| 1 | 1 | | 85R5748 GRM-D |
|---|
| 2 | 2 | | By: Raymond, King of Uvalde H.B. No. 1127 |
|---|
| 3 | 3 | | |
|---|
| 4 | 4 | | |
|---|
| 5 | 5 | | A BILL TO BE ENTITLED |
|---|
| 6 | 6 | | AN ACT |
|---|
| 7 | 7 | | relating to a franchise tax credit pilot program for taxable |
|---|
| 8 | 8 | | entities that employ certain apprentices. |
|---|
| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 10 | 10 | | SECTION 1. Chapter 171, Tax Code, is amended by adding |
|---|
| 11 | 11 | | Subchapter N to read as follows: |
|---|
| 12 | 12 | | SUBCHAPTER N. TAX CREDIT PILOT PROGRAM FOR WAGES PAID TO CERTAIN |
|---|
| 13 | 13 | | APPRENTICES |
|---|
| 14 | 14 | | Sec. 171.701. DEFINITION. In this subchapter, "registered |
|---|
| 15 | 15 | | apprenticeship" means an apprenticeship program that is: |
|---|
| 16 | 16 | | (1) registered with the United States Department of |
|---|
| 17 | 17 | | Labor; and |
|---|
| 18 | 18 | | (2) qualified to receive funding provided through the |
|---|
| 19 | 19 | | Texas Workforce Commission under Chapter 133, Education Code. |
|---|
| 20 | 20 | | Sec. 171.702. ENTITLEMENT TO CREDIT. A taxable entity is |
|---|
| 21 | 21 | | entitled to a credit in the amount and under the conditions provided |
|---|
| 22 | 22 | | by this subchapter against the tax imposed under this chapter. |
|---|
| 23 | 23 | | Sec. 171.703. QUALIFICATION. (a) A taxable entity |
|---|
| 24 | 24 | | qualifies for a credit under this subchapter for wages paid to each |
|---|
| 25 | 25 | | apprentice who meets the requirements of Subsection (b) and is |
|---|
| 26 | 26 | | employed by the taxable entity in a registered apprenticeship |
|---|
| 27 | 27 | | position that is located or based in a county that borders the |
|---|
| 28 | 28 | | United Mexican States. |
|---|
| 29 | 29 | | (b) The apprentice must: |
|---|
| 30 | 30 | | (1) be a member of a household with a total income that |
|---|
| 31 | 31 | | is at or below the income guidelines necessary to qualify for the |
|---|
| 32 | 32 | | national free or reduced-price lunch program established under 42 |
|---|
| 33 | 33 | | U.S.C. Section 1751 et seq.; or |
|---|
| 34 | 34 | | (2) reside in a census tract in which 30 percent or |
|---|
| 35 | 35 | | more of the population has a household income at or below 185 |
|---|
| 36 | 36 | | percent of the federal poverty level. |
|---|
| 37 | 37 | | Sec. 171.704. AMOUNT; LIMITATIONS. (a) Subject to |
|---|
| 38 | 38 | | Subsection (b), the amount of the credit for a report in connection |
|---|
| 39 | 39 | | with each apprentice described by Section 171.703 is equal to the |
|---|
| 40 | 40 | | lesser of: |
|---|
| 41 | 41 | | (1) 50 percent of the wages paid by the taxable entity |
|---|
| 42 | 42 | | to the apprentice; or |
|---|
| 43 | 43 | | (2) $5,000. |
|---|
| 44 | 44 | | (b) The total amount of the credit for each report is equal |
|---|
| 45 | 45 | | to the lesser of: |
|---|
| 46 | 46 | | (1) the total of the credits allowed under Subsection |
|---|
| 47 | 47 | | (a) for the reporting period for all apprentices; or |
|---|
| 48 | 48 | | (2) the amount of franchise tax due after applying all |
|---|
| 49 | 49 | | other applicable credits. |
|---|
| 50 | 50 | | Sec. 171.705. APPLICATION FOR CREDIT. (a) A taxable entity |
|---|
| 51 | 51 | | must apply for a credit under this subchapter on or with the tax |
|---|
| 52 | 52 | | report for the period for which the credit is claimed. |
|---|
| 53 | 53 | | (b) The comptroller shall promulgate a form for the |
|---|
| 54 | 54 | | application for the credit. A taxable entity must use the form in |
|---|
| 55 | 55 | | applying for the credit. |
|---|
| 56 | 56 | | Sec. 171.706. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A |
|---|
| 57 | 57 | | taxable entity may claim a credit under this subchapter for a report |
|---|
| 58 | 58 | | only in connection with wages paid during the accounting period on |
|---|
| 59 | 59 | | which the report is based. |
|---|
| 60 | 60 | | Sec. 171.707. REPORT ON PILOT PROGRAM. (a) Not later than |
|---|
| 61 | 61 | | September 1, 2022, the comptroller shall prepare and deliver to the |
|---|
| 62 | 62 | | governor, the lieutenant governor, the speaker of the house of |
|---|
| 63 | 63 | | representatives, and the presiding officer of each legislative |
|---|
| 64 | 64 | | standing committee with primary jurisdiction over taxation a report |
|---|
| 65 | 65 | | that evaluates the effect of the pilot program on the employment |
|---|
| 66 | 66 | | outcomes and earnings of apprentices with respect to whom credits |
|---|
| 67 | 67 | | are granted under the pilot program under this subchapter. The |
|---|
| 68 | 68 | | report must include a recommendation regarding whether the pilot |
|---|
| 69 | 69 | | program should be continued, expanded, or terminated. |
|---|
| 70 | 70 | | (b) A taxable entity that claims a credit under this |
|---|
| 71 | 71 | | subchapter shall provide to the comptroller information the |
|---|
| 72 | 72 | | comptroller requests to prepare the report described by Subsection |
|---|
| 73 | 73 | | (a). |
|---|
| 74 | 74 | | Sec. 171.708. EXPIRATION. This subchapter expires December |
|---|
| 75 | 75 | | 31, 2024. |
|---|
| 76 | 76 | | SECTION 2. A taxable entity may claim the credit under |
|---|
| 77 | 77 | | Subchapter N, Chapter 171, Tax Code, as added by this Act, only for |
|---|
| 78 | 78 | | wages paid on or after the effective date of this Act and only on a |
|---|
| 79 | 79 | | franchise tax report originally due under Chapter 171, Tax Code, on |
|---|
| 80 | 80 | | or after that date. |
|---|
| 81 | 81 | | SECTION 3. This Act takes effect January 1, 2018. |
|---|