SRC-SEW S.B. 1200 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 1200
77R7931 DAK-DBy: Shapiro
Finance
4/18/2001
As Filed


DIGEST AND PURPOSE 

Currently, only one in five Texans holds a college degree, even though the
demand for a well-educated workforce is growing.  Texas currently provides
franchise tax credits for a number of purposes, including employment
created in an enterprise zone, employment of certain children, and
employment of inmates, and federal tax policy encourages businesses to be
involved in charitable donations.  As proposed, S.B. 1200 provides
businesses with a 25 percent credit against their franchise tax for
charitable contributions made to certain non-profit educational
organizations in order to encourage businesses to support educational
opportunities in Texas. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 171, Tax Code, by adding Subchapter S, as
follows: 

SUBCHAPTER S.  TAX CREDIT FOR CONTRIBUTIONS TO ORGANIZATIONS ASSISTING
EDUCATIONALLY DISADVANTAGED CHILDREN 

 Sec.  171.851.  DEFINITION.  Defines "at-risk child."

Sec.  171.852.  ELIGIBILITY.  Provides that a corporation is eligible for a
credit against the tax imposed under this chapter in the amount under the
conditions and limitations provided by this subchapter. 

Sec.  171.853.  CREDIT FOR CONTRIBUTIONS.  Authorizes a corporation to
claim a credit under this subchapter only for a contribution to certain
organizations. 

Sec.  171.854.  LIMITATIONS.  Prohibits the total credit claimed under this
subchapter for a period from exceeding a certain amount.  Authorizes a
corporation to claim a credit under this subchapter for a contribution made
during an accounting period only against the tax owed for the corresponding
reporting period. 

Sec.  171.855.  APPLICATION FOR CREDIT.  Requires a corporation to apply
for credit under this subchapter on or with the tax report for the period
for which the credit is claimed. Requires the comptroller to adopt a form
for the application for the credit.  Requires a corporation to use this
form in applying for the credit. 

Sec.  171.856.  ASSIGNMENT PROHIBITED.  Prohibits a corporation from
conveying, assigning, or transferring the credit allowed under this
subchapter to another entity unless all of the assets of the corporation
are conveyed, assigned, or transferred in the same transaction. 

 SECTION 2.  Effective date: January 1, 2002.  Provides that this Act
applies only to a report due on or after the effective date.  Authorizes a
corporation to claim a credit under Chapter 171S, Tax Code, as added by
this Act, only for a contribution made on or after January 1, 2002.