12/22/2008 — Master site admin
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As you visit this site you will find pieces of information that you may want to add to a Custom Profile. To do that simply click the "add" link that is associated with that information. Once you are finished gathering data simply click "View Custom Report" and that will take you directly to your report. From there you can email, print or create a PDF of that report.
Venture Capital - CAPCO
The Comptroller of Public Accounts and the Texas Treasury Safekeeping Trust Company is responsible for administering the new Texas CAPCO program. The program is funded by “Insurance Premium Tax Credits”. In essence, the CAPCO program is designed to encourage growth of businesses, create jobs and generate additional state tax revenues. The primary difference between a traditional venture capital investment and a state supported CAPCO structure is in the type and location of the businesses (the portfolio companies). As a method to encourage and retain high paying jobs and industries in Texas, the law requires CAPCOs to invest 30% of their capital in “strategically located” and 50% in “early stage” businesses.
In 2002, the total taxable premiums attributable to 1,381 licensed insurers and HMO’s in the state was over $49.3 billion. Texas’ tax revenue on those premiums was almost $773.5 million. Over the course of the next 10 years (without considering growth in premiums or tax rates) Texas should collect almost $8 billion in insurance premium tax. Tax credits under the CAPCO program may not be utilized until 2009 at the maximum rate of 25% of earned credits per year. How the program works: Beginning in January 2005, venture capital companies may make application (with a mandatory non-refundable fee of $7,500) to the Comptroller to become certified as a CAPCO. Within 120 days of rule adoption (estimated to occur sometime in April, 2005) CAPCOs submit a request for an allocation of the total $200MM in available premium tax credits. These tax credits can only be used to offset future insurance premium taxes beginning in 2009 at the rate of 25% per year. Insurance companies must commit to invest money in the CAPCOs up to the amount of their specific allocation. CAPCO’s then repay the insurance company investors over time with a combination of earnings on their investments and future tax credits. The CAPCOs earn the tax credits by investing in certain targeted Texas businesses.