| (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; (A) the certified investors name, address, and taxpayer identification number; (B) the date and amount of investment received by the CAPCO from each certified investor; and (C) the type and amount of security issued by the CAPCO to the certified investors in exchange for the investment resulting in premium tax credits, including the names of the companies that issued the security together with a copy of the security instrument. (2) An annual report due each January 31 that contains: (A) the amount of the CAPCO's certified capital, including details of all investments, at the end of the preceding calendar year, including but not limited to whether or not the company has invested more than 15% of its total certified capital in any one business for Program One or Program Two; (B) a detailed listing of investment violations under this section; (C) each qualified investment the CAPCO made during the preceding year and, with respect to each qualified investment, the number of retained jobs and the average wages paid per employee of the qualified business at the time the qualified investment was made with respect to Program One and Program Two; (D) the number of jobs created by the investment and the average wages paid for the jobs; (E) the classification of the qualified businesses according to the industrial sector and the size of the business; (F) a copy of the business plan or plan of operation for each of the qualified businesses in which the CAPCO invested in the preceding year; and (G) any other information the comptroller requires by notification or instructions to each CAPCO. (3) An annual audited financial statement for the prior calendar year ending December 31, by April 1, that includes the opinion of an independent certified public accountant. The auditor shall also address the methods of operation and conduct of the business of the company by performing certain agreed upon procedures to determine whether: (A) the company is complying with Insurance Code, Chapter 4, Subchapter B, with respect to the CAPCO requirements and the rules adopted in this section; (B) the funds received by the company have been invested as required within the time provided by Insurance Code, Article 4.56(a); and (C) the company has invested the funds in qualified businesses. (k) Report to the legislature. The comptroller shall prepare a biennial report to the legislature with respect to results of implementation of this section. This report shall be filed with the governor, the lieutenant governor, and the speaker of the house of representatives, not later than December 15 of each even-numbered year. The report shall include: (1) the names and number of CAPCOs holding certified capital; (2) the amount of certified capital invested in each CAPCO; (3) the amount of certified capital the CAPCO has invested in qualified business, including the names and locations of the businesses, as of January 1, 2006, and each subsequent year; (4) the amount of tax credits granted based on certified investments along with the tax credits taken by year; (5) the performance of each CAPCO with respect to renewal and reporting requirements; (6) information concerning qualified businesses in which CAPCOs have invested, and is to include: (A) the classification of the businesses, along with the industrial sector and size of each business; (B) the total number of jobs created by the investment and the average wages paid for the jobs; and (C) the total number of jobs retained as a result of the investment and the average wages paid for the jobs; (7) a list of the CAPCOs that have been decertified or that have failed to renew the certification and the reason for any decertification. (l) Confidentiality: any information containing confidential business or trade secrets shall be kept confidential only to the extent provided by the Texas Public Information Act, Texas Government Code, Chapter 552. |
