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.