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


Office of House Bill AnalysisH.B. 1447
By: Oliveira
Ways & Means
3/30/2001
Introduced



BACKGROUND AND PURPOSE 

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.  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.  While the tax refunds offered under DERZs are
similar to the credits offered under SIAs, there is concern that DERZs
refunds are generally less valuable than SIAs refunds.  Adding DERZs to the
definition of SIAs 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.  House Bill 1447 adds DERZs
to the definition of SIAs. 

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 1447 amends the Tax Code to add to the definition of "strategic
investment area" a defense economic readjustment zone with above state
average unemployment and below state average per capita income. 

EFFECTIVE DATE

January 1, 2002.