Texas Senate Bill SB1295

Texas 2017 - 85th Regular

Caption

Relating to an insurance premium tax credit for investment in certain communities; imposing a monetary penalty; authorizing fees.

Impact

The expected impact of SB1295 on state laws involves the facilitation of targeted economic growth in low-income areas through financial incentives. By establishing a framework for tax credits associated with investments in qualified equity, the bill encourages the generation of capital in economically disadvantaged neighborhoods. The Comptroller's oversight ensures that investments meet compliance requirements and that the tax credits are issued responsibly. A biennial report will be prepared to assess the implementation and effectiveness of the program, shedding light on its contributions to local economies and job creation.

Summary

Senate Bill 1295 introduces an insurance premium tax credit aimed at encouraging investment in designated communities through qualified community development entities. The bill stipulates that investing entities can receive tax credits based on the amount of equity investments made in low-income communities. These credits gradually increase in percentage over a specified timeline, incentivizing investors to commit funds into these regions over time. The bill is structured to benefit both rural areas and urban municipalities with various allocations for community development projects.

Contention

Notably, potential points of contention around SB1295 may arise regarding the balance of benefits between urban and rural allocations, as well as the administrative feasibility of managing the tax credits. Concerns may include the adequacy of oversight by the Comptroller in ensuring that the tax incentives translate into tangible improvements in living standards in the targeted communities. The requirement for reports and penalties for non-compliance may also incite debate on whether this creates an adequate incentive for genuine investment as opposed to mere compliance with tax credit provisions.