Floor Packet Page No. 18                                                    



	

Amend CSHB 3 as follows:                                                     

	(1)  On page 12, line 12, strike "Except" and substitute 

"Subject to the election to pay the franchise tax rates as they 

existed on January 1, 2006, as provided by Section 171.0021, and 

except".

	(2)  On page 14, between lines 12 and 13, insert:                              

	Sec. 171.0021.  ELECTION TO PAY FRANCHISE TAX RATES AS THEY 

EXISTED ON JANUARY 1, 2006.  (a)  Notwithstanding any other 

provision of this chapter, a taxable entity may elect to pay the 

franchise tax at the rates and in the manner provided by this 

chapter as it existed on January 1, 2006, except as changed for 

purposes of this section.

	(b)  An election under this section shall be made by the 

taxable entity on its annual report and is effective only for that 

annual report.  The election may be changed by filing an amended 

report.

	(c)  A reference under this section to this chapter or a part 

of this chapter is a reference to this chapter or part of this 

chapter as it existed on January 1, 2006, only if it is followed by 

the language, "as it existed on January 1, 2006."  A reference under 

this section to this chapter or a part of this chapter that is not 

followed by that language means this chapter or a part of this 

chapter as it exists for the tax year for which the taxable entity 

files the annual report.

	(d)  For purposes of this section, this chapter as it existed 

on January 1, 2006, applies to any taxable entity as defined under 

Section 171.0002.

	(e)  For purposes of this section, this chapter as it existed 

on January 1, 2006, allows combined reporting by an affiliated 

group engaged in unitary business as provided under Section 

171.104.

	(f)  For purposes of this section, in computing net taxable 

earned surplus under Section 171.110, as it existed on January 1, 

2006, a taxable entity shall add to its reportable federal taxable 

income any wages and cash compensation that the taxable entity 

would be precluded from including in a determination of wages and 

cash compensation under Section 171.101 as a result of the 

limitation of Section 171.1013(c).

	(g)  For purposes of this section, this chapter as it existed 

on January 1, 2006, includes Section 171.2515.