HBA-KDB C.S.H.B. 1447 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 1447
By: Oliveira
Ways & Means
4/30/2001
Committee Report (Substituted)



BACKGROUND 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.  C.S.H.B. 1447 adds a DERZ
to the definition of an SIA. 

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

C.S.H.B. 1447 amends the Tax Code to add to the definition of "strategic
investment area" a defense economic readjustment zone. 

EFFECTIVE DATE

January 1, 2002.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1447 modifies the original bill by removing the qualification that
a defense economic readjustment zone have above state average unemployment
and below state average per capita income to be considered a strategic
investment area.