85R13314 BEF-F
By: Lucio III H.B. No. 3630
A BILL TO BE ENTITLED
AN ACT
relating to an insurance premium tax credit for investment in
certain communities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 231 to read as follows:
CHAPTER 231. PREMIUM TAX CREDIT FOR INVESTMENT IN CERTAIN
COMMUNITIES
Sec. 231.001. GENERAL DEFINITIONS. In this chapter:
(1) "Internal Revenue Code" means the Internal Revenue
Code of 1986 in effect on September 1, 2017, excluding any changes
made by federal law after that date, but including any regulations
adopted under that code that are applicable to the tax year to which
the provisions of the code in effect on that date applied.
(2) "State premium tax liability" means any premium
tax liability incurred under Chapter 221, 222, 223, 223A, or 224.
(3) "Low-income community," "qualified equity
investment," and "qualified low-income community investment" have
the meanings assigned by Section 45D, Internal Revenue Code.
Sec. 231.002. DEFINITION: QUALIFIED COMMUNITY DEVELOPMENT
ENTITY. In this chapter, "qualified community development entity"
has the meaning assigned by Section 45D, Internal Revenue Code,
provided that the entity has entered into, for the current year or a
prior year with an allocation effective date on or after July 1,
2015, an allocation agreement with the Community Development
Financial Institutions Fund of the United States Department of the
Treasury with respect to credits authorized by Section 45D,
Internal Revenue Code, that includes this state in the service area
specified in the allocation agreement. The term includes a
qualified community development entity that is controlled by or
under common control with another qualified community development
entity described by this section.
Sec. 231.003. RULES ESTABLISHING CREDIT. (a) The
comptroller, in consultation with the Texas Workforce Commission,
by rule shall establish a credit against state premium tax
liability for entities that make qualified equity investments in
qualified community development entities in this state. The rules
must comply with this section.
(b) The purpose of the credit is to promote new job
creation, job retention, and capital investment in economically
distressed and low-income communities.
(c) Available credits must be allocated so that an equal
amount of credits are available in connection with qualified
low-income community investments in:
(1) rural communities;
(2) seaports;
(3) educational institutions that provide
prekindergarten, primary education, secondary education, higher
education, and workforce skills training; and
(4) distressed metropolitan communities throughout
the state.
(d) The amount of the credit in connection with a qualified
equity investment may not exceed 39 percent of the purchase price of
the investment. An entity must be able to claim the entire amount of
the credit in connection with an investment not later than the
seventh anniversary of the date the investment is made.
(e) A qualified community development entity must place a
refundable deposit of at least $500,000 with the state during the
period in which tax credits may be claimed in connection with
qualified equity investments in the entity. An entity that
violates rules under this section is subject to forfeiture of all or
part of the deposit.
(f) At least $300 million in credits must be made available.
Sec. 231.004. ELIGIBILITY FOR CREDIT. An entity is
eligible for a credit against the entity's state premium tax
liability in the amount and under the conditions and limitations
provided by rules adopted under Section 231.003.
Sec. 231.005. 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.
SECTION 2. As soon as practicable after this Act becomes law
for purposes of Section 2001.006, Government Code, the comptroller
shall adopt rules under Section 231.003, Insurance Code, as added
by this Act.
SECTION 3. This Act applies only to an insurance premium tax
report originally due on or after January 1, 2018.
SECTION 4. 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, 2017.