By Giddings H.B. No. 3566 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to a franchise tax credit for certain corporations that 1-3 provide group health benefit plan 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 S, to read as follows: 1-7 SUBCHAPTER S. TAX CREDIT FOR CERTAIN CORPORATIONS THAT 1-8 PROVIDE A GROUP HEALTH BENEFIT PLAN FOR EMPLOYEES. 1-9 Sec. 171.851. DEFINITIONS. In this subchapter: 1-10 (1) "Corporation" has the meaning assigned by Section 1-11 171.001(b)(3). 1-12 (2) "Full-time employee" means an employee in a 1-13 permanent job that requires at least 1600 hours of work a year. 1-14 (3) "Health Insurance Expenditures" means the total 1-15 amount of premiums or other charges that the corporation pays each 1-16 year to provide benefits to full time employees under a Group 1-17 Health Benefit Plan. 1-18 (4) "Group Health Benefit Plan" has the meaning 1-19 assigned by Section 171.751(6). 1-20 Sec. 171.852. CREDIT. A corporation is eligible for a credit 1-21 against the tax imposed by this chapter if the corporation has no 1-22 more than 100 employees and pays at least 80% of the premiums or 1-23 other charges assessed under a group health benefit plan that is 2-1 applicable to the corporation's full-time employees. 2-2 Sec. 171.853. CALCULATION OF CREDIT. (a) The base for 2-3 determining the amount of credit available under this subchapter 2-4 each year is corporation's health insurance expenditures. 2-5 (b) The maximum credit available to a corporation with not 2-6 more than 25 employees is an amount equal to 100% of the 2-7 corporation's franchise tax liability calculated before applying 2-8 any other credits for which the corporation is eligible. 2-9 (c) The maximum credit available to a corporation with more 2-10 than 25 but fewer than 51 employees is an amount equal to 75% of 2-11 the corporation's franchise tax liability calculated before 2-12 applying any other credits for which the corporation is eligible. 2-13 (d) The maximum credit available to a corporation with more 2-14 than 50 but fewer than 76 employees is an amount equal to 50% of 2-15 the corporation's franchise tax liability calculated before 2-16 applying any other credits for which the corporation is eligible. 2-17 (e) The maximum credit available to a corporation with more 2-18 than 75 but fewer than 101 employees is an amount equal to 25% of 2-19 the corporation's franchise tax liability calculated before 2-20 applying any other credits for which the corporation is eligible. 2-21 (d) No credit is available to a corporation with more than 2-22 100 employees. 2-23 Sec. 171.854. CARRYFORWARD OR ASSIGNMENT OF CREDIT 2-24 PROHIBITED. (a) No unused portion of a credit authorized by this 2-25 subchapter may be carried forward to another report. 2-26 (b) No portion of a credit authorized by this subchapter may 3-1 be conveyed, assigned, transferred to or claimed by another entity 3-2 except pursuant to a transaction in which all of the assets of the 3-3 corporation are conveyed, assigned or transferred in the same 3-4 transaction. 3-5 Sec. 171.855. BIENNIAL REPORT TO THE LEGISLATURE. (a) 3-6 Before the beginning of each regular session of the legislature, 3-7 the comptroller shall submit to the governor, the lieutenant 3-8 governor, and the speaker of the house of representatives a report 3-9 that states the amount of credits claimed under this subchapter 3-10 during the previous two report periods. 3-11 (b) The comptroller may require a corporation that claims a 3-12 credit authorized by this subchapter to submit such documentation 3-13 as the comptroller considers necessary to support its claim and to 3-14 enable the comptroller to compile the report required by this 3-15 section. 3-16 (c) The comptroller shall provide notice to the members of 3-17 the legislature that the report required under this section is 3-18 available on request. 3-19 SECTION 2. This Act takes effect on January 1, 2002, and 3-20 applies to reports originally due on or after that date. A 3-21 corporation may claim a credit under Subchapter S, Chapter 171, Tax 3-22 Code, as added by this Act, only for an expenditure made on or 3-23 after January 1, 2002.