Bill Text: TX SB891 | 2011-2012 | 82nd Legislature | Comm Sub

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Bill Title: Relating to certain investments in certain Texas businesses by insurance companies and related organizations.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-05-13 - Not again placed on intent calendar [SB891 Detail]

Download: Texas-2011-SB891-Comm_Sub.html

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By: Carona S.B. No. 891
(In the Senate - Filed February 23, 2011; March 23, 2011,
read first time and referred to Committee on Economic Development;
May 10, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 4, Nays 1; May 10, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 891 By: Jackson

A BILL TO BE ENTITLED
AN ACT
relating to certain investments in certain Texas businesses by
insurance companies and related organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 228.001, Insurance Code, is amended by
adding Subdivisions (5-b), (5-c), (7-c), and (7-d) and amending
Subdivisions (7-a) and (7-b) to read as follows:
(5-b) "Match" means cash invested or lent to a
qualified business by another party that is not a certified capital
company contemporaneously with, or subsequent to, a qualified
investment in the qualified business. The term includes cash
invested or lent to a qualified business by the certified capital
company or its affiliates that would otherwise be a qualified
investment but that is made with funds that are not certified
capital.
(5-c) "Net profit realized on qualified investments"
means the sum of all funds returned to a certified capital company
in repayment, sale, or exchange of the company's qualified
investments in excess of the sum of the cost basis of such qualified
investments. To compute the net profit realized on qualified
investments, all of the certified capital company's qualified
investments are aggregated such that gains on qualified investments
are netted against losses on qualified investments.
(7-a) "Profit share percentage" means a payment in an
amount equal to 20 percent of the net profit realized on qualified
investments.
(7-b) "Program One" means the program for allocation
and investment of certified capital under this chapter before
January 1, 2007.
(7-c) [(7-b)] "Program Two" means the program for
allocation and investment of certified capital under this chapter
on or after January 1, 2007.
(7-d) "Program Three" means the program for allocation
and investment of certified capital under this chapter on or after
September 1, 2011.
SECTION 2. Subchapter B, Chapter 228, Insurance Code, is
amended by adding Section 228.0525 to read as follows:
Sec. 228.0525. ACCEPTANCE OF PREMIUM TAX ALLOCATION CLAIMS.
The rules adopted under Section 228.052 must provide that the
comptroller shall accept premium tax credit allocation claims on
behalf of certified investors with respect to Program Three not
later than January 1, 2012.
SECTION 3. Section 228.101, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) With respect to Program Three, an application must
include a sworn statement by the managers of the applicant that:
(1) the applicant, if certified as a certified capital
company, will, prior to decertification, secure match commitments
in an amount equal to at least 150 percent of the company's Program
Three allocation; and
(2) Section 228.3021(d) applies to a certified capital
company under Program Three.
SECTION 4. Subsection (a), Section 228.107, Insurance Code,
is amended to read as follows:
(a) Not later than January 31 of each year, each certified
capital company shall pay a nonrefundable renewal fee in an amount
set by the comptroller that is sufficient to reimburse the
comptroller for annual administrative costs of the program, not to
exceed $15,000 per certified capital company. The comptroller
shall notify each certified capital company of the amount of the fee
not later than January 31 of the year preceding the year in which
the fee is due [of $5,000 to the comptroller].
SECTION 5. Subsection (b), Section 228.157, Insurance Code,
is amended to read as follows:
(b) A certified capital company may make a qualified
distribution at any time. To make a distribution or payment other
than a qualified distribution, a company must have:
(1) made qualified investments in an amount
cumulatively equal to 100 percent of the company's certified
capital; and
(2) with respect to Program Three, paid the state any
applicable profit share percentage and:
(A) secured match investments in an amount equal
to at least 150 percent of the company's Program Three allocation
under Section 228.101; or
(B) been decertified under Section 228.3021.
SECTION 6. Section 228.251, Insurance Code, is amended by
adding Subsection (d) to read as follows:
(d) With respect to credits earned as a result of
investments made under Program Three, beginning with the tax report
due March 1, 2017, for the 2016 tax year, a certified investor may
take up to 25 percent of the vested premium tax credit in any
taxable year of the certified investor. The credit may not be
applied to estimated payments due in 2016.
SECTION 7. Subsection (b), Section 228.253, Insurance Code,
is amended to read as follows:
(b) The certified capital company must have filed the claim
with the comptroller on the date on which the comptroller accepted
premium tax credit allocation claims on behalf of certified
investors with respect to Program One, [or] Program Two, or Program
Three, as applicable, under the comptroller's rules.
SECTION 8. Section 228.254, Insurance Code, is amended to
read as follows:
Sec. 228.254. TOTAL LIMIT ON PREMIUM TAX CREDITS. (a) The
total amount of certified capital for which premium tax credits may
be allowed under this chapter for all years in which premium tax
credits are allowed is:
(1) $200 million for Program One; [and]
(2) $200 million for Program Two; and
(3) $200 million for Program Three.
(b) The total amount of certified capital for which premium
tax credits may be allowed for all certified investors under this
chapter may not exceed the amount that would entitle all certified
investors in certified capital companies to take total credits of
$50 million in a year with respect to Program One, [and] $50 million
in a year with respect to Program Two, and $50 million in a year with
respect to Program Three.
(c) A certified capital company and the company's
affiliates may not file premium tax credit allocation claims with
respect to Program One, [or] Program Two, or Program Three, as
applicable, in excess of the maximum amount of certified capital
for which premium tax credits may be allowed for that program as
provided by this section.
SECTION 9. Section 228.255, Insurance Code, is amended to
read as follows:
Sec. 228.255. ALLOCATION OF PREMIUM TAX CREDIT. (a) If
the total premium tax credits claimed by all certified investors
with respect to Program One, [or] Program Two, or Program Three, as
applicable, exceeds the total limits on premium tax credits
established for that program by Section 228.254(a), the comptroller
shall allocate the total amount of premium tax credits allowed
under this chapter to certified investors in certified capital
companies on a pro rata basis in accordance with this section.
(b) The pro rata allocation for each certified investor
shall be the product of:
(1) a fraction, the numerator of which is the amount of
the premium tax credit allocation claim filed on behalf of the
investor with respect to Program One, [or] Program Two, or Program
Three, as applicable, and the denominator of which is the total
amount of all premium tax credit allocation claims filed on behalf
of all certified investors with respect to that program; and
(2) the total amount of certified capital for which
premium tax credits may be allowed with respect to that program
under this chapter.
(c) The maximum amount of certified capital for which
premium tax credit allocation may be allowed on behalf of a single
certified investor and the investor's affiliates with respect to
Program One, [or] Program Two, or Program Three, as applicable,
whether by one or more certified capital companies, may not exceed
the greater of:
(1) $10 million; or
(2) 15 percent of the maximum aggregate amount
available with respect to that program under Section 228.254(a).
SECTION 10. Subchapter G, Chapter 228, Insurance Code, is
amended by adding Section 228.3021 to read as follows:
Sec. 228.3021. VOLUNTARY DECERTIFICATION OF CERTIFIED
CAPITAL COMPANY. (a) The comptroller may decertify a certified
capital company on the written request of the company if the
comptroller finds that the company has made qualified investments
in an amount equal to 100 percent of the company's certified
capital.
(b) The comptroller shall notify any appropriate state
agency of a decertification of a certified capital company.
(c) On being decertified by the comptroller, a certified
capital company is not required to pay the annual renewal fee
required by Section 228.107.
(d) With respect to Program Three, a certified capital
company may not be decertified under this section before match
investments have been made in an amount equal to at least 150
percent of the company's Program Three allocation under Section
228.101.
SECTION 11. Section 228.351, Insurance Code, is amended by
adding Subsection (f) to read as follows:
(f) This subchapter does not authorize the recapture and
forfeiture of premium tax credits following voluntary
decertification of a certified capital company under Section
228.3021.
SECTION 12. This Act takes effect September 1, 2011.
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