1-1 By: Duncan S.B. No. 9 1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read 1-3 first time and referred to Committee on Finance; April 16, 1999, 1-4 reported favorably by the following vote: Yeas 8, Nays 0; 1-5 April 16, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to a franchise tax credit for corporations that provide 1-9 financing for certain before and after school programs. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Chapter 171, Tax Code, is amended by adding 1-12 Subchapter N to read as follows: 1-13 SUBCHAPTER N. TAX CREDIT FOR CONTRIBUTIONS TO 1-14 BEFORE AND AFTER SCHOOL PROGRAMS 1-15 Sec. 171.701. DEFINITION. In this subchapter, "school-age 1-16 child care" means care provided before and after school and during 1-17 the summer and holidays for children who are at least five years of 1-18 age but younger than 14 years of age. 1-19 Sec. 171.702. CREDIT. A corporation that meets the 1-20 eligibility requirements under this subchapter is entitled to a 1-21 credit in the amount allowed by this subchapter against the tax 1-22 imposed under this chapter. 1-23 Sec. 171.703. EXPENDITURES ELIGIBLE FOR CREDIT. (a) A 1-24 corporation may claim a credit under this subchapter only for a 1-25 qualifying expenditure relating to the operation of a school-age 1-26 child care program that is operated by: 1-27 (1) a nonprofit organization licensed under Chapter 1-28 42, Human Resources Code; 1-29 (2) a nonprofit, accredited educational facility or by 1-30 another nonprofit entity under contract with the educational 1-31 facility, if the Texas Education Agency or Southern Association of 1-32 Colleges and Schools has approved the curriculum content of the 1-33 program operated under the contract; or 1-34 (3) a county or municipality, if the governing body of 1-35 the county or municipality annually adopts standards of care by 1-36 order or ordinance that include minimum child-to-staff ratios, 1-37 staff qualifications, facility, health, and safety standards, and 1-38 mechanisms for monitoring and enforcing the standards. 1-39 (b) A qualifying expenditure includes an expenditure for: 1-40 (1) constructing, renovating, or remodeling a facility 1-41 or structure to be used by the program; 1-42 (2) purchasing necessary equipment, supplies, or food 1-43 to be used in the program; or 1-44 (3) operating the program, including administrative 1-45 and staff costs. 1-46 Sec. 171.704. AMOUNT; LIMITATIONS. (a) The amount of the 1-47 credit is equal to 30 percent of a corporation's qualifying 1-48 expenditures. 1-49 (b) A corporation may claim a credit under this subchapter 1-50 for a qualifying expenditure during an accounting period only 1-51 against the tax owed for the corresponding reporting period. 1-52 (c) A corporation may not claim a credit in an amount that 1-53 exceeds 50 percent of the amount of net franchise tax due, after 1-54 applying any other credits, for the reporting period. 1-55 Sec. 171.705. APPLICATION FOR CREDIT. (a) A corporation 1-56 must apply for a credit under this subchapter on or with the tax 1-57 report for the period for which the credit is claimed. 1-58 (b) The comptroller shall adopt a form for the application 1-59 for the credit. A corporation must use this form in applying for 1-60 the credit. 1-61 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not 1-62 convey, assign, or transfer a credit allowed under this subchapter 1-63 to another entity unless all of the assets of the corporation are 1-64 conveyed, assigned, or transferred in the same transaction. 2-1 SECTION 2. A corporation may claim the credit under 2-2 Subchapter N, Chapter 171, Tax Code, as added by this Act, only: 2-3 (1) for a qualifying expenditure made on or after the 2-4 effective date of this Act; and 2-5 (2) on a franchise tax report due under Chapter 171, 2-6 Tax Code, on or after January 1, 2000. 2-7 SECTION 3. The importance of this legislation and the 2-8 crowded condition of the calendars in both houses create an 2-9 emergency and an imperative public necessity that the 2-10 constitutional rule requiring bills to be read on three several 2-11 days in each house be suspended, and this rule is hereby suspended, 2-12 and that this Act take effect and be in force from and after its 2-13 passage, and it is so enacted. 2-14 * * * * *