H.B. No. 4735 introduces Chapter 487A to the Government Code, focusing on rural development funds and associated insurance tax credits for investments in these funds. The bill defines key terms such as "rural area," "rural development fund," and "targeted small business," and outlines the criteria for qualifying rural development funds, which must demonstrate significant prior investments in nonpublic companies in rural areas. It mandates the comptroller to adopt rules for implementation and monitoring, including the collection of application and participation fees to support administrative costs. The bill aims to stimulate economic development in rural areas by incentivizing investments in targeted small businesses, thereby creating and retaining jobs.

Additionally, the bill establishes criteria for applicants, including job creation estimates and a nonrefundable application fee of $10,000. The comptroller is responsible for approving applications within 30 days and can allocate up to $300 million in investment authority, with specific limits on tax credits. It outlines grounds for application denial and allows for rectification of issues post-denial. The bill also introduces amendments to existing regulations, including the comptroller's authority to revoke tax credit certificates for funds that fail to maintain required investment levels. Furthermore, it sets conditions for application acceptance, mandates annual reporting from rural development funds, and emphasizes maintaining investment levels in targeted small businesses, ultimately enhancing accountability and economic growth in rural areas.

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