HBA-JRA H.J.R. 11 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.J.R. 11
By: Corte
Ways & Means
3/2/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, businesses in Texas pay a franchise tax based on either capital
assets or income, whichever is greater.  The rate of this tax can be
changed by the legislature.  As proposed, H.J.R. 11 requires the submission
to the voters of a constitutional amendment limiting the tax rate on the
income component of the franchise tax to 4.5 percent. 

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 Article VIII of the Texas Constitution, by adding
Section 25, as follows: 

Sec. 25.  Prohibits the legislature from imposing a tax exceeding 4.5
percent on the component of a corporation's or other legal entity's tax
that is based on the entity's income, if the legislature imposes a tax on
the privilege to operate as a corporation or other legal entity in this
state and a component of the tax is determined by the corporation's or
other entity's gross, net, or other adjusted income. 

SECTION 2.  Requires this proposed constitutional amendment to be submitted
to the voters at an election to be held November 2, 1999.  Sets forth the
required language for the ballot.