1-1                                   AN ACT
 1-2     relating to a franchise tax credit for certain activities in
 1-3     defense economic readjustment zones.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 171.721(2), Tax Code, is amended to read
 1-6     as follows:
 1-7                 (2)  "Strategic investment area" means an area that is
 1-8     determined by the comptroller under Section 171.726 that is:
 1-9                       (A)  a county within this state  with above state
1-10     average unemployment and below state average per capita income;
1-11     [or]
1-12                       (B)  an area within this state that is a
1-13     federally designated urban enterprise community or an urban
1-14     enhanced enterprise community; or
1-15                       (C)  a defense economic readjustment zone
1-16     designated under Chapter 2310, Government Code.
1-17           SECTION 2. (a)  This Act takes effect January 1, 2002, and a
1-18     corporation may claim a credit under Subchapters O, P, and Q,
1-19     Chapter 171, Tax Code, in a defense economic readjustment zone
1-20     designated as a strategic investment area as a result of the change
1-21     in law made by this Act only:
1-22                 (1)  on a report originally due on or after that date;
1-23     and
1-24                 (2)  for expenses and payments incurred, qualified
 2-1     investments or expenditures made, and new jobs created in that area
 2-2     on or after that date.
 2-3           (b)  The change in law made by this Act does not affect taxes
 2-4     imposed before the effective date of this Act, and the law in
 2-5     effect before the effective date of this Act is continued in effect
 2-6     for purposes of the liability for and collection of those taxes.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 1447 was passed by the House on May
         8, 2001, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 1447 was passed by the Senate on May
         22, 2001, by the following vote:  Yeas 30, Nays 0, 1 present, not
         voting.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor