1-1     By:  Ellis, Zaffirini, West                           S.B. No. 1113

 1-2           (In the Senate - Filed March 11, 1997; March 13, 1997, read

 1-3     first time and referred to Committee on Health and Human Services;

 1-4     March 26, 1997, reported favorably by the following vote:  Yeas 11,

 1-5     Nays 0; March 26, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to a state tax refund and federal income tax credit

 1-9     available to certain employers of AFDC recipients.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subchapter D, Chapter 301, Labor Code, is amended

1-12     by adding Section 301.067 to read as follows:

1-13           Sec. 301.067.  FEDERAL WORK OPPORTUNITY TAX CREDIT AND STATE

1-14     TAX REFUND FOR CERTAIN EMPLOYERS.  (a)  The commission is the lead

1-15     agency in promoting awareness of the federal work opportunity tax

1-16     credit program and the state tax refund for employers under

1-17     Subchapter H.

1-18           (b)  The commission, in coordination with the comptroller's

1-19     office and the Texas Department of Human Services, shall develop

1-20     and distribute educational materials designed to increase awareness

1-21     of the tax credit and tax refund described by Subsection (a) to

1-22     encourage employers to hire recipients of the financial assistance

1-23     program for persons with dependent children under Chapter 31, Human

1-24     Resources Code.

1-25           SECTION 2.  Subchapter D, Chapter 31, Human Resources Code,

1-26     is transferred to Chapter 301, Labor Code, redesignated as

1-27     Subchapter H, and amended to read as follows:

1-28                SUBCHAPTER H [D].  TAX REFUND FOR WAGES PAID

1-29                 TO EMPLOYEE RECEIVING FINANCIAL ASSISTANCE

1-30           Sec. 301.101 [31.071].  DEFINITION.  In this subchapter,

1-31     "wages" has the meaning assigned by Sections 51(c)(1), (2), and

1-32     (3), Internal Revenue Code of 1986 (26 U.S.C. Section 51).

1-33           Sec. 301.102 [31.072].  TAX REFUND VOUCHER.  (a)  The

1-34     commission [department] shall issue a tax refund voucher in the

1-35     amount allowed by this subchapter and subject to the restrictions

1-36     imposed by this subchapter to a person that meets the eligibility

1-37     requirements under this subchapter.

1-38           (b)  A person issued a tax refund voucher may, subject to the

1-39     provisions of this subchapter, apply for the amount of the refund

1-40     of a tax that is paid by the person to this state if the tax is

1-41     administered by the comptroller and deposited to the credit of the

1-42     general revenue fund without dedication.

1-43           Sec. 301.103 [31.073].  AMOUNT OF REFUND; LIMITATION.

1-44     (a)  The amount of the refund allowed under this subchapter is

1-45     equal to 20 percent of the total wages, up to a maximum of $10,000

1-46     in wages for each employee, paid or incurred by a person for

1-47     services rendered by an employee of the person during the period

1-48     beginning with the date the employee begins work for the person and

1-49     ending on the first anniversary of that date.

1-50           (b)  The refund claimed for a calendar year may not exceed

1-51     the amount of net tax paid by the person to this state, after any

1-52     other applicable tax credits, in that calendar year.

1-53           Sec. 301.104 [31.074].  ELIGIBILITY.  A person is eligible

1-54     for the refund for wages paid or incurred by the person, during

1-55     each calendar year for which the refund is claimed, only if:

1-56                 (1)  the wages paid or incurred by the person are for

1-57     services of an employee who is:

1-58                       (A)  a resident of this state; and

1-59                       (B)  a recipient of financial assistance and

1-60     services in accordance with Chapter 31, Human Resources Code [this

1-61     chapter];

1-62                 (2)  the person satisfies the certification

1-63     requirements under Section 301.105 [31.075]; and

1-64                 (3)  the person provides and pays for the benefit of

 2-1     the employee a part of the cost of coverage under:

 2-2                       (A)  a health plan provided by a health

 2-3     maintenance organization established under the Texas Health

 2-4     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance

 2-5     Code);

 2-6                       (B)  a health benefit plan approved by the

 2-7     commissioner of insurance; or

 2-8                       (C)  a self-funded or self-insured employee

 2-9     welfare benefit plan that provides health benefits and is

2-10     established in accordance with the Employee Retirement Income

2-11     Security Act of 1974 (29 U.S.C. 1001 et seq.)  [at least 80 percent

2-12     of the cost of major medical health insurance coverage that

2-13     provides for:]

2-14                       [(A)  a maximum $300 deductible to the employee;

2-15     and]

2-16                       [(B)  payment by the insurance provider of at

2-17     least 70 percent of insurance claims during the claim year in

2-18     excess of the deductible].

2-19           Sec. 301.105 [31.075].  CERTIFICATION.  A person is not

2-20     eligible for the refund for wages paid or incurred by the person

2-21     unless the person has received a written certification from the

2-22     commission [appropriate state agency responsible for certification]

2-23     that the employee is a recipient of financial assistance and

2-24     services on or before the day the employee begins employment with

2-25     the person.

2-26           Sec. 301.106 [31.076].  APPLICATION FOR REFUND; ISSUANCE.

2-27     (a)  A person may apply for a tax refund voucher for wages paid an

2-28     employee in a calendar year only on or after January 1 and before

2-29     April 1 of the following calendar year.

2-30           (b)  The commission [department] shall promulgate a form for

2-31     the application for the tax refund voucher.  A person must use this

2-32     form in applying for the refund.

2-33           (c)  On issuance of the tax refund voucher to the person by

2-34     the commission [department], the person may apply the voucher

2-35     against a tax paid by the person to this state only for the

2-36     calendar year for which the voucher is issued.

2-37           Sec. 301.107.  RULES.  (a)  The commission shall adopt rules

2-38     as necessary to carry out its powers and duties under this

2-39     subchapter.

2-40           (b)  The Texas Department of Human Services shall provide to

2-41     the commission information as necessary to enable the commission to

2-42     determine whether a person is eligible for the tax refund

2-43     authorized by this subchapter.

2-44           SECTION 3.  Section 111.109, Tax Code, is amended to read as

2-45     follows:

2-46           Sec. 111.109.  TAX REFUND FOR WAGES PAID TO EMPLOYEE

2-47     RECEIVING AID TO FAMILIES WITH DEPENDENT CHILDREN.  The comptroller

2-48     shall issue a refund for a tax paid by a person to this state in

2-49     the amount of a tax refund voucher issued by the Texas Workforce

2-50     Commission [Department of Human Services] under Subchapter H [D],

2-51     Chapter 301 [31], Labor [Human Resources] Code, subject to the

2-52     provisions of that subchapter.

2-53           SECTION 4.  (a)  Except as provided by Subsection (b) of this

2-54     section, this Act takes effect September 1, 1997.

2-55           (b)  The changes in law made by this Act to Section 301.104,

2-56     Labor Code, as added by this Act, take effect January  1, 1998.  A

2-57     person may claim the refund under Section 301.104, Labor Code, as

2-58     added by this Act, only for wages paid or incurred on or after the

2-59     effective date of this Act and only on a tax report due on or after

2-60     that date.

2-61           (c)  As soon as possible after the effective date of this

2-62     Act, the Texas Department of Human Services shall transfer to the

2-63     Texas Workforce Commission any forms in the custody of the

2-64     department that were prescribed by the department to issue a tax

2-65     refund voucher to eligible employers.

2-66           (d)  Rules of the Texas Department of Human Services under

2-67     Subchapter D, Chapter 31, Human Resources Code, are continued in

2-68     effect as rules of the Texas Workforce Commission under Subchapter

2-69     H, Chapter 301, Labor Code, until superseded by a rule of the Texas

 3-1     Workforce Commission.

 3-2           SECTION 5.  The importance of this legislation and the

 3-3     crowded condition of the calendars in both houses create an

 3-4     emergency and an imperative public necessity that the

 3-5     constitutional rule requiring bills to be read on three several

 3-6     days in each house be suspended, and this rule is hereby suspended.

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