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.