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


Office of House Bill AnalysisH.B. 3140
By: Swinford
Ways & Means
3/30/2001
Introduced



BACKGROUND AND PURPOSE 

The 76th Legislature passed legislation which 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 that have 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"  categories: 2824, 2833-2836, 2841, 2861, 2865,
2869, 2891, 2899, 3262, or 3952 of the 1987 Standard Industrial
Classification Manual published by the federal Office of Management and
Budget. 

EFFECTIVE DATE

January 1, 2002.