By Haywood S.B. No. 282 75R4058 CBH-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to incentives for an employer that establishes and 1-3 operates a day-care center for children of employees or purchases 1-4 child-care services for employees. 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 Subchapters N and O to read as follows: 1-8 SUBCHAPTER N. TAX CREDIT FOR ESTABLISHING DAY-CARE CENTER 1-9 OR PURCHASING CHILD-CARE SERVICES 1-10 Sec. 171.701. DEFINITION. In this subchapter, "day-care 1-11 center" has the meaning assigned by Section 42.002, Human Resources 1-12 Code. 1-13 Sec. 171.702. 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. 171.703. CREDIT FOR DAY-CARE CENTER AND PURCHASED CHILD 1-18 CARE. (a) A corporation may claim a credit under this subchapter 1-19 only for a qualifying expenditure relating to: 1-20 (1) the establishment and operation of a day-care 1-21 center primarily to provide care for the children of employees of 1-22 the corporation or of the corporation and one or more other 1-23 entities sharing the costs of establishing and operating the 1-24 center; or 2-1 (2) the purchase of child-care services that are 2-2 actually provided to children of employees of the corporation. 2-3 (b) A qualifying expenditure includes an expenditure for: 2-4 (1) planning the day-care center; 2-5 (2) preparing a site to be used for the day-care 2-6 center; 2-7 (3) constructing the day-care center; 2-8 (4) renovating or remodeling a structure to be used 2-9 for the day-care center; 2-10 (5) purchasing equipment necessary in the use of the 2-11 day-care center and installed for permanent use in or immediately 2-12 adjacent to the day-care center, including kitchen appliances and 2-13 other food preparation equipment; 2-14 (6) expanding the day-care center; 2-15 (7) maintaining and operating the day-care center, 2-16 including paying direct administration and staff costs; or 2-17 (8) purchasing child-care services that are actually 2-18 provided to children of employees of the corporation. 2-19 (c) The amount of the credit is equal to the lesser of: 2-20 (1) $30,000; or 2-21 (2) 30 percent of the corporation's qualifying 2-22 expenditures. 2-23 (d) If a corporation shares in the cost of establishing and 2-24 operating a day-care center, the corporation is entitled to a 2-25 credit for the qualifying expenditures made by that corporation, 2-26 subject to the limitation prescribed by Subsection (c). 2-27 (e) If a corporation is also eligible for a credit under 3-1 Subchapter O, the total credit claimed under this subchapter and 3-2 Subchapter O in a reporting period may not exceed $30,000. 3-3 Sec. 171.704. APPLICATION FOR CREDIT. (a) A corporation 3-4 must apply for a credit under this subchapter on or with the tax 3-5 report for the period for which the credit is claimed. 3-6 (b) If the corporation is claiming a credit for a qualifying 3-7 expenditure for purchasing child-care services, the corporation 3-8 must include proof that the services were actually provided to 3-9 children of employees of the corporation. 3-10 (c) The comptroller shall adopt a form for the application 3-11 for the credit. A corporation must use this form in applying for 3-12 the credit. 3-13 Sec. 171.705. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. 3-14 (a) A corporation may claim a credit under this subchapter for 3-15 qualifying expenditures made during an accounting period only 3-16 against the tax owed for the corresponding reporting period. 3-17 (b) A corporation may not claim a credit in an amount that 3-18 exceeds the amount of tax due for the report. 3-19 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not 3-20 convey, assign, or transfer the credit allowed under this 3-21 subchapter to another entity unless all of the assets of the 3-22 corporation are conveyed, assigned, or transferred in the same 3-23 transaction. 3-24 (Sections 171.707-171.750 reserved for expansion 3-25 SUBCHAPTER O. TAX CREDIT FOR HIRING CERTAIN EMPLOYEES 3-26 Sec. 171.751. DEFINITIONS. In this subchapter: 3-27 (1) "Day-care center" has the meaning assigned by 4-1 Section 42.002, Human Resources Code. 4-2 (2) "Wages" has the meaning assigned by Sections 4-3 51(c)(1), (2), and (3), Internal Revenue Code of 1986 (26 U.S.C. 4-4 Section 51). 4-5 Sec. 171.752. CREDIT. A corporation that meets the 4-6 eligibility requirements under this subchapter is entitled to a 4-7 credit in the amount allowed by this subchapter against the tax 4-8 imposed under this chapter. 4-9 Sec. 171.753. CREDIT FOR WAGES PAID TO ELIGIBLE EMPLOYEE. 4-10 (a) A corporation is eligible for a credit under this subchapter 4-11 only if the corporation has established and operates a day-care 4-12 center primarily to provide care for the children of employees of 4-13 the corporation or of the corporation and one or more other 4-14 entities sharing the costs of establishing and operating the 4-15 center. 4-16 (b) The corporation may claim a credit for wages paid to an 4-17 employee who: 4-18 (1) is a resident of this state; 4-19 (2) is a recipient of child-care services under 4-20 Chapter 31, Human Resource Code, on or immediately before the date 4-21 the employee begins employment with the corporation; and 4-22 (3) receives child-care services from the corporation 4-23 at a child-care center established and operated by the corporation 4-24 in accordance with Subsection (a). 4-25 (c) The amount of the credit may not exceed $600 in wages 4-26 paid or incurred by the corporation for services rendered by the 4-27 eligible employee during the period beginning on the date the 5-1 employee begins work for the corporation and ending on the first 5-2 anniversary of that date. If before the first anniversary of the 5-3 date of employment the employee voluntarily leaves the employment, 5-4 is unable to work because of a disability, or is terminated with or 5-5 without cause, the amount of the credit is reduced by the 5-6 proportion of the year not worked. 5-7 (d) The total credits claimed under this subchapter in a 5-8 reporting period may not exceed $30,000. If a corporation is also 5-9 eligible for a credit under Subchapter N, the total credits 5-10 claimed under this subchapter and Subchapter N in a reporting 5-11 period may not exceed $30,000. 5-12 Sec. 171.754. APPLICATION FOR CREDIT. (a) A corporation 5-13 must apply for a credit under this subchapter on or with the tax 5-14 report for the period for which the credit is claimed. 5-15 (b) The corporation must include with the application a 5-16 written certification from the appropriate state agency responsible 5-17 for certification that the employee is a recipient of child-care 5-18 services under Chapter 31, Human Resources Code, on or immediately 5-19 before the date the employee begins employment with the 5-20 corporation. 5-21 (c) The comptroller shall adopt a form for the application 5-22 for the credit. A corporation must use this form in applying for 5-23 the credit. 5-24 Sec. 171.755. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. 5-25 (a) A corporation may claim a credit under this subchapter for 5-26 wages paid or incurred during an accounting period only against the 5-27 tax owed for the corresponding reporting period. 6-1 (b) A corporation may not claim a credit in an amount that 6-2 exceeds the amount of tax due for the report. 6-3 Sec. 171.756. ASSIGNMENT PROHIBITED. A corporation may not 6-4 convey, assign, or transfer the credit allowed under this 6-5 subchapter to another entity unless all of the assets of the 6-6 corporation are conveyed, assigned, or transferred in the same 6-7 transaction. 6-8 SECTION 2. A corporation may claim the credit under 6-9 Subchapter N or O, Chapter 171, Tax Code, as added by this Act, 6-10 only: 6-11 (1) for a qualifying expenditure made or for wages 6-12 paid or incurred on or after the effective date of this Act; and 6-13 (2) on a franchise tax report due under Chapter 171, 6-14 Tax Code, on or after January 1, 1998. 6-15 SECTION 3. The importance of this legislation and the 6-16 crowded condition of the calendars in both houses create an 6-17 emergency and an imperative public necessity that the 6-18 constitutional rule requiring bills to be read on three several 6-19 days in each house be suspended, and this rule is hereby suspended, 6-20 and that this Act take effect and be in force from and after its 6-21 passage, and it is so enacted.