HBA-JRA S.B. 9 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 9 By: Duncan Ways & Means 4/30/1999 Engrossed BACKGROUND AND PURPOSE Current law does not entitle a corporation to a franchise tax credit for financing a school-age child care program. S.B. 9 entitles a corporation that provides financing for certain school-age child care programs to a franchise tax credit. 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 Chapter 171, Tax Code, by adding Subchapter N, as follows: SUBCHAPTER N. TAX CREDIT FOR CONTRIBUTIONS TO BEFORE AND AFTER SCHOOL PROGRAMS Sec. 171.701. DEFINITION. Defines "school-age child care." Sec. 171.702. CREDIT. Entitles a corporation that meets the eligibility requirements under this subchapter to a credit in the amount allowed by this subchapter against the franchise tax. Sec. 171.703. EXPENDITURES ELIGIBLE FOR CREDIT. (a) Authorizes a corporation to claim a credit under this subchapter only for a qualifying expenditure relating to the operation of a school-age child care program that is operated by a nonprofit organization licensed under Chapter 42 (Regulation of Certain Facilities, Homes, and Agencies That Provide Child-care Services), Human Resources Code; a nonprofit, accredited educational facility or by another nonprofit entity under contract with the educational facility, if the Texas Education Agency or Southern Association of Colleges and Schools has approved the curriculum content of the program operated under the contract; or a county or municipality, if the governing body of the county or municipality adopts certain standards of care. (b) Provides that a qualifying expenditure includes an expenditure for constructing, renovating, or remodeling a facility or structure to be used by the program; purchasing necessary equipment, supplies, or food to be used in the program; or operating the program, including administrative and staff costs. Sec. 171.704. AMOUNT; LIMITATIONS. Provides that the amount of the credit is equal to 30 percent of a corporation's qualifying expenditures. Authorizes a corporation to claim a franchise tax credit for a qualifying expenditure during an accounting period only against the tax owed for the corresponding reporting period. Prohibits a corporation from claiming a credit in an amount that exceeds 50 percent of the amount of net franchise tax due, after applying for other credits, for the reporting period. Sec. 171.705. APPLICATION FOR CREDIT. Provides that a corporation must apply for a franchise tax credit on or with the tax report for the period for which the credit is claimed. Requires the comptroller of public accounts (comptroller) to adopt a form for the application of credit. Requires a corporation to use this form in applying for credit. Sec. 171.706. ASSIGNMENT PROHIBITED. Prohibits a corporation from conveying, assigning, or transferring a franchise tax credit to another entity unless all of the assets of the corporation are conveyed, assigned, or transferred in the same transaction. SECTION 2. Authorizes a corporation to claim the credit under Subchapter N, Chapter 171, Tax Code, only for a qualifying expenditure made on or after the effective date of this Act and on a franchise tax report under Chapter 171, Tax Code, on or after January 1, 2000. SECTION 3.Emergency clause. Effective date: upon passage.