The bill would amend the Government Code by adding new Chapter 487A, regarding rural development funds. The bill would amend the Insurance Code by adding new Chapter 232, regarding tax credit for investment in rural development funds.
The bill would require the Comptroller to accept applications from entities seeking approval as rural development funds.
Applications would include a nonrefundable application fee of $10,000 that would be deposited to General Revenue Fund 0001 to be dedicated for the purposes of administering new Chapter 487A and new Insurance Code Chapter 232.
The bill would describe the application process, including grounds for denial of an application, and a process for resubmission of additional information.
Upon approval of an application, the Comptroller would provide a tax credit allocation statement that would include the amount of tax credit certificates the applicant is authorized to allocate to its investors.
The Comptroller could approve investment authority in amounts up to $300 million including up to $150 million of tax credit certificate allocation authority.
The bill would describe the process in which a rural development fund could exit the program. Upon exit, the bill would require a rural development fund to remit to the Comptroller the lesser of 1) the fund's excess return, as defined in the bill; or 2) the state reimbursement amount, as defined in the bill.
The bill would require the Comptroller to set an annual program participation fee in an amount sufficient to cover the costs of administering new Chapters 487A and 232 in excess of any application fee revenue collected.
The bill would require the Comptroller, before the beginning of the 92nd Legislature, to submit to the Legislature a report on the economic benefits of new Chapter 487A. The report would include the total positive fiscal impact attributable to jobs created or retained as a result of rural development fund investments. If the positive fiscal impacts reported do not exceed the sum of tax credit certificates issued, the Comptroller would be prohibited from accepting additional applications from entities seeking approval as rural development funds after January 1, 2026.
An entity that holds a tax credit certificate issued under Chapter 487A, as described above, would be eligible for a premium tax credit in tax years in which the first, second, or third anniversary of the date in which the certificate was issued falls. The amount of the tax credit for the first two years would be 33 percent of the amount of the total tax credit; for the third year, 34 percent.
Entities would be allowed to carry forward unused credits. An entity could not transfer the credit to another entity.
The Comptroller would begin accepting applications not later than October 1, 2025. New Chapter 232 would apply only to a tax report due on or after January 1, 2025.
Note: This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either in, with, or outside the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.