1-1     By:  Moncrief, Fraser, Lucio                            S.B. No. 63
 1-2           (In the Senate - Filed November 13, 2000; January 10, 2001,
 1-3     read first time and referred to Committee on Business and Commerce;
 1-4     March 26, 2001, reported favorably by the following vote:  Yeas 6,
 1-5     Nays 0; March 26, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to a franchise tax credit for wages paid to persons with
 1-9     certain disabilities.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Chapter 171, Tax Code, is amended by adding
1-12     Subchapter S to read as follows:
1-13             SUBCHAPTER S.  TAX CREDIT FOR WAGES PAID TO PERSONS
1-14                          WITH CERTAIN DISABILITIES
1-15           Sec. 171.851.  ENTITLEMENT TO CREDIT.  A corporation is
1-16     entitled to a credit in the amount and under the conditions and
1-17     limitations provided by this subchapter against the tax imposed
1-18     under this chapter.
1-19           Sec. 171.852.  QUALIFICATION.  A corporation qualifies for a
1-20     credit under this subchapter for each employee:
1-21                 (1)  originally hired on or after January 1, 2002;
1-22                 (2)  who, at the time of being hired, is an individual
1-23     eligible under 42 U.S.C. Section 1382, as amended, for supplemental
1-24     security income benefits on the basis of disability or blindness or
1-25     is a recipient of social security disability insurance benefits;
1-26     and
1-27                 (3)  who:
1-28                       (A)  remains continuously employed with the
1-29     corporation for at least six months;
1-30                       (B)  earns at least the minimum wage;
1-31                       (C)  works an average of at least 20 hours a
1-32     week; and
1-33                       (D)  receives the same benefits as the employer's
1-34     other workers.
1-35           Sec. 171.853.  AMOUNT; LIMITATIONS.  (a)  The amount of the
1-36     credit is 10 percent of the wages paid by the corporation for each
1-37     qualified employee.
1-38           (b)  A corporation may claim the credit only for wages paid
1-39     the qualified employee during the first two years of employment.
1-40           (c)  The credit claimed for each privilege period may not
1-41     exceed 50 percent of the amount of net franchise tax due, after any
1-42     other applicable credits, for the privilege period.
1-43           Sec. 171.854.  APPLICATION FOR CREDIT.  (a)  A corporation
1-44     must apply for a credit under this subchapter on or with the tax
1-45     report for the period for which the credit is claimed.
1-46           (b)  The comptroller shall promulgate a form for the
1-47     application for the credit.  A corporation must use the form in
1-48     applying for the credit.
1-49           Sec. 171.855.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.  A
1-50     corporation may claim a credit under this subchapter for wages paid
1-51     during an accounting period only against the tax owed for the
1-52     corresponding privilege period.
1-53           Sec. 171.856.  RULES.  The comptroller shall adopt rules
1-54     necessary to implement this subchapter.
1-55           SECTION 2.  This Act takes effect January 1, 2002, and
1-56     applies only to:
1-57                 (1)  a report originally due on or after that date; and
1-58                 (2)  wages paid on or after that date.
1-59                                  * * * * *