By Grusendorf H.B. No. 1569
76R5113 JD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a franchise tax and property tax credit for certain
1-3 corporations for payment of certain educational scholarships.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 171, Tax Code, is amended
1-6 by adding Section 171.0025 to read as follows:
1-7 Sec. 171.0025. TAX CREDIT FOR PRIVATE SCHOOL SCHOLARSHIPS.
1-8 (a) The purpose of this section is to provide a franchise tax
1-9 credit for certain scholarships funded by a corporation for
1-10 educationally disadvantaged children. It is the intent of the
1-11 legislature that freedom of religion of all citizens be held
1-12 inviolate and that nothing in this section be construed to cause
1-13 excessive governmental entanglement with the religious instruction
1-14 of a private school. With respect to a private school, nothing in
1-15 this section gives a governmental agency authority to regulate,
1-16 control, supervise, or in any way be involved in the:
1-17 (1) form, manner, or content of religious instruction,
1-18 ministry, teaching, or curriculum offered by the private school;
1-19 (2) ability of the private school to select and
1-20 supervise qualified personnel and otherwise control the terms of
1-21 employment, including the right to employ individuals who share the
1-22 religious views of the school;
1-23 (3) internal self-governance and autonomy of the
1-24 private school; or
2-1 (4) religious environment of the private school, such
2-2 as symbols, art, icons, and scripture.
2-3 (b) A corporation is entitled to receive a franchise tax
2-4 credit if the corporation funds a scholarship as provided by this
2-5 section payable toward the private school tuition of an
2-6 educationally disadvantaged child who:
2-7 (1) is eligible to attend the public free schools; and
2-8 (2) did not attend an accredited or unaccredited
2-9 private school during the 1998-1999 school year.
2-10 (c) A school district shall issue a tax credit voucher to an
2-11 eligible corporation if the corporation submits to the district:
2-12 (1) a sworn application using a form prescribed by the
2-13 comptroller; and
2-14 (2) proof in the form and manner prescribed by the
2-15 comptroller that the educationally disadvantaged child resides in
2-16 and is eligible to attend public free school in the school
2-17 district, is enrolled in an accredited private school, and is using
2-18 the scholarship to attend that school.
2-19 (d) The corporation must submit the application and proof
2-20 required by Subsection (c) to the school district not later than
2-21 the 30th day after the date the district's school year begins. Not
2-22 later than the 60th day after the district's school year begins,
2-23 the district shall provide to the comptroller:
2-24 (1) the total dollar amount of tax credits the
2-25 district has issued or will issue under this section for that
2-26 school year; and
2-27 (2) any other information the comptroller requires.
3-1 (e) A corporation may fund more than one scholarship. For
3-2 each qualifying scholarship, the corporation is entitled to a tax
3-3 credit in an amount equal to the amount the corporation paid to an
3-4 accredited private school to fund a scholarship or to a nonprofit
3-5 foundation that provides scholarships for students who attend
3-6 accredited private schools, but not to exceed 50 percent of the
3-7 total state funding the district receives per student in average
3-8 daily attendance under the Foundation School Program for the school
3-9 year in which the corporation makes the payment.
3-10 (f) The corporation must claim the tax credit on the report
3-11 for which net taxable earned surplus or net taxable capital is
3-12 based on the same period during which the corporation provided the
3-13 scholarship funding.
3-14 (g) A corporation may not claim a tax credit in an amount
3-15 that exceeds the amount of the tax due for that report. A credit
3-16 allowed under this section may not be carried forward or backward
3-17 or used to create a business loss carryover.
3-18 (h) A corporation may not convey, assign, or transfer a tax
3-19 credit allowed under this section to another person unless all the
3-20 assets of the corporation are conveyed, assigned, or transferred to
3-21 that person in the same transaction.
3-22 (i) The corporation, the school district, the private
3-23 school, and the nonprofit foundation, as appropriate, must provide
3-24 to the comptroller any information the comptroller requires to
3-25 determine the validity of a tax credit claim.
3-26 (j) In this section:
3-27 (1) "Accredited private school" means a private school
4-1 accredited by an accrediting association recognized by the
4-2 commissioner of education.
4-3 (2) "Educationally disadvantaged child" means a
4-4 student enrolled or eligible for enrollment in the national school
4-5 lunch program for free or reduced-price lunch.
4-6 SECTION 2. Chapter 31, Tax Code, is amended by adding
4-7 Section 31.051 to read as follows:
4-8 Sec. 31.051. TAX CREDIT FOR PRIVATE SCHOOL SCHOLARSHIPS.
4-9 (a) The purpose of this section is to provide a tax credit for
4-10 certain scholarships funded by a corporation for educationally
4-11 disadvantaged children. It is the intent of the legislature that
4-12 freedom of religion of all citizens be held inviolate and that
4-13 nothing in this section be construed to cause excessive
4-14 governmental entanglement with the religious instruction of a
4-15 private school. With respect to a private school, nothing in this
4-16 section gives a governmental agency authority to regulate, control,
4-17 supervise, or in any way be involved in the:
4-18 (1) form, manner, or content of religious instruction,
4-19 ministry, teaching, or curriculum offered by the private school;
4-20 (2) ability of the private school to select and
4-21 supervise qualified personnel and otherwise control the terms of
4-22 employment, including the right to employ individuals who share the
4-23 religious views of the school;
4-24 (3) internal self-governance and autonomy of the
4-25 private school; or
4-26 (4) religious environment of the private school, such
4-27 as symbols, art, icons, and scripture.
5-1 (b) The governing body of a school district by resolution
5-2 may authorize a corporation to fund a private school scholarship in
5-3 lieu of paying part of the taxes imposed for maintenance and
5-4 operation purposes by the district on property owned by the
5-5 corporation.
5-6 (c) The governing body may not authorize a corporation to
5-7 receive a tax credit under this section unless the corporation:
5-8 (1) pays money that is used to fund a scholarship of
5-9 an educationally disadvantaged child who:
5-10 (A) is eligible to attend public free school in
5-11 the school district granting the credit; and
5-12 (B) did not attend an accredited or unaccredited
5-13 private school during the 1998-1999 school year; and
5-14 (2) submits to the district proof that the
5-15 educationally disadvantaged child resides in and is eligible to
5-16 attend public free school in the school district, is enrolled in an
5-17 accredited private school, and is using the scholarship to attend
5-18 that school.
5-19 (d) The corporation must submit to the district the proof
5-20 required by Subsection (c)(2) not later than the 30th day after the
5-21 date the district's school year begins. Not later than the 60th
5-22 day after the district's school year begins, the district shall
5-23 provide to the comptroller:
5-24 (1) the number of scholarships for which the district
5-25 will authorize a tax credit under this section and the amount of
5-26 tax credit to be allowed; and
5-27 (2) any other information the comptroller requires.
6-1 (e) A corporation may fund more than one scholarship. For
6-2 each qualifying scholarship funded, the school district may grant
6-3 the corporation a credit against the taxes owed in an amount equal
6-4 to the amount the corporation paid to an accredited private school
6-5 to fund a scholarship or to a nonprofit foundation that provides
6-6 scholarships for students who attend accredited private schools,
6-7 but not to exceed 50 percent of the school district's tier one
6-8 local fund assignment per student in average daily attendance under
6-9 the Foundation School Program for the school year in which the
6-10 corporation makes the payment.
6-11 (f) In this section:
6-12 (1) "Accredited private school" means a private school
6-13 accredited by an accrediting association recognized by the
6-14 commissioner of education.
6-15 (2) "Educationally disadvantaged child" means a
6-16 student enrolled or eligible for enrollment in the national school
6-17 lunch program for free or reduced-price lunch.
6-18 SECTION 3. Section 42.005, Education Code, is amended by
6-19 adding Subsection (e) to read as follows:
6-20 (e) For each student who attends a private school under a
6-21 scholarship for which a corporation receives a franchise tax
6-22 credit voucher under Section 171.0025, Tax Code, the commissioner
6-23 shall reduce state funding to that student's school district by the
6-24 amount of the credit.
6-25 SECTION 4. Section 171.0025, Tax Code, as added by this Act,
6-26 applies to franchise tax reports originally due on or after January
6-27 1, 2000.
7-1 SECTION 5. The importance of this legislation and the
7-2 crowded condition of the calendars in both houses create an
7-3 emergency and an imperative public necessity that the
7-4 constitutional rule requiring bills to be read on three several
7-5 days in each house be suspended, and this rule is hereby suspended,
7-6 and that this Act take effect and be in force from and after its
7-7 passage, and it is so enacted.