Texas House Bill HB1634

Texas 2015 - 84th Regular

Caption

Relating to a franchise tax credit for certain taxable entities offering postsecondary tuition assistance.

Impact

The bill amends Chapter 171 of the Tax Code by introducing a new subchapter that outlines the eligibility criteria for qualifying for the credit. Taxable entities that wish to benefit must be located in a neighborhood empowerment zone and provide tuition assistance for their employees attending postsecondary educational institutions. Additionally, the total revenue of the taxable entity must not exceed $10 million. This limitation is designed to target small to medium-sized businesses, enabling them to invest in the professional growth of their workforce.

Summary

House Bill 1634 proposes the establishment of a franchise tax credit intended for certain taxable entities that provide postsecondary tuition assistance to their employees. This bill aims to support businesses operating within designated neighborhood empowerment zones while promoting workforce education and skill development. By offering a financial incentive, the bill encourages employers to contribute to the higher education of their employees, which could potentially enhance employee retention and job performance.

Conclusion

Overall, HB1634 facilitates a financial mechanism to bolster employee education through tuition assistance that organizations can provide while also aligning with broader goals of enhancing the skill set available in local neighborhoods. The emphasis on limiting eligibility to certain revenue thresholds coupled with location designation aims to ensure that the benefits are directed towards fostering growth in businesses that may otherwise lack the resources for such programs.

Contention

While the bill provides a structured framework for companies to apply for tax credits based on the Tuition Assistance they provide, it may raise questions regarding its effectiveness and the potential misuse of the tax credit system. Critics could argue that such financial incentives might not sufficiently stimulate local economies or lead to meaningful investment in workforce education, particularly if the criteria make it difficult for many businesses to qualify. Additionally, the expiration date set for December 31, 2020, raises concerns about the longevity and sustained impact of this financial support.