Bill Text: TX SB574 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to a franchise tax credit for entities that establish a grocery store or healthy corner store in a food desert.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-04-15 - Left pending in committee [SB574 Detail]

Download: Texas-2019-SB574-Introduced.html
  86R4375 BEF-D
 
  By: Miles S.B. No. 574
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a franchise tax credit for entities that establish a
  grocery store or healthy corner store in a food desert.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 171, Tax Code, is amended by adding
  Subchapter N-1 to read as follows:
  SUBCHAPTER N-1.  TAX CREDIT FOR ESTABLISHMENT OF FOOD STORE IN FOOD
  DESERT
         Sec. 171.721.  DEFINITIONS. In this subchapter:
               (1)  "Corner store" means a store that has fewer than
  2,000 square feet of retail space.
               (2)  "Department" means the Texas Department of Housing
  and Community Affairs.
               (3)  "Food desert" means a geographic area in this
  state determined by the department to be an area that:
                     (A)  has limited access to healthy food retailers
  and is located in a low-income or high-poverty area; or
                     (B)  otherwise has serious healthy food access
  limitations.
               (4)  "Grocery store" means a store that has at least:
                     (A)  66 percent of the store's retail space
  reserved for the sale of food products;
                     (B)  50 percent of the store's food retail space
  reserved for the sale of non-prepared foods or foods intended for
  home preparation and consumption; and
                     (C)  30 percent of the store's food retail space
  reserved for the sale of perishable foods, including dairy
  products, fresh produce, fresh meats, poultry, and fish, and frozen
  foods.
               (5)  "Healthy corner store" means a corner store that:
                     (A)  offers a wide variety of fresh produce for
  sale; and
                     (B)  allocates at least 20 percent of the store's
  retail space to fresh produce and other perishable foods, including
  dairy products.
               (6)  "Supplemental nutrition assistance program" means
  the nutritional assistance program operated under Chapter 33, Human
  Resources Code, and formerly referred to as the food stamp program.
               (7)  "WIC program" means the federal special
  supplemental nutrition program for women, infants, and children
  authorized by 42 U.S.C. Section 1786.
         Sec. 171.722.  ENTITLEMENT TO CREDIT. A taxable entity is
  entitled to a credit in the amount and under the conditions and
  limitations provided by this subchapter against the tax imposed
  under this chapter.
         Sec. 171.723.  QUALIFICATION. A taxable entity qualifies
  for a credit under this subchapter if, on or after January 1, 2020,
  the taxable entity opens a grocery store or healthy corner store:
               (1)  located in a food desert;
               (2)  located in a low or moderate income area, as
  determined by the United States Department of Housing and Urban
  Development, or that serves a customer base living in a low or
  moderate income area;
               (3)  that begins accepting benefits under the WIC
  program and the supplemental nutrition assistance program not later
  than the 90th day after the date the store opens; and
               (4)  that is open year-round.
         Sec. 171.724.  CERTIFICATION OF ELIGIBILITY. (a) Before
  claiming a credit under this subchapter, a taxable entity must
  request from the department a certificate of eligibility on which
  the department certifies that the taxable entity qualifies for a
  credit under Section 171.723.  The taxable entity must include with
  the taxable entity's request information required by the department
  to determine whether the taxable entity meets the requirements of
  Section 171.723.
         (b)  The department shall issue a certificate of eligibility
  to a taxable entity that qualifies for a credit under Section
  171.723.
         (c)  The taxable entity must forward the certificate of
  eligibility and the following documentation to the comptroller to
  claim the credit:
               (1)  an audited cost report issued by a certified
  public accountant, as defined by Section 901.002, Occupations Code,
  that itemizes the taxable entity's expenditures to which Section
  171.725 applies;
               (2)  the date the grocery store or healthy corner store
  first opened for business and evidence of that opening; and
               (3)  an attestation of the total amount of the taxable
  entity's expenditures to which Section 171.725 applies.
         (d)  For purposes of approving a credit under this
  subchapter, the comptroller may rely on the audited cost report
  provided by the taxable entity applying for the credit.
         Sec. 171.725.  AMOUNT OF CREDIT. (a)  A taxable entity may
  claim a credit for each store described by Section 171.723 equal to
  five percent of the amount the taxable entity spends to establish
  the store during the earliest 12-month period:
               (1)  in which the taxable entity makes an expenditure
  to which this section applies; and
               (2)  that includes the date the store opens for
  business.
         (b)  Subsection (a) applies to amounts spent to:
               (1)  purchase or lease the land or building for the
  store;
               (2)  construct or remodel the store; and
               (3)  furnish and equip the store.
         (c)  Subsection (a) does not apply to amounts spent to
  acquire inventory for the store.
         Sec. 171.726.  LIMITATIONS. (a)  The total credit a taxable
  entity may claim under this subchapter for a tax report, including
  the amount of any credit carryforward under Section 171.728, may
  not exceed 50 percent of the amount of franchise tax due after
  applying all other applicable credits.
         (b)  A taxable entity may not convey, assign, or transfer a
  credit under this subchapter to another entity unless all of the
  assets of the taxable entity are conveyed, assigned, or transferred
  in the same transaction.
         Sec. 171.727.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.
  Subject to Section 171.728, a taxable entity may claim a credit
  under this subchapter on a tax report only for an expenditure made
  during the period on which the report is based.
         Sec. 171.728.  CARRYFORWARD. (a)  If a taxable entity is
  eligible for a credit that exceeds the limitation under Section
  171.726(a), the taxable entity may carry the unused credit forward
  for not more than five consecutive reports.
         (b)  Credits, including credit carryforwards, are considered
  to be used in the following order:
               (1)  a credit carryforward under this subchapter; and
               (2)  a current year credit.
         Sec. 171.729.  APPLICATION FOR CREDIT. 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.  The
  comptroller may promulgate an application form for the credit under
  this subchapter.
         Sec. 171.730.  RULES. (a) The department may adopt rules
  governing the requirements to qualify for a credit under Section
  171.723, including rules governing the stores that qualify as
  grocery stores or healthy corner stores and the areas that qualify
  as food deserts.
         (b)  The comptroller may adopt any rules necessary to
  administer this subchapter other than rules described by Subsection
  (a).
         SECTION 2.  This Act applies only to a report originally due
  on or after the effective date of this Act.
         SECTION 3.  This Act takes effect January 1, 2020.
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