Bill Text: TX HB1718 | 2023-2024 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to rural development funds and insurance tax credits for certain investments in those funds; authorizing fees.
Spectrum: Moderate Partisan Bill (Republican 4-1)
Status: (Engrossed - Dead) 2023-05-04 - Referred to Finance [HB1718 Detail]
Download: Texas-2023-HB1718-Introduced.html
Bill Title: Relating to rural development funds and insurance tax credits for certain investments in those funds; authorizing fees.
Spectrum: Moderate Partisan Bill (Republican 4-1)
Status: (Engrossed - Dead) 2023-05-04 - Referred to Finance [HB1718 Detail]
Download: Texas-2023-HB1718-Introduced.html
88R2583 BEF-D | ||
By: Ashby | H.B. No. 1718 |
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relating to rural development funds and insurance tax credits for | ||
certain investments in those funds; authorizing fees. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle F, Title 4, Government Code, is amended | ||
by adding Chapter 487A to read as follows: | ||
CHAPTER 487A. RURAL DEVELOPMENT FUNDS | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 487A.0001. GENERAL DEFINITIONS. In this chapter: | ||
(1) "Closing date" means the date a rural development | ||
fund has collected all of the credit-eligible capital contributions | ||
required by Section 487A.0056(a)(1). | ||
(2) "Growth investment" means any capital or equity | ||
investment by a rural development fund in a targeted small business | ||
or any loan by a rural development fund to a targeted small business | ||
with a stated maturity date of at least one year after the date of | ||
issuance. | ||
(3) "Rural area" means an area: | ||
(A) other than a municipality with a population | ||
of more than 50,000 or an urbanized area contiguous and adjacent to | ||
the municipality; or | ||
(B) determined to be rural in character by the | ||
United States Department of Agriculture. | ||
(4) "Rural development fund" means an entity approved | ||
by the comptroller as a rural development fund. | ||
Sec. 487A.0002. DEFINITION: AFFILIATE. (a) In this | ||
chapter, "affiliate" means an entity that directly or indirectly | ||
through one or more intermediaries controls, is controlled by, or | ||
is under common control with another entity. | ||
(b) For purposes of Subsection (a), an entity is controlled | ||
by another entity if the controlling entity: | ||
(1) holds, directly or indirectly, the majority voting | ||
or ownership interest in the controlled entity; or | ||
(2) has control over the day-to-day operations of the | ||
controlled entity by contract or by law. | ||
Sec. 487A.0003. DEFINITION: CREDIT-ELIGIBLE CAPITAL | ||
CONTRIBUTION. (a) In this chapter and subject to Subsection (b), | ||
"credit-eligible capital contribution" means an investment of cash | ||
that equals the amount specified on a tax credit certificate issued | ||
by the comptroller under Section 487A.0055(2) made by an entity | ||
that is subject to state insurance tax liability, as defined by | ||
Section 232.0001, Insurance Code. | ||
(b) An investment made by an entity qualifies as a | ||
credit-eligible capital contribution only if the entity making the | ||
investment receives in exchange for the investment: | ||
(1) an equity interest in a rural development fund; or | ||
(2) at par value or premium, a debt instrument that has | ||
a maturity date of at least five years from the closing date and a | ||
repayment schedule that is no faster than level principal | ||
amortization over five years. | ||
Sec. 487A.0004. DEFINITION: INVESTMENT AUTHORITY. (a) In | ||
this chapter, "investment authority" means the amount stated on the | ||
notice issued under Section 487A.0055(1) approving the rural | ||
development fund. | ||
(b) At least 65 percent of a rural development fund's | ||
investment authority must consist of credit-eligible capital | ||
contributions. | ||
Sec. 487A.0005. DEFINITION: JOBS CREATED. (a) In this | ||
chapter, "jobs created" means, with respect to a targeted small | ||
business, employment positions that: | ||
(1) are created by the targeted small business; | ||
(2) are located in this state; | ||
(3) require at least 35 hours of work each week; and | ||
(4) were not located in this state at the time of the | ||
initial growth investment in the targeted small business. | ||
(b) The number of jobs created by a targeted small business | ||
is calculated each year by subtracting the number of employment | ||
positions in this state at the targeted small business at the time | ||
of the initial growth investment in the targeted small business | ||
from the monthly average of those employment positions for that | ||
year. If the number calculated under this subsection is less than | ||
zero, the number shall be reported as zero. | ||
(c) The monthly average of employment positions for a year | ||
is calculated by adding the number of employment positions existing | ||
on the last day of each month of the year and dividing that sum by | ||
12. | ||
Sec. 487A.0006. DEFINITION: JOBS RETAINED. (a) In this | ||
chapter, "jobs retained" means, with respect to a targeted small | ||
business, employment positions that: | ||
(1) are located in this state, require at least 35 | ||
hours of work each week, and existed before the initial growth | ||
investment in the targeted small business; and | ||
(2) would have been lost or moved out of this state had | ||
a growth investment in the targeted small business not been made, as | ||
certified in writing by an executive officer of the targeted small | ||
business to the rural development fund. | ||
(b) The number of jobs retained by a targeted small business | ||
is calculated each year based on the monthly average of employment | ||
positions for that year. | ||
(c) The monthly average of employment positions for a year | ||
is calculated by adding the number of employment positions existing | ||
on the last day of each month of the year and dividing that sum by | ||
12. | ||
(d) The reported number of jobs retained for a year may not | ||
exceed the number reported on the initial report under Section | ||
487A.0154. The rural development fund shall reduce the number of | ||
jobs retained for a year if employment at the targeted small | ||
business is less than the number reported on the initial report. | ||
Sec. 487A.0007. DEFINITION: TARGETED SMALL BUSINESS. (a) | ||
In this chapter, "targeted small business" means a business that, | ||
at the time of the initial growth investment in the business: | ||
(1) had fewer than 250 employees, including any | ||
persons who would be considered employees under the federal law to | ||
which 13 C.F.R. Section 121.103(h)(2) applies as a result of the | ||
application of that provision; and | ||
(2) has its principal business operations located in | ||
this state. | ||
(b) For purposes of Subsection (a)(2), the principal | ||
business operations of a business are located at a place where: | ||
(1) at least 80 percent of the business's employees | ||
work; or | ||
(2) employees who are paid at least 80 percent of the | ||
business's payroll work. | ||
(c) An out-of-state business that agrees to relocate or hire | ||
new employees using the proceeds of a growth investment to | ||
establish principal business operations in this state qualifies as | ||
a targeted small business if the business satisfies the | ||
requirements of: | ||
(1) Subsection (a)(1) at the time of the initial | ||
growth investment in the business; and | ||
(2) Subsection (a)(2) not later than the 180th day | ||
after receiving the initial growth investment or a later date | ||
agreed to by the comptroller. | ||
Sec. 487A.0008. RULES. The comptroller shall adopt rules | ||
necessary to implement this chapter. | ||
Sec. 487A.0009. DISPOSITION OF FEES. Application fees | ||
submitted under Section 487A.0051(b)(7) and participation fees | ||
collected under Section 487A.0155 shall be deposited to the credit | ||
of the general revenue fund and may be appropriated only to the | ||
comptroller for the purpose of administering this chapter and | ||
Chapter 232, Insurance Code. | ||
SUBCHAPTER B. APPROVAL OF RURAL DEVELOPMENT FUNDS; TAX CREDIT | ||
CERTIFICATES | ||
Sec. 487A.0051. APPLICATION. (a) Subject to Section | ||
487A.0202, the comptroller shall accept applications from entities | ||
seeking approval as rural development funds. | ||
(b) An application must include: | ||
(1) the total investment authority sought by the | ||
applicant under the applicant's business plan; | ||
(2) evidence sufficient to prove to the comptroller's | ||
satisfaction that, as of the date the applicant submits the | ||
application: | ||
(A) the applicant or affiliates of the applicant | ||
have invested, in the aggregate, at least $100 million in nonpublic | ||
companies; and | ||
(B) at least one principal in a rural business | ||
investment company licensed under 7 U.S.C. Section 2009cc et seq. | ||
or a small business investment company licensed under 15 U.S.C. | ||
Section 681 is, and has been for at least four years, an officer or | ||
employee of the applicant or of an affiliate of the applicant on the | ||
date the application is submitted; | ||
(3) a copy of the rural business investment company | ||
license or small business investment company license described by | ||
Subdivision (2)(B); | ||
(4) an estimate of the number of jobs created and jobs | ||
retained that will result from the applicant's growth investments; | ||
(5) a business plan that includes a revenue impact | ||
assessment that: | ||
(A) projects state and local tax revenue to be | ||
generated by the applicant's proposed growth investments; and | ||
(B) is prepared by a nationally recognized | ||
third-party independent economic forecasting firm using a dynamic | ||
economic forecasting model that analyzes the applicant's business | ||
plan for the 10-year period following the date the applicant | ||
submits the application; | ||
(6) a signed affidavit from each committed investor | ||
stating the amount of credit-eligible capital contributions the | ||
investor commits to making; and | ||
(7) a nonrefundable application fee of $5,000. | ||
Sec. 487A.0052. DECISION ON APPLICATION. (a) The | ||
comptroller shall make a determination on each application not | ||
later than the 30th day after the date the comptroller receives the | ||
application. The comptroller shall make application | ||
determinations in the order in which applications are received and | ||
shall consider applications received on the same day to be received | ||
simultaneously. | ||
(b) The comptroller may approve not more than $300 million | ||
of investment authority under this chapter in any calendar year. | ||
(c) If a request for investment authority exceeds the limit | ||
under Subsection (b), the comptroller shall reduce the investment | ||
authority and the credit-eligible capital contributions for that | ||
application as necessary to avoid exceeding the limit. If multiple | ||
applications received on the same day request a combined investment | ||
authority that exceeds the limit under Subsection (b), the | ||
comptroller shall proportionally reduce the investment authority | ||
and the credit-eligible capital contributions for those | ||
applications as necessary to avoid exceeding the limit. The | ||
comptroller may not reduce an applicant's investment authority for | ||
any reason other than as authorized by this subsection. | ||
Sec. 487A.0053. GROUNDS FOR DENIAL. The comptroller may | ||
deny an application under this subchapter only if: | ||
(1) the application is incomplete or the application | ||
fee is not paid in full; | ||
(2) the applicant fails to satisfy the requirements of | ||
Section 487A.0051(b)(2); | ||
(3) the revenue impact assessment submitted under | ||
Section 487A.0051(b)(5) does not demonstrate that the applicant's | ||
business plan will result in a positive economic impact on combined | ||
state and local revenue during the 10-year period covered by the | ||
assessment that exceeds the cumulative amount of tax credits that | ||
would be issued to the applicant's investors under Chapter 232, | ||
Insurance Code, if the application were approved; | ||
(4) the credit-eligible capital contributions | ||
described in affidavits submitted under Section 487A.0051(b)(6) do | ||
not equal at least 65 percent of the total amount of investment | ||
authority sought under the applicant's business plan; or | ||
(5) the comptroller has already approved the maximum | ||
amount of investment authority allowed under Section 487A.0052(b). | ||
Sec. 487A.0054. SUBMISSION OF ADDITIONAL INFORMATION | ||
FOLLOWING DENIAL. (a) If the comptroller denies an application, | ||
the applicant may, not later than the 15th day after the date the | ||
comptroller provides notice of denial, provide additional | ||
information to the comptroller to complete, clarify, or cure | ||
defects in the application identified by the comptroller. | ||
(b) If the applicant completes, clarifies, or cures the | ||
defects in its application during the period prescribed by | ||
Subsection (a), the application is considered complete as of the | ||
original submission date. | ||
(c) If the applicant fails to complete, clarify, or cure the | ||
defects in its application during the period prescribed by | ||
Subsection (a), the application is finally denied. An applicant | ||
who wishes to reapply must resubmit an application in full with a | ||
new submission date. | ||
(d) The comptroller shall review and reconsider an | ||
application described by Subsection (a) for which the applicant | ||
provides additional information not later than the 30th day after | ||
the date the applicant provides the information. The comptroller | ||
shall consider that application before any pending applications | ||
submitted after the date that application was originally submitted. | ||
(e) This section does not apply to an application denied as | ||
a result of the applicant's failure to submit with the application | ||
affidavits required by Section 487A.0051(b)(6). | ||
Sec. 487A.0055. APPROVAL BY COMPTROLLER. On approval of an | ||
application, the comptroller shall provide: | ||
(1) written notice to the applicant of the applicant's | ||
approval as a rural development fund, including the amount of the | ||
fund's investment authority; and | ||
(2) a tax credit certificate to each investor whose | ||
affidavit was included in the application and include on the | ||
certificate the amount of the investor's credit-eligible capital | ||
contribution. | ||
Sec. 487A.0056. FUND CAPITALIZATION REQUIREMENTS. (a) A | ||
rural development fund shall: | ||
(1) not later than the 60th day after the date the fund | ||
receives an approval notice under Section 487A.0055, collect the | ||
credit-eligible capital contribution from each investor issued a | ||
tax credit certificate under that section; | ||
(2) not later than the 65th day after the date the fund | ||
receives an approval notice under Section 487A.0055, send to the | ||
comptroller documentation sufficient to prove that the fund has | ||
collected the amounts described in Subdivision (1); and | ||
(3) not later than the third anniversary of the | ||
closing date: | ||
(A) subject to Subsection (b), collect one or | ||
more investments of cash that, when added to the contributions | ||
collected under Subdivision (1), equal the fund's investment | ||
authority; and | ||
(B) send to the comptroller documentation | ||
sufficient to prove that the fund has collected the amounts | ||
described in Paragraph (A). | ||
(b) At least 10 percent of the rural development fund's | ||
investment authority must consist of equity investments | ||
contributed directly or indirectly by affiliates of the fund, | ||
including employees, officers, and directors of those affiliates. | ||
Sec. 487A.0057. LAPSE OF APPROVAL. (a) If a rural | ||
development fund fails to comply with the requirements of Section | ||
487A.0056, the fund's approval lapses and the portion of the fund's | ||
investment authority that is not invested in growth investments at | ||
the time of the lapse does not count toward the limit prescribed by | ||
Section 487A.0052(b). | ||
(b) The comptroller shall first award lapsed investment | ||
authority pro rata to each rural development fund whose requested | ||
investment authority was reduced under Section 487A.0052(c). The | ||
rural development fund may allocate the investment authority | ||
awarded under this subsection to the fund's investors in the fund's | ||
discretion. The comptroller may award any remaining investment | ||
authority to new applicants. | ||
(c) In the manner prescribed by the comptroller, a rural | ||
development fund whose approval lapses under this section: | ||
(1) may continue to administer and collect repayments | ||
of growth investments made before the lapse; and | ||
(2) shall remit to each of the fund's investors the | ||
amount of any credit-eligible capital contribution, cash | ||
contribution described by Section 487A.0056(a)(3)(A), or profit | ||
from growth investments to which the investor is entitled. | ||
SUBCHAPTER C. REVOCATION OF TAX CREDIT CERTIFICATE | ||
Sec. 487A.0101. GROUNDS FOR REVOCATION. (a) The | ||
comptroller shall revoke a tax credit certificate issued under | ||
Subchapter B in connection with an investment in a rural | ||
development fund if, before the fund exits the program under | ||
Section 487A.0151, the fund: | ||
(1) subject to Subsection (b), fails to invest at | ||
least 60 percent of the fund's investment authority in growth | ||
investments in this state on or before the second anniversary of the | ||
closing date and 100 percent of the fund's investment authority in | ||
growth investments in this state on or before the third anniversary | ||
of the closing date; | ||
(2) subject to Subsection (c) and after making the | ||
investments necessary to avoid revocation under Subdivision (1), | ||
fails to maintain growth investments equal to 100 percent of the | ||
fund's investment authority until the sixth anniversary of the | ||
closing date; | ||
(3) makes a distribution or payment that results in | ||
the fund having less than all of the amounts described by Section | ||
487A.0056 collected by the fund: | ||
(A) invested in growth investments in this state; | ||
or | ||
(B) available for investment in growth | ||
investments and held in: | ||
(i) cash; | ||
(ii) United States Treasury securities; | ||
(iii) bonds or notes issued by this state or | ||
an agency or political subdivision of this state; or | ||
(iv) a deposit account with a depository | ||
institution headquartered or chartered in this state; or | ||
(4) subject to Subsection (d), makes a growth | ||
investment in a targeted small business that directly or indirectly | ||
through an affiliate owns, has the right to acquire an ownership | ||
interest in, makes a loan to, or makes an investment in the fund, an | ||
affiliate of the fund, or an investor in the fund. | ||
(b) For purposes of Subsection (a)(1): | ||
(1) the amount of growth investments that a rural | ||
development fund may count with respect to a particular targeted | ||
small business, including any amount invested in an affiliate of | ||
the targeted small business, may not exceed $7.5 million; and | ||
(2) at least 75 percent of the required amounts of | ||
growth investments must consist of growth investments in targeted | ||
small businesses whose principal business operations are located | ||
in, or are relocated to, a rural area in this state. | ||
(c) For purposes of Subsection (a)(2): | ||
(1) the amount of growth investments that a rural | ||
development fund may count with respect to a particular targeted | ||
small business, including any amount invested in an affiliate of | ||
the targeted small business, may not exceed $7.5 million; | ||
(2) an investment that is sold or repaid is considered | ||
to be maintained if the rural development fund reinvests an amount | ||
equal to the capital returned or recovered by the fund from the | ||
original investment, excluding any profit realized, in another | ||
growth investment in this state on or before the first anniversary | ||
of the date the capital is returned or recovered; and | ||
(3) an amount received periodically by a rural | ||
development fund is considered to be continually invested in growth | ||
investments if that amount is reinvested in one or more growth | ||
investments by the end of the calendar year following the year of | ||
receipt. | ||
(d) Subsection (a)(4) does not apply to investments in | ||
publicly traded securities by a targeted small business or an owner | ||
or affiliate of the targeted small business. For purposes of | ||
Subsection (a)(4), a rural development fund is not considered an | ||
affiliate of a targeted small business solely as a result of the | ||
fund's growth investment in the targeted small business. | ||
Sec. 487A.0102. OPPORTUNITY TO CORRECT VIOLATION. (a) | ||
Before revoking a tax credit certificate under this subchapter, the | ||
comptroller shall notify the rural development fund of the reasons | ||
for the pending revocation. | ||
(b) The rural development fund may, not later than the 90th | ||
day after the date the notice is received, correct any violation | ||
outlined in the notice to the satisfaction of the comptroller and | ||
avoid revocation of the tax credit certificate. | ||
Sec. 487A.0103. ALLOCATION OF REVOKED INVESTMENT | ||
AUTHORITY. (a) If a tax credit certificate is revoked under this | ||
subchapter, the associated investment authority does not count | ||
toward the limit on total investment authority described in Section | ||
487A.0052(b). | ||
(b) The comptroller shall first award revoked investment | ||
authority pro rata to each rural development fund whose requested | ||
investment authority was reduced under Section 487A.0052(c). The | ||
comptroller may award any remaining investment authority to new | ||
applicants. | ||
SUBCHAPTER D. CERTAIN FUND OPERATIONS | ||
Sec. 487A.0151. APPLICATION TO EXIT PROGRAM. (a) On or | ||
after the sixth anniversary of the closing date, a rural | ||
development fund may apply to the comptroller to exit the program | ||
and no longer be subject to regulation under this chapter. | ||
(b) The comptroller shall respond to the application not | ||
later than the 30th day after receipt. | ||
(c) A rural development fund is eligible to exit the program | ||
under this section if no tax credit certificates related to | ||
investments in the fund have been revoked and the fund has not | ||
received any revocation notice that has not been corrected under | ||
Section 487A.0102. | ||
(d) The comptroller may not unreasonably deny an | ||
application under this section. The comptroller shall give the | ||
rural development fund notice of a denial and include in the notice | ||
the reasons for the denial. | ||
Sec. 487A.0152. NO REVOCATION FOLLOWING EXIT. The | ||
comptroller may not revoke a tax credit certificate related to an | ||
investment in a rural development fund after the fund's exit from | ||
the program. | ||
Sec. 487A.0153. EVALUATION OF PROPOSED INVESTMENT. (a) A | ||
rural development fund, before making a growth investment, may | ||
request from the comptroller a written opinion as to whether the | ||
business in which the fund proposes to invest qualifies as a | ||
targeted small business. | ||
(b) Not later than the 15th business day after receiving the | ||
request, the comptroller shall notify the rural development fund of | ||
its determination. | ||
(c) If the comptroller fails to notify the rural development | ||
fund of its determination on or before the 15th business day after | ||
receiving the request, the business in which the fund proposes to | ||
invest is considered to be a targeted small business for purposes of | ||
this chapter. | ||
Sec. 487A.0154. ANNUAL REPORT. (a) A rural development | ||
fund shall submit a report to the comptroller on or before the fifth | ||
business day after each anniversary of the closing date until the | ||
fund has exited the program under Section 487A.0151. | ||
(b) The report must document the rural development fund's | ||
growth investments and include: | ||
(1) a bank statement showing each growth investment; | ||
(2) the name, location, and industry of each business | ||
receiving a growth investment, including either the determination | ||
notice described by Section 487A.0153 or evidence that the business | ||
qualified as a targeted small business at the time the investment | ||
was made; | ||
(3) the number of jobs created and jobs retained in the | ||
preceding calendar year as a result of the fund's growth | ||
investments as of the last day of that period; | ||
(4) the average annual salary of the jobs described by | ||
Subdivision (3) and evidence of any other monetary or social | ||
benefit to this state as a result of those jobs; | ||
(5) a description, including the amount, of each | ||
growth investment in a targeted small business located in a rural | ||
area made in the 24 months following the closing date; and | ||
(6) any other information the comptroller requires. | ||
(c) A rural development fund may, but is not required to, | ||
include in any report submitted under this section information | ||
about the number of jobs created and jobs retained with respect to a | ||
former growth investment that the fund has exited. | ||
Sec. 487A.0155. PARTICIPATION FEE. (a) A rural | ||
development fund that has not exited the program under Section | ||
487A.0151 before the first day of a state fiscal year shall remit to | ||
the comptroller a participation fee in connection with the state | ||
fiscal year in an amount determined under Subsection (b)(2). The | ||
comptroller shall prescribe the date on which the fee payment is | ||
due. | ||
(b) For each state fiscal year, the comptroller shall | ||
determine: | ||
(1) the costs incurred by the comptroller to | ||
administer this chapter and Chapter 232, Insurance Code, less the | ||
amount of application fees submitted under Section | ||
487A.0051(b)(7); and | ||
(2) the amount of the participation fee each rural | ||
development fund described by Subsection (a) is required to pay in | ||
connection with the state fiscal year, which is computed by | ||
multiplying the amount determined under Subdivision (1) for the | ||
state fiscal year by a fraction: | ||
(A) the numerator of which is the amount of the | ||
rural development fund's investment authority; and | ||
(B) the denominator of which is the total amount | ||
of investment authority for all rural development funds required to | ||
pay a fee under Subsection (a) in connection with the state fiscal | ||
year. | ||
SUBCHAPTER E. REPORT; CONDITIONS FOR ACCEPTANCE OF CERTAIN | ||
APPLICATIONS | ||
Sec. 487A.0201. REPORT. (a) Before the beginning of the | ||
91st Legislature, Regular Session, the comptroller shall submit to | ||
the lieutenant governor, the speaker of the house of | ||
representatives, and each other member of the legislature a report | ||
on the economic benefits of this chapter. | ||
(b) The report must include an assessment of: | ||
(1) the aggregate effects of growth investments made | ||
under this chapter, including: | ||
(A) the total number of jobs created by all | ||
targeted small businesses, including direct jobs, indirect jobs, | ||
and induced jobs; | ||
(B) the total number of jobs retained by all | ||
targeted small businesses; | ||
(C) the total amount of wages paid in connection | ||
with jobs created and jobs retained by all targeted small | ||
businesses; | ||
(D) the median wage of jobs created and jobs | ||
retained by all targeted small businesses; | ||
(E) the total effect on personal income in this | ||
state, including direct and indirect effects; | ||
(F) the total amount of growth investments; | ||
(G) the gross domestic product of this state | ||
attributable to targeted small businesses; | ||
(H) the total taxable value of property of | ||
targeted small businesses in this state according to tax appraisal | ||
rolls; | ||
(I) the total positive fiscal effect on this | ||
state and local governments in this state; and | ||
(J) the total number and dollar amount of growth | ||
investments in targeted small businesses located in rural areas; | ||
(2) the benefits to this state from cost savings | ||
attributable to jobs created and jobs retained by all targeted | ||
small businesses, including: | ||
(A) Medicaid savings, with savings to this state | ||
and the federal government listed separately; | ||
(B) food assistance program savings; | ||
(C) unemployment insurance payment savings; and | ||
(D) any other savings that can be reasonably | ||
estimated using data available to the comptroller in connection | ||
with some or all targeted small businesses; and | ||
(3) the total positive fiscal effect on this state and | ||
local governments in this state of the benefits described by | ||
Subdivision (2). | ||
(c) The report may not include information that is | ||
confidential by law. | ||
(d) In preparing the portion of the report described by | ||
Subsection (b)(1), the comptroller shall: | ||
(1) use standard, nationally recognized economic | ||
estimation techniques, including economic multipliers; and | ||
(2) base the assessment on data submitted to the | ||
comptroller by each rural development fund. | ||
Sec. 487A.0202. CONDITIONS FOR ACCEPTANCE OF CERTAIN | ||
APPLICATIONS. (a) The comptroller may not accept applications | ||
under Section 487A.0051 after January 1, 2024, unless the total | ||
positive fiscal effects described by Section 487A.0201(b) exceed | ||
the sum of all tax credit certificates issued by the comptroller | ||
under Subchapter B. | ||
(b) The comptroller shall resume accepting applications | ||
under Section 487A.0051 when the condition provided by Subsection | ||
(a) is satisfied. | ||
SECTION 2. Subtitle B, Title 3, Insurance Code, is amended | ||
by adding Chapter 232 to read as follows: | ||
CHAPTER 232. TAX CREDIT FOR INVESTMENT IN RURAL DEVELOPMENT FUND | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 232.0001. DEFINITIONS. In this chapter: | ||
(1) "Affiliate" has the meaning assigned by Section | ||
487A.0002, Government Code. | ||
(2) "Closing date" has the meaning assigned by Section | ||
487A.0001, Government Code. | ||
(3) "State insurance tax liability" means any tax | ||
liability incurred under Chapter 221, 222, 223, 223A, 224, 225, | ||
226, or 281. | ||
Sec. 232.0002. RULES. The comptroller shall adopt rules | ||
necessary to implement this chapter. | ||
SUBCHAPTER B. TAX CREDIT | ||
Sec. 232.0051. ELIGIBILITY FOR CREDIT. An entity is | ||
eligible for a credit against the entity's state insurance tax | ||
liability in the amount and under the conditions provided by this | ||
chapter. | ||
Sec. 232.0052. QUALIFICATION. An entity is eligible for a | ||
credit for a tax year if the entity holds a tax credit certificate | ||
issued under Section 487A.0055, Government Code, and the third, | ||
fourth, fifth, or sixth anniversary of the closing date in | ||
connection with which the certificate was issued occurs during the | ||
tax year. | ||
Sec. 232.0053. AMOUNT OF CREDIT; LIMITATION. (a) The | ||
amount of credit for a tax year in connection with a tax credit | ||
certificate described by Section 232.0052 is equal to 25 percent of | ||
the amount of the credit-eligible capital contribution stated on | ||
the certificate. | ||
(b) The total credit claimed for a tax year, including the | ||
amount of any carryforward under Section 232.0054, may not exceed | ||
the amount of state insurance tax liability due for the entity for | ||
the tax year after applying all other applicable tax credits. | ||
(c) Credits may be applied to the entity's estimated or | ||
final tax payments for the tax year. | ||
Sec. 232.0054. CARRYFORWARD. If an entity is eligible for a | ||
credit that exceeds the limitation under Section 232.0053(b), the | ||
entity may carry the unused credit forward and apply the credit to a | ||
subsequent tax report. | ||
Sec. 232.0055. ASSIGNMENT PROHIBITED. (a) Except as | ||
provided by Subsection (b), an entity may not convey, assign, or | ||
transfer the credit allowed under this chapter to another entity. | ||
(b) An entity may convey, assign, or transfer the credit | ||
allowed under this chapter to an affiliate of the entity that is | ||
subject to state insurance tax liability. | ||
Sec. 232.0056. RETALIATORY TAX. An entity claiming a | ||
credit under this chapter is not required to pay any additional | ||
retaliatory tax levied under Chapter 281 as a result of claiming | ||
that credit. | ||
SUBCHAPTER C. RECAPTURE OF CREDIT | ||
Sec. 232.0101. RECAPTURE. The comptroller shall recapture | ||
the amount of a credit claimed on a tax report filed under Chapter | ||
221, 222, 223, 223A, 224, 225, 226, or 281 from an entity if the tax | ||
credit certificate on which the credit is based is revoked under | ||
Subchapter C, Chapter 487A, Government Code. | ||
SECTION 3. (a) As soon as practicable after this Act | ||
becomes law as provided by Section 2001.006, Government Code, the | ||
comptroller of public accounts shall adopt rules necessary to | ||
implement Chapter 487A, Government Code, as added by this Act, and | ||
Chapter 232, Insurance Code, as added by this Act. | ||
(b) Not later than October 1, 2023, the comptroller of | ||
public accounts shall begin accepting applications under Section | ||
487A.0051(a), Government Code, as added by this Act. | ||
SECTION 4. Chapter 232, Insurance Code, as added by this | ||
Act, applies only to a tax report originally due on or after January | ||
1, 2023. | ||
SECTION 5. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2023. |