Texas 2021 - 87th Regular

Texas House Bill HB570 Compare Versions

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Old	New		Differences
	1	+	87R15969 BEF-D
1	2		By: Paddie, Button, Harris, Burrows, Guillen, H.B. No. 570
2	3		et al.
	4	+	Substitute the following for H.B. No. 570:
	5	+	By: Button C.S.H.B. No. 570
3	6
4	7
5	8		A BILL TO BE ENTITLED
6	9		AN ACT
7	10		relating to small business recovery funds and insurance tax credits
8	11		for certain investments in those funds; imposing a monetary
9	12		penalty; authorizing fees.
10	13		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	14		SECTION 1. Subtitle F, Title 4, Government Code, is amended
12	15		by adding Chapter 487A to read as follows:
13	16		CHAPTER 487A. SMALL BUSINESS RECOVERY FUNDS
14	17		SUBCHAPTER A. GENERAL PROVISIONS
15	18		Sec. 487A.0001. GENERAL DEFINITIONS. In this chapter:
16	19		(1) "Closing date" means the date a small business
17	20		recovery fund has collected all of the amounts described by Section
18	21		487A.0056(a)(1).
19	22		(2) "Growth investment" means any capital or equity
20	23		investment by a small business recovery fund in a targeted small
21	24		business or any loan by a small business recovery fund to a targeted
22	25		small business with a stated maturity date of at least one year
23	26		after the date of issuance.
24	27		(3) "Office" means the Texas Economic Development and
25	28		Tourism Office.
26	29		(4) "Rural area" means an area:
27	30		(A) other than a municipality with a population
28	31		of more than 50,000 or an urbanized area contiguous and adjacent to
29	32		the municipality; or
30	33		(B) determined to be rural in character by the
31	34		United States Department of Agriculture.
32	35		(5) "Small business recovery fund" means an entity
33	36		approved by the office as a small business recovery fund.
34	37		Sec. 487A.0002. DEFINITION: AFFILIATE. (a) In this
35	38		chapter, "affiliate" means an entity that directly or indirectly
36	39		through one or more intermediaries controls, is controlled by, or
37	40		is under common control with another entity.
38	41		(b) For purposes of Subsection (a), an entity is controlled
39	42		by another entity if the controlling entity:
40	43		(1) holds, directly or indirectly, the majority voting
41	44		or ownership interest in the controlled entity; or
42	45		(2) has control over the day-to-day operations of the
43	46		controlled entity by contract or by law.
44	47		Sec. 487A.0003. DEFINITION: CREDIT-ELIGIBLE CAPITAL
45	48		CONTRIBUTION. (a) In this chapter and subject to Subsection (b),
46	49		"credit-eligible capital contribution" means an investment of cash
47	50		that equals the amount specified on a tax credit certificate issued
48	51		by the office under Section 487A.0055(2) made by an entity that is
49	52		subject to state insurance tax liability, as defined by Section
50	53		232.0001, Insurance Code.
51	54		(b) An investment made by an entity qualifies as a
52	55		credit-eligible capital contribution only if the entity making the
53	56		investment receives in exchange for the investment:
54	57		(1) an equity interest in a small business recovery
55	58		fund; or
56	59		(2) at par value or premium, a debt instrument that has
57	60		a maturity date of at least five years from the closing date and a
58	61		repayment schedule that is no faster than level principal
59	62		amortization over five years.
60	63		Sec. 487A.0004. DEFINITION: INVESTMENT AUTHORITY. (a) In
61	64		this chapter, "investment authority" means the amount stated on the
62	65		notice issued under Section 487A.0055(1) approving the small
63	66		business recovery fund.
64	67		(b) At least 65 percent of a small business recovery fund's
65	68		investment authority must consist of credit-eligible capital
66	69		contributions.
67	70		Sec. 487A.0005. DEFINITION: JOBS CREATED. (a) In this
68	71		chapter, "jobs created" means, with respect to a targeted small
69	72		business, employment positions that:
70	73		(1) are created by the targeted small business;
71	74		(2) are located in this state;
72	75		(3) require at least 35 hours of work each week; and
73	76		(4) were not located in this state at the time of the
74	77		initial growth investment in the targeted small business.
75	78		(b) The number of jobs created by a targeted small business
76	79		is calculated each year by subtracting the number of employment
77	80		positions in this state at the targeted small business at the time
78	81		of the initial growth investment in the targeted small business
79	82		from the monthly average of those employment positions for that
80	83		year. If the number calculated under this subsection is less than
81	84		zero, the number shall be reported as zero.
82	85		(c) The monthly average of employment positions for a year
83	86		is calculated by adding the number of employment positions existing
84	87		on the last day of each month of the year and dividing that sum by
85	88		12.
86	89		Sec. 487A.0006. DEFINITION: JOBS RETAINED. (a) In this
87	90		chapter, "jobs retained" means, with respect to a targeted small
88	91		business, employment positions that:
89	92		(1) are located in this state, require at least 35
90	93		hours of work each week, and existed before the initial growth
91	94		investment in the targeted small business; and
92	95		(2) would have been lost or moved out of this state had
93	96		a growth investment in the targeted small business not been made, as
94	97		certified in writing by an executive officer of the targeted small
95	98		business to the small business recovery fund.
96	99		(b) The number of jobs retained by a targeted small business
97	100		is calculated each year based on the monthly average of employment
98	101		positions for that year.
99	102		(c) The monthly average of employment positions for a year
100	103		is calculated by adding the number of employment positions existing
101	104		on the last day of each month of the year and dividing that sum by
102	105		12.
103	106		(d) The reported number of jobs retained for a year may not
104	107		exceed the number reported on the initial report under Section
105	108		487A.0155. The small business recovery fund shall reduce the
106	109		number of jobs retained for a year if employment at the targeted
107	110		small business is less than the number reported on the initial
108	111		report.
109	112		Sec. 487A.0007. DEFINITION: TARGETED SMALL BUSINESS. (a)
110	113		In this chapter, "targeted small business" means a business that,
111	114		at the time of the initial growth investment in the business:
112	115		(1) had fewer than 250 employees, including any
113	116		persons who would be considered employees under the federal law to
114	117		which 13 C.F.R. Section 121.103(h)(4) applies as a result of the
115	118		application of that provision; and
116	119		(2) has its principal business operations located in
117	120		this state.
118	121		(b) For purposes of Subsection (a)(2), the principal
119	122		business operations of a business are located at a place where:
120	123		(1) at least 80 percent of the business's employees
121	124		work; or
122	125		(2) employees who are paid at least 80 percent of the
123	126		business's payroll work.
124	127		(c) An out-of-state business that agrees to relocate or hire
125	128		new employees using the proceeds of a growth investment to
126	129		establish principal business operations in this state qualifies as
127	130		a targeted small business if the business satisfies the
128	131		requirements of:
129	132		(1) Subsection (a)(1) at the time of the initial
130	133		growth investment in the business; and
131	134		(2) Subsection (a)(2) not later than the 180th day
132	135		after receiving the initial growth investment or a later date
133	136		agreed to by the office.
134	137		Sec. 487A.0008. RULES. The office shall adopt rules
135	138		necessary to implement this chapter.
136	139		SUBCHAPTER B. APPROVAL OF SMALL BUSINESS RECOVERY FUNDS; TAX
137	140		CREDIT CERTIFICATES
138	141		Sec. 487A.0051. APPLICATION. (a) Subject to Section
139	142		487A.0202, the office shall accept applications from entities
140	143		seeking approval as small business recovery funds.
141	144		(b) An application must include:
142	145		(1) the total investment authority sought by the
143	146		applicant under the applicant's business plan;
144	147		(2) evidence sufficient to prove to the office's
145	148		satisfaction that, as of the date the applicant submits the
146	149		application:
147	150		(A) the applicant or affiliates of the applicant
148	151		have invested, in the aggregate, at least $100 million in nonpublic
149	152		companies; and
150	153		(B) at least one principal in a rural business
151	154		investment company licensed under 7 U.S.C. Section 2009cc et seq.
152	155		or a small business investment company licensed under 15 U.S.C.
153	156		Section 681 is, and has been for at least four years, an officer or
154	157		employee of the applicant or of an affiliate of the applicant on the
155	158		date the application is submitted;
156	159		(3) a copy of the rural business investment company
157	160		license or small business investment company license described by
158	161		Subdivision (2)(B);
159	162		(4) an estimate of the number of jobs created and jobs
160	163		retained that will result from the applicant's growth investments;
161	164		(5) a business plan that includes a revenue impact
162	165		assessment that:
163	166		(A) projects state and local tax revenue to be
164	167		generated by the applicant's proposed growth investments; and
165	168		(B) is prepared by a nationally recognized third
166	169		party independent economic forecasting firm using a dynamic
167	170		economic forecasting model that analyzes the applicant's business
168	171		plan for the 10-year period following the date the applicant
169	172		submits the application;
170	173		(6) a signed affidavit from each committed investor
171	174		stating the amount of credit-eligible capital contributions the
172	175		investor commits to making; and
173	176		(7) a nonrefundable application fee of $5,000.
174	177		Sec. 487A.0052. DECISION ON APPLICATION. (a) The office
175	178		shall make a determination on each application not later than the
176	179		30th day after the date the office receives the application. The
177	180		office shall make application determinations in the order in which
178	181		applications are received and shall consider applications received
179	182		on the same day to be received simultaneously.
180		-	(b) The office ~~shall~~ approve ~~up to~~ $500 million of
181		-	investment authority under this chapter.
	183	+	(b) The office may approve not more than $500 million of
	184	+	investment authority under this chapter in any calendar year.
182	185		(c) If a request for investment authority exceeds the limit
183	186		under Subsection (b), the office shall reduce the investment
184	187		authority and the credit-eligible capital contributions for that
185	188		application as necessary to avoid exceeding the limit. If multiple
186	189		applications received on the same day request a combined investment
187	190		authority that exceeds the limit under Subsection (b), the office
188	191		shall proportionally reduce the investment authority and the
189	192		credit-eligible capital contributions for those applications as
190	193		necessary to avoid exceeding the limit. The office may not reduce
191	194		an applicant's investment authority for any reason other than as
192	195		authorized by this subsection.
193	196		Sec. 487A.0053. GROUNDS FOR DENIAL. The office may deny an
194	197		application under this subchapter only if:
195	198		(1) the application is incomplete or the application
196	199		fee is not paid in full;
197	200		(2) the applicant fails to satisfy the requirements of
198	201		Section 487A.0051(b)(2);
199	202		(3) the revenue impact assessment submitted under
200	203		Section 487A.0051(b)(5) does not demonstrate that the applicant's
201	204		business plan will result in a positive economic impact on combined
202	205		state and local revenue during the 10-year period covered by the
203	206		assessment that exceeds the cumulative amount of tax credits that
204	207		would be issued to the applicant's investors under Chapter 232,
205	208		Insurance Code, if the application were approved;
206	209		(4) the credit-eligible capital contributions
207	210		described in affidavits submitted under Section 487A.0051(b)(6) do
208	211		not equal at least 65 percent of the total amount of investment
209	212		authority sought under the applicant's business plan; or
210	213		(5) the office has already approved the maximum amount
211	214		of investment authority allowed under Section 487A.0052(b).
212	215		Sec. 487A.0054. SUBMISSION OF ADDITIONAL INFORMATION
213	216		FOLLOWING DENIAL. (a) If the office denies an application the
214	217		applicant may, not later than the 15th day after the date the office
215	218		provides notice of denial, provide additional information to the
216	219		office to complete, clarify, or cure defects in the application
217	220		identified by the office.
218	221		(b) If the applicant completes, clarifies, or cures the
219	222		defects in its application during the period prescribed by
220	223		Subsection (a), the application is considered complete as of the
221	224		original submission date.
222	225		(c) If the applicant fails to complete, clarify, or cure the
223	226		defects in its application during the period prescribed by
224	227		Subsection (a), the application is finally denied. An applicant
225	228		who wishes to reapply must resubmit an application in full with a
226	229		new submission date.
227	230		(d) The office shall review and reconsider an application
228	231		described by Subsection (a) for which the applicant provides
229	232		additional information not later than the 30th day after the date
230	233		the applicant provides the information. The office shall consider
231	234		that application before any pending applications submitted after
232	235		the date that application was originally submitted.
233	236		(e) This section does not apply to an application denied as
234	237		a result of the applicant's failure to submit with the application
235	238		affidavits required by Section 487A.0051(b)(6).
236	239		Sec. 487A.0055. APPROVAL BY OFFICE. On approval of an
237	240		application, the office shall provide:
238	241		(1) written notice to the applicant of the applicant's
239	242		approval as a small business recovery fund, including the amount of
240	243		the fund's investment authority; and
241	244		(2) a tax credit certificate to each investor whose
242	245		affidavit was included in the application and include on the
243	246		certificate the amount of the investor's credit-eligible capital
244	247		contribution.
245	248		Sec. 487A.0056. DUTIES OF FUND FOLLOWING APPROVAL. (a) A
246	249		small business recovery fund shall:
247	250		(1) not later than the 60th day after the date the fund
248	251		receives the approval notice under Section 487A.0055:
249	252		(A) collect the credit-eligible capital
250	253		contribution from each investor issued a tax credit certificate
251	254		under Section 487A.0055; and
252	255		(B) subject to Subsection (b), collect one or
253	256		more investments of cash that, when added to the contributions
254	257		collected under Paragraph (A), equal the fund's investment
255	258		authority; and
256	259		(2) not later than the 65th day after the date the fund
257	260		receives the approval notice under Section 487A.0055, send to the
258	261		office documentation sufficient to prove that the fund has
259	262		collected the amounts described in Subdivision (1).
260	263		(b) At least 10 percent of the small business recovery
261	264		fund's investment authority must consist of equity investments
262	265		contributed directly or indirectly by affiliates of the fund,
263	266		including employees, officers, and directors of those affiliates.
264	267		Sec. 487A.0057. LAPSE OF APPROVAL. (a) If a small business
265	268		recovery fund fails to comply with the requirements of Section
266	269		487A.0056, the fund's approval lapses and the corresponding
267	270		investment authority described by Section 487A.0056(a)(1) does not
268	271		count toward the limit prescribed by Section 487A.0052(b).
269	272		(b) The office shall first award lapsed investment
270	273		authority pro rata to each small business recovery fund whose
271	274		requested investment authority was reduced under Section
272	275		487A.0052(c). The small business recovery fund may allocate the
273	276		investment authority awarded under this subsection to the fund's
274	277		investors in the fund's discretion. The office may award any
275	278		remaining investment authority to new applicants.
276	279		Sec. 487A.0058. DISPOSITION OF APPLICATION FEES.
277	280		Application fees submitted to the office under Section
278	281		487A.0051(b)(7) shall be deposited to the credit of the general
279	282		revenue fund and may be appropriated only to the office for the
280	283		purpose of administering this chapter.
281	284		SUBCHAPTER C. REVOCATION OF TAX CREDIT CERTIFICATE
282	285		Sec. 487A.0101. GROUNDS FOR REVOCATION. (a) The office
283	286		shall revoke a tax credit certificate issued under Subchapter B in
284	287		connection with an investment in a small business recovery fund if,
285	288		before the fund exits the program under Section 487A.0151, the
286	289		fund:
287	290		(1) subject to Subsection (b), fails to invest at
288	291		least 60 percent of the fund's investment authority in growth
289	292		investments in this state on or before the second anniversary of the
290	293		closing date and 100 percent of the fund's investment authority in
291	294		growth investments in this state on or before the third anniversary
292	295		of the closing date;
293	296		(2) subject to Subsection (c) and after making the
294	297		investments necessary to avoid revocation under Subdivision (1),
295	298		fails to maintain growth investments equal to 100 percent of the
296	299		fund's investment authority until the sixth anniversary of the
297	300		closing date;
298	301		(3) makes a distribution or payment that results in
299	302		the fund having less than 100 percent of its investment authority:
300	303		(A) invested in growth investments in this state;
301	304		or
302	305		(B) available for investment in growth
303	306		investments and held in:
304	307		(i) cash;
305	308		(ii) United States Treasury securities;
306	309		(iii) bonds or notes issued by this state or
307	310		an agency or political subdivision of this state; or
308	311		(iv) a deposit account with a depository
309	312		institution headquartered or chartered in this state; or
310	313		(4) subject to Subsection (d), makes a growth
311	314		investment in a targeted small business that directly or indirectly
312	315		through an affiliate owns, has the right to acquire an ownership
313	316		interest in, makes a loan to, or makes an investment in the fund, an
314	317		affiliate of the fund, or an investor in the fund.
315	318		(b) For purposes of Subsection (a)(1):
316	319		(1) the amount of growth investments that a small
317	320		business recovery fund may count with respect to a particular
318	321		targeted small business, including any amount invested in an
319	322		affiliate of the targeted small business, may not exceed $5
320	323		million; and
321	324		(2) at least 75 percent of the required amounts of
322	325		growth investments must consist of growth investments in targeted
323	326		small businesses whose principal business operations are located
324	327		in, or are relocated to, a rural area in this state.
325	328		(c) For purposes of Subsection (a)(2):
326	329		(1) the amount of growth investments that a small
327	330		business recovery fund may count with respect to a particular
328	331		targeted small business, including any amount invested in an
329	332		affiliate of the targeted small business, may not exceed $5
330	333		million;
331	334		(2) an investment that is sold or repaid is considered
332	335		to be maintained if the small business recovery fund reinvests an
333	336		amount equal to the capital returned or recovered by the fund from
334	337		the original investment, excluding any profit realized, in another
335	338		growth investment in this state on or before the first anniversary
336	339		of the date the capital is returned or recovered; and
337	340		(3) an amount received periodically by a small
338	341		business recovery fund is considered to be continually invested in
339	342		growth investments if that amount is reinvested in one or more
340	343		growth investments by the end of the calendar year following the
341	344		year of receipt.
342	345		(d) Subsection (a)(4) does not apply to investments in
343	346		publicly traded securities by a targeted small business or an owner
344	347		or affiliate of the targeted small business. For purposes of
345	348		Subsection (a)(4), a small business recovery fund is not considered
346	349		an affiliate of a targeted small business solely as a result of the
347	350		fund's growth investment in the targeted small business.
348	351		(e) The office shall:
349	352		(1) notify the comptroller when the office revokes a
350	353		tax credit certificate; and
351	354		(2) on request, provide the comptroller with lists of
352	355		valid and revoked tax credit certificates.
353	356		Sec. 487A.0102. OPPORTUNITY TO CORRECT VIOLATION. (a)
354	357		Before revoking a tax credit certificate under this subchapter, the
355	358		office shall notify the small business recovery fund of the reasons
356	359		for the pending revocation.
357	360		(b) The small business recovery fund may, not later than the
358	361		90th day after the date the notice is received, correct any
359	362		violation outlined in the notice to the satisfaction of the office
360	363		and avoid revocation of the tax credit certificate.
361	364		Sec. 487A.0103. ALLOCATION OF REVOKED INVESTMENT
362	365		AUTHORITY. (a) If a tax credit certificate is revoked under this
363	366		subchapter, the associated investment authority does not count
364	367		toward the limit on total investment authority described in Section
365	368		487A.0052(b).
366	369		(b) The office shall first award revoked investment
367	370		authority pro rata to each small business recovery fund whose
368	371		requested investment authority was reduced under Section
369	372		487A.0052(c). The office may award any remaining investment
370	373		authority to new applicants.
371	374		SUBCHAPTER D. CERTAIN FUND OPERATIONS
372	375		Sec. 487A.0151. APPLICATION TO EXIT PROGRAM. (a) On or
373	376		after the sixth anniversary of the closing date, a small business
374	377		recovery fund may apply to the office to exit the program and no
375	378		longer be subject to regulation under this chapter.
376	379		(b) The office shall respond to the application not later
377	380		than the 30th day after receipt.
378	381		(c) A small business recovery fund is eligible to exit the
379	382		program under this section if no tax credit certificates related to
380	383		investments in the fund have been revoked and the fund has not
381	384		received any revocation notice that has not been corrected under
382	385		Section 487A.0102.
383	386		(d) The office may not unreasonably deny an application
384	387		under this section. The office shall give the small business
385	388		recovery fund notice of a denial and include in the notice the
386	389		reasons for the denial.
387	390		Sec. 487A.0152. NO REVOCATION FOLLOWING EXIT. The office
388	391		may not revoke a tax credit certificate related to an investment in
389	392		a small business recovery fund after the fund's exit from the
390	393		program.
391	394		Sec. 487A.0153. PENALTY FOR CERTAIN DISTRIBUTIONS. (a)
392	395		For purposes of this section:
393	396		(1) the "actual number of jobs created and retained"
394	397		is the number of jobs created and jobs retained as a result of all of
395	398		a small business recovery fund's current and former growth
396	399		investments, as reported on the fund's reports submitted under
397	400		Section 487A.0155; and
398	401		(2) the "estimated number of jobs created and
399	402		retained" is the estimated number of jobs created and jobs retained
400	403		included in a small business recovery fund's application under
401	404		Section 487A.0051(b)(4) reduced, if applicable, by the same
402	405		percentage as the total investment authority sought under the
403	406		fund's business plan submitted under Section 487A.0051(b)(1) was
404	407		reduced under Section 487A.0052(c).
405	408		(b) A small business recovery fund is subject to a penalty
406	409		in the amount provided by Subsection (c) if:
407	410		(1) the fund authorizes a distribution to the fund's
408	411		equity holders in an amount that, when added to all previous
409	412		distributions to the fund's equity holders and any previous
410	413		penalties under this section, exceeds the fund's investment
411	414		authority; and
412	415		(2) the fund's actual number of jobs created and
413	416		retained is less than the fund's estimated number of jobs created
414	417		and retained.
415	418		(c) The amount of the penalty is equal to the amount of the
416	419		authorized distribution multiplied by a fraction:
417	420		(1) the numerator of which is the fund's estimated
418	421		number of jobs created and retained less the fund's actual number of
419	422		jobs created and retained; and
420	423		(2) the denominator of which is the fund's estimated
421	424		number of jobs created and retained.
422	425		(d) Before making a distribution to the fund's equity
423	426		holders, the fund shall deduct the amount of the penalty from the
424	427		amount otherwise authorized to be distributed to the equity holders
425	428		and pay the penalty to the office.
426	429		(e) The office shall deposit penalties received under
427	430		Subsection (d) in the general revenue fund.
428	431		Sec. 487A.0154. EVALUATION OF PROPOSED INVESTMENT. (a) A
429	432		small business recovery fund, before making a growth investment,
430	433		may request from the office a written opinion as to whether the
431	434		business in which the fund proposes to invest qualifies as a
432	435		targeted small business.
433	436		(b) Not later than the 15th business day after receiving the
434	437		request, the office shall notify the small business recovery fund
435	438		of its determination.
436	439		(c) If the office fails to notify the small business
437	440		recovery fund of its determination on or before the 15th business
438	441		day after receiving the request, the business in which the fund
439	442		proposes to invest is considered to be a targeted small business for
440	443		purposes of this chapter.
441	444		Sec. 487A.0155. ANNUAL REPORT. (a) A small business
442	445		recovery fund shall submit a report to the office on or before the
443	446		fifth business day after each anniversary of the closing date until
444	447		the fund has exited the program under Section 487A.0151.
445	448		(b) The report must document the small business recovery
446	449		fund's growth investments and include:
447	450		(1) a bank statement showing each growth investment;
448	451		(2) the name, location, and industry of each business
449	452		receiving a growth investment, including either the determination
450	453		notice described by Section 487A.0154 or evidence that the business
451	454		qualified as a targeted small business at the time the investment
452	455		was made;
453	456		(3) the number of jobs created and jobs retained in the
454	457		preceding calendar year as a result of the fund's growth
455	458		investments as of the last day of that period;
456	459		(4) the average annual salary of the jobs described by
457	460		Subdivision (3) and evidence of any other monetary or social
458	461		benefit to this state as a result of those jobs;
459	462		(5) a description, including the amount, of each
460	463		growth investment in a targeted small business located in a rural
461	464		area made in the 24 months following the closing date; and
462	465		(6) any other information the office requires.
463	466		(c) A small business recovery fund may, but is not required
464	467		to, include in any report submitted under this section information
465	468		about the number of jobs created and jobs retained with respect to a
466	469		former growth investment that the fund has exited.
467	470		SUBCHAPTER E. REPORT; CONDITIONS FOR ACCEPTANCE OF CERTAIN
468	471		APPLICATIONS
469	472		Sec. 487A.0201. REPORT. (a) Before the beginning of the
470	473		90th Legislature, Regular Session, the office shall submit to the
471	474		lieutenant governor, the speaker of the house of representatives,
472	475		and each member of the legislature a report on the economic benefits
473	476		of this chapter.
474	477		(b) The report must include an assessment of:
475	478		(1) the aggregate effects of growth investments made
476	479		under this chapter, including:
477	480		(A) the total number of jobs created by all
478	481		targeted small businesses, including direct jobs, indirect jobs,
479	482		and induced jobs;
480	483		(B) the total number of jobs retained by all
481	484		targeted small businesses;
482	485		(C) the total amount of wages paid in connection
483	486		with jobs created and jobs retained by all targeted small
484	487		businesses;
485	488		(D) the median wage of jobs created and jobs
486	489		retained by all targeted small businesses;
487	490		(E) the total effect on personal income in this
488	491		state, including direct and indirect effects;
489	492		(F) the total amount of growth investments;
490	493		(G) the gross domestic product of this state
491	494		attributable to targeted small businesses;
492	495		(H) the total taxable value of property of
493	496		targeted small businesses in this state according to tax appraisal
494	497		rolls;
495	498		(I) the total positive fiscal effect on this
496	499		state and local governments in this state; and
497	500		(J) the total number and dollar amount of growth
498	501		investments in targeted small businesses located in rural areas;
499	502		(2) the benefits to this state from cost savings
500	503		attributable to jobs created and jobs retained by all targeted
501	504		small businesses, including:
502	505		(A) Medicaid savings, with savings to this state
503	506		and the federal government listed separately;
504	507		(B) food assistance program savings;
505	508		(C) unemployment insurance payment savings; and
506	509		(D) any other savings that can be reasonably
507	510		estimated using data available to the office in connection with
508	511		some or all targeted small businesses; and
509	512		(3) the total positive fiscal effect on this state and
510	513		local governments in this state of the benefits described by
511	514		Subdivision (2).
512	515		(c) The report may not include information that is
513	516		confidential by law.
514	517		(d) In preparing the portion of the report described by
515	518		Subsection (b)(1), the office shall:
516	519		(1) use standard, nationally recognized economic
517	520		estimation techniques, including economic multipliers; and
518	521		(2) base the assessment on data submitted to the
519	522		office by each small business recovery fund.
520	523		Sec. 487A.0202. CONDITIONS FOR ACCEPTANCE OF CERTAIN
521	524		APPLICATIONS. (a) The office may not accept applications under
522	525		Section 487A.0051 after January 1, 2022, unless the total positive
523	526		fiscal effects described by Section 487A.0201(b) exceed the sum of
524	527		all tax credit certificates issued by the office under Subchapter
525	528		B.
526	529		(b) The office shall resume accepting applications under
527	530		Section 487A.0051 when the condition provided by Subsection (a) is
528	531		satisfied.
529	532		SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
530	533		by adding Chapter 232 to read as follows:
531	534		CHAPTER 232. TAX CREDIT FOR INVESTMENT IN SMALL BUSINESS RECOVERY
532	535		FUND
533	536		SUBCHAPTER A. GENERAL PROVISIONS
534	537		Sec. 232.0001. DEFINITIONS. In this chapter:
535	538		(1) "Affiliate" has the meaning assigned by Section
536	539		487A.0002, Government Code.
537	540		(2) "Closing date" has the meaning assigned by Section
538	541		487A.0001, Government Code.
539	542		(3) "State insurance tax liability" means any tax
540	543		liability incurred under Chapter 221, 222, 223, 223A, 224, 225,
541	544		226, or 281.
542	545		Sec. 232.0002. RULES. The comptroller shall adopt rules
543	546		necessary to implement this chapter.
544	547		SUBCHAPTER B. TAX CREDIT
545	548		Sec. 232.0051. ELIGIBILITY FOR CREDIT. An entity is
546	549		eligible for a credit against the entity's state insurance tax
547	550		liability in the amount and under the conditions and limitations
548	551		provided by this chapter.
549	552		Sec. 232.0052. QUALIFICATION. An entity is eligible for a
550	553		credit for a tax year if the entity holds a tax credit certificate
551	554		issued under Section 487A.0055, Government Code, and the third,
552	555		fourth, fifth, or sixth anniversary of the closing date in
553	556		connection with which the certificate was issued occurs during the
554	557		tax year.
555	558		Sec. 232.0053. AMOUNT OF CREDIT; LIMITATION. (a) The
556	559		amount of credit for a tax year in connection with a tax credit
557	560		certificate described by Section 232.0052 is equal to 25 percent of
558	561		the amount of the credit-eligible capital contribution stated on
559	562		the certificate.
560	563		(b) The total credit claimed for a tax year, including the
561	564		amount of any carryforward under Section 232.0054, may not exceed
562	565		the amount of state insurance tax liability due for the entity for
563	566		the tax year after applying all other applicable tax credits.
564	567		(c) Credits may be applied to the entity's estimated or
565	568		final tax payments for the tax year.
566	569		Sec. 232.0054. CARRYFORWARD. If an entity is eligible for a
567	570		credit that exceeds the limitation under Section 232.0053(b), the
568	571		entity may carry the unused credit forward and apply the credit to a
569	572		subsequent tax report.
570	573		Sec. 232.0055. ASSIGNMENT PROHIBITED. (a) Except as
571	574		provided by Subsection (b), an entity may not convey, assign, or
572	575		transfer the credit allowed under this chapter to another entity.
573	576		(b) An entity may convey, assign, or transfer the credit
574	577		allowed under this chapter to an affiliate of the entity that is
575	578		subject to state insurance tax liability.
576	579		Sec. 232.0056. RETALIATORY TAX. An entity claiming a
577	580		credit under this chapter is not required to pay any additional
578	581		retaliatory tax levied under Chapter 281 as a result of claiming
579	582		that credit.
580	583		SUBCHAPTER C. RECAPTURE OF CREDIT
581	584		Sec. 232.0101. RECAPTURE. The comptroller shall recapture
582	585		the amount of a credit claimed on a tax report filed under Chapter
583	586		221, 222, 223, 223A, 224, 225, 226, or 281 from an entity if the tax
584	587		credit certificate on which the credit is based is revoked under
585	588		Subchapter C, Chapter 487A, Government Code.
586	589		SECTION 3. (a) As soon as practicable after this Act
587	590		becomes law as provided by Section 2001.006, Government Code:
588	591		(1) the Texas Economic Development and Tourism Office
589	592		shall adopt rules necessary to implement Chapter 487A, Government
590	593		Code, as added by this Act; and
591	594		(2) the comptroller of public accounts shall adopt
592	595		rules necessary to implement Chapter 232, Insurance Code, as added
593	596		by this Act.
594	597		(b) Not later than October 1, 2021, the Texas Economic
595	598		Development and Tourism Office shall begin accepting applications
596	599		under Section 487A.0051(a), Government Code, as added by this Act.
597	600		SECTION 4. Chapter 232, Insurance Code, as added by this
598	601		Act, applies only to a tax report originally due on or after January
599	602		1, 2021.
600	603		SECTION 5. This Act takes effect immediately if it receives
601	604		a vote of two-thirds of all the members elected to each house, as
602	605		provided by Section 39, Article III, Texas Constitution. If this
603	606		Act does not receive the vote necessary for immediate effect, this
604	607		Act takes effect September 1, 2021.