By Goolsby H.B. No. 2489 77R7931 DAK-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a franchise tax credit for contributions to 1-3 organizations assisting educationally disadvantaged children. 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 S to read as follows: 1-7 SUBCHAPTER S. TAX CREDIT FOR CONTRIBUTIONS TO ORGANIZATIONS 1-8 ASSISTING EDUCATIONALLY DISADVANTAGED CHILDREN 1-9 Sec. 171.851. DEFINITION. In this subchapter, "at-risk 1-10 child" means: 1-11 (1) a student at risk of dropping out of school as 1-12 defined by Section 29.081, Education Code; or 1-13 (2) a child who is eligible for the national school 1-14 lunch program of free or reduced-price lunches. 1-15 Sec. 171.852. ELIGIBILITY. A corporation is eligible for a 1-16 credit against the tax imposed under this chapter in the amount and 1-17 under the conditions and limitations provided by this subchapter. 1-18 Sec. 171.853. CREDIT FOR CONTRIBUTIONS. A corporation may 1-19 claim a credit under this subchapter only for a contribution to an 1-20 organization that: 1-21 (1) is a nonprofit corporation organized for 1-22 educational purposes to aid community colleges and other schools in 1-23 meeting the needs of at-risk children; 1-24 (2) is exempt from the tax imposed under this chapter; 2-1 and 2-2 (3) spends 80 percent or more of its funds for direct 2-3 assistance for at-risk children. 2-4 Sec. 171.854. LIMITATION. (a) The total credit claimed 2-5 under this subchapter for a period may not exceed 25 percent of the 2-6 amount of franchise tax due for the report after any other 2-7 applicable tax credits. 2-8 (b) A corporation may claim a credit under this subchapter 2-9 for a contribution made during an accounting period only against 2-10 the tax owed for the corresponding reporting period. 2-11 Sec. 171.855. APPLICATION FOR CREDIT. (a) A corporation 2-12 must apply for a credit under this subchapter on or with the tax 2-13 report for the period for which the credit is claimed. 2-14 (b) The comptroller shall adopt a form for the application 2-15 for the credit. A corporation must use this form in applying for 2-16 the credit. 2-17 Sec. 171.856. ASSIGNMENT PROHIBITED. A corporation may not 2-18 convey, assign, or transfer the credit allowed under this 2-19 subchapter to another entity unless all of the assets of the 2-20 corporation are conveyed, assigned, or transferred in the same 2-21 transaction. 2-22 SECTION 2. (a) This Act takes effect January 1, 2002, and 2-23 applies only to a report due on or after that date. 2-24 (b) A corporation may claim a credit under Subchapter S, 2-25 Chapter 171, Tax Code, as added by this Act, only for a 2-26 contribution made on or after January 1, 2002.