By Ellis                                               S.B. No. 426
         76R392 CBH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a franchise tax credit for an employer that purchases
 1-3     or subsidizes child-care services for employees.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 171, Tax Code, is amended by adding
 1-6     Subchapter N to read as follows:
 1-7       SUBCHAPTER N.  TAX CREDIT FOR PURCHASING OR SUBSIDIZING COST OF
 1-8                             CHILD-CARE SERVICES
 1-9           Sec. 171.701.  DEFINITIONS.  In this subchapter:
1-10                 (1)  "Day-care center" has the meaning assigned by
1-11     Section 42.002, Human Resources Code.
1-12                 (2)  "Family home"  has the meaning assigned by Section
1-13     42.002, Human Resources Code.
1-14           Sec. 171.702.  CREDIT.  A corporation that meets the
1-15     eligibility requirements under this subchapter is entitled to a
1-16     credit in the amount allowed by this subchapter against the tax
1-17     imposed under this chapter.
1-18           Sec. 171.703.  CREDIT FOR  PURCHASED OR SUBSIDIZED CHILD
1-19     CARE.  (a)  A corporation may claim a credit under this
1-20     subchapter for an expenditure the corporation makes to purchase or
1-21     subsidize the cost of child-care services that are actually
1-22     provided to children of employees of the corporation at:
1-23                 (1)  a day-care center; or
1-24                 (2)  a family home that is registered or listed with
 2-1     the Department of Protective and Regulatory Services under Chapter
 2-2     42, Human Resources Code.
 2-3           (b)  The amount of the credit is equal to 30 percent of the
 2-4     corporation's expenditures under Subsection (a).
 2-5           Sec. 171.704.  APPLICATION FOR CREDIT.  (a)  A corporation
 2-6     must apply for a credit under this subchapter on or with the tax
 2-7     report for the period for which the credit is claimed.
 2-8           (b)  The corporation must include proof that the child-care
 2-9     services the  corporation purchased or subsidized were actually
2-10     provided  to children of employees of the corporation at a day-care
2-11     center or 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  an
2-17     expenditure made during an accounting period only against the tax
2-18     owed  for the corresponding reporting period.
2-19           (b)  A corporation may not claim a credit in an amount that
2-20     exceeds 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.  This Act takes effect January 1, 2000.  A
2-27     corporation may claim a credit under Subchapter N, Chapter 171, Tax
 3-1     Code, as added by this Act, only for an expenditure made on or
 3-2     after that date.
 3-3           SECTION 3.  The importance of this legislation and the
 3-4     crowded condition of the calendars in both houses create an
 3-5     emergency and an imperative public necessity that the
 3-6     constitutional rule requiring bills to be read on three several
 3-7     days in each house be suspended, and this rule is hereby suspended.