SRC-DBM S.B. 9 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 9
76R9408  SMJ-DBy: Duncan
Finance
4/13/1999
As Filed


DIGEST 

Nationwide about 35 percent of all 12-year-olds are unsupervised while
their parents are at work; these children are exposed to a higher risk of
truancy, poor grades, and drug abuse.  Quality after-school programs have
proven to be an effective tool in reducing these risk factors.  Quality
after-school programs help reduce juvenile crime and increase safety; boost
school performance; improve student attendance; lower dropout rates; assist
the unmet needs of working parents; and help students develop the values
and skills they need in order to excel.  S.B. 9 would entitle corporations
that provide financing for certain  before and after school programs to a
franchise tax credit. 


PURPOSE

As proposed, S.B. 9 entitles corporations that provide financing for
certain before and after school programs to a franchise tax credit. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the comptroller of public accounts in
SECTION 1 (Section 171.704(b), Chapter 171N, Tax Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 171, Tax Code, by adding Subchapter N, as
follows: 

SUBCHAPTER N.  TAX CREDIT FOR CONTRIBUTIONS TO
BEFORE AND AFTER SCHOOL PROGRAMS

 Sec. 171.701.  DEFINITION.  Defines "school-age child care."

Sec. 171.702.  CREDIT.  Provides that a corporation that meets the
eligibility requirements under this subchapter is entitled to a credit in
the amount allowed by this subchapter against the tax imposed under this
chapter. 

Sec. 171.703.  EXPENDITURES ELIGIBLE FOR CREDIT. Authorizes a corporation
to claim a credit under this subchapter only for a qualifying expenditure
relating to the operation of a school-age chid care program that is
operated by certain entities.  Sets forth qualifying expenditures. 

Sec. 171.704.  AMOUNT; LIMITATIONS.  Provides that the amount of the credit
is equal to 30 percent of a corporation's qualifying expenditures.
Authorizes a corporation to claim a credit under this subchapter for a
qualifying expenditure during an accounting period only against the tax
owed for the corresponding reporting period.  Prohibits a corporation from
claiming a credit in an amount that exceeds 50 percent of the amount of net
franchise tax due, after applying for other credits, for the reporting
period. 

Sec. 171.705.  APPLICATION FOR CREDIT.  Requires a corporation to apply for
credit under this subchapter on or with the tax report for the period for
which the credit is claimed. Requires the comptroller of public accounts
(comptroller) to adopt a form for the application of credit.  Requires a
corporation to use this form in applying for credit. 

 Sec. 171.706.  ASSIGNMENT PROHIBITED.  Prohibits a corporation from
conveying, assigning, or transferring a credit allowed under this
subchapter to another entity unless all of the assets of the corporation
are conveyed, assigned, or transferred in the same transaction.   

SECTION 2.  Authorizes a corporation to claim the credit under Chapter
171N, Tax Code, only for a qualifying expenditure made on or after the
effective date of this Act; and on a franchise tax report under Chapter
171, Tax Code, on or after January 1, 2000. 

SECTION 3.Emergency clause.
  Effective date: upon passage.