H.B. No. 3191 introduces a new franchise tax credit for taxable entities that make specific contributions towards child care for their employees. The bill adds Subchapter N-1 to Chapter 171 of the Tax Code, defining "child-care contribution" and establishing eligibility criteria for the credit. To qualify, a taxable entity must subsidize at least $1,200 of an employee's annual child care costs at licensed facilities. The credit amount is based on total contributions made, with a cap of $3,600 per child and an overall limit of $25 million in credits awarded per fiscal year. The bill also allows for the sale or assignment of credits and outlines procedures for application and potential carryforward of unused credits.

Additionally, the Texas Workforce Commission is tasked with conducting a study to explore strategies for improving access to child care in the state, particularly through employer engagement. A report on the findings is required by December 31, 2026. The provisions of the new tax credit will apply to reports due on or after January 1, 2027, and the act is set to take effect on January 1, 2026.

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