Texas 2025 - 89th Regular

Texas House Bill HB3605 Compare Versions

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

Old	New	Differences
1	1	89R10421 RDS-F
2	2	By: Ordaz H.B. No. 3605
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a franchise tax credit for taxable entities that employ
10	10	certain apprentices in broadband utility engineering or
11	11	construction jobs.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Chapter 171, Tax Code, is amended by adding
14	14	Subchapter N-1 to read as follows:
15	15	SUBCHAPTER N-1. TAX CREDIT FOR EMPLOYMENT OF APPRENTICES FOR
16	16	BROADBAND UTILITY CONSTRUCTION
17	17	Sec. 171.721. GENERAL DEFINITIONS. In this subchapter:
18	18	(1) "Broadband utility engineering or construction
19	19	job" means a job described in category 237130 of the 2022 North
20	20	American Industry Classification System.
21	21	(2) "Commission" means the Texas Workforce
22	22	Commission.
23	23	Sec. 171.722. DEFINITION: QUALIFYING APPRENTICE. (a) For
24	24	purposes of this subchapter, "qualifying apprentice" means an
25	25	apprentice employed by a taxable entity:
26	26	(1) in a broadband utility engineering or construction
27	27	job; and
28	28	(2) as part of an apprenticeship program that is:
29	29	(A) certified as an industry-recognized
30	30	apprenticeship program by an entity determined to meet United
31	31	States Department of Labor criteria; or
32	32	(B) registered with the United States Department
33	33	of Labor and qualified to receive funding provided through the
34	34	commission under Chapter 133, Education Code.
35	35	(b) An individual who otherwise meets the definition of
36	36	qualifying apprentice under Subsection (a) may not be considered a
37	37	qualifying apprentice of a taxable entity for purposes of this
38	38	subchapter:
39	39	(1) beyond the earlier of:
40	40	(A) the fourth anniversary of the date the
41	41	individual was employed by the entity as a qualifying apprentice;
42	42	or
43	43	(B) the conclusion of the initial term of the
44	44	apprenticeship program in which the individual is participating; or
45	45	(2) if the individual was employed by the entity in
46	46	another capacity immediately before being employed by the entity as
47	47	a qualifying apprentice.
48	48	Sec. 171.723. ENTITLEMENT TO CREDIT. A taxable entity is
49	49	entitled to a credit in the amount and under the conditions provided
50	50	by this subchapter against the tax imposed under this chapter.
51	51	Sec. 171.724. QUALIFICATION. A taxable entity qualifies
52	52	for a credit under this subchapter if, during the period for which
53	53	the credit is claimed, the entity employs at least one qualifying
54	54	apprentice for at least three months and, in accordance with
55	55	criteria adopted by the commission by rule, provides the apprentice
56	56	with training and skills development in pole climbing, rigging,
57	57	fiber and coax splicing, or other tasks required of an aerial
58	58	lineman.
59	59	Sec. 171.725. CERTIFICATE OF ELIGIBILITY. (a) Before
60	60	claiming a credit under this subchapter, a taxable entity must
61	61	request a certificate of eligibility from the commission stating
62	62	that the entity qualifies for a credit under this subchapter by
63	63	satisfying the requirements of Section 171.724. The entity must
64	64	request the certificate of eligibility in the manner prescribed by
65	65	the commission.
66	66	(b) On receipt of a request under Subsection (a), the
67	67	commission shall:
68	68	(1) determine whether the taxable entity is eligible
69	69	for a credit under this subchapter; and
70	70	(2) if the commission determines that the taxable
71	71	entity is eligible for a credit, issue the requested certificate of
72	72	eligibility.
73	73	Sec. 171.726. AMOUNT OF CREDIT; LIMITATION. (a) Subject to
74	74	Subsections (b) and (c), the amount of the credit a taxable entity
75	75	may claim on a report is an amount equal to $5,000 multiplied by the
76	76	number of qualifying apprentices employed by the entity during the
77	77	period covered by the report.
78	78	(b) The total credit claimed on a report may not exceed the
79	79	amount of franchise tax due for the report after the application of
80	80	any other applicable credits.
81	81	(c) The total amount of credits that may be awarded under
82	82	Subsection (a) in a state fiscal biennium may not exceed $10
83	83	million.
84	84	Sec. 171.727. CARRYFORWARD. (a) If a taxable entity is
85	85	eligible for a credit that exceeds the limitation under Section
86	86	171.726(b), the entity may carry the unused credit forward for not
87	87	more than five consecutive reports.
88	88	(b) A carryforward is considered the remaining portion of a
89	89	credit that cannot be claimed on a report because of the limitation
90	90	under Section 171.726(b).
91	91	(c) Credits, including a carryforward, are considered to be
92	92	used in the following order:
93	93	(1) a carryforward under this section; and
94	94	(2) a credit for the period on which the report is
95	95	based.
96	96	Sec. 171.728. APPLICATION FOR CREDIT. (a) A taxable entity
97	97	must apply for a credit under this subchapter on or with the report
98	98	for the period for which the credit is claimed.
99	99	(b) A taxable entity must apply for the credit in the manner
100	100	prescribed by the comptroller and include with the application:
101	101	(1) the certificate of eligibility issued under
102	102	Section 171.725; and
103	103	(2) any information requested by the comptroller to
104	104	determine the amount of the credit.
105	105	(c) The comptroller shall award a credit to a taxable entity
106	106	that submits an application that complies with the provisions of
107	107	this section if the entity is eligible for the credit and the credit
108	108	is available under Section 171.726(c).
109	109	Sec. 171.729. SALE OR ASSIGNMENT OF CREDIT. (a) A taxable
110	110	entity that employs a qualifying apprentice may sell or assign all
111	111	or part of the credit that may be claimed in relation to that
112	112	qualifying apprentice to one or more taxable entities, and any
113	113	taxable entity to which all or part of the credit is sold or
114	114	assigned may sell or assign all or part of the credit to another
115	115	taxable entity. There is no limit on the total number of
116	116	transactions for the sale or assignment of all or part of the total
117	117	credit authorized under this subchapter.
118	118	(b) A taxable entity that sells or assigns a credit under
119	119	this section and the taxable entity to which the credit is sold or
120	120	assigned shall jointly submit written notice of the sale or
121	121	assignment to the comptroller not later than the 30th day after the
122	122	date of the sale or assignment. The notice must include:
123	123	(1) the date on which the credit was originally
124	124	established;
125	125	(2) the date of the sale or assignment;
126	126	(3) the amount of the credit sold or assigned and the
127	127	remaining period during which it may be used;
128	128	(4) the names, addresses, and federal tax
129	129	identification numbers of the taxable entity that sold or assigned
130	130	the credit or part of the credit and the taxable entity to which the
131	131	credit or part of the credit was sold or assigned; and
132	132	(5) the amount of the credit owned by the selling or
133	133	assigning taxable entity before the sale or assignment, and the
134	134	amount the selling or assigning taxable entity retained, if any,
135	135	after the sale or assignment.
136	136	(c) The sale or assignment of a credit in accordance with
137	137	this section does not extend the period for which a credit may be
138	138	carried forward.
139	139	Sec. 171.730. RULES. The comptroller may adopt rules
140	140	necessary to implement and administer this subchapter.
141	141	Sec. 171.731. REPORT. (a) Not later than November 1 of
142	142	each even-numbered year, the commission shall prepare and deliver
143	143	to the governor, the lieutenant governor, the speaker of the house
144	144	of representatives, and the presiding officer of each legislative
145	145	standing committee with primary jurisdiction over taxation a report
146	146	that evaluates the effect of the tax credits issued under this
147	147	subchapter on the employment outcomes and earnings of qualifying
148	148	apprentices with respect to whom credits are issued under this
149	149	subchapter. The report must include a recommendation regarding
150	150	whether the tax credit should be expanded or terminated.
151	151	(b) A taxable entity that requests a certificate of
152	152	eligibility under Section 171.725 shall provide, on request of the
153	153	commission, information the commission determines is necessary to
154	154	prepare the report under this section.
155	155	SECTION 2. Subchapter N-1, Chapter 171, Tax Code, as added
156	156	by this Act, applies only to a report originally due on or after
157	157	January 1, 2026.
158	158	SECTION 3. An entity may apply for a franchise tax credit
159	159	under Subchapter N-1, Chapter 171, Tax Code, as added by this Act,
160	160	only in connection with an apprentice first employed on or after the
161	161	effective date of this Act.
162	162	SECTION 4. This Act takes effect January 1, 2026.