88R7330 SRA-F
 
  By: Capriglione H.B. No. 4809
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the strong families credit against certain taxes for
  entities that contribute to certain organizations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 5, Alcoholic Beverage Code, is amended by
  adding Chapter 207 to read as follows:
  CHAPTER 207.  STRONG FAMILIES TAX CREDIT
         Sec. 207.001.  DEFINITIONS.  In this chapter:
               (1)  "Designated contribution," "eligible
  organization," and "strong families credit" have the meanings
  assigned by Section 171.701, Tax Code.
               (2)  "Taxpayer" means a person who pays a tax under this
  title.
         Sec. 207.002.  ELIGIBILITY.  A taxpayer that makes a
  designation contribution that meets the requirements of Subchapter
  N, Chapter 171, Tax Code, is entitled to apply for a strong families
  credit in the amount and under the conditions provided by this
  chapter against taxes paid under this title.
         Sec. 207.003.  AMOUNT OF CREDIT; LIMITATIONS.  (a)  Subject
  to Subsections (b) and (c), the amount of a taxpayer's credit for a
  state fiscal year is equal to the lesser of:
               (1)  the amount of designated contributions made to
  eligible organizations during the state fiscal year; or
               (2)  the amount of taxes paid by the taxpayer under this
  title during the state fiscal year.
         (b)  The maximum amount of strong families credits that may
  be awarded for a state fiscal year is the amount provided by Section
  171.706(b), Tax Code.
         (c)  The maximum amount of designated contributions a
  taxpayer may make to all eligible organizations in a state fiscal
  year is the amount provided by Section 171.706(c), Tax Code.
         (d)  The comptroller shall allocate strong families credits
  as provided by Section 171.706(d), Tax Code.
         Sec. 207.004.  APPLICATION.  (a)  A taxpayer must apply to
  claim a strong families credit against a tax imposed under this
  title.
         (b)  The comptroller shall prescribe the form and method of
  applying to claim a credit under this section. The taxpayer must use
  this method in applying for the credit.
         (c)  The comptroller may award a credit to a taxpayer who
  applies for the credit under Subsection (a) if the taxpayer is
  eligible for the credit and the credit is available under Section
  171.706(b), Tax Code.
         (d)  The comptroller shall notify a taxpayer in writing of
  the comptroller's decision to grant or deny the application under
  Subsection (a). If the comptroller denies a taxpayer's
  application, the comptroller shall include in the notice of denial
  the reasons for the comptroller's decision.
         Sec. 207.005.  RULES.  The comptroller may adopt rules and
  procedures necessary to implement, administer, and enforce this
  chapter.
         SECTION 2.  Subtitle B, Title 3, Insurance Code, is amended
  by adding Chapter 230 to read as follows:
  CHAPTER 230. STRONG FAMILIES TAX CREDIT
         Sec. 230.001.  DEFINITIONS. In this chapter:
               (1)  "Designated contribution," "eligible
  organization," and "strong families credit" have the meanings
  assigned by Section 171.701, Tax Code.
               (2)  "State insurance tax liability" means any tax
  liability incurred by an entity under Chapters 221 through 226 or
  Chapter 281.
         Sec. 230.002.  ELIGIBILITY.  An entity that makes a
  designated contribution that meets the requirements of Subchapter
  N, Chapter 171, Tax Code, is entitled to apply for a strong families
  credit in the amount and under the conditions provided by this
  chapter against the entity's state insurance tax liability.
         Sec. 230.003.  AMOUNT OF CREDIT; LIMITATION ON TOTAL
  CREDITS. (a)  Subject to Subsections (b) and (c), the amount of an
  entity's credit for a report is equal to the lesser of:
               (1)  the amount of designated contributions made to an
  eligible organization during the year covered by the report; or
               (2)  the amount of the entity's state insurance tax
  liability for the year covered by the report after applying all
  other applicable credits.
         (b)  The maximum amount of strong families credits that may
  be awarded for a state fiscal year is the amount provided by Section
  171.706(b), Tax Code.
         (c)  The maximum amount of designated contributions an
  entity may make to all eligible organizations in a state fiscal year
  is the amount provided by Section 171.706(c), Tax Code.
         (d)  The comptroller shall allocate strong families credits
  as provided by Section 171.706(d), Tax Code.
         Sec. 230.004.  APPLICATION FOR CREDIT. (a) An entity must
  apply to claim a strong families credit under this chapter on or
  with the report covering the year in which the designated
  contribution was made.
         (b)  The comptroller shall prescribe the form and method of
  applying to claim a credit under this section. An entity must use
  this method in applying for the credit under this chapter.
         (c)  The comptroller may award a credit to an entity that
  applies for the credit under Subsection (a) if the entity is
  eligible for the credit and the credit is available under Section
  171.706(b), Tax Code.
         Sec. 230.005.  ASSIGNMENT PROHIBITED; EXCEPTION.  An entity
  may not convey, assign, or transfer the strong families credit to
  another entity unless substantially all of the assets of the entity
  are conveyed, assigned, or transferred in the same transaction.
         Sec. 230.006.  RULES.  The comptroller may adopt rules and
  procedures necessary to implement, administer, and enforce this
  chapter.
         SECTION 3.  Chapter 171, Tax Code, is amended by adding
  Subchapter N to read as follows:
  SUBCHAPTER N. STRONG FAMILIES TAX CREDIT
         Sec. 171.701.  DEFINITIONS. In this subchapter:
               (1)  "Designated contribution" means a monetary
  contribution to an eligible organization that the contributor
  designates at the time of contribution as being made for the purpose
  of the strong families credit.
               (2)  "Eligible organization" means an organization
  that is designated by the comptroller as an eligible organization
  under this subchapter.
               (3)  "Strong families credit" means the tax credit
  established under this subchapter that may be claimed under:
                     (A)  Chapter 207, Alcoholic Beverage Code;
                     (B)  Chapter 230, Insurance Code;
                     (C)  this subchapter; or
                     (D)  Chapter 203.
         Sec. 171.702.  ELIGIBILITY FOR CREDIT.  A taxable entity
  that makes a designated contribution that meets the requirements of
  this subchapter is eligible to apply for a strong families credit in
  the amount and under the conditions provided by this subchapter
  against the tax imposed under this chapter.
         Sec. 171.703.  QUALIFICATIONS FOR ELIGIBLE ORGANIZATION;
  VERIFICATION OF ELIGIBILITY.  (a)  An organization may apply for
  designation as an eligible organization under this subchapter if
  the organization:
               (1)  is exempt from federal income taxation under
  Section 501(a), Internal Revenue Code of 1986, as an organization
  described by Section 501(c)(3) of that code;
               (2)  is authorized to transact business in this state;
               (3)  has provided the following services in this state
  for at least three years preceding the organization's initial
  application for designation as an eligible organization:
                     (A)  mental health services, including individual
  and family therapy;
                     (B)  in-home and community-based parenting
  services;
                     (C)  comprehensive case management services based
  on the assessment of family strengths and needs;
                     (D)  financial empowerment services, including
  financial literacy, job skills, and vocational training; or
                     (E)  in-school programs, community-based events,
  or online resources to assist fathers in learning and improving
  parenting skills or programs that provide services and resources
  that engage absent fathers in being more involved in their
  children's lives.
         (b)  Services described by Subsections (a)(3)(A) through (D)
  must be provided based on community needs identified through a
  needs assessment, implemented with a continuous quality
  improvement process, and evaluated based on outcomes.
         (c)  An organization must reapply for designation as an
  eligible organization each calendar year by submitting to the
  comptroller a signed application form containing:
               (1)  a description of the qualifying services and
  resources provided by the organization; 
               (2)  the total number of individuals served through the
  services and resources described by Subdivision (1) during the
  previous calendar year and the number of those individuals served
  and provided resources that year using designated contributions;
               (3)  outcomes for services described by Subdivision
  (1);
               (4)  the organization's financial information;
               (5)  the organization's contact information;
               (6)  a statement, signed under penalty of perjury by an
  officer of the organization, that the organization meets all
  criteria to qualify as an eligible organization, has fulfilled the
  requirements for the previous calendar year, and intends to fulfill
  the requirements for the next calendar year; and
               (7)  any other documentation requested by the
  comptroller to verify eligibility or compliance with this section.
         Sec. 171.704.  DUTIES OF ELIGIBLE ORGANIZATION. (a)  An
  eligible organization shall:
               (1)  conduct a local, state, and national criminal
  background check for all individuals working directly with children
  in a program funded by designated contributions that includes the
  use of:
                     (A)  a commercial multistate and
  multijurisdiction criminal records locator or other similar
  commercial nationwide database; and
                     (B)  the national sex offender registry database
  maintained by the United States Department of Justice or a
  successor agency;
               (2)  spend all designated contributions, other than the
  amount described by Subdivision (3), to provide services for
  residents of this state;
               (3)  spend no more than five percent of the total dollar
  amount of designated contributions on administrative expenses; and
               (4)  annually submit to the comptroller:
                     (A)  the report of an audit of the eligible
  organization conducted by an independent certified public
  accountant in accordance with generally accepted auditing
  principles completed not later than the 180th day after the end of
  the eligible organization's fiscal year; and
                     (B)  a copy of the eligible organization's most
  recent Form 990 filed with the Internal Revenue Service.
         (b)  On receipt of a designated contribution, an eligible
  organization shall provide the entity making the contribution with
  a certificate of contribution that includes:
               (1)  the entity's name;
               (2)  the eligible organization's name;
               (3)  the entity's federal employer identification
  number, if applicable;
               (4)  the amount of the designated contribution; and
               (5)  the date the designated contribution was made.
         Sec. 171.705.  DUTIES OF COMPTROLLER. (a)  The comptroller
  shall:
               (1)  accept applications for designation or
  redesignation as an eligible organization and provide that
  designation to eligible applicants;
               (2)  revoke an organization's designation as an
  eligible organization if the organization violates this subchapter
  or fails to maintain the eligibility requirements of this
  subchapter;
               (3)  publish information about the strong families
  credit on the comptroller's website, including:
                     (A)  the requirements and process for an
  organization to be designated as an eligible organization; and
                     (B)  a list of organizations currently designated
  as eligible organizations; and
               (4)  require the return of designated contributions
  made to an organization that has had the organization's designation
  as an eligible organization revoked or that otherwise fails to
  comply with the requirements of this subchapter. 
         (b)  An organization that is required to return
  contributions under Subsection (a)(4) is ineligible for
  designation or redesignation as an eligible organization for a
  period of 10 years beginning on the date the requirement is imposed.
         (c)  An organization whose designation as an eligible
  organization lapses or is revoked for a reason other than the reason
  described by Subsection (a)(4) may reapply for designation as an
  eligible organization.
         Sec. 171.706.  AMOUNT OF CREDIT; LIMITATION ON TOTAL
  CREDITS. (a)  Subject to Subsections (b) and (c), the amount of a
  taxable entity's credit for a report is equal to the lesser of:
               (1)  the amount of designated contributions made to
  designated organizations during the period covered by the report;
  or
               (2)  the amount of franchise tax due for the report
  after applying all other applicable credits.
         (b)  For the 2024 state fiscal year, the maximum amount of
  strong families credits that may be awarded is $25 million.  For
  each subsequent state fiscal year, the maximum amount of strong
  families credits that may be awarded is:
               (1)  the same maximum amount allowed under this
  subsection for the previous state fiscal year, if less than the
  maximum amount of credits was awarded that fiscal year; or
               (2)  an amount equal to 110 percent of the maximum
  amount allowed under this subsection for the previous state fiscal
  year, if the maximum amount of credits was awarded that fiscal year.
         (c)  For the 2024 state fiscal year, each entity may make no
  more than $2.5 million in designated contributions.  For each
  subsequent state fiscal year, each entity may make qualifying
  contributions of not more than 110 percent of the amount allowed to
  be made under this subsection for the previous state fiscal year.
         (d)  The comptroller by rule shall prescribe procedures by
  which the comptroller will allocate strong families credits. The
  procedures must provide that any credits are allocated to entities
  that apply on a first-come, first-served basis.
         Sec. 171.707.  APPLICATION FOR CREDIT. (a) A taxable entity
  must apply to claim a strong families credit under this subchapter
  on or with the report covering the period in which the designated
  contribution was made.
         (b)  The comptroller shall prescribe the form and method of
  applying to claim a credit under this section. A taxable entity
  must use this method in applying for the credit.
         (c)  The comptroller may award a credit to a taxable entity
  that applies for the credit under Subsection (a) if the taxable
  entity is eligible for the credit and the credit is available under
  Section 171.706(b).
         (d)  The comptroller shall notify a taxable entity in writing
  of the comptroller's decision to grant or deny the application
  under Subsection (a). If the comptroller denies a taxable entity's
  application, the comptroller shall include in the notice of denial
  the reasons for the comptroller's decision.
         Sec. 171.708.  ASSIGNMENT PROHIBITED; EXCEPTION.  A taxable
  entity may not convey, assign, or transfer a strong families credit
  awarded under this subchapter to another taxable entity unless
  substantially all of the assets of the taxable entity are conveyed,
  assigned, or transferred in the same transaction.
         Sec. 171.709.  RULES.  The comptroller may adopt rules and
  procedures necessary to implement, administer, and enforce this
  subchapter.
         SECTION 4.  Subtitle I, Title 2, Tax Code, is amended by
  adding Chapter 203 to read as follows:
  CHAPTER 203.  STRONG FAMILIES TAX CREDIT
         Sec. 203.001.  DEFINITIONS.  In this chapter, "designated
  contribution," "eligible organization," and "strong families
  credit" have the meanings assigned by Section 171.701.
         Sec. 203.002.  ELIGIBILITY.  A producer that makes a
  designated contribution that meets the requirements of Subchapter
  N, Chapter 171, is entitled to apply for a strong families credit in
  the amount and under the conditions provided by this chapter
  against tax paid under Chapter 201 or 202.
         Sec. 203.003.  AMOUNT OF CREDIT; LIMITATIONS.  (a)  Subject
  to Subsections (b) and (c), the amount of a producer's credit for a
  state fiscal year is equal to the lesser of:
               (1)  the amount of designated contributions made to
  eligible organizations during the state fiscal year; or
               (2)  the amount of taxes paid by the producer under
  Chapter 201 or 202, as applicable, during the state fiscal year.
         (b)  The maximum amount of strong families credits that may
  be awarded for a state fiscal year is the amount provided by Section
  171.706(b).
         (c)  The maximum amount of designated contributions a
  producer may make to all eligible organizations in a state fiscal
  year is the amount provided by Section 171.706(c).
         (d)  The comptroller shall allocate strong families credits
  as provided by Section 171.706(d).
         Sec. 203.004.  APPLICATION.  (a)  The person responsible for
  paying the tax under Chapter 201 or 202 must apply to claim a strong
  families credit against that tax.
         (b)  The comptroller shall prescribe the form and method of
  applying to claim a credit under this section.  The person
  responsible for paying the tax must use this method in applying for
  the credit.
         (c)  The comptroller may award a credit to a person who
  applies for the credit under Subsection (a) if the person is
  eligible for the credit and the credit is available under Section
  171.706(b).
         (d)  The comptroller shall notify a person in writing of the
  comptroller's decision to grant or deny the application under
  Subsection (a). If the comptroller denies a person's application,
  the comptroller shall include in the notice of denial the reasons
  for the comptroller's decision.
         Sec. 203.005.  RULES.  The comptroller may adopt rules and
  procedures necessary to implement, administer, and enforce this
  chapter.
         SECTION 5.  (a) An entity may apply for a credit under
  Chapter 207, Alcoholic Beverage Code, as added by this Act, Chapter
  230, Insurance Code, as added by this Act, Subchapter N, Chapter
  171, Tax Code, as added by this Act, or Chapter 203, Tax Code, as
  added by this Act, only for a designated contribution made on or
  after January 1, 2024.
         (b)  Chapter 207, Alcoholic Beverage Code, as added by this
  Act, Chapter 230, Insurance Code, as added by this Act, Subchapter
  N, Chapter 171, Tax Code, as added by this Act, and Chapter 203, Tax
  Code, as added by this Act, apply only to a report originally due on
  or after January 1, 2024.
         SECTION 6.  This Act takes effect January 1, 2024.