S.B. No. 2018         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.  Chapter 171, Tax Code, is amended by adding   Subchapter P to read as follows:   SUBCHAPTER P. STRONG FAMILIES TAX CREDIT          Sec. 171.801.  DEFINITIONS. In this subchapter:                (1)  "At-risk family" has the meaning assigned by   Section 137.002, Human Resources Code.                (2)  "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.                (3)  "Eligible organization" means an organization   determined to be an eligible organization under this subchapter.                (4)  "Foundation" means the OneStar Foundation.                (5)  "Strong families credit" means the tax credit   established under this subchapter.          Sec. 171.802.  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. 171.803.  CERTIFICATION AS ELIGIBLE ORGANIZATION.  (a)     The foundation shall certify an organization 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 in this state for at   least three years preceding the organization's receipt of the   organization's initial designated contribution:                      (A)  comprehensive case management services for   at-risk families based on an assessment of family strengths and   needs, including assisting families in achieving self-sufficiency   and stability and encouraging workforce participation; or                      (B)  services and resources to assist fathers in   learning and improving parenting skills and being more engaged in   their children's lives through in-school programs and online   resources;                (4)  does not directly or indirectly provide abortion   services, or offer information related to abortion services; and                (5)  has not received, either directly or indirectly   through a contractor, more than 50 percent of its total annual   revenue from this state or a political subdivision of this state in   the preceding state fiscal year.          (b)  To remain an eligible organization, an organization   must submit each calendar year the following information to the   foundation in the manner prescribed by the comptroller:                (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 with resources that year using designated   contributions;                (3)  outcomes for services and resources 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 under this section,   has complied with the requirements under Section 171.804 for the   previous calendar year, and intends to comply with those   requirements for the next calendar year; and                (7)  any other documentation necessary to verify   eligibility or compliance with this section.          (c)  The comptroller may consult with the foundation to   determine the manner in which an organization must demonstrate that   the organization is an eligible organization for purposes of this   subchapter.          Sec. 171.804.  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 or   resources 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 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 entity's state taxpayer identification number,   if applicable;                (5)  the amount of the designated contribution; and                (6)  the date the designated contribution was made.          (c)  An eligible organization shall provide to the   comptroller a copy of each certificate of contribution provided to   an entity under Subsection (b) not later than the 30th day after the   date the organization provided the certificate to the entity making   the designated contribution.          Sec. 171.805.  AMOUNT OF CREDIT; LIMITATION ON TOTAL   CREDITS. (a)  Subject to Subsection (b), the amount of a taxable   entity's credit for a report is equal to the lesser of:                (1)  the amount of credit awarded to the entity under   Section 171.807; or                (2)  the amount of franchise tax due for the report   after applying all other applicable credits.          (b)  The total amount of strong families credits awarded may   not exceed $5 million each year.          Sec. 171.806.  CARRYFORWARD.  (a)  If a taxable entity is   awarded a credit that exceeds the limitation under Section   171.805(a), the entity may carry the unused credit forward for not   more than five consecutive reports.          (b)  A carryforward is considered the remaining portion of a   credit awarded to a taxable entity that cannot be claimed on a   report because of the limitation under Section 171.805(a).          Sec. 171.807.  APPLICATION FOR CREDIT. (a) The comptroller   may award a credit to a taxable entity that applies for the credit   under this subchapter if the taxable entity is eligible for the   credit and the credit is available under Section 171.805(b).          (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.  The   comptroller may adopt rules prescribing the application process for   the credit, including rules prescribing:                (1)  a process by which the credit is awarded on a   first-come, first-served basis;                (2)  an enrollment period with application deadlines to   submit an application for the credit;                (3)  a requirement that a taxable entity must apply for   the credit using an electronic application; and                (4)  the information required to be submitted with the   application for the credit, including the certificate of   contribution described by Section 171.804(b).          (c)  A taxable entity may not apply for an amount of credit   greater than the lesser of:                (1)  the taxable entity's designated contributions made   to eligible organizations during the relevant period; or                (2)  $1 million.          (d)  A taxable entity may be awarded an amount of credit less   than the total amount of credit to which the entity would otherwise   be entitled if awarding the entity the total amount of credit would   exceed the limitation under Section 171.805(b).          (e)  The comptroller shall notify a taxable entity in writing   of the amount of credit, if any, awarded to the entity.          (f)  The award or denial of a credit under this subchapter   and the amount of any credit awarded is not a contested case under   Chapter 2001, Government Code.          (g)  Subject to the limitations prescribed by this   subchapter, a taxable entity may claim the amount of credit awarded   by the comptroller on the report originally due after the entity   receives the notice described by Subsection (e).          Sec. 171.808.  CREDIT FOR DESIGNATED CONTRIBUTION MADE BY   MEMBER OF COMBINED GROUP OR TIERED PARTNERSHIP AGREEMENT. (a) A   credit under this subchapter for designated contributions made by a   member of an affiliated group that files a combined report under   Section 171.1015 must be claimed on the combined report required by   Section 171.1014 for the group, and the combined group is   considered the taxable entity making the designated contribution   for purposes of this subchapter.          (b)  An upper tier entity that includes the total revenue of   a lower tier entity for purposes of computing its taxable margin as   authorized by Section 171.1015 may claim the credit under this   subchapter for designated contributions made by the lower tier   entity to the extent of the upper tier entity's ownership interest   in the lower tier entity.  No more than $1 million in credit awarded   for designated contributions made during the period on which a   report is based may be claimed on the report.          Sec. 171.809.  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. 171.810.  FEES. The foundation may set and charge to an   organization a fee in an amount sufficient to cover the   foundation's costs to certify the organization as an eligible   organization under Section 171.803.          Sec. 171.811.  RULES.  The comptroller may adopt rules and   procedures necessary to implement, administer, and enforce this   subchapter.          Sec. 171.812.  EXPIRATION.  (a)  This subchapter expires   January 1, 2029.          (b)  The expiration of this subchapter does not affect the   carryforward of a credit under Section 171.806 or those credits for   which a taxable entity is eligible after the date this subchapter   expires based on designated contributions made before that date.          SECTION 2.  (a) A taxable entity may apply for a credit   under Subchapter P, Chapter 171, Tax Code, as added by this Act,   only for a designated contribution made on or after June 1, 2026.          (b)  Subchapter P, Chapter 171, Tax Code, as added by this   Act, applies only to a report originally due on or after June 1,   2026.          SECTION 3.  This Act takes effect June 1, 2026.               ______________________________ ______________________________      President of the Senate Speaker of the House                 I hereby certify that S.B. No. 2018 passed the Senate on   April 28, 2025, by the following vote:  Yeas 31, Nays 0; May 29,   2025, Senate refused to concur in House amendments and requested   appointment of Conference Committee; May 30, 2025, House granted   request of the Senate; May 31, 2025, Senate adopted Conference   Committee Report by the following vote:  Yeas 31, Nays 0.       ______________________________   Secretary of the Senate                I hereby certify that S.B. No. 2018 passed the House, with   amendments, on May 28, 2025, by the following vote:  Yeas 97,   Nays 31, one present not voting; May 30, 2025, House granted   request of the Senate for appointment of Conference Committee;   May 31, 2025, House adopted Conference Committee Report by the   following vote:  Yeas 97, Nays 27, two present not voting.       ______________________________   Chief Clerk of the House            Approved:     ______________________________               Date       ______________________________              Governor