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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for wages paid to certain |
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employees. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter R to read as follows: |
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SUBCHAPTER R. TAX CREDIT FOR WAGES PAID TO CERTAIN EMPLOYEES |
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Sec. 171.871. DEFINITIONS. In this subchapter: |
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(1) "Commission" means the Texas Workforce |
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Commission. |
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(2) "Wages" means payments described by Sections |
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51(c)(1), (2), and (3), Internal Revenue Code. |
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Sec. 171.872. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions provided |
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by this subchapter against the tax imposed under this chapter. |
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Sec. 171.873. QUALIFICATION. A taxable entity qualifies |
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for a credit under this subchapter for the wages paid or incurred by |
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the taxable entity for the services of each employee who: |
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(1) is a resident of this state; and |
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(2) at the time the person is hired by the taxable |
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entity: |
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(A) has been issued a document by the commission |
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stating that the individual is a Qualified IV-A recipient as |
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defined by 26 U.S.C. Section 51(d)(2) or is otherwise a member of a |
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family that receives financial assistance and services under |
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Chapter 31 or 34, Human Resources Code; |
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(B) served on active duty in the United States |
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armed forces and was discharged or released from active duty after |
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September 11, 2001; |
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(C) is at least 18 years of age but younger than |
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25 years of age, is unemployed, and has not been enrolled in an |
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educational institution for at least six months; |
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(D) had exhausted the person's unemployment |
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compensation benefits at any time during the preceding 18 months |
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and is unemployed; or |
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(E) is unemployed and receiving unemployment |
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compensation benefits. |
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Sec. 171.874. CONFIRMATION OF ELIGIBILITY. (a) A taxable |
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entity is not entitled to the credit under this subchapter for wages |
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paid or incurred for the services of an employee unless the taxable |
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entity requests and receives a confirmation from the commission |
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that the employee meets the requirements under Section 171.873. |
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(b) A taxable entity must request confirmation for each |
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employee for which the person intends to claim the credit not later |
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than the 60th day after the date the employee begins employment with |
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the taxable entity. |
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(c) The commission shall promulgate an online form that a |
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taxable entity must use to request the certification. |
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(d) A taxable entity is considered to have received the |
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confirmation that the employee meets the requirements under Section |
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171.873 if the taxable entity does not receive from the commission a |
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confirmation or a denial of confirmation not later than the 61st day |
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after the date the taxable entity submitted the original request |
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for the confirmation. |
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(e) The commission shall forward each confirmation to the |
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comptroller. |
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(f) The Health and Human Services Commission shall provide |
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to the commission information necessary for the commission to |
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confirm that an employee meets the requirements under Section |
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171.873. |
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Sec. 171.875. AMOUNT; LIMITATIONS. (a) The amount of the |
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credit in relation to each employee is equal to the lesser of |
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$10,000 or 20 percent of the wages paid or incurred by the taxable |
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entity for the services of that employee beginning on the date the |
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employee begins employment and ending on the anniversary of that |
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date. |
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(b) The total credit claimed under this subchapter for a |
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report, including the amount of any carryforward credit under |
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Section 171.876, may not exceed the amount of franchise tax due for |
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the report after any other applicable credits. |
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Sec. 171.876. CARRYFORWARD. (a) If a taxable entity is |
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eligible for a credit that exceeds the limitation under Section |
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171.875(b), the taxable entity may carry the unused credit forward |
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for not more than five consecutive reports. |
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(b) A carryforward is considered the remaining portion of a |
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credit that cannot be claimed in the current year because of the |
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limitation under Section 171.875(b). |
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Sec. 171.877. APPLICATION FOR CREDIT. (a) A taxable entity |
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must apply for a credit under this subchapter on or with the tax |
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report for the period for which the credit is claimed. |
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(b) The comptroller shall promulgate a form for the |
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application for the credit. A taxable entity must use the form in |
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applying for the credit. |
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Sec. 171.878. ASSIGNMENT PROHIBITED. A taxable entity may |
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not convey, assign, or transfer a credit allowed under this |
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subchapter to another entity unless all of the assets of the taxable |
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entity, or a discrete unit of the taxable entity that paid or |
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incurred the wages, are sold, conveyed, assigned, or transferred in |
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the same transaction or in a related transaction, to a taxable |
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entity that directly or indirectly owns, controls, or otherwise |
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directs, wholly or partly, an interest in the taxable entity from |
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which the credit is conveyed, assigned, or transferred. |
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Sec. 171.879. RULES. The comptroller and the commission |
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shall adopt rules necessary to administer this subchapter. |
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SECTION 2. Section 19.011(a), Education Code, is amended to |
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read as follows: |
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(a) In order to achieve the goals stated in Section 19.003, |
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the district with the cooperation of the Health and Human Services |
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Commission, the Texas Workforce Investment Council, the Texas |
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Workforce Commission, the Texas Economic Development and Tourism |
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Office, and the department shall provide persons confined or |
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imprisoned in the department: |
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(1) information from local workforce [and] |
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development boards on job training and employment referral |
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services; and |
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(2) information on the franchise tax credit [refund
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voucher] program under Subchapter R, Chapter 171, Tax [H, Chapter
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301, Labor] Code. |
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SECTION 3. Section 301.0671, Labor Code, is amended to read |
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as follows: |
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Sec. 301.0671. FEDERAL WORK OPPORTUNITY TAX CREDIT AND |
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FRANCHISE [STATE] TAX CREDIT [REFUND] FOR CERTAIN EMPLOYERS. (a) |
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The commission is the lead agency in promoting awareness of the |
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federal work opportunity tax credit program and the franchise |
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[state] tax credit [refund] for employers under Subchapter R, |
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Chapter 171, Tax Code [H]. |
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(b) The commission, in coordination with the comptroller's |
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office and the Health and Human Services Commission [Texas
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Department of Human Services], shall develop and distribute |
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educational materials designed to increase awareness of the tax |
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credits [credit and tax refund] described by Subsection (a) to |
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encourage employers to hire recipients of the financial assistance |
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program [for persons with dependent children] under Chapter 31, |
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Human Resources Code. |
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SECTION 4. Section 306.007(a), Labor Code, is amended to |
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read as follows: |
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(a) To assist in the reintegration into the labor force of |
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persons formerly sentenced to the correctional institutions |
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division or committed to the Texas Juvenile Justice Department |
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[Youth Commission], the commission through Project RIO shall |
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provide: |
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(1) to those persons: |
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(A) information from local workforce development |
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boards on job training and employment referral services; |
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(B) information from the Department of State |
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Health Services on substance abuse treatment services; |
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(C) information from the Texas Department of |
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Housing and Community Affairs on housing services; |
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(D) information from the Texas Veterans |
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Commission on services for veterans; and |
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(E) information on franchise tax credits for |
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employers [refund voucher programs] under Subchapter R, Chapter |
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171, Tax Code [H, Chapter 301]; and |
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(2) to the employers and potential employers of those |
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persons: |
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(A) information from the Texas Economic |
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Development and Tourism Office on the enterprise zone program; and |
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(B) information from local workforce development |
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boards on services listed in Section 2308.304, Government Code. |
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SECTION 5. The following are repealed: |
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(1) Subchapter H, Chapter 301, Labor Code; and |
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(2) Section 111.109, Tax Code. |
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SECTION 6. The repeal of Subchapter H, Chapter 301, Labor |
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Code, and Section 111.109, Tax Code, by this Act does not affect an |
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eligible person's right to claim a refund of state taxes that was |
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established under Subchapter H, Chapter 301, Labor Code, and |
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Section 111.109, Tax Code, before the effective date of this Act. An |
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eligible person's right to claim a refund of state taxes that was |
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established under Subchapter H, Chapter 301, Labor Code, and |
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Section 111.109, Tax Code, before the effective date of this Act is |
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governed by the law in effect on the date the right to claim the |
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refund was established, and the former law is continued in effect |
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for that purpose. |
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SECTION 7. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 8. This Act takes effect January 1, 2016. |