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.