SRC-SEW H.B. 1447 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1447
77R11584 DAK-DBy: Oliveira (Van de Putte)
Finance
5/10/2001
Engrossed


DIGEST AND PURPOSE 

The 75th Legislature created defense economic readjustment zones (DERZs) to
offer tax credits for a limited time to businesses locating, creating jobs,
and investing in areas suffering the economic impact of closed or downsized
military installations. The 76th Legislature created research and
development, job creation, and investment tax credits for strategic
investment areas (SIAs), which are federal urban enterprise communities and
counties suffering from above average unemployment and below average per
capita income. While the tax refunds offered under a DERZ are similar to
the credits offered under an SIA, there is concern that a DERZ refund is
generally less valuable than an SIA refund. Adding a DERZ to the definition
of an SIA may help to better redevelop communities negatively impacted by
closed or downsized military bases by making more businesses eligible for a
wider variety of tax incentives. H.B. 1447 adds a DERZ to the definition of
an SIA.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 171.721(2), Tax Code, to redefine "strategic
investment area." 
  
SECTION 2. (a) Effective date:  January 1, 2002.  Authorizes a corporation
to claim a credit under Subchapters O, P, and Q, Chapter 171, Tax Code, in
a defense economic readjustment zone designated as a strategic investment
area as a result of the change in law made by this Act only on a report
originally due on or after that date; and for expenses and payments
incurred, qualified investments or expenditures made, and new jobs created
in that area on or after that date. 
 
(b)  Provides that the change in law made by this Act does not affect taxes
imposed before the effective date of this Act, and the law in effect before
the effective date of this Act is continued in effect for purposes of the
liability for and collection of those taxes.