By: Montford S.B. No. 899
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the application and administration of the franchise
1-2 tax.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 171.001(b), Tax Code, is amended to read
1-5 as follows:
1-6 (b) In this chapter:
1-7 (1) "Banking corporation" means each state, national,
1-8 domestic, or foreign bank, and each bank organized under Section
1-9 25(a), Federal Reserve Act (12 U.S.C. Secs. 611-631) (edge
1-10 corporations), but does not include a bank holding company as that
1-11 term is defined by Section 2, Bank Holding Company Act of 1956 (12
1-12 U.S.C. Sec. 1841).
1-13 (2) "Beginning Date" means:
1-14 (A) for a corporation chartered in Texas, the
1-15 date the charter is effective; and
1-16 (B) for a foreign corporation, the earlier of:
1-17 (i) the date the certificate of authority
1-18 is effective; or
1-19 (ii) the date the corporation begins doing
1-20 business in Texas.
1-21 (3) <(2)> "Corporation" includes:
1-22 (A) a limited liability company, including a
1-23 foreign limited liability company, as defined under the Texas
2-1 Limited Liability Company Act (Article 1528n, Vernon's Texas Civil
2-2 Statutes); <and>
2-3 (B) a state or federal savings and loan
2-4 association; and
2-5 (C) a banking corporation.
2-6 (4) <(3)> "Charter" includes a limited liability
2-7 company's certificate of organization.
2-8 (5) <(4)> "Internal Revenue Code" means the Internal
2-9 Revenue Code of 1986 in effect for the federal tax year beginning
2-10 on or after January 1, 1990, and before January 1, 1991, and any
2-11 regulations adopted under that code applicable to that period.
2-12 (6) <(5)> "Officer" and "director" include a limited
2-13 liability company's directors and managers.
2-14 (7) <(6)> "Savings and loan association" includes a
2-15 state or federal savings bank.
2-16 (8) <(7)> "Shareholder" includes a limited liability
2-17 company's member.
2-18 SECTION 2. Sections 171.0011(a), (b), and (c), Tax Code, are
2-19 amended to read as follows:
2-20 (a) An additional tax is imposed on a corporation that for
2-21 any reason becomes <is subject to the tax imposed under Section
2-22 171.001 and that is> no longer subject to the earned surplus
2-23 component of the tax, whether or not the corporation remains
2-24 subject to the taxable capital component of the tax <taxing
2-25 jurisdiction of this state in relation to the tax on net taxable
3-1 earned surplus>.
3-2 (b) The additional tax is equal to 4.5 percent of <the rate
3-3 then in effect under Section 171.002(a)(2) multiplied by> the
3-4 corporation's net taxable earned surplus computed on the period
3-5 beginning on the day after the last day for which the tax imposed
3-6 on net taxable earned surplus was computed under Section 171.1532
3-7 and ending on the date the corporation is no longer subject to the
3-8 earned surplus component of the tax <taxing jurisdiction of this
3-9 state in relation to the tax on net taxable earned surplus>.
3-10 (c) The additional tax imposed and any report required by
3-11 the comptroller are due on the 60th day after the corporation
3-12 becomes no longer subject to the earned surplus component of the
3-13 tax <taxing jurisdiction of this state are delinquent after the
3-14 60th day after the date on which the corporation is no longer
3-15 subject to the taxing jurisdiction of this state in relation to the
3-16 tax on net taxable earned surplus>.
3-17 SECTION 3. Section 171.002(d), Tax Code, is amended to read
3-18 as follows:
3-19 (d) If the amount of tax computed <under Subsection (b)> for
3-20 a corporation is less than $100, the corporation is not required to
3-21 pay that amount and is not considered to owe any tax for that
3-22 period.
3-23 SECTION 4. Section 171.0022, Tax Code is added to read as
3-24 follows:
3-25 Sec. 171.0022. TITLE INSURANCE HOLDING COMPANY TAX CREDITS.
4-1 (a) Controlled company. For franchise tax purposes controlled
4-2 company has the same meaning as defined in the Insurance Code,
4-3 Article 21.49-1.
4-4 (b) Eligibility. A title insurance holding company that is
4-5 subject to the Insurance Code, Article 21.49-1, and which controls
4-6 one or more domestic title insurance companies that are subject to
4-7 the tax on premiums under the Insurance Code, Article 9.59, is
4-8 entitled to a credit against its franchise tax imposed under this
4-9 chapter.
4-10 (c) Calculation of credit.
4-11 (1) The credit for each controlled domestic title
4-12 insurance company is computed by multiplying the amount of tax on
4-13 premiums paid by that company in the most recent calendar year
4-14 ending before the franchise tax report is due, by the percentage of
4-15 ownership of the title insurance holding company in the controlled
4-16 domestic title insurance company.
4-17 (2) The percentage of ownership of a controlled
4-18 domestic title insurance company is determined as of the end of the
4-19 accounting period upon which taxable capital is based.
4-20 (d) Limitations.
4-21 (1) No portion of a credit may be carried forward or
4-22 carried back and used on a report for another period.
4-23 (2) A corporation may not take credit for the same tax
4-24 on premiums more than once.
4-25 SECTION 5. Article 9.59, Section 16, Insurance Code, is
5-1 amended to read as follows:
5-2 Sec. 16. (a) The definitions for this section are the same
5-3 as for Article 21.49-1 of this code.
5-4 (b) A title insurance holding company that is subject to
5-5 Article 21.49-1, Insurance Code, and which controls one or more
5-6 domestic title insurance companies that are subject to the tax on
5-7 premiums under this article is entitled to a credit against its
5-8 franchise tax imposed by Chapter 171, Tax Code in accordance with
5-9 the provisions of Section 171.0022, Tax Code. <The amount of the
5-10 credit for each controlled domestic title insurance company is
5-11 computed by multiplying the amount of tax on premiums paid by that
5-12 controlled domestic title insurance company in the most recent
5-13 calendar year ending before the franchise tax report is due, by the
5-14 percentage ownership of the title insurance holding company in the
5-15 controlled domestic title insurance company. The percentage of
5-16 ownership of a controlled domestic title insurance company is
5-17 determined as of the accounting year-end upon which the franchise
5-18 tax report is based.>
5-19 <(c) A claim for a credit is subject to the following
5-20 limitations:>
5-21 <(1) if the total amount of the credit for all
5-22 controlled title insurance companies exceeds the franchise tax due,
5-23 the credit is an amount equal to the franchise tax due;>
5-24 <(2) the minimum franchise tax must be paid; and>
5-25 <(3) a credit may not be carried forward or backward
6-1 and apply to another year's franchise tax report.>
6-2 (c) <(d)> Nothing under this article may be construed to
6-3 exempt title insurance holding companies, or title insurance agents
6-4 from paying any tax imposed under the Tax Code. Provided, however,
6-5 title insurance companies and title insurance agents whose
6-6 principal activity is the business of title insurance are exempted
6-7 from Chapter 171, Tax Code.
6-8 SECTION 6. Sections 171.063(a), (e), (f), and (g), Tax Code,
6-9 are amended to read as follows:
6-10 (a) The following corporations are exempt from the franchise
6-11 tax:
6-12 (1) a nonprofit corporation exempted from the federal
6-13 income tax under Section 501(c)(3), (4), (5), (6), or (7) of the
6-14 Internal Revenue Code of 1954, as it existed on January 1, 1975; or
6-15 (2) a corporation exempted under Section 501(c)(2) or
6-16 (25) of the Internal Revenue Code of 1986, if the entity or
6-17 entities <corporation or corporations> for which it holds title to
6-18 property is either exempt from or not subject to the franchise tax;
6-19 and
6-20 (3) a corporation exempted from federal income tax
6-21 under Section 501(c)(16), of the Internal Revenue Code of 1986.
6-22 (e) An exemption established under Subsection (c) and (d) of
6-23 this section is to be recognized, after it is finally established,
6-24 as of the date <of> the corporation's charter or certificate of
6-25 authority is effective.
7-1 (f) If a corporation timely files evidence with the
7-2 comptroller under Subsection (d) of this section that it has
7-3 applied for a federal exemption and if the application is finally
7-4 denied by the Internal Revenue Service, no penalty will be imposed
7-5 on the corporation for the period from the corporation's beginning
7-6 date to the date of denial of its application for federal
7-7 exemption. <this chapter does not impose a penalty on the
7-8 corporation from the date of its charter or certificate of
7-9 authority to the date of the final denial.>.
7-10 (g) If a corporation's federal tax exemption is withdrawn by
7-11 the Internal Revenue Service for failure of the corporation to
7-12 qualify or maintain its qualification for the exemption, the
7-13 corporation's exemption under this section ends on the <effective>
7-14 date the Internal Revenue Service's withdrawal of its federal tax
7-15 exemption is effective <of the withdrawal>. The effective date of
7-16 the Internal Revenue Service's withdrawal will be considered the
7-17 beginning date of the corporation for purpose of determining the
7-18 privilege periods of the corporation and for all purposes of this
7-19 chapter.
7-20 SECTION 7. Section 171.1032, Tax Code, is amended by
7-21 amending Subsection (a) and adding Subsection (c) to read as
7-22 follows:
7-23 (a) In apportioning taxable earned surplus, the gross
7-24 receipts of a corporation from its business done in this state is
7-25 the sum of the corporation's receipts from:
8-1 (1) each sale of tangible personal property if the
8-2 property is delivered or shipped to a buyer in this state
8-3 regardless of the FOB point or another condition of the sale, and
8-4 each sale of tangible personal property shipped from this state to
8-5 a purchaser in another state in which the seller is not subject to
8-6 any tax imposed on, or measured by net income <taxation>;
8-7 (2) each service performed in this state;
8-8 (3) each rental of property situated in this state;
8-9 (4) each royalty for the use of a patent or copyright
8-10 in this state; and
8-11 (5) other business done in this state.
8-12 (c) Amounts deemed received by a corporation in certain
8-13 stock purchases that are treated as asset acquisitions under
8-14 Section 338 of the Internal Revenue Code will be treated as sales
8-15 of assets by the target corporation. For purposes of this
8-16 Subsection, the purchaser of the target corporation's stock will be
8-17 considered the purchaser of the assets.
8-18 SECTION 8. Section 171.1051, Tax Code, is amended by adding
8-19 Subsection (d) to read as follows:
8-20 (d) Amounts deemed received by a corporation in certain
8-21 stock purchases that are treated as asset acquisitions under
8-22 Section 338 of the Internal Revenue Code will be treated as sales
8-23 of assets by the target corporation. For purposes of this
8-24 Subsection, the purchaser of the target corporation's stock will be
8-25 considered the purchaser of the assets.
9-1 SECTION 9. Section 171.106(d), Tax Code, is added to read as
9-2 follows:
9-3 (d) Amounts deemed received by a corporation in certain
9-4 stock purchases that are treated as asset acquisitions under
9-5 Section 338 of the Internal Revenue Code will be treated as sales
9-6 of assets by the target corporation. For purposes of this
9-7 Subsection, the purchaser of the target corporation's stock will be
9-8 considered the purchaser of the assets.
9-9 SECTION 10. Section 171.107, Tax Code is amended to read as
9-10 follows:
9-11 Sec. 171.107. DEDUCTION OF COST OF SOLAR ENERGY DEVICE <FROM
9-12 TAXABLE CAPITAL APPORTIONED TO THIS STATE>.
9-13 (a) In this section, "solar energy device" means a system or
9-14 series of mechanisms designed primarily to provide heating or
9-15 cooling or to produce electrical or mechanical power by collecting
9-16 and transferring solar-generated energy. The term includes a
9-17 mechanical or chemical device that has the ability to store
9-18 solar-generated energy for use in heating or cooling or in the
9-19 production of power.
9-20 (b) A corporation may deduct from its apportioned taxable
9-21 capital the undepreciated <amortized> cost of a solar energy device
9-22 or, after adding back to taxable earned surplus the amount of
9-23 depreciation deducted for the solar energy device in arriving at
9-24 its taxable earned surplus, from its apportioned taxable earned
9-25 surplus 20 percent of the <amortized> cost of a solar energy device
10-1 for the first five years after the date the device is placed in
10-2 service in this state if:
10-3 (1) the device is acquired by the corporation for
10-4 heating or cooling or for the production of power; and
10-5 (2) the device is used solely in this state by the
10-6 corporation. <; and>
10-7 <(3) the cost of the device is amortized in accordance
10-8 with Subsection (c) of this section.>
10-9 (c) If a corporation chooses to use the deduction available
10-10 under this section, no depreciation may be deducted in arriving at
10-11 taxable earned surplus for the solar energy device for any report
10-12 year beginning after the fifth year from the date the device is
10-13 placed in service in this state. <The amortization of the cost of
10-14 a solar energy device must:>
10-15 <(1) be for a period of at least 60 months;>
10-16 <(2) provide for equal monthly amounts;>
10-17 <(3) begin on the month in which the device is placed
10-18 in service in this state; and>
10-19 <(4) cover only a period in which the device is in use
10-20 in this state.>
10-21 (d) <A corporation that makes a deduction under this section
10-22 shall file with the comptroller an amortization schedule showing
10-23 the period in which a deduction is to be made.> On the request of
10-24 the comptroller, the corporation shall file with the comptroller
10-25 such proof of the cost of the solar energy device and <or> proof of
11-1 the corporation's use of the device <device's operation> in this
11-2 state as the comptroller may request.
11-3 SECTION 11. Sections 171.109(f), (i), and (j), Tax Code are
11-4 amended to read as follows:
11-5 (f) A corporation declaring dividends shall exclude those
11-6 dividends from its taxable capital as of the date the dividends are
11-7 declared. A corporation receiving dividends shall include those
11-8 dividends in its gross receipts for taxable capital apportionment
11-9 purposes <to the extent not excluded under Section 171.1032(b) or
11-10 171.1051(c),> and in its taxable capital as of the date the
11-11 dividends are declared by the corporation declaring the dividends.
11-12 (i) The following accounts may also be excluded from
11-13 surplus, to the extent they are in conformance with generally
11-14 accepted accounting principles or the appropriate federal income
11-15 tax method, whichever is applicable:
11-16 (1) a reserve or allowance for uncollectible trade
11-17 accounts and trade notes receivable; and
11-18 (2) a contra-asset account for depletion,
11-19 depreciation, or amortization.
11-20 (j) A corporation may not exclude from surplus:
11-21 (1) liabilities for compensation and other benefits
11-22 provided to employees, other than wages, that are not debt as of
11-23 the end of the accounting period upon which the taxable capital
11-24 component is based <are not payable in the current accounting
11-25 year>, including retirement, medical, insurance, postretirement,
12-1 and other similar benefits; and
12-2 (2) deferred tax credits.
12-3 SECTION 12. Sections 171.110(d) and (e), Tax Code, are
12-4 amended to read as follows:
12-5 (d) A corporation's reportable federal taxable income is the
12-6 corporation's federal taxable income after Schedule C special
12-7 deductions and before net operating loss deductions as computed
12-8 under the Internal Revenue Code. <, except that> An <an> S
12-9 corporation's or a limited liability company's reportable federal
12-10 taxable income is the amount of the income reportable to the
12-11 Internal Revenue Service as allocated <taxable> to the S
12-12 corporation's shareholders, or to the limited liability company's
12-13 members. For purposes of this subsection, all references to a
12-14 limited liability company shall apply to a limited liability
12-15 company that files a U.S. Partnership Return of Income in reporting
12-16 its federal income tax.
12-17 (1) Items of income, loss, deduction, or credit
12-18 reportable as separately stated items to the shareholders of an S
12-19 corporation or to the members of a limited liability company shall
12-20 be treated as items of income, loss, deduction, or credit of the S
12-21 corporation or of the limited liability company.
12-22 (2) The treatment of items of income, loss, deduction
12-23 or credit shall be subject to any federal income tax requirements
12-24 or limitations imposed on the S corporation or limited liability
12-25 company, but without regard to federal income tax limitations or
13-1 restrictions imposed on the shareholders of an S corporation or on
13-2 the members of a limited liability company.
13-3 (3) Notwithstanding any provision of Subdivision (1)
13-4 or (2) to the contrary, the comptroller may adopt such rules as may
13-5 be necessary in the determination of the comptroller for the
13-6 reporting requirements of specific items of income, loss,
13-7 deduction, or credit of an S corporation or limited liability
13-8 company to which the provisions of this subsection apply.
13-9 (4) Any item of income, loss, deduction, or credit
13-10 taxable to a corporation in its capacity as a member of a limited
13-11 liability company shall be excluded by the corporation in computing
13-12 its own taxable earned surplus.
13-13 (e) For purposes of this section, a business loss is any
13-14 negative amount after apportionment. The business loss may be
13-15 carried forward to the year succeeding the loss year as a deduction
13-16 in computing net taxable earned surplus, then successively to the
13-17 succeeding four report <taxable> years <after the loss year> or
13-18 until the loss is exhausted, whichever occurs first, but for not
13-19 more than five report <taxable> years after the loss year.
13-20 Notwithstanding the preceding sentence, a business loss from a tax
13-21 year that ends before January 1, 1991, may not be used to reduce
13-22 net taxable earned surplus. The business loss carry forward under
13-23 this section may not be conveyed, assigned, or transferred to any
13-24 other entity for its use in calculating its franchise tax.
13-25 SECTION 13. Section 171.1121(a), Tax Code, is amended to
14-1 read as follows:
14-2 (a) For purposes of this section, "gross receipts" means all
14-3 revenues reportable by a corporation on its federal tax return,
14-4 without deduction for the cost of property sold, materials used,
14-5 labor performed, or other costs incurred, unless otherwise
14-6 specifically provided in this chapter. The term "gross receipts"
14-7 does not include revenues which are not included in taxable earned
14-8 surplus. For example, Schedule C special deductions and any
14-9 amounts subtracted from reportable federal taxable income under
14-10 section 171.110(a)(1) are not included in taxable earned surplus
14-11 and therefore are not considered "gross receipts."
14-12 SECTION 14. Section 171.151, Tax Code, is amended to read as
14-13 follows:
14-14 Sec. 171.151. PRIVILEGE PERIOD COVERED BY TAX. The
14-15 franchise tax shall be paid for each of the following:
14-16 (1) an initial period beginning on the beginning date
14-17 of <that> the corporation <files its charter or is granted a
14-18 certificate of authority or the date that a foreign corporation
14-19 begins doing business in this state, whichever is earlier,> and
14-20 ending on the day before the first anniversary of the beginning
14-21 <that> date;
14-22 (2) a second period beginning on the first anniversary
14-23 of the beginning date of <that> the corporation <files its charter
14-24 or is granted its certificate of authority or the date that a
14-25 foreign corporation begins doing business in this state, whichever
15-1 is earlier,> and ending on the December 31 following the beginning
15-2 <that> date, unless the date of the first anniversary is December
15-3 31, in which event the second period begins and ends on that
15-4 December 31; and
15-5 (3) after the initial and second periods have expired,
15-6 a regular annual period beginning each year on January 1 and ending
15-7 the following December 31.
15-8 SECTION 15. Section 171.152(c), Tax Code, is amended to read
15-9 as follows:
15-10 (c) Payment of the tax covering the regular annual period is
15-11 due May 15 of each year after the beginning of the regular annual
15-12 period. However, if the anniversary of the beginning date of the
15-13 corporation <the date that the domestic corporation files its
15-14 charter or the foreign corporation begins doing business in Texas
15-15 or is granted its certificate of authority, whichever occurs
15-16 first,> is after October 3 and before January 1, the payment of the
15-17 tax covering the first regular annual period is due on the same day
15-18 as the tax covering the initial period.
15-19 SECTION 16. Sections 171.153(a) and (c), Tax Code are
15-20 amended to read as follows:
15-21 (a) The tax covering the initial period is reported on the
15-22 initial report and is based on the business done by the corporation
15-23 during the period beginning on the beginning date of the
15-24 corporation <day the corporation files its charter or is granted a
15-25 certificate of authority or the date that a foreign corporation
16-1 begins doing business in this state, whichever is earlier,> and:
16-2 (1) ending on the last accounting period ending date
16-3 that is at least six months after the beginning date and at least
16-4 60 days before the original due date of the initial report; or
16-5 (2) if there is no such period ending date in
16-6 Subdivision (1) of this subsection, then ending on the day that is
16-7 the last day of a calendar month and that is nearest to the end of
16-8 the corporation's first year of business; or
16-9 (3) ending on the day after the merger occurs, for the
16-10 survivor of a merger which occurs after the day on which the tax is
16-11 based in Subdivision (1) or Subdivision (2), whichever is
16-12 applicable, of Subsection (a) and before January 1 of the year an
16-13 initial report is due by the survivor.
16-14 (c) The tax covering the regular annual period is based on
16-15 the business done by the corporation during its last accounting
16-16 period that ends in the year before the year in which the tax is
16-17 due; unless a corporation is the survivor of a merger which occurs
16-18 between the end of its last accounting period in the year before
16-19 the report year and January 1 of the report year, in which case the
16-20 tax will be based on the financial condition of the surviving
16-21 corporation for the 12-month period ending on the day after the
16-22 merger. However, if the first anniversary of the beginning date of
16-23 the corporation <that the corporation files its charter, is granted
16-24 a certificate of authority, or begins doing business in this state>
16-25 is after October 3 and before January 1, the tax covering the first
17-1 regular annual period is based on the same business on which the
17-2 tax covering the initial period is based and is reported on the
17-3 initial report.
17-4 SECTION 17. Sections 171.1531(b) and (c), Tax Code, are
17-5 amended to read as follows:
17-6 (b) The survivor of a merger is entitled to a credit against
17-7 the tax computed on its net taxable capital under Section
17-8 171.002(b)(1) <or refund> in the amount of the franchise tax
17-9 computed on net taxable capital paid by the nonsurvivors for the
17-10 credit period, provided the tax computed on net taxable capital
17-11 paid by the survivor for the credit period is based on the
17-12 survivor's financial condition after the merger. Only a survivor
17-13 that is subject to the franchise tax is entitled to the merger
17-14 credit <or refund>. The merger credit shall be allocated among
17-15 survivors based on net taxable capital reported, and as provided by
17-16 Section 171.153.
17-17 (c) The credit <or refund> will be limited to the lesser of
17-18 the amount of tax on net taxable capital paid for the credit period
17-19 by the survivor or by the non survivors.
17-20 SECTION 18. Section 171.1532, Tax Code, is amended by
17-21 amending Subsections (a) and (b), and adding Subsection (c) to read
17-22 as follows:
17-23 (a) The tax covering the privilege periods included on the
17-24 initial report, as required by Section 171.153, is based on the
17-25 business done by the corporation during the period beginning on the
18-1 beginning date of the corporation <day the corporation files its
18-2 charter or is granted a certificate of authority or the date that a
18-3 foreign corporation begins doing business in this state, whichever
18-4 is earlier,>; and
18-5 (1) ending on the last accounting period ending date
18-6 for federal income tax purposes that is at least 60 days before the
18-7 original due date of the initial report; or
18-8 (2) if there is no such period ending date in
18-9 Subdivision (1) of this subsection, then ending on the day that is
18-10 the last day of a calendar month and that is nearest to the end of
18-11 the corporation's first year of business.
18-12 (b) The tax covering the regular annual period, other than a
18-13 regular annual period included on the initial report, is based on
18-14 the business done by the corporation during the period beginning
18-15 with the day after the last date upon which earned surplus on a
18-16 previous report was <the initial report is> based<, as required by
18-17 Subsection (a) of this section,> and ending with its last
18-18 accounting period ending date for federal income tax purposes in
18-19 the year before the year in which the report is originally due. If
18-20 there is no such ending date, then December 31 must be used.
18-21 SECTION 19. Section 171.201(a), Tax Code, is amended to read
18-22 as follows:
18-23 (a) Except as provided by Section 171.2022, a corporation on
18-24 which the franchise tax is imposed shall file an initial report
18-25 with the comptroller containing:
19-1 (1) financial information of the corporation necessary
19-2 to compute the tax under this chapter <information showing the
19-3 financial condition of the corporation on the day that is the last
19-4 day of a calendar month and that is nearest to the end of the
19-5 corporation's first year of business>;
19-6 (2) the name and address of each officer and director
19-7 of the corporation;
19-8 (3) the name and address of the agent of the
19-9 corporation designated under Section 171.354; and
19-10 (4) other information required by the comptroller.
19-11 SECTION 20. Section 171.202(d), Tax Code, is amended to read
19-12 as follows:
19-13 (d) In the case of a taxpayer whose previous return was its
19-14 initial report, the optional payment provided under Paragraph (B)
19-15 of Subdivision (2) of Subsection (c) of this section must be equal
19-16 to the greater of:
19-17 (1) an amount produced by multiplying the net taxable
19-18 capital, as reported <required to be shown> on the initial report,
19-19 by the rate of tax in Section 171.002(a)(1) which is effective
19-20 January 1 of the year in which the report is due; or
19-21 (2) an amount produced by multiplying the <amount paid
19-22 on> net taxable earned surplus, reported <as required> on the
19-23 initial report, by the rate of tax in Section 171.002(a)(2) which
19-24 is effective January 1 of the year in which the report is due.
19-25 SECTION 21. Section 171.255(a), Tax Code is amended to read
20-1 as follows:
20-2 (a) If the corporate privileges of a corporation are
20-3 forfeited for the failure to file a report or pay a tax or penalty,
20-4 each director or officer of the corporation is liable for each debt
20-5 of the corporation that is created or incurred in this state after
20-6 the date on which the report, tax, or penalty is due and before the
20-7 corporate privileges are revived. The liability includes liability
20-8 for any tax or penalty imposed by this chapter on the corporation
20-9 that becomes due and payable after the date of the forfeiture. For
20-10 purposes of this section, the term "debt" specifically includes any
20-11 amount owed under this Title or any other provision of state law
20-12 for tax, interest or penalty.
20-13 SECTION 22. This Act takes effect for reports originally due
20-14 on or after January 1, 1994.
20-15 SECTION 23. The importance of this legislation and the
20-16 crowded condition of the calendars in both houses create an
20-17 emergency and an imperative public necessity that the
20-18 constitutional rule requiring bills to be read on three several
20-19 days in each house be suspended, and this rule is hereby suspended.