HBA-JLV H.B. 2489 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2489
By: Goolsby
Ways & Means
3/30/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, the state provides credits to the franchise tax for a number of
purposes, including employment created in an enterprise zone, and the
employment of certain children.  This tax credit provides businesses with
an incentive to help support their communities.  House Bill 2489 creates a
state tax incentive that encourages businesses to contribute to
organizations assisting educationally disadvantaged children.   

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. 

ANALYSIS

House Bill 2489 amends the Tax Code to authorize a corporation to claim a
franchise tax credit only for a contribution to an organization that is a
nonprofit corporation organized for educational purposes to aid community
colleges and other schools in meeting the needs of at-risk children,
exempt from the franchise tax imposed, and spends 80 percent or more of its
funds for direct assistance for at-risk children.  The bill prohibits a
total credit claimed for a period from exceeding 25 percent of the amount
of franchise tax due for the report after any other applicable tax credits.
A corporation is authorized to claim a tax credit for contributions made
during an accounting period only against the tax owed for the corresponding
reporting period.  A corporation must apply for a credit on or with the tax
report for the period for which the credit is claimed.  The bill prohibits
a corporation from conveying, assigning, or transferring an allowed credit
to another entity unless all of the assets of the corporation are conveyed,
assigned, or transferred in the same transaction.    

EFFECTIVE DATE

January 1, 2002.