By:  Moncrief, et al.                                   S.B. No. 63
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a franchise tax credit for wages paid to persons with
 1-3     certain disabilities.
 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 WAGES PAID TO PERSONS
 1-8                          WITH CERTAIN DISABILITIES
 1-9           Sec. 171.851.  ENTITLEMENT TO CREDIT.  A corporation is
1-10     entitled to a credit in the amount and under the conditions and
1-11     limitations provided by this subchapter against the tax imposed
1-12     under this chapter.
1-13           Sec. 171.852.  QUALIFICATION.  A corporation qualifies for a
1-14     credit under this subchapter for each employee:
1-15                 (1)  originally hired on or after January 1, 2002;
1-16                 (2)  who, at the time of being hired, is an individual
1-17     eligible under 42 U.S.C. Section 1382, as amended, for supplemental
1-18     security income benefits on the basis of disability or blindness or
1-19     is a recipient of social security disability insurance benefits;
1-20     and
1-21                 (3)  who:
1-22                       (A)  remains continuously employed with the
1-23     corporation for at least six months;
1-24                       (B)  earns at least the minimum wage;
1-25                       (C)  works an average of at least 20 hours a
 2-1     week; and
 2-2                       (D)  receives the same benefits as the employer's
 2-3     other workers.
 2-4           Sec. 171.853.  AMOUNT; LIMITATIONS.  (a)  The amount of the
 2-5     credit is 10 percent of the wages paid by the corporation for each
 2-6     qualified employee.
 2-7           (b)  A corporation may claim the credit only for wages paid
 2-8     the qualified employee during the first two years of employment.
 2-9           (c)  The credit claimed for each privilege period may not
2-10     exceed 50 percent of the amount of net franchise tax due, after any
2-11     other applicable credits, for the privilege period.
2-12           Sec. 171.854.  APPLICATION FOR CREDIT.  (a)  A corporation
2-13     must apply for a credit under this subchapter on or with the tax
2-14     report for the period for which the credit is claimed.
2-15           (b)  The comptroller shall promulgate a form for the
2-16     application for the credit.  A corporation must use the form in
2-17     applying for the credit.
2-18           Sec. 171.855.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.  A
2-19     corporation may claim a credit under this subchapter for wages paid
2-20     during an accounting period only against the tax owed for the
2-21     corresponding privilege period.
2-22           Sec. 171.856.  RULES.  The comptroller shall adopt rules
2-23     necessary to implement this subchapter.
2-24           SECTION 2.  This Act takes effect January 1, 2002, and
2-25     applies only to:
2-26                 (1)  a report originally due on or after that date; and
 3-1                 (2)  wages paid on or after that date.
 3-2                          COMMITTEE AMENDMENT NO. 1
 3-3           Amend S.B. No. 63 as follows:
 3-4           (1)  In SECTION 1 of the bill, in new Section 171.852(1), Tax
 3-5     Code, between "hired" and "on" (senate engrossment, page 1, line
 3-6     15), insert "for a position located or based in this state".
 3-7           (2)  In SECTION 1 of the bill, in new Section 171.852(3)(A),
 3-8     Tax Code, between "corporation" and "for" (senate engrossment, page
 3-9     1, line 23), insert "in a position located or based in this state".
3-10           (3)  In SECTION 1 of the bill, strike new Section 171.853(b),
3-11     Tax Code (senate engrossment, page 2, lines 7-8), and substitute:
3-12           (b)  A corporation may claim the credit only for wages paid
3-13     the qualified employee:
3-14                 (1)  for a position located or based in this state; and
3-15                 (2)  during the first two years of employment.
3-16                                                                Hartnett