Texas 2019 - 86th Regular

Texas House Bill HB3423 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R9164 CBH-D
2	2	By: Allison H.B. No. 3423
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to ad valorem and franchise tax credits for donations to
8	8	school districts to create or support career and technical
9	9	education programs or courses.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 31, Tax Code, is amended by adding
12	12	Section 31.038 to read as follows:
13	13	Sec. 31.038. SCHOOL DISTRICT TAX CREDIT FOR DONATIONS TO
14	14	CREATE OR SUPPORT CAREER AND TECHNICAL EDUCATION PROGRAMS OR
15	15	COURSES. (a) In this section:
16	16	(1) "Business entity" means a legal entity, including
17	17	a corporation or partnership, that is formed for the purpose of
18	18	making a profit.
19	19	(2) "Career and technical education" means training
20	20	that teaches new private sector workplace skills, adds value to the
21	21	wage-earning potential of participants, and increases the
22	22	long-term employability of participants.
23	23	(3) "Principal office" means the location in this
24	24	state where the decision makers for a business entity conduct the
25	25	daily affairs of the business.
26	26	(b) An owner of real property located in a school district
27	27	is entitled to a credit against the taxes imposed in a tax year on
28	28	that property by the district if:
29	29	(1) the property owner is a business entity;
30	30	(2) the property owner's principal office is located
31	31	in the district; and
32	32	(3) the property owner donates money to the district
33	33	to create a new career and technical education program or course in
34	34	the district or to expand an existing career and technical
35	35	education program or course in the district.
36	36	(c) The amount of the credit to which a property owner is
37	37	entitled under this section against the taxes imposed by the school
38	38	district on the owner's property in a tax year is equal to the
39	39	lesser of $5 million or an amount equal to:
40	40	(1) for a donation described by Subsection (b)(3) that
41	41	is made during the preceding 12-month period and that does not
42	42	exceed $100,000, 50 percent of the amount of the donation;
43	43	(2) for a donation described by Subsection (b)(3) that
44	44	is made during the preceding 12-month period and that exceeds
45	45	$100,000 but does not exceed $300,000, $50,000 plus 100 percent of
46	46	the amount of the donation that exceeds $100,000; or
47	47	(3) for a donation described by Subsection (b)(3) that
48	48	is made during the preceding 12-month period and that exceeds
49	49	$300,000, $250,000 plus 50 percent of the amount of the donation
50	50	that exceeds $300,000.
51	51	(d) Notwithstanding Subsection (c), the amount of the
52	52	credit to which a property owner is entitled under this section in
53	53	any tax year may not exceed the amount of taxes imposed by the
54	54	school district on the property owner's property in that tax year.
55	55	(e) The property owner must file an application each year
56	56	with the chief appraiser of the appraisal district in which the
57	57	property is located to receive a credit under this section. The
58	58	application must include an affidavit stating the donations made
59	59	under Subsection (b)(3) by the property owner during the preceding
60	60	12-month period and include any relevant information or
61	61	documentation required by the application form.
62	62	(f) The chief appraiser shall forward a copy of the
63	63	application to the comptroller and to the school district described
64	64	by Subsection (b).
65	65	(g) The comptroller shall determine whether the donation
66	66	qualifies for a credit under this section. A determination of the
67	67	comptroller is subject to appeal under the provisions of this title
68	68	applicable to an order of the comptroller apportioning the
69	69	appraised value of railroad rolling stock among counties.
70	70	(h) The comptroller shall adopt rules for the
71	71	administration of this section, including rules prescribing the
72	72	form of an application for a credit, specifying the 12-month period
73	73	for which the donations are used to calculate the credit, and
74	74	governing appeals of comptroller determinations under Subsection
75	75	(g).
76	76	SECTION 2. Chapter 171, Tax Code, is amended by adding
77	77	Subchapter K-2 to read as follows:
78	78	SUBCHAPTER K-2. TAX CREDIT FOR DONATIONS TO CREATE OR EXPAND CAREER
79	79	AND TECHNICAL EDUCATION PROGRAMS OR COURSES
80	80	Sec. 171.581. DEFINITIONS. In this subchapter, "career and
81	81	technical education" and "principal office" have the meanings
82	82	assigned by Section 31.038.
83	83	Sec. 171.582. ENTITLEMENT TO CREDIT. A taxable entity is
84	84	entitled to a credit in the amount and under the conditions and
85	85	limitations provided by this subchapter against the tax imposed
86	86	under this chapter.
87	87	Sec. 171.583. DONATION OF MONEY TO SCHOOL DISTRICT FOR
88	88	CAREER AND TECHNICAL EDUCATION PROGRAM OR COURSE. (a) A taxable
89	89	entity qualifies for a credit under this subchapter if the taxable
90	90	entity:
91	91	(1) donates money to a school district in this state to
92	92	create a new career and technical education program or course in the
93	93	district or to expand an existing career and technical education
94	94	program or course in the district; and
95	95	(2) the principal office of the taxable entity is not
96	96	located in the district to which the entity makes the donation.
97	97	(b) A school district that receives a donation under
98	98	Subsection (a) shall issue to the taxable entity a receipt listing
99	99	the amount of the donation. If the donation is made over a period of
100	100	more than one year, the district shall issue a receipt each year
101	101	listing the amount of the donation made during that year.
102	102	Sec. 171.584. AMOUNT OF CREDIT; LIMITATION. (a) The amount
103	103	of the credit that may be claimed on a report is equal to the lesser
104	104	of $5 million or an amount equal to:
105	105	(1) for a donation described by Section 171.583 that
106	106	is made during the reporting period and that does not exceed
107	107	$100,000, 50 percent of the amount of the donation;
108	108	(2) for a donation described by Section 171.583 that
109	109	is made during the reporting period and that exceeds $100,000 but
110	110	does not exceed $300,000, $50,000 plus 100 percent of the amount of
111	111	the donation that exceeds $100,000; or
112	112	(3) for a donation described by Section 171.583 that
113	113	is made during the reporting period and that exceeds $300,000,
114	114	$250,000 plus 50 percent of the amount of the donation that exceeds
115	115	$300,000.
116	116	(b) Notwithstanding Subsection (a), the amount of the
117	117	credit may not exceed the amount of franchise tax due for the
118	118	report, after applying all other applicable credits.
119	119	Sec. 171.585. APPLICATION FOR CREDIT. (a) A taxable entity
120	120	must apply for a credit under this subchapter on or with the report
121	121	for the period for which the credit is claimed. The taxable entity
122	122	must include the receipt for that period provided by the school
123	123	district under Section 171.583(b).
124	124	(b) The burden of establishing eligibility for and the value
125	125	of the credit is on the taxable entity.
126	126	Sec. 171.586. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
127	127	taxable entity may claim a credit under this subchapter for a report
128	128	only in connection with donations made during the accounting period
129	129	on which the report is based.
130	130	Sec. 171.587. RULES. The comptroller may adopt rules and
131	131	forms necessary to implement this subchapter.
132	132	SECTION 3. (a) Section 31.038, Tax Code, as added by this
133	133	Act, applies only to ad valorem taxes imposed for a tax year
134	134	beginning on or after the effective date of this Act.
135	135	(b) Subchapter K-2, Chapter 171, Tax Code, as added by this
136	136	Act, applies only to a report originally due on or after the
137	137	effective date of this Act.
138	138	SECTION 4. This Act takes effect January 1, 2020, but only
139	139	if the constitutional amendment proposed by the 86th Legislature,
140	140	Regular Session, 2019, authorizing the legislature to provide for a
141	141	credit against ad valorem taxes imposed by a school district on the
142	142	property owned by a business entity that donates money to the
143	143	district to create or support career and technical education
144	144	programs or courses is approved by the voters. If that amendment
145	145	is not approved by the voters, this Act has no effect.