| (3) A premium tax credit allocation claim form for certified investors must be prepared and executed by each CAPCO receiving an investment commitment, on a form provided by the comptroller. A CAPCO and its affiliates may not file premium tax credit allocation claims in excess of the maximum amount of certified capital for which premium tax credits may be allowed. The form shall include an affidavit of the certified investor that legally binds the investor to make an investment of certified capital in an amount allocated by the comptroller. The forms with respect to Program One are due from each CAPCO not later than the 120th day after the date the CAPCO rule is adopted. The forms with respect to Program Two are due from each CAPCO not later than January 1 2008. (4) The comptroller shall notify each CAPCO of the amount of tax credits allocated to each certified investor not later than the 15th business day after the date on which the comptroller accepts premium tax credit allocation claims. (5) A certified investor's tax credits are limited to the amount of certified capital as allocated or as subsequently reallocated by the comptroller and funded by the certified investor. The maximum request for premium tax credits that any one individual certified investor, on an aggregate basis with its affiliates, may request in one or more premium tax allocation claim forms submitted pursuant to paragraph (1) of this subsection may not, with respect to Program One or Program Two as applicable, exceed the greater of: (A) $10 million; or (B) 15% of the maximum aggregate amount available under Insurance Code, Article 4.67(a). (6) The total amount of credits allowed is $200 million Program One and $200 million for Program Two. Total annual credits, with respect to each of Program One and Program Two, are limited to the lesser of $50 million per year, or 25% of the total amount of investment with respect to each of Program One and Program Two. A CAPCO, together with its affiliates, may not file premium tax credit allocation claims on behalf of its investors in excess of $200 million with respect to Program One or Program Two. (7) Pro rata allocation of credits. (A) The comptroller shall perform a pro rata allocation of the total amount of premium tax credits under this if: (i) the total amount of certified capital requested under paragraph (3) of this subsection exceeds the total limit on credits under paragraph (6) of this subsection; or (ii) if an allocation of credits under clause (i) of this subparagraph has occurred and a CAPCO notifies the comptroller either by hand delivery or overnight common carrier delivery service that it did not receive an investment of certified capital equal to the amount of the investment commitment from one or more investors, as provided on the premium tax credit allocation form that is filed under paragraph (3) of this subsection, before the end of the 10th business day after the date of receipt of the notice of allocation. (B) the pro rata allocation for each certified investor shall be computed as follows: (i) for an allocation under subparagraph (A)(i) of this paragraph, a fraction, the numerator of which is the value determined in paragraph (5) of this subsection for each certified investor and the denominator of which is the total amount of all premium tax credit allocation claims that are filed with respect to Program One or Program Two under paragraph (3) of this subsection, for all certified investors, multiplied by the total limit on credits for such program as provided by paragraph (6) of this subsection. (ii) for a reallocation under subparagraph (A)(ii) of this paragraph, the comptroller shall reallocate the forfeited premium tax credit allocation among the other certified investors in all CAPCOs that originally received an allocation, in an amount that will ensure a result after reallocation that is the same as if the original request for the forfeited allocation had not been included in the allocation process. (8) Premium tax credits allocated under this subsection may be transferred or assigned as provided in §3.830 of this title (relating to Premium Tax Credit for Examination Expenses, Evaluation Fees, Assessments, and Certified Capital Companies (CAPCOs); Limitations and Transfers). The transfer or assignment of a premium tax credit does not affect the schedule for taking premium tax credits under this section. The transfer, sale, or assignment of premium tax credits, are subject to the follow conditions: (A) Failure to comply with §3.830 of this title, could jeopardize the investor's ability to transfer premium tax credits. (B) Any liability with respect to premium tax credits transferred pursuant to Insurance Code, Article 4.71, that are recaptured pursuant to Insurance Code, Chapter 4, Subchapter B, shall be the responsibility of the taxpayer that actually claimed the credit. (9) If a CAPCO is decertified, the comptroller will adjust any tax report records that are impacted by the recapture or forfeiture of premium tax credits under Program One or Program Two and will enforce the collection of additional premium taxes as a result of the recapture or forfeiture. For purposes of this section in the recapture of tax credits taken, the provisions of Tax Code, §111.207, shall apply as if the limitation period had been tolled before the end of the limitation under Tax Code, §111.204. These provisions shall apply to all insurers and persons, including those who received a transfer or assignment of the credits to be adjusted or recaptured. (h) Evaluation of Proposed Qualified Business. Before a CAPCO makes an investment, it may request that the comptroller determine whether the business is a qualified business, an early stage business, or a strategic investment business or a low-income community business. The CAPCO shall provide all information it has gathered on the business including its plan of operation and plans for future expansion. The request may be denied if the comptroller determines that the proposed investment is not consistent with the CAPCO's investment strategy or investment criteria as approved by the comptroller at certification. (1) Not later than 15 business days following receipt of a request, the comptroller shall issue a determination of whether the business meets the definition of a qualified business, early stage business, or strategic investment business or low-income community business. (2) The comptroller may notify the CAPCO that an additional 15 business days will be needed to review and make the determination. (3) If the comptroller fails to notify the CAPCO as provided under either paragraph (1) or (2) of this subsection, the business is considered to be a qualified business, early stage business, or a strategic investment business or low-income community business, as appropriate. (i) Qualified distributions and repayment of debt. A CAPCO may make a qualified distribution at any time. A CAPCO may make a distribution or payment that is not a qualified distribution only if the CAPCO has made original qualified investments in an amount cumulatively equal to 100% of its certified capital. (1) A CAPCO may make repayments of principal and interest on its indebtedness without regard to this subsection, and without restriction, including repayments of indebtedness of the CAPCO on which certified investors earned premium tax credits. Repayments do not relieve the CAPCO of the requirements for renewal and continuance of certification under subsection (d) of this section. (2) If a business in which a qualified investment has been made relocates its principal business operations outside Texas during the term of the CAPCO's investment in the business, the cumulative amount of qualified investments made from Program One or Program Two, for purposes of satisfying the requirements of this subsection, is reduced by the amount of the CAPCO's qualified investments in this business. This provision shall not apply if the business demonstrates that it has returned its principal business operations to Texas not later than 90 days after the date of its relocation. (3) If a qualified business in which a qualified investment has been made is subsequently acquired by or merged into another entity, whether headquartered inside or outside of Texas during the term of the CAPCO investment in the business, it will remain a qualified investment and not be subject to paragraph (2) of this subsection, if after the acquisition or merger and for the duration of the CAPCO's investment in the business, the business continues to operate within the remaining provisions of this section for qualified business as stated in subsection (a)(15) of this section. (4) If, after a CAPCO initially invests in a qualified business, there is a subsequent follow on investment in that qualified business, the investment will be considered an additional qualified investment for purposes of satisfying the provision requiring investment milestones. (j) Required reports. Each CAPCO shall report to the comptroller: (1) as soon as practicable after receipt of certified capital, but not to exceed 45 days; Cont'd... |
