HBA-EDN S.B. 63 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 63
By: Moncrief
Ways & Means
5/4/2001
Engrossed



BACKGROUND AND PURPOSE 

Currently, federal law allows businesses that hire qualified disabled
workers to apply for a federal work opportunity tax credit.  Senate Bill 63
entitles a corporation to a franchise tax credit for wages paid to persons
with certain disabilities. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the comptroller of public accounts in
SECTION 1 (Section 171.856, Tax Code) of this bill. 

ANALYSIS

Senate Bill 63 amends the Tax Code to entitle a corporation to a franchise
tax credit (credit) for wages paid to persons with certain disabilities.  A
corporation qualifies for a credit for each employee: 

_originally hired on or after January 1, 2002;

_who, at the time of being hired, is an individual eligible under federal
law for supplemental security income benefits on the basis of disability or
blindness or is a recipient of social security disability insurance
benefits; and 

_who remains continuously employed with the corporation for at least 6
months, earns at least the minimum wage, works an average of at least 20
hours a week, and receives the same benefits as the employer's other
workers. 

S.B. 63 provides that the amount of the credit is 10 percent of the wages
paid by the corporation for each qualified employee.  The bill authorizes a
corporation to claim the credit only for wages paid the qualified employee
during the first two years of employment and prohibits the credit claimed
for each privilege period from exceeding 50 percent of the amount of net
franchise tax due, after any applicable credits, for the privilege period. 

S.B. 63 provides that a corporation must apply for a credit, using a form
that the comptroller of public accounts (comptroller) is required to
promulgate, on or with the tax report for the period for which the credit
is claimed.  A corporation is authorized to claim a credit for wages paid
during an accounting period only against the tax owed for the corresponding
privilege period.   

S.B. 63 requires the comptroller to adopt rules necessary to implement
these provisions.   

EFFECTIVE DATE

January 1, 2002.