Bill Text: TX HB1000 | 2019-2020 | 86th Legislature | Engrossed

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Bill Title: Relating to rural and opportunity funds and insurance tax credits for certain investments in those funds; imposing a monetary penalty; authorizing fees.

Spectrum: Slight Partisan Bill (Republican 6-2)

Status: (Engrossed - Dead) 2019-04-17 - Referred to Business & Commerce [HB1000 Detail]

Download: Texas-2019-HB1000-Engrossed.html

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86R16954 BEF-D
By: Paddie, Price, Phelan, Nevárez, Springer, H.B. No. 1000
et al.

A BILL TO BE ENTITLED
AN ACT
relating to rural and opportunity funds and insurance tax credits
for certain investments in those funds; imposing a monetary
penalty; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 487A to read as follows:
CHAPTER 487A. RURAL AND OPPORTUNITY FUNDS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 487A.0001. GENERAL DEFINITIONS. In this chapter:
(1) "Closing date" means the date a rural and
opportunity fund has collected all of the amounts described by
Section 487A.0056(a)(1).
(2) "Growth investment" means any capital or equity
investment by a rural and opportunity fund in a targeted small
business or any loan by a rural and opportunity fund to a targeted
small business with a stated maturity date of at least one year
after the date of issuance.
(3) "Office" means the Texas Economic Development and
Tourism Office.
(4) "Qualified area" means:
(A) a rural community as defined by Section
12.046, Agriculture Code, that is not a geographic area delineated
as urbanized by the United States Census Bureau; or
(B) a qualified opportunity zone as defined by
Section 1400Z-1, Internal Revenue Code of 1986.
(5) "Rural and opportunity fund" means an entity
approved by the office as a rural and opportunity fund.
Sec. 487A.0002. DEFINITION: AFFILIATE. (a) In this
chapter, "affiliate" means an entity that directly or indirectly
through one or more intermediaries controls, is controlled by, or
is under common control with another entity.
(b) For purposes of Subsection (a), an entity is controlled
by another entity if the controlling entity:
(1) holds, directly or indirectly, the majority voting
or ownership interest in the controlled entity; or
(2) has control over the day-to-day operations of the
controlled entity by contract or by law.
Sec. 487A.0003. DEFINITION: CREDIT-ELIGIBLE CAPITAL
CONTRIBUTION. (a) In this chapter and subject to Subsection (b),
"credit-eligible capital contribution" means an investment of cash
that equals the amount specified on a tax credit certificate issued
by the office under Section 487A.0055(2) made by an entity that is
subject to state insurance tax liability, as defined by Section
232.0001, Insurance Code.
(b) An investment made by an entity qualifies as a
credit-eligible capital contribution only if the entity making the
investment receives in exchange for the investment:
(1) an equity interest in the rural and opportunity
fund; or
(2) at par value or premium, a debt instrument that has
a maturity date of at least five years from the closing date and a
repayment schedule that is no faster than level principal
amortization over five years.
Sec. 487A.0004. DEFINITION: INVESTMENT AUTHORITY. (a) In
this chapter, "investment authority" means the amount stated on the
notice issued under Section 487A.0055(1) approving the rural and
opportunity fund.
(b) At least 65 percent of a rural and opportunity fund's
investment authority must consist of credit-eligible capital
contributions.
Sec. 487A.0005. DEFINITION: JOBS CREATED. (a) In this
chapter, "jobs created" means, with respect to a targeted small
business, employment positions that are created by the targeted
small business, are located in this state, require at least 35 hours
of work each week, and were not located in this state at the time of
the initial growth investment in the targeted small business.
(b) The number of jobs created by a targeted small business
is calculated each year by subtracting the number of employment
positions in this state at the targeted small business at the time
of the initial growth investment in the targeted small business
from the monthly average of those employment positions for that
year. If the number calculated under this subsection is less than
zero, the number shall be reported as zero.
(c) The monthly average of employment positions for a year
is calculated by adding together the number of employment positions
existing on the last day of each month of the year and dividing by
12.
Sec. 487A.0006. DEFINITION: JOBS RETAINED. (a) In this
chapter, "jobs retained" means, with respect to a targeted small
business, employment positions:
(1) located in this state requiring at least 35 hours
of work each week that existed before the initial growth investment
in the targeted small business; and
(2) that would have been lost or moved out of this
state had a growth investment in the targeted small business not
been made, as certified in writing by an executive officer of the
targeted small business to the rural and opportunity fund.
(b) The number of jobs retained by a targeted small business
is calculated each year based on the monthly average of employment
positions for that year.
(c) The monthly average of employment positions for a year
is calculated by adding together the number of employment positions
existing on the last day of each month of the year and dividing by
12.
(d) The reported number of jobs retained for a year may not
exceed the number reported on the initial report under Section
487A.0155. The rural and opportunity fund shall reduce the number
of jobs retained for a year if employment at the targeted small
business drops below the number reported on the initial report.
Sec. 487A.0007. DEFINITION: TARGETED SMALL BUSINESS. (a)
In this chapter, "targeted small business" means a business that,
at the time of the initial growth investment in the business:
(1) had fewer than 250 employees; and
(2) has its principal business operations located in
one or more qualified areas in this state.
(b) For purposes of Subsection (a)(2), the principal
business operations of a business are located at a place where:
(1) at least 60 percent of the business's employees
work; or
(2) employees who are paid at least 60 percent of the
business's payroll work.
(c) An out-of-state business that agrees to relocate or hire
new employees using the proceeds of a growth investment to
establish principal business operations in a qualified area in this
state qualifies as a targeted small business if the business
satisfies the requirements of:
(1) Subsection (a)(1) at the time of the initial
growth investment in the business; and
(2) Subsection (a)(2) not later than the 180th day
after receiving the initial growth investment or a later date
agreed to by the office.
Sec. 487A.0008. RULES. The office shall adopt rules
necessary to implement this chapter.
SUBCHAPTER B. APPROVAL OF RURAL AND OPPORTUNITY FUNDS
Sec. 487A.0051. APPLICATION. (a) Subject to Section
487A.0202, the office shall accept applications from entities
seeking approval as rural and opportunity funds.
(b) An application must include:
(1) the total investment authority sought by the
applicant under the applicant's business plan;
(2) evidence sufficient to prove to the office's
satisfaction that, as of the date the applicant submits the
application:
(A) the applicant or affiliates of the applicant
have invested, in the aggregate, at least $100 million in nonpublic
companies located in:
(i) a municipality with a population of
less than 50,000, regardless of whether the municipality is located
inside or outside this state;
(ii) a county with a population of less than
200,000, regardless of whether the county is located inside or
outside this state; or
(iii) a census tract designated as a
qualified opportunity zone in accordance with Section 1400Z-1,
Internal Revenue Code of 1986, regardless of when the designation
is made and regardless of whether the census tract is located inside
or outside this state; and
(B) at least one principal in a rural business
investment company licensed under 7 U.S.C. Section 2009cc et seq.
or a small business investment company licensed under 15 U.S.C.
Section 681 is, and has been for at least four years, an officer or
employee of the applicant or of an affiliate of the applicant on the
date the application is submitted;
(3) a copy of the rural business investment company
license or small business investment company license described by
Subdivision (2)(B);
(4) an estimate of the number of jobs created and jobs
retained as a result of the applicant's growth investments;
(5) a business plan that includes a revenue impact
assessment that:
(A) projects state and local tax revenue to be
generated by the applicant's proposed growth investments; and
(B) is prepared by a nationally recognized third
party independent economic forecasting firm using a dynamic
economic forecasting model that analyzes the applicant's business
plan for the 10-year period following the date the applicant
submits the application;
(6) a signed affidavit from each committed investor
stating the amount of credit-eligible capital contributions the
investor commits to making; and
(7) a nonrefundable application fee of $5,000.
Sec. 487A.0052. DECISION ON APPLICATION. (a) The office
shall make a determination on each application not later than the
30th day after the date the office receives the application. The
office shall make application determinations in the order in which
applications are received and shall consider applications received
on the same day to be received simultaneously.
(b) The office may approve investment authority under this
chapter in amounts that would allow not more than $35 million in tax
credits to be claimed under Section 232.0053, Insurance Code, in
any calendar year, excluding any credit carryforwards under Section
232.0054, Insurance Code.
(c) If a request for investment authority exceeds the
limitation under Subsection (b), the office shall reduce the
investment authority and the credit-eligible capital contributions
for that application as necessary to avoid exceeding the limit. If
multiple applications received on the same day request a combined
investment authority that exceeds the limit under Subsection (b),
the office shall proportionally reduce the investment authority and
the credit-eligible capital contributions for those applications
as necessary to avoid exceeding the limit. The office may not
reduce an applicant's investment authority for any reason other
than as authorized by this subsection.
Sec. 487A.0053. GROUNDS FOR DENIAL. The office may deny an
application under this subchapter only if:
(1) the application is incomplete or the application
fee is not paid in full;
(2) the applicant fails to satisfy the requirements of
Section 487A.0051(b)(2);
(3) the revenue impact assessment submitted under
Section 487A.0051(b)(5) does not demonstrate that the applicant's
business plan will result in a positive economic impact on combined
state and local revenue during the 10-year period covered by the
assessment that exceeds the cumulative amount of tax credits that
would be issued to the applicant's investors under Chapter 232,
Insurance Code, if the application were approved;
(4) the credit-eligible capital contributions
described in affidavits submitted under Section 487A.0051(b)(6) do
not equal at least 65 percent of the total amount of investment
authority sought under the applicant's business plan; or
(5) the office has already approved the maximum amount
of investment authority allowed under Section 487A.0052(b).
Sec. 487A.0054. SUBMISSION OF ADDITIONAL INFORMATION
FOLLOWING DENIAL. (a) If the office denies an application the
applicant may, not later than the 15th day after the date the office
provides notice of denial, provide additional information to the
office to complete, clarify, or cure defects in the application
identified by the office.
(b) If the applicant completes, clarifies, or cures the
defects in its application during the period prescribed by
Subsection (a), the application is considered complete as of the
original submission date.
(c) If the applicant fails to complete, clarify, or cure the
defects in its application during the period prescribed by
Subsection (a), the application is finally denied. An applicant
who wishes to reapply must resubmit an application in full with a
new submission date.
(d) The office shall review and reconsider an application
described by Subsection (a) for which the applicant provides
additional information not later than the 30th day after the date
the applicant provides the information. The office shall consider
that application before any pending applications submitted after
the date that application was originally submitted.
(e) This section does not apply to an application denied as
a result of the applicant's failure to submit with the application
affidavits required by Section 487A.0051(b)(6).
Sec. 487A.0055. APPROVAL BY OFFICE. On approval of an
application, the office shall provide:
(1) written notice to the applicant of the applicant's
approval as a rural and opportunity fund, including the amount of
the fund's investment authority; and
(2) a tax credit certificate to each investor whose
affidavit was included in the application and include on the
certificate the amount of the investor's credit-eligible capital
contribution.
Sec. 487A.0056. DUTIES OF FUND FOLLOWING APPROVAL. (a) A
rural and opportunity fund shall:
(1) not later than the 60th day after the date the fund
receives the approval notice under Section 487A.0055:
(A) collect the credit-eligible capital
contribution from each investor issued a tax credit certificate
under Section 487A.0055; and
(B) subject to Subsection (b), collect one or
more investments of cash that, when added to the contributions
collected under Paragraph (A), equal the fund's investment
authority; and
(2) not later than the 65th day after the date the fund
receives the approval notice under Section 487A.0055, send to the
office documentation sufficient to prove that the fund has
collected the amounts described in Subdivision (1).
(b) At least 10 percent of the rural and opportunity fund's
investment authority must consist of equity investments
contributed directly or indirectly by affiliates of the fund,
including employees, officers, and directors of those affiliates.
Sec. 487A.0057. LAPSE OF APPROVAL. (a) If a rural and
opportunity fund fails to comply with the requirements of Section
487A.0056, the fund's approval lapses and the corresponding
investment authority described by Section 487A.0056(a)(1) does not
count toward the limit prescribed by Section 487A.0052(b).
(b) The office shall first award lapsed investment
authority pro rata to each rural and opportunity fund whose
requested investment authority was reduced under Section
487A.0052(c). The rural and opportunity fund may allocate the
investment authority awarded under this subsection to the fund's
investors in the fund's discretion. The office may award any
remaining investment authority to new applicants.
Sec. 487A.0058. DISPOSITION OF APPLICATION FEES.
Application fees submitted to the office under Section
487A.0051(b)(7) shall be deposited to the credit of the general
revenue fund and may be appropriated only to the office for the
purpose of administering this chapter.
SUBCHAPTER C. REVOCATION OF TAX CREDIT CERTIFICATE
Sec. 487A.0101. GROUNDS FOR REVOCATION. (a) The office
shall revoke a tax credit certificate issued under Subchapter B in
connection with an investment in a rural and opportunity fund if,
before the fund exits the program under Section 487A.0151, the
fund:
(1) subject to Subsection (b), fails to invest at
least 60 percent of the fund's investment authority in growth
investments in this state on or before the second anniversary of the
closing date and 100 percent of the fund's investment authority in
growth investments in this state on or before the third anniversary
of the closing date;
(2) subject to Subsection (c) and after making the
investments necessary to avoid revocation under Subdivision (1),
fails to maintain growth investments equal to 100 percent of the
fund's investment authority until the sixth anniversary of the
closing date;
(3) makes a distribution or payment that results in
the fund having less than 100 percent of its investment authority
invested in growth investments in this state or available for
investment in growth investments and held in cash or marketable
securities; or
(4) subject to Subsection (d), makes a growth
investment in a targeted small business that directly or indirectly
through an affiliate owns, has the right to acquire an ownership
interest in, makes a loan to, or makes an investment in the fund, an
affiliate of the fund, or an investor in the fund.
(b) For purposes of Subsection (a)(1):
(1) the amount of growth investments that a rural and
opportunity fund may count with respect to a particular targeted
small business, including any amount invested in an affiliate of
the targeted small business, may not exceed the greater of $5
million or 20 percent of the fund's investment authority; and
(2) at least 67 percent of the required investments
must be growth investments in targeted small businesses whose
principal business operations are located in, or are relocated to,
one or more qualified areas described by Section 487A.0001(4)(A).
(c) For purposes of Subsection (a)(2):
(1) the amount of growth investments that a rural and
opportunity fund may count with respect to a particular targeted
small business, including any amount invested in an affiliate of
the targeted small business, may not exceed the greater of $5
million or 20 percent of the fund's investment authority;
(2) an investment that is sold or repaid is considered
to be maintained if the rural and opportunity fund reinvests an
amount equal to the capital returned or recovered by the fund from
the original investment, excluding any profit realized, in another
growth investment in this state on or before the first anniversary
of the date the capital is returned or recovered; and
(3) an amount received periodically by a rural and
opportunity fund is considered to be continually invested in growth
investments if that amount is reinvested in one or more growth
investments by the end of the calendar year following the year of
receipt.
(d) Subsection (a)(4) does not apply to investments in
publicly traded securities by a targeted small business or an owner
or affiliate of the targeted small business. For purposes of
Subsection (a)(4), a rural and opportunity fund is not considered
an affiliate of a targeted small business solely as a result of the
fund's growth investment in the targeted small business.
(e) The office shall:
(1) notify the comptroller when the office revokes a
tax credit certificate; and
(2) on request, provide the comptroller with lists of
valid and revoked tax credit certificates.
Sec. 487A.0102. OPPORTUNITY TO CORRECT VIOLATION. (a)
Before revoking a tax credit certificate under this subchapter, the
office shall notify the rural and opportunity fund of the reasons
for the pending revocation.
(b) The rural and opportunity fund may, not later than the
90th day after the date the notice is received, correct any
violation outlined in the notice to the satisfaction of the office
and avoid revocation of the tax credit certificate.
Sec. 487A.0103. ALLOCATION OF REVOKED INVESTMENT
AUTHORITY. (a) If a tax credit certificate is revoked under this
subchapter, the associated investment authority does not count
toward the limit on total investment authority described in Section
487A.0052(b).
(b) The office shall first award revoked investment
authority pro rata to each rural and opportunity fund whose
requested investment authority was reduced under Section
487A.0052(c). The office may award any remaining investment
authority to new applicants.
SUBCHAPTER D. CERTAIN FUND OPERATIONS
Sec. 487A.0151. APPLICATION TO EXIT PROGRAM. (a) On or
after the sixth anniversary of the closing date, a rural and
opportunity fund may apply to the office to exit the program and no
longer be subject to regulation under this chapter.
(b) The office shall respond to the application not later
than the 30th day after receipt.
(c) A rural and opportunity fund is eligible to exit the
program under this section if no tax credit certificates related to
investments in the fund have been revoked and the fund has not
received any revocation notice that has not been corrected under
Section 487A.0102.
(d) The office may not unreasonably deny an application
under this section. The office shall give the rural and opportunity
fund notice of a denial and include in the notice the reasons for
the denial.
Sec. 487A.0152. NO REVOCATION FOLLOWING EXIT. The office
may not revoke a tax credit certificate related to an investment in
a rural and opportunity fund after the fund's exit from the program.
Sec. 487A.0153. PENALTY FOR CERTAIN DISTRIBUTIONS. (a)
For purposes of this section:
(1) the "actual number of jobs created and retained"
is the number of jobs created and jobs retained as a result of all of
a rural and opportunity fund's current and former growth
investments, as reported on the fund's reports submitted under
Section 487A.0155; and
(2) the "estimated number of jobs created and
retained" is the estimated number of jobs created and jobs retained
included in a rural and opportunity fund's application under
Section 487A.0051(b)(4) reduced, if applicable, by the same
percentage as the total investment authority sought under the
fund's business plan submitted under Section 487A.0051(b)(1) was
reduced under Section 487A.0052(c).
(b) A rural and opportunity fund is subject to a penalty in
the amount provided by Subsection (c) if:
(1) the fund authorizes a distribution to the fund's
equity holders in an amount that, when added to all previous
distributions to the fund's equity holders and any previous
penalties under this section, exceeds the fund's investment
authority; and
(2) the fund's actual number of jobs created and
retained is less than the fund's estimated number of jobs created
and retained.
(c) The amount of the penalty is equal to the amount of the
authorized distribution multiplied by a fraction:
(1) the numerator of which is the fund's estimated
number of jobs created and retained less the fund's actual number of
jobs created and retained; and
(2) the denominator of which is the fund's estimated
number of jobs created and retained.
(d) Before making a distribution to the fund's equity
holders, the fund shall deduct the amount of the penalty from the
amount otherwise authorized to be distributed to the equity holders
and pay the penalty to the office.
(e) The office shall deposit penalties received under
Subsection (d) in the general revenue fund.
Sec. 487A.0154. EVALUATION OF PROPOSED INVESTMENT. (a) A
rural and opportunity fund, before making a growth investment, may
request from the office a written opinion as to whether the business
in which the fund proposes to invest qualifies as a targeted small
business.
(b) Not later than the 15th business day after receiving the
request, the office shall notify the rural and opportunity fund of
its determination.
(c) If the office fails to notify the rural and opportunity
fund of its determination on or before the 15th business day after
receiving the request, the business in which the fund proposes to
invest is considered to be a targeted small business for purposes of
this chapter.
Sec. 487A.0155. ANNUAL REPORT. (a) A rural and opportunity
fund shall submit a report to the office on or before the fifth
business day after each anniversary of the closing date until the
fund has exited the program under Section 487A.0151.
(b) The report must document the rural and opportunity
fund's growth investments and include:
(1) a bank statement showing each growth investment;
(2) the name, location, and industry of each business
receiving a growth investment, including either the determination
notice described by Section 487A.0154 or evidence that the business
qualified as a targeted small business at the time the investment
was made;
(3) the number of jobs created and jobs retained in the
preceding calendar year as a result of the fund's growth
investments as of the last day of that period;
(4) the average annual salary of the jobs described by
Subdivision (3) and evidence of any other monetary or social
benefit to this state as a result of those jobs; and
(5) any other information the office requires.
(c) A rural and opportunity fund may, but is not required
to, include in any report submitted under this section information
about the number of jobs created and jobs retained with respect to a
former growth investment that the fund has exited.
SUBCHAPTER E. REPORT; CONDITIONS FOR ACCEPTANCE OF CERTAIN
APPLICATIONS
Sec. 487A.0201. REPORT. (a) Before the beginning of the
90th Legislature, Regular Session, the office shall submit to the
lieutenant governor, the speaker of the house of representatives,
and each member of the legislature a report on the economic benefits
of this chapter.
(b) The report must include an assessment of:
(1) the aggregate effects of growth investments made
under this chapter, including:
(A) the total number of jobs created by all
targeted small businesses, including direct jobs, indirect jobs,
and induced jobs;
(B) the total number of jobs retained by all
targeted small businesses;
(C) the total amount of wages paid in connection
with jobs created and jobs retained by all targeted small
businesses;
(D) the median wage of jobs created and jobs
retained by all targeted small businesses;
(E) the total effect on personal income in this
state, including direct and indirect effects;
(F) the total amount of growth investments;
(G) the gross domestic product of this state
attributable to targeted small businesses;
(H) the total taxable value of property of
targeted small businesses in this state according to tax appraisal
rolls; and
(I) the total positive fiscal effect on this
state and local governments in this state;
(2) the benefits to this state from cost savings
attributable to jobs created and jobs retained by all targeted
small businesses, including:
(A) Medicaid savings, with savings to this state
and the federal government listed separately;
(B) food assistance program savings;
(C) unemployment insurance payment savings; and
(D) any other savings that can be reasonably
estimated using data available to the office in connection with
some or all targeted small businesses; and
(3) the total positive fiscal effect on this state and
local governments in this state of the benefits described by
Subdivision (2).
(c) The report may not include information that is
confidential by law.
(d) In preparing the portion of the report described by
Subsection (b)(1), the office shall use standard, nationally
recognized economic estimation techniques, including economic
multipliers.
(e) The portion of the report described by Subsection (b)(1)
must be based on data submitted to the office by each rural and
opportunity fund.
Sec. 487A.0202. CONDITIONS FOR ACCEPTANCE OF CERTAIN
APPLICATIONS. (a) The office may not accept applications under
Section 487A.0051 after January 1, 2022, unless the total positive
fiscal effects described by Section 487A.0201(b) exceed the sum of
all tax credit certificates issued by the office under Section
487A.0055(2).
(b) The office shall resume accepting applications under
Section 487A.0051 when the condition provided by Subsection (a) is
satisfied.
SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 232 to read as follows:
CHAPTER 232. TAX CREDIT FOR INVESTMENT IN RURAL AND OPPORTUNITY
FUND
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 232.0001. DEFINITIONS. In this chapter:
(1) "Affiliate" has the meaning assigned by Section
487A.0002, Government Code.
(2) "Closing date" has the meaning assigned by Section
487A.0001, Government Code.
(3) "State insurance tax liability" means any tax
liability incurred under Chapter 221, 222, 223, 223A, 224, 225,
226, or 281.
Sec. 232.0002. RULES. The comptroller shall adopt rules
necessary to implement this chapter.
SUBCHAPTER B. TAX CREDIT
Sec. 232.0051. ELIGIBILITY FOR CREDIT. An entity is
eligible for a credit against the entity's state insurance tax
liability in the amount and under the conditions and limitations
provided by this chapter.
Sec. 232.0052. QUALIFICATION. An entity is eligible for a
credit for a tax year if:
(1) the entity holds a tax credit certificate issued
under Section 487A.0055, Government Code; and
(2) the third, fourth, fifth, or sixth anniversary of
the closing date in connection with which the certificate was
issued occurs during the tax year.
Sec. 232.0053. AMOUNT OF CREDIT; LIMITATION. (a) The
amount of credit for a tax year is equal to 25 percent of the amount
of the credit-eligible capital contribution stated on the tax
credit certificate described by Section 232.0052.
(b) The total credit claimed for a tax year, including the
amount of any carryforward under Section 232.0054, may not exceed
the amount of state insurance tax liability due for the entity for
the tax year after applying all other applicable tax credits.
(c) Credits may be applied to the entity's estimated or
final tax payments for the tax year.
Sec. 232.0054. CARRYFORWARD. If an entity is eligible for a
credit that exceeds the limitation under Section 232.0053(b), the
entity may carry the unused credit forward for not more than 20
consecutive tax reports. Credits, including credit carryforwards,
are considered to be used in the following order:
(1) a credit carryforward under this chapter; and
(2) a current year credit.
Sec. 232.0055. ASSIGNMENT PROHIBITED. (a) Except as
provided by Subsection (b), an entity may not convey, assign, or
transfer the credit allowed under this chapter to another entity.
(b) An entity may convey, assign, or transfer the credit
allowed under this chapter to an affiliate of the entity that is
subject to state insurance tax liability.
Sec. 232.0056. 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.
SUBCHAPTER C. RECAPTURE OF CREDIT
Sec. 232.0101. RECAPTURE. The comptroller shall recapture
the amount of a credit claimed on a tax report filed under Chapter
221, 222, 223, 223A, 224, 225, 226, or 281 from an entity if the tax
credit certificate on which the credit is based is revoked under
Subchapter C, Chapter 487A, Government Code.
SECTION 3. (a) As soon as practicable after this Act
becomes law as provided by Section 2001.006, Government Code:
(1) the Texas Economic Development and Tourism Office
shall adopt rules necessary to implement Chapter 487A, Government
Code, as added by this Act; and
(2) the comptroller of public accounts shall adopt
rules necessary to implement Chapter 232, Insurance Code, as added
by this Act.
(b) Not later than January 1, 2020, the Texas Economic
Development and Tourism Office shall begin accepting applications
under Section 487A.0051(a), Government Code, as added by this Act.
SECTION 4. Chapter 232, Insurance Code, as added by this
Act, applies only to a tax report originally due on or after January
1, 2020.
SECTION 5. This Act takes effect September 1, 2019.