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Regular Session, 2013
HOUSE BILL NO. 698
BY REPRESENTATIVE THOMPSON
TAX CREDITS: Provides relative to the School Readiness Tax Credits
AN ACT1
To amend and reenact R.S. 47:6102, 6103(A)(1) and (2), and 6109(A), to enact R.S.2
47:6110, and to repeal R.S. 47:6104 through 6109, relative to income tax credits; to3
provide relative to school readiness tax credits; to provide for certain definitions; to4
provide for the administration of such credits; to provide for School Readiness5
Expense Tax Credits; to provide for the eligibility of applicants and qualifications6
for such credits; to provide for certain notifications; to authorize the promulgation7
of rules and regulations; to provide for penalties for certain violations; to provide for8
the recovery of such credits under certain circumstances; to provide for9
effectiveness; and to provide for related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 47:6102, 6103(A)(1) and (2), and 6109(A) are hereby amended and12
reenacted to read as follows:13
§6102. Definitions14
For purposes of this Chapter, the following terms shall have the following15
definitions:16
(1) "Child" or "children" means people who are five years of age or less.17
(2) "Child care facility" means any entity which the Department of Children18
and Family Services state administrator of the Child Care Development Fund19
determines is eligible to participate in the quality rating system according to criteria20 HLS 13RS-1362 ORIGINAL
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set forth by rule adopted in the manner provided for in R.S. 47:6103, has applied to1
the Department of Children and Family Services for evaluation under such system,2
and is participating in the system.3
(3) "Child care provider" means a taxpayer who owns an eligible child care4
facility or facilities.5
(4) "Child care resource and referral agencies" means those agencies with6
whom the Department of Children and Family Services department has contracted7
to provide child care resource and referral.8
(5) "Department" shall mean the state agency designated as the state9
administrator of the Child Care Development Fund and responsible for distributing10
and managing tax credits associated with the fund. 11
(6) "Eligible business child care expenses" means the total of the following12
expenses of a business that supports quality child care as provided for in R.S.13
47:6107:14
(a) For the construction, renovation, expansion, or major repair of an eligible15
child care facility, or for the purchase of equipment for such facility, or for the16
maintenance and operation thereof, not to exceed fifty thousand dollars in expenses17
per tax year.18
(b) For payments made to an eligible child care facility for child care19
services to support employees not to exceed five thousand dollars per child per tax20
year.21
(c) For the purchase of child care slots at eligible child care facilities actually22
provided or reserved for children of employees not to exceed fifty thousand dollars23
per tax year.24
(6) (7) "Eligible child care director" means an individual as defined in Title25
48 of the Louisiana Administrative Code, as amended, enrolled in the state26
practitioner registry developed and maintained by the Department of Children and27
Family Services department, and who is employed in an eligible child care facility28
which participates in the quality rating system.29 HLS 13RS-1362 ORIGINAL
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(7) (8) "Eligible child care facility" means a child care facility which has1
applied to the Department of Children and Family Services department for an2
evaluation under its quality rating system and is participating in the quality rating3
system.4
(8) (9) "Eligible child care staff" means an individual enrolled in the state5
practitioner registry developed and maintained by the Department of Children and6
Family Services department and who is employed in an eligible child care facility7
which participates in the quality rating system and who otherwise meets the8
qualifications provided for in Title 48 of the Louisiana Administrative Code, Chapter9
53, as amended.10
(9)(a) (10)(a) "Quality rating" means the number of "stars" awarded to an11
eligible child care facility by the quality rating system.12
(b) The quality rating of the facility shall be based on the initial rating of the13
facility if it is the facility's first year participating in the quality rating system.14
Thereafter, the quality rating shall be the rating of the facility as of July first of each15
year.16
(10) (11) "Quality rating system" means a rule promulgated by the17
Department of Children and Family Services department implementing the Louisiana18
Quality Rating System which establishes criteria for evaluating and rating the quality19
of an eligible child care facility in terms of the award of "stars", with five "stars"20
being the highest quality child care facility.21
§6103. Implementation22
A.(1) The Department of Children and Family Services department shall23
promulgate rules and regulations for the purpose of developing and implementing24
the provisions of this Chapter in accordance with the provisions of the25
Administrative Procedure Act.26
(2) The Department of Children and Family Services department is27
authorized to use the emergency rulemaking process for the first set of rules28
developing and implementing this Chapter. Prior to adoption of the emergency rule,29 HLS 13RS-1362 ORIGINAL
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the department shall provide written notification that it intends to publish such rule1
in the State Register and the rule shall be subject to approval by the Senate2
Committee on Revenue and Fiscal Affairs and the House Committee on Ways and3
Means. However, if such committees do not take action on the rule within sixty days4
of publication in the State Register, the rule shall become effective.5
* * *6
§6109. Recapture of credits7
A. If the Department of Children and Family Services or the Department of8
Revenue find department finds that a child care facility, a business, or an individual9
has obtained a tax credit in violation of the provisions of this Chapter, including but10
not limited to fraud or misrepresentation, then the taxpayer's state income tax for11
such taxable period shall be increased by such amount necessary for the recapture12
of the tax credit provided for in this Chapter.13
* * *14
Section 2. R.S. 47:6110 is hereby enacted to read as follows: 15
§6110. School Readiness Expense Tax Credits16
A. Beginning July 1, 2015, there shall be allowed an income tax credit for17
eligible school readiness expenses incurred by qualified persons and entities. The18
eligibility of an applicant for such credit shall be determined pursuant to the19
applicant's performance achievements pursuant to the uniform accountability system20
established by the State Board of Elementary and Secondary Education, hereinafter21
referred to as "board". The department shall notify persons and entities of their22
eligibility for such credits on forms to be furnished by the department. The23
department and the board shall notify applicants of their qualification for receipt of24
a tax credit as a result of the applicant's performance on the uniform accountability25
system established by the board.26
B. The board shall promulgate rules and regulations in accordance with the27
Administrative Procedure Act to establish guidelines regarding qualifications for the28
tax credits, notification of eligible applicants, the amount of such tax credits, and the29 HLS 13RS-1362 ORIGINAL
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distribution and administration of such tax credits. All rules and regulations1
promulgated pursuant to the provisions of this Section shall be subject to oversight2
by the House Committee on Ways and Means and Senate Committee on Revenue3
and Fiscal Affairs.4
C. The department shall strive to ensure that the eligibility of applicants and5
the amount of school readiness expense tax credits granted pursuant to the provisions6
of this Section shall be equitable in comparison to the eligibility of applicants and7
the amount of school readiness tax credits granted prior to July 1, 2015, provided that8
the applicant maintains their eligibility.9
D.(1) If the department or the Department of Revenue finds that an applicant10
granted a tax credit pursuant to the provisions of this Section obtained the credit in11
violation of any provision of this Chapter or rule promulgated by the board,12
including but not limited to fraud or misrepresentation, the applicant granted the13
credit shall be subject to all applicable civil and criminal penalties.14
(2) The secretary of the Department of Revenue may recover any credits15
granted and subsequently disallowed as authorized pursuant to the provisions of R.S.16
47:1561.2. Persons or entities shall have the right to appeal decisions of the17
secretary as permitted in accordance with the provisions of R.S. 47:1565.18
Section 3. R.S. 47:6104 through 6109 are hereby repealed in their entirety.19
Section 4. Sections 1 and 4 of this Act shall become effective July 1, 2013, and20
Sections 2 and 3 of this Act shall become effective on July 1, 2015.21
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Thompson HB No. 698
Abstract: Repeals, beginning July 1, 2015, the school readiness tax credits and establishes,
beginning July 1, 2015, the school readiness expense tax credit.
Present law establishes school readiness tax credits in order to promote quality child care for
children five years of age or less. Present law requires the Dept. of Children and Family
Services (DCFS) to determine the eligibility of child care facilities, child care providers,
child care directors, and staff for receipt of tax credits. HLS 13RS-1362 ORIGINAL
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Proposed law retains present law but deletes references to DCFS and adds a definition for
"department" which shall mean the state agency designated as the state administrator of the
Child Care Development Fund. Further provides that the department shall be responsible
for distributing and managing tax credits associated with the fund.
Present law provides for an individual income tax credit for child care expenses based on the
quality rating of the child care facility which the child attends. The amount of the credit
varies depending on the quality rating of the child care facility.
Present law provides for a refundable income or corporation franchise tax credit for child
care providers. The amount of the credit shall be equal to an amount based upon the average
monthly number of children who either participate in the Child Care Assistance Program or
who are foster children in the custody of DCFS, and who are attending a child care facility
or facilities operated by the child care provider, multiplied by an amount which shall be
based upon the quality rating of each child care facility operated by the child care provider.
Present law provides for a refundable individual income tax credit for eligible child care
directors and eligible child care staff. The amount of the credit varies based upon the
qualifications of the provider.
Present law provides for a refundable income tax or corporation franchise tax credit for
eligible business child care expenses supported by a business. The amount of the credit shall
be based on a percentage of eligible business child care expenses depending upon the quality
rating of the child care facility to which the expenses are related or the quality rating of the
child care facility the child attends. Present law provides for an additional refundable
income or corporation franchise tax for the payment by a business of fees and grants to child
care resource and referral agencies not to exceed $5,000 per tax year.
Proposed law repeals, beginning on July 1, 2015, the school readiness tax credits established
pursuant to present law in favor of establishing a school readiness expense tax credit.
Proposed law provides beginning July 1, 2015, there shall be allowed an income tax credit
for eligible school readiness expenses incurred by qualified persons and entities. The
eligibility of a tax credit applicant shall be determined according to the applicant's
performance achievements under the uniform accountability system established by the State
Board of Elementary and Secondary Education, hereinafter the "board".
Proposed law requires the department to notify persons and entities of their eligibility for
such credits on forms furnished by the department.
Proposed law requires the board to promulgate rules and regulations in accordance with the
Administrative Procedure Act to establish guidelines regarding qualifications for the tax
credits, notification of eligible applicants, the amount of such tax credits, and the distribution
and administration of such tax credits. Further requires all rules and regulations to be
subject to oversight by the House ways and means and Senate revenue and fiscal affairs
committees.
Proposed law requires the department to strive to ensure that the eligibility of applicants and
the amount of school readiness expense tax credits granted pursuant to proposed law is
equitable in comparison to the eligibility of applicants and the amount of school readiness
tax credits granted prior to July 1, 2015, provided the applicant maintains their eligibility.
Proposed law provides that if the applicant obtained a credit in violation of the law or any
rule of the board, the applicant shall be subject to all applicable civil and criminal penalties.
Additionally provides for the recovery of disallowed credits and the right of an applicant to
appeal decisions of the secretary as permitted in accordance with present law. HLS 13RS-1362 ORIGINAL
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Provisions of the present law and proposed law relative to the school readiness tax credit
shall be effective July 1, 2013.
Provisions of proposed law establishing the school readiness expense tax credit shall be
effective July 1, 2015.
(Amends R.S. 47:6102, 6103(A)(1) and (2), and 6109(A); Adds R.S. 47:6110; Repeals R.S.
47:6104-6109)