By: Maxey H.B. No. 1176
73R4941 DAK-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a franchise tax credit for wages paid by a corporation
1-3 to certain employees receiving aid to families with dependent
1-4 children.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 171, Tax Code, is amended by adding
1-7 Subchapter K to read as follows:
1-8 SUBCHAPTER K. TAX CREDIT FOR WAGES PAID TO EMPLOYEE
1-9 RECEIVING AID TO FAMILIES WITH DEPENDENT CHILDREN
1-10 Sec. 171.601. DEFINITION. In this subchapter, "wages" has
1-11 the meaning assigned by Sections 51(c)(1), (2), and (3), Internal
1-12 Revenue Code.
1-13 Sec. 171.602. CREDIT. A corporation that meets the
1-14 eligibility requirements under this subchapter is entitled to a
1-15 credit in the amount allowed by this subchapter against the tax
1-16 imposed under this chapter.
1-17 Sec. 171.603. AMOUNT OF CREDIT; LIMITATION. (a) The amount
1-18 of the credit allowed under this subchapter is equal to 20 percent
1-19 of the total wages, up to a maximum of $10,000 of wages for each
1-20 employee, paid or incurred by a corporation for services rendered
1-21 by an employee of the corporation during the period beginning with
1-22 the date the employee begins work for the corporation and ending on
1-23 the first anniversary of that date.
1-24 (b) The credit claimed for each privilege period may not
2-1 exceed the amount of net franchise tax due for the privilege period
2-2 after any other applicable tax credits.
2-3 Sec. 171.604. ELIGIBILITY. A corporation is eligible for
2-4 the credit on wages paid or incurred by the corporation, during the
2-5 accounting period for the privilege period for which the credit is
2-6 claimed, only if:
2-7 (1) the wages paid or incurred by the corporation are
2-8 for services of an employee who:
2-9 (A) is a resident of this state; and
2-10 (B) at the time the employment begins, is a
2-11 recipient of aid from this state's program for Aid to Families with
2-12 Dependent Children under Part A of Title IV of the Social Security
2-13 Act (42 U.S.C. 601 et seq.);
2-14 (2) the corporation satisfies the certification
2-15 requirements under Section 171.605; and
2-16 (3) the corporation provides and pays for the benefit
2-17 of the employee at least 80 percent of the cost of major medical
2-18 health insurance coverage that provides for:
2-19 (A) a maximum $300 deductible to the employees;
2-20 and
2-21 (B) payment by the insurance provider of at
2-22 least 70 percent of insurance claims during the claim year in
2-23 excess of the deductible.
2-24 Sec. 171.605. CERTIFICATION. A corporation is not eligible
2-25 for the credit on wages paid or incurred by the corporation unless
2-26 the corporation has received before the due date of its franchise
2-27 tax report for the privilege period for which the credit is claimed
3-1 a written certification from the Texas Employment Commission or the
3-2 appropriate state agency responsible for certification under this
3-3 state's program for Aid to Families with Dependent Children that
3-4 the employee is a recipient of aid from the program on or before
3-5 the day the employee begins employment with the corporation.
3-6 Sec. 171.606. APPLICATION FOR CREDIT. (a) A corporation
3-7 must apply for a credit under this subchapter on or with the tax
3-8 report for the period for which the credit is claimed.
3-9 (b) The comptroller shall promulgate a form for the
3-10 application for the credit. A corporation must use this form in
3-11 applying for the credit.
3-12 Sec. 171.607. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
3-13 corporation may claim a credit under this subchapter for wages paid
3-14 an employee during an accounting period only against the tax owed
3-15 for the corresponding privilege period.
3-16 SECTION 2. (a) This Act takes effect September 1, 1993.
3-17 (b) A corporation may claim the credit under Subchapter K,
3-18 Chapter 171, Tax Code, as added by this Act, only for any wages
3-19 paid or incurred on or after the effective date of this Act and
3-20 only on a franchise tax report due under Chapter 171, Tax Code, on
3-21 or after January 1, 1994.
3-22 SECTION 3. The importance of this legislation and the
3-23 crowded condition of the calendars in both houses create an
3-24 emergency and an imperative public necessity that the
3-25 constitutional rule requiring bills to be read on three several
3-26 days in each house be suspended, and this rule is hereby suspended.