| 1 | 1 | | 88R11832 RDS-D |
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| 2 | 2 | | By: Guillen H.B. No. 3785 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a franchise tax credit for taxable entities that employ |
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| 8 | 8 | | certain apprentices. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 171, Tax Code, is amended by adding |
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| 11 | 11 | | Subchapter K to read as follows: |
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| 12 | 12 | | SUBCHAPTER K. TAX CREDIT FOR EMPLOYMENT OF APPRENTICES |
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| 13 | 13 | | Sec. 171.551. DEFINITION. In this subchapter, "qualifying |
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| 14 | 14 | | apprentice" means an individual who is employed by a taxable |
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| 15 | 15 | | entity: |
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| 16 | 16 | | (1) for the purpose of learning a vocational trade; |
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| 17 | 17 | | (2) as an apprentice; or |
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| 18 | 18 | | (3) while enrolled in a work-based learning program. |
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| 19 | 19 | | Sec. 171.552. ENTITLEMENT TO CREDIT. A taxable entity is |
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| 20 | 20 | | entitled to a credit in the amount and under the conditions provided |
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| 21 | 21 | | by this subchapter against the tax imposed under this chapter. |
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| 22 | 22 | | Sec. 171.553. QUALIFICATION; CERTIFICATE OF ELIGIBILITY. |
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| 23 | 23 | | (a) A taxable entity qualifies for a credit under this subchapter |
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| 24 | 24 | | if, during the period for which the credit is claimed, the entity |
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| 25 | 25 | | employs at least one qualifying apprentice. |
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| 26 | 26 | | (b) Before claiming a credit under this subchapter, a |
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| 27 | 27 | | taxable entity must request a certificate of eligibility from the |
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| 28 | 28 | | Texas Workforce Commission or the Office of Apprenticeship of the |
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| 29 | 29 | | United States Department of Labor stating that the entity employed |
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| 30 | 30 | | at least one qualifying apprentice during the period for which the |
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| 31 | 31 | | credit is claimed. |
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| 32 | 32 | | Sec. 171.554. AMOUNT OF CREDIT; LIMITATION. (a) Subject to |
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| 33 | 33 | | Subsection (b), the amount of the credit a taxable entity may claim |
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| 34 | 34 | | on a report is an amount equal to the lesser of: |
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| 35 | 35 | | (1) the sum of the following amounts: |
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| 36 | 36 | | (A) $2,000 multiplied by the number of qualifying |
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| 37 | 37 | | apprentices employed by the entity during the period covered by the |
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| 38 | 38 | | report that are at least 16 years of age but younger than 18 years of |
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| 39 | 39 | | age; |
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| 40 | 40 | | (B) $4,000 multiplied by the number of qualifying |
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| 41 | 41 | | apprentices employed by the entity during the period covered by the |
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| 42 | 42 | | report that are at least 18 years of age and are not described by |
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| 43 | 43 | | Paragraph (C); and |
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| 44 | 44 | | (C) $6,000 multiplied by the number of qualifying |
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| 45 | 45 | | apprentices employed by the entity during the period covered by the |
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| 46 | 46 | | report that are at least 18 years of age and are veterans of the |
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| 47 | 47 | | United States armed services or the Texas military forces; or |
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| 48 | 48 | | (2) $100,000. |
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| 49 | 49 | | (b) The total credit claimed on a report may not exceed the |
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| 50 | 50 | | amount of franchise tax due for the report after the application of |
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| 51 | 51 | | any other applicable credits. |
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| 52 | 52 | | Sec. 171.555. APPLICATION FOR CREDIT. (a) A taxable entity |
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| 53 | 53 | | must apply for a credit under this subchapter on or with the report |
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| 54 | 54 | | for the period for which the credit is claimed. |
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| 55 | 55 | | (b) The comptroller shall promulgate a form for the |
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| 56 | 56 | | application for the credit. A taxable entity must use the form in |
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| 57 | 57 | | applying for the credit and must include with the application any |
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| 58 | 58 | | certificates received from the Texas Workforce Commission or the |
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| 59 | 59 | | Office of Apprenticeship of the United States Department of Labor |
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| 60 | 60 | | during the period for which the credit is claimed. |
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| 61 | 61 | | (c) The comptroller may require a taxable entity to submit |
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| 62 | 62 | | with an application any other information the comptroller |
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| 63 | 63 | | determines is necessary to determine whether the entity qualifies |
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| 64 | 64 | | for the credit under Section 171.553. |
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| 65 | 65 | | Sec. 171.556. CARRYFORWARD. (a) If a taxable entity is |
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| 66 | 66 | | eligible for a credit that exceeds the limitation under Section |
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| 67 | 67 | | 171.554(b), the entity may carry the unused credit forward for up to |
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| 68 | 68 | | two consecutive reports. |
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| 69 | 69 | | (b) A carryforward is considered the remaining portion of a |
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| 70 | 70 | | credit that cannot be claimed in the current year because of the |
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| 71 | 71 | | limitation under Section 171.554(b). |
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| 72 | 72 | | (c) Credits, including a carryforward, are considered to be |
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| 73 | 73 | | used in the following order: |
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| 74 | 74 | | (1) a carryforward under this subchapter; and |
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| 75 | 75 | | (2) a current year credit. |
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| 76 | 76 | | Sec. 171.557. RULES. The comptroller shall adopt rules |
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| 77 | 77 | | necessary to implement and administer this subchapter. |
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| 78 | 78 | | SECTION 2. Subchapter K, Chapter 171, Tax Code, as added by |
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| 79 | 79 | | this Act, applies only to a report originally due on or after |
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| 80 | 80 | | January 1, 2024. |
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| 81 | 81 | | SECTION 3. This Act takes effect January 1, 2024. |
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