| 1 | 1 | | 85R13314 BEF-F |
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| 2 | 2 | | By: Lucio III H.B. No. 3630 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to an insurance premium tax credit for investment in |
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| 8 | 8 | | certain communities. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subtitle B, Title 3, Insurance Code, is amended |
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| 11 | 11 | | by adding Chapter 231 to read as follows: |
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| 12 | 12 | | CHAPTER 231. PREMIUM TAX CREDIT FOR INVESTMENT IN CERTAIN |
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| 13 | 13 | | COMMUNITIES |
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| 14 | 14 | | Sec. 231.001. GENERAL DEFINITIONS. In this chapter: |
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| 15 | 15 | | (1) "Internal Revenue Code" means the Internal Revenue |
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| 16 | 16 | | Code of 1986 in effect on September 1, 2017, excluding any changes |
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| 17 | 17 | | made by federal law after that date, but including any regulations |
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| 18 | 18 | | adopted under that code that are applicable to the tax year to which |
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| 19 | 19 | | the provisions of the code in effect on that date applied. |
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| 20 | 20 | | (2) "State premium tax liability" means any premium |
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| 21 | 21 | | tax liability incurred under Chapter 221, 222, 223, 223A, or 224. |
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| 22 | 22 | | (3) "Low-income community," "qualified equity |
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| 23 | 23 | | investment," and "qualified low-income community investment" have |
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| 24 | 24 | | the meanings assigned by Section 45D, Internal Revenue Code. |
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| 25 | 25 | | Sec. 231.002. DEFINITION: QUALIFIED COMMUNITY DEVELOPMENT |
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| 26 | 26 | | ENTITY. In this chapter, "qualified community development entity" |
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| 27 | 27 | | has the meaning assigned by Section 45D, Internal Revenue Code, |
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| 28 | 28 | | provided that the entity has entered into, for the current year or a |
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| 29 | 29 | | prior year with an allocation effective date on or after July 1, |
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| 30 | 30 | | 2015, an allocation agreement with the Community Development |
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| 31 | 31 | | Financial Institutions Fund of the United States Department of the |
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| 32 | 32 | | Treasury with respect to credits authorized by Section 45D, |
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| 33 | 33 | | Internal Revenue Code, that includes this state in the service area |
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| 34 | 34 | | specified in the allocation agreement. The term includes a |
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| 35 | 35 | | qualified community development entity that is controlled by or |
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| 36 | 36 | | under common control with another qualified community development |
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| 37 | 37 | | entity described by this section. |
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| 38 | 38 | | Sec. 231.003. RULES ESTABLISHING CREDIT. (a) The |
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| 39 | 39 | | comptroller, in consultation with the Texas Workforce Commission, |
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| 40 | 40 | | by rule shall establish a credit against state premium tax |
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| 41 | 41 | | liability for entities that make qualified equity investments in |
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| 42 | 42 | | qualified community development entities in this state. The rules |
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| 43 | 43 | | must comply with this section. |
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| 44 | 44 | | (b) The purpose of the credit is to promote new job |
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| 45 | 45 | | creation, job retention, and capital investment in economically |
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| 46 | 46 | | distressed and low-income communities. |
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| 47 | 47 | | (c) Available credits must be allocated so that an equal |
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| 48 | 48 | | amount of credits are available in connection with qualified |
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| 49 | 49 | | low-income community investments in: |
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| 50 | 50 | | (1) rural communities; |
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| 51 | 51 | | (2) seaports; |
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| 52 | 52 | | (3) educational institutions that provide |
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| 53 | 53 | | prekindergarten, primary education, secondary education, higher |
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| 54 | 54 | | education, and workforce skills training; and |
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| 55 | 55 | | (4) distressed metropolitan communities throughout |
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| 56 | 56 | | the state. |
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| 57 | 57 | | (d) The amount of the credit in connection with a qualified |
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| 58 | 58 | | equity investment may not exceed 39 percent of the purchase price of |
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| 59 | 59 | | the investment. An entity must be able to claim the entire amount of |
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| 60 | 60 | | the credit in connection with an investment not later than the |
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| 61 | 61 | | seventh anniversary of the date the investment is made. |
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| 62 | 62 | | (e) A qualified community development entity must place a |
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| 63 | 63 | | refundable deposit of at least $500,000 with the state during the |
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| 64 | 64 | | period in which tax credits may be claimed in connection with |
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| 65 | 65 | | qualified equity investments in the entity. An entity that |
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| 66 | 66 | | violates rules under this section is subject to forfeiture of all or |
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| 67 | 67 | | part of the deposit. |
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| 68 | 68 | | (f) At least $300 million in credits must be made available. |
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| 69 | 69 | | Sec. 231.004. ELIGIBILITY FOR CREDIT. An entity is |
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| 70 | 70 | | eligible for a credit against the entity's state premium tax |
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| 71 | 71 | | liability in the amount and under the conditions and limitations |
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| 72 | 72 | | provided by rules adopted under Section 231.003. |
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| 73 | 73 | | Sec. 231.005. RETALIATORY TAX. An entity claiming a credit |
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| 74 | 74 | | under this chapter is not required to pay any additional |
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| 75 | 75 | | retaliatory tax levied under Chapter 281 as a result of claiming |
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| 76 | 76 | | that credit. |
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| 77 | 77 | | SECTION 2. As soon as practicable after this Act becomes law |
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| 78 | 78 | | for purposes of Section 2001.006, Government Code, the comptroller |
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| 79 | 79 | | shall adopt rules under Section 231.003, Insurance Code, as added |
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| 80 | 80 | | by this Act. |
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| 81 | 81 | | SECTION 3. This Act applies only to an insurance premium tax |
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| 82 | 82 | | report originally due on or after January 1, 2018. |
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| 83 | 83 | | SECTION 4. This Act takes effect immediately if it receives |
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| 84 | 84 | | a vote of two-thirds of all the members elected to each house, as |
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| 85 | 85 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 86 | 86 | | Act does not receive the vote necessary for immediate effect, this |
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| 87 | 87 | | Act takes effect September 1, 2017. |
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