85R5748 GRM-D
By: Raymond, King of Uvalde H.B. No. 1127
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit pilot program for taxable
entities that employ certain apprentices.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. TAX CREDIT PILOT PROGRAM FOR WAGES PAID TO CERTAIN
APPRENTICES
Sec. 171.701. DEFINITION. In this subchapter, "registered
apprenticeship" means an apprenticeship program that is:
(1) registered with the United States Department of
Labor; and
(2) qualified to receive funding provided through the
Texas Workforce Commission under Chapter 133, Education Code.
Sec. 171.702. 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. 171.703. QUALIFICATION. (a) A taxable entity
qualifies for a credit under this subchapter for wages paid to each
apprentice who meets the requirements of Subsection (b) and is
employed by the taxable entity in a registered apprenticeship
position that is located or based in a county that borders the
United Mexican States.
(b) The apprentice must:
(1) be a member of a household with a total income that
is at or below the income guidelines necessary to qualify for the
national free or reduced-price lunch program established under 42
U.S.C. Section 1751 et seq.; or
(2) reside in a census tract in which 30 percent or
more of the population has a household income at or below 185
percent of the federal poverty level.
Sec. 171.704. AMOUNT; LIMITATIONS. (a) Subject to
Subsection (b), the amount of the credit for a report in connection
with each apprentice described by Section 171.703 is equal to the
lesser of:
(1) 50 percent of the wages paid by the taxable entity
to the apprentice; or
(2) $5,000.
(b) The total amount of the credit for each report is equal
to the lesser of:
(1) the total of the credits allowed under Subsection
(a) for the reporting period for all apprentices; or
(2) the amount of franchise tax due after applying all
other applicable credits.
Sec. 171.705. 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. 171.706. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
taxable entity may claim a credit under this subchapter for a report
only in connection with wages paid during the accounting period on
which the report is based.
Sec. 171.707. REPORT ON PILOT PROGRAM. (a) Not later than
September 1, 2022, the comptroller shall prepare and deliver to the
governor, the lieutenant governor, the speaker of the house of
representatives, and the presiding officer of each legislative
standing committee with primary jurisdiction over taxation a report
that evaluates the effect of the pilot program on the employment
outcomes and earnings of apprentices with respect to whom credits
are granted under the pilot program under this subchapter. The
report must include a recommendation regarding whether the pilot
program should be continued, expanded, or terminated.
(b) A taxable entity that claims a credit under this
subchapter shall provide to the comptroller information the
comptroller requests to prepare the report described by Subsection
(a).
Sec. 171.708. EXPIRATION. This subchapter expires December
31, 2024.
SECTION 2. A taxable entity may claim the credit under
Subchapter N, Chapter 171, Tax Code, as added by this Act, only for
wages paid on or after the effective date of this Act and only on a
franchise tax report originally due under Chapter 171, Tax Code, on
or after that date.
SECTION 3. This Act takes effect January 1, 2018.