By: Duncan, Zaffirini S.B. No. 9 A BILL TO BE ENTITLED AN ACT 1-1 relating to a franchise tax credit for corporations that provide 1-2 financing for certain before and after school programs. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Chapter 171, Tax Code, is amended by adding 1-5 Subchapter N to read as follows: 1-6 SUBCHAPTER N. TAX CREDIT FOR CONTRIBUTIONS TO 1-7 BEFORE AND AFTER SCHOOL PROGRAMS 1-8 Sec. 171.701. DEFINITION. In this subchapter, "school-age 1-9 child care" means care provided before and after school and during 1-10 the summer and holidays for children who are at least five years of 1-11 age but younger than 14 years of age. 1-12 Sec. 171.702. CREDIT. A corporation that meets the 1-13 eligibility requirements under this subchapter is entitled to a 1-14 credit in the amount allowed by this subchapter against the tax 1-15 imposed under this chapter. 1-16 Sec. 171.703. EXPENDITURES ELIGIBLE FOR CREDIT. (a) A 1-17 corporation may claim a credit under this subchapter only for a 1-18 qualifying expenditure relating to the operation of a school-age 1-19 child care program that is operated by: 1-20 (1) a nonprofit organization licensed under Chapter 1-21 42, Human Resources Code; 1-22 (2) a nonprofit, accredited educational facility or by 1-23 another nonprofit entity under contract with the educational 1-24 facility, if the Texas Education Agency or Southern Association of 2-1 Colleges and Schools has approved the curriculum content of the 2-2 program operated under the contract; or 2-3 (3) a county or municipality, if the governing body of 2-4 the county or municipality annually adopts standards of care by 2-5 order or ordinance that include minimum child-to-staff ratios, 2-6 staff qualifications, facility, health, and safety standards, and 2-7 mechanisms for monitoring and enforcing the standards. 2-8 (b) A qualifying expenditure includes an expenditure for: 2-9 (1) constructing, renovating, or remodeling a facility 2-10 or structure to be used by the program; 2-11 (2) purchasing necessary equipment, supplies, or food 2-12 to be used in the program; or 2-13 (3) operating the program, including administrative 2-14 and staff costs. 2-15 Sec. 171.704. AMOUNT; LIMITATIONS. (a) The amount of the 2-16 credit is equal to 30 percent of a corporation's qualifying 2-17 expenditures. 2-18 (b) A corporation may claim a credit under this subchapter 2-19 for a qualifying expenditure during an accounting period only 2-20 against the tax owed for the corresponding reporting period. 2-21 (c) A corporation may not claim a credit in an amount that 2-22 exceeds 50 percent of the amount of net franchise tax due, after 2-23 applying any other credits, for the reporting period. 2-24 Sec. 171.705. APPLICATION FOR CREDIT. (a) A corporation 2-25 must apply for a credit under this subchapter on or with the tax 2-26 report for the period for which the credit is claimed. 3-1 (b) The comptroller shall adopt a form for the application 3-2 for the credit. A corporation must use this form in applying for 3-3 the credit. 3-4 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not 3-5 convey, assign, or transfer a credit allowed under this subchapter 3-6 to another entity unless all of the assets of the corporation are 3-7 conveyed, assigned, or transferred in the same transaction. 3-8 SECTION 2. A corporation may claim the credit under 3-9 Subchapter N, Chapter 171, Tax Code, as added by this Act, only: 3-10 (1) for a qualifying expenditure made on or after the 3-11 effective date of this Act; and 3-12 (2) on a franchise tax report due under Chapter 171, 3-13 Tax Code, on or after January 1, 2000. 3-14 SECTION 3. The importance of this legislation and the 3-15 crowded condition of the calendars in both houses create an 3-16 emergency and an imperative public necessity that the 3-17 constitutional rule requiring bills to be read on three several 3-18 days in each house be suspended, and this rule is hereby suspended, 3-19 and that this Act take effect and be in force from and after its 3-20 passage, and it is so enacted.