85R13314 BEF-F
 
  By: Lucio III H.B. No. 3630
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to an insurance premium tax credit for investment in
  certain communities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 231 to read as follows:
  CHAPTER 231. PREMIUM TAX CREDIT FOR INVESTMENT IN CERTAIN
  COMMUNITIES
         Sec. 231.001.  GENERAL DEFINITIONS. In this chapter:
               (1)  "Internal Revenue Code" means the Internal Revenue
  Code of 1986 in effect on September 1, 2017, excluding any changes
  made by federal law after that date, but including any regulations
  adopted under that code that are applicable to the tax year to which
  the provisions of the code in effect on that date applied.
               (2)  "State premium tax liability" means any premium
  tax liability incurred under Chapter 221, 222, 223, 223A, or 224.
               (3)  "Low-income community," "qualified equity
  investment," and "qualified low-income community investment" have
  the meanings assigned by Section 45D, Internal Revenue Code.
         Sec. 231.002.  DEFINITION: QUALIFIED COMMUNITY DEVELOPMENT
  ENTITY.  In this chapter, "qualified community development entity"
  has the meaning assigned by Section 45D, Internal Revenue Code,
  provided that the entity has entered into, for the current year or a
  prior year with an allocation effective date on or after July 1,
  2015, an allocation agreement with the Community Development
  Financial Institutions Fund of the United States Department of the
  Treasury with respect to credits authorized by Section 45D,
  Internal Revenue Code, that includes this state in the service area
  specified in the allocation agreement. The term includes a
  qualified community development entity that is controlled by or
  under common control with another qualified community development
  entity described by this section.
         Sec. 231.003.  RULES ESTABLISHING CREDIT. (a)  The
  comptroller, in consultation with the Texas Workforce Commission,
  by rule shall establish a credit against state premium tax
  liability for entities that make qualified equity investments in
  qualified community development entities in this state.  The rules
  must comply with this section.
         (b)  The purpose of the credit is to promote new job
  creation, job retention, and capital investment in economically
  distressed and low-income communities.
         (c)  Available credits must be allocated so that an equal
  amount of credits are available in connection with qualified
  low-income community investments in:
               (1)  rural communities;
               (2)  seaports;
               (3)  educational institutions that provide
  prekindergarten, primary education, secondary education, higher
  education, and workforce skills training; and
               (4)  distressed metropolitan communities throughout
  the state.
         (d)  The amount of the credit in connection with a qualified
  equity investment may not exceed 39 percent of the purchase price of
  the investment. An entity must be able to claim the entire amount of
  the credit in connection with an investment not later than the
  seventh anniversary of the date the investment is made.
         (e)  A qualified community development entity must place a
  refundable deposit of at least $500,000 with the state during the
  period in which tax credits may be claimed in connection with
  qualified equity investments in the entity.  An entity that
  violates rules under this section is subject to forfeiture of all or
  part of the deposit.
         (f)  At least $300 million in credits must be made available.
         Sec. 231.004.  ELIGIBILITY FOR CREDIT. An entity is
  eligible for a credit against the entity's state premium tax
  liability in the amount and under the conditions and limitations
  provided by rules adopted under Section 231.003.
         Sec. 231.005.  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.
         SECTION 2.  As soon as practicable after this Act becomes law
  for purposes of Section 2001.006, Government Code, the comptroller
  shall adopt rules under Section 231.003, Insurance Code, as added
  by this Act.
         SECTION 3.  This Act applies only to an insurance premium tax
  report originally due on or after January 1, 2018.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2017.