By Romo H.B. No. 1046
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to establishing a franchise tax credit for wages paid to
1-3 AFDC recipients.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 171.0023, Tax Code is added to read as
1-6 follows:
1-7 SEC. 171.0023. TAX CREDIT FOR WAGES PAID TO EMPLOYEE
1-8 RECEIVING AID TO FAMILIES WITH DEPENDENT CHILDREN.
1-9 (a) A corporation that meets the eligibility requirements
1-10 under this Section shall be entitled to a credit in the amount
1-11 allowed by this Section against the franchise tax imposed under
1-12 this chapter.
1-13 (b) The amount of the credit allowed under this Section is
1-14 equal to 20 percent of the qualified first year wages paid or
1-15 incurred during the taxable year.
1-16 (c) In order for a corporation to be eligible for the
1-17 credit, during each tax year for which the credit is claimed, the
1-18 corporation must:
1-19 (1) pay or incur a liability for payment of qualified
1-20 first year wages to an employee who is a resident of this state and
1-21 is a recipient of aid from this state's program for Aid for
1-22 Families with Dependent Children ("AFDC") pursuant to the
1-23 provisions of Part A of Title IV of the Social Security Act (42
2-1 U.S.C. 601 et seq.); and;
2-2 (2) provide and pay at least 80 percent of the cost of
2-3 major medical health insurance coverage for such employee which
2-4 provides a maximum $300 deductible to the employee and payment by
2-5 the insurance provider of at least 70 percent of insurance claims
2-6 during the claim year in excess of the deductible.
2-7 (d) For purposes of this Section, the term "wages" will be
2-8 the same as provided in Section 51 (c) (1), (2) and (3) of the
2-9 Internal Revenue Code and the term "qualified first year wages"
2-10 will mean, with respect to each employee, the total wages up to a
2-11 maximum of $10,000 per taxable year, paid or incurred by the
2-12 corporation attributable to services rendered during the 1-year
2-13 period beginning with the date the employee begins work for the
2-14 corporation.
2-15 (e) No wages will be taken into account in computing the
2-16 credit under this Section with respect to any employee unless such
2-17 employee has been employed by the corporation at least one year.
2-18 (f) In calculating the credit under this Section, a
2-19 corporation may not include the qualified first year wages of an
2-20 employee unless the corporation has:
2-21 (1) received a written certification from the Texas
2-22 Employment Commission or the appropriate state agency responsible
2-23 for certification under the federal/state AFDC aid program of this
2-24 state that the employee is a recipient of aid from the
2-25 federal/state AFDC program on or before the day such employee
3-1 begins work for the corporation; or
3-2 (2) has requested in writing such certification and
3-3 receives such certification prior to the due date of its franchise
3-4 tax report for the taxable period for which the qualified first
3-5 year wages of that employee is sought to be included in the credit
3-6 claimed.
3-7 (g) A corporation may claim the credit under this Section
3-8 beginning on the first franchise tax report due under this chapter
3-9 after January 1, 1994. The credit claimed under this Section for
3-10 each privilege period may not exceed the amount of net franchise
3-11 tax due for such privilege period after any other applicable tax
3-12 credits.
3-13 (h) No portion of the credit claimed under this Section for
3-14 each taxable period may be carried forward or carried back and used
3-15 as a credit on a report for another period.
3-16 SECTION 2. The importance of this legislation and the
3-17 crowded condition of the calendars in both houses create an
3-18 emergency and an imperative public necessity that the
3-19 constitutional rule requiring bills to be read on three several
3-20 days in each house be suspended, and this rule is hereby suspended.