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.