Floor Packet Page No. 415                                                   



	

Amend CSHB 3 by adding the following appropriately lettered 

PART to ARTICLE 2 of the bill and relettering subsequent PARTS of 

that article accordingly:



PART __.  FRANCHISE TAX CREDIT FOR HEALTH BENEFIT PLAN



FOR EMPLOYEES AND DEPENDENTS

	SECTION 2__.01.  Chapter 171, Tax Code, is amended by adding 

Subchapter X to read as follows:



SUBCHAPTER X.  TAX CREDIT FOR HEALTH BENEFIT PLAN FOR EMPLOYEES AND 

THEIR DEPENDENTS

	Sec. 171.941.  ENTITLEMENT TO CREDIT.  A corporation is 

entitled to a credit in the amount and under the conditions and 

limitations provided by this subchapter against the tax imposed 

under this chapter.

	Sec. 171.942.  QUALIFICATION.  A corporation qualifies for a 

credit under this subchapter if the corporation:

		(1)  has gross receipts from its entire business, as 

determined by Section 171.105, for the reporting period in an 

amount equal to or less than $1 million; and

		(2)  obtains coverage for its employees and their 

dependents under a health benefit plan that constitutes creditable 

coverage for the purposes of Section 1205.004, Insurance Code.

	Sec. 171.943.  AMOUNT; LIMITATIONS.  (a)  The amount of the 

credit is 15 percent of the cost to the corporation of obtaining 

coverage for its employees and their dependents under a health 

benefit plan.

	(b)  The credit claimed for each privilege period may not 

exceed the amount of franchise tax due, before any other applicable 

tax credits, for the privilege period.

	(c)  A corporation may claim a credit under this subchapter 

for an expenditure made during an accounting period only against 

the tax owed for the corresponding privilege period.

	(d)  A corporation may not carry over an expenditure made 

during a privilege period to a subsequent privilege period.

	(e)  A corporation may not convey, assign, or transfer a 

credit under this subchapter to another entity unless all of the 

assets of the corporation are conveyed, assigned, or transferred in 

the same transaction.

	Sec. 171.944.  APPLICATION FOR CREDIT.  A corporation must 

apply for a credit under this subchapter on or with the tax report 

for the period for which the credit is claimed.

	Sec. 171.945.  RULES.  The comptroller shall adopt rules 

necessary to implement this subchapter.

	SECTION 2__.02.  This part takes effect January 1, 2006, and 

applies only to a tax report originally due on or after that date.

	SECTION 2__.03. Section 151.325, Tax Code, is repealed.