HBA-SEP, AMW H.B. 1812 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1812
By: Wohlgemuth
Ways & Means
3/16/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, the number of elderly is the fastest growing age group in Texas.
While the elderly are relying on Medicaid as the largest public funding
source for their care, the population of working adults contributing to
Medicaid is diminishing.  The 76th Legislature established standards for
long-term care insurance, which included the parents of the insured and the
parents of the insured's spouse in the minimum coverage standards of
long-term care insurance which provides a daily benefit to cover costs of
long-term care for a person who needs medical or personal care services in
a setting other than a hospital, such as a nursing home or the patient's
home.  Few corporations offer long-term care insurance policies, and
existing policies rarely allow the insured to build equity in the program.
House Bill 1812 authorizes a corporation to claim a franchise tax credit
for expenditures for a long-term care insurance policy (credit) with
greater incentives for policies that allow equity building for employees
and sets limitations on the credit. 

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. 

ANALYSIS

House Bill 1812 amends the Tax Code to authorize a corporation to claim a
franchise tax credit for expenditures for a long-term care insurance policy
(credit) only for an expenditure made toward the cost of a long-term care
insurance policy for an employee or the employee's parent.  The bill sets
forth provisions regarding the amount of the credit and limitations on the
credit.    

The bill specifies that a corporation must apply for a credit on or with
the tax report for the period for which the credit is claimed.  The bill
requires the comptroller to adopt a form for the application for the credit
and provides that a corporation must use this form in applying for the
credit.  The bill prohibits a corporation from conveying, assigning, or
transferring the credit to another entity unless all of the assets of the
corporation are conveyed, assigned, or transferred in the same transaction. 

EFFECTIVE DATE

January 1, 2002.