Bill Text: TX SB2390 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the strong families credit against certain taxes for entities that contribute to certain organizations.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2023-03-23 - Referred to Finance [SB2390 Detail]

Download: Texas-2023-SB2390-Introduced.html

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88R7330 SRA-F
By: Paxton, Hughes S.B. No. 2390

A BILL TO BE ENTITLED
AN ACT
relating to the strong families credit against certain taxes for
entities that contribute to certain organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 5, Alcoholic Beverage Code, is amended by
adding Chapter 207 to read as follows:
CHAPTER 207. STRONG FAMILIES TAX CREDIT
Sec. 207.001. DEFINITIONS. In this chapter:
(1) "Designated contribution," "eligible
organization," and "strong families credit" have the meanings
assigned by Section 171.701, Tax Code.
(2) "Taxpayer" means a person who pays a tax under this
title.
Sec. 207.002. ELIGIBILITY. A taxpayer that makes a
designation contribution that meets the requirements of Subchapter
N, Chapter 171, Tax Code, is entitled to apply for a strong families
credit in the amount and under the conditions provided by this
chapter against taxes paid under this title.
Sec. 207.003. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject
to Subsections (b) and (c), the amount of a taxpayer's credit for a
state fiscal year is equal to the lesser of:
(1) the amount of designated contributions made to
eligible organizations during the state fiscal year; or
(2) the amount of taxes paid by the taxpayer under this
title during the state fiscal year.
(b) The maximum amount of strong families credits that may
be awarded for a state fiscal year is the amount provided by Section
171.706(b), Tax Code.
(c) The maximum amount of designated contributions a
taxpayer may make to all eligible organizations in a state fiscal
year is the amount provided by Section 171.706(c), Tax Code.
(d) The comptroller shall allocate strong families credits
as provided by Section 171.706(d), Tax Code.
Sec. 207.004. APPLICATION. (a) A taxpayer must apply to
claim a strong families credit against a tax imposed under this
title.
(b) The comptroller shall prescribe the form and method of
applying to claim a credit under this section. The taxpayer must use
this method in applying for the credit.
(c) The comptroller may award a credit to a taxpayer who
applies for the credit under Subsection (a) if the taxpayer is
eligible for the credit and the credit is available under Section
171.706(b), Tax Code.
(d) The comptroller shall notify a taxpayer in writing of
the comptroller's decision to grant or deny the application under
Subsection (a). If the comptroller denies a taxpayer's
application, the comptroller shall include in the notice of denial
the reasons for the comptroller's decision.
Sec. 207.005. RULES. The comptroller may adopt rules and
procedures necessary to implement, administer, and enforce this
chapter.
SECTION 2. Subtitle B, Title 3, Insurance Code, is amended
by adding Chapter 230 to read as follows:
CHAPTER 230. STRONG FAMILIES TAX CREDIT
Sec. 230.001. DEFINITIONS. In this chapter:
(1) "Designated contribution," "eligible
organization," and "strong families credit" have the meanings
assigned by Section 171.701, Tax Code.
(2) "State insurance tax liability" means any tax
liability incurred by an entity under Chapters 221 through 226 or
Chapter 281.
Sec. 230.002. ELIGIBILITY. An entity that makes a
designated contribution that meets the requirements of Subchapter
N, Chapter 171, Tax Code, is entitled to apply for a strong families
credit in the amount and under the conditions provided by this
chapter against the entity's state insurance tax liability.
Sec. 230.003. AMOUNT OF CREDIT; LIMITATION ON TOTAL
CREDITS. (a) Subject to Subsections (b) and (c), the amount of an
entity's credit for a report is equal to the lesser of:
(1) the amount of designated contributions made to an
eligible organization during the year covered by the report; or
(2) the amount of the entity's state insurance tax
liability for the year covered by the report after applying all
other applicable credits.
(b) The maximum amount of strong families credits that may
be awarded for a state fiscal year is the amount provided by Section
171.706(b), Tax Code.
(c) The maximum amount of designated contributions an
entity may make to all eligible organizations in a state fiscal year
is the amount provided by Section 171.706(c), Tax Code.
(d) The comptroller shall allocate strong families credits
as provided by Section 171.706(d), Tax Code.
Sec. 230.004. APPLICATION FOR CREDIT. (a) An entity must
apply to claim a strong families credit under this chapter on or
with the report covering the year in which the designated
contribution was made.
(b) The comptroller shall prescribe the form and method of
applying to claim a credit under this section. An entity must use
this method in applying for the credit under this chapter.
(c) The comptroller may award a credit to an entity that
applies for the credit under Subsection (a) if the entity is
eligible for the credit and the credit is available under Section
171.706(b), Tax Code.
Sec. 230.005. ASSIGNMENT PROHIBITED; EXCEPTION. An entity
may not convey, assign, or transfer the strong families credit to
another entity unless substantially all of the assets of the entity
are conveyed, assigned, or transferred in the same transaction.
Sec. 230.006. RULES. The comptroller may adopt rules and
procedures necessary to implement, administer, and enforce this
chapter.
SECTION 3. Chapter 171, Tax Code, is amended by adding
Subchapter N to read as follows:
SUBCHAPTER N. STRONG FAMILIES TAX CREDIT
Sec. 171.701. DEFINITIONS. In this subchapter:
(1) "Designated contribution" means a monetary
contribution to an eligible organization that the contributor
designates at the time of contribution as being made for the purpose
of the strong families credit.
(2) "Eligible organization" means an organization
that is designated by the comptroller as an eligible organization
under this subchapter.
(3) "Strong families credit" means the tax credit
established under this subchapter that may be claimed under:
(A) Chapter 207, Alcoholic Beverage Code;
(B) Chapter 230, Insurance Code;
(C) this subchapter; or
(D) Chapter 203.
Sec. 171.702. ELIGIBILITY FOR CREDIT. A taxable entity
that makes a designated contribution that meets the requirements of
this subchapter is eligible to apply for a strong families credit in
the amount and under the conditions provided by this subchapter
against the tax imposed under this chapter.
Sec. 171.703. QUALIFICATIONS FOR ELIGIBLE ORGANIZATION;
VERIFICATION OF ELIGIBILITY. (a) An organization may apply for
designation as an eligible organization under this subchapter if
the organization:
(1) is exempt from federal income taxation under
Section 501(a), Internal Revenue Code of 1986, as an organization
described by Section 501(c)(3) of that code;
(2) is authorized to transact business in this state;
(3) has provided the following services in this state
for at least three years preceding the organization's initial
application for designation as an eligible organization:
(A) mental health services, including individual
and family therapy;
(B) in-home and community-based parenting
services;
(C) comprehensive case management services based
on the assessment of family strengths and needs;
(D) financial empowerment services, including
financial literacy, job skills, and vocational training; or
(E) in-school programs, community-based events,
or online resources to assist fathers in learning and improving
parenting skills or programs that provide services and resources
that engage absent fathers in being more involved in their
children's lives.
(b) Services described by Subsections (a)(3)(A) through (D)
must be provided based on community needs identified through a
needs assessment, implemented with a continuous quality
improvement process, and evaluated based on outcomes.
(c) An organization must reapply for designation as an
eligible organization each calendar year by submitting to the
comptroller a signed application form containing:
(1) a description of the qualifying services and
resources provided by the organization;
(2) the total number of individuals served through the
services and resources described by Subdivision (1) during the
previous calendar year and the number of those individuals served
and provided resources that year using designated contributions;
(3) outcomes for services described by Subdivision
(1);
(4) the organization's financial information;
(5) the organization's contact information;
(6) a statement, signed under penalty of perjury by an
officer of the organization, that the organization meets all
criteria to qualify as an eligible organization, has fulfilled the
requirements for the previous calendar year, and intends to fulfill
the requirements for the next calendar year; and
(7) any other documentation requested by the
comptroller to verify eligibility or compliance with this section.
Sec. 171.704. DUTIES OF ELIGIBLE ORGANIZATION. (a) An
eligible organization shall:
(1) conduct a local, state, and national criminal
background check for all individuals working directly with children
in a program funded by designated contributions that includes the
use of:
(A) a commercial multistate and
multijurisdiction criminal records locator or other similar
commercial nationwide database; and
(B) the national sex offender registry database
maintained by the United States Department of Justice or a
successor agency;
(2) spend all designated contributions, other than the
amount described by Subdivision (3), to provide services for
residents of this state;
(3) spend no more than five percent of the total dollar
amount of designated contributions on administrative expenses; and
(4) annually submit to the comptroller:
(A) the report of an audit of the eligible
organization conducted by an independent certified public
accountant in accordance with generally accepted auditing
principles completed not later than the 180th day after the end of
the eligible organization's fiscal year; and
(B) a copy of the eligible organization's most
recent Form 990 filed with the Internal Revenue Service.
(b) On receipt of a designated contribution, an eligible
organization shall provide the entity making the contribution with
a certificate of contribution that includes:
(1) the entity's name;
(2) the eligible organization's name;
(3) the entity's federal employer identification
number, if applicable;
(4) the amount of the designated contribution; and
(5) the date the designated contribution was made.
Sec. 171.705. DUTIES OF COMPTROLLER. (a) The comptroller
shall:
(1) accept applications for designation or
redesignation as an eligible organization and provide that
designation to eligible applicants;
(2) revoke an organization's designation as an
eligible organization if the organization violates this subchapter
or fails to maintain the eligibility requirements of this
subchapter;
(3) publish information about the strong families
credit on the comptroller's website, including:
(A) the requirements and process for an
organization to be designated as an eligible organization; and
(B) a list of organizations currently designated
as eligible organizations; and
(4) require the return of designated contributions
made to an organization that has had the organization's designation
as an eligible organization revoked or that otherwise fails to
comply with the requirements of this subchapter.
(b) An organization that is required to return
contributions under Subsection (a)(4) is ineligible for
designation or redesignation as an eligible organization for a
period of 10 years beginning on the date the requirement is imposed.
(c) An organization whose designation as an eligible
organization lapses or is revoked for a reason other than the reason
described by Subsection (a)(4) may reapply for designation as an
eligible organization.
Sec. 171.706. AMOUNT OF CREDIT; LIMITATION ON TOTAL
CREDITS. (a) Subject to Subsections (b) and (c), the amount of a
taxable entity's credit for a report is equal to the lesser of:
(1) the amount of designated contributions made to
designated organizations during the period covered by the report;
or
(2) the amount of franchise tax due for the report
after applying all other applicable credits.
(b) For the 2024 state fiscal year, the maximum amount of
strong families credits that may be awarded is $25 million. For
each subsequent state fiscal year, the maximum amount of strong
families credits that may be awarded is:
(1) the same maximum amount allowed under this
subsection for the previous state fiscal year, if less than the
maximum amount of credits was awarded that fiscal year; or
(2) an amount equal to 110 percent of the maximum
amount allowed under this subsection for the previous state fiscal
year, if the maximum amount of credits was awarded that fiscal year.
(c) For the 2024 state fiscal year, each entity may make no
more than $2.5 million in designated contributions. For each
subsequent state fiscal year, each entity may make qualifying
contributions of not more than 110 percent of the amount allowed to
be made under this subsection for the previous state fiscal year.
(d) The comptroller by rule shall prescribe procedures by
which the comptroller will allocate strong families credits. The
procedures must provide that any credits are allocated to entities
that apply on a first-come, first-served basis.
Sec. 171.707. APPLICATION FOR CREDIT. (a) A taxable entity
must apply to claim a strong families credit under this subchapter
on or with the report covering the period in which the designated
contribution was made.
(b) The comptroller shall prescribe the form and method of
applying to claim a credit under this section. A taxable entity
must use this method in applying for the credit.
(c) The comptroller may award a credit to a taxable entity
that applies for the credit under Subsection (a) if the taxable
entity is eligible for the credit and the credit is available under
Section 171.706(b).
(d) The comptroller shall notify a taxable entity in writing
of the comptroller's decision to grant or deny the application
under Subsection (a). If the comptroller denies a taxable entity's
application, the comptroller shall include in the notice of denial
the reasons for the comptroller's decision.
Sec. 171.708. ASSIGNMENT PROHIBITED; EXCEPTION. A taxable
entity may not convey, assign, or transfer a strong families credit
awarded under this subchapter to another taxable entity unless
substantially all of the assets of the taxable entity are conveyed,
assigned, or transferred in the same transaction.
Sec. 171.709. RULES. The comptroller may adopt rules and
procedures necessary to implement, administer, and enforce this
subchapter.
SECTION 4. Subtitle I, Title 2, Tax Code, is amended by
adding Chapter 203 to read as follows:
CHAPTER 203. STRONG FAMILIES TAX CREDIT
Sec. 203.001. DEFINITIONS. In this chapter, "designated
contribution," "eligible organization," and "strong families
credit" have the meanings assigned by Section 171.701.
Sec. 203.002. ELIGIBILITY. A producer that makes a
designated contribution that meets the requirements of Subchapter
N, Chapter 171, is entitled to apply for a strong families credit in
the amount and under the conditions provided by this chapter
against tax paid under Chapter 201 or 202.
Sec. 203.003. AMOUNT OF CREDIT; LIMITATIONS. (a) Subject
to Subsections (b) and (c), the amount of a producer's credit for a
state fiscal year is equal to the lesser of:
(1) the amount of designated contributions made to
eligible organizations during the state fiscal year; or
(2) the amount of taxes paid by the producer under
Chapter 201 or 202, as applicable, during the state fiscal year.
(b) The maximum amount of strong families credits that may
be awarded for a state fiscal year is the amount provided by Section
171.706(b).
(c) The maximum amount of designated contributions a
producer may make to all eligible organizations in a state fiscal
year is the amount provided by Section 171.706(c).
(d) The comptroller shall allocate strong families credits
as provided by Section 171.706(d).
Sec. 203.004. APPLICATION. (a) The person responsible for
paying the tax under Chapter 201 or 202 must apply to claim a strong
families credit against that tax.
(b) The comptroller shall prescribe the form and method of
applying to claim a credit under this section. The person
responsible for paying the tax must use this method in applying for
the credit.
(c) The comptroller may award a credit to a person who
applies for the credit under Subsection (a) if the person is
eligible for the credit and the credit is available under Section
171.706(b).
(d) The comptroller shall notify a person in writing of the
comptroller's decision to grant or deny the application under
Subsection (a). If the comptroller denies a person's application,
the comptroller shall include in the notice of denial the reasons
for the comptroller's decision.
Sec. 203.005. RULES. The comptroller may adopt rules and
procedures necessary to implement, administer, and enforce this
chapter.
SECTION 5. (a) An entity may apply for a credit under
Chapter 207, Alcoholic Beverage Code, as added by this Act, Chapter
230, Insurance Code, as added by this Act, Subchapter N, Chapter
171, Tax Code, as added by this Act, or Chapter 203, Tax Code, as
added by this Act, only for a designated contribution made on or
after January 1, 2024.
(b) Chapter 207, Alcoholic Beverage Code, as added by this
Act, Chapter 230, Insurance Code, as added by this Act, Subchapter
N, Chapter 171, Tax Code, as added by this Act, and Chapter 203, Tax
Code, as added by this Act, apply only to a report originally due on
or after January 1, 2024.
SECTION 6. This Act takes effect January 1, 2024.