Texas Senate Bill SB826

Texas 2019 - 86th Regular

Caption

Relating to rural and opportunity funds and insurance tax credits for certain investments in those funds; imposing a monetary penalty; authorizing fees.

Impact

The implications of SB826 on state laws include the establishment of a structured tax credit system tied to the viability and success of rural investments. By incentivizing investments in targeted small businesses, the legislation aims to reduce economic disparities between urban and rural areas, potentially leading to increased employment, business growth, and overall community development in less populated regions. The Texas Economic Development and Tourism Office will oversee this process, creating rules necessary for the application and administration of these credits.

Summary

Senate Bill 826, which addresses rural and opportunity funds, seeks to promote investments in lower-population areas of Texas through the creation of a tax credit scheme. The bill facilitates a framework where certain entities can obtain tax credits for investments into designated rural and small businesses. Specifically, it outlines eligibility for these tax credits based on capital contributions made to rural and opportunity funds, and incentivizes those funds to invest in targeted small businesses located in qualified areas, which are defined as either rural communities or designated opportunity zones.

Contention

Notable points of contention surrounding SB826 might stem from the administration of the funds and the accountability mechanisms in place to ensure that promised investments and job creation targets are met. Critics may argue that there is a risk of abuse of the tax credit system if there are inadequate checks to ensure that funds lead to tangible benefits in terms of job creation and economic growth. Additionally, the balance between state-level incentives and the autonomy of local businesses could spark debate regarding local versus state control of economic development initiatives.