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Financial Assistance 3


Recommendation

Texas should amend current state law to give franchise tax credits to telephone companies or other donor companies that provide a free telephone calling card to the families of National Guard members and reservists called to active duty for the “Enduring Freedom” and homeland defense “Noble Eagle” campaigns against terrorism; and any future national emergency declared in accordance with federal law.


Summary

Telephone Cards: The families of Texas National Guard members and reservists called to active duty could be issued a special service calling card that would allow them to dial a specific number to speak with their loved ones. The proposed special service calling card would allow a certain amount of telephone air time per month. The service calling cards could be called “Enduring Freedom” for overseas calls, or “Noble Eagle” for domestic calls.

The viability of the calling cards would depend on the communications infrastructure available in the area or the location of the person serving. A person in the service located in a remote area would not be able to make or receive calls.

During the Bosnia conflict, servicemen could communicate with their loved ones in the United States via telephone card if commercial telephones were available. At other times, the families of servicemen could contact their loved one through a telephone call patched through a military switchboard specifically designated for that purpose.[1]

Implementing this recommendation will allow the families of Texas members of the National Guard and reservists on active duty to speak to their sons, daughters or spouses for a specific number of minutes each month. The value of the service plan would be based on comparable service plans, but would not exceed a specific amount. The telephone service provider would be given a franchise tax credit for a portion of the value of the calling card.


Legislative Changes Required

Legislative action would be required to change the Tax Code to grant the tax credit and to set the amount of credit allowed.


Fiscal Impact

An estimated 2,475 Texas reservists[2] may be called to active duty. Assuming that a calling card would cost about $300 annually, or $25 monthly, and assuming that the state of Texas were to grant a tax credit of $0.50 cents on every $1.00 spent by the donor company for this program, the estimated cost to the General Revenue Fund to implement this proposal for 2,475 families would be $371,000 per year.


[1] Telephone interview with Mr. John Standford, legislative liaison, Adjutant General’s Department, Austin, Texas, October 19, 2001.

[2] This estimate is based on the president’s original authorization to call 50,000 reservists to active duty.