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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 taxable entities that employ |
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certain apprentices in broadband utility engineering or |
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construction jobs. |
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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 N-1 to read as follows: |
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SUBCHAPTER N-1. TAX CREDIT FOR EMPLOYMENT OF APPRENTICES FOR |
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BROADBAND UTILITY CONSTRUCTION |
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Sec. 171.721. GENERAL DEFINITIONS. In this subchapter: |
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(1) "Broadband utility engineering or construction |
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job" means a job described in category 237130 of the 2022 North |
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American Industry Classification System. |
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(2) "Commission" means the Texas Workforce Commission. |
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Sec. 171.722. DEFINITION: QUALIFYING APPRENTICE. (a) For |
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purposes of this subchapter, "qualifying apprentice" means an |
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apprentice employed by a taxable entity: |
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(1) in a broadband utility engineering or construction job; |
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and |
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(2) and as part of an apprenticeship program that is: |
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(A) certified as an industry-recognized |
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apprenticeship program by an entity determined to meet United |
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States Department of Labor criteria; or |
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(B) registered with the United States Department |
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of Labor and qualified to receive funding provided through the |
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commission under Chapter 133, Education Code. |
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(b) An individual who otherwise meets the definition of |
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qualifying apprentice under Subsection (a) may not be considered a |
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qualifying apprentice of a taxable entity for purposes of this |
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subchapter: |
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(1) beyond the earlier of: |
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(A) the fourth anniversary of the date the |
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individual was employed by the entity as a qualifying apprentice; |
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or |
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(B) the conclusion of the initial term of the |
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apprenticeship program in which the individual is participating; |
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or |
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(2) if the individual was employed by the entity in |
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another capacity immediately before being employed by the entity |
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as a qualifying apprentice. |
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Sec. 171.723. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions |
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provided by this subchapter against the tax imposed under this |
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chapter. |
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Sec. 171.724. QUALIFICATION. A taxable entity qualifies |
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for a credit under this subchapter if, during the period for which |
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the credit is claimed, the entity employs at least one qualifying |
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apprentice for at least three months and, in accordance with |
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criteria adopted by the commission by rule, provides the apprentice |
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with training and skills development in pole climbing, rigging, |
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fiber and coax splicing, or other tasks required of an aerial |
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lineman. |
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Sec. 171.725. CERTIFICATE OF ELIGIBILITY. (a) Before |
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claiming a credit under this subchapter, a taxable entity must |
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request a certificate of eligibility from the commission stating |
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that the entity qualifies for a credit under this subchapter by |
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satisfying the requirements of Section 171.724. The entity must |
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request the certificate of eligibility in the manner prescribed by |
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the commission. |
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(b) On receipt of a request under Subsection (a), the |
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commission shall: |
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(1) determine whether the taxable entity is eligible |
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for a credit under this subchapter; and |
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(2) if the commission determines that the taxable |
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entity is eligible for a credit, issue the requested certificate of |
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eligibility. |
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Sec. 171.726. AMOUNT OF CREDIT; LIMITATION. (a) Subject to |
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Subsections (b) and (c), the amount of the credit a taxable entity |
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may claim on a report is an amount equal to $5,000 multiplied by the |
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number of qualifying apprentices employed by the entity during the |
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period covered by the report. |
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(b) The total credit claimed on a report may not exceed the |
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amount of franchise tax due for the report after the application of |
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any other applicable credits. |
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(c) The total amount of credits that may be awarded under |
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Subsection (a) in a state fiscal biennium may not exceed $10 |
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million. |
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Sec. 171.727. 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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171.726(b), the entity may carry the unused credit forward for not |
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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 on a report because of the limitation |
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under Section 171.726(b). |
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(c) Credits, including a carryforward, are considered to be |
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used in the following order: |
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(1) a carryforward under this section; and |
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(2) a credit for the period on which the report is |
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based. |
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Sec. 171.728. APPLICATION FOR CREDIT. (a) A taxable entity |
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must apply for a credit under this subchapter on or with the report |
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for the period for which the credit is claimed. |
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(b) A taxable entity must apply for the credit in the manner |
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prescribed by the comptroller and include with the application: |
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(1) the certificate of eligibility issued under |
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Section 171.725; and |
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(2) any information requested by the comptroller to |
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determine the amount of the credit. |
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(c) The comptroller shall award a credit to a taxable entity |
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that submits an application that complies with the provisions of |
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this section if the entity is eligible for the credit and the |
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credit is available under Section 171.726(c). |
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assigned shall jointly submit written notice of the sale or |
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assignment to the comptroller not later than the 30th day after the |
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date of the sale or assignment. The notice must include: |
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(1) the date on which the credit was originally |
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established; |
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(2) the date of the sale or assignment; |
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(3 the amount of the credit sold or assigned and the |
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remaining period during which it may be used; |
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(4) the names, addresses, and federal tax |
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identification numbers of the taxable entity that sold or assigned |
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the credit or part of the credit and the taxable entity to which the |
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credit or |
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Sec. 171.729. RULES. The comptroller may adopt rules |
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necessary to implement and administer this subchapter. |
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Sec. 171.730. REPORT. (a) Not later than November 1 of |
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each even-numbered year, the commission shall prepare and deliver |
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to the governor, the lieutenant governor, the speaker of the house |
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of representatives, and the presiding officer of each legislative |
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standing committee with primary jurisdiction over taxation a |
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report that evaluates the effect of the tax credits issued under |
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this subchapter on the employment outcomes and earnings of |
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qualifying apprentices with respect to whom credits are issued |
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under this subchapter. The report must include a recommendation |
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regarding whether the tax credit should be expanded or terminated. |
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(b) A taxable entity that requests a certificate of |
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eligibility under Section 171.725 shall provide, on request of the |
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commission, information the commission determines is necessary to |
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prepare the report under this section. |
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SECTION 2. Subchapter N-1, Chapter 171, Tax Code, as added |
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by this Act, applies only to a report originally due on or after |
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January 1, 2026. |
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SECTION 3. An entity may apply for a franchise tax credit |
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under Subchapter N-1, Chapter 171, Tax Code, as added by this Act, |
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only in connection with an apprentice first employed on or after |
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the effective date of this Act. |
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SECTION 4. This Act takes effect January 1, 2026. |