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.
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