By: Miles, et al. S.B. No. 518
A BILL TO BE ENTITLED
AN ACT
relating to a franchise tax credit for entities that employ certain
students in certain paid internship or similar programs.
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 PAID INTERNSHIPS GIVEN TO CERTAIN HIGH
SCHOOL STUDENTS
Sec. 171.871. DEFINITIONS. In this subchapter:
(1) "Commission" means the Texas Workforce
Commission.
(2) "Eligible internship program" means a paid
internship or similar program that meets the requirements of rules
adopted by the commission under Section 171.875 and requires an
eligible student to work at least the number of hours equivalent to
five hours per week for one semester.
(3) "Eligible student" means a home-schooled student
or a student enrolled in a public, private, or charter school who
has reached the minimum age required under Chapter 51, Labor Code,
to legally work in the eligible internship program.
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 FOR CREDIT. A taxable entity
qualifies for a credit under this subchapter for each eligible
student who completes an eligible internship program offered by the
taxable entity.
Sec. 171.874. AMOUNT OF CREDIT; LIMITATIONS. (a) The
amount of the credit is $1,000 for each eligible student who
completes an eligible internship program offered by the taxable
entity.
(b) A taxable entity may claim the credit only for an
eligible internship program offered by the taxable entity that is
located or based in this state.
(c) A taxable entity may not claim the credit in connection
with an eligible student if an owner of the taxable entity is
related to the eligible student within the third degree of
consanguinity as determined under Subchapter B, Chapter 573,
Government Code.
(d) The total amount of tax credits that may be awarded
under this subchapter may not exceed $5 million in a state fiscal
biennium.
(e) The comptroller by rule shall prescribe procedures by
which the comptroller may allocate credits under this subchapter.
The procedures must provide that credits are allocated to taxable
entities that apply under Section 171.876 on a first-come,
first-served basis.
Sec. 171.875. COMMISSION RULES. The commission, after
consulting with the commissioner of education, shall adopt rules
providing the requirements that an internship or similar program
must meet to be considered an eligible internship program under
this subchapter.
Sec. 171.876. 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. 171.877. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
taxable entity may claim a credit under this subchapter against the
tax owed for a privilege period only in connection with an eligible
student who completes an eligible internship program during the
privilege period.
Sec. 171.878. BIENNIAL STUDY AND REPORT. (a) In this
section, "school" refers to the school of public affairs at Texas
Southern University.
(b) The school shall biennially study and report on the
effectiveness of the tax credit established by this subchapter in
creating jobs. The report must include, to the extent available,
for each privilege period covered by the report:
(1) the total number of eligible internship programs
offered in which eligible students participated and the total
amount of credits claimed by taxable entities for those internship
programs;
(2) the total number of eligible students who
completed an eligible internship program and who were subsequently
hired for a permanent job in this state by the taxable entity that
offered the program;
(3) for the permanent jobs described by Subdivision
(2):
(A) the median wage of those jobs;
(B) the North American Industry Classification
System classification of each of those jobs; and
(C) the number of those jobs that provide health
benefits coverage;
(4) the number of taxable entities receiving a credit
that are historically underutilized businesses, as that term is
defined by Section 2161.001, Government Code, and the total amount
of credits claimed by those entities;
(5) demographic information on students participating
in eligible internship programs under this subchapter, including
the schools in which the students are enrolled, to the extent
allowed under state and federal law; and
(6) an assessment of the number of eligible internship
programs that would not have been offered in the absence of the
credit and the total number of students who completed those
programs, including:
(A) for the 2018 privilege period, a comparison
of the number of students for which a credit is reported under
Subdivision (1) to the number of public high school students of
legal working age who were employed in this state for any period of
time during the 2017 privilege period by the taxable entities that
offered eligible internship programs reported under Subdivision
(1) for the 2018 privilege period; and
(B) for the 2018 privilege period and each
subsequent period, an estimate of the number of public high school
students of legal working age who were employed in this state for
any period of time during the privilege period outside of an
eligible internship program.
(c) To the extent allowed by law, the comptroller, the Texas
Higher Education Coordinating Board, and any other appropriate
state agency shall assist the school in obtaining the information
needed to prepare the report required under Subsection (b).
(d) Not later than December 1 of each even-numbered year,
the school shall submit the report required under Subsection (b) to
the governor, the lieutenant governor, and the legislature. The
report may be submitted electronically.
Sec. 171.879. EXPIRATION. (a) This subchapter expires
December 31, 2023.
(b) The expiration of this subchapter does not affect the
carryforward of a credit authorized under this subchapter
established before the date this subchapter expires.
SECTION 2. A taxable entity may claim the credit under
Subchapter R, Chapter 171, Tax Code, as added by this Act, only in
connection with an eligible student who completes a paid internship
or similar program 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. The first report required by Section 171.878,
Tax Code, as added by this Act, is due not later than December 1,
2018.
SECTION 4. This Act takes effect January 1, 2018.