| 1 | 1 | | 88R9814 RDS-D |
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| 2 | 2 | | By: Lopez of Bexar H.B. No. 5263 |
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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 certain taxable entities |
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| 8 | 8 | | that provide certain employees with job-related skills training. |
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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 AND TRAINING OF CERTAIN |
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| 13 | 13 | | EMPLOYEES |
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| 14 | 14 | | Sec. 171.551. DEFINITIONS. In this subchapter: |
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| 15 | 15 | | (1) "Eligible worker training program" means a |
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| 16 | 16 | | training program that improves a qualified employee's job-related |
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| 17 | 17 | | skills in a manner that is necessary to adapt to new demands in the |
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| 18 | 18 | | workplace due to the adoption of new technology, equipment, or |
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| 19 | 19 | | innovation, including: |
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| 20 | 20 | | (A) a program that assists a qualified employee |
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| 21 | 21 | | in successfully obtaining one or more industry-recognized |
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| 22 | 22 | | certificates or credentials; |
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| 23 | 23 | | (B) a post-secondary vocational or job training |
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| 24 | 24 | | program that assists a qualified employee in successfully obtaining |
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| 25 | 25 | | a license or an associate degree from an accredited institution of |
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| 26 | 26 | | higher education; or |
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| 27 | 27 | | (C) a training program developed under the |
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| 28 | 28 | | federal Workforce Innovation and Opportunity Act (29 U.S.C. Section |
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| 29 | 29 | | 3101 et seq.). |
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| 30 | 30 | | (2) "Qualified employee" means an employee who, during |
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| 31 | 31 | | the period for which the credit is claimed, works for a qualified |
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| 32 | 32 | | employer not less than 35 hours per week for six consecutive months |
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| 33 | 33 | | and: |
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| 34 | 34 | | (A) is enrolled in the Jobs Corps program |
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| 35 | 35 | | administered by the United States Department of Labor; |
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| 36 | 36 | | (B) holds an active employment authorization |
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| 37 | 37 | | document issued through the federal Deferred Action for Childhood |
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| 38 | 38 | | Arrivals program; or |
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| 39 | 39 | | (C) holds an active H2-A or H2-B visa authorizing |
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| 40 | 40 | | the employee to work in the United States. |
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| 41 | 41 | | (3) "Qualified employer" means a taxable entity that |
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| 42 | 42 | | is engaged in an industry that is experiencing a shortage of workers |
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| 43 | 43 | | due to a lack of technical skills and technological disruption that |
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| 44 | 44 | | requires significant capital investment for the entity to remain |
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| 45 | 45 | | competitive within the industry, including: |
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| 46 | 46 | | (A) agriculture; |
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| 47 | 47 | | (B) manufacturing; |
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| 48 | 48 | | (C) food service; |
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| 49 | 49 | | (D) transit; |
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| 50 | 50 | | (E) advanced technologies and manufacturing; |
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| 51 | 51 | | (F) aerospace and defense; |
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| 52 | 52 | | (G) biotechnology and life science; |
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| 53 | 53 | | (H) information and computer technology; |
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| 54 | 54 | | (I) logistics and transportation; |
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| 55 | 55 | | (J) petroleum refining or chemical production; |
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| 56 | 56 | | and |
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| 57 | 57 | | (K) energy production. |
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| 58 | 58 | | Sec. 171.552. ENTITLEMENT TO CREDIT. A qualified employer |
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| 59 | 59 | | is entitled to a credit in the amount and under the conditions |
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| 60 | 60 | | provided by this subchapter against the tax imposed under this |
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| 61 | 61 | | chapter. |
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| 62 | 62 | | Sec. 171.553. QUALIFICATION FOR CREDIT. A qualified |
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| 63 | 63 | | employer qualifies for a credit under this subchapter if, during |
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| 64 | 64 | | the period for which the report on which the credit is claimed is |
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| 65 | 65 | | based, the qualified employer implements an eligible worker |
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| 66 | 66 | | training program. |
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| 67 | 67 | | Sec. 171.554. AMOUNT OF CREDIT; LIMITATION. (a) Subject to |
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| 68 | 68 | | Subsection (b), the amount of the credit a qualified employer may |
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| 69 | 69 | | claim on a report is an amount equal to the sum of $500 multiplied by |
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| 70 | 70 | | the number of qualified employees employed by the qualified |
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| 71 | 71 | | employer and that completed an eligible worker training program |
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| 72 | 72 | | offered by the employer during the period covered by the report. |
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| 73 | 73 | | (b) The total credit claimed on a report may not exceed the |
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| 74 | 74 | | amount of franchise tax due for the report after the application of |
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| 75 | 75 | | any other applicable credits. |
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| 76 | 76 | | Sec. 171.555. APPLICATION FOR CREDIT. (a) A qualified |
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| 77 | 77 | | employer must apply for a credit under this subchapter on or with |
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| 78 | 78 | | the report for the period for which the credit is claimed. |
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| 79 | 79 | | (b) The comptroller shall promulgate a form for the |
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| 80 | 80 | | application for the credit. A qualified employer must use the form |
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| 81 | 81 | | in applying for the credit. |
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| 82 | 82 | | (c) The comptroller may require a qualified employer to |
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| 83 | 83 | | submit with an application any other information the comptroller |
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| 84 | 84 | | determines is necessary to determine whether the employer qualifies |
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| 85 | 85 | | for the credit under Section 171.553. |
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| 86 | 86 | | Sec. 171.556. RULES. The comptroller shall adopt rules |
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| 87 | 87 | | necessary to implement and administer this subchapter. |
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| 88 | 88 | | SECTION 2. Subchapter K, Chapter 171, Tax Code, as added by |
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| 89 | 89 | | this Act, applies only to a report originally due on or after |
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| 90 | 90 | | January 1, 2024. |
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| 91 | 91 | | SECTION 3. This Act takes effect January 1, 2024. |
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