HBA-KDB H.B. 3140 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 3140
By: Swinford
Ways & Means
7/18/2001
Enrolled



BACKGROUND AND PURPOSE 

The 76th Legislature passed legislation that provided for certain franchise
tax credits for business activity in counties deemed strategic investment
areas with the goal of stimulating economic development.  The investment
tax credit, which authorized a corporation to establish credit equal to 7.5
percent of qualified capital investment, and the job creation credit, which
authorized a corporation to establish credit equal to 25 percent of the
total wages and salaries paid by the corporation for qualifying jobs, were
made available to agricultural processing corporations located in counties
having a population of less than 50,000. Agricultural processing is defined
by activities described by certain codes from the Standard Industrial
Classification Manual (manual) published by the federal Office of
Management and Budget.  However, there is concern that the listing of these
codes is not exhaustive and some additional codes may be needed to allow
more innovations and flexibility.  The added codes would include processing
activities such as producing organic fibers, medicinals, soap, gum and wood
chemicals, industrial organic chemicals, adhesives, sealants, gelatin, and
art goods.  House Bill 3140 adds codes from the manual to the current
definition of "agricultural processing." 

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 3140 amends the Tax Code to add to the definition of
"agricultural processing" the following categories: 2824, 2833, 2834, 2835,
2836, 2841, 3262, or  3952, in product classes 28692 or 28698 of category
2869, or in product classes 28992 or 28994 of category 2899 of the 1987
Standard Industrial Classification Manual published by the federal Office
of Management and Budget. 

EFFECTIVE DATE

January 1, 2002.