Bill Text: TX SB2018 | 2025-2026 | 89th Legislature | Enrolled

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Bill Title: Relating to the strong families credit against certain taxes for entities that contribute to certain organizations.

Sponsorship: Moderate Partisan Bill (Republican 8-2)

Status: (Passed) 2025-06-20 - Effective on . . . . . . . . . . . . . . . June 1, 2026 [SB2018 Detail]

Download: Texas-2025-SB2018-Enrolled.html

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S.B. No. 2018

AN ACT
relating to the strong families credit against certain taxes for
entities that contribute to certain organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 171, Tax Code, is amended by adding
Subchapter P to read as follows:
SUBCHAPTER P. STRONG FAMILIES TAX CREDIT
Sec. 171.801. DEFINITIONS. In this subchapter:
(1) "At-risk family" has the meaning assigned by
Section 137.002, Human Resources Code.
(2) "Designated contribution" means a monetary
contribution to an eligible organization that the contributor
designates at the time of contribution as being made for the purpose
of the strong families credit.
(3) "Eligible organization" means an organization
determined to be an eligible organization under this subchapter.
(4) "Foundation" means the OneStar Foundation.
(5) "Strong families credit" means the tax credit
established under this subchapter.
Sec. 171.802. ELIGIBILITY FOR CREDIT. A taxable entity
that makes a designated contribution that meets the requirements of
this subchapter is eligible to apply for a strong families credit in
the amount and under the conditions provided by this subchapter
against the tax imposed under this chapter.
Sec. 171.803. CERTIFICATION AS ELIGIBLE ORGANIZATION. (a)
The foundation shall certify an organization as an eligible
organization under this subchapter if the organization:
(1) is exempt from federal income taxation under
Section 501(a), Internal Revenue Code of 1986, as an organization
described by Section 501(c)(3) of that code;
(2) is authorized to transact business in this state;
(3) has provided the following in this state for at
least three years preceding the organization's receipt of the
organization's initial designated contribution:
(A) comprehensive case management services for
at-risk families based on an assessment of family strengths and
needs, including assisting families in achieving self-sufficiency
and stability and encouraging workforce participation; or
(B) services and resources to assist fathers in
learning and improving parenting skills and being more engaged in
their children's lives through in-school programs and online
resources;
(4) does not directly or indirectly provide abortion
services, or offer information related to abortion services; and
(5) has not received, either directly or indirectly
through a contractor, more than 50 percent of its total annual
revenue from this state or a political subdivision of this state in
the preceding state fiscal year.
(b) To remain an eligible organization, an organization
must submit each calendar year the following information to the
foundation in the manner prescribed by the comptroller:
(1) a description of the qualifying services and
resources provided by the organization;
(2) the total number of individuals served through the
services and resources described by Subdivision (1) during the
previous calendar year and the number of those individuals served
and provided with resources that year using designated
contributions;
(3) outcomes for services and resources described by
Subdivision (1);
(4) the organization's financial information;
(5) the organization's contact information;
(6) a statement, signed under penalty of perjury by an
officer of the organization, that the organization meets all
criteria to qualify as an eligible organization under this section,
has complied with the requirements under Section 171.804 for the
previous calendar year, and intends to comply with those
requirements for the next calendar year; and
(7) any other documentation necessary to verify
eligibility or compliance with this section.
(c) The comptroller may consult with the foundation to
determine the manner in which an organization must demonstrate that
the organization is an eligible organization for purposes of this
subchapter.
Sec. 171.804. DUTIES OF ELIGIBLE ORGANIZATION. (a) An
eligible organization shall:
(1) conduct a local, state, and national criminal
background check for all individuals working directly with children
in a program funded by designated contributions that includes the
use of:
(A) a commercial multistate and
multijurisdiction criminal records locator or other similar
commercial nationwide database; and
(B) the national sex offender registry database
maintained by the United States Department of Justice or a
successor agency;
(2) spend all designated contributions, other than the
amount described by Subdivision (3), to provide services or
resources for residents of this state;
(3) spend no more than five percent of the total dollar
amount of designated contributions on administrative expenses; and
(4) annually submit to the comptroller a copy of the
eligible organization's most recent Form 990 filed with the
Internal Revenue Service.
(b) On receipt of a designated contribution, an eligible
organization shall provide the entity making the contribution with
a certificate of contribution that includes:
(1) the entity's name;
(2) the eligible organization's name;
(3) the entity's federal employer identification
number, if applicable;
(4) the entity's state taxpayer identification number,
if applicable;
(5) the amount of the designated contribution; and
(6) the date the designated contribution was made.
(c) An eligible organization shall provide to the
comptroller a copy of each certificate of contribution provided to
an entity under Subsection (b) not later than the 30th day after the
date the organization provided the certificate to the entity making
the designated contribution.
Sec. 171.805. AMOUNT OF CREDIT; LIMITATION ON TOTAL
CREDITS. (a) Subject to Subsection (b), the amount of a taxable
entity's credit for a report is equal to the lesser of:
(1) the amount of credit awarded to the entity under
Section 171.807; or
(2) the amount of franchise tax due for the report
after applying all other applicable credits.
(b) The total amount of strong families credits awarded may
not exceed $5 million each year.
Sec. 171.806. CARRYFORWARD. (a) If a taxable entity is
awarded a credit that exceeds the limitation under Section
171.805(a), the entity may carry the unused credit forward for not
more than five consecutive reports.
(b) A carryforward is considered the remaining portion of a
credit awarded to a taxable entity that cannot be claimed on a
report because of the limitation under Section 171.805(a).
Sec. 171.807. APPLICATION FOR CREDIT. (a) The comptroller
may award a credit to a taxable entity that applies for the credit
under this subchapter if the taxable entity is eligible for the
credit and the credit is available under Section 171.805(b).
(b) A taxable entity must apply for the credit in the manner
prescribed by the comptroller and include with the application any
information requested by the comptroller to determine whether the
entity is eligible for the credit under this subchapter. The
comptroller may adopt rules prescribing the application process for
the credit, including rules prescribing:
(1) a process by which the credit is awarded on a
first-come, first-served basis;
(2) an enrollment period with application deadlines to
submit an application for the credit;
(3) a requirement that a taxable entity must apply for
the credit using an electronic application; and
(4) the information required to be submitted with the
application for the credit, including the certificate of
contribution described by Section 171.804(b).
(c) A taxable entity may not apply for an amount of credit
greater than the lesser of:
(1) the taxable entity's designated contributions made
to eligible organizations during the relevant period; or
(2) $1 million.
(d) A taxable entity may be awarded an amount of credit less
than the total amount of credit to which the entity would otherwise
be entitled if awarding the entity the total amount of credit would
exceed the limitation under Section 171.805(b).
(e) The comptroller shall notify a taxable entity in writing
of the amount of credit, if any, awarded to the entity.
(f) The award or denial of a credit under this subchapter
and the amount of any credit awarded is not a contested case under
Chapter 2001, Government Code.
(g) Subject to the limitations prescribed by this
subchapter, a taxable entity may claim the amount of credit awarded
by the comptroller on the report originally due after the entity
receives the notice described by Subsection (e).
Sec. 171.808. CREDIT FOR DESIGNATED CONTRIBUTION MADE BY
MEMBER OF COMBINED GROUP OR TIERED PARTNERSHIP AGREEMENT. (a) A
credit under this subchapter for designated contributions made by a
member of an affiliated group that files a combined report under
Section 171.1015 must be claimed on the combined report required by
Section 171.1014 for the group, and the combined group is
considered the taxable entity making the designated contribution
for purposes of this subchapter.
(b) An upper tier entity that includes the total revenue of
a lower tier entity for purposes of computing its taxable margin as
authorized by Section 171.1015 may claim the credit under this
subchapter for designated contributions made by the lower tier
entity to the extent of the upper tier entity's ownership interest
in the lower tier entity. No more than $1 million in credit awarded
for designated contributions made during the period on which a
report is based may be claimed on the report.
Sec. 171.809. ASSIGNMENT PROHIBITED; EXCEPTION. A taxable
entity may not convey, assign, or transfer a strong families credit
awarded under this subchapter to another taxable entity unless
substantially all of the assets of the taxable entity are conveyed,
assigned, or transferred in the same transaction.
Sec. 171.810. FEES. The foundation may set and charge to an
organization a fee in an amount sufficient to cover the
foundation's costs to certify the organization as an eligible
organization under Section 171.803.
Sec. 171.811. RULES. The comptroller may adopt rules and
procedures necessary to implement, administer, and enforce this
subchapter.
Sec. 171.812. EXPIRATION. (a) This subchapter expires
January 1, 2029.
(b) The expiration of this subchapter does not affect the
carryforward of a credit under Section 171.806 or those credits for
which a taxable entity is eligible after the date this subchapter
expires based on designated contributions made before that date.
SECTION 2. (a) A taxable entity may apply for a credit
under Subchapter P, Chapter 171, Tax Code, as added by this Act,
only for a designated contribution made on or after June 1, 2026.
(b) Subchapter P, Chapter 171, Tax Code, as added by this
Act, applies only to a report originally due on or after June 1,
2026.
SECTION 3. This Act takes effect June 1, 2026.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 2018 passed the Senate on
April 28, 2025, by the following vote: Yeas 31, Nays 0; May 29,
2025, Senate refused to concur in House amendments and requested
appointment of Conference Committee; May 30, 2025, House granted
request of the Senate; May 31, 2025, Senate adopted Conference
Committee Report by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 2018 passed the House, with
amendments, on May 28, 2025, by the following vote: Yeas 97,
Nays 31, one present not voting; May 30, 2025, House granted
request of the Senate for appointment of Conference Committee;
May 31, 2025, House adopted Conference Committee Report by the
following vote: Yeas 97, Nays 27, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor