HBA-MPM H.B. 65 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 65
By: Greenberg
Ways and Means
3/9/1999
Introduced



BACKGROUND AND PURPOSE 

Quality child care is not affordable for many working families.  H.B. 65
provides a tax credit for corporations that choose to purchase or subsidize
child care services provided to employees' children at a day-care center or
family home. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 171, Tax Code, to add Subchapter N, as follows:

SUBCHAPTER N.  TAX CREDIT FOR PURCHASING OR SUBSIDIZING COST OF CHILD-CARE
SERVICES 

Sec. 171.701.  DEFINITIONS.  Defines "day-care center" and "family home"
with the meanings assigned by Section 42.002, Human Resources Code, which
defines "day-care center" as a child-care facility that provides care for
more than 12 children under 14 years of age for less than 24 hours a day,
and "family home" as a home that provides regular care in the caretaker's
own residence for not more than six children under age 14, excluding
children related to the caretaker, and that provides care after school
hours for not more than six additional elementary school children, but the
total number of children, including those related to the caretaker, does
not exceed 12 as any time.  Further states that this term does not include
a home that provides care exclusively for any number of children related to
the caretaker. 

Sec. 171.702.  CREDIT.  Entitles a corporation that meets the eligibility
requirements listed in this subchapter to take a tax credit.   

Sec. 171.703.  CREDIT FOR PURCHASED OR SUBSIDIZED CHILD CARE.  Authorizes a
corporation to claim a tax credit for expenditures used to purchase or
subsidize child care services provided to the corporation's employees at a
day-care center or family home registered or listed with the Department of
Protective and Regulatory Services under Chapter 42, Human Resources Code
(Regulation of Certain Facilities, Homes, and Agencies that Provide
Child-Care Services).  Establishes that the tax credit is equal to 30
percent of the corporation's expenditures under this chapter. 

Sec. 171.704.  APPLICATION FOR CREDIT.  Provides that a corporation must
apply for the credit on or with the tax report for the period for which the
credit is claimed.  Provides that the corporation must supply proof that
the child-care services purchased or subsidized were actually provided to
employees' children at a day-care center or registered or listed family
home.  Requires the comptroller to adopt a form for the tax credit
application.  Sets forth that a corporation must use this form when
applying for the credit. 

Sec. 171.705.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.  Authorizes a
corporation to claim credit for a child-care expenditure during an
accounting period only against taxes owed for the corresponding reporting
period.  Prohibits a corporation from claiming a credit in excess of the
amount of the total tax due. 

Sec. 171.706.  ASSIGNMENT PROHIBITED.  Prohibits a corporation from
conveying, assigning, or transferring credit to another entity unless all
of the assets of the corporation are conveyed, assigned, and transferred in
the same transaction. 

SECTION 2.  Effective date:  January 1, 2000.  
            Makes application of this Act prospective.

SECTION 3.  Emergency clause.