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A BILL TO BE ENTITLED
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AN ACT
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relating to a franchise tax credit for entities that establish a |
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grocery store or healthy corner store in a food desert. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 171, Tax Code, is amended by adding |
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Subchapter K to read as follows: |
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SUBCHAPTER K. TAX CREDIT FOR ESTABLISHMENT OF FOOD STORE IN FOOD |
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DESERT |
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Sec. 171.551. DEFINITIONS. In this subchapter: |
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(1) "Corner store" means a store that has fewer than |
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2,000 square feet of retail space. |
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(2) "Department" means the Texas Department of Housing |
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and Community Affairs. |
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(3) "Food desert" means a geographic area in this |
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state determined by the department to be an area that: |
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(A) has limited access to healthy food retailers |
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and is located in a low-income or high-poverty area; or |
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(B) otherwise has serious healthy food access |
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limitations. |
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(4) "Grocery store" means a store that has at least: |
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(A) 66 percent of the store's retail space |
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reserved for the sale of food products; |
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(B) 50 percent of the store's food retail space |
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reserved for the sale of non-prepared foods or foods intended for |
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home preparation and consumption; and |
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(C) 30 percent of the store's food retail space |
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reserved for the sale of perishable foods, including dairy |
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products, fresh produce, fresh meats, poultry, and fish, and frozen |
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foods. |
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(5) "Healthy corner store" means a corner store that: |
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(A) offers a wide variety of fresh produce for |
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sale; and |
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(B) allocates at least 20 percent of the store's |
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retail space to fresh produce and other perishable foods, including |
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dairy products. |
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(6) "Supplemental nutrition assistance program" means |
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the nutritional assistance program operated under Chapter 33, Human |
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Resources Code, and formerly referred to as the food stamp program. |
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(7) "WIC program" means the federal special |
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supplemental nutrition program for women, infants, and children |
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authorized by 42 U.S.C. Section 1786. |
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Sec. 171.552. ENTITLEMENT TO CREDIT. A taxable entity is |
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entitled to a credit in the amount and under the conditions provided |
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by this subchapter against the tax imposed under this chapter. |
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Sec. 171.553. QUALIFICATION. A taxable entity qualifies |
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for a credit under this subchapter if, on or after January 1, 2024, |
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the taxable entity opens a grocery store or healthy corner store: |
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(1) located in a food desert; |
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(2) located in a low or moderate income area, as |
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determined by the United States Department of Housing and Urban |
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Development, or that serves a customer base living in a low or |
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moderate income area; |
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(3) that begins accepting benefits under the WIC |
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program and the supplemental nutrition assistance program not later |
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than the 90th day after the date the store opens; and |
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(4) that is open year-round. |
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Sec. 171.554. CERTIFICATION OF ELIGIBILITY. (a) Before |
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claiming a credit under this subchapter, a taxable entity must |
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request from the department a certificate of eligibility on which |
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the department certifies that the taxable entity qualifies for a |
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credit under Section 171.553. The taxable entity must include with |
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the taxable entity's request information required by the department |
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to determine whether the taxable entity meets the requirements of |
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Section 171.553. |
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(b) The department shall issue a certificate of eligibility |
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to a taxable entity that qualifies for a credit under Section |
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171.553. |
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(c) The taxable entity must forward the certificate of |
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eligibility and the following documentation to the comptroller to |
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claim the credit: |
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(1) an audited cost report issued by a certified |
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public accountant, as defined by Section 901.002, Occupations Code, |
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that itemizes the taxable entity's expenditures to which Section |
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171.555 applies; |
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(2) the date the grocery store or healthy corner store |
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first opened for business and evidence of that opening; and |
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(3) an attestation of the total amount of the taxable |
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entity's expenditures to which Section 171.555 applies. |
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(d) For purposes of approving a credit under this |
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subchapter, the comptroller may rely on the audited cost report |
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provided by the taxable entity applying for the credit. |
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Sec. 171.555. AMOUNT OF CREDIT. (a) A taxable entity may |
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claim a credit for each store described by Section 171.553 equal to |
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five percent of the amount the taxable entity spends to establish |
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the store during the earliest 12-month period: |
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(1) in which the taxable entity makes an expenditure |
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to which this section applies; and |
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(2) that includes the date the store opens for |
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business. |
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(b) Subsection (a) applies to amounts spent to: |
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(1) purchase or lease the land or building for the |
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store; |
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(2) construct or remodel the store; and |
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(3) furnish and equip the store. |
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(c) Subsection (a) does not apply to amounts spent to |
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acquire inventory for the store. |
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Sec. 171.556. LIMITATIONS. (a) The total credit a taxable |
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entity may claim under this subchapter for a report, including the |
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amount of any credit carryforward under Section 171.558, may not |
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exceed 50 percent of the amount of franchise tax due after applying |
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all other applicable credits. |
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(b) A taxable entity may not convey, assign, or transfer a |
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credit under this subchapter to another entity unless all of the |
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assets of the taxable entity are conveyed, assigned, or transferred |
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in the same transaction. |
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Sec. 171.557. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. |
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Subject to Section 171.558, a taxable entity may claim a credit |
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under this subchapter on a report only for an expenditure made |
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during the period on which the report is based. |
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Sec. 171.558. CARRYFORWARD. (a) If a taxable entity is |
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eligible for a credit that exceeds the limitation under Section |
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171.556(a), the taxable entity may carry the unused credit forward |
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for not more than five consecutive reports. |
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(b) Credits, including credit carryforwards, are considered |
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to be used in the following order: |
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(1) a credit carryforward under this subchapter; and |
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(2) a current year credit. |
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Sec. 171.559. APPLICATION FOR CREDIT. A taxable entity |
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must apply for a credit under this subchapter on or with the report |
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for the period for which the credit is claimed. The comptroller may |
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promulgate an application form for the credit under this |
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subchapter. |
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Sec. 171.560. RULES. (a) The department may adopt rules |
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governing the requirements to qualify for a credit under Section |
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171.553, including rules governing the stores that qualify as |
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grocery stores or healthy corner stores and the areas that qualify |
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as food deserts. |
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(b) The comptroller may adopt any rules necessary to |
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administer this subchapter other than rules described by Subsection |
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(a). |
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SECTION 2. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2024. |