Reprinted
February 26, 2013
SENATE BILL No. 239
_____
DIGEST OF SB 239
(Updated February 25, 2013 2:55 pm - DI 73)
Citations Affected: IC 6-3.1; IC 12-17.2.
Synopsis: Tax credit for quality child care. Establishes the paths to
quality income tax credit. Provides that an individual is entitled to a
nonrefundable income tax credit for each dependent child of the
individual who is at least three years of age and less than six years of
age and who is attending a child care facility that voluntarily
participates in the paths to quality rating system (qualified child care
facility) and that has a quality rating of level 2 or higher. Provides that
the amount of the credit is based on the number of months the
dependent child attends the qualified child care facility and the quality
rating of the qualified child care facility. Requires the division of
family resources to adopt rules to administer the paths to quality rating
system.
Effective: Upon passage; January 1, 2014.
Holdman
, Head, Taylor
January 7, 2013, read first time and referred to Committee on Tax and Fiscal Policy.
February 21, 2013, amended, reported favorably _ Do Pass.
February 25, 2013, read second time, amended, ordered engrossed.
Reprinted
February 26, 2013
First Regular Session 118th General Assembly (2013)
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SENATE BILL No. 239
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-3.1-34; (13)SB0239.2.1. -->
SECTION 1. IC 6-3.1-34 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2014]:
Chapter 34. Paths to Quality Tax Credit
Sec. 1. As used in this chapter, "child care facility" means a:
(1) child care center licensed under IC 12-17.2-4;
(2) child care home licensed under IC 12-17.2-5; or
(3) child care ministry licensed or registered under
IC 12-17.2-6.
Sec. 2. As used in this chapter, "dependent child" means a child
at least three (3) years of age and less than six (6) years of age who:
(1) qualifies as a dependent of a taxpayer (as defined in
Section 152 of the Internal Revenue Code); and
(2) is the natural or adopted child of the taxpayer or, if
custody of the child has been awarded in a court proceeding
to someone other than the mother or father, the court
appointed guardian or custodian of the child.
If the parents of a child are divorced, a taxpayer under this section
refers to the parent who is eligible to take the exemption for the
child under Section 151 of the Internal Revenue Code.
Sec. 3. As used in this chapter, "division" refers to the division
of family resources established under IC 12-13-1-1.
Sec. 4. As used in this chapter, "paths to quality program"
refers to the program established by IC 12-17.2-2-14.
Sec. 5. As used in this chapter, "qualified child care facility"
means a child care facility that voluntarily participates in the paths
to quality program.
Sec. 6. As used in this chapter, "qualified dependent child"
means a dependent child who attends a qualified child care facility
that receives a level 2 through level 4 quality rating.
Sec. 7. As used in this chapter, "quality rating" means the level
number awarded to a qualified child care facility under the quality
rating system.
Sec. 8. As used in this chapter, "quality rating system" means
the quality rating system established by the division under
IC 12-17.2-2-14(c).
Sec. 9. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under IC 6-3-1
through IC 6-3-7 (the adjusted gross income tax), as computed
after the application of the credits that under IC 6-3.1-1-2 are to be
applied before the credits provided in this chapter.
Sec. 10. As used in this chapter, except as provided in section 2
of this chapter, "taxpayer" means an individual.
Sec. 11. (a) Each taxable year, a taxpayer is entitled to credit
against the taxpayer's state tax liability for each qualified
dependent child of the taxpayer who regularly attends a qualified
child care facility during the taxpayer's taxable year if the
qualified child care facility has a quality rating of level 2, level 3,
or level 4. A taxpayer is not entitled to a carryover, carryback, or
refund of an unused credit.
(b) The amount of the credit to which a taxpayer is entitled for
each qualified dependent child equals the STEP TWO total in the
following formula:
STEP ONE: For each month in which the qualified dependent
child:
(A) is at least three (3) years of age and is less than six (6)
years of age during any part of the month; and
(B) attends the qualified child care facility for at least
one hundred (100) hours;
determine the monthly credit amount under subsection (c)
based on the quality rating of the qualified child care facility
for that month.
STEP TWO: Determine the sum of the amounts calculated
under STEP ONE for each month during the taxpayer's
taxable year.
(c) The monthly credit amount for a qualified dependent child
who attends a qualified child care facility at least one hundred
(100) hours during that month equals the following:
(1) If the qualified dependent child attends a qualified child
care facility with a quality rating of level 4, twenty dollars
($20).
(2) If the qualified dependent child attends a qualified child
care facility with a quality rating of level 3, fifteen dollars
($15).
(3) If the qualified dependent child attends a qualified child
care facility with a quality rating of level 2, five dollars ($5).
The quality rating for a qualified child care facility for the month
in which the quality rating for the facility changes is the lower
quality rating assigned to the qualified child care facility during
that month.
Sec. 12. Not later than January 15 of each year, the division
shall send a letter to each qualified child care facility certifying the
quality rating awarded to the qualified child care facility for each
month during the previous calendar year.
Sec. 13. To receive a credit under section 11 of this chapter, a
taxpayer must claim the credit on the taxpayer's annual state tax
return or returns in the manner prescribed by the department. The
taxpayer shall submit to the department all information that the
department determines is necessary to validate eligibility and
calculate a credit provided under section 11 of this chapter.
Sec. 14. The department, with the advice of the division, shall
adopt rules under IC 4-22-2 to administer this chapter.
SOURCE: IC 12-17.2-2-14; (13)SB0239.2.2. -->
SECTION 2. IC 12-17.2-2-14 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 14. (a) As used in this section,
"program" refers to the paths to quality program established by
subsection (b).
(b) The paths to quality program is established. The program is
a voluntary child care facility quality rating and improvement
system implemented by the division in partnership with the
following organizations:
(1) Indiana Association for the Education of Young Children.
(2) Indiana Association for Child Care Resource and Referral.
(3) Indiana Head Start Collaboration Office.
(4) Indiana Department of Education.
(5) Early Childhood Alliance.
(6) 4 C's of Southern Indiana.
(c) The program shall use four (4) levels at which a child care
facility participating in the program may be rated, with level 4
indicating the highest level of quality child care.
(d) The division shall adopt rules under IC 4-22-2 to administer
the paths to quality program rating system. The rules must include
procedures that outline eligibility and application procedures for
the program, the establishment of procedures relating to the rating
process, and the establishment or alteration of standards used in
the rating process.
(e) The division shall adopt rules under IC 4-22-2 to establish
the steering council of the program to make recommendations to
the division on program issues and resources. Rules adopted under
this subsection must require that council members be appointed
from partner organizations that assist in the implementation of the
program and serve to coordinate the project plan.
SOURCE: ; (13)SB0239.2.3. -->
SECTION 3.
An emergency is declared for this act.