HBA-JRA H.B. 2477 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2477
By: Brown, Betty
Ways & Means
4/1/1999
Introduced



BACKGROUND AND PURPOSE 

The purpose of this bill is to allow small businesses the opportunity to
support education in their local communities by helping their employees
obtain a college education.  H.B. 2477 entitles a small business that pays
at least 50 percent of college tuition for an employee to a franchise tax
credit for the amount of the tuition paid by the employer. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 171, Tax Code, by adding Section
171.0025, as follows: 

Sec. 171.0025.  TAX CREDIT FOR HIGHER EDUCATION SCHOLARSHIPS.  (a) Defines
"institution of higher education" in this section. 

(b)  Provides that a person is eligible to receive a franchise tax credit
under this section only if the person is the sole proprietor of a business
with fewer than 100 employees or a business entity with fewer than 100
employees. 

(c)  Entitles an eligible person to a franchise tax credit if the person
funds a scholarship as provided by this section payable toward the payment
of at least 50 percent of the tuition costs of an institution of higher
education of the person's employee who is attending an institution of
higher education and enrolls for at least six semester credit hours. 

(d)  Requires the Comptroller of Public Accounts (comptroller) to issue a
tax credit voucher to an eligible person if the person submits to the
comptroller a sworn application and proof that the employee is employed by
the person, is enrolled in an institution of higher education, and is using
the scholarship to attend that institution. 

(e)  Provides that the person must submit the application and proof within
30 days of the beginning of the institution's semester or session. 

(f)  Authorizes a person to fund more than one scholarship.  Entitles the
person to a tax credit in the amount of the employee's tuition costs
covered by the scholarship for each qualifying scholarship. 

(g)  Provides that a person must claim the tax credit on the report for
which net taxable earned surplus or net taxable capital is based on the
same period during which the person provided the scholarship funding. 

(h)  Prohibits a person from claiming a tax credit in excess of the amount
of the tax due for that report.  Prohibits a credit from being carried
forward or backward or used to create a business loss carryover. 
 
(i)  Prohibits a person from conveying, assigning, or transferring a tax
credit allowed under this section to another person unless all the assets
of the person are conveyed, assigned, or transferred to that person in the
same transaction. 

(j)  Provides that a person must provide to the comptroller any information
the comptroller requires to determine the validity of a tax credit claim. 

SECTION 2.  Makes application of this Act prospective to franchise tax
reports originally due on or after January 1, 2000. 

SECTION 3.Emergency clause.
  Effective date: upon passage.