114 STAT. 2763A-606 PUBLIC LAW 106-554—APPENDIX G shall not exceed the portion of the limitation amount allocated under subsection (f) to such entity. " (3) SAFE HARBOR FOR DETERMINING USE OF CASH.— The requirement of paragraph (1)(B) shall be treated as met if at least 85 percent of the aggregate gross assets of the qualified community development entity are invested in qualified lowincome community investments. "(4) TREATMENT OF SUBSEQUENT PURCHASERS.— The term 'qualified equity investment' includes any equity investment which would (but for paragraph (1)(A)) be a qualified equity investment in the hands of the taxpayer if such investment was a qualified equity investment in the hands of a prior holder. "(5) REDEMPTIONS. —^A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this subsection. "(6) EQUITY INVESTMENT.—The term 'equity investment' means— "(A) any stock (other than nonqualified preferred stock as defined in section 351(g)(2)) in an entity which is a corporation, and "(B) any capital interest in an entity which is a partnership. "(c) QUALIFIED COMMUNITY DEVELOPMENT ENTITY. — For purposes of this section— "(1) IN GENERAL.— The term 'qualified community development entity means any domestic corporation or partnership if— "(A) the primary mission of the entity is serving, or providing investment capital for, low-income communities or low-income persons, "(B) the entity maintains accountability to residents of low-income communities through their representation on any governing board of the entity or on any advisory board to the entity, and "(C) the entity is certified by the Secretary for purposes of this section as being a qualified community development entity. " (2) SPECIAL RULES FOR CERTAIN ORGANIZATIONS. — The requirements of paragraph (1) shall be treated as met by— "(A) any specialized small business investment company (as defined in section 1044(c)(3)), and "(B) any community development financial institution (as defined in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702)). " (d) QUALIFIED LOW-INCOME COMMUNITY INVESTMENTS.—For purposes of this section— "(1) IN GENERAL. —The term 'qualified low-income community investment' means— "(A) any capital or equity investment in, or loan to, any qualified active low-income community business, "(B) the purchase from another qualified community development entity of any loan made by such entity which is a qualified low-income community investment, "(C) financial counseling and other services specified in regulations prescribed by the Secretary to businesses located in, and residents of, low-income communities, and
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