|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to franchise tax and insurance premium tax credits for |
|
investment in certain communities; imposing a monetary penalty; |
|
authorizing fees. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Title 2, Tax Code, is amended by adding Subtitle |
|
K to read as follows: |
|
SUBTITLE K. CREDITS APPLICABLE TO MULTIPLE TAXES |
|
CHAPTER 221. FRANCHISE TAX AND INSURANCE PREMIUM TAX CREDITS FOR |
|
INVESTMENT IN CERTAIN COMMUNITIES |
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
Sec. 221.001. GENERAL DEFINITIONS. In this chapter: |
|
(1) "Applicable percentage" means zero percent for the |
|
first two credit allowance dates, seven percent for the third |
|
credit allowance date, and eight percent for the next four credit |
|
allowance dates. |
|
(2) "Credit allowance date" means, with respect to any |
|
qualified equity investment: |
|
(A) the date on which the investment is initially |
|
made; and |
|
(B) the anniversary of that date in each of the |
|
six years immediately following that date. |
|
(3) "Federal tax regulations" means regulations |
|
adopted under the Internal Revenue Code of 1986 that are applicable |
|
to the tax year to which the provisions of the code in effect on |
|
September 1, 2015, applied. |
|
(4) "Franchise tax" means the tax imposed under |
|
Chapter 171. |
|
(5) "Internal Revenue Code" means the Internal Revenue |
|
Code of 1986 in effect on September 1, 2015, 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. |
|
(6) "Purchase price" means the amount paid to the |
|
issuer of a qualified equity investment for the qualified equity |
|
investment, including any underwriter's fees. |
|
(7) "State premium tax liability" means any premium |
|
tax liability incurred under Chapter 221, 222, 223, 223A, or 224, |
|
Insurance Code. |
|
(8) "Taxable entity" has the meaning assigned by |
|
Section 171.0002. |
|
Sec. 221.002. DEFINITION: LONG-TERM DEBT SECURITY. (a) In |
|
this chapter, "long-term debt security" means a debt instrument |
|
issued by a qualified community development entity, at par value or |
|
a premium, with an original maturity date not earlier than the |
|
seventh year after the date on which the debt instrument is issued, |
|
with no acceleration of repayment, amortization, or prepayment |
|
features before its original maturity date. |
|
(b) The qualified community development entity that issues |
|
a long-term debt security may not make cash interest payments on the |
|
security during the period beginning on the date on which the |
|
security is issued and ending on the final credit allowance date in |
|
an amount that exceeds the cumulative operating income, as defined |
|
by federal tax regulations adopted under Section 45D, Internal |
|
Revenue Code, of the qualified community development entity for |
|
that period before giving effect to the interest expense of the |
|
long-term debt security. |
|
(c) This section does not limit the holder's ability to |
|
accelerate payments on a long-term debt security in situations in |
|
which the issuer has defaulted on covenants designed to ensure |
|
compliance with this chapter or Section 45D, Internal Revenue Code. |
|
Sec. 221.003. DEFINITION: QUALIFIED ACTIVE LOW-INCOME |
|
COMMUNITY BUSINESS. (a) In this chapter, "qualified active |
|
low-income community business" has the meaning assigned by Section |
|
45D, Internal Revenue Code, and Section 1.45D-1 of the federal tax |
|
regulations. |
|
(b) A business is considered a qualified active low-income |
|
community business for the duration of the qualified community |
|
development entity's investment in, or loan to, the business if the |
|
entity reasonably expects, at the time it makes the investment or |
|
loan, that the business will continue to satisfy the requirements |
|
for being a qualified active low-income community business |
|
throughout the entire period of the investment or loan. |
|
Sec. 221.004. 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 |
|
any prior year, 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. 221.005. DEFINITION: QUALIFIED EQUITY INVESTMENT. (a) |
|
An investment or security is a "qualified equity investment" for |
|
purposes of this chapter if: |
|
(1) the investment or security is an equity investment |
|
in, or long-term debt security issued by, a qualified community |
|
development entity; |
|
(2) the investment or security is acquired on or after |
|
October 1, 2015, at its original issuance solely in exchange for |
|
cash, except as provided by Subsection (b); |
|
(3) not later than the second anniversary of the date |
|
of issuance at least 85 percent of the investment's or security's |
|
purchase price is used by the issuer to make qualified low-income |
|
community investments in this state; and |
|
(4) the investment or security is designated by the |
|
issuer as a qualified equity investment under this section and is |
|
certified by the comptroller as not exceeding the limitations |
|
provided by Section 221.154. |
|
(b) A qualified equity investment includes an investment or |
|
security that does not satisfy the requirements of Subsection |
|
(a)(2) if the investment or security was a qualified equity |
|
investment in the hands of a prior holder. |
|
Sec. 221.006. DEFINITION: QUALIFIED INVESTOR. In this |
|
chapter, "qualified investor" means an entity that invests in a |
|
qualified equity investment. |
|
Sec. 221.007. DEFINITION: QUALIFIED LOW-INCOME COMMUNITY |
|
INVESTMENT. In this chapter, "qualified low-income community |
|
investment" means a capital or equity investment in, or loan to, a |
|
qualified active low-income community business made by a qualified |
|
community development entity. |
|
Sec. 221.008. RULES. The comptroller shall adopt rules |
|
necessary to implement this chapter. |
|
Sec. 221.009. AUDIT BY COMPTROLLER. The comptroller shall |
|
review or audit the investments of a qualified community |
|
development entity on a periodic basis. In conducting the review or |
|
audit, the comptroller shall ensure that the qualified community |
|
development entity has made and maintained the investment required |
|
under Section 221.201(a)(3) to avoid recapture of a credit claimed |
|
in connection with a qualified equity investment. |
|
Sec. 221.010. ELECTION OF CREDIT. (a) A qualified investor |
|
or a subsequent holder of a qualified equity investment may not |
|
claim a credit under both Subchapters B and C for the amount of |
|
credit accrued on a credit allowance date. |
|
(b) A qualified investor or a subsequent holder of a |
|
qualified equity investment who qualifies for a credit under both |
|
Subchapters B and C for the amount of credit accrued on a credit |
|
allowance date shall: |
|
(1) elect under which subchapter to claim a credit for |
|
the amount of credit accrued on that date; and |
|
(2) notify the comptroller of that election. |
|
(c) The limitation specified by Subsection (a) and the |
|
election required by Subsection (b) do not apply to a credit |
|
carryforward under Section 221.054 or 221.104. |
|
SUBCHAPTER B. FRANCHISE TAX CREDIT |
|
Sec. 221.051. ELIGIBILITY FOR CREDIT. Subject to Section |
|
221.010, a taxable entity is eligible for a credit against the tax |
|
imposed under Chapter 171 in the amount provided by this subchapter |
|
and under the conditions and limitations provided by this chapter. |
|
Sec. 221.052. QUALIFICATION. A taxable entity is eligible |
|
for a credit if the taxable entity is: |
|
(1) a qualified investor who holds a qualified equity |
|
investment on a credit allowance date; or |
|
(2) a subsequent holder of a qualified equity |
|
investment who holds the investment on a credit allowance date. |
|
Sec. 221.053. AMOUNT OF CREDIT; LIMITATION. (a) The amount |
|
of credit for a report is equal to the credit accrued, as determined |
|
under Subsection (b), on each credit allowance date: |
|
(1) that occurs during the period on which the report |
|
is based; and |
|
(2) on which the taxable entity holds the qualified |
|
equity investment. |
|
(b) The amount of credit accrued on a credit allowance date |
|
equals the applicable percentage for the credit allowance date |
|
multiplied by the purchase price paid to the issuer of the qualified |
|
equity investment. |
|
(c) The total credit claimed for a report, including the |
|
amount of any carryforward under Section 221.054, may not exceed |
|
the amount of franchise tax due for the report after applying all |
|
other applicable tax credits. |
|
Sec. 221.054. CARRYFORWARD. If a taxable entity is |
|
eligible for a credit that exceeds the limitation under Section |
|
221.053(c), the taxable entity may carry the unused credit forward |
|
for not more than 20 consecutive reports. Credits, including |
|
credit carryforwards, are considered to be used in the following |
|
order: |
|
(1) a credit carryforward under this subchapter; and |
|
(2) a current year credit. |
|
Sec. 221.055. BURDEN OF ESTABLISHING CREDIT. The burden of |
|
establishing entitlement to and the value of the credit is on the |
|
taxable entity. |
|
Sec. 221.056. ASSIGNMENT PROHIBITED. A taxable entity may |
|
not convey, assign, or transfer the credit allowed under this |
|
subchapter to another entity. |
|
Sec. 221.057. APPLICATION FOR CREDIT. A taxable entity |
|
must apply for a credit under this subchapter on or with the tax |
|
report for the period for which the credit is claimed. |
|
SUBCHAPTER C. INSURANCE PREMIUM TAX CREDIT |
|
Sec. 221.101. ELIGIBILITY FOR CREDIT. Subject to Section |
|
221.010, an entity is eligible for a credit against the entity's |
|
state premium tax liability in the amount provided by this |
|
subchapter and under the conditions and limitations provided by |
|
this chapter. |
|
Sec. 221.102. QUALIFICATION. An entity is eligible for a |
|
credit if the entity is: |
|
(1) a qualified investor who holds a qualified equity |
|
investment on a credit allowance date; or |
|
(2) a subsequent holder of a qualified equity |
|
investment who holds the investment on a credit allowance date. |
|
Sec. 221.103. AMOUNT OF CREDIT; LIMITATION. (a) The amount |
|
of credit for a tax year is equal to the credit accrued, as |
|
determined under Subsection (b), on each credit allowance date: |
|
(1) that occurs during the tax year; and |
|
(2) on which the entity holds the qualified equity |
|
investment. |
|
(b) The amount of credit accrued on a credit allowance date |
|
equals the applicable percentage for the credit allowance date |
|
multiplied by the purchase price paid to the issuer of the qualified |
|
equity investment. |
|
(c) The total credit claimed for a tax year, including the |
|
amount of any carryforward under Section 221.104, may not exceed |
|
the amount of state premium tax liability due for the tax year after |
|
applying all other applicable tax credits. |
|
Sec. 221.104. CARRYFORWARD. If an entity is eligible for a |
|
credit that exceeds the limitation under Section 221.103(c), 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 subchapter; and |
|
(2) a current year credit. |
|
Sec. 221.105. BURDEN OF ESTABLISHING CREDIT. The burden of |
|
establishing entitlement to and the value of the credit is on the |
|
entity. |
|
Sec. 221.106. ASSIGNMENT PROHIBITED. An entity may not |
|
convey, assign, or transfer the credit allowed under this |
|
subchapter to another entity. |
|
Sec. 221.107. APPLICATION FOR CREDIT. An entity must apply |
|
for a credit under this subchapter on or with the tax report for the |
|
tax year for which the credit is claimed. |
|
Sec. 221.108. RETALIATORY TAX. (a) An entity claiming a |
|
credit under this subchapter is not required to pay any additional |
|
retaliatory tax levied under Chapter 281, Insurance Code, as a |
|
result of claiming that credit. |
|
(b) In addition to the exclusion provided by Subsection (a), |
|
an entity claiming a credit under this subchapter is not required to |
|
pay any additional tax that may arise as a result of claiming that |
|
credit. |
|
SUBCHAPTER D. CERTIFICATION AS QUALIFIED EQUITY INVESTMENT |
|
Sec. 221.151. APPLICATION FOR CERTIFICATION AS QUALIFIED |
|
EQUITY INVESTMENT. (a) A qualified community development entity |
|
that seeks to have an equity investment or long-term debt security |
|
certified as a qualified equity investment eligible for credits |
|
under this chapter must apply to the comptroller as provided by this |
|
section. |
|
(b) An application under this section must include the |
|
following: |
|
(1) evidence of the applicant's certification as a |
|
qualified community development entity, including evidence of the |
|
service area of the entity that includes this state; |
|
(2) a copy of an allocation agreement executed by the |
|
applicant, or its controlling entity, and the community development |
|
financial institutions fund of the United States Department of the |
|
Treasury; |
|
(3) a certificate executed by an executive officer of |
|
the applicant attesting that the allocation agreement remains in |
|
effect and has not been revoked or canceled by the community |
|
development financial institutions fund; |
|
(4) a description of the amount and structure of the |
|
equity investment or long-term debt security proposed to be |
|
certified; |
|
(5) examples of the types of qualified active |
|
low-income community businesses in which the applicant, its |
|
controlling entity, or affiliates of its controlling entity have |
|
invested under the federal New Markets Tax Credit Program; |
|
(6) a nonrefundable application fee of $5,000 to be |
|
paid to the comptroller; and |
|
(7) the refundable performance deposit required by |
|
Subchapter F. |
|
Sec. 221.152. ACTION ON APPLICATION. (a) Not later than |
|
the 30th day after the date an application under Section 221.151 is |
|
received, the comptroller shall grant or deny the application in |
|
full or part. |
|
(b) If the comptroller denies the application, the |
|
comptroller shall inform the applicant of the denial. |
|
Sec. 221.153. CERTIFICATION OF QUALIFIED EQUITY |
|
INVESTMENT. (a) If an application under Section 221.151 is |
|
granted, the comptroller shall certify the proposed equity |
|
investment or long-term debt security as a qualified equity |
|
investment that is eligible for credits under this chapter, subject |
|
to Section 221.154. |
|
(b) The comptroller shall provide written notice of the |
|
certification to the qualified community development entity. |
|
Sec. 221.154. LIMIT ON CERTIFIED INVESTMENTS. (a) Subject |
|
to Subsection (b), not more than $250 million in qualified equity |
|
investments may be certified under Section 221.153. |
|
(b) The comptroller shall allocate at least 50 percent of |
|
the amount available under Subsection (a) to certify applications |
|
from applicants that: |
|
(1) have an allocation agreement with the community |
|
development financial institutions fund of the United States |
|
Department of the Treasury that requires the applicant to invest at |
|
least 50 percent of the applicant's qualified equity investments in |
|
nonmetropolitan areas; and |
|
(2) will invest the amount certified in census tracts |
|
that are not part of a metropolitan statistical area or |
|
municipality with a population of more than 50,000. |
|
(c) Subject to Subsection (d), if a pending application |
|
cannot be fully certified due to the limit under Subsection (a) or |
|
(b), the comptroller shall certify the portion that can be |
|
certified. |
|
(d) The comptroller shall certify qualified equity |
|
investments in the order in which applications are received by the |
|
comptroller. Applications received on the same day are considered |
|
to have been received simultaneously. For applications that are |
|
complete and received on the same day and for which the total |
|
amounts requested cannot be certified because of the limit |
|
specified by Subsection (a) or (b), the comptroller shall certify, |
|
consistent with remaining qualified equity investment capacity, |
|
the qualified equity investments in proportionate percentages |
|
based on the proportion that the amount of qualified equity |
|
investment requested in an application bears to the total amount of |
|
qualified equity investments requested in all applications |
|
received on the same day. |
|
Sec. 221.155. TRANSFER OF INVESTMENT AUTHORITY. A |
|
qualified community development entity whose application for |
|
certification of a qualified equity investment is approved under |
|
this subchapter may transfer all or a portion of its certified |
|
qualified equity investment authority to its controlling entity or |
|
to a qualified community development entity controlled by or under |
|
common control with the transferring entity, if the transferring |
|
entity: |
|
(1) provides the information required in the |
|
application under Section 221.151(b) with respect to the recipient |
|
of the transfer; and |
|
(2) notifies the comptroller of the transfer not later |
|
than the 30th day after the date of the transfer. |
|
Sec. 221.156. ISSUANCE OF QUALIFIED EQUITY INVESTMENT; FEE. |
|
(a) Not later than the second anniversary of the date the qualified |
|
community development entity receives notice of certification, the |
|
entity or a recipient of a transfer under Section 221.155 shall |
|
issue the qualified equity investment and receive cash in the |
|
amount certified. |
|
(b) The qualified community development entity or a |
|
recipient of a transfer under Section 221.155 must provide the |
|
comptroller with evidence of the receipt of the cash investment not |
|
later than the 10th business day after the date the cash investment |
|
is received. |
|
(c) At the time the qualified community development entity |
|
or a recipient of a transfer under Section 221.155 issues the |
|
qualified equity investment, the qualified community development |
|
entity or transfer recipient shall pay to the comptroller a fee |
|
equal to 20 basis points of the amount issued. Fees collected under |
|
this subsection may be appropriated only to pay the cost of |
|
preparing a report under Section 221.352. |
|
Sec. 221.157. LAPSE OF CERTIFICATION. (a) If the qualified |
|
community development entity or a recipient of a transfer under |
|
Section 221.155 does not issue the qualified equity investment and |
|
receive the cash investment before the second anniversary of the |
|
date the certification notice is received as required by Section |
|
221.156, the certification lapses and the qualified community |
|
development entity or recipient of the transfer may not accept an |
|
equity investment or issue a long-term debt security as a qualified |
|
equity investment without reapplying to the comptroller for |
|
certification. |
|
(b) If a certification lapses under this section, the |
|
comptroller shall reissue the previously certified amount, giving |
|
preference to an applicant for reissuance of certification whose |
|
proposed amount for certification was previously certified in a |
|
reduced amount under Section 221.154. If more than one applicant |
|
for reissuance of certification had its proposed amount reduced, |
|
the comptroller shall reissue the certified amount to those |
|
applicants in amounts determined by the comptroller, subject to the |
|
limits specified by Section 221.154. |
|
(c) After reissuing certifications under Subsection (b), |
|
the comptroller shall reissue any certified amounts remaining to |
|
applicants in amounts determined by the comptroller, subject to the |
|
limits specified by Section 221.154. |
|
SUBCHAPTER E. RECAPTURE OF CREDIT |
|
Sec. 221.201. RECAPTURE. (a) Subject to Section 221.202, |
|
the comptroller shall recapture the amount of a credit claimed on a |
|
report filed under Chapter 171 or a premium tax report filed under |
|
Chapter 221, 222, 223, 223A, or 224, Insurance Code, from the |
|
qualified investor or a subsequent holder of the qualified equity |
|
investment that claims the credit if: |
|
(1) any amount of a federal tax credit available with |
|
respect to a qualified equity investment that is eligible for a |
|
credit under this chapter is recaptured under Section 45D, Internal |
|
Revenue Code, in which case the comptroller's recapture must be |
|
proportionate to the federal recapture with respect to the |
|
qualified equity investment; |
|
(2) the issuer redeems or makes principal repayment |
|
with respect to a qualified equity investment before the seventh |
|
anniversary of the date the qualified equity investment is issued, |
|
in which case the comptroller's recapture must be proportionate to |
|
the amount of the redemption or repayment with respect to the |
|
qualified equity investment; or |
|
(3) the issuer fails to invest an amount equal to 85 |
|
percent of the purchase price of the qualified equity investment in |
|
qualified low-income community investments in this state not later |
|
than the second anniversary of the date the qualified equity |
|
investment is issued, or fails to maintain 85 percent of that level |
|
of investment in qualified low-income community investments in this |
|
state until the last credit allowance date for the qualified equity |
|
investment. |
|
(b) For purposes of this chapter, a qualified low-income |
|
community investment is considered held by an issuer even if the |
|
investment has been sold or repaid if the issuer reinvests an amount |
|
equal to the capital returned to or recovered by the issuer from the |
|
original investment, exclusive of any profits realized, in another |
|
qualified low-income community investment not later than the 12th |
|
month after the date the issuer receives the capital. |
|
(c) An issuer is not required to reinvest capital returned |
|
from a qualified low-income community investment after the sixth |
|
anniversary of the date the qualified equity investment whose |
|
proceeds were used to make the qualified low-income community |
|
investment was issued. The qualified low-income community |
|
investment is considered held by the issuer through the seventh |
|
anniversary of the date the qualified equity investment was issued. |
|
(d) Periodic amounts received during a calendar year as |
|
repayment of principal on a loan that is a qualified low-income |
|
community investment shall be treated as continuously invested in a |
|
qualified low-income community investment if the amounts are |
|
reinvested in one or more qualified low-income community |
|
investments not later than the last day of the following calendar |
|
year. |
|
Sec. 221.202. NOTICE OF NONCOMPLIANCE. (a) The |
|
comptroller shall notify a qualified community development entity |
|
and a qualified investor that has claimed a credit on a report if |
|
the credit is subject to recapture under Section 221.201. |
|
(b) The comptroller may not recapture a credit under this |
|
subchapter if the qualified community development entity cures the |
|
noncompliance described by Section 221.201 before the 90th day |
|
after the date the qualified community development entity receives |
|
notice under Subsection (a). |
|
SUBCHAPTER F. SECURITY FOR PERFORMANCE |
|
Sec. 221.251. SECURITY REQUIRED. Not later than the 14th |
|
day after the date a qualified equity investment is certified under |
|
Subchapter D, the qualified community development entity that |
|
received investment authority for the qualified equity investment |
|
must deposit $500,000 with the comptroller as a refundable |
|
performance deposit to be deposited as required by Section 221.254. |
|
Sec. 221.252. FAILURE TO PROVIDE SECURITY: LOSS OF |
|
CERTIFICATION. The comptroller shall revoke the certification of |
|
the qualified equity investment of a qualified community |
|
development entity that fails to make a deposit under Section |
|
221.251. |
|
Sec. 221.253. FORFEITURE OF SECURITY. (a) A qualified |
|
community development entity that makes a performance deposit under |
|
Section 221.251 forfeits the deposit in its entirety if: |
|
(1) the qualified community development entity and any |
|
qualified community development entity to which a transfer is made |
|
by the qualified community development entity under Section 221.155 |
|
fail to issue the total amount of qualified equity investments |
|
certified by the comptroller and receive cash in the amount |
|
certified under Section 221.153 not later than the date specified |
|
by Section 221.156; or |
|
(2) subject to Subsection (b), the qualified community |
|
development entity or a qualified community development entity to |
|
which a transfer is made by the qualified community development |
|
entity under Section 221.155 that issues a qualified equity |
|
investment certified under Section 221.153 fails to make or |
|
maintain the investment required under Section 221.201(a)(3) to |
|
avoid recapture of a tax credit claimed in connection with the |
|
qualified equity investment. |
|
(b) A deposit is not subject to forfeiture under Subsection |
|
(a)(2) if the qualified community development entity cures the |
|
noncompliance before the 90th day after the date the qualified |
|
community development entity receives notice under Subsection (c). |
|
(c) The comptroller shall notify a qualified community |
|
development entity that made a deposit under Section 221.251 if the |
|
deposit is subject to forfeiture under this section. |
|
Sec. 221.254. NEW MARKETS PERFORMANCE GUARANTEE FUND. (a) |
|
The new markets performance guarantee fund is an interest-bearing |
|
fund outside the state treasury with the comptroller. The fund |
|
consists of money the comptroller deposits under Subsection (b). |
|
The comptroller shall administer the fund. |
|
(b) The comptroller shall deposit a performance deposit |
|
made under Section 221.251 to the credit of the new markets |
|
performance guarantee fund. The deposit must remain on deposit with |
|
the fund until the comptroller determines that: |
|
(1) the qualified community development entity has |
|
complied with the provisions of this chapter; or |
|
(2) the deposit has been forfeited and will be |
|
deposited in accordance with Section 221.256. |
|
Sec. 221.255. RELEASE OF SECURITY. (a) Not earlier than |
|
the 30th day after the date the requirements that must be satisfied |
|
to avoid forfeiture of a deposit as described by Section 221.253 are |
|
satisfied, a qualified community development entity that made the |
|
deposit may request a refund of the deposit from the comptroller. |
|
(b) The comptroller shall refund the deposit or, if |
|
applicable, give notice of noncompliance as described by Section |
|
221.253 not later than the 30th day after the date of receiving a |
|
request under Subsection (a). |
|
Sec. 221.256. DEPOSIT OF FORFEITED SECURITY. The |
|
comptroller shall deposit in the general revenue fund a deposit |
|
forfeited under Section 221.253. |
|
SUBCHAPTER G. EVALUATION OF BUSINESS BY COMPTROLLER |
|
Sec. 221.301. EVALUATION REQUIRED. (a) Except as provided |
|
by Subsection (c), a qualified community development entity or a |
|
recipient of a transfer under Section 221.155 must, before making |
|
an investment in a business, request a written opinion from the |
|
comptroller as to whether the business in which the qualified |
|
community development entity proposes to invest would qualify as a |
|
qualified active low-income community business under Section |
|
221.003. |
|
(b) Not later than the 15th business day after the date of |
|
the receipt of a request under Subsection (a), the comptroller |
|
shall determine whether the business is a qualified active |
|
low-income community business, notify the qualified community |
|
development entity of the determination, and provide an explanation |
|
of the determination. |
|
(c) A qualified community development entity or a recipient |
|
of a transfer under Section 221.155 is not required to request a |
|
written opinion under Subsection (a) before making an investment in |
|
a business if the qualified community development entity or |
|
transfer recipient concurrently makes a federal qualified |
|
low-income community investment in the business. |
|
Sec. 221.302. CONSIDERATION OF FEDERAL TAX LAWS. In |
|
issuing a written opinion and making other determinations under |
|
this chapter, the comptroller shall consider Section 45D, Internal |
|
Revenue Code, and the federal tax regulations issued under that |
|
code, to the extent that those provisions are applicable. |
|
SUBCHAPTER H. REPORTING |
|
Sec. 221.351. REPORT TO COMPTROLLER. (a) Except as |
|
provided by this subsection, a qualified community development |
|
entity that issues a qualified equity investment under Section |
|
221.156 shall submit an annual report to the comptroller not later |
|
than the fifth business day after the anniversary of a credit |
|
allowance date applicable to the investment. The qualified |
|
community development entity is not required to submit any report |
|
under this subsection after the annual report following the final |
|
credit allowance date. |
|
(b) The report must: |
|
(1) provide evidence that the qualified community |
|
development entity has made and maintained the investment required |
|
under Section 221.201(a)(3) to avoid recapture of a credit claimed |
|
in connection with the qualified equity investment; |
|
(2) include one or more bank statements for the |
|
qualified community development entity that reflect each qualified |
|
low-income community investment made by the qualified community |
|
development entity in connection with the qualified equity |
|
investment; |
|
(3) state the name, location, and industry code of |
|
each qualified active low-income community business receiving a |
|
qualified low-income community investment in connection with the |
|
qualified equity investment; |
|
(4) state the number of employment positions created |
|
and retained as a result of each qualified low-income community |
|
investment made in connection with the qualified equity investment; |
|
(5) state whether the qualified community development |
|
entity has been subject to a recapture of any amount of a federal |
|
tax credit available under Section 45D, Internal Revenue Code, with |
|
respect to the qualified equity investment; and |
|
(6) include a copy of the most recent annual report |
|
submitted by the qualified community development entity to the |
|
United States Department of the Treasury regarding Section 45D, |
|
Internal Revenue Code. |
|
(c) A qualified community development entity that fails to |
|
submit a report to the comptroller within the time prescribed by |
|
Subsection (a) shall pay to the comptroller a penalty equal to the |
|
sum of: |
|
(1) $25,000; and |
|
(2) $5,000 for each day the report is not submitted |
|
after the date the report is due under Subsection (a). |
|
Sec. 221.352. COMPTROLLER'S REPORT TO THE LEGISLATURE. (a) |
|
The comptroller shall contract with an independent researcher at a |
|
center for research established under Section 1.005, Education |
|
Code, to prepare a biennial report with respect to the |
|
implementation of this chapter. |
|
(b) The report must include: |
|
(1) the number of qualified community development |
|
entities holding certified qualified equity investments; |
|
(2) the amount of qualified equity investments of each |
|
qualified community development entity; |
|
(3) the investments each qualified community |
|
development entity has made in qualified active low-income |
|
community businesses as of the most recent annual report submitted |
|
to the comptroller by the qualified community development entity; |
|
(4) the total amount of credits earned under this |
|
chapter; |
|
(5) the performance of each qualified community |
|
development entity with respect to reporting requirements imposed |
|
by this chapter; |
|
(6) with respect to each qualified active low-income |
|
community business in which a qualified community development |
|
entity has invested: |
|
(A) the classification of the qualified active |
|
low-income community business according to the industrial sector |
|
and the size of the business; |
|
(B) the total number of jobs created by the |
|
qualified low-income community investment and the average wages |
|
paid for the jobs; and |
|
(C) the total number of jobs retained as a result |
|
of the qualified low-income community investment and the average |
|
wages paid for the jobs; and |
|
(7) an analysis of the effect implementation of this |
|
chapter has had during the period covered by the report on: |
|
(A) economic activity in this state; and |
|
(B) state tax revenue. |
|
(c) The comptroller shall file the report with the governor, |
|
the lieutenant governor, and the speaker of the house of |
|
representatives not later than December 15 of each even-numbered |
|
year. |
|
SECTION 2. (a) As soon as practicable after the effective |
|
date of this Act, the comptroller of public accounts shall adopt |
|
rules necessary to implement the provisions of Chapter 221, Tax |
|
Code, as added by this Act. |
|
(b) The comptroller of public accounts shall accept |
|
applications for certification of qualified equity investments as |
|
required by Chapter 221, Tax Code, as added by this Act, beginning |
|
not later than October 2, 2015. |
|
SECTION 3. Subchapter B, Chapter 221, Tax Code, as added by |
|
this Act, applies only to a report under Chapter 171, Tax Code, |
|
originally due on or after January 1, 2016. |
|
SECTION 4. Subchapter C, Chapter 221, Tax Code, as added by |
|
this Act, applies only to a tax report originally due on or after |
|
January 1, 2016. |
|
SECTION 5. This Act takes effect September 1, 2015. |