Amend SB 861 as follows: Strike SECTIONS 7 and 15 and
substitute the following:
      SECTION 7  Section 171.106, Tax Code, is amended to read as
follows:
      (a)  Except as provided by Subsections (c) and (d), a
corporation's taxable capital is apportioned to this state to
determine the amount of the tax imposed under Section 171.002(b)(1)
by multiplying the corporation's taxable capital by a fraction, the
numerator of which is the corporation's gross receipts from
business done in this state, as determined under Section 171.103 or
171.1031, as applicable, and the denominator of which is the
corporation's gross receipts from its entire business, as
determined under Section 171.105.
      (b)  Except as provided by Subsections (c) and (d), a
corporation's taxable earned surplus is apportioned to this state
to determine the amount of tax imposed under Section 171.002(b)(2)
by multiplying the taxable earned surplus by a fraction, the
numerator of which is the corporation's gross receipts from
business done in this state, as determined under Section 171.1031
or 171.1032, as applicable, and the denominator of which is the
corporation's gross receipts from its entire business, as
determined under Section 171.1051.
      (c)  A corporation's taxable capital or earned surplus that
is derived, directly or indirectly, from the sale of management,
distribution, or administration services to or on behalf of a
regulated investment company, including a corporation that includes
trustees or sponsors of employee benefit plans that have accounts
in a regulated investment company, is apportioned to this state to
determine the amount of the tax imposed under Section 171.002 by
multiplying the corporation's total taxable capital or earned
surplus from the sale of services to or on behalf of a regulated
investment company by a fraction, the numerator of which is the
average of the sum of shares owned at the beginning of the year and
the  sum of shares owned at the end of the year by the investment
company shareholders who are commercially domiciled in this state
or, if the shareholders are individuals, are residents of this
state and the denominator of which is the average of the sum of
shares owned at the beginning of the year and the sum of shares
owned at the end of the year by all investment company
shareholders. The corporation shall make a separate computation to
allocate taxable capital and earned surplus. In this subsection,
"regulated investment company" has the meaning assigned by
Section 851 (a), Internal Revenue Code.
      (d)  A corporation's taxable capital or taxable earned
surplus that is derived, directly or indirectly, from the sale of
management, administration, or investment services to an employee
retirement plan is apportioned to this state to determine the
amount of the tax imposed under Section 171.002 by multiplying the
corporation's total taxable capital or earned surplus from the sale
of services to an employee retirement plan company by a fraction,
the numerator of which is the average of the sum of beneficiaries
domiciled in Texas at the beginning of the year and the sum of
beneficiaries domiciled in Texas at the end of the year, and the
denominator of which is the average of the sum of all beneficiaries
at the beginning of the year and the sum of all beneficiaries at
the end of the year. The corporation shall make a separate
computation to apportion taxable capital and earned surplus. In
this Section, "employee retirement plan" means a plan or other
arrangement that is qualified under Section 401 (a), Internal
Revenue Code or satisfies the requirements of Section 403, Internal
Revenue Code, or a government plan described in Section 414 (d),
Internal Revenue Code. The term does not include an individual
retirement account or individual retirement annuity within the
meaning of Section 408, Internal Revenue Code.
      (e)  On or before January 1, 1998, each entity registered
with State Securities Board under Art. 581, V.A.T.C.S. that
provides management, administration, or investment services to an
employee retirement plan, must file a report with the comptroller
containing such information as the comptroller deems necessary in
order to determine the fiscal impact of subsection (d) of this
section. The State Securities Board and Commissioner shall
cooperate with the comptroller in obtaining the information. The
State Securities Commissioner shall impose the penalties as are
provided in V.A.T.C.S. Art. 581 against any entity that the
comptroller certifies is delinquent in the filing of the report
required by this section.
      (f)  On or before September 1, 1998 the comptroller shall
issue a report which evaluates the statewide fiscal impact of
Section 171.106(d), Tax Code.  If the comptroller determines that
implementing Section 171.106(d) will not have a negative fiscal
impact to this state, then Section 171.106(d) shall be effective
for reports or returns originally due on or after January 1, 1999.
If the comptroller determines that there will be a negative fiscal
impact, then that subsection shall not be implemented.
      (g)  If this Act and another Act of the 75th Legislature,
Regular Session, 1997, make the same substantive change from the
current law but differ in text, this Act prevails regardless of the
relative dates of enactment.
      SECTION 15  (a)Except as provided by Subsections (b) and (c)
of this section, this Act takes effect January 1, 1998, and applies
to a report originally due on or after that date.
      (b)  Section 171.212, Tax Code, as added by this Act, takes
effect on the earliest date that it may take effect under
Section 39, Article III, Texas Constitution.
      (c)  Section 171.106(d), Tax Code, as added by this Act,
takes effect for all reports originally due on or after the date
the comptroller determines that the implementation of
Section 171.106(d) will not have a negative fiscal impact on the
state, but in no case earlier than January 1, 1999. If the
comptroller determines that implementing Section 171.106(d), Tax
Code will result in a negative fiscal impact, then that subsection
has no effect.