SRC-DBM S.B. 783 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 783
76R1784  DAK-DBy: Moncrief
Finance
3/15/1999
As Filed


DIGEST 

Currently, federal law allows businesses that hire qualified disabled
workers to apply for a Federal Work Opportunity Tax Credit.  While the
federal program has been generally successful, a number of disabled Texans
have indicated that greater incentives, especially at the state level,
could provide expanded employment opportunities.  The Comptroller's Office
has identified the franchise tax as the levy most likely to work with a
state incentive program.  S.B. 783 would create a franchise tax credit for
wages paid to persons with certain disabilities. 

PURPOSE

As proposed, S.B. 783 creates a franchise tax credit for wages paid to
persons with certain disabilities. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the comptroller of public accounts in
SECTION 1 (Section 171.756, Chapter 171P, Tax Code) of this bill. 

SECTION BY SECTION ANALYSIS

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

SUBCHAPTER P.  TAX CREDIT FOR WAGES PAID TO PERSONS
WITH CERTAIN DISABILITIES

Sec. 171.751.  ENTITLEMENT TO CREDIT.  Provides that a corporation is
entitled to a credit in the amount and under the conditions and limitations
provided by this subchapter against the tax imposed under this chapter. 

Sec. 171.752. QUALIFICATION.  Sets forth corporate qualifications for
credit under this subchapter for each employee under certain conditions. 

Sec. 171.753.  AMOUNT; LIMITATIONS.  Provides that the amount of the credit
is 10 percent of the wages paid by the corporation for each qualified
employee.  Authorizes a corporation to claim the credit only for wages paid
to the qualified employee during the first two years of employment.
Prohibits the credit claimed for each privilege period from exceeding 50
percent of the amount of net franchise tax due, after any other applicable
credits, for the privilege period. 

Sec. 171.754.  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 comptroller to promulgate a form
for the application for the credit.  Requires a corporation to use this
form in applying for credit. 

Sec. 171.755.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.  Authorizes a
corporation to claim a credit under this subchapter for wages paid during
an accounting period only against the tax owed for the corresponding
privilege period. 

Sec. 171.756.  RULES.  Requires the comptroller to adopt rules necessary to
implement this subchapter. 

 SECTION 2.Effective date: January 1, 2000.
  Makes application of this Act prospective.

SECTION 3.Emergency clause.