By Homer                                               H.B. No. 679
         77R2954 CBH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to providing a deduction of not more than $100,000 for a
 1-3     corporation under the franchise tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter C, Chapter 171, Tax Code, is amended by
 1-6     adding Section 171.108 to read as follows:
 1-7           Sec. 171.108.  DEDUCTION FROM TAXABLE CAPITAL OR TAXABLE
 1-8     EARNED SURPLUS. A corporation may deduct from its taxable capital
 1-9     computed under Section 171.101(a)(1) and from its taxable earned
1-10     surplus computed under Section 171.110(a)(1) an amount equal to the
1-11     lesser of:
1-12                 (1)  $100,000;
1-13                 (2)  the amount of the corporation's gross receipts:
1-14                       (A)  from its entire business under Section
1-15     171.105; or
1-16                       (B)  from its entire business under Section
1-17     171.1051, including the amount excepted under Section 171.1051(a);
1-18                 (3)  the amount of the corporation's taxable capital;
1-19     or
1-20                 (4)  the amount of the corporation's taxable earned
1-21     surplus.
1-22           SECTION 2. This Act takes effect January 1, 2002, and applies
1-23     to a report originally due on or after that date.