Floor Packet Page No. 382
Amend CSHB 4 as follows:
(1) On page 393, between lines 22 and 23, insert a new
article to read as follows:
ARTICLE 22. FINANCIAL INSTITUTIONS
OCCUPATION TAX
SECTION 22.01. Title 2, Tax Code, is amended by adding
Subtitle K to read as follows:
SUBTITLE K. OCCUPATION TAXES
CHAPTER 231. FINANCIAL INSTITUTIONS OCCUPATION TAX
SUBCHAPTER A. DEFINITIONS
Sec. 231.001. DEFINITIONS. In this chapter:
(1) "Bank" means a state or national bank, domestic or
foreign bank, or a bank organized under Section 25(a) of the
Federal Reserve Act (12 U.S.C. Sections 611-631) (edge
corporations) but does not include a bank holding company as
defined by Section 2 of the Bank Holding Company Act of 1956 (12
U.S.C. Section 1841).
(2) "Branch" means a facility operated by a financial
institution at which the financial institution receives deposits,
pays checks, or lends money, but does not include:
(A) the principal office of the financial
institution;
(B) an automatic teller machine; or
(C) a drive-in facility.
(3) "Charitable organization" means any organization
exempt from federal income tax under Section 501(a) of the Internal
Revenue Code of 1986 by being listed as an exempt organization in
Sections 501(c)(3) through 501(c)(10) of the code.
(4) "Deposits" means the balance of money or its
equivalent held by a financial institution in the usual course of
business for which the financial institution has given or is
obligated to give credit, conditionally or unconditionally, to a
commercial, checking, savings, time, or thrift account or that is
evidenced by a certificate of deposit.
(5) "Financial institution" means a bank or a savings
and loan association.
(6) "Local area" means a financial institution's local
community, as delineated under federal regulations adopted under
the Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et
seq.).
(7) "Local area borrower" means a borrower that is an
individual residing in a financial institution's local area or in
the local area of one of its branches, a business having its
principal place of business in the institution's local area or in
the local area of one of its branches, or an entity conducting the
majority of its affairs in the institution's local area or in the
local area of one of its branches.
(8) "Savings and loan association" means a savings and
loan association or a savings bank organized under the laws of this
state, another state, or the United States.
(9) "Tax" means the occupation tax imposed by this
chapter.
Sections 231.002-231.020 reserved for expansion
SUBCHAPTER B. TAX IMPOSED; PAYMENT AND REPORTS
Sec. 231.021. TAX IMPOSED; RATE. (a) A tax is imposed on a
financial institution that engages in the business of accepting
deposits in this state.
(b) The tax rate is three percent of the average annual net
taxable deposits of the financial institution.
Sec. 231.022. REGULAR ANNUAL PERIOD COVERED BY TAX. The tax
is for a regular annual period beginning each year on May 1 and
ending the following April 30.
Sec. 231.023. DATE ON WHICH PAYMENT IS DUE. Payment of the
tax is due March 15 of each year before the beginning of the
regular annual period.
Sec. 231.024. PAYMENT TO COMPTROLLER. A financial
institution shall pay the tax to the comptroller.
Sec. 231.025. REPORTS. (a) Each financial institution in
this state shall report to the comptroller on or before March 15 of
the year after the year in which the fiscal year ends.
(b) The report must include for the computation period
covered by the report:
(1) the total deposits of the institution;
(2) the allocations of deposits among the principal
office and branches as required by Section 231.045 if the
institution's annual gross deposits are $1 billion or more;
(3) the value of loans made to local area borrowers
that qualify for deductions under this chapter if the institution's
annual gross deposits are $1 billion or more; and
(4) any other information required by the
comptroller's rules.
Sec. 231.026. PAYMENT AND REPORTING; NEW INSTITUTIONS. (a)
The comptroller by rule shall provide for the reporting,
computation, and payment of the tax for financial institutions that
begin accepting deposits in this state after May 1, 1994.
(b) The rules shall provide for an initial period and a
second period for the payment of the tax in the same manner as the
franchise taxes imposed under Chapter 171 are paid and reported for
corporations that begin doing business in this state.
Sections 231.027-231.040 reserved for expansion
SUBCHAPTER C. COMPUTATION OF TAX
Sec. 231.041. COMPUTATION PERIOD. The tax covering the
regular annual period for a financial institution is determined on
a computation period consisting of the institution's fiscal year
that ends in the year before the year in which the tax is due.
Sec. 231.042. AVERAGE ANNUAL GROSS DEPOSITS. A financial
institution shall determine its average annual gross deposits for a
computation period by dividing the sum of the daily deposits for
the computation period by 365.
Sec. 231.043. GROSS TAXABLE DEPOSITS. A financial
institution shall determine its gross taxable deposits for a
computation period by subtracting from the institution's average
annual gross deposits for the computation period:
(1) $1 billion;
(2) the average annual deposits made at the
institution by other financial institutions;
(3) the average annual deposits made at the
institution by the federal or state government or any political
subdivision of the state government, or any board, commission,
department, institution, agency, or office within the federal or
state government or within a political subdivision of the state
government;
(4) the average annual deposits made at the
institution by foreign countries; and
(5) the average annual deposits made at the
institution by an individual who is not a citizen of the United
States and who is not a resident of this state or by a legal entity
that is created under a charter or other authorization issued by a
foreign country and that is not engaged in business in this state.
Sec. 231.044. AVERAGE ANNUAL NET TAXABLE DEPOSITS. A
financial institution shall determine its average annual net
taxable deposits for a computation period by subtracting from its
gross taxable deposits for the computation period:
(1) the product of 1.75 and the average annual balance
of the institution's loans made to local area borrowers; and
(2) the amount of cash contributed by the institution
to charitable organizations in the institution's local area.
Sec. 231.045. ALLOCATIONS AMONG BRANCHES. (a) A financial
institution that has a principal office and one or more branches in
this state shall report its average annual gross deposits, gross
taxable deposits, and average annual net taxable deposits
separately for the office and each branch, using the amounts of
deposits and loans assigned to each facility. The $1 billion
deduction provided by Section 231.043(1) is allocated among an
institution's office and branches according to each facility's
proportionate share of the average annual gross deposits of the
financial institution.
(b) If the allocations and assignments under Subsection (a)
result in an office or branch having average annual net taxable
deposits of less than zero, the financial institution may transfer
the negative amount to the principal office or another branch and
treat the amount as a deduction to that facility's average annual
net taxable deposits.
(c) A financial institution may not carry an unused
deduction from one computation period to a different computation
period.
Sections 231.046-231.060 reserved for expansion
SUBCHAPTER D. ENFORCEMENT; PENALTIES
Sec. 231.061. EXAMINATION OF FINANCIAL INSTITUTIONS. To
determine the tax liability of a financial institution, the
comptroller may investigate or examine the records of the financial
institution.
Sec. 231.062. INTEREST. (a) The yearly interest rate on
the delinquent payment of the tax is 10 percent.
(b) A delinquent tax draws interest beginning on the 60th
day after the date that the tax is due.
Sec. 231.063. PENALTY. A penalty of 10 percent of the tax
due is imposed on a financial institution that does not pay the tax
when due.
Sec. 231.064. STATE DEPOSITORY. The comptroller shall
notify the state treasurer if a financial institution designated as
a state depository under Chapter 404, Government Code, fails to
report or pay the tax.
Sec. 231.065. PENALTY FOR FAILURE TO FILE REPORT. (a) A
person commits an offense if the person fails to file a report as
required by this chapter.
(b) An offense under this section is a Class A misdemeanor.
Sections 231.066-231.080 reserved for expansion
SUBCHAPTER E. ALLOCATION OF REVENUE; CREATION OF FUND
Sec. 231.081. ALLOCATION. The comptroller shall allocate
the revenue from the tax as follows:
(1) one-quarter to the foundation school fund; and
(2) three-quarters to general revenue.
SECTION 22.02. Section 404.021, Government Code, is amended
by adding Subsection (e) to read as follows:
(e) An institution is not eligible to be a state depository
if the institution fails to report or pay the tax due under Chapter
231, Tax Code.
SECTION 22.03. Section 404.022, Government Code, is amended
by amending Subsection (c) and adding Subsection (k) to read as
follows:
(c) The application for designation as a state depository
must include a statement:
(1) of the amount of the applicant's paid capital
stock and permanent surplus, if any, or if the applicant is a
private bank, the amount of net proprietorship;
(2) of the maximum amount of state funds the applicant
will accept;
(3) of the applicant's condition on the date the
application is submitted; <and>
(4) that the books and accounts of the institution, if
it is designated as a state depository, will be open at all times
for inspection by the board or a member or accredited
representative of the board; and
(5) that the institution reported and paid any tax due
under Chapter 231, Tax Code, on or before the application date.
(k) If an institution previously designated as a state
depository fails to report or pay the tax imposed by Chapter 231,
Tax Code, the treasurer shall withdraw state funds from the
institution, except that the treasurer is not required to withdraw
funds at a time or in a manner that will result in loss to the
state.
SECTION 22.04. (a) This article takes effect September 1,
1997.
(b) The first report and the first tax payable under Chapter
231, Tax Code, as added by this article, are due on or before March
15, 1998, for the regular annual period beginning May 1, 1998.
(2) Renumber the subsequent articles and sections of the
bill appropriately.