86R9164 CBH-D
By: Allison H.B. No. 3423
A BILL TO BE ENTITLED
AN ACT
relating to ad valorem and franchise tax credits for donations to
school districts to create or support career and technical
education programs or courses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 31, Tax Code, is amended by adding
Section 31.038 to read as follows:
Sec. 31.038. SCHOOL DISTRICT TAX CREDIT FOR DONATIONS TO
CREATE OR SUPPORT CAREER AND TECHNICAL EDUCATION PROGRAMS OR
COURSES. (a) In this section:
(1) "Business entity" means a legal entity, including
a corporation or partnership, that is formed for the purpose of
making a profit.
(2) "Career and technical education" means training
that teaches new private sector workplace skills, adds value to the
wage-earning potential of participants, and increases the
long-term employability of participants.
(3) "Principal office" means the location in this
state where the decision makers for a business entity conduct the
daily affairs of the business.
(b) An owner of real property located in a school district
is entitled to a credit against the taxes imposed in a tax year on
that property by the district if:
(1) the property owner is a business entity;
(2) the property owner's principal office is located
in the district; and
(3) the property owner donates money to the district
to create a new career and technical education program or course in
the district or to expand an existing career and technical
education program or course in the district.
(c) The amount of the credit to which a property owner is
entitled under this section against the taxes imposed by the school
district on the owner's property in a tax year is equal to the
lesser of $5 million or an amount equal to:
(1) for a donation described by Subsection (b)(3) that
is made during the preceding 12-month period and that does not
exceed $100,000, 50 percent of the amount of the donation;
(2) for a donation described by Subsection (b)(3) that
is made during the preceding 12-month period and that exceeds
$100,000 but does not exceed $300,000, $50,000 plus 100 percent of
the amount of the donation that exceeds $100,000; or
(3) for a donation described by Subsection (b)(3) that
is made during the preceding 12-month period and that exceeds
$300,000, $250,000 plus 50 percent of the amount of the donation
that exceeds $300,000.
(d) Notwithstanding Subsection (c), the amount of the
credit to which a property owner is entitled under this section in
any tax year may not exceed the amount of taxes imposed by the
school district on the property owner's property in that tax year.
(e) The property owner must file an application each year
with the chief appraiser of the appraisal district in which the
property is located to receive a credit under this section. The
application must include an affidavit stating the donations made
under Subsection (b)(3) by the property owner during the preceding
12-month period and include any relevant information or
documentation required by the application form.
(f) The chief appraiser shall forward a copy of the
application to the comptroller and to the school district described
by Subsection (b).
(g) The comptroller shall determine whether the donation
qualifies for a credit under this section. A determination of the
comptroller is subject to appeal under the provisions of this title
applicable to an order of the comptroller apportioning the
appraised value of railroad rolling stock among counties.
(h) The comptroller shall adopt rules for the
administration of this section, including rules prescribing the
form of an application for a credit, specifying the 12-month period
for which the donations are used to calculate the credit, and
governing appeals of comptroller determinations under Subsection
(g).
SECTION 2. Chapter 171, Tax Code, is amended by adding
Subchapter K-2 to read as follows:
SUBCHAPTER K-2. TAX CREDIT FOR DONATIONS TO CREATE OR EXPAND CAREER
AND TECHNICAL EDUCATION PROGRAMS OR COURSES
Sec. 171.581. DEFINITIONS. In this subchapter, "career and
technical education" and "principal office" have the meanings
assigned by Section 31.038.
Sec. 171.582. ENTITLEMENT TO CREDIT. A taxable entity is
entitled to a credit in the amount and under the conditions and
limitations provided by this subchapter against the tax imposed
under this chapter.
Sec. 171.583. DONATION OF MONEY TO SCHOOL DISTRICT FOR
CAREER AND TECHNICAL EDUCATION PROGRAM OR COURSE. (a) A taxable
entity qualifies for a credit under this subchapter if the taxable
entity:
(1) donates money to a school district in this state to
create a new career and technical education program or course in the
district or to expand an existing career and technical education
program or course in the district; and
(2) the principal office of the taxable entity is not
located in the district to which the entity makes the donation.
(b) A school district that receives a donation under
Subsection (a) shall issue to the taxable entity a receipt listing
the amount of the donation. If the donation is made over a period of
more than one year, the district shall issue a receipt each year
listing the amount of the donation made during that year.
Sec. 171.584. AMOUNT OF CREDIT; LIMITATION. (a) The amount
of the credit that may be claimed on a report is equal to the lesser
of $5 million or an amount equal to:
(1) for a donation described by Section 171.583 that
is made during the reporting period and that does not exceed
$100,000, 50 percent of the amount of the donation;
(2) for a donation described by Section 171.583 that
is made during the reporting period and that exceeds $100,000 but
does not exceed $300,000, $50,000 plus 100 percent of the amount of
the donation that exceeds $100,000; or
(3) for a donation described by Section 171.583 that
is made during the reporting period and that exceeds $300,000,
$250,000 plus 50 percent of the amount of the donation that exceeds
$300,000.
(b) Notwithstanding Subsection (a), the amount of the
credit may not exceed the amount of franchise tax due for the
report, after applying all other applicable credits.
Sec. 171.585. APPLICATION FOR CREDIT. (a) A taxable entity
must apply for a credit under this subchapter on or with the report
for the period for which the credit is claimed. The taxable entity
must include the receipt for that period provided by the school
district under Section 171.583(b).
(b) The burden of establishing eligibility for and the value
of the credit is on the taxable entity.
Sec. 171.586. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
taxable entity may claim a credit under this subchapter for a report
only in connection with donations made during the accounting period
on which the report is based.
Sec. 171.587. RULES. The comptroller may adopt rules and
forms necessary to implement this subchapter.
SECTION 3. (a) Section 31.038, Tax Code, as added by this
Act, applies only to ad valorem taxes imposed for a tax year
beginning on or after the effective date of this Act.
(b) Subchapter K-2, Chapter 171, Tax Code, as added by this
Act, applies only to a report originally due on or after the
effective date of this Act.
SECTION 4. This Act takes effect January 1, 2020, but only
if the constitutional amendment proposed by the 86th Legislature,
Regular Session, 2019, authorizing the legislature to provide for a
credit against ad valorem taxes imposed by a school district on the
property owned by a business entity that donates money to the
district to create or support career and technical education
programs or courses is approved by the voters. If that amendment
is not approved by the voters, this Act has no effect.