85(R) - 2017
Texas Workforce Commission
Relating to a franchise tax credit for entities that employ certain students in certain paid internship or similar programs.
Estimated Two-year Net Impact to General Revenue Related Funds for SB518, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2019.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($4,000,000) for the 2018-19 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
SB 518 would give businesses and other taxable entities the ability to qualify for a franchise tax credit if they employ eligible high school students as paid interns. The entity will receive $1,000 for each eligible student who completes the offered internship program if they claim the credit during the appropriate time period. However, the total amount of tax credits awarded may not exceed $5 million in a fiscal biennium. Lastly, the school would be required to conduct a study and report on the effectiveness of the tax credit in creating jobs.
Vote Recommendation Notes
Our first specific objection to this bill is that tax dollars should not be used to subsidize private sector internships. This is not the appropriate use of tax dollars. More broadly, we oppose special carveouts and exemptions for specific groups of people or businesses. This legislation violates the principles of free markets and limited government. For these reasons we oppose SB 518.