SRC-JXG S.B. 426 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 426
76R392 CBH-DBy: Ellis
Finance
2/25/1999
As Filed


DIGEST 

Currently, Texas law does not entitle an employer who purchases or
subsidizes child-care services for employees to receive a franchise tax
credit. Nearly three million Texas children under the age of 18, have both
parents or their only parent in the workforce. Access to affordable,
reliable, quality child-care services can greatly affect employee
satisfaction and productivity. This bill would provide a franchise tax
credit to employers who invest in quality child-care services for their
employees' children. 
 
PURPOSE

As proposed, S.B. 426 provides a franchise tax credit to employers who
provide quality child-care services for the children of their employees. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

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

SUBCHAPTER N. TAX CREDIT FOR PURCHASING OR SUBSIDIZING COST OF
 CHILD-CARE SERVICES

Sec. 171.701. DEFINITIONS. Defines "day-care center" and "family home."

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. CREDIT FOR PURCHASED OR SUBSIDIZED CHILD CARE. Authorizes a
corporation to claim a credit under this subchapter for an expenditure the
corporation makes to purchase or subsidize the cost of child-care services
that are actually provided to children of employees of the corporation a
day care center or certain family homes. Provides that the amount of the
credit is equal to 30 percent of the corporation's expenditures under
Subsection (a). 

Sec. 171.704. APPLICATION FOR CREDIT. Requires a corporation to apply for a
credit under this subchapter on or with the tax report for the period for
which the credit is claimed. Requires the corporation to include proof that
the child-care services the corporation purchased or subsidized were
actually provided to children of employees of the corporation at a day-care
center or registered or listed family home. Requires the comptroller to
adopt a form for the application for the credit. Requires a corporation to
use this form in applying for the credit. 

Sec. 171.705. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. Authorizes a
corporation to claim a credit under this subchapter for an expenditure made
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 the amount of tax due for the report. 

Sec. 171.706. ASSIGNMENT PROHIBITED. Prohibits a corporation from
conveying, assigning, or transferring the 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. Effective date: January 1, 2000. 
           Makes application of this Act prospective.

SECTION 3. Emergency clause.