HBA-KDB H.B. 983 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 983
By: Kitchen
Ways & Means
3/15/2001
Introduced



BACKGROUND AND PURPOSE 

Long-term care services for the elderly, such as nursing home stays and
home care, are  expensive, and the cost continues to rise, making it
difficult for people to afford such services.  Health insurance plans
generally do not pay for long-term care services and Medicare provides only
short-term, skilled nursing home care following hospitalization.  However,
long-term care insurance may provide financial protection by covering a
wide range of services to help individuals live at home as well as receive
skilled care in a nursing home.  Without  it, people may see their
retirement savings and assets depleted by long-term illness. House Bill 983
provides a tax credit for a corporation to assist in the purchasing of
long-term care insurance  of its employees, its employees' spouses, and its
employees' parents. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 983 amends the Tax Code to authorize a corporation to claim a
franchise tax credit  made only for an expenditure toward the cost of a
long-term care insurance policy for an employee or the employee's spouse or
parent. 

H.B. 983 provides that the amount of the credit in relation to an employee
and the employee's spouse or parent is equal to the lesser of 20 percent of
the cost incurred by the employer or $100.  The bill prohibits the total
credit for a tax report from exceeding $5000.  The bill prohibits  the
total credit claimed for a period from exceeding the amount of franchise
tax due for the tax report after any other applicable tax credits.  The
bill authorizes a corporation to claim a credit for an expenditure made
during an accounting period only against the tax owed for the corresponding
reporting period. 

H.B. 983 provides that a corporation must apply for a credit on or with the
tax report for the period for which the credit is claimed.  The bill
requires the comptroller of public accounts to adopt a form for the
application for the credit.  The bill provides that a corporation must use
this from in applying for the credit. 

H.B. 983 prohibits a corporation from conveying, assigning, or transferring
the credit to another entity unless all of the assets of the corporation
are conveyed, assigned, or transferred in the same transaction. 

EFFECTIVE DATE

January 1, 2002.