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.