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BILL ANALYSIS

 

 

Senate Research Center

C.S.S.B. 4

84R21727 E

By: Taylor, Larry et al.

 

Education

 

4/10/2015

 

Committee Report (Substituted)

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Throughout the State of Texas, students are primarily assigned to a school campus based upon their home address, regardless of whether the school campus is the best educational match for them. Students from low-income families and students with disabilities often have few, if any, options for education. A tax credit scholarship program would enable low-income students and students with disabilities to receive a scholarship to attend the school of their choice. In addition, students would also be able to apply for a limited scholarship to apply toward education assistance costs in a public school, such as tutoring, instructional materials, and lab/classroom fees.

 

Through the tax credit scholarship program, businesses would be able to invest in the future workforce and provide assistance to low-income and disabled students by making a donation to an educational scholarship organization and receive a tax credit for the donation. C.S.S.B. 4 directs the comptroller of public accounts of the State of Texas to certify the nonprofit organizations that may award education scholarships to eligible students.

 

C.S.S.B. 4 amends current law relating to a franchise or insurance premium tax credit for contributions made to certain educational assistance organizations and adds provisions subject to a criminal penalty.

 

RULEMAKING AUTHORITY

 

Rulemaking authority is expressly granted to the comptroller of public accounts of the State of Texas in SECTION 1 (Section 171.558, Tax Code, and Section 171.560, Tax Code) and SECTION 2 (Section 230.052, Insurance Code, and Section 230.054, Insurance Code) of this bill.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Chapter 171, Tax Code, by adding Subchapter K, as follows:

 

SUBCHAPTER K. TAX CREDIT FOR CONTRIBUTIONS TO CERTAIN EDUCATIONAL ASSISTANCE ORGANIZATIONS

 

Sec. 171.551. DEFINITION. Defines "educational assistance organization" in this subchapter.

 

Sec. 171.552. ELIGIBILITY REQUIREMENTS FOR CERTIFICATION OF EDUCATIONAL ASSISTANCE ORGANIZATION. (a) Authorizes an organization to apply to the comptroller of public accounts of the State of Texas (comptroller) for certification as a certified education assistance organization.

 

(b) Provides that, to be eligible for certification, the organization:

 

(1) is required to:

 

(A) be exempt from federal tax under Section 501(a) of the Internal Revenue Code by being listed as an exempt organization in Section 501(c)(3) of that code;

 

(B) be in good standing with the state;

 

(C) be located in the state;

 

(D) allocate at least 90 percent of its annual revenue from contributions that are designated for scholarships or educational expense assistance for eligible students under this subchapter for student scholarships and assistance for educational expenses, including tuition, transportation, textbooks, and other supplies, and for other related educational expense assistance as described by this section;

 

(E) award scholarships and assistance for qualifying educational expenses to eligible students who demonstrate the greatest financial and academic need;

 

(F) give each donor a receipt for money contributed to the organization that includes the name of the organization, the name of the donor, the amount of the contribution, the information required by Section 171.556(c), and any other information required by the comptroller;

 

(G) demonstrate experience and technical expertise in:

 

(i) accepting, processing, and tracking applications for scholarships or educational expense assistance; and

 

(ii) awarding scholarships to students in primary or secondary schools;

 

(H) agree to be independently audited on an annual basis and file the audit with the comptroller; and

 

(I) disburse within two academic years of receipt contributions received from and designated by taxable entities for scholarships or educational expense assistance under this subchapter; and

 

(2) is prohibited from:

 

(A) awarding all scholarships under this subchapter to students who attend a particular school or pay educational expenses incurred only at a particular school;

 

(B) providing to a student a scholarship in an annual amount that exceeds the amount provided under Section 171.557(a) or (b) unless the money used to provide the portion of the scholarship in excess of that amount was contributed by a person other than an entity that notifies the organization under Section 171.556(c) that the entity may apply for a tax credit for the contribution; and

 

(C) providing to a student educational expense assistance in excess of the amount provided under Section 171.557(c) per academic year, unless the money used to provide the portion of the assistance in excess of that amount was contributed by a person other than an entity that notifies the organization under Section 171.556(c) that the entity may apply for a tax credit for the contribution, including assistance for:

 

(i) facility fees;

 

(ii) textbooks;

 

(iii) school supplies;

 

(iv) tutoring;

 

(v) academic after-school programs;

 

(vi) school or lab fees;

 

(vii) before-school or after-school child care; and

 

(viii) transportation expenses, including the cost to transfer from one public school to another.

 

(c) Authorizes the comptroller to certify not more than 25 certified educational assistance organizations. Authorizes the comptroller to certify as a certified educational assistance organization an organization that applies under Subsection (a) if the organization meets the requirements of Subsection (b). Provides that the comptroller has broad discretion in determining whether to grant or deny an application for certification.

 

(d) Requires the comptroller to notify an organization in writing of the comptroller's decision to grant or deny the application under Subsection (a). Requires the comptroller, if the comptroller denies an organization's application, to include in the notice of denial the reasons for the comptroller's decision.

 

(e) Authorizes the organization, if the comptroller denies an organization's application under Subsection (a), to request in writing a reconsideration of the application not later than the 10th day after the date of the notice under Subsection (d). Provides that, if the organization does not request a reconsideration of the application on or before that date, the comptroller's decision is final. Prohibits an organization from requesting reconsideration of an application if the comptroller denied the application because 25 organizations were already certified as certified educational assistance organizations.

 

(f) Authorizes an organization that requests a reconsideration under Subsection (e) to submit to the comptroller not later than the 30th day after the date the request for reconsideration is submitted additional information and documents to support the organization's request for reconsideration.

 

(g) Provides that the comptroller's reconsideration of an application under this section is not a contested case under Chapter 2001 (Administrative Procedure), Government Code. Provides that the comptroller's decision on a request for reconsideration of an application is final and is not appealable.

 

(h) Provides that this section does not create a cause of action to contest a decision of the comptroller to deny an application for certification as a certified educational assistance organization.

 

Sec. 171.5525. ALLOCATION OF MONEY DESIGNATED FOR SCHOLARSHIPS OR EDUCATIONAL EXPENSE ASSISTANCE. Requires a certified educational assistance organization to use, of the amount required to be allocated as provided by Section 171.552(b)(1)(D):

 

(1) at least 80 percent to award scholarships as described by Sections 171.557(a) and (b); and

 

(2) not more than 20 percent to award educational expense assistance as described by Section 171.557(c).

 

Sec. 171.553. NONPUBLIC SCHOOL REQUIREMENTS. Prohibits a certified educational assistance organization from awarding scholarships to or paying educational expenses for eligible students enrolled in a nonpublic school unless the nonpublic school executes a notarized affidavit, with supporting documents, concerning the school's qualification for scholarships and educational expense assistance for eligible students who receive assistance from a certified educational assistance organization, including evidence of:

 

(1) accreditation or of actively being in the process of accreditation by the Texas Education Agency (TEA) or by an organization recognized by the Texas Private School Accreditation Commission;

 

(2) annual administration of a nationally norm-referenced assessment instrument or the appropriate assessment instrument required under Section 39.023 (Adoption and Administration of Instruments), Education Code;

 

(3) valid certificate of occupancy; and

 

(4) policy statements regarding:

 

(A) admissions;

 

(B) curriculum;

 

(C) safety;

 

(D) food service inspection; and

 

(E) student to teacher ratios.

 

Sec. 171.554. ELIGIBILITY. Authorizes a taxable entity to apply for a credit against the tax imposed under this chapter in the amount and under the conditions and limitations provided by this subchapter. Requires the comptroller to award credits as provided by Section 171.559.

 

Sec. 171.555. ELIGIBILITY OF STUDENTS; NOTICE TO CERTAIN PARENTS; INCLUSION IN CALCULATION OF EQUALIZED WEALTH LEVEL. (a) Provides that to be eligible to apply for assistance from a certified educational assistance organization under this subchapter:

 

(1) a student:

 

(A) is required to:

 

(i) be in foster care;

 

(ii) be in institutional care; or

 

(iii) have a household income not greater than 250 percent of the income guidelines necessary to qualify for the national free or reduced-price lunch program established under 42 U.S.C. Section 1751 et seq.; and

 

(B) is required to:

 

(i) have been enrolled in a public school during the preceding school year;

 

(ii) be starting school in the state for the first time;

 

(iii) be the sibling of a student who is eligible; or

 

(iv) if the person attends a nonpublic school:

 

(a) qualify as a student who is not counted toward a public school's average daily attendance during the year in which the student receives the scholarship or educational expense assistance to attend the school, except as provided by Subsection (f); and

 

(b) be located in a county with a population greater than 50,000; or

 

(2) the student is required to have previously qualified under Subdivision (1).

 

(a-1)  Provides that, notwithstanding Subsection (a), a school district located in a county described by that subsection is authorized to vote at a general election to allow students to participate in the tax credit scholarship program described by this subchapter.

 

(b) Provides that, in addition to the students eligible under Subsection (a), a student is eligible to apply for assistance from a certified educational assistance organization under this subchapter if:

 

(1) the student is in kindergarten through grade 12 and eligible under Section 29.003 (Eligibility Criteria), Education Code, to participate in a school district's special education program; and

 

(2) an individualized education program has been developed for the student under Section 29.005 (Individualized Education Program), Education Code.

 

(c) Requires a school district to provide written notice of the availability of assistance under this subchapter to the parent of a student who is eligible to apply for assistance under Subsection (b). Requires that the notice under this subsection inform the parent that a qualifying school is not subject to laws regarding the provision of education services in the same manner as a public school, and a student with disabilities attending a qualifying school may not receive the services a student with disabilities attending a public school is entitled to receive under federal and state law. Requires that the notice provide information regarding rights a student with disabilities is entitled to under federal and state law if the student attends a public school, including:

 

(1) rights provided under the Individuals with Disabilities Education Act (20 U.S.C. Section 1400 et seq.), including:

 

(A) an individualized education program;

 

(B) education services provided in the least restrictive environment;

 

(C) instruction from certified teachers;

 

(D) due process hearings to ensure proper and full implementation of an individualized education program;

 

(E) transition and planning services; and

 

(F) supplementary aids and services;

 

(2) rights provided under Subchapter A (Special Education Program), Chapter 29, Education Code; and

 

(3) other rights provided under federal or state law.

 

(d) Authorizes a student who establishes eligibility under Subsection (b) to continue to receive assistance under this subchapter until the earlier of the date the student graduates from high school or the student's 22nd birthday.

 

(e) Requires a certified educational assistance organization to award scholarships and educational expense assistance to eligible students who apply in accordance with this subchapter.

 

(f) Provides that a student who receives a scholarship under this subchapter is included in the weighted average daily attendance of the school district the student would otherwise attend for purposes of determining the district's equalized wealth level under Chapter 41 (Equalized Wealth Level), Education Code.

 

Sec. 171.556. CREDIT FOR CONTRIBUTIONS. (a) Authorizes a taxable entity to apply for a credit under this subchapter only for money contributed to a certified educational assistance organization and designated for scholarships or educational expense assistance for eligible students.

 

(b) Prohibits a taxable entity from applying for a credit under this subchapter for a contribution made to a certified educational assistance organization if:

 

(1) the taxable entity requires that the contribution benefit a particular person or school; or

 

(2) the contribution is designated to provide a scholarship or educational expense assistance for a taxable entity employee or for a spouse or dependent of a taxable entity employee.

 

(c) Requires an entity to notify a certified educational assistance organization in writing when the entity makes a contribution if the entity may apply for a tax credit under this subchapter or Chapter 230 (Credit Against Premium Taxes for Certain Contributions), Insurance Code, for the contribution. Prohibits an entity from applying for a credit for the contribution unless the entity provides the notification at the time the contribution is made. Requires the certified educational assistance organization to indicate on the receipt provided under Section 171.552(b)(1)(F) that the entity made the notification under this subsection.

 

Sec. 171.557. LIMIT ON AMOUNT OF SCHOLARSHIP OR EDUCATIONAL EXPENSE ASSISTANCE. (a) Prohibits the maximum scholarship amount a certified educational assistance organization may award to a student under this subchapter using money contributed by an entity that notifies the organization under Section 171.556(c) that the entity may apply for a tax credit for the contribution, except as provided by Subsection (b), from exceeding 75 percent of the amount of funding equal to the statewide average amount to which a school district would be entitled under the Foundation School Program under Chapter 42 (Foundation School Program), Education Code, for a student in average daily attendance.

 

(b) Prohibits the maximum scholarship amount under Subsection (a) from exceeding 50 percent of the statewide average amount described by Subsection (a) if the student receiving the scholarship has a household income greater than 175 percent of the income guidelines necessary to qualify for the national free or reduced-price lunch program established under 42 U.S.C. Section 1751 et seq. Provides that this subsection does not apply to a student who is eligible for assistance under Section 171.555(b) or (d).

 

(c) Prohibits the maximum educational expense assistance a certified educational assistance organization may award to a student under this subchapter using money contributed by an entity that notifies the organization under Section 171.556(c) that the entity may apply for a tax credit for the contribution from exceeding $500 for the 2016 state fiscal year, increased by five percent each subsequent year.

 

Sec. 171.558 AMOUNTS; LIMITATION ON TOTAL CREDITS. (a) Provides that subject to Subsections (b) and (c), the amount of a taxable entity's annual credit is equal to the lesser of the amount of the qualifying contributions made by the taxable entity or 50 percent of the taxable entity's tax liability under this chapter.

 

(b) Prohibits the total amount of tax credits that may be awarded under this subchapter and Chapter 230, Insurance Code, for the 2016 state fiscal year, from exceeding $100 million. Provides that, for each subsequent state fiscal year, the total amount of tax credits that may be awarded is an amount equal to 110 percent of the total amount of tax credits that may be awarded in the previous state fiscal year.

 

(c) Requires the comptroller by rule to prescribe procedures by which the comptroller may allocate credits under this subchapter. Requires that the procedures provide that credits are first allocated to taxable entities that were granted preliminary approval for a credit under Section 171.5585 in the amount that was preliminarily approved. Requires that the procedures provide that any remaining credits are allocated on a first-come, first-served basis, based on the date the contribution was initially made.

 

(d) Provides that the comptroller may require a taxable entity to notify the comptroller of the amount the taxable entity intends or expects to apply for under this subchapter before the beginning of a state fiscal year or at any other time required by the comptroller.

 

Sec. 171.5585. PRELIMINARY APPROVAL FOR CREDIT. (a) Provides that, before making a contribution to a certified educational assistance organization, a taxable entity may apply to the comptroller for preliminary approval of a credit under this subchapter for the contribution.

 

(b) Requires a taxable entity to apply for preliminary approval of a credit on a form provided by the comptroller that includes the amount the taxable entity expects to contribute and any other information required by the comptroller.

 

(c) Requires the comptroller to grant preliminary approval for credits under this subchapter and Chapter 230, Insurance Code, on a first-come, first-served basis, based on the date the application for preliminary approval is received by the comptroller.

 

(d) Requires the comptroller to grant preliminary approval for a credit under this subchapter if the total amount of credits preliminarily approved under this subchapter and Chapter 230, Insurance Code, does not exceed the amount provided by Section 171.558(b).

 

(e) Provides that a credit for which the comptroller grants preliminary approval remains subject to the limitation under Section 171.558(a) and any other limitations prescribed by this subchapter.

 

Sec. 171.559. APPLICATION FOR CREDIT. (a) Requires a taxable entity to apply for a credit under this subchapter on or with the tax report for the period.

 

(b) Requires the comptroller to adopt a form for the application for the credit. Requires a taxable entity to use this form in applying for the credit and submit with the application the receipt issued under Section 171.552(b)(1)(F), including the information required by Section 171.556(c).

 

(c) Provides that 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 171.558(b). Provides that the comptroller has broad discretion in determining whether to grant or deny an application for a credit.

 

(d) Requires the comptroller to notify a taxable entity in writing of the comptroller's decision to grant or deny the application under Subsection (a). Requires the comptroller, if the comptroller denies a taxable entity's application, to include in the notice of denial the reasons for the comptroller's decision.

 

(e) Authorizes the taxable entity, if the comptroller denies a taxable entity's application under Subsection (a), to request in writing a reconsideration of the application not later than the 10th day after the date of the notice under Subsection (d). Provides that, if the taxable entity does not request a reconsideration of the application on or before that date, the comptroller's decision is final.

 

(f) Authorizes a taxable entity that requests a reconsideration under Subsection (e) to submit to the comptroller not later than the 30th day after the date the request for reconsideration is submitted additional information and documents to support the taxable entity's request for reconsideration.

 

(g) Provides that the comptroller's reconsideration of an application under this section is not a contested case under Chapter 2001 (Administrative Procedure), Government Code. Provides that the comptroller's decision on a request for reconsideration of an application is final and is not appealable.

 

(h) Provides that this section does not create a cause of action to contest a decision of the comptroller to deny an application for a credit under this subchapter.

 

Sec. 171.560. RULES; PROCEDURES. (a) Requires the comptroller to adopt rules and procedures to implement, administer, and enforce this subchapter.

 

(b) Provides that a rule adopted under Subsection (a) is binding on an organization that applies for certification as an educational assistance organization, a taxable entity that applies for a credit, and a state or local governmental entity, including a political subdivision, as necessary to implement, administer, and enforce this subchapter.

 

Sec. 171.561. ASSIGNMENT PROHIBITED; EXCEPTION. Prohibits a taxable entity from conveying, assigning, or transferring the credit allowed under this subchapter to another taxable entity unless all assets of the taxable entity are conveyed, assigned, or transferred in the same transaction.

 

Sec. 171.562. REVOCATION. (a) Requires the comptroller to revoke a certification provided under Section 171.552 if the comptroller finds that a certified educational assistance organization:

 

(1) is no longer eligible under Section 171.552; or

 

(2) intentionally and substantially violates this subchapter.

 

(b) Provides that the comptroller has broad discretion in determining whether to revoke a certification under Subsection (a).

 

(c) Requires the comptroller to notify a certified educational assistance organization in writing of the comptroller's decision to revoke the organization's certification. Requires the comptroller, if the comptroller revokes an organization's certification, to include in the notice of revocation the reasons for the revocation.

 

(d) Authorizes the organization, if the comptroller revokes a certified educational assistance organization's certification under Subsection (a), to request in writing a reconsideration of the revocation not later than the 10th day after the date of the notice under Subsection (c) or the revocation is final.

 

(e) Authorizes an organization that requests a reconsideration under Subsection (d) to submit to the comptroller not later than the 30th day after the date the request for reconsideration is submitted additional information and documents to support the organization's request for reconsideration.

 

(f) Provides that the comptroller's reconsideration of a revocation under this section is not a contested case under Chapter 2001, Government Code. Provides that the comptroller's decision on a request for reconsideration of a revocation is final and is not appealable.

 

(g) Provides that this section does not create a cause of action to contest a decision of the comptroller to revoke a certified educational assistance organization's certification under this subchapter.

 

(h) Provides that revocation of a certification under this section does not affect the validity of a tax credit relating to a contribution made before the date of revocation.

 

Sec. 171.563. REPORT OF NET SAVINGS TO PUBLIC EDUCATION. (a) Defines "net savings" in this section.

 

(b) Requires the comptroller, not later than December 31 of each even-numbered year, to determine the amount of net savings for the previous state fiscal biennium and make available to the public a report of that amount of savings.

 

Sec. 171.564. NOTICE OF AVAILABILITY OF CREDIT. Requires the comptroller to provide notice of the availability of the credit under this subchapter on the comptroller's Internet website, in the instructions for franchise tax report forms, and in any notice sent to a taxable entity concerning the requirement to file a franchise tax report.

 

SECTION 2. Amends Subtitle B, Title 3, Insurance Code, by adding Chapter 230, as follows:

 

CHAPTER 230. CREDIT AGAINST PREMIUM TAXES FOR CERTAIN CONTRIBUTIONS

 

SUBCHAPTER A. GENERAL PROVISIONS

 

Sec. 230.001. DEFINITIONS. Defines "education assistance organization" and "state premium tax liability" in this chapter.

 

SUBCHAPTER B. CREDIT

 

Sec. 230.051. CREDIT. Authorizes an entity to apply for a credit against the entity's state premium tax liability in the amount and under the conditions and limitations provided by this chapter. Requires the comptroller to award credits as provided by Section 230.053.

 

Sec. 230.052. AMOUNTS; LIMITATION ON TOTAL CREDITS. (a) Provides that, subject to Subsections (b) and (c), the amount of an entity's credit is equal to the lesser of the amount of the qualifying contributions made to an educational assistance organization or 50 percent of the entity's state premium tax liability if the contributions and the organizations that received the contributions meet the requirements prescribed by Subchapter K, Chapter 171, Tax Code.

 

(b) Prohibits the total amount of tax credits that may be awarded under this chapter and Subchapter K, Chapter 171, Tax Code, for the 2016 state fiscal year, from exceeding $100 million. Provides that, for each subsequent state fiscal year, the total amount of tax credits that may be awarded is an amount equal to 110 percent of the total amount of tax credits that may be applied for in the previous state fiscal year.

 

(c) Requires the comptroller by rule to prescribe procedures by which the comptroller may allocate credits under this chapter. Requires that the procedures provide that credits are first allocated to entities that were granted preliminary approval for a credit under Section 230.0525 in the amount that was preliminarily approved. Requires that the procedures provide that any remaining credits are allocated on a first-come, first-served basis, based on the date the contribution was initially made.

 

(d) Authorizes the comptroller to require an entity to notify the comptroller of the amount the entity intends or expects to apply for under this chapter before the beginning of a state fiscal year or at any other time required by the comptroller.

 

Sec. 230.0525. PRELIMINARY APPROVAL FOR CREDIT. (a) Authorizes an entity, before making a contribution to a certified educational assistance organization, to apply to the comptroller for preliminary approval of a credit under this chapter for the contribution.

 

(b) Requires an entity to apply for preliminary approval of a credit on a form provided by the comptroller that includes the amount the entity expects to contribute and any other information required by the comptroller.

 

(c) Requires the comptroller to grant preliminary approval for credits under this chapter and Subchapter K, Chapter 171, Tax Code, on a first-come, first-served basis, based on the date the application for preliminary approval is received by the comptroller.

 

(d) Requires the comptroller to grant preliminary approval for a credit under this chapter if the total amount of credits preliminarily approved under this chapter and Subchapter K, Chapter 171, Tax Code, does not exceed the amount provided by Section 230.052(b).

 

(e) Provides that a credit for which the comptroller grants preliminary approval remains subject to the limitation under Section 230.052(a) and any other limitations prescribed by this chapter.

 

Sec. 230.053. APPLICATION FOR CREDIT. (a) Requires an entity to apply for a credit under this chapter on or with the tax return for the taxable year and submit with the application the receipt issued under Section 171.552(b)(1)(F), Tax Code, including the information required by Section 171.556(c), Tax Code.

 

(b) Requires the comptroller to adopt a form for the application for the credit. Requires an entity to use this form in applying for the credit.

 

(c) Authorizes the comptroller to 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 230.052(b). Provides that the comptroller has broad discretion in determining whether to grant or deny an application for a credit.

 

(d) Requires the comptroller to notify an entity in writing of the comptroller's decision to grant or deny the application under Subsection (a). Requires the comptroller, if the comptroller denies an entity's application, to include in the notice of denial the reasons for the comptroller's decision.

 

(e) Authorizes an entity, if the comptroller denies an entity's application under Subsection (a), to request in writing a reconsideration of the application not later than the 10th day after the date of the notice under Subsection (d). Provides that, if the entity does not request a reconsideration of the application on or before that date, the comptroller's decision is final.

 

(f) Authorizes an entity that requests a reconsideration under Subsection (e) to submit to the comptroller not later than the 30th day after the date the request for reconsideration is submitted additional information and documents to support the entity's request for reconsideration.

 

(g) Provides that the comptroller's reconsideration of an application under this section is not a contested case under Chapter 2001, Government Code. Provides that the comptroller's decision on a request for reconsideration of an application is final and is not appealable.

 

(h) Provides that this section does not create a cause of action to contest a decision of the comptroller to deny an application for a credit under this chapter.

 

Sec. 230.054. RULES; PROCEDURES. (a) Requires the comptroller to adopt rules and procedures to implement, administer, and enforce this chapter.

 

(b) Provides that a rule adopted under Subsection (a) is binding on an organization that applies for certification as an educational assistance organization, an entity that applies for a credit, and a state or local governmental entity, including a political subdivision, as necessary to implement, administer, and enforce this chapter.

 

Sec. 230.055. ASSIGNMENT PROHIBITED; EXCEPTION. Prohibits an entity from conveying, assigning, or transferring the credit allowed under this chapter to another entity unless all of the assets of the entity are conveyed, assigned, or transferred in the same transaction.

 

Sec. 230.056. NOTICE OF AVAILABILITY OF CREDIT. Requires the comptroller to provide notice of the availability of the credit under this chapter on the comptroller's Internet website, in the instructions for insurance premium tax report forms, and in any notice sent to an entity concerning the requirement to file an insurance premium tax report.

 

SECTION 3. (a) Provides that the constitutionality and other validity under the state or federal constitution of all or any part of Subchapter K, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by this Act, may be determined in an action for declaratory judgment in a district court in Travis County under Chapter 37 (Declaratory Judgments), Civil Practice and Remedies Code, except that this section does not authorize an award of attorney's fees against this state and Section 37.009 (Costs), Civil Practice and Remedies Code, does not apply to an action filed under this section. Provides that this section does not authorize a taxpayer suit to contest the denial of a tax credit by the comptroller of public accounts.

 

(b) Provides that an appeal of a declaratory judgment or order, however characterized, of a district court, including an appeal of the judgment of an appellate court, holding or otherwise determining that all or any part of Subchapter K, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by this Act, is constitutional or unconstitutional, or otherwise valid or invalid, under the state or federal constitution is an accelerated appeal.

 

(c) Provides that, if the judgment or order is interlocutory, an interlocutory appeal may be taken from the judgment or order and is an accelerated appeal.

 

(d) Authorizes a district court in Travis County to grant or deny a temporary or otherwise interlocutory injunction or a permanent injunction on the grounds of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of Subchapter K, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by this Act.

 

(e) Provides that there is a direct appeal to the Supreme Court of Texas (supreme court) from an order, however characterized, of a trial court granting or denying a temporary or otherwise interlocutory injunction or a permanent injunction on the grounds of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of Subchapter K, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by this Act.

 

(f) Provides that the direct appeal is an accelerated appeal.

 

(g) Provides that this section exercises the authority granted by Section 3-b (Appeal from Order Granting or Denying Information), Article V, Texas Constitution.

 

(h) Provides that the filing of a direct appeal under this section will automatically stay any temporary or otherwise interlocutory injunction or permanent injunction granted in accordance with this section pending final determination by the supreme court, unless the supreme court makes specific findings that the applicant seeking such injunctive relief has pleaded and proved that:

 

(1) the applicant has a probable right to the relief it seeks on final hearing; and

 

(2) the applicant will suffer a probable injury that is imminent and irreparable, and that the applicant has no other adequate legal remedy.

 

(i) Provides that an appeal under this section, including an interlocutory, accelerated, or direct appeal, is governed, as applicable, by the Texas Rules of Appellate Procedure, including Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1), 38.6(a) and (b), 40.1(b), and 49.4.

 

SECTION 4. Provides that an entity may apply for a credit under Subchapter K, Chapter 171, Tax Code, or Chapter 230, Insurance Code, as added by this Act, only for an expenditure made on or after the effective date of this Act.

 

SECTION 5. Requires the comptroller, not later than February 15, 2016, to adopt rules as provided by Section 171.560(a), Tax Code, and Section 230.054(a), Insurance Code, as added by this Act.

 

SECTION 6. Requires the comptroller to make the initial determination of net savings and report regarding that savings as required by Section 171.563, Tax Code, as added by this Act, not later than December 31, 2018, based on the state fiscal biennium ending August 31, 2017.

 

SECTION 7. Provides that this Act applies only a report originally due on or after the effective date of this Act.

 

SECTION 8. Effective date: January 1, 2016.