79R7021 DAK-D

By:  Hopson                                                       H.B. No. 1666



A BILL TO BE ENTITLED

AN ACT

relating to a tax credit for certain corporations obtaining 
coverage for their employees under a health benefit plan.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 171, Tax Code, is amended by adding 
Subchapter X to read as follows:

SUBCHAPTER X.  TAX CREDIT FOR HEALTH BENEFIT PLAN FOR EMPLOYEES
	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 $750,000; and
		(2)  obtains coverage for its employees 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 10 percent of the cost to the corporation of obtaining 
coverage for its employees 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.  This Act applies only to a tax report originally 
due on or after the effective date of this Act.
	SECTION 3.  This Act takes effect January 1, 2006.