Texas Senate Bill SB654

Texas 2025 - 89th Regular

• Filed: 12/18/24

Caption

Relating to a franchise tax credit for certain child-care centers that increase their capacity to care for children.

Impact

If enacted, SB654 will amend Chapter 171 of the Texas Tax Code to introduce the new subchapter that outlines the tax credit provisions. Licensed child-care centers that participate in the Texas Rising Star Program and meet specific capacity increase criteria will be eligible for this credit. The amount of credit is tiered based on the percentage increase in capacity, providing significant benefits to those who make substantial improvements. This change is expected to have a positive impact on child-care availability statewide, particularly in areas where demand for services has outpaced supply.

Summary

SB654 proposes a franchise tax credit aimed at incentivizing licensed child-care centers in Texas to increase their capacity to care for more children. The intention behind the bill is to address the growing demand for child care services in the state by providing financial benefits to those facilities that expand their services. By offering a tax credit based on the percentage increase in capacity, the legislation encourages child-care providers to hire additional staff and invest in their facilities to better serve families in Texas.

Contention

While the bill seeks to tackle the issue of child-care shortages, it may also raise concerns among various stakeholders regarding funding implications and the equitable distribution of resources. Advocates for early childhood education may support the legislation as a means of enhancing child-care options, but critics might argue that reliance on tax credits could lead to uneven benefits for larger providers compared to smaller, independent centers. Additionally, there may be scrutiny over the selection process for the Texas Rising Star Program and whether all child-care facilities have equal opportunities to qualify for the credits.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section