By Shapleigh                                           S.B. No. 498
         76R1523 CBH-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a franchise tax credit for the cost of a guarantee fee
 1-3     paid to obtain a loan guaranteed by the Small Business
 1-4     Administration.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Chapter 171, Tax Code, is amended by adding
 1-7     Subchapter N to read as follows:
 1-8      SUBCHAPTER N.  TAX CREDIT FOR SMALL BUSINESS ADMINISTRATION LOAN
 1-9                                GUARANTEE FEE
1-10           Sec. 171.701.  CREDIT.  A corporation is entitled to a credit
1-11     against the tax imposed under this chapter for a guarantee fee paid
1-12     by the corporation to obtain a loan guaranteed by the federal Small
1-13     Business Administration.
1-14           Sec. 171.702.  APPLICATION FOR CREDIT.  (a)  A corporation
1-15     must apply for a credit under this subchapter on or with the tax
1-16     report for the period for which the credit is claimed.
1-17           (b)  The comptroller shall adopt a form for the application
1-18     for the credit.   A corporation must use this form in applying for
1-19     the  credit.
1-20           Sec. 171.703.  PERIOD FOR WHICH CREDIT MAY BE CLAIMED.  (a)
1-21     A corporation may claim a credit under this subchapter for the
1-22     costs of a guarantee fee paid during an accounting period only
1-23     against the tax owed for the corresponding reporting period.
1-24           (b)  A corporation may not claim a credit in an amount that
 2-1     exceeds the amount of tax due for the report.
 2-2           (c)  A credit allowed under this subchapter may not be
 2-3     carried forward or backward.
 2-4           Sec. 171.704.  ASSIGNMENT PROHIBITED.   A corporation may not
 2-5     convey, assign, or transfer the credit allowed under this
 2-6     subchapter to another entity unless all of the assets of the
 2-7     corporation are conveyed, assigned, or transferred in the same
 2-8     transaction.
 2-9           SECTION 2.  A corporation may claim the credit under
2-10     Subchapter N, Chapter 171, Tax Code, as added by this Act, only for
2-11     a guarantee fee payment made on or after the effective date of this
2-12     Act and on a franchise tax report due under Chapter 171, Tax Code,
2-13     on or after January 1, 2000.
2-14           SECTION 3.  The importance of this legislation and the
2-15     crowded condition of the calendars in both houses create an
2-16     emergency and an imperative public necessity that the
2-17     constitutional rule requiring bills to be read on three several
2-18     days in each house be suspended, and this rule is hereby suspended,
2-19     and that this Act take effect and be in force from and after its
2-20     passage, and it is so enacted.