Texas House Bill HJR49

Texas 2011 - 82nd Regular

• Filed: 12/22/10
• Introduced: 12/22/10
• Refer: 2/21/11

Caption

Proposing a constitutional amendment requiring any increase in a rate of the franchise tax be approved by two-thirds of all the members elected to each house of the legislature.

Impact

The amendment, if passed, is anticipated to create a robust check on the legislative authority to raise franchise tax rates, potentially leading to a more stable tax environment for businesses operating in Texas. This move could afford better predictability in tax obligations and may influence businesses’ investment decisions. Additionally, the measure reflects a shift toward greater scrutiny over tax policy adjustments, which some may argue is essential for fostering economic growth while preventing sudden fiscal burdens on taxable entities. By establishing a higher threshold for tax increases, HJR49 emphasizes the need for broader legislative agreement before such financial moves are made.

Summary

HJR49 is a joint resolution proposing a constitutional amendment to require that any increase in the rate of the franchise tax in Texas must be approved by a two-thirds majority of all members elected to each house of the legislature. This change aims to enhance the legislative oversight on tax increases, ensuring that such decisions are made with significant consensus among elected representatives. The measure targets the rates that apply to all taxable entities, including those primarily engaged in retail and wholesale trade. Notably, this resolution excludes any proposed reduction in franchise tax rates from the stringent voting requirement, which may encourage adjustments to taxation without the burden of supermajority approval.

Sentiment

The sentiment surrounding HJR49 seems generally supportive among proponents, who argue that implementing a supermajority requirement will protect taxpayers from sudden and potentially harmful tax hikes. Supporters view this bill as a necessary step towards more responsible fiscal governance. Conversely, opponents might raise concerns that this higher standard could lead to legislative gridlock, hindering necessary adjustments to the tax system that could respond to economic changes. This division creates a platform for significant debate about the balance of power within state taxation policy and the role of government oversight in economic regulation.

Contention

Main points of contention include concerns that the new amendment may overly restrict the legislature's ability to adapt taxation to shifting economic needs. Critics may express that while the proposed measure aims to safeguard against undue tax burdens, it could also impede the government’s capacity to respond effectively to revenue needs during economic downturns. Furthermore, there could be discussions regarding the implications for state programs that rely on franchise tax revenue, raising questions about future financial security for various public services and infrastructure.