Texas 2021 - 87th Regular

Texas Senate Bill SB1710 Compare Versions

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1	1	87R612 BEF-D
2	2	By: Springer S.B. No. 1710
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to small business recovery funds and insurance tax credits
8	8	for certain investments in those funds; imposing a monetary
9	9	penalty; authorizing fees.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subtitle F, Title 4, Government Code, is amended
12	12	by adding Chapter 487A to read as follows:
13	13	CHAPTER 487A. SMALL BUSINESS RECOVERY FUNDS
14	14	SUBCHAPTER A. GENERAL PROVISIONS
15	15	Sec. 487A.0001. GENERAL DEFINITIONS. In this chapter:
16	16	(1) "Closing date" means the date a small business
17	17	recovery fund has collected all of the amounts described by Section
18	18	487A.0056(a)(1).
19	19	(2) "Growth investment" means any capital or equity
20	20	investment by a small business recovery fund in a targeted small
21	21	business or any loan by a small business recovery fund to a targeted
22	22	small business with a stated maturity date of at least one year
23	23	after the date of issuance.
24	24	(3) "Office" means the Texas Economic Development and
25	25	Tourism Office.
26	26	(4) "Rural area" means an area:
27	27	(A) other than a municipality with a population
28	28	of more than 50,000 or an urbanized area contiguous and adjacent to
29	29	the municipality; or
30	30	(B) determined to be rural in character by the
31	31	United States Department of Agriculture.
32	32	(5) "Small business recovery fund" means an entity
33	33	approved by the office as a small business recovery fund.
34	34	Sec. 487A.0002. DEFINITION: AFFILIATE. (a) In this
35	35	chapter, "affiliate" means an entity that directly or indirectly
36	36	through one or more intermediaries controls, is controlled by, or
37	37	is under common control with another entity.
38	38	(b) For purposes of Subsection (a), an entity is controlled
39	39	by another entity if the controlling entity:
40	40	(1) holds, directly or indirectly, the majority voting
41	41	or ownership interest in the controlled entity; or
42	42	(2) has control over the day-to-day operations of the
43	43	controlled entity by contract or by law.
44	44	Sec. 487A.0003. DEFINITION: CREDIT-ELIGIBLE CAPITAL
45	45	CONTRIBUTION. (a) In this chapter and subject to Subsection (b),
46	46	"credit-eligible capital contribution" means an investment of cash
47	47	that equals the amount specified on a tax credit certificate issued
48	48	by the office under Section 487A.0055(2) made by an entity that is
49	49	subject to state insurance tax liability, as defined by Section
50	50	232.0001, Insurance Code.
51	51	(b) An investment made by an entity qualifies as a
52	52	credit-eligible capital contribution only if the entity making the
53	53	investment receives in exchange for the investment:
54	54	(1) an equity interest in a small business recovery
55	55	fund; or
56	56	(2) at par value or premium, a debt instrument that has
57	57	a maturity date of at least five years from the closing date and a
58	58	repayment schedule that is no faster than level principal
59	59	amortization over five years.
60	60	Sec. 487A.0004. DEFINITION: INVESTMENT AUTHORITY. (a) In
61	61	this chapter, "investment authority" means the amount stated on the
62	62	notice issued under Section 487A.0055(1) approving the small
63	63	business recovery fund.
64	64	(b) At least 65 percent of a small business recovery fund's
65	65	investment authority must consist of credit-eligible capital
66	66	contributions.
67	67	Sec. 487A.0005. DEFINITION: JOBS CREATED. (a) In this
68	68	chapter, "jobs created" means, with respect to a targeted small
69	69	business, employment positions that:
70	70	(1) are created by the targeted small business;
71	71	(2) are located in this state;
72	72	(3) require at least 35 hours of work each week; and
73	73	(4) were not located in this state at the time of the
74	74	initial growth investment in the targeted small business.
75	75	(b) The number of jobs created by a targeted small business
76	76	is calculated each year by subtracting the number of employment
77	77	positions in this state at the targeted small business at the time
78	78	of the initial growth investment in the targeted small business
79	79	from the monthly average of those employment positions for that
80	80	year. If the number calculated under this subsection is less than
81	81	zero, the number shall be reported as zero.
82	82	(c) The monthly average of employment positions for a year
83	83	is calculated by adding the number of employment positions existing
84	84	on the last day of each month of the year and dividing that sum by
85	85	12.
86	86	Sec. 487A.0006. DEFINITION: JOBS RETAINED. (a) In this
87	87	chapter, "jobs retained" means, with respect to a targeted small
88	88	business, employment positions that:
89	89	(1) are located in this state, require at least 35
90	90	hours of work each week, and existed before the initial growth
91	91	investment in the targeted small business; and
92	92	(2) would have been lost or moved out of this state had
93	93	a growth investment in the targeted small business not been made, as
94	94	certified in writing by an executive officer of the targeted small
95	95	business to the small business recovery fund.
96	96	(b) The number of jobs retained by a targeted small business
97	97	is calculated each year based on the monthly average of employment
98	98	positions for that year.
99	99	(c) The monthly average of employment positions for a year
100	100	is calculated by adding the number of employment positions existing
101	101	on the last day of each month of the year and dividing that sum by
102	102	12.
103	103	(d) The reported number of jobs retained for a year may not
104	104	exceed the number reported on the initial report under Section
105	105	487A.0155. The small business recovery fund shall reduce the
106	106	number of jobs retained for a year if employment at the targeted
107	107	small business is less than the number reported on the initial
108	108	report.
109	109	Sec. 487A.0007. DEFINITION: TARGETED SMALL BUSINESS. (a)
110	110	In this chapter, "targeted small business" means a business that,
111	111	at the time of the initial growth investment in the business:
112	112	(1) had fewer than 250 employees, including any
113	113	persons who would be considered employees under the federal law to
114	114	which 13 C.F.R. Section 121.103(h)(4) applies as a result of the
115	115	application of that provision; and
116	116	(2) has its principal business operations located in
117	117	this state.
118	118	(b) For purposes of Subsection (a)(2), the principal
119	119	business operations of a business are located at a place where:
120	120	(1) at least 80 percent of the business's employees
121	121	work; or
122	122	(2) employees who are paid at least 80 percent of the
123	123	business's payroll work.
124	124	(c) An out-of-state business that agrees to relocate or hire
125	125	new employees using the proceeds of a growth investment to
126	126	establish principal business operations in this state qualifies as
127	127	a targeted small business if the business satisfies the
128	128	requirements of:
129	129	(1) Subsection (a)(1) at the time of the initial
130	130	growth investment in the business; and
131	131	(2) Subsection (a)(2) not later than the 180th day
132	132	after receiving the initial growth investment or a later date
133	133	agreed to by the office.
134	134	Sec. 487A.0008. RULES. The office shall adopt rules
135	135	necessary to implement this chapter.
136	136	SUBCHAPTER B. APPROVAL OF SMALL BUSINESS RECOVERY FUNDS; TAX
137	137	CREDIT CERTIFICATES
138	138	Sec. 487A.0051. APPLICATION. (a) Subject to Section
139	139	487A.0202, the office shall accept applications from entities
140	140	seeking approval as small business recovery funds.
141	141	(b) An application must include:
142	142	(1) the total investment authority sought by the
143	143	applicant under the applicant's business plan;
144	144	(2) evidence sufficient to prove to the office's
145	145	satisfaction that, as of the date the applicant submits the
146	146	application:
147	147	(A) the applicant or affiliates of the applicant
148	148	have invested, in the aggregate, at least $100 million in nonpublic
149	149	companies; and
150	150	(B) at least one principal in a rural business
151	151	investment company licensed under 7 U.S.C. Section 2009cc et seq.
152	152	or a small business investment company licensed under 15 U.S.C.
153	153	Section 681 is, and has been for at least four years, an officer or
154	154	employee of the applicant or of an affiliate of the applicant on the
155	155	date the application is submitted;
156	156	(3) a copy of the rural business investment company
157	157	license or small business investment company license described by
158	158	Subdivision (2)(B);
159	159	(4) an estimate of the number of jobs created and jobs
160	160	retained that will result from the applicant's growth investments;
161	161	(5) a business plan that includes a revenue impact
162	162	assessment that:
163	163	(A) projects state and local tax revenue to be
164	164	generated by the applicant's proposed growth investments; and
165	165	(B) is prepared by a nationally recognized third
166	166	party independent economic forecasting firm using a dynamic
167	167	economic forecasting model that analyzes the applicant's business
168	168	plan for the 10-year period following the date the applicant
169	169	submits the application;
170	170	(6) a signed affidavit from each committed investor
171	171	stating the amount of credit-eligible capital contributions the
172	172	investor commits to making; and
173	173	(7) a nonrefundable application fee of $5,000.
174	174	Sec. 487A.0052. DECISION ON APPLICATION. (a) The office
175	175	shall make a determination on each application not later than the
176	176	30th day after the date the office receives the application. The
177	177	office shall make application determinations in the order in which
178	178	applications are received and shall consider applications received
179	179	on the same day to be received simultaneously.
180	180	(b) The office may approve not more than $500 million of
181	181	investment authority under this chapter in any calendar year.
182	182	(c) If a request for investment authority exceeds the limit
183	183	under Subsection (b), the office shall reduce the investment
184	184	authority and the credit-eligible capital contributions for that
185	185	application as necessary to avoid exceeding the limit. If multiple
186	186	applications received on the same day request a combined investment
187	187	authority that exceeds the limit under Subsection (b), the office
188	188	shall proportionally reduce the investment authority and the
189	189	credit-eligible capital contributions for those applications as
190	190	necessary to avoid exceeding the limit. The office may not reduce
191	191	an applicant's investment authority for any reason other than as
192	192	authorized by this subsection.
193	193	Sec. 487A.0053. GROUNDS FOR DENIAL. The office may deny an
194	194	application under this subchapter only if:
195	195	(1) the application is incomplete or the application
196	196	fee is not paid in full;
197	197	(2) the applicant fails to satisfy the requirements of
198	198	Section 487A.0051(b)(2);
199	199	(3) the revenue impact assessment submitted under
200	200	Section 487A.0051(b)(5) does not demonstrate that the applicant's
201	201	business plan will result in a positive economic impact on combined
202	202	state and local revenue during the 10-year period covered by the
203	203	assessment that exceeds the cumulative amount of tax credits that
204	204	would be issued to the applicant's investors under Chapter 232,
205	205	Insurance Code, if the application were approved;
206	206	(4) the credit-eligible capital contributions
207	207	described in affidavits submitted under Section 487A.0051(b)(6) do
208	208	not equal at least 65 percent of the total amount of investment
209	209	authority sought under the applicant's business plan; or
210	210	(5) the office has already approved the maximum amount
211	211	of investment authority allowed under Section 487A.0052(b).
212	212	Sec. 487A.0054. SUBMISSION OF ADDITIONAL INFORMATION
213	213	FOLLOWING DENIAL. (a) If the office denies an application the
214	214	applicant may, not later than the 15th day after the date the office
215	215	provides notice of denial, provide additional information to the
216	216	office to complete, clarify, or cure defects in the application
217	217	identified by the office.
218	218	(b) If the applicant completes, clarifies, or cures the
219	219	defects in its application during the period prescribed by
220	220	Subsection (a), the application is considered complete as of the
221	221	original submission date.
222	222	(c) If the applicant fails to complete, clarify, or cure the
223	223	defects in its application during the period prescribed by
224	224	Subsection (a), the application is finally denied. An applicant
225	225	who wishes to reapply must resubmit an application in full with a
226	226	new submission date.
227	227	(d) The office shall review and reconsider an application
228	228	described by Subsection (a) for which the applicant provides
229	229	additional information not later than the 30th day after the date
230	230	the applicant provides the information. The office shall consider
231	231	that application before any pending applications submitted after
232	232	the date that application was originally submitted.
233	233	(e) This section does not apply to an application denied as
234	234	a result of the applicant's failure to submit with the application
235	235	affidavits required by Section 487A.0051(b)(6).
236	236	Sec. 487A.0055. APPROVAL BY OFFICE. On approval of an
237	237	application, the office shall provide:
238	238	(1) written notice to the applicant of the applicant's
239	239	approval as a small business recovery fund, including the amount of
240	240	the fund's investment authority; and
241	241	(2) a tax credit certificate to each investor whose
242	242	affidavit was included in the application and include on the
243	243	certificate the amount of the investor's credit-eligible capital
244	244	contribution.
245	245	Sec. 487A.0056. DUTIES OF FUND FOLLOWING APPROVAL. (a) A
246	246	small business recovery fund shall:
247	247	(1) not later than the 60th day after the date the fund
248	248	receives the approval notice under Section 487A.0055:
249	249	(A) collect the credit-eligible capital
250	250	contribution from each investor issued a tax credit certificate
251	251	under Section 487A.0055; and
252	252	(B) subject to Subsection (b), collect one or
253	253	more investments of cash that, when added to the contributions
254	254	collected under Paragraph (A), equal the fund's investment
255	255	authority; and
256	256	(2) not later than the 65th day after the date the fund
257	257	receives the approval notice under Section 487A.0055, send to the
258	258	office documentation sufficient to prove that the fund has
259	259	collected the amounts described in Subdivision (1).
260	260	(b) At least 10 percent of the small business recovery
261	261	fund's investment authority must consist of equity investments
262	262	contributed directly or indirectly by affiliates of the fund,
263	263	including employees, officers, and directors of those affiliates.
264	264	Sec. 487A.0057. LAPSE OF APPROVAL. (a) If a small business
265	265	recovery fund fails to comply with the requirements of Section
266	266	487A.0056, the fund's approval lapses and the corresponding
267	267	investment authority described by Section 487A.0056(a)(1) does not
268	268	count toward the limit prescribed by Section 487A.0052(b).
269	269	(b) The office shall first award lapsed investment
270	270	authority pro rata to each small business recovery fund whose
271	271	requested investment authority was reduced under Section
272	272	487A.0052(c). The small business recovery fund may allocate the
273	273	investment authority awarded under this subsection to the fund's
274	274	investors in the fund's discretion. The office may award any
275	275	remaining investment authority to new applicants.
276	276	Sec. 487A.0058. ADDITIONAL CREDIT FOR RURAL AREA
277	277	INVESTMENTS. (a) If a small business recovery fund makes one or
278	278	more growth investments in targeted small businesses located in
279	279	rural areas before the second anniversary of the closing date, the
280	280	office shall issue an additional tax credit certificate to each
281	281	investor who made a credit-eligible capital contribution to the
282	282	fund. The office shall issue the certificates not later than the
283	283	60th day after the second anniversary of the closing date.
284	284	(b) The office shall specify the amount of the additional
285	285	credit on a certificate. The additional credit is equal to 15
286	286	percent of the portion of the investor's credit-eligible capital
287	287	contribution the small business recovery fund used to make a growth
288	288	investment in a targeted small business located in a rural area, as
289	289	determined by the office.
290	290	Sec. 487A.0059. DISPOSITION OF APPLICATION FEES.
291	291	Application fees submitted to the office under Section
292	292	487A.0051(b)(7) shall be deposited to the credit of the general
293	293	revenue fund and may be appropriated only to the office for the
294	294	purpose of administering this chapter.
295	295	SUBCHAPTER C. REVOCATION OF TAX CREDIT CERTIFICATE
296	296	Sec. 487A.0101. GROUNDS FOR REVOCATION. (a) The office
297	297	shall revoke a tax credit certificate issued under Subchapter B in
298	298	connection with an investment in a small business recovery fund if,
299	299	before the fund exits the program under Section 487A.0151, the
300	300	fund:
301	301	(1) subject to Subsection (b), fails to invest at
302	302	least 60 percent of the fund's investment authority in growth
303	303	investments in this state on or before the second anniversary of the
304	304	closing date and 100 percent of the fund's investment authority in
305	305	growth investments in this state on or before the third anniversary
306	306	of the closing date;
307	307	(2) subject to Subsection (c) and after making the
308	308	investments necessary to avoid revocation under Subdivision (1),
309	309	fails to maintain growth investments equal to 100 percent of the
310	310	fund's investment authority until the sixth anniversary of the
311	311	closing date;
312	312	(3) makes a distribution or payment that results in
313	313	the fund having less than 100 percent of its investment authority:
314	314	(A) invested in growth investments in this state;
315	315	or
316	316	(B) available for investment in growth
317	317	investments and held in:
318	318	(i) cash;
319	319	(ii) United States Treasury securities;
320	320	(iii) bonds or notes issued by this state or
321	321	an agency or political subdivision of this state; or
322	322	(iv) a deposit account with a depository
323	323	institution headquartered or chartered in this state; or
324	324	(4) subject to Subsection (d), makes a growth
325	325	investment in a targeted small business that directly or indirectly
326	326	through an affiliate owns, has the right to acquire an ownership
327	327	interest in, makes a loan to, or makes an investment in the fund, an
328	328	affiliate of the fund, or an investor in the fund.
329	329	(b) For purposes of Subsection (a)(1), the amount of growth
330	330	investments that a small business recovery fund may count with
331	331	respect to a particular targeted small business, including any
332	332	amount invested in an affiliate of the targeted small business, may
333	333	not exceed $5 million.
334	334	(c) For purposes of Subsection (a)(2):
335	335	(1) the amount of growth investments that a small
336	336	business recovery fund may count with respect to a particular
337	337	targeted small business, including any amount invested in an
338	338	affiliate of the targeted small business, may not exceed $5
339	339	million;
340	340	(2) an investment that is sold or repaid is considered
341	341	to be maintained if the small business recovery fund reinvests an
342	342	amount equal to the capital returned or recovered by the fund from
343	343	the original investment, excluding any profit realized, in another
344	344	growth investment in this state on or before the first anniversary
345	345	of the date the capital is returned or recovered; and
346	346	(3) an amount received periodically by a small
347	347	business recovery fund is considered to be continually invested in
348	348	growth investments if that amount is reinvested in one or more
349	349	growth investments by the end of the calendar year following the
350	350	year of receipt.
351	351	(d) Subsection (a)(4) does not apply to investments in
352	352	publicly traded securities by a targeted small business or an owner
353	353	or affiliate of the targeted small business. For purposes of
354	354	Subsection (a)(4), a small business recovery fund is not considered
355	355	an affiliate of a targeted small business solely as a result of the
356	356	fund's growth investment in the targeted small business.
357	357	(e) The office shall:
358	358	(1) notify the comptroller when the office revokes a
359	359	tax credit certificate; and
360	360	(2) on request, provide the comptroller with lists of
361	361	valid and revoked tax credit certificates.
362	362	Sec. 487A.0102. OPPORTUNITY TO CORRECT VIOLATION. (a)
363	363	Before revoking a tax credit certificate under this subchapter, the
364	364	office shall notify the small business recovery fund of the reasons
365	365	for the pending revocation.
366	366	(b) The small business recovery fund may, not later than the
367	367	90th day after the date the notice is received, correct any
368	368	violation outlined in the notice to the satisfaction of the office
369	369	and avoid revocation of the tax credit certificate.
370	370	Sec. 487A.0103. ALLOCATION OF REVOKED INVESTMENT
371	371	AUTHORITY. (a) If a tax credit certificate is revoked under this
372	372	subchapter, the associated investment authority does not count
373	373	toward the limit on total investment authority described in Section
374	374	487A.0052(b).
375	375	(b) The office shall first award revoked investment
376	376	authority pro rata to each small business recovery fund whose
377	377	requested investment authority was reduced under Section
378	378	487A.0052(c). The office may award any remaining investment
379	379	authority to new applicants.
380	380	SUBCHAPTER D. CERTAIN FUND OPERATIONS
381	381	Sec. 487A.0151. APPLICATION TO EXIT PROGRAM. (a) On or
382	382	after the sixth anniversary of the closing date, a small business
383	383	recovery fund may apply to the office to exit the program and no
384	384	longer be subject to regulation under this chapter.
385	385	(b) The office shall respond to the application not later
386	386	than the 30th day after receipt.
387	387	(c) A small business recovery fund is eligible to exit the
388	388	program under this section if no tax credit certificates related to
389	389	investments in the fund have been revoked and the fund has not
390	390	received any revocation notice that has not been corrected under
391	391	Section 487A.0102.
392	392	(d) The office may not unreasonably deny an application
393	393	under this section. The office shall give the small business
394	394	recovery fund notice of a denial and include in the notice the
395	395	reasons for the denial.
396	396	Sec. 487A.0152. NO REVOCATION FOLLOWING EXIT. The office
397	397	may not revoke a tax credit certificate related to an investment in
398	398	a small business recovery fund after the fund's exit from the
399	399	program.
400	400	Sec. 487A.0153. PENALTY FOR CERTAIN DISTRIBUTIONS. (a)
401	401	For purposes of this section:
402	402	(1) the "actual number of jobs created and retained"
403	403	is the number of jobs created and jobs retained as a result of all of
404	404	a small business recovery fund's current and former growth
405	405	investments, as reported on the fund's reports submitted under
406	406	Section 487A.0155; and
407	407	(2) the "estimated number of jobs created and
408	408	retained" is the estimated number of jobs created and jobs retained
409	409	included in a small business recovery fund's application under
410	410	Section 487A.0051(b)(4) reduced, if applicable, by the same
411	411	percentage as the total investment authority sought under the
412	412	fund's business plan submitted under Section 487A.0051(b)(1) was
413	413	reduced under Section 487A.0052(c).
414	414	(b) A small business recovery fund is subject to a penalty
415	415	in the amount provided by Subsection (c) if:
416	416	(1) the fund authorizes a distribution to the fund's
417	417	equity holders in an amount that, when added to all previous
418	418	distributions to the fund's equity holders and any previous
419	419	penalties under this section, exceeds the fund's investment
420	420	authority; and
421	421	(2) the fund's actual number of jobs created and
422	422	retained is less than the fund's estimated number of jobs created
423	423	and retained.
424	424	(c) The amount of the penalty is equal to the amount of the
425	425	authorized distribution multiplied by a fraction:
426	426	(1) the numerator of which is the fund's estimated
427	427	number of jobs created and retained less the fund's actual number of
428	428	jobs created and retained; and
429	429	(2) the denominator of which is the fund's estimated
430	430	number of jobs created and retained.
431	431	(d) Before making a distribution to the fund's equity
432	432	holders, the fund shall deduct the amount of the penalty from the
433	433	amount otherwise authorized to be distributed to the equity holders
434	434	and pay the penalty to the office.
435	435	(e) The office shall deposit penalties received under
436	436	Subsection (d) in the general revenue fund.
437	437	Sec. 487A.0154. EVALUATION OF PROPOSED INVESTMENT. (a) A
438	438	small business recovery fund, before making a growth investment,
439	439	may request from the office a written opinion as to whether the
440	440	business in which the fund proposes to invest qualifies as a
441	441	targeted small business.
442	442	(b) Not later than the 15th business day after receiving the
443	443	request, the office shall notify the small business recovery fund
444	444	of its determination.
445	445	(c) If the office fails to notify the small business
446	446	recovery fund of its determination on or before the 15th business
447	447	day after receiving the request, the business in which the fund
448	448	proposes to invest is considered to be a targeted small business for
449	449	purposes of this chapter.
450	450	Sec. 487A.0155. ANNUAL REPORT. (a) A small business
451	451	recovery fund shall submit a report to the office on or before the
452	452	fifth business day after each anniversary of the closing date until
453	453	the fund has exited the program under Section 487A.0151.
454	454	(b) The report must document the small business recovery
455	455	fund's growth investments and include:
456	456	(1) a bank statement showing each growth investment;
457	457	(2) the name, location, and industry of each business
458	458	receiving a growth investment, including either the determination
459	459	notice described by Section 487A.0154 or evidence that the business
460	460	qualified as a targeted small business at the time the investment
461	461	was made;
462	462	(3) the number of jobs created and jobs retained in the
463	463	preceding calendar year as a result of the fund's growth
464	464	investments as of the last day of that period;
465	465	(4) the average annual salary of the jobs described by
466	466	Subdivision (3) and evidence of any other monetary or social
467	467	benefit to this state as a result of those jobs;
468	468	(5) a description, including the amount, of each
469	469	growth investment in a targeted small business located in a rural
470	470	area made in the 24 months following the closing date; and
471	471	(6) any other information the office requires.
472	472	(c) A small business recovery fund may, but is not required
473	473	to, include in any report submitted under this section information
474	474	about the number of jobs created and jobs retained with respect to a
475	475	former growth investment that the fund has exited.
476	476	SUBCHAPTER E. REPORT; CONDITIONS FOR ACCEPTANCE OF CERTAIN
477	477	APPLICATIONS
478	478	Sec. 487A.0201. REPORT. (a) Before the beginning of the
479	479	90th Legislature, Regular Session, the office shall submit to the
480	480	lieutenant governor, the speaker of the house of representatives,
481	481	and each member of the legislature a report on the economic benefits
482	482	of this chapter.
483	483	(b) The report must include an assessment of:
484	484	(1) the aggregate effects of growth investments made
485	485	under this chapter, including:
486	486	(A) the total number of jobs created by all
487	487	targeted small businesses, including direct jobs, indirect jobs,
488	488	and induced jobs;
489	489	(B) the total number of jobs retained by all
490	490	targeted small businesses;
491	491	(C) the total amount of wages paid in connection
492	492	with jobs created and jobs retained by all targeted small
493	493	businesses;
494	494	(D) the median wage of jobs created and jobs
495	495	retained by all targeted small businesses;
496	496	(E) the total effect on personal income in this
497	497	state, including direct and indirect effects;
498	498	(F) the total amount of growth investments;
499	499	(G) the gross domestic product of this state
500	500	attributable to targeted small businesses;
501	501	(H) the total taxable value of property of
502	502	targeted small businesses in this state according to tax appraisal
503	503	rolls;
504	504	(I) the total positive fiscal effect on this
505	505	state and local governments in this state; and
506	506	(J) the total number and dollar amount of growth
507	507	investments in targeted small businesses located in rural areas;
508	508	(2) the benefits to this state from cost savings
509	509	attributable to jobs created and jobs retained by all targeted
510	510	small businesses, including:
511	511	(A) Medicaid savings, with savings to this state
512	512	and the federal government listed separately;
513	513	(B) food assistance program savings;
514	514	(C) unemployment insurance payment savings; and
515	515	(D) any other savings that can be reasonably
516	516	estimated using data available to the office in connection with
517	517	some or all targeted small businesses; and
518	518	(3) the total positive fiscal effect on this state and
519	519	local governments in this state of the benefits described by
520	520	Subdivision (2).
521	521	(c) The report may not include information that is
522	522	confidential by law.
523	523	(d) In preparing the portion of the report described by
524	524	Subsection (b)(1), the office shall:
525	525	(1) use standard, nationally recognized economic
526	526	estimation techniques, including economic multipliers; and
527	527	(2) base the assessment on data submitted to the
528	528	office by each small business recovery fund.
529	529	Sec. 487A.0202. CONDITIONS FOR ACCEPTANCE OF CERTAIN
530	530	APPLICATIONS. (a) The office may not accept applications under
531	531	Section 487A.0051 after January 1, 2022, unless the total positive
532	532	fiscal effects described by Section 487A.0201(b) exceed the sum of
533	533	all tax credit certificates issued by the office under Subchapter
534	534	B.
535	535	(b) The office shall resume accepting applications under
536	536	Section 487A.0051 when the condition provided by Subsection (a) is
537	537	satisfied.
538	538	SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
539	539	by adding Chapter 232 to read as follows:
540	540	CHAPTER 232. TAX CREDIT FOR INVESTMENT IN SMALL BUSINESS RECOVERY
541	541	FUND
542	542	SUBCHAPTER A. GENERAL PROVISIONS
543	543	Sec. 232.0001. DEFINITIONS. In this chapter:
544	544	(1) "Affiliate" has the meaning assigned by Section
545	545	487A.0002, Government Code.
546	546	(2) "Closing date" has the meaning assigned by Section
547	547	487A.0001, Government Code.
548	548	(3) "State insurance tax liability" means any tax
549	549	liability incurred under Chapter 221, 222, 223, 223A, 224, 225,
550	550	226, or 281.
551	551	Sec. 232.0002. RULES. The comptroller shall adopt rules
552	552	necessary to implement this chapter.
553	553	SUBCHAPTER B. TAX CREDIT
554	554	Sec. 232.0051. ELIGIBILITY FOR CREDIT. An entity is
555	555	eligible for a credit against the entity's state insurance tax
556	556	liability in the amount and under the conditions and limitations
557	557	provided by this chapter.
558	558	Sec. 232.0052. QUALIFICATION. An entity is eligible for a
559	559	credit for a tax year if:
560	560	(1) the entity holds a tax credit certificate issued
561	561	under Section 487A.0055, Government Code, and the third, fourth,
562	562	fifth, or sixth anniversary of the closing date in connection with
563	563	which the certificate was issued occurs during the tax year; or
564	564	(2) the entity holds a tax credit certificate issued
565	565	under Section 487A.0058, Government Code, in connection with which
566	566	a credit under this chapter has not previously been claimed.
567	567	Sec. 232.0053. AMOUNT OF CREDIT; LIMITATION. (a) The
568	568	amount of credit for a tax year in connection with a tax credit
569	569	certificate described by Section 232.0052(1) is equal to 25 percent
570	570	of the amount of the credit-eligible capital contribution stated on
571	571	the certificate.
572	572	(b) The amount of credit for a tax year in connection with a
573	573	tax credit certificate described by Section 232.0052(2) is equal to
574	574	the amount of credit stated on the certificate, less any amount in
575	575	connection with which a credit under this chapter has previously
576	576	been claimed.
577	577	(c) The total credit claimed for a tax year, including the
578	578	amount of any carryforward under Section 232.0054, may not exceed
579	579	the amount of state insurance tax liability due for the entity for
580	580	the tax year after applying all other applicable tax credits.
581	581	(d) Credits may be applied to the entity's estimated or
582	582	final tax payments for the tax year.
583	583	Sec. 232.0054. CARRYFORWARD. If an entity is eligible for a
584	584	credit that exceeds the limitation under Section 232.0053(c), the
585	585	entity may carry the unused credit forward and apply the credit to a
586	586	subsequent tax report.
587	587	Sec. 232.0055. ASSIGNMENT PROHIBITED. (a) Except as
588	588	provided by Subsection (b), an entity may not convey, assign, or
589	589	transfer the credit allowed under this chapter to another entity.
590	590	(b) An entity may convey, assign, or transfer the credit
591	591	allowed under this chapter to an affiliate of the entity that is
592	592	subject to state insurance tax liability.
593	593	Sec. 232.0056. RETALIATORY TAX. An entity claiming a
594	594	credit under this chapter is not required to pay any additional
595	595	retaliatory tax levied under Chapter 281 as a result of claiming
596	596	that credit.
597	597	SUBCHAPTER C. RECAPTURE OF CREDIT
598	598	Sec. 232.0101. RECAPTURE. The comptroller shall recapture
599	599	the amount of a credit claimed on a tax report filed under Chapter
600	600	221, 222, 223, 223A, 224, 225, 226, or 281 from an entity if the tax
601	601	credit certificate on which the credit is based is revoked under
602	602	Subchapter C, Chapter 487A, Government Code.
603	603	SECTION 3. (a) As soon as practicable after this Act
604	604	becomes law as provided by Section 2001.006, Government Code:
605	605	(1) the Texas Economic Development and Tourism Office
606	606	shall adopt rules necessary to implement Chapter 487A, Government
607	607	Code, as added by this Act; and
608	608	(2) the comptroller of public accounts shall adopt
609	609	rules necessary to implement Chapter 232, Insurance Code, as added
610	610	by this Act.
611	611	(b) Not later than October 1, 2021, the Texas Economic
612	612	Development and Tourism Office shall begin accepting applications
613	613	under Section 487A.0051(a), Government Code, as added by this Act.
614	614	SECTION 4. Chapter 232, Insurance Code, as added by this
615	615	Act, applies only to a tax report originally due on or after January
616	616	1, 2021.
617	617	SECTION 5. This Act takes effect immediately if it receives
618	618	a vote of two-thirds of all the members elected to each house, as
619	619	provided by Section 39, Article III, Texas Constitution. If this
620	620	Act does not receive the vote necessary for immediate effect, this
621	621	Act takes effect September 1, 2021.