By Haywood S.B. No. 533
75R5311 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a franchise tax credit for a corporation that
1-3 establishes a day-care center for children of employees or
1-4 purchases 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 Subchapter N to read as follows:
1-8 SUBCHAPTER N. TAX CREDIT FOR ESTABLISHING DAY-CARE CENTER OR
1-9 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 ESTABLISHING DAY-CARE CENTER.
1-18 (a) A corporation may claim a credit under this subchapter only
1-19 for a qualifying expenditure relating to:
1-20 (1) the establishment of a day-care center primarily
1-21 to provide care for the children of employees of the corporation or
1-22 of the corporation and one or more other entities sharing the costs
1-23 of establishing the center; or
1-24 (2) the purchase of child-care services that are
2-1 actually provided to children of employees of the corporation.
2-2 (b) A qualifying expenditure includes an expenditure for:
2-3 (1) planning the day-care center;
2-4 (2) preparing a site to be used for the day-care
2-5 center;
2-6 (3) constructing the day-care center;
2-7 (4) renovating or remodeling a structure to be used
2-8 for the day-care center;
2-9 (5) purchasing equipment necessary in the use of the
2-10 day-care center and installed for permanent use in or immediately
2-11 adjacent to the day-care center, including kitchen appliances; or
2-12 (6) purchasing child-care services that are actually
2-13 provided to children of employees of the corporation.
2-14 (c) The amount of the credit is equal to the lesser of:
2-15 (1) $25,000; or
2-16 (2) 25 percent of the corporation's qualifying
2-17 expenditures.
2-18 (d) If a corporation shares in the cost of establishing a
2-19 day-care center, the corporation is entitled to a credit for the
2-20 qualifying expenditures made by that corporation, subject to the
2-21 limitation prescribed by Subsection (c).
2-22 Sec. 171.704. APPLICATION FOR CREDIT. (a) A corporation
2-23 must apply for a credit under this subchapter on or with the tax
2-24 report for the period for which the credit is claimed.
2-25 (b) If the corporation is claiming a credit for a qualifying
2-26 expenditure for purchasing child-care services, the corporation
2-27 must include proof that the services were actually provided to
3-1 children of employees of the corporation.
3-2 (c) The comptroller shall adopt a form for the application
3-3 for the credit. A corporation must use this form in applying for
3-4 the credit.
3-5 Sec. 171.705. PERIOD FOR WHICH CREDIT MAY BE CLAIMED.
3-6 (a) A corporation may claim a credit under this subchapter for
3-7 qualifying expenditures made during an accounting period only
3-8 against the tax owed for the corresponding reporting period.
3-9 (b) A corporation may not claim a credit in an amount that
3-10 exceeds the amount of tax due for the report.
3-11 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not
3-12 convey, assign, or transfer the credit allowed under this
3-13 subchapter to another entity unless all of the assets of the
3-14 corporation are conveyed, assigned, or transferred in the same
3-15 transaction.
3-16 SECTION 2. A corporation may claim the credit under
3-17 Subchapter N, Chapter 171, Tax Code, as added by this Act, only for
3-18 a qualifying expenditure made on or after the effective date of
3-19 this Act and only on a franchise tax report due under Chapter 171,
3-20 Tax Code, on or after January 1, 1998.
3-21 SECTION 3. The importance of this legislation and the
3-22 crowded condition of the calendars in both houses create an
3-23 emergency and an imperative public necessity that the
3-24 constitutional rule requiring bills to be read on three several
3-25 days in each house be suspended, and this rule is hereby suspended,
3-26 and that this Act take effect and be in force from and after its
3-27 passage, and it is so enacted.