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80C68(2) DLF

CHAPTER 228. PREMIUM TAX CREDIT FOR CERTAIN INVESTMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Revised Law

228.001.

GENERAL

DEFINITIONS.

In this chapter:

"Allocation date" means the date on which certified investors are allocated premium tax credits.

"Certified capital" means cash invested by a certified investor that fully funds the purchase price of an equity interest in a certified capital company or a qualified debt instrument issued by the company.

"Certified capital company" means a partnership, corporation, or trust or limited liability company, whether organized on a profit or nonprofit basis, that:

has as the company's primary business activity the investment of cash in qualified businesses; and

is certified as meeting the criteria of this chapter.

"Certified investor" means an insurer or other person that has state premium tax liability and that contributes certified capital pursuant to a premium tax credit allocation under this chapter.

"Early stage business" means a business described by

Section 228.152.

"Person" means an individual or entity, including a corporation, general or limited partnership, or trust or limited liability company.

"Premium tax credit allocation claim" means a claim for allocation of premium tax credits.

"Qualified business" means a business described by

Section 228.201.

"Qualified debt instrument" means a debt instrument issued by a certified capital company, at par value or a premium, that:

has an original maturity date that is a date on or after the fifth anniversary of the date of issuance;

has a repayment

schedule that is not faster than a level principal amortization over five years; and

does not have interest, distribution, or payment features that are related to:

the profitability of the company; or

the performance of the company's investment portfolio.

"Qualified investment" means the investment of cash by a certified capital company in a qualified business for the purchase of any debt, debt participation, equity, or hybrid security of any nature or description, including a debt instrument or security that has the characteristics of debt but that provides for conversion into equity or equity participation instruments such as options or warrants.

"State premium tax liability" means:

any liability incurred by any person under

Chapter 221, 222, 223, or 224; or

if the tax liability imposed under

Chapter 221, 222, 223, or 224 is eliminated or reduced, any tax liability imposed on an insurer or other person that had premium tax liability under Subchapter A,

Chapter 4, or

Article 9.59 as those laws existed on January 1, 2003.

"Strategic investment business" means a business described by

Section 228.153(2). (V.T.I.C. Art. 4.51, Subdivs. (2), (3), (4), (5), (6) (part), (7), (8), (9) (part), (10), (12), (13), (15) (part).)

Source Law

In this subchapter:

"Allocation date" means the date on which the certified investors of a certified capital company are allocated premium tax credits by the comptroller under this subchapter.

"Certified capital" means an investment of cash by a certified investor in a certified capital company that fully funds the purchase price of an equity interest in the company or a qualified debt instrument issued by the certified capital company.

"Certified capital company" means a partnership, corporation, or trust or limited liability company, whether organized on a profit or not-for-profit basis, that has as its primary business activity the investment of cash in qualified businesses and that is certified as meeting the criteria of this subchapter.

"Certified investor" means an insurance company or other person that has state premium tax liability and that contributes certified capital pursuant to an allocation of premium tax credits under this subchapter.

"Early stage business" means

"Person" means a natural person or entity, including a corporation, general or limited partnership, or trust or limited liability company.

"Premium tax credit allocation claim" means a claim for allocation of premium tax credits.

"Qualified business" means

"Qualified debt instrument" means a debt instrument issued by a certified capital company, at par value or a premium, that:

has an original maturity date of at least five years after the date of issuance;

has a repayment

schedule that is not faster than a level principal amortization over five years; and

has no interest, distribution, or payment features that are related to the profitability of the certified capital company or the performance of the certified capital company's investment portfolio.

"Qualified investment" means the investment of cash by a certified capital company in a qualified business for the purchase of any debt, debt participation, equity, or hybrid security of any nature or description, including a debt instrument or security that has the characteristics of debt but that provides for conversion into equity or equity participation instruments such as options or warrants.

"State premium tax liability" means:

any liability incurred by any person under

Chapter 221, 222, 223, or 224 of this code; or

if the tax liability imposed under

Chapter 221, 222, 223, or 224 of this code is eliminated or reduced, any tax liability imposed on an insurance company or other person that had premium tax liability under Subchapter A of this

chapter or

Article 9.59 of this code as those laws existed on January 1, 2003.

"Strategic investment business" means

Revisor's Note

Subdivision (2), V.T.I.C.

Article 4.51, provides that the allocation date is the date on which the certified investors of "a certified capital company" are allocated premium tax credits "by the comptroller under this subchapter." The revised law omits the quoted language as unnecessary because the language duplicates the provisions of Subchapter B, V.T.I.C.

Chapter 4, that are revised as Subchapter F of this

chapter and that govern the allocation of premium tax credits.

The revised law also omits "a certified capital company" as unnecessary because to be considered a certified investor a person must invest cash in a certified capital company.

Subdivisions (5) and (13), V.T.I.C.

Article 4.51, refer to "an insurance company."

Throughout this chapter, the revised law substitutes "insurer" for "insurance company" because, in this context, the terms are synonymous and "insurer" is the term more consistently used in Subtitle B, Title 3, Insurance Code, with reference to insurance premium taxes.

Subdivision (7), V.T.I.C.

Article 4.51, refers to a "natural person." The revised law substitutes "individual" for "natural person" for consistency with the terminology used in this code.

Revised Law

228.002.

DEFINITION OF AFFILIATE.

In this chapter, "affiliate" of another person means:

a person that is an affiliate for purposes of

Section 823.003;

a person that directly or indirectly:

beneficially owns 10 percent or more of the outstanding voting securities or other voting or management interests of the other person, whether through rights, options, convertible interests, or otherwise; or

controls or holds power to vote 10 percent or more of the outstanding voting securities or other voting or management interests of the other person;

a person 10 percent or more of the outstanding voting securities or other voting or management interests of which are directly or indirectly:

beneficially owned by the other person, whether through rights, options, convertible interests, or otherwise; or

controlled or held with power to vote by the other person;

a partnership in which the other person is a general partner;

an officer, director, employee, or agent of the other person; or

an immediate family member of an officer, director, employee, or agent described by Subdivision (5). (V.T.I.C. Art. 4.51, Subdiv. (1).)

Source Law

In this subchapter:

"Affiliate" of another person means:

a person who is an affiliate for purposes of

Section 2, Ar