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

89(R) SB 2018 - Enrolled version - Bill Text

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