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.