TX HB4735

Creates a Rural Development Fund program administered by the comptroller, allowing up to $300 million in total investment authority and $150 million in tax credit allocations for entities that invest in small businesses located in rural areas of Texas (municipalities with population under 50,000 or USDA-designated rural areas)

Provides insurance premium tax credits to investors who make credit-eligible capital contributions to approved rural development funds, with credits paid out at 33% in years one and two, and 34% in year three after the closing date, applicable against state insurance tax liabilities

Requires rural development funds to invest at least 60% of their investment authority in growth investments within 2 years and 100% within 3 years, with investments capped at $7.5 million per targeted small business initially and $15 million total per business

Establishes eligibility requirements for rural development fund applicants, including having invested at least $100 million in nonpublic U.S. companies (with $70 million in rural areas) and maintaining at least 10% equity investment from fund affiliates

Mandates annual reporting on jobs created and retained, requires a comptroller report to the legislature before the 92nd session assessing economic benefits, and conditions future applications after January 1, 2026 on demonstrating positive fiscal effects exceeding total tax credits issued