HBA-JRA H.B. 219 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 219
By: Hilderbran
Ways & Means
3/3/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the Tax Code exempts a Texas business from paying the franchise
tax if the business owes less than $100 in tax.  This exemption benefits a
small business which operates on small profit margins.  An exemption
threshold based on  a net taxable earned surplus of $100,000 would relieve
more companies of their current franchise tax liability.  H.B. 219
establishes a new threshold for an exemption to the franchise tax based on
a net taxable earned surplus of $100,000 or less. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 171.002(d), Tax Code, to exempt from the
franchise tax, a corporation with a net taxable earned surplus of $100,000
or less, rather than a computed franchise tax of less than $100, regardless
of the amount of the corporation's net taxable capital. 

SECTION 2.  Effective date:  January 1, 2000.
            Makes application of this Act prospective.

SECTION 3.  Emergency clause.