AN ACT
1-1 relating to tax exemptions and credits.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subchapter A, Chapter 151, Tax Code, is amended
1-4 by adding Sections 151.00393 and 151.00394 to read as follows:
1-5 Sec. 151.00393. INTERNET. "Internet" means collectively the
1-6 myriad of computer and telecommunications facilities, including
1-7 equipment and operating software, that comprise the interconnected
1-8 worldwide network of networks that employ the Transmission Control
1-9 Protocol/Internet Protocol, or any predecessor or successor
1-10 protocols to the protocol, to communicate information of all kinds
1-11 by wire or radio.
1-12 Sec. 151.00394. INTERNET ACCESS SERVICE. (a) "Internet
1-13 access service" means a service that enables users to access
1-14 content, information, electronic mail, or other services offered
1-15 over the Internet and may also include access to proprietary
1-16 content, information, and other services as part of a package of
1-17 services offered to consumers. The term does not include
1-18 telecommunications services.
1-19 (b) "Internet access service" does not include and the
1-20 exemption under Section 151.325 does not apply to any other taxable
1-21 service listed in Section 151.0101(a), unless the taxable service
1-22 is provided in conjunction with and is merely incidental to the
1-23 provision of Internet access service.
1-24 (c) On and after October 1, 1999, "Internet access service"
2-1 is not included in the definitions of "data processing service" and
2-2 "information service."
2-3 SECTION 2. Subsection (a), Section 151.0101, Tax Code, is
2-4 amended to read as follows:
2-5 (a) "Taxable services" means:
2-6 (1) amusement services;
2-7 (2) cable television services;
2-8 (3) personal services;
2-9 (4) motor vehicle parking and storage services;
2-10 (5) the repair, remodeling, maintenance, and
2-11 restoration of tangible personal property, except:
2-12 (A) aircraft;
2-13 (B) a ship, boat, or other vessel, other than:
2-14 (i) a taxable boat or motor as defined by
2-15 Section 160.001;
2-16 (ii) a sports fishing boat; or
2-17 (iii) any other vessel used for pleasure;
2-18 (C) the repair, maintenance, and restoration of
2-19 a motor vehicle; and
2-20 (D) the repair, maintenance, creation, and
2-21 restoration of a computer program, including its development and
2-22 modification, not sold by the person performing the repair,
2-23 maintenance, creation, or restoration service;
2-24 (6) telecommunications services;
2-25 (7) credit reporting services;
2-26 (8) debt collection services;
3-1 (9) insurance services;
3-2 (10) information services;
3-3 (11) real property services;
3-4 (12) data processing services;
3-5 (13) real property repair and remodeling;
3-6 (14) security services; [and]
3-7 (15) telephone answering services; and
3-8 (16) Internet access service.
3-9 SECTION 3. Section 151.0103, Tax Code, is amended to read as
3-10 follows:
3-11 Sec. 151.0103. TELECOMMUNICATIONS SERVICES. For the
3-12 purposes of this title only, "telecommunications services" means
3-13 the electronic or electrical transmission, conveyance, routing, or
3-14 reception of sounds, signals, data, or information utilizing wires,
3-15 cable, radio waves, microwaves, satellites, fiber optics, or any
3-16 other method now in existence or that may be devised, including but
3-17 not limited to long-distance telephone service. The term does not
3-18 include:
3-19 (1) the storage of data or information for subsequent
3-20 retrieval or the processing, or reception and processing, of data
3-21 or information intended to change its form or content; [or]
3-22 (2) the sale or use of a telephone prepaid calling
3-23 card; or
3-24 (3) Internet access service.
3-25 SECTION 4. Subsection (b), Section 151.3111, Tax Code, is
3-26 amended to read as follows:
4-1 (b) Subsection (a) of this section does not apply to the
4-2 performance of a service on:
4-3 (1) tangible personal property that would be exempted
4-4 solely because of the exempt status of the seller of the property;
4-5 (2) tangible personal property that is exempted solely
4-6 because of the application of Section 151.303, 151.304, or 151.306
4-7 of this code;
4-8 (3) motor vehicles, trailers, or semitrailers as
4-9 defined, taxed, or exempted by Chapter 152 of this code;
4-10 (4) a taxable boat or motor as defined by Section
4-11 160.001; [or]
4-12 (5) machinery and equipment with a purchase price
4-13 greater than $50,000 used exclusively in a commercial timber
4-14 operation as described by Section 151.3161(a); or
4-15 (6) tangible personal property exempt under Section
4-16 151.326.
4-17 SECTION 5. Subsection (a), Section 151.313, Tax Code, is
4-18 amended to read as follows:
4-19 (a) The following items are exempted from the taxes imposed
4-20 by this chapter:
4-21 (1) a drug or medicine, other than insulin, if
4-22 prescribed or dispensed for a human or animal by a licensed
4-23 practitioner of the healing arts;
4-24 (2) insulin;
4-25 (3) a drug or medicine, without regard to whether it
4-26 is prescribed or dispensed by a licensed practitioner of the
5-1 healing arts, that is labeled with a national drug code issued by
5-2 the federal Food and Drug Administration;
5-3 (4) a hypodermic syringe or needle;
5-4 (5) [(4)] a brace; hearing aid or audio loop;
5-5 orthopedic, dental, or prosthetic device; ileostomy, colostomy, or
5-6 ileal bladder appliance; or supplies or replacement parts for the
5-7 listed items;
5-8 (6) [(5)] a therapeutic appliance, device, and any
5-9 related supplies specifically designed for those products, if
5-10 dispensed or prescribed by a licensed practitioner of the healing
5-11 arts, when those items are purchased and used by an individual for
5-12 whom the items listed in this subdivision were dispensed or
5-13 prescribed;
5-14 (7) [(6)] corrective lens and necessary and related
5-15 supplies, if dispensed or prescribed by an ophthalmologist or
5-16 optometrist;
5-17 (8) [(7)] specialized printing or signalling equipment
5-18 used by the deaf for the purpose of enabling the deaf to
5-19 communicate through the use of an ordinary telephone and all
5-20 materials, paper, and printing ribbons used in that equipment;
5-21 (9) [(8)] a braille wristwatch, braille writer,
5-22 braille paper and braille electronic equipment that connects to
5-23 computer equipment, and the necessary adaptive devices and adaptive
5-24 computer software;
5-25 (10) [(9)] each of the following items if purchased
5-26 for use by the blind to enable them to function more independently:
6-1 a slate and stylus, print enlarger, light probe, magnifier, white
6-2 cane, talking clock, large print terminal, talking terminal, or
6-3 harness for guide dog; [and]
6-4 (11) [(10)] hospital beds; and
6-5 (12) blood glucose monitoring test strips.
6-6 SECTION 6. Subchapter H, Chapter 151, Tax Code, is amended
6-7 by adding Section 151.325 to read as follows:
6-8 Sec. 151.325. BASIC FEE FOR INTERNET ACCESS SERVICE.
6-9 (a) The sale, use, or other consumption in this state of Internet
6-10 access service is exempted from the taxes imposed by this chapter
6-11 in an amount not to exceed the first $25 of a monthly charge.
6-12 (b) The exemption provided by this section applies without
6-13 regard to:
6-14 (1) whether the Internet access service is bundled
6-15 with another service, including any other taxable service listed in
6-16 Section 151.0101(a); or
6-17 (2) the billing period used by the service provider.
6-18 (c) The exemption in this section applies to the total sales
6-19 price the service provider charges for Internet access to a
6-20 purchaser, without regard to whether the service provider charges
6-21 one lump-sum amount or separately bills the purchaser for each
6-22 user.
6-23 SECTION 7. Subchapter H, Chapter 151, Tax Code, is amended
6-24 by adding Section 151.326 to read as follows:
6-25 Sec. 151.326. CLOTHING AND FOOTWEAR FOR LIMITED PERIOD.
6-26 (a) The sale of an article of clothing or footwear designed to be
7-1 worn on or about the human body is exempted from the taxes imposed
7-2 by this chapter if:
7-3 (1) the sales price of the article is less than $100;
7-4 and
7-5 (2) the sale takes place during a period beginning at
7-6 12:01 a.m. on the first Friday in August and ending at 12 midnight
7-7 on the following Sunday.
7-8 (b) This section does not apply to:
7-9 (1) any special clothing or footwear that is primarily
7-10 designed for athletic activity or protective use and that is not
7-11 normally worn except when used for the athletic activity or
7-12 protective use for which it is designed;
7-13 (2) accessories, including jewelry, handbags, luggage,
7-14 umbrellas, wallets, watches, and similar items carried on or about
7-15 the human body, without regard to whether worn on the body in a
7-16 manner characteristic of clothing; and
7-17 (3) the rental of clothing or footwear.
7-18 (c) On or after January 1, 2000, the governing body of a
7-19 local taxing authority may repeal the application of this exemption
7-20 in the manner provided by Chapter 326.
7-21 SECTION 8. Subchapter H, Chapter 151, Tax Code, is amended
7-22 by adding Section 151.351 to read as follows:
7-23 Sec. 151.351. INFORMATION SERVICES AND DATA PROCESSING
7-24 SERVICES. There is exempted from the taxes imposed by this chapter
7-25 20 percent of the value of information services and data processing
7-26 services.
8-1 SECTION 9. Subtitle C, Title 3, Tax Code, is amended by
8-2 adding Chapter 326 to read as follows:
8-3 CHAPTER 326. STATE SALES AND USE TAX EXEMPTIONS IN RELATION
8-4 TO LOCAL SALES AND USE TAXES
8-5 Sec. 326.001. APPLICABILITY. This chapter applies to local
8-6 sales and use taxes administered and computed under this subtitle
8-7 and to which this subtitle applies, including a tax imposed under:
8-8 (1) Chapter 285, 775, or 776, Health and Safety Code;
8-9 (2) Chapter 326, 334, 335, 363, 377, 383, or 384,
8-10 Local Government Code;
8-11 (3) Chapter 451, 452, 453, or 457, Transportation
8-12 Code;
8-13 (4) the Development Corporation Act of 1979 (Article
8-14 5190.6, Vernon's Texas Civil Statutes);
8-15 (5) Section 13A, Chapter 35, Acts of the 59th
8-16 Legislature, Regular Session, 1965, as added by Chapter 66, Acts of
8-17 the 71st Legislature, Regular Session, 1989;
8-18 (6) Chapter 598, Acts of the 71st Legislature, Regular
8-19 Session, 1989;
8-20 (7) Chapter 1316, Acts of the 75th Legislature,
8-21 Regular Session, 1997; or
8-22 (8) Chapter 289, Acts of the 73rd Legislature, Regular
8-23 Session, 1993.
8-24 Sec. 326.002. STATE EXEMPTIONS. Notwithstanding any other
8-25 law, an exemption to the state sales and use tax provided by
8-26 Chapter 151 does not apply to a local sales and use tax to which
9-1 this chapter applies if:
9-2 (1) the governing body of the local taxing authority
9-3 repeals the exemption in the manner provided by Section 326.003;
9-4 and
9-5 (2) the exemption provided by Chapter 151 specifically
9-6 provides that the governing body of the local taxing authority may
9-7 repeal the exemption in the manner provided by this chapter.
9-8 Sec. 326.003. REPEAL BY LOCAL TAXING AUTHORITY. (a) The
9-9 governing body of a taxing authority may by a majority vote adopt
9-10 an appropriate order, including an ordinance, to repeal the
9-11 application of an exemption described by Section 326.002.
9-12 (b) The governing body must hold a public hearing before
9-13 taking a vote.
9-14 (c) A taxing authority that has repealed the application of
9-15 an exemption under this section may in the same manner reinstate
9-16 the exemption.
9-17 (d) A vote of the governing body of a taxing authority
9-18 repealing the application or reinstating the exemption must be
9-19 entered in the minutes for the meeting. The secretary of the
9-20 taxing authority shall send to the comptroller by certified or
9-21 registered mail a copy of the order adopted under this section.
9-22 Sec. 326.004. EFFECTIVE DATE. The repeal of the application
9-23 of the exemption or a reinstated exemption under Section 326.003
9-24 takes effect within the taxing authority on the first day of the
9-25 first calendar quarter occurring after the expiration of the first
9-26 complete calendar quarter occurring after the date on which the
10-1 comptroller receives a copy of the order adopted under that
10-2 section.
10-3 SECTION 10. Subsection (d), Section 171.002, Tax Code, is
10-4 amended to read as follows:
10-5 (d) A [If the amount of tax computed for a corporation is
10-6 less than $100, the] corporation is not required to pay any tax
10-7 [that amount] and is not considered to owe any tax for a [that]
10-8 period if:
10-9 (1) the amount of tax computed for the corporation is
10-10 less than $100; or
10-11 (2) the amount of the corporation's gross receipts:
10-12 (A) from its entire business under Section
10-13 171.105 is less than $150,000; and
10-14 (B) from its entire business under Section
10-15 171.1051, including the amount excepted under Section 171.1051(a),
10-16 is less than $150,000.
10-17 SECTION 11. Subsection (a), Section 171.203, Tax Code, is
10-18 amended to read as follows:
10-19 (a) A corporation on which the franchise tax is imposed,
10-20 regardless of whether the corporation is required to pay any tax,
10-21 shall file a report with the comptroller containing:
10-22 (1) the name of each corporation in which the
10-23 corporation filing the report owns a 10 percent or greater interest
10-24 and the percentage owned by the corporation;
10-25 (2) the name of each corporation that owns a 10
10-26 percent or greater interest in the corporation filing the report;
11-1 (3) the name, title, and mailing address of each
11-2 person who is an officer or director of the corporation on the date
11-3 the report is filed and the expiration date of each person's term
11-4 as an officer or director, if any;
11-5 (4) the name and address of the agent of the
11-6 corporation designated under Section 171.354 of this code; and
11-7 (5) the address of the corporation's principal office
11-8 and principal place of business.
11-9 SECTION 12. Section 171.204, Tax Code, is amended to read as
11-10 follows:
11-11 Sec. 171.204. INFORMATION REPORT. (a) Except as provided
11-12 by Subsection (b), to [To] determine eligibility for the exemption
11-13 provided by Section 171.2022, or to determine the amount of the
11-14 franchise tax or the correctness of a franchise tax report, the
11-15 comptroller may require an officer of a corporation that may be
11-16 subject to the tax imposed under this chapter to file an
11-17 information report with the comptroller stating the amount of the
11-18 corporation's taxable capital and earned surplus, or any other
11-19 information the comptroller may request.
11-20 (b) The comptroller may require an officer of a corporation
11-21 that does not owe any tax because of the application of Section
11-22 171.002(d)(2) to file an abbreviated information report with the
11-23 comptroller stating the amount of the corporation's gross receipts
11-24 from its entire business. The comptroller may not require a
11-25 corporation described by this subsection to file an information
11-26 report that requires the corporation to report or compute its
12-1 earned surplus or taxable capital.
12-2 SECTION 13. Chapter 171, Tax Code, is amended by adding
12-3 Subchapter N to read as follows:
12-4 SUBCHAPTER N. TAX CREDIT FOR ESTABLISHING DAY-CARE CENTER
12-5 OR PURCHASING CHILD-CARE SERVICES
12-6 Sec. 171.701. DEFINITIONS. In this subchapter:
12-7 (1) "Day-care center" has the meaning assigned by
12-8 Section 42.002, Human Resources Code.
12-9 (2) "Family home" has the meaning assigned by Section
12-10 42.002, Human Resources Code.
12-11 Sec. 171.702. CREDIT. A corporation that meets the
12-12 eligibility requirements under this subchapter is entitled to a
12-13 credit in the amount allowed by this subchapter against the tax
12-14 imposed under this chapter.
12-15 Sec. 171.703. CREDIT FOR DAY-CARE CENTER AND PURCHASED CHILD
12-16 CARE. (a) A corporation may claim a credit under this subchapter
12-17 only for a qualifying expenditure relating to:
12-18 (1) the establishment and operation of a day-care
12-19 center primarily to provide care for the children of employees of
12-20 the corporation or of the corporation and one or more other
12-21 entities sharing the costs of establishing and operating the
12-22 center; or
12-23 (2) the purchase of child-care services that are
12-24 actually provided to children of employees of the corporation at a:
12-25 (A) day-care center; or
12-26 (B) family home that is registered or listed
13-1 with the Department of Protective and Regulatory Services under
13-2 Chapter 42, Human Resources Code.
13-3 (b) A qualifying expenditure includes an expenditure for:
13-4 (1) planning the day-care center;
13-5 (2) preparing a site to be used for the day-care
13-6 center;
13-7 (3) constructing the day-care center;
13-8 (4) renovating or remodeling a structure to be used
13-9 for the day-care center;
13-10 (5) purchasing equipment necessary in the use of the
13-11 day-care center and installed for permanent use in or immediately
13-12 adjacent to the day-care center, including kitchen appliances and
13-13 other food preparation equipment;
13-14 (6) expanding the day-care center;
13-15 (7) maintaining and operating the day-care center,
13-16 including paying direct administration and staff costs; or
13-17 (8) purchasing all or part of child-care services that
13-18 are actually provided to children of employees of the corporation
13-19 at a day-care center or registered or listed family home.
13-20 (c) The amount of the credit is equal to the lesser of:
13-21 (1) $50,000;
13-22 (2) 50 percent of the corporation's qualifying
13-23 expenditures; or
13-24 (3) the amount of the limitation provided by Section
13-25 171.705(b).
13-26 (d) If a corporation shares in the cost of establishing and
14-1 operating a day-care center, the corporation is entitled to a
14-2 credit for the qualifying expenditures made by that corporation,
14-3 subject to the limitation prescribed by Subsection (c).
14-4 Sec. 171.704. APPLICATION FOR CREDIT. (a) A corporation
14-5 must apply for a credit under this subchapter on or with the tax
14-6 report for the period for which the credit is claimed.
14-7 (b) If the corporation is claiming a credit for a qualifying
14-8 expenditure for purchasing child-care services, the corporation
14-9 must maintain proof that the services were actually provided to
14-10 children of employees of the corporation at a day-care center or
14-11 registered or listed family home.
14-12 (c) The comptroller shall adopt a form for the application
14-13 for the credit. A corporation must use this form in applying for
14-14 the credit.
14-15 Sec. 171.705. PERIOD FOR WHICH CREDIT MAY BE CLAIMED.
14-16 (a) A corporation may claim a credit under this subchapter for
14-17 qualifying expenditures made during an accounting period only
14-18 against the tax owed for the corresponding reporting period.
14-19 (b) A corporation may not claim a credit in an amount that
14-20 exceeds 90 percent of the amount of tax due for the report.
14-21 Sec. 171.706. ASSIGNMENT PROHIBITED. A corporation may not
14-22 convey, assign, or transfer the credit allowed under this
14-23 subchapter to another entity unless all of the assets of the
14-24 corporation are conveyed, assigned, or transferred in the same
14-25 transaction.
14-26 Sec. 171.707. BIENNIAL REPORT BY COMPTROLLER. (a) Before
15-1 the beginning of each regular session of the legislature, the
15-2 comptroller shall submit to the governor, the lieutenant governor,
15-3 and the speaker of the house of representatives a report that
15-4 states:
15-5 (1) the total amount of qualifying expenditures
15-6 incurred by corporations that claim a credit under this subchapter;
15-7 (2) the total amount of credits applied against the
15-8 tax under this chapter and the amount of unused credits including:
15-9 (A) the total amount of franchise tax due by
15-10 corporations claiming a credit under this subchapter before and
15-11 after the application of the credit;
15-12 (B) the average percentage reduction in
15-13 franchise tax due by corporations claiming a credit under this
15-14 subchapter;
15-15 (C) the percentage of tax credits that were
15-16 awarded to corporations with fewer than 100 employees; and
15-17 (D) the two-digit standard industrial
15-18 classification of corporations claiming a credit under this
15-19 subchapter;
15-20 (3) the geographical distribution of qualifying
15-21 expenditures giving rise to a credit authorized by this subchapter;
15-22 (4) the impact of the credit provided by this
15-23 subchapter on promoting economic development in this state; and
15-24 (5) the impact of the credit provided under this
15-25 subchapter on state tax revenues.
15-26 (b) The final report issued prior to the expiration of this
16-1 subchapter shall include historical information on the credit
16-2 authorized under this subchapter.
16-3 (c) The comptroller may not include in the report
16-4 information that is confidential by law.
16-5 (d) For purposes of this section, the comptroller may
16-6 require a corporation that claims a credit under this subchapter to
16-7 submit information, on a form provided by the comptroller, on the
16-8 location of the corporation's qualifying expenditures and any other
16-9 information necessary to complete the report required under this
16-10 section.
16-11 SECTION 14. Chapter 171, Tax Code, is amended by adding
16-12 Subchapter O to read as follows:
16-13 SUBCHAPTER O. TAX CREDIT FOR CERTAIN RESEARCH AND
16-14 DEVELOPMENT ACTIVITIES
16-15 Sec. 171.721. DEFINITIONS. In this subchapter:
16-16 (1) "Base amount," "basic research payment," and
16-17 "qualified research expense" have the meanings assigned those terms
16-18 by Section 41, Internal Revenue Code, except that all such payments
16-19 and expenses must be for research conducted within this state.
16-20 (2) "Strategic investment area" means an area that is
16-21 determined by the comptroller under Section 171.726 that is:
16-22 (A) a county within this state with above state
16-23 average unemployment and below state average per capita income; or
16-24 (B) an area within this state that is a
16-25 federally designated urban enterprise community or an urban
16-26 enhanced enterprise community.
17-1 Sec. 171.722. ELIGIBILITY. (a) A corporation is eligible
17-2 for a credit against the tax imposed under this chapter in the
17-3 amount and under the conditions and limitations provided by this
17-4 subchapter.
17-5 (b) A corporation may claim a credit under Section
17-6 171.723(d) or take a carryforward credit without regard to whether
17-7 the strategic investment area in which it made qualified research
17-8 expenses and basic research payments subsequently loses its
17-9 designation as a strategic investment area.
17-10 Sec. 171.723. CALCULATION OF CREDIT. (a) The credit for
17-11 any report equals five percent of the sum of:
17-12 (1) the excess of qualified research expenses incurred
17-13 in this state during the period upon which the tax is based over
17-14 the base amount for this state; and
17-15 (2) the basic research payments determined under
17-16 Section 41(e)(1)(A), Internal Revenue Code, for this state during
17-17 the period upon which the tax is based.
17-18 (b) A corporation may elect to compute the credit for
17-19 qualified research expenses incurred in this state in a manner
17-20 consistent with the alternative incremental credit described in
17-21 Section 41(c)(4), Internal Revenue Code, only if for the
17-22 corresponding federal tax period:
17-23 (1) a federal election was made to compute the federal
17-24 credit under Section 41(c)(4), Internal Revenue Code;
17-25 (2) the corporation was a member of a consolidated
17-26 group for which a federal election was made under Section 41(c)(4),
18-1 Internal Revenue Code; or
18-2 (3) the corporation did not claim the federal credit
18-3 under Section 41(a)(1), Internal Revenue Code.
18-4 (c) For purposes of the alternate credit computation method
18-5 in Subsection (b), the credit percentages applicable to qualified
18-6 research expenses described in Sections 41(c)(4)(A)(i), (ii), and
18-7 (iii), Internal Revenue Code, are 0.41 percent, 0.55 percent, and
18-8 0.69 percent, respectively.
18-9 (d) In computing the credit under this section, a
18-10 corporation may multiply by two the amount of any qualified
18-11 research expenses and basic research payments made in a strategic
18-12 investment area.
18-13 (e) The burden of establishing entitlement to and the value
18-14 of the credit is on the corporation.
18-15 (f) For the purposes of this section, "gross receipts" as
18-16 used in Section 41, Internal Revenue Code, means gross receipts as
18-17 determined under Section 171.1032.
18-18 Sec. 171.724. LIMITATIONS. (a) The total credit claimed
18-19 under this subchapter for a report, including the amount of any
18-20 carryforward credit under Section 171.725, may not exceed 50
18-21 percent of the amount of franchise tax due for the report before
18-22 any other applicable tax credits.
18-23 (b) The total credit claimed under this subchapter and
18-24 Subchapters P and Q for a report, including the amount of any
18-25 carryforward credits, may not exceed the amount of franchise tax
18-26 due for the report after any other applicable credits.
19-1 (c) A corporation that establishes its eligibility for a
19-2 credit under this subchapter is not eligible to establish a credit
19-3 under Subchapter P.
19-4 Sec. 171.725. CARRYFORWARD. If a corporation is eligible
19-5 for a credit that exceeds the limitation under Section 171.724(a)
19-6 or (b), the corporation may carry the unused credit forward for not
19-7 more than 20 consecutive reports. A credit carryforward from a
19-8 previous report is considered to be utilized before the current
19-9 year credit.
19-10 Sec. 171.726. DETERMINATION OF STRATEGIC INVESTMENT AREAS.
19-11 (a) Not later than September 1 each year, the comptroller shall
19-12 determine areas that qualify as strategic investment areas using
19-13 the most recently completed full calendar year data available on
19-14 that date and, not later than October 1, shall publish a list and
19-15 map of the designated areas.
19-16 (b) The designation is effective for the following calendar
19-17 year for purposes of credits available under this subchapter.
19-18 Sec. 171.727. BIENNIAL REPORT BY COMPTROLLER. (a) Before
19-19 the beginning of each regular session of the legislature, the
19-20 comptroller shall submit to the governor, the lieutenant governor,
19-21 and the speaker of the house of representatives a report that
19-22 states:
19-23 (1) the total amount of expenses and payments incurred
19-24 by corporations that claim a credit under this subchapter;
19-25 (2) the total amount of credits applied against the
19-26 tax under this chapter and the amount of unused credits including:
20-1 (A) the total amount of franchise tax due by
20-2 corporations claiming a credit under this subchapter before and
20-3 after the application of the credit;
20-4 (B) the average percentage reduction in
20-5 franchise tax due by corporations claiming a credit under this
20-6 subchapter;
20-7 (C) the percentage of tax credits that were
20-8 awarded to corporations with fewer than 100 employees; and
20-9 (D) the two-digit standard industrial
20-10 classification of corporations claiming a credit under this
20-11 subchapter;
20-12 (3) the geographical distribution of expenses and
20-13 payments giving rise to a credit authorized by this subchapter;
20-14 (4) the impact of the credit provided by this
20-15 subchapter on the amount of research and development performed in
20-16 this state and employment in research and development in this
20-17 state; and
20-18 (5) the impact of the credit provided under this
20-19 subchapter on employment, capital investment, and personal income
20-20 in this state and on state tax revenues.
20-21 (b) The final report issued prior to the expiration of this
20-22 subchapter shall include historical information on the credit
20-23 authorized under this subchapter.
20-24 (c) The comptroller may not include in the report
20-25 information that is confidential by law.
20-26 (d) For purposes of this section, the comptroller may
21-1 require a corporation that claims a credit under this subchapter to
21-2 submit information, on a form provided by the comptroller, on the
21-3 location of the corporation's research expenses and payments in
21-4 this state and any other information necessary to complete the
21-5 report required under this section.
21-6 Sec. 171.728. COMPTROLLER POWERS AND DUTIES. The
21-7 comptroller shall adopt rules and forms necessary to implement this
21-8 subchapter.
21-9 Sec. 171.729. EXPIRATION. (a) This subchapter expires
21-10 December 31, 2009.
21-11 (b) The expiration of this subchapter does not affect the
21-12 carryforward of a credit under Section 171.725 for those credits to
21-13 which a corporation is eligible before the date this subchapter
21-14 expires.
21-15 Sec. 171.730. TEMPORARY CREDIT RATES AND LIMITATIONS.
21-16 (a) Notwithstanding any other provision of this subchapter, this
21-17 section applies to a report originally due before January 1, 2002.
21-18 (b) For purposes of computing the credit under Section
21-19 171.723(a) for a report described by Subsection (a), the credit
21-20 equals four percent of the sum of:
21-21 (1) the excess of qualified research expenses incurred
21-22 in this state during the period upon which the tax is based over
21-23 the base amount for this state; and
21-24 (2) the basic research payments determined under
21-25 Section 41(e)(1)(A), Internal Revenue Code, for this state during
21-26 the period upon which the tax is based.
22-1 (c) For purposes of computing the credit under Section
22-2 171.723(d) for a report described by Subsection (a), a corporation
22-3 may multiply by 1.5 the amount of any qualified research expenses
22-4 and basic research payments made in a strategic investment area.
22-5 (d) The total credit claimed under this subchapter for a
22-6 report described by Subsection (a), including the amount of any
22-7 carryforward credit under Section 171.725, may not exceed 25
22-8 percent of the amount of franchise tax due for the report before
22-9 any other applicable tax credits.
22-10 (e) For purposes of the alternate credit computation method
22-11 in Section 171.723(b), the credit percentages applicable to
22-12 qualified research expenses described in Sections 41(c)(4)(A)(i),
22-13 (ii), and (iii), Internal Revenue Code, are 0.33 percent, 0.44
22-14 percent, and 0.55 percent, respectively.
22-15 (f) This section expires January 1, 2002.
22-16 (g) The expiration of this section does not affect the
22-17 carryforward of a credit under Section 171.725 for those credits to
22-18 which a corporation is eligible before the date this section
22-19 expires.
22-20 SECTION 15. Chapter 171, Tax Code, is amended by adding
22-21 Subchapter P to read as follows:
22-22 SUBCHAPTER P. TAX CREDITS FOR CERTAIN JOB CREATION ACTIVITIES
22-23 Sec. 171.751. DEFINITIONS. In this subchapter:
22-24 (1) "Agricultural processing" means an establishment
22-25 primarily engaged in activities described in categories 2011-2099,
22-26 2211, 2231, or 3111-3199 of the 1987 Standard Industrial
23-1 Classification Manual published by the federal Office of Management
23-2 and Budget.
23-3 (2) "Central administrative offices" means an
23-4 establishment primarily engaged in performing management or support
23-5 services for other establishments of the same enterprise. An
23-6 enterprise consists of all establishments having more than 50
23-7 percent common direct or indirect ownership.
23-8 (3) "County average weekly wage" means the average
23-9 weekly wage for all covered employment in the county as computed by
23-10 the Texas Workforce Commission.
23-11 (4) "Data processing" means an establishment primarily
23-12 engaged in activities described in categories 7371-7379 of the 1987
23-13 Standard Industrial Classification Manual published by the federal
23-14 Office of Management and Budget.
23-15 (5) "Distribution" means an establishment primarily
23-16 engaged in activities described in categories 5012-5199 of the 1987
23-17 Standard Industrial Classification Manual published by the federal
23-18 Office of Management and Budget.
23-19 (6) "Group health benefit plan" means:
23-20 (A) a health plan provided by a health
23-21 maintenance organization established under the Texas Health
23-22 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
23-23 Code);
23-24 (B) a health benefit plan approved by the
23-25 commissioner of insurance; or
23-26 (C) a self-funded or self-insured employee
24-1 welfare benefit plan that provides health benefits and is
24-2 established in accordance with the Employee Retirement Income
24-3 Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.
24-4 (7) "Manufacturing" means an establishment primarily
24-5 engaged in activities described in categories 2011-3999 of the 1987
24-6 Standard Industrial Classification Manual published by the federal
24-7 Office of Management and Budget.
24-8 (8) "Qualified business" means an establishment
24-9 primarily engaged in agricultural processing, central
24-10 administrative offices, distribution, data processing,
24-11 manufacturing, research and development, or warehousing.
24-12 (9) "Qualifying job" means a new permanent full-time
24-13 job that:
24-14 (A) is located in:
24-15 (i) a strategic investment area; or
24-16 (ii) a county within this state with a
24-17 population of less than 50,000, if the job is created by a business
24-18 primarily engaged in agricultural processing;
24-19 (B) requires at least 1,600 hours of work a
24-20 year;
24-21 (C) pays at least 110 percent of the county
24-22 average weekly wage for the county where the job is located;
24-23 (D) is covered by a group health benefit plan
24-24 for which the business pays at least 80 percent of the premiums or
24-25 other charges assessed under the plan for the employee;
24-26 (E) is not transferred from one area in this
25-1 state to another area in this state; and
25-2 (F) is not created to replace a previous
25-3 employee.
25-4 (10) "Research and development" means an establishment
25-5 primarily engaged in activities described in category 8731 of the
25-6 1987 Standard Industrial Classification Manual published by the
25-7 federal Office of Management and Budget.
25-8 (11) "Strategic investment area" has the meaning
25-9 assigned that term by Section 171.721.
25-10 (12) "Warehousing" means an establishment primarily
25-11 engaged in activities described in categories 4221-4226 of the 1987
25-12 Standard Industrial Classification Manual published by the federal
25-13 Office of Management and Budget.
25-14 Sec. 171.752. ELIGIBILITY. (a) A corporation is eligible
25-15 for a credit against the tax imposed under this chapter if the
25-16 corporation:
25-17 (1) is a qualified business as defined in Section
25-18 171.751;
25-19 (2) creates a minimum of 10 qualifying jobs; and
25-20 (3) pays an average weekly wage, for the year in which
25-21 credits are claimed, of at least 110 percent of the county average
25-22 weekly wage for the county where the qualifying jobs are located.
25-23 (b) A corporation may claim a credit or take a carryforward
25-24 credit without regard to whether the strategic investment area in
25-25 which it created the qualifying jobs subsequently loses its
25-26 designation as a strategic investment area, if applicable.
26-1 Sec. 171.753. CALCULATION OF CREDIT. A corporation may
26-2 establish a credit equal to 25 percent of the total wages and
26-3 salaries paid by the corporation for qualifying jobs during the
26-4 period upon which the tax is based.
26-5 Sec. 171.754. LENGTH OF CREDIT. The credit established
26-6 shall be claimed in five equal installments of one-fifth the credit
26-7 amount over the five consecutive reports beginning with the report
26-8 based upon the period during which the qualifying jobs were
26-9 created.
26-10 Sec. 171.755. LIMITATIONS. (a) The total credit claimed
26-11 under this subchapter for a report, including the amount of any
26-12 carryforward credit under Section 171.756, may not exceed 50
26-13 percent of the amount of franchise tax due for the report before
26-14 any other applicable tax credits.
26-15 (b) The total credit claimed under this subchapter and
26-16 Subchapters O and Q for a report, including the amount of any
26-17 carryforward credits, may not exceed the amount of franchise tax
26-18 due for the report after any other applicable credits.
26-19 (c) A corporation that establishes its eligibility for a
26-20 credit under this subchapter is not eligible to establish a credit
26-21 under Subchapter O.
26-22 Sec. 171.756. CARRYFORWARD. (a) If a corporation is
26-23 eligible for a credit from an installment that exceeds the
26-24 limitations under Section 171.755(a) or (b), the corporation may
26-25 carry the unused credit forward for not more than five consecutive
26-26 reports.
27-1 (b) A carryforward is considered the remaining portion of an
27-2 installment that cannot be claimed in the current year because of
27-3 the tax limitation under Section 171.755. A carryforward is added
27-4 to the next year's installment of the credit in determining the tax
27-5 limitation for that year. A credit carryforward from a previous
27-6 report is considered to be utilized before the current year
27-7 installment.
27-8 Sec. 171.757. CERTIFICATION OF ELIGIBILITY. (a) For the
27-9 initial and each succeeding report in which a credit is claimed
27-10 under this subchapter, the corporation shall file with its report,
27-11 on a form provided by the comptroller, information that
27-12 sufficiently demonstrates that the corporation is eligible for the
27-13 credit and is in compliance with Section 171.752.
27-14 (b) The burden of establishing entitlement to and the value
27-15 of the credit is on the corporation.
27-16 (c) If, in one of the five years in which the installment of
27-17 a credit accrues, the number of the corporation's full-time
27-18 employees falls below the number of full-time employees the
27-19 corporation had in the year in which the corporation qualified for
27-20 the credit, the credit expires and the corporation may not take any
27-21 remaining installment of the credit.
27-22 (d) Notwithstanding Subsection (c), the corporation may,
27-23 however, take the portion of an installment that accrued in a
27-24 previous year and was carried forward to the extent permitted under
27-25 Section 171.756.
27-26 Sec. 171.758. ASSIGNMENT PROHIBITED. A corporation may not
28-1 convey, assign, or transfer the credit allowed under this
28-2 subchapter to another entity unless all of the assets of the
28-3 corporation are conveyed, assigned, or transferred in the same
28-4 transaction.
28-5 Sec. 171.759. BIENNIAL REPORT BY COMPTROLLER. (a) Before
28-6 the beginning of each regular session of the legislature, the
28-7 comptroller shall submit to the governor, the lieutenant governor,
28-8 and the speaker of the house of representatives a report that
28-9 states:
28-10 (1) the total number of jobs created by corporations
28-11 that claim a credit under this subchapter and the average and
28-12 median annual wage of those jobs;
28-13 (2) the total amount of credits applied against the
28-14 tax under this chapter and the amount of unused credits including:
28-15 (A) the total amount of franchise tax due by
28-16 corporations claiming a credit under this subchapter before and
28-17 after the application of the credit;
28-18 (B) the average percentage reduction in
28-19 franchise tax due by corporations claiming a credit under this
28-20 subchapter; and
28-21 (C) the percentage of tax credits that were
28-22 awarded to corporations with fewer than 100 employees;
28-23 (3) a breakdown of the two-digit standard industrial
28-24 classification of businesses claiming a credit under this
28-25 subchapter;
28-26 (4) the geographical distribution of the credits
29-1 claimed under this subchapter; and
29-2 (5) the impact of the credit provided under this
29-3 subchapter on employment, personal income, and capital investment
29-4 in this state and on state tax revenues.
29-5 (b) The final report issued prior to the expiration of this
29-6 subchapter shall include historical information on the credit
29-7 authorized under this subchapter.
29-8 (c) The comptroller may not include in the report
29-9 information that is confidential by law.
29-10 (d) For purposes of this section, the comptroller may
29-11 require a corporation that claims a credit under this subchapter to
29-12 submit information, on a form provided by the comptroller, on the
29-13 location of the corporation's job creation in this state and any
29-14 other information necessary to complete the report required under
29-15 this section.
29-16 (e) The comptroller shall provide notice to the members of
29-17 the legislature that the report required under this section is
29-18 available on request.
29-19 Sec. 171.760. COMPTROLLER POWERS AND DUTIES. The
29-20 comptroller shall adopt rules and forms necessary to implement this
29-21 subchapter.
29-22 Sec. 171.761. EXPIRATION. (a) This subchapter expires
29-23 December 31, 2009.
29-24 (b) The expiration of this subchapter does not affect the
29-25 carryforward of a credit under Section 171.756 or those credits for
29-26 which a corporation is eligible before the date this subchapter
30-1 expires.
30-2 SECTION 16. Chapter 171, Tax Code, is amended by adding
30-3 Subchapter Q to read as follows:
30-4 SUBCHAPTER Q. TAX CREDITS FOR CERTAIN CAPITAL INVESTMENTS
30-5 Sec. 171.801. DEFINITIONS. In this subchapter:
30-6 (1) "Agricultural processing," "central administrative
30-7 offices," "county average weekly wage," "data processing,"
30-8 "distribution," "manufacturing," "qualified business," "research
30-9 and development," and "warehousing" have the meanings assigned
30-10 those terms by Section 171.751.
30-11 (2) "Qualified capital investment" means tangible
30-12 personal property first placed in service in a strategic investment
30-13 area, or first placed in service in a county with a population of
30-14 less than 50,000 by a corporation primarily engaged in agricultural
30-15 processing, and that is described in Section 1245(a), Internal
30-16 Revenue Code, such as engines, machinery, tools, and implements
30-17 used in a trade or business or held for investment and subject to
30-18 an allowance for depreciation, cost recovery under the accelerated
30-19 cost recovery system, or amortization. The term does not include
30-20 real property or buildings and their structural components.
30-21 Property that is leased under a capitalized lease is considered a
30-22 "qualified capital investment," but property that is leased under
30-23 an operating lease is not considered a "qualified capital
30-24 investment." Property expensed under Section 179, Internal Revenue
30-25 Code, is not considered a "qualified capital investment."
30-26 (3) "Strategic investment area" has the meaning
31-1 assigned that term by Section 171.721.
31-2 Sec. 171.802. ELIGIBILITY. (a) A qualified business is
31-3 eligible for a credit against the tax imposed under this chapter in
31-4 the amount and under the conditions and limitations provided by
31-5 this subchapter.
31-6 (b) To qualify for the credit authorized under this
31-7 subchapter, a qualified business must:
31-8 (1) pay an average weekly wage, at the location with
31-9 respect to which the credit is claimed, that is at least 110
31-10 percent of the county average weekly wage;
31-11 (2) offer coverage to all full-time employees at the
31-12 location with respect to which the credit is claimed by a group
31-13 health benefit plan, as defined by Section 171.751, for which the
31-14 business pays at least 80 percent of the premiums or other charges
31-15 assessed under the plan for the employees; and
31-16 (3) make a minimum $500,000 qualified capital
31-17 investment.
31-18 (c) A corporation may claim a credit or take a carryforward
31-19 credit without regard to whether the strategic investment area in
31-20 which it made the qualified capital investment subsequently loses
31-21 its designation as a strategic investment area, if applicable.
31-22 Sec. 171.803. CALCULATION OF CREDIT. A corporation may
31-23 establish a credit equal to 7.5 percent of the qualified capital
31-24 investment during the period upon which the tax is based.
31-25 Sec. 171.804. LENGTH OF CREDIT. The credit established
31-26 shall be claimed in five equal installments of one-fifth the credit
32-1 amount over the five consecutive reports beginning with the report
32-2 based upon the period during which the qualified capital investment
32-3 was made.
32-4 Sec. 171.805. LIMITATIONS. (a) The total credit claimed
32-5 under this subchapter for a report, including the amount of any
32-6 carryforward credit under Section 171.806, may not exceed 50
32-7 percent of the amount of franchise tax due for the report before
32-8 any other applicable tax credits.
32-9 (b) The total credit claimed under this subchapter and
32-10 Subchapters O and P for a report, including the amount of any
32-11 carryforward credits, may not exceed the amount of franchise tax
32-12 due for the report after any other applicable tax credits.
32-13 (c) A corporation that establishes its eligibility for a
32-14 credit under this subchapter is not eligible to claim a franchise
32-15 tax reduction authorized under Section 171.1015.
32-16 Sec. 171.806. CARRYFORWARD. (a) If a corporation is
32-17 eligible for a credit from an installment that exceeds the
32-18 limitation under Section 171.805(a) or (b), the corporation may
32-19 carry the unused credit forward for not more than five consecutive
32-20 reports.
32-21 (b) A carryforward is considered the remaining portion of an
32-22 installment that cannot be claimed in the current year because of
32-23 the tax limitation under Section 171.805. A carryforward is added
32-24 to the next year's installment of the credit in determining the tax
32-25 limitation for that year. A credit carryforward from a previous
32-26 report is considered to be utilized before the current year
33-1 installment.
33-2 Sec. 171.807. CERTIFICATION OF ELIGIBILITY. (a) For the
33-3 initial and each succeeding report in which a credit is claimed
33-4 under this subchapter, the corporation shall file with its report,
33-5 on a form provided by the comptroller, information that
33-6 sufficiently demonstrates that the corporation is eligible for the
33-7 credit and is in compliance with Section 171.802.
33-8 (b) The burden of establishing entitlement to and the value
33-9 of the credit is on the qualified business.
33-10 (c) A credit expires under this subchapter and the
33-11 corporation may not take any remaining installment of the credit if
33-12 in one of the five years in which the installment of a credit
33-13 accrues, the qualified business:
33-14 (1) disposes of the qualified capital investment;
33-15 (2) takes the qualified capital investment out of
33-16 service;
33-17 (3) moves the qualified capital investment out of this
33-18 state; or
33-19 (4) fails to pay an average weekly wage as required by
33-20 Section 171.802.
33-21 (d) Notwithstanding Subsection (c), the corporation may take
33-22 the portion of an installment that accrued in a previous year and
33-23 was carried forward to the extent permitted under Section 171.806.
33-24 Sec. 171.808. ASSIGNMENT PROHIBITED. A corporation may not
33-25 convey, assign, or transfer the credit allowed under this
33-26 subchapter to another entity unless all of the assets of the
34-1 corporation are conveyed, assigned, or transferred in the same
34-2 transaction.
34-3 Sec. 171.809. BIENNIAL REPORT BY COMPTROLLER. (a) Before
34-4 the beginning of each regular session of the legislature, the
34-5 comptroller shall submit to the governor, the lieutenant governor,
34-6 and the speaker of the house of representatives a report that
34-7 states:
34-8 (1) the total amount of qualified capital investments
34-9 made by corporations that claim a credit under this subchapter and
34-10 the average and median wages paid by those corporations;
34-11 (2) the total amount of credits applied against the
34-12 tax under this chapter and the amount of unused credits, including:
34-13 (A) the total amount of franchise tax due by
34-14 corporations claiming a credit under this subchapter before and
34-15 after the application of the credit;
34-16 (B) the average percentage reduction in
34-17 franchise tax due by corporations claiming a credit under this
34-18 subchapter;
34-19 (C) the percentage of tax credits that were
34-20 awarded to corporations with fewer than 100 employees; and
34-21 (D) the two-digit standard industrial
34-22 classification of corporations claiming a credit under this
34-23 subchapter;
34-24 (3) the geographical distribution of the qualified
34-25 capital investments on which tax credit claims are made under this
34-26 subchapter; and
35-1 (4) the impact of the credit provided under this
35-2 subchapter on employment, capital investment, personal income, and
35-3 state tax revenues.
35-4 (b) The final report issued before the expiration of this
35-5 subchapter shall include historical information on the credit
35-6 authorized under this subchapter.
35-7 (c) The comptroller may not include in the report
35-8 information that is confidential by law.
35-9 (d) For purposes of this section, the comptroller may
35-10 require a corporation that claims a credit under this subchapter to
35-11 submit information, on a form provided by the comptroller, on the
35-12 location of the corporation's capital investment in this state and
35-13 any other information necessary to complete the report required
35-14 under this section.
35-15 (e) The comptroller shall provide notice to the members of
35-16 the legislature that the report required under this section is
35-17 available on request.
35-18 Sec. 171.810. COMPTROLLER POWERS AND DUTIES. The
35-19 comptroller shall adopt rules and forms necessary to implement this
35-20 subchapter.
35-21 Sec. 171.811. EXPIRATION. (a) This subchapter expires
35-22 December 31, 2009.
35-23 (b) The expiration of this subchapter does not affect the
35-24 carryforward of a credit under Section 171.806 or those credits for
35-25 which a corporation is eligible before the date this subchapter
35-26 expires.
36-1 SECTION 17. Chapter 171, Tax Code, is amended by adding
36-2 Subchapter R to read as follows:
36-3 SUBCHAPTER R. TAX CREDIT FOR CONTRIBUTIONS TO
36-4 BEFORE AND AFTER SCHOOL PROGRAMS
36-5 Sec. 171.831. DEFINITION. In this subchapter, "school-age
36-6 child care" means care provided before and after school and during
36-7 the summer and holidays for children who are at least five years of
36-8 age but younger than 14 years of age.
36-9 Sec. 171.832. CREDIT. A corporation that meets the
36-10 eligibility requirements under this subchapter is entitled to a
36-11 credit in the amount allowed by this subchapter against the tax
36-12 imposed under this chapter.
36-13 Sec. 171.833. EXPENDITURES ELIGIBLE FOR CREDIT. (a) A
36-14 corporation may claim a credit under this subchapter only for a
36-15 qualifying expenditure relating to the operation of a school-age
36-16 child care program that is operated by:
36-17 (1) a nonprofit organization licensed under Chapter
36-18 42, Human Resources Code;
36-19 (2) a nonprofit, accredited educational facility or by
36-20 another nonprofit entity under contract with the educational
36-21 facility, if the Texas Education Agency or Southern Association of
36-22 Colleges and Schools has approved the curriculum content of the
36-23 program operated under the contract; or
36-24 (3) a county or municipality, if the governing body of
36-25 the county or municipality annually adopts standards of care by
36-26 order or ordinance that include minimum child-to-staff ratios,
37-1 staff qualifications, facility, health, and safety standards, and
37-2 mechanisms for monitoring and enforcing the standards.
37-3 (b) A qualifying expenditure includes an expenditure for:
37-4 (1) constructing, renovating, or remodeling a facility
37-5 or structure to be used by the program;
37-6 (2) purchasing necessary equipment, supplies, or food
37-7 to be used in the program; or
37-8 (3) operating the program, including administrative
37-9 and staff costs.
37-10 Sec. 171.834. AMOUNT; LIMITATIONS. (a) The amount of the
37-11 credit is equal to 30 percent of a corporation's qualifying
37-12 expenditures.
37-13 (b) A corporation may claim a credit under this subchapter
37-14 for a qualifying expenditure during an accounting period only
37-15 against the tax owed for the corresponding reporting period.
37-16 (c) A corporation may not claim a credit in an amount that
37-17 exceeds 50 percent of the amount of net franchise tax due, after
37-18 applying any other credits, for the reporting period.
37-19 Sec. 171.835. APPLICATION FOR CREDIT. (a) A corporation
37-20 must apply for a credit under this subchapter on or with the tax
37-21 report for the period for which the credit is claimed.
37-22 (b) The comptroller shall adopt a form for the application
37-23 for the credit. A corporation must use this form in applying for
37-24 the credit.
37-25 Sec. 171.836. ASSIGNMENT PROHIBITED. A corporation may not
37-26 convey, assign, or transfer a credit allowed under this subchapter
38-1 to another entity unless all of the assets of the corporation are
38-2 conveyed, assigned, or transferred in the same transaction.
38-3 SECTION 18. The comptroller of public accounts of the State
38-4 of Texas may combine the reports required under Subchapters N, O,
38-5 P, and Q, Chapter 171, Tax Code, as added by this Act, into a
38-6 single report.
38-7 SECTION 19. (a) Before the beginning of the 79th
38-8 Legislature, Regular Session, the comptroller of public accounts of
38-9 the State of Texas shall report to the legislature and the governor
38-10 on the effect that exempting small corporations from the franchise
38-11 tax under Section 171.002, Tax Code, as amended by this Act, has
38-12 had on the economy of this state, including on the creation of new
38-13 jobs in this state.
38-14 (b) The report must include:
38-15 (1) an assessment of the intended purposes of the
38-16 exemptions and whether the exemptions are achieving those
38-17 objectives;
38-18 (2) an assessment of whether the exemptions have
38-19 created any problems in the administration of the franchise tax;
38-20 and
38-21 (3) a recommendation for retaining, eliminating, or
38-22 amending the exemptions.
38-23 (c) The comptroller of public accounts of the State of Texas
38-24 may include the report in any other report made to the legislature.
38-25 SECTION 20. (a) Except as otherwise provided by this
38-26 section, this Act takes effect October 1, 1999.
39-1 (b) The changes in law made by this Act by amending
39-2 Subsection (b), Section 151.3111, Tax Code, and adding Section
39-3 151.326, Tax Code, take effect on the earliest day that they may
39-4 take effect under Section 39, Article III, Texas Constitution. The
39-5 comptroller of public accounts of the State of Texas may adopt
39-6 emergency rules for the implementation of those provisions.
39-7 (c) The changes in law made by this Act by amending
39-8 Subsection (a), Section 151.313, Tax Code, take effect April 1,
39-9 2000.
39-10 (d) The changes in law made by this Act by amending
39-11 Subsection (d), Section 171.002, Subsection (a), Section 171.203,
39-12 and Section 171.204, Tax Code, and adding Subchapters N, O, P, Q,
39-13 and R, Chapter 171, Tax Code, take effect January 1, 2000, and
39-14 apply only to a report originally due on or after that date.
39-15 (e) A corporation may claim a credit under Subchapters N, O,
39-16 P, Q, and R, Chapter 171, Tax Code, as added by this Act, only for
39-17 expenses and payments incurred, qualified investments or
39-18 expenditures made, or new jobs created on or after January 1, 2000.
39-19 (f) The changes in law made by this Act do not affect taxes
39-20 imposed before the effective date of those changes, and the law in
39-21 effect before the effective date of those changes is continued in
39-22 effect for purposes of the liability for and collection of those
39-23 taxes.
39-24 SECTION 21. The importance of this legislation and the
39-25 crowded condition of the calendars in both houses create an
39-26 emergency and an imperative public necessity that the
S.B. No. 441
40-1 constitutional rule requiring bills to be read on three several
40-2 days in each house be suspended, and this rule is hereby suspended,
40-3 and that this Act take effect and be in force according to its
40-4 terms, and it is so enacted.
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 441 passed the Senate on
April 8, 1999, by a viva-voce vote; May 27, 1999, Senate refused to
concur in House amendments and requested appointment of Conference
Committee; May 28, 1999, House granted request of the Senate;
May 30, 1999, Senate adopted Conference Committee Report by the
following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 441 passed the House, with
amendments, on May 26, 1999, by the following vote: Yeas 140,
Nays 0, three present not voting; May 28, 1999, House granted
request of the Senate for appointment of Conference Committee;
May 30, 1999, House adopted Conference Committee Report by the
following vote: Yeas 144, Nays 1, three present not voting.
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Chief Clerk of the House
Approved:
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Date
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Governor