1-1 By: Haywood, et al. S.B. No. 58 1-2 (In the Senate - Filed November 16, 1998; January 26, 1999, 1-3 read first time and referred to Committee on Finance; 1-4 April 27, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 9, Nays 0; April 27, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 58 By: Moncrief 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to incentives for an employer that establishes and 1-11 operates a day-care center for children of employees or purchases 1-12 child-care services for employees. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. Chapter 171, Tax Code, is amended by adding 1-15 Subchapter N to read as follows: 1-16 SUBCHAPTER N. TAX CREDIT FOR ESTABLISHING DAY-CARE CENTER 1-17 OR PURCHASING CHILD-CARE SERVICES 1-18 Sec. 171.701. DEFINITIONS. In this subchapter: 1-19 (1) "Day-care center" has the meaning assigned by 1-20 Section 42.002, Human Resources Code. 1-21 (2) "Family home" has the meaning assigned by Section 1-22 42.002, Human Resources Code. 1-23 Sec. 171.702. CREDIT. A corporation that meets the 1-24 eligibility requirements under this subchapter is entitled to a 1-25 credit in the amount allowed by this subchapter against the tax 1-26 imposed under this chapter. 1-27 Sec. 171.703. CREDIT FOR DAY-CARE CENTER AND PURCHASED CHILD 1-28 CARE. (a) A corporation may claim a credit under this subchapter 1-29 only for a qualifying expenditure relating to: 1-30 (1) the establishment and operation of a day-care 1-31 center primarily to provide care for the children of employees of 1-32 the corporation or of the corporation and one or more other 1-33 entities sharing the costs of establishing and operating the 1-34 center; or 1-35 (2) the purchase of child-care services that are 1-36 actually provided to children of employees of the corporation at a: 1-37 (A) day-care center; or 1-38 (B) family home that is registered or listed 1-39 with the Department of Protective and Regulatory Services under 1-40 Chapter 42, Human Resources Code. 1-41 (b) A qualifying expenditure includes an expenditure for: 1-42 (1) planning the day-care center; 1-43 (2) preparing a site to be used for the day-care 1-44 center; 1-45 (3) constructing the day-care center; 1-46 (4) renovating or remodeling a structure to be used 1-47 for the day-care center; 1-48 (5) purchasing equipment necessary in the use of the 1-49 day-care center and installed for permanent use in or immediately 1-50 adjacent to the day-care center, including kitchen appliances and 1-51 other food preparation equipment; 1-52 (6) expanding the day-care center; 1-53 (7) maintaining and operating the day-care center, 1-54 including paying direct administration and staff costs; or 1-55 (8) purchasing all or part of child-care services that 1-56 are actually provided to children of employees of the corporation 1-57 at a day-care center or registered or listed family home. 1-58 (c) The amount of the credit is equal to the lesser of: 1-59 (1) $50,000; 1-60 (2) 50 percent of the corporation's qualifying 1-61 expenditures; or 1-62 (3) the amount of the limitation provided by Section 1-63 171.705(b). 1-64 (d) If a corporation shares in the cost of establishing and 2-1 operating a day-care center, the corporation is entitled to a 2-2 credit for the qualifying expenditures made by that corporation, 2-3 subject to the limitation prescribed by Subsection (c). 2-4 Sec. 171.704. APPLICATION FOR CREDIT. (a) A corporation 2-5 must apply for a credit under this subchapter on or with the tax 2-6 report for the period for which the credit is claimed. 2-7 (b) If the corporation is claiming a credit for a qualifying 2-8 expenditure for purchasing child-care services, the corporation 2-9 must include proof that the services were actually provided to 2-10 children of employees of the corporation at a day-care center or 2-11 registered or listed family home. 2-12 (c) The comptroller shall adopt a form for the application 2-13 for the credit. A corporation must use this form in applying for 2-14 the credit. 2-15 Sec. 171.705. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. 2-16 (a) A corporation may claim a credit under this subchapter for 2-17 qualifying expenditures made during an accounting period only 2-18 against the tax owed for the corresponding reporting period. 2-19 (b) A corporation may not claim a credit in an amount that 2-20 exceeds 90 percent of the amount of tax due for the report. 2-21 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not 2-22 convey, assign, or transfer the credit allowed under this 2-23 subchapter to another entity unless all of the assets of the 2-24 corporation are conveyed, assigned, or transferred in the same 2-25 transaction. 2-26 SECTION 2. A corporation may claim the credit under 2-27 Subchapter N, Chapter 171, Tax Code, as added by this Act, only: 2-28 (1) for a qualifying expenditure made on or after the 2-29 effective date of this Act; and 2-30 (2) on a franchise tax report due under Chapter 171, 2-31 Tax Code, on or after January 1, 2000. 2-32 SECTION 3. The importance of this legislation and the 2-33 crowded condition of the calendars in both houses create an 2-34 emergency and an imperative public necessity that the 2-35 constitutional rule requiring bills to be read on three several 2-36 days in each house be suspended, and this rule is hereby suspended, 2-37 and that this Act take effect and be in force from and after its 2-38 passage, and it is so enacted. 2-39 * * * * *