

k. Any fund of funds representing two or more of the funds listed in paragraphs a. through j.

(c) ADECA may charge application fees for the powers and responsibilities delegated to it herein, and it may charge fees for its financial and oversight audits of the funds. ADECA may retain consultants to assist it with the powers and responsibilities delegated to it herein.

(Act 2019-392, §6.)