HBA-EDN H.B. 1483 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1483 By: Homer Ways & Means 4/12/2001 Introduced BACKGROUND AND PURPOSE Many businesses accumulate large amounts of materials which are currently placed in the solid waste stream but which could be recycled with the proper equipment. Providing a tax credit for businesses that make recycling efforts may increase the amount of waste that is recycled. House Bill 1483 provides a franchise tax credit for a capital expenditure made toward purchasing recycling equipment and authorizes receipts from sales of recycled products to be excluded from the computation of gross receipts for franchise taxes. 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 1483 amends the Tax Code to authorize a corporation to exclude receipts from sales of recycled products manufactured by the corporation when determining gross receipts for taxable capital and taxable earned surplus. The bill requires a corporation that chooses to exclude such receipts to exclude those receipts from each computation of gross receipts for franchise taxes. The bill provides for any amount derived from the sale of recycled products manufactured by the corporation to be included in computing the net taxable earned surplus of a corporation. H.B. 1483 provides that a corporation is eligible for a franchise tax credit for a capital expenditure made toward purchasing recycling equipment (credit). The bill authorizes a corporation to claim a credit in an amount equal to the lesser of the total amount of the capital expenditure made during the reporting period or $50,000. The bill authorizes a corporation to claim a credit only in five equal installments of one-fifth the credit amount over five consecutive reports beginning with the report based on the period during which the capital expenditure was made. The bill prohibits the total credit claimed for a period from exceeding the amount of franchise tax due for the report after any other applicable tax credits. H.B. 1483 provides that a corporation must apply for a credit, using a form the comptroller of public accounts is required to adopt, on or with the tax report for the period for which the credit is claimed. The bill prohibits a corporation from conveying, assigning, or transferring a credit to another entity unless all of the assets of the corporation are conveyed, assigned, or transferred in the same transaction. EFFECTIVE DATE January 1, 2002.