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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) and to enact R.S.2
47:6103(C), relative to income tax credits; to provide relative to school readiness tax3
credits; to provide for certain definitions; to provide for the administration and4
recapture of such credits; to require certain recommendations; to provide for5
effectiveness; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 47:6102, 6103(A)(1) and (2), and 6109(A) are hereby amended and8
reenacted and R.S. 47:6103(C) is hereby enacted to read as follows:9
§6102. Definitions10
For purposes of this Chapter, the following terms shall have the following11
definitions:12
(1) "Child" or "children" means people who are five years of age or less.13
(2) "Child care facility" means any entity which that the Department of14
Children and Family Services state administrator of the Child Care Development15
Fund determines is eligible to participate in the quality rating system according to16
criteria set forth by rule adopted in the manner provided for in R.S. 47:6103, has17
applied to the Department of Children and Family Services for evaluation under such18
system, and is participating in the system.19 HLS 13RS-1362 REENGROSSED
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(3) "Child care provider" means a taxpayer who owns an eligible child care1
facility or facilities.2
(4) "Child care resource and referral agencies" means those agencies with3
whom the Department of Children and Family Services department has contracted4
to provide child care resource and referral.5
(5) "Department" shall mean the state agency designated as the lead agency6
of the Child Care Development Fund and responsible for determining the eligibility7
for the tax credits associated with the fund. 8
(6) "Eligible business child care expenses" means the total of the following9
expenses of a business that supports quality child care as provided for in R.S.10
47:6107:11
(a) For the construction, renovation, expansion, or major repair of an eligible12
child care facility, or for the purchase of equipment for such facility, or for the13
maintenance and operation thereof, not to exceed fifty thousand dollars in expenses14
per tax year.15
(b) For payments made to an eligible child care facility for child care16
services to support employees not to exceed five thousand dollars per child per tax17
year.18
(c) For the purchase of child care slots at eligible child care facilities actually19
provided or reserved for children of employees not to exceed fifty thousand dollars20
per tax year.21
(6) (7) "Eligible child care director" means an individual as defined in Title22
48 of the Louisiana Administrative Code, as amended, enrolled in the state23
practitioner registry developed and maintained by the Department of Children and24
Family Services department, and who is employed in an eligible child care facility25
which participates in the quality rating system.26
(7) (8) "Eligible child care facility" means a child care facility which that has27
applied to the Department of Children and Family Services department for an28 HLS 13RS-1362 REENGROSSED
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evaluation under its quality rating system and is participating in the quality rating1
system.2
(8) (9) "Eligible child care staff" means an individual enrolled in the state3
practitioner registry developed and maintained by the Department of Children and4
Family Services department and who is employed in an eligible child care facility5
which participates in the quality rating system and who otherwise meets the6
qualifications provided for in Title 48 of the Louisiana Administrative Code, Chapter7
53, as amended.8
(9)(a) (10)(a) "Quality rating" means the number of "stars" awarded to an9
eligible child care facility by the quality rating system.10
(b) The quality rating of the facility shall be based on the initial rating of the11
facility if it is the facility's first year participating in the quality rating system.12
Thereafter, the quality rating shall be the rating of the facility as of July first of each13
year.14
(10) (11) "Quality rating system" means a rule promulgated by the15
Department of Children and Family Services department implementing the Louisiana16
Quality Rating System which establishes criteria for evaluating and rating the quality17
of an eligible child care facility in terms of the award of "stars", with five "stars"18
being the highest quality child care facility.19
(12) "Tiered Kindergarten Readiness Improvement System" means the20
system established pursuant to R.S. 17:407.23.21
(13) "The Early Childhood Care and Education Network" means the network22
established pursuant to R.S. 17:407.23.23
(14) "Eligible early childhood learning centers" means successful early24
childhood learning centers according to rules and regulations promulgated by the25
State Board of Elementary and Secondary Education for the Tiered Kindergarten26
Readiness Improvement System, and that maintain a Type III license.27 HLS 13RS-1362 REENGROSSED
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§6103. Implementation1
A.(1) The Department of Children and Family Services department, in2
consultation with the Department of Revenue, shall promulgate rules and regulations3
for the purpose of developing and implementing the provisions of this Chapter in4
accordance with the provisions of the Administrative Procedure Act.5
(2) The Department of Children and Family Services department is6
authorized to use the emergency rulemaking process for the first set of rules7
developing and implementing this Chapter. Prior to adoption of the emergency rule,8
the department shall provide written notification that it intends to publish such rule9
in the State Register and the rule shall be subject to approval by the Senate10
Committee on Revenue and Fiscal Affairs and the House Committee on Ways and11
Means. However, if such committees do not take action on the rule within sixty days12
of publication in the State Register, the rule shall become effective.13
* * *14
C. The department, in collaboration with the State Board of Elementary and15
Secondary Education, shall make recommendations for legislation no later than16
January 1, 2015, to align the tax credits provided for in this Chapter with the Early17
Childhood Care and Education Network, which promotes kindergarten readiness in18
eligible early childhood learning centers and which evaluates eligible centers19
utilizing the letter grade system adopted through rules promulgated by the State20
Board of Elementary and Secondary Education for determining the success of an21
eligible center.22
* * *23
§6109. Recapture of credits24
A. If the Department of Children and Family Services or the Department of25
Revenue find Department of Revenue or the department find that a child care26
facility, a business, or an individual has obtained a tax credit in violation of the27
provisions of this Chapter, including but not limited to fraud or misrepresentation,28
then the taxpayer's state income tax for such taxable period shall be increased by29 HLS 13RS-1362 REENGROSSED
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such amount necessary for the recapture of the tax credit provided for in this1
Chapter.2
* * *3
Section 2. This Act shall become effective on July 1, 2013; if vetoed by the4
governor and subsequently approved by the legislature, this Act shall become effective on5
July 1, 2013, or on the day following such approval by the legislature, whichever is later.6
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: Requires the department, in collaboration with BESE, to make recommendations
for legislation no later than Jan. 1, 2015, to align the tax credits in present law with
the Early Childhood Care and Education Network.
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.
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 lead agency of the Child
Care Development Fund and responsible for determining the eligibility for the tax credits
associated with the fund.
Proposed law adds definitions for "Tiered Kindergarten Readiness Improvement System",
"The Early Childhood Care and Education Network", and "eligible early childhood learning
centers".
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 HLS 13RS-1362 REENGROSSED
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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 requires the department, in collaboration with the State Board of Elementary
and Secondary Education (BESE), to make recommendations for legislation no later than
Jan. 1, 2015, to align the tax credits provided for in present law with the Early Childhood
Care and Education Network, which promotes kindergarten readiness in eligible early
childhood learning centers and which evaluates eligible centers utilizing the letter grade
system adopted through rules promulgated by BESE for determining the success of an
eligible center.
Effective July 1, 2013.
(Amends R.S. 47:6102, 6103(A)(1) and (2), and 6109(A); Adds R.S. 47:6103(C))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Adds definitions for the Tiered Kindergarten Readiness Improvement System,
the Early Childhood Care and Education Network, and eligible early childhood
learning centers.
2. Adds requirement that the Department of Revenue work in consultation with the
department to promulgate rules and regulation to implement present law.
3. Adds requirement that the department, in collaboration with BESE, make
recommendations for legislation no later than Jan. 1, 2015, to align the tax credits
authorized in present law with the Early Childhood Care and Education Network.
4. Deletes provisions which repealed the tax credits in present law in favor of
establishing a school readiness expense tax credit.
House Floor Amendments to the engrossed bill.
1. Changes the definition of department from the state agency designated as the
administrator of the Child Care Development Fund responsible for distributing
and managing the tax credits in present law to the lead agency of the Child Care
Development Fund and responsible for determining the eligibility for the tax
credits in present law.