By Nelson                                        S.B. No. 941

      75R2614 CLG-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to a state tax refund and federal income tax credit

 1-3     available to certain employers of AFDC recipients.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter D, Chapter 301, Labor Code, is amended

 1-6     by adding Section 301.067 to read as follows:

 1-7           Sec. 301.067.  FEDERAL WORK OPPORTUNITY TAX CREDIT AND STATE

 1-8     TAX REFUND FOR CERTAIN EMPLOYERS.  (a)  The commission is the lead

 1-9     agency in promoting awareness of the federal work opportunity tax

1-10     credit program and the state tax refund for employers under

1-11     Subchapter H.

1-12           (b)  The commission, in coordination with the comptroller's

1-13     office and the Texas Department of Human Services, shall develop

1-14     and distribute educational materials designed to increase awareness

1-15     of the tax credit and tax refund described by Subsection (a) to

1-16     encourage employers to hire recipients of the financial assistance

1-17     program for persons with dependent children under Chapter 31, Human

1-18     Resources Code.

1-19           SECTION 2.  Subchapter D, Chapter 31, Human Resources Code,

1-20     is transferred to Chapter 301, Labor Code, redesignated as

1-21     Subchapter H, and amended to read as follows:

1-22                SUBCHAPTER H [D].  TAX REFUND FOR WAGES PAID

1-23                 TO EMPLOYEE RECEIVING FINANCIAL ASSISTANCE 

1-24           Sec. 301.101 [31.071].  DEFINITION.  In this subchapter,

 2-1     "wages" has the meaning assigned by Sections 51(c)(1), (2), and

 2-2     (3), Internal Revenue Code of 1986 (26 U.S.C. Section 51).

 2-3           Sec. 301.102 [31.072].  TAX REFUND VOUCHER.  (a)  The

 2-4     commission [department] shall issue a tax refund  voucher in the

 2-5     amount allowed by this subchapter and subject to the restrictions

 2-6     imposed by this subchapter to a person that meets the eligibility

 2-7     requirements under this subchapter.

 2-8           (b)  A person issued a tax refund voucher may, subject to the

 2-9     provisions of this subchapter, apply for the amount of the refund

2-10     of a tax that is paid by the person to this state if the tax is

2-11     administered by the comptroller and deposited to the credit of the

2-12     general revenue fund without dedication.

2-13           Sec. 301.103 [31.073].  AMOUNT OF REFUND; LIMITATION.

2-14     (a)  The amount of the refund allowed under this subchapter  is

2-15     equal to 20 percent of the total wages, up to a maximum of $10,000

2-16     in wages for each employee, paid or incurred by a person for

2-17     services rendered by an employee of the person during the period

2-18     beginning with the date the employee begins work for the person and

2-19     ending on the first anniversary of that date.

2-20           (b)  The refund claimed for a calendar year may not exceed

2-21     the amount of net tax paid by the person to this state, after any

2-22     other applicable tax credits, in that calendar year.

2-23           Sec. 301.104 [31.074].  ELIGIBILITY.  A person is eligible

2-24     for the refund for wages paid or incurred by the person, during

2-25     each calendar year for which the refund is claimed, only if:

2-26                 (1)  the wages paid or incurred by the person are for

2-27     services of an employee who is:

 3-1                       (A)  a resident of this state; and

 3-2                       (B)  a recipient of financial assistance and

 3-3     services in accordance with Chapter 31, Human Resources Code [this

 3-4     chapter];

 3-5                 (2)  the person satisfies the certification

 3-6     requirements under Section 301.105 [31.075]; and

 3-7                 (3)  the person provides and pays for the benefit of

 3-8     the employee a part of the cost of coverage under:

 3-9                       (A)  a health plan provided by a health

3-10     maintenance organization established under the Texas Health

3-11     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance

3-12     Code);

3-13                       (B)  a health benefit plan approved by the

3-14     commissioner of insurance; or

3-15                       (C)  a self-funded or self-insured employee

3-16     welfare benefit plan that provides health benefits and is

3-17     established in accordance with the Employee Retirement Income

3-18     Security Act of 1974 (29 U.S.C.  1001 et seq.)  [at least 80

3-19     percent of the cost of major medical  health insurance coverage

3-20     that provides for:]

3-21                       [(A)  a maximum $300 deductible to the employee;

3-22     and]

3-23                       [(B)  payment by the insurance provider of at

3-24     least 70 percent of insurance claims during the claim year in

3-25     excess of the deductible].

3-26           Sec. 301.105 [31.075].  CERTIFICATION.  A person is not

3-27     eligible for the refund for wages paid or incurred by the person

 4-1     unless the person has received a written certification from the

 4-2     commission [appropriate state agency responsible for certification]

 4-3     that the  employee is a recipient of financial assistance and

 4-4     services on or before the day the employee begins employment with

 4-5     the person.

 4-6           Sec. 301.106 [31.076].  APPLICATION FOR REFUND; ISSUANCE.

 4-7     (a)  A person may apply for a tax refund voucher for  wages paid an

 4-8     employee in a calendar year only on or after January 1 and before

 4-9     April 1 of the following calendar year.

4-10           (b)  The commission [department] shall promulgate a form for

4-11     the application for the tax refund voucher.  A person must use this

4-12     form in applying for the refund.

4-13           (c)  On issuance of the tax refund voucher to the person by

4-14     the commission [department], the person may apply the voucher

4-15     against a tax paid by the person to this state only for the

4-16     calendar year for which the voucher is issued.

4-17           Sec. 301.107.  RULES.  (a)  The commission shall adopt rules

4-18     as necessary to carry out its powers and duties under this

4-19     subchapter.

4-20           (b)  The Texas Department of Human Services shall provide to

4-21     the commission information as necessary to enable the commission to

4-22     determine whether a person is eligible for the tax refund

4-23     authorized by this subchapter.

4-24           SECTION 3.  Section 111.109, Tax Code, is amended to read as

4-25     follows:

4-26           Sec. 111.109.  TAX REFUND FOR WAGES PAID TO EMPLOYEE

4-27     RECEIVING AID TO FAMILIES WITH DEPENDENT CHILDREN.  The comptroller

 5-1     shall issue a refund for a tax paid by a person to this state in

 5-2     the amount of a tax refund voucher issued by the Texas Workforce

 5-3     Commission [Department of Human Services] under Subchapter H [D],

 5-4     Chapter 301 [31], Labor [Human Resources] Code, subject to the

 5-5     provisions of that subchapter.

 5-6           SECTION 4.  (a)  Except as provided by Subsection (b) of this

 5-7     section, this Act takes effect September 1, 1997.

 5-8           (b)  The changes in law made by this Act to Section 301.104,

 5-9     Labor Code, as added by this Act, take effect January  1, 1998.  A

5-10     person may claim the refund under Section 301.104, Labor Code, as

5-11     added by this Act, only for wages paid or incurred on or after the

5-12     effective date of this Act and only on a tax report due on or after

5-13     that date.

5-14           (c)  As soon as possible after the effective date of this

5-15     Act, the Texas Department of Human Services shall transfer to the

5-16     Texas Workforce Commission any forms in the custody of the

5-17     department that were prescribed by the department to issue a tax

5-18     refund voucher to eligible employers.

5-19           (d)  Rules of the Texas Department of Human Services under

5-20     Subchapter D, Chapter 31, Human Resources Code, are continued in

5-21     effect as rules of the Texas Workforce Commission under Subchapter

5-22     H, Chapter 301, Labor Code, until superseded by a rule of the Texas

5-23     Workforce Commission.

5-24           SECTION 5.  The importance of this legislation and the

5-25     crowded condition of the calendars in both houses create an

5-26     emergency and an imperative public necessity that the

5-27     constitutional rule requiring bills to be read on three several

 6-1     days in each house be suspended, and this rule is hereby suspended.