HBA-EDN H.B. 679 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 679 By: Homer Ways & Means 4/19/2001 Introduced BACKGROUND AND PURPOSE Small businesses are an integral part of the economy. However, many small businesses may find it difficult to flourish and expand, particularly in the face of rising costs and taxes. Allowing these businesses to take a deduction on franchise taxes may help to alleviate the financial burden on these businesses and thereby stimulate economic growth in the state. House Bill 679 authorizes a corporation to take a franchise tax deduction for a certain amount from its taxable capital or taxable earned surplus. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 679 amends the Tax Code to authorize a corporation to deduct from its taxable capital and from its taxable earned surplus an amount equal to the lesser of: _$100,000; _the amount of the corporation's gross receipts from its entire business for taxable capital or for taxable earned surplus, including items of income generated outside this state that are subject to allocation to the state of commercial domicile; _the amount of the corporation's taxable capital; or _the amount of the corporation's taxable earned surplus. EFFECTIVE DATE January 1, 2002.