HB5273 - Relating to a franchise tax credit for certain child-care centers that increase their capacity to care for children.

  89R1402 SRA-D     By: González of El Paso H.B. No. 5273       A BILL TO BE ENTITLED   AN ACT   relating to a franchise tax credit for certain child-care centers   that increase their capacity to care for children.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  It is the intent of the legislature that the   franchise tax credit proposed by this Act will incentivize   large-scale child-care providers to create additional capacity at   the providers' locations and therefore significantly increase the   availability of child care in this state.          SECTION 2.  Chapter 171, Tax Code, is amended by adding   Subchapter P-1 to read as follows:   SUBCHAPTER P-1.     TAX CREDIT FOR CHILD-CARE CENTERS THAT INCREASE   CAPACITY           Sec.   171.821.     DEFINITION. In this subchapter, "licensed   child-care center" means a child-care center licensed, certified,   or registered by the Department of Family and Protective Services   to provide assessment, care, training, education, custody,   treatment, or supervision for a child who is not related by blood,   marriage, or adoption to the owner or operator of the center, for   all or part of the 24-hour day, whether or not the center is   operated for profit or charges for the services it offers.           Sec.   171.822.     ENTITLEMENT TO CREDIT. A taxable entity is   entitled to a credit in the amount and under the conditions provided   by this subchapter against the tax imposed under this chapter.           Sec.   171.823.     QUALIFICATION. A taxable entity qualifies   for a credit under this subchapter if the taxable entity operates   one or more licensed child-care centers, each of which is certified   as a provider in the Texas Rising Star Program.           Sec.   171.824.     AMOUNT OF CREDIT; LIMITATIONS. (a) This   subsection applies to a taxable entity other than a taxable entity   described by Subsection (b). Subject to Subsections (c) and (d),   the amount of the credit a taxable entity to which this subsection   applies may claim on a report for each licensed child-care center   location operated by the entity is equal to:                 (1)     if the capacity of the licensed child-care center   is increased 25 percent or more but less than 50 percent during the   period on which the report is based, 50 percent of the additional   salary associated with the increase in the capacity of the licensed   child-care center paid by the entity during the period on which the   report is based;                 (2)     if the capacity of the licensed child-care center   is increased by 50 percent or more but less than 75 percent during   the period on which the report is based, 75 percent of the   additional salary associated with the increase in the capacity of   the licensed child-care center paid by the entity during the period   on which the report is based; or                 (3)     if the capacity of the licensed child-care center   is increased by 75 percent or more during the period on which the   report is based, 100 percent of the additional salary associated   with the increase in the capacity of the licensed child-care center   paid by the entity during the period on which the report is based.           (b)     This subsection applies only to a taxable entity that is   a member of an affiliated group that files a combined report under   Section 171.1014. Subject to Subsections (c) and (d), the amount of   the credit a taxable entity to which this subsection applies may   claim on a report is equal to:                 (1)     if the capacity of at least 50 percent of the   licensed child-care center locations operated by all members of the   taxable entity's combined group is increased by 25 percent or more   but less than 50 percent during the period on which the report is   based, 50 percent of the additional salary associated with the   increase in capacity at those locations paid during the period on   which the report is based;                 (2)     if the capacity of at least 50 percent of the   licensed child-care center locations operated by all members of the   taxable entity's combined group is increased by 50 percent or more   but less than 75 percent during the period on which the report is   based, 75 percent of the additional salary associated with the   increase in capacity at those locations paid during the period on   which the report is based; or                 (3)     if the capacity of at least 50 percent of the   licensed child-care center locations operated by all members of the   taxable entity's combined group is increased by 75 percent or more   during the period on which the report is based, 100 percent of the   additional salary associated with the increase in capacity at those   locations paid during the period on which the report is based.           (c)     A taxable entity may continue to claim a credit in the   amount the entity claims on the first report on which the entity   claims a credit under this subchapter on the two reports due   subsequent to that first report if the entity maintains the   increase in child-care capacity that forms the basis of the credit   claimed on the first report during the period covered by each of the   two subsequent reports.           (d)     The total amount of credit claimed by a taxable entity   on a report may not exceed the amount of franchise tax due for the   report after the application of any other applicable credits.           Sec.   171.825.     APPLICATION FOR CREDIT. (a) A taxable entity   must apply for a credit under this subchapter on or with the report   for the period for which the credit is claimed.           (b)     A taxable entity must apply for the credit in the manner   prescribed by the comptroller and include with the application any   information requested by the comptroller to determine whether the   entity is eligible for the credit under this subchapter.           Sec.   171.826.     ASSIGNMENT PROHIBITED; EXEMPTION. A taxable   entity may not convey, assign, or transfer a credit under this   subchapter to another entity unless substantially all of the assets   of the taxable entity are conveyed, assigned, or transferred in the   same transaction.           Sec.   171.827.     RULES. The comptroller shall adopt rules   necessary to implement and administer this subchapter.          SECTION 3.  This Act applies only to a report originally due   on or after the effective date of this Act.          SECTION 4.  This Act takes effect January 1, 2026.