By Brown of Kaufman H.B. No. 2477 76R5632 CAG-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a franchise tax credit for certain business entities 1-3 for payment of certain 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 HIGHER EDUCATION SCHOLARSHIPS. 1-8 (a) In this section, "institution of higher education" means an 1-9 institution of higher education or a private or independent 1-10 institution of higher education as those terms are defined by 1-11 Section 61.003, Education Code. 1-12 (b) A person is eligible to receive a tax credit under this 1-13 section only if the person is: 1-14 (1) an individual who is the sole proprietor of a 1-15 business with fewer than 100 employees; or 1-16 (2) a business entity with fewer than 100 employees. 1-17 (c) An eligible person is entitled to receive a franchise 1-18 tax credit if the person funds a scholarship as provided by this 1-19 section payable toward the payment of at least 50 percent of the 1-20 tuition costs of an institution of higher education of the person's 1-21 employee who: 1-22 (1) is attending an institution of higher education; 1-23 and 1-24 (2) enrolls for at least six semester credit hours. 2-1 (d) The comptroller shall issue a tax credit voucher to an 2-2 eligible person if the person submits to the comptroller: 2-3 (1) a sworn application using a form prescribed by the 2-4 comptroller; and 2-5 (2) proof in the form and manner prescribed by the 2-6 comptroller that the employee is employed by the person, is 2-7 enrolled in an institution of higher education, and is using the 2-8 scholarship to attend that institution. 2-9 (e) The person must submit the application and proof 2-10 required by Subsection (d) to the comptroller not later than the 2-11 30th day after the date the institution's semester or session 2-12 begins. 2-13 (f) A person may fund more than one scholarship. For each 2-14 qualifying scholarship, the person is entitled to a tax credit in 2-15 an amount equal to the amount of the employee's tuition costs 2-16 covered by the scholarship. 2-17 (g) A person must claim the tax credit on the report for 2-18 which net taxable earned surplus or net taxable capital is based on 2-19 the same period during which the person provided the scholarship 2-20 funding. 2-21 (h) A person may not claim a tax credit in an amount that 2-22 exceeds the amount of the tax due for that report. A credit 2-23 allowed under this section may not be carried forward or backward 2-24 or used to create a business loss carryover. 2-25 (i) A person may not convey, assign, or transfer a tax 2-26 credit allowed under this section to another person unless all the 2-27 assets of the person are conveyed, assigned, or transferred to that 3-1 person in the same transaction. 3-2 (j) The person must provide to the comptroller any 3-3 information the comptroller requires to determine the validity of a 3-4 tax credit claim. 3-5 SECTION 2. Section 171.0025, Tax Code, as added by this Act, 3-6 applies to franchise tax reports originally due on or after January 3-7 1, 2000. 3-8 SECTION 3. The importance of this legislation and the 3-9 crowded condition of the calendars in both houses create an 3-10 emergency and an imperative public necessity that the 3-11 constitutional rule requiring bills to be read on three several 3-12 days in each house be suspended, and this rule is hereby suspended, 3-13 and that this Act take effect and be in force from and after its 3-14 passage, and it is so enacted.