SRC-TBR H.B. 3140 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 3140
By: Swinford (Haywood)
Finance
5/11/2001
Engrossed


DIGEST AND PURPOSE 

The 76th Legislature passed legislation which provided for certain
franchise tax credits for business activity in counties deemed strategic
investment areas with the goal of stimulating economic development.  The
investment tax credit, which authorized a corporation to establish credit
equal to 7.5 percent of qualified capital investment, and the job creation
credit, which authorized a corporation to establish credit equal to 25
percent of the total wages and salaries paid by the corporation for
qualifying jobs, were made available to agricultural processing
corporations located in counties that have a population of less than
50,000.  Agricultural processing is defined by activities described by
certain codes from the Standard Industrial Classification Manual (manual)
published by the federal Office of Management and Budget. However, there is
concern that the listing of these codes is not exhaustive and some
additional codes may be needed to allow more innovations and flexibility.
The added codes would include processing activities such as producing
organic fibers, medicinals, soap, gum and wood chemicals, industrial
organic chemicals, adhesives, sealants, gelatin, and art goods.  H.B. 3140
adds codes from the manual to the current definition of "agricultural
processing." 

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 171.751(1), Tax Code, to define "agricultural
processing." 

SECTION 2.  Effective date: January 1, 2002.  Makes application of this Act
prospective.