By:  Fraser, et al.                                    S.B. No. 148
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to exempting certain small corporations from the franchise
 1-2     tax.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subsection (d), Section 171.002, Tax Code, is
 1-5     amended to read as follows:
 1-6           (d)  A [If the amount of tax computed for a corporation is
 1-7     less than $100, the] corporation is not required to pay any tax
 1-8     [that amount] and is not considered to owe any tax for a [that]
 1-9     period if:
1-10                 (1)  the amount of tax computed for the corporation is
1-11     less than $100; or
1-12                 (2)  the amount of the corporation's gross receipts:
1-13                       (A)  from its entire business under Section
1-14     171.105 is less than $100,000; and
1-15                       (B)  from its entire business under Section
1-16     171.1051, including the amount excepted under Section 171.1051(a),
1-17     is less than $100,000.
1-18           SECTION 2.  Section 171.204, Tax Code, is amended to read as
1-19     follows:
1-20           Sec. 171.204.  Information Report.  (a)  Except as provided
1-21     by Subsection (b), to [To] determine eligibility for the exemption
1-22     provided by Section 171.2022, or to determine the amount of the
1-23     franchise tax or the correctness of a franchise tax report, the
1-24     comptroller may require an officer of a corporation that may be
 2-1     subject to the tax imposed under this chapter to file an
 2-2     information report with the comptroller stating the amount of the
 2-3     corporation's taxable capital and earned surplus, or any other
 2-4     information the comptroller may request.
 2-5           (b)  The comptroller may not require an officer of a
 2-6     corporation that does not owe any tax because of the application of
 2-7     Section 171.002(d)(2) to file an information report.
 2-8           SECTION 3.  (a)  Before the beginning of the 79th
 2-9     Legislature, Regular Session, the comptroller of public accounts
2-10     shall report to the legislature and the governor on the effect that
2-11     exempting small corporations from the franchise tax under Section
2-12     171.002, Tax Code, as amended by this Act, and from the reporting
2-13     requirements has had on the economy of this state, including on the
2-14     creation of new jobs in this state.
2-15           (b)  The report must include:
2-16                 (1)  an assessment of the intended purposes of the
2-17     exemptions and whether the exemptions are achieving those
2-18     objectives;
2-19                 (2)  an assessment of whether the exemptions have
2-20     created any problems in the administration of the franchise tax;
2-21     and
2-22                 (3)  a recommendation for retaining, eliminating, or
2-23     amending the exemptions.
2-24           (c)  The comptroller of public accounts may include the
2-25     report in any other report made to the legislature.
2-26           SECTION 4.  (a)  This Act takes effect January 1, 2000, and
 3-1     applies to a report that, if the corporation required to make the
 3-2     report was not exempt from that requirement, would be originally
 3-3     due on or after that date.
 3-4           (b)  The change in law made by this Act does not affect taxes
 3-5     imposed before the effective date of this Act, and the law in
 3-6     effect before that date is continued in effect for purposes of the
 3-7     liability for and collection of those taxes.
 3-8           SECTION 5.  The importance of this legislation and the
 3-9     crowded condition of the calendars in both houses create an
3-10     emergency and an imperative public necessity that the
3-11     constitutional rule requiring bills to be read on three several
3-12     days in each house be suspended, and this rule is hereby suspended.