84R10829 CBH-F
By: Oliveira H.B. No. 3305
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for wages paid to certain
employees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter R to read as follows:
SUBCHAPTER R. TAX CREDIT FOR WAGES PAID TO CERTAIN EMPLOYEES
Sec. 171.871. DEFINITIONS. In this subchapter:
(1) "Commission" means the Texas Workforce
Commission.
(2) "Wages" means payments described by Sections
51(c)(1), (2), and (3), Internal Revenue Code.
Sec. 171.872. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions provided
by this subchapter against the tax imposed under this chapter.
Sec. 171.873. QUALIFICATION. A taxable entity qualifies
for a credit under this subchapter for the wages paid or incurred by
the taxable entity for the services of each employee who:
(1) is a resident of this state; and
(2) at the time the person is hired by the taxable
entity:
(A) has been issued a document by the commission
stating that the individual is a Qualified IV-A recipient as
defined by 26 U.S.C. Section 51(d)(2) or is otherwise a member of a
family that receives financial assistance and services under
Chapter 31 or 34, Human Resources Code;
(B) served on active duty in the United States
armed forces and was discharged or released from active duty after
September 11, 2001;
(C) is at least 18 years of age but younger than
25 years of age, is unemployed, and has not been enrolled in an
educational institution for at least six months;
(D) had exhausted the person's unemployment
compensation benefits at any time during the preceding 18 months
and is unemployed; or
(E) is unemployed and receiving unemployment
compensation benefits.
Sec. 171.874. CONFIRMATION OF ELIGIBILITY. (a) A taxable
entity is not entitled to the credit under this subchapter for wages
paid or incurred for the services of an employee unless the taxable
entity requests and receives a confirmation from the commission
that the employee meets the requirements under Section 171.873.
(b) A taxable entity must request confirmation for each
employee for which the person intends to claim the credit not later
than the 60th day after the date the employee begins employment with
the taxable entity.
(c) The commission shall promulgate an online form that a
taxable entity must use to request the certification.
(d) A taxable entity is considered to have received the
confirmation that the employee meets the requirements under Section
171.873 if the taxable entity does not receive from the commission a
confirmation or a denial of confirmation not later than the 61st day
after the date the taxable entity submitted the original request
for the confirmation.
(e) The commission shall forward each confirmation to the
comptroller.
(f) The Health and Human Services Commission shall provide
to the commission information necessary for the commission to
confirm that an employee meets the requirements under Section
171.873.
Sec. 171.875. AMOUNT; LIMITATIONS. (a) The amount of the
credit in relation to each employee is equal to the lesser of
$10,000 or 20 percent of the wages paid or incurred by the taxable
entity for the services of that employee beginning on the date the
employee begins employment and ending on the anniversary of that
date.
(b) The total credit claimed under this subchapter for a
report, including the amount of any carryforward credit under
Section 171.876, may not exceed the amount of franchise tax due for
the report after any other applicable credits.
Sec. 171.876. CARRYFORWARD. (a) If a taxable entity is
eligible for a credit that exceeds the limitation under Section
171.875(b), the taxable entity may carry the unused credit forward
for not more than five consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit that cannot be claimed in the current year because of the
limitation under Section 171.875(b).
Sec. 171.877. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the tax
report for the period for which the credit is claimed.
(b) The comptroller shall promulgate a form for the
application for the credit. A taxable entity must use the form in
applying for the credit.
Sec. 171.878. ASSIGNMENT PROHIBITED. A taxable entity may
not convey, assign, or transfer a credit allowed under this
subchapter to another entity unless all of the assets of the taxable
entity, or a discrete unit of the taxable entity that paid or
incurred the wages, are sold, conveyed, assigned, or transferred in
the same transaction or in a related transaction, to a taxable
entity that directly or indirectly owns, controls, or otherwise
directs, wholly or partly, an interest in the taxable entity from
which the credit is conveyed, assigned, or transferred.
Sec. 171.879. RULES. The comptroller and the commission
shall adopt rules necessary to administer this subchapter.
SECTION 2. Section 19.011(a), Education Code, is amended to
read as follows:
(a) In order to achieve the goals stated in Section 19.003,
the district with the cooperation of the Health and Human Services
Commission, the Texas Workforce Investment Council, the Texas
Workforce Commission, the Texas Economic Development and Tourism
Office, and the department shall provide persons confined or
imprisoned in the department:
(1) information from local workforce [and]
development boards on job training and employment referral
services; and
(2) information on the franchise tax credit [refund
voucher] program under Subchapter R, Chapter 171, Tax [H, Chapter
301, Labor] Code.
SECTION 3. Section 301.0671, Labor Code, is amended to read
as follows:
Sec. 301.0671. FEDERAL WORK OPPORTUNITY TAX CREDIT AND
FRANCHISE [STATE] TAX CREDIT [REFUND] FOR CERTAIN EMPLOYERS. (a)
The commission is the lead agency in promoting awareness of the
federal work opportunity tax credit program and the franchise
[state] tax credit [refund] for employers under Subchapter R,
Chapter 171, Tax Code [H].
(b) The commission, in coordination with the comptroller's
office and the Health and Human Services Commission [Texas
Department of Human Services], shall develop and distribute
educational materials designed to increase awareness of the tax
credits [credit and tax refund] described by Subsection (a) to
encourage employers to hire recipients of the financial assistance
program [for persons with dependent children] under Chapter 31,
Human Resources Code.
SECTION 4. Section 306.007(a), Labor Code, is amended to
read as follows:
(a) To assist in the reintegration into the labor force of
persons formerly sentenced to the correctional institutions
division or committed to the Texas Juvenile Justice Department
[Youth Commission], the commission through Project RIO shall
provide:
(1) to those persons:
(A) information from local workforce development
boards on job training and employment referral services;
(B) information from the Department of State
Health Services on substance abuse treatment services;
(C) information from the Texas Department of
Housing and Community Affairs on housing services;
(D) information from the Texas Veterans
Commission on services for veterans; and
(E) information on franchise tax credits for
employers [refund voucher programs] under Subchapter R, Chapter
171, Tax Code [H, Chapter 301]; and
(2) to the employers and potential employers of those
persons:
(A) information from the Texas Economic
Development and Tourism Office on the enterprise zone program; and
(B) information from local workforce development
boards on services listed in Section 2308.304, Government Code.
SECTION 5. The following are repealed:
(1) Subchapter H, Chapter 301, Labor Code; and
(2) Section 111.109, Tax Code.
SECTION 6. The repeal of Subchapter H, Chapter 301, Labor
Code, and Section 111.109, Tax Code, by this Act does not affect an
eligible person's right to claim a refund of state taxes that was
established under Subchapter H, Chapter 301, Labor Code, and
Section 111.109, Tax Code, before the effective date of this Act. An
eligible person's right to claim a refund of state taxes that was
established under Subchapter H, Chapter 301, Labor Code, and
Section 111.109, Tax Code, before the effective date of this Act is
governed by the law in effect on the date the right to claim the
refund was established, and the former law is continued in effect
for that purpose.
SECTION 7. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 8. This Act takes effect January 1, 2016.