Texas House Bill HB2061

Texas 2013 - 83rd Regular

Caption

Relating to a tax credit for investment in certain communities; imposing a monetary penalty; authorizing a fee.

Impact

In passing HB2061, the legislation will directly influence the financial landscape for low-income areas by encouraging private investment through tax relief mechanisms. Investors can earn credits progressively, encouraging sustained investments that could stimulate economic growth, job creation, and overall community development. The bill also mandates biennial reports to be submitted to the comptroller, ensuring oversight and assessment of the investment activities and their economic impacts.

Summary

House Bill 2061 aims to establish a tax credit system designed to incentivize investments in low-income communities. This tax credit is specifically targeted toward qualified community development entities that issue qualified equity investments, allowing investors to claim credits against their state premium tax liabilities. The tax credit structure delineates specific percentages applicable over various time periods following the investment, enhancing the attractiveness of long-term financial commitment in these communities.

Contention

While the bill is designed to foster economic growth, it has generated discussion regarding the effectiveness and operational limits of such tax incentives. Critics may argue about the potential for misuse or inefficient allocation of funds, raising concerns about the real impacts on the targeted communities. The specified penalties for non-compliance, such as failure to submit required reports, further reflect an effort to maintain accountability among the entities benefiting from these credits.