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.