TITLE: Relating to a franchise tax credit for entities that employ certain students in certain paid internship or similar programs.

SUMMARY: Relating to a franchise tax credit for entities that employ certain students in certain paid internship or similar programs.

FULL TEXT:
AN ACT relating to a franchise tax credit for entities that employ certain students in certain paid internship or similar programs. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 171, Tax Code, is amended by adding Subchapter Rto read as follows: SUBCHAPTER R. TAX CREDIT FOR PAID INTERNSHIPS GIVEN TO CERTAIN STUDENTS Sec. 171.871. DEFINITIONS. In this subchapter: (1) "Commission" means the Texas Workforce Commission. (2) "Eligible internship program" means a paid internship or similar program that: (A) meets the requirements of rules adopted by the commission under Section 171.875; and (B) is part of: (i) the curriculum requirements for an endorsement under Section 28.025(c-1), Education Code; (ii) the curriculum for a public junior college; or (iii) a course of study in a private school or a nontraditional secondary education setting, such as a home school setting, that is substantially similar, under rules adopted by the commissioner of education under Section 171.875, to the curriculum requirements described by Subparagraph (i). (3) "Eligible student" means a student who has reached the minimum age required under Chapter 51, Labor Code, to legally work in the eligible internship program and who is enrolled: (A) in a public or private school; (B) in a course of study in a nontraditional secondary education setting, including a home school setting; or (C) full-time or part-time in a public junior college. (4) "Private school" means a school that: (A) offers a course of instruction for students in one or more grades from prekindergarten through grade 12; and (B) is not operated by a governmental entity. (5) "Public junior college" has the meaning assigned by Section 61.003, Education Code. Sec. 171.872. 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. 171.873. QUALIFICATION FOR CREDIT. A taxable entity qualifies for a credit under this subchapter for each eligible student who completes an eligible internship program offered by the taxable entity. Sec. 171.874. AMOUNT OF CREDIT; LIMITATIONS. (a) The amount of the credit is $1,000 for each eligible student who completes an eligible internship program offered by the taxable entity. (b) A taxable entity may claim the credit only for an eligible internship program offered by the taxable entity that is located or based in this state. (c) A taxable entity may not claim the credit in connection with an eligible student if an owner of the taxable entity is related to the eligible student within the third degree of consanguinity as determined under Subchapter B, Chapter 573, Government Code. Sec. 171.875. RULES. (a) The commission, after consulting with the commissioner of education and the Texas Higher Education Coordinating Board, shall adopt rules providing the requirements that an internship or similar program must meet to be considered an eligible internship program under this subchapter. Rules adopted by the commission under this subsection must be consistent with the rules adopted by the commissioner of education under Subsection (b). (b) The commissioner of education shall adopt rules to determine whether a student's course of study in a private school or nontraditional secondary education setting is substantially similar to the curriculum requirements for an endorsement described by Section 28.025(c-1), Education Code. Sec. 171.876. APPLICATION FOR CREDIT. (a) A taxable entity must apply for a credit under this subchapter on or with the tax report for the period for which the credit is claimed. (b) The comptroller shall promulgate a form for the application for the credit. A taxable entity must use the form in applying for the credit. Sec. 171.877. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A taxable entity may claim a credit under this subchapter against the tax owed for a privilege period only in connection with an eligible student who completes an eligible internship program during the privilege period. SECTION 2. A taxable entity may claim the credit under Subchapter R, Chapter 171, Tax Code, as added by this Act, only in connection with an eligible student who completes an eligible internship program on or after the effective date of this Act and only on a franchise tax report due under Chapter 171, Tax Code, on or after January 1, 2018. SECTION 3. This Act takes effect January 1, 2018.