SB2018

A contribution must be money given to an eligible organization and designated for this credit when given. OneStar Foundation must certify organizations meeting all statutory conditions: federal 501(c)(3) tax-exempt status, authority to do business in Texas, and at least three years of specified Texas services before receiving their first designated contribution. The services can be comprehensive case management helping at-risk families become stable and self-sufficient and encouraging work, or specified father-engagement and parenting services through in-school programs and online resources. “At-risk family” incorporates an existing definition covering a family with a child or pregnant woman and specified child-welfare, justice-system, family-stability or infant-health risks. Final law, 171.801–.803; Incorporated family definition.

Eligible organizations cannot directly or indirectly provide abortion services or offer information related to abortion services. They also cannot have received more than half their total annual revenue from Texas state or local government, directly or through a contractor, in the preceding state fiscal year. Annual submissions to OneStar must describe services, people served, outcomes, finances and contacts, and include an officer’s compliance statement signed under penalty of perjury. These limits mean the credit does not cover every charity that assists families. Final law, 171.803.

Organizations must check local, state and national criminal backgrounds of everyone working directly with children in programs funded by these contributions, including specified national criminal-record and sex-offender databases. Contributions must support Texas residents, with no more than 5% used for administration. Organizations must submit their latest IRS Form 990 annually to the comptroller, issue contribution certificates to donors, and send the comptroller copies within 30 days after providing them to donors. OneStar may charge organizations a fee sufficient to cover certification costs. Final law, 171.804 and .810.

A qualifying donation makes a business eligible to apply; the comptroller must award the credit before it can be claimed. The amount used on a report cannot exceed the award or franchise tax due after other credits. Awards may be reduced when the statewide cap would be exceeded. Unused awarded credit may carry forward for up to five consecutive reports. The comptroller may set application rules, including first-come-first-served awards, enrollment deadlines and electronic applications. Written notice is required; the award decision and amount are not a contested case under the Administrative Procedure Act. A claim goes on the report originally due after notice, subject to the limits. Final law, 171.805–.807.

An affiliated group’s credit belongs on its combined report, with the group treated as the contributor. Special rules let an upper-tier entity claim its ownership share of a lower-tier entity’s qualifying contribution when the statutory revenue-reporting conditions apply; the provision limits newly awarded period-based credit claimed on a report to $1 million. Credits cannot be transferred separately from substantially all the business’s assets. The credit provisions expire January 1, 2029, but preserve carryforwards and eligibility based on earlier contributions. Only contributions made, and reports originally due, on or after June 1, 2026 qualify under the transition rule. Final law, 171.808–.812 and sections 2–3; Combined-report background; Tiered-partnership background.

How the bill changed: The introduced and Senate committee texts were identical and proposed credits against several taxes, a $10 million overall cap, January 2026 implementation and Health and Human Services Commission certification. Paxton’s adopted Senate replacement narrowed the credit to franchise tax, set the $5 million annual cap, moved implementation to June 2026 and expiration to January 2029, and changed the qualifying services from both categories to either category. It dropped the proposed independent annual audit, mandatory continuous-quality-improvement process and detailed HHSC certification/revocation/return-of-contributions system; annual financial/outcome reporting and Form 990 remained. The Senate-passed and House committee texts were identical. Introduced; Senate committee; Senate replacement; Senate-passed; House committee.

Harris’s adopted House amendment installed OneStar certification, clarified that credits and carryforwards depend on an award, added the 30-day certificate-copy rule and certification fee, and revised the application cap. It also proposed extending the separate research-and-development credit’s expiration from December 2026 to December 2028. The conference agreement kept the family-credit changes but removed that research-and-development extension; SB2018 did not enact it. Both chambers adopted the conference report May 31. The complete amendment index lists these two amendments. House amendment, including item 18; Conference text and comparison; Final law; Amendment index; Version index.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

The credit can encourage businesses to fund eligible family and father-engagement services, but awards depend on certification, applications, available capacity under the cap and tax liability. Families do not apply for this business tax credit themselves. The restrictions exclude some providers, while reporting, screening, certification fees and the 5% administrative limit impose compliance costs. The reviewed record does not establish actual donations, approved organizations, family outcomes or economic gains. Final law.

The final conference fiscal note estimates a $5 million Property Tax Relief Fund revenue loss in each of fiscal years 2027, 2028 and 2029, assuming the full annual credit is used—$15 million total. It separately estimates $146,000 a year in General Revenue administration in 2027–30 for two employees, and explains that lost Property Tax Relief Fund money must be replaced with General Revenue for school funding. For 2026–27, its headline $146,000 General Revenue-related impact is therefore not the entire exposure: it also identifies the $5 million tax-fund loss. No local-government fiscal effect is anticipated. These are forecasts, not an appropriation or measured results. Final fiscal note.

Do not use the House-stage estimate of $193.49 million in tax-fund losses for 2027 as the cost of enacted SB2018: that version included the research-and-development extension removed in conference. Likewise, the introduced bill’s multi-tax estimate belongs to a discarded proposal. House-stage fiscal note; Introduced fiscal note; Conference fiscal note.