Texas 2009 - 81st Regular

Texas House Bill HB1036 Compare Versions

Only one version of the bill is available at this time.

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1	1	81R1240 CBH-D
2	2	By: Paxton H.B. No. 1036
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the method of computing the franchise tax and the rates
8	8	of the tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. The heading of Subchapter A, Chapter 171, Tax
11	11	Code, is amended to read as follows:
12	12	SUBCHAPTER A. [DEFINITIONS;] TAX IMPOSED
13	13	SECTION 2. Sections 171.001, 171.0011, and 171.002, Tax
14	14	Code, are amended to read as follows:
15	15	Sec. 171.001. TAX IMPOSED. (a) A franchise tax is imposed
16	16	on:
17	17	(1) each corporation [taxable entity] that does
18	18	business in this state or that is chartered [or organized] in this
19	19	state; and
20	20	(2) each limited liability company that does business
21	21	in this state or that is organized under the laws of this state.
22	22	(b) In this chapter:
23	23	(1) "Banking corporation" means each state, national,
24	24	domestic, or foreign bank, whether organized under the laws of this
25	25	state, another state, or another country, or under federal law,
26	26	including a limited banking association organized under Subtitle A,
27	27	Title 3, Finance Code, and each bank organized under Section 25(a),
28	28	Federal Reserve Act (12 U.S.C. Sections 611-631) (edge
29	29	corporations), but does not include a bank holding company as that
30	30	term is defined by Section 2, Bank Holding Company Act of 1956 (12
31	31	U.S.C. Section 1841).
32	32	(2) "Beginning date" means:
33	33	(A) for a corporation chartered in this state,
34	34	the date on which the corporation's charter takes effect; and
35	35	(B) for a foreign corporation, the date on which
36	36	the corporation begins doing business in this state.
37	37	(3) "Corporation" includes:
38	38	(A) a limited liability company, as defined under
39	39	the Texas Limited Liability Company Act;
40	40	(B) a savings and loan association; and
41	41	(C) a banking corporation.
42	42	(4) "Charter" includes a limited liability company's
43	43	certificate of organization.
44	44	(5) "Internal Revenue Code" means the Internal Revenue
45	45	Code of 1986 in effect for the federal tax year beginning on or
46	46	after January 1, 1996, and before January 1, 1997, and any
47	47	regulations adopted under that code applicable to that period.
48	48	(6) "Officer" and "director" include a limited
49	49	liability company's directors and managers and a limited banking
50	50	association's directors and managers and participants if there are
51	51	no directors or managers.
52	52	(7) "Savings and loan association" means a savings and
53	53	loan association or savings bank, whether organized under the laws
54	54	of this state, another state, or another country, or under federal
55	55	law.
56	56	(8) "Shareholder" includes a limited liability
57	57	company's member and a limited banking association's participant.
58	58	(c) The tax imposed under this chapter extends to the limits
59	59	of the United States Constitution and the federal law adopted under
60	60	the United States Constitution.
61	61	[(c) The tax imposed under this section or Section 171.0011
62	62	is not imposed on an entity if, during the period on which the
63	63	report is based, the entity qualifies as a passive entity as defined
64	64	by Section 171.0003.]
65	65	Sec. 171.0011. ADDITIONAL TAX. (a) An [Except as provided
66	66	by Section 171.001(c), an] additional tax is imposed on a
67	67	corporation [taxable entity] that for any reason becomes no longer
68	68	subject to the earned surplus component of the tax, without regard
69	69	to whether the corporation remains subject to the taxable capital
70	70	component of the tax [imposed under this chapter].
71	71	(b) The additional tax is equal to 2.25 percent of the
72	72	corporation's net taxable earned surplus [the appropriate rate
73	73	under Section 171.002 of the taxable entity's taxable margin]
74	74	computed on the period beginning on the day after the last day for
75	75	which the tax imposed on [taxable margin or] net taxable earned
76	76	surplus was computed under Section 171.1532 and ending on the date
77	77	the corporation [taxable entity] is no longer subject to the earned
78	78	surplus component of the tax [imposed under this chapter].
79	79	(c) The additional tax imposed and any report required by
80	80	the comptroller are due on the 60th day after the date the
81	81	corporation [taxable entity] becomes no longer subject to the
82	82	earned surplus component of the tax [imposed under this chapter].
83	83	(d) Except as otherwise provided by this section, the
84	84	provisions of this chapter apply to the tax imposed under this
85	85	section.
86	86	Sec. 171.002. RATES; COMPUTATION OF TAX. (a) The rates
87	87	[Subject to Sections 171.003 and 171.1016 and except as provided by
88	88	Subsection (b), the rate] of the franchise tax are:
89	89	(1) 0.125 [is one] percent per year of privilege
90	90	period of net taxable capital; and
91	91	(2) 2.25 percent of net taxable earned surplus
92	92	[margin].
93	93	(b) The amount of franchise tax on each corporation is
94	94	computed by adding the following:
95	95	(1) the amount calculated by applying the tax rate
96	96	prescribed by Subsection (a)(1) to the corporation's net taxable
97	97	capital; and
98	98	(2) the difference between:
99	99	(A) the amount calculated by applying the tax
100	100	rate prescribed by Subsection (a)(2) to the corporation's net
101	101	taxable earned surplus; and
102	102	(B) the amount determined under Subdivision (1)
103	103	[Subject to Sections 171.003 and 171.1016, the rate of the
104	104	franchise tax is 0.5 percent of taxable margin for those taxable
105	105	entities primarily engaged in retail or wholesale trade].
106	106	(c) In making a computation under Subsection (b), an amount
107	107	computed under Subsection (b)(1) or (b)(2) that is zero or less is
108	108	computed as a zero [A taxable entity is primarily engaged in retail
109	109	or wholesale trade only if:
110	110	[(1) the total revenue from its activities in retail
111	111	or wholesale trade is greater than the total revenue from its
112	112	activities in trades other than the retail and wholesale trades;
113	113	[(2) except as provided by Subsection (c-1), less than
114	114	50 percent of the total revenue from activities in retail or
115	115	wholesale trade comes from the sale of products it produces or
116	116	products produced by an entity that is part of an affiliated group
117	117	to which the taxable entity also belongs; and
118	118	[(3) the taxable entity does not provide retail or
119	119	wholesale utilities, including telecommunications services,
120	120	electricity, or gas].
121	121	[(c-1) Subsection (c)(2) does not apply to total revenue
122	122	from activities in a retail trade described by Major Group 58 of the
123	123	Standard Industrial Classification Manual published by the federal
124	124	Office of Management and Budget.]
125	125	(d) A corporation [taxable entity] is not required to pay
126	126	any tax and is not considered to owe any tax for a period if:
127	127	(1) the amount of tax computed for the corporation
128	128	[taxable entity] is less than $100 [$1,000]; or
129	129	(2) the amount of the corporation's gross receipts:
130	130	(A) [taxable entity's total revenue] from its
131	131	entire business under Section 171.105 is less than $150,000; and
132	132	(B) from its entire business under Section
133	133	171.1051, including the amount excepted under Section 171.1051(a),
134	134	is less than $150,000 [or equal to $300,000 or the amount determined
135	135	under Section 171.006 per 12-month period on which margin is
136	136	based].
137	137	SECTION 3. Subchapter A, Chapter 171, Tax Code, is amended
138	138	by adding Section 171.005 to read as follows:
139	139	Sec. 171.005. RATE OF TAX FOR CORPORATION IN PROCESS OF
140	140	LIQUIDATION. The franchise tax rate on a corporation in the process
141	141	of liquidation, as defined by Section 171.102, is the rate
142	142	established by Section 171.002.
143	143	SECTION 4. Section 171.052, Tax Code, is amended to read as
144	144	follows:
145	145	Sec. 171.052. CERTAIN CORPORATIONS. (a) An [Except as
146	146	provided by Subsection (c), an] insurance organization, title
147	147	insurance company, or title insurance agent authorized to engage in
148	148	insurance business in this state now required to pay an annual tax
149	149	under Chapter 4 or 9, Insurance Code, measured by its gross premium
150	150	receipts is exempted from the franchise tax. A nonadmitted
151	151	insurance organization that is required to pay a gross premium
152	152	receipts tax during a tax year is exempted from the franchise tax
153	153	for that same tax year.
154	154	(b) Farm mutuals, local mutual aid associations, and burial
155	155	associations are not subject to the franchise tax.
156	156	[(c) An entity is subject to the franchise tax for a tax year
157	157	in any portion of which the entity is in violation of an order
158	158	issued by the Texas Department of Insurance under Section
159	159	2254.003(b), Insurance Code, that is final after appeal or that is
160	160	no longer subject to appeal.]
161	161	SECTION 5. The heading of Subchapter C, Chapter 171, Tax
162	162	Code, is amended to read as follows:
163	163	SUBCHAPTER C. DETERMINATION OF TAXABLE CAPITAL AND TAXABLE EARNED
164	164	SURPLUS [MARGIN]; ALLOCATION AND APPORTIONMENT
165	165	SECTION 6. Section 171.101, Tax Code, is amended to read as
166	166	follows:
167	167	Sec. 171.101. DETERMINATION OF NET TAXABLE CAPITAL
168	168	[MARGIN]. (a) Except as provided by Subsections (b) and (c), the
169	169	net [The] taxable capital [margin] of a corporation [taxable
170	170	entity] is computed by:
171	171	(1) adding the corporation's stated capital, as
172	172	defined by Section 21.002, Business Organizations Code, and the
173	173	corporation's surplus, to determine the corporation's taxable
174	174	capital [determining the taxable entity's margin, which is the
175	175	lesser of:
176	176	[(A) 70 percent of the taxable entity's total
177	177	revenue from its entire business, as determined under Section
178	178	171.1011; or
179	179	[(B) an amount computed by:
180	180	[(i) determining the taxable entity's total
181	181	revenue from its entire business, under Section 171.1011; and
182	182	[(ii) subtracting, at the election of the
183	183	taxable entity, either:
184	184	[(a) cost of goods sold, as determined
185	185	under Section 171.1012; or
186	186	[(b) compensation, as determined
187	187	under Section 171.1013; and
188	188	[(iii) subtracting, in addition to any
189	189	subtractions made under Subparagraph (ii)(a) or (b), compensation,
190	190	as determined under Section 171.1013, paid to an individual during
191	191	the period the individual is serving on active duty as a member of
192	192	the armed forces of the United States if the individual is a
193	193	resident of this state at the time the individual is ordered to
194	194	active duty and the cost of training a replacement for the
195	195	individual];
196	196	(2) apportioning the corporation's taxable capital
197	197	[taxable entity's margin] to this state as provided by Section
198	198	171.106(a), (c), or (d), as applicable, [171.106] to determine the
199	199	corporation's [taxable entity's] apportioned taxable capital
200	200	[margin]; and
201	201	(3) subtracting from the amount computed under
202	202	Subdivision (2) any other allowable deductions to determine the
203	203	corporation's net [taxable entity's] taxable capital [margin].
204	204	(b) The net taxable capital of a limited liability company
205	205	is computed by:
206	206	(1) adding the company's members' contributions, as
207	207	provided for under the Texas Limited Liability Company Act, and
208	208	surplus to determine the company's taxable capital;
209	209	(2) apportioning the amount determined under
210	210	Subdivision (1) to this state in the same manner that the taxable
211	211	capital of a corporation is apportioned to this state under Section
212	212	171.106(a), (c), or (d), as applicable, to determine the company's
213	213	apportioned taxable capital; and
214	214	(3) subtracting from the amount computed under
215	215	Subdivision (2) any other allowable deductions, to determine the
216	216	company's net taxable capital [Notwithstanding Subsection
217	217	(a)(1)(B)(ii), a staff leasing services company may subtract only
218	218	compensation as determined under Section 171.1013].
219	219	(c) The net taxable capital of a savings and loan
220	220	association is computed by:
221	221	(1) determining the association's net worth; and
222	222	(2) apportioning the amount determined under
223	223	Subdivision (1) to this state in the same manner that the taxable
224	224	capital of a corporation is apportioned to this state under Section
225	225	171.106(a) to determine the association's net taxable capital [In
226	226	making a computation under this section, an amount that is zero or
227	227	less is computed as a zero].
228	228	[(d) An election under Subsection (a)(1)(B)(ii) shall be
229	229	made by the taxable entity on its annual report and is effective
230	230	only for that annual report. A taxable entity shall notify the
231	231	comptroller of its election not later than the due date of the
232	232	annual report.]
233	233	SECTION 7. Subchapter C, Chapter 171, Tax Code, is amended
234	234	by adding Section 171.102 to read as follows:
235	235	Sec. 171.102. DETERMINATION OF TAXABLE CAPITAL OF
236	236	CORPORATION IN PROCESS OF LIQUIDATION. (a) "Corporation in the
237	237	process of liquidation" means a corporation that:
238	238	(1) adopts and pursues in good faith a plan to marshal
239	239	the assets of the corporation, to pay or settle with the
240	240	corporation's creditors and debtors, and to apportion the remaining
241	241	assets of the corporation among the corporation's stockholders;
242	242	(2) adopts the plan by a resolution approved by the
243	243	corporation's board of directors and ratified by a majority of the
244	244	stockholders of record; and
245	245	(3) conducts the liquidation in the manner provided by
246	246	the law of this state to dissolve a corporation.
247	247	(b) The taxable capital of a corporation in the process of
248	248	liquidation is the difference between the amount of the
249	249	corporation's stock issued and the amount of the liquidating
250	250	dividends paid on the stock.
251	251	(c) The president and the secretary of the corporation shall
252	252	file an affidavit with the comptroller containing information about
253	253	the amount of liquidating dividends paid and a statement that the
254	254	corporation is in the process of liquidation. The plan described by
255	255	Subsection (a) for the corporation's liquidation must be attached
256	256	to and be a part of the affidavit.
257	257	(d) This section applies only to the computation of a
258	258	corporation's taxable capital under Section 171.101.
259	259	SECTION 8. Subchapter C, Chapter 171, Tax Code, is amended
260	260	by amending Section 171.103 and adding Sections 171.1032 and
261	261	171.104 to read as follows:
262	262	Sec. 171.103. DETERMINATION OF GROSS RECEIPTS FROM BUSINESS
263	263	DONE IN THIS STATE FOR TAXABLE CAPITAL [MARGIN]. In [(a) Subject
264	264	to Section 171.1055, in] apportioning taxable capital [margin], the
265	265	gross receipts of a corporation [taxable entity] from its business
266	266	done in this state is the sum of the corporation's [taxable
267	267	entity's] receipts from:
268	268	(1) each sale of tangible personal property if the
269	269	property is delivered or shipped to a buyer in this state regardless
270	270	of the FOB point or another condition of the sale, and each sale of
271	271	tangible personal property shipped from this state to a purchaser
272	272	in another state in which the seller is not subject to taxation;
273	273	(2) each service performed in this state[, except that
274	274	receipts derived from servicing loans secured by real property are
275	275	in this state if the real property is located in this state];
276	276	(3) each rental of property situated in this state;
277	277	(4) the use of a patent, copyright, trademark,
278	278	franchise, or license in this state;
279	279	(5) each sale of real property located in this state,
280	280	including royalties from oil, gas, or other mineral interests; and
281	281	(6) other business done in this state.
282	282	[(b) A combined group shall include in its gross receipts
283	283	computed under Subsection (a) the gross receipts of each taxable
284	284	entity that is a member of the combined group and that has a nexus
285	285	with this state for the purpose of taxation.
286	286	[(c) A taxable entity that is a combined group shall include
287	287	in a report filed under Section 171.201 or 171.202, for each member
288	288	of the combined group that does not have nexus with this state for
289	289	the purpose of taxation:
290	290	[(1) the gross receipts computed under Subsection (a);
291	291	and
292	292	[(2) the gross receipts computed under Subsection (a)
293	293	that are subject to taxation in another state under a throwback law
294	294	or regulation.
295	295	[(d) The information required by Subsection (c) may be used
296	296	for informational purposes only. The comptroller shall adopt
297	297	rules as necessary to enforce the reporting requirement prescribed
298	298	by Subsection (c).]
299	299	Sec. 171.1032. DETERMINATION OF GROSS RECEIPTS FROM
300	300	BUSINESS DONE IN THIS STATE FOR TAXABLE EARNED SURPLUS. (a) Except
301	301	for the gross receipts of a corporation that are subject to Section
302	302	171.1061, in apportioning taxable earned surplus, the gross
303	303	receipts of a corporation from its business done in this state is
304	304	the sum of the corporation's receipts from:
305	305	(1) each sale of tangible personal property if the
306	306	property is delivered or shipped to a buyer in this state regardless
307	307	of the FOB point or another condition of the sale, and each sale of
308	308	tangible personal property shipped from this state to a purchaser
309	309	in another state in which the seller is not subject to any tax on, or
310	310	measured by, net income, without regard to whether the tax is
311	311	imposed;
312	312	(2) each service performed in this state;
313	313	(3) each rental of property situated in this state;
314	314	(4) the use of a patent, copyright, trademark,
315	315	franchise, or license in this state;
316	316	(5) each sale of real property located in this state,
317	317	including royalties from oil, gas, or other mineral interests;
318	318	(6) each partnership or joint venture to the extent
319	319	provided by Subsection (c); and
320	320	(7) other business done in this state.
321	321	(b) A corporation shall deduct from its gross receipts
322	322	computed under Subsection (a) any amount to the extent included
323	323	under Subsection (a) because of the application of Section 78 or
324	324	Sections 951-964, Internal Revenue Code, any amount excludable
325	325	under Section 171.110(k), and dividends received from a subsidiary,
326	326	associate, or affiliated corporation that does not transact a
327	327	substantial portion of its business or regularly maintain a
328	328	substantial portion of its assets in the United States.
329	329	(c) A corporation shall include in its gross receipts
330	330	computed under Subsection (a) the corporation's share of the gross
331	331	receipts of each partnership and joint venture of which the
332	332	corporation is a part apportioned to this state as though the
333	333	corporation directly earned the receipts, including receipts from
334	334	business done with the corporation.
335	335	Sec. 171.104. GROSS RECEIPTS FROM BUSINESS DONE IN TEXAS:
336	336	DEDUCTION FOR FOOD AND MEDICINE RECEIPTS. A corporation may deduct
337	337	from its receipts includable under Section 171.103(1) the amount of
338	338	the corporation's receipts from sales of the following items, if
339	339	the items are shipped from outside this state and the receipts would
340	340	be includable under Section 171.103(1) in the absence of this
341	341	section:
342	342	(1) food that is exempted from the state sales and use
343	343	tax under Section 151.314; and
344	344	(2) health care supplies that are exempted from the
345	345	state sales and use tax under Section 151.313.
346	346	SECTION 9. Subchapter C, Chapter 171, Tax Code, is amended
347	347	by amending Section 171.105 and adding Section 171.1051 to read as
348	348	follows:
349	349	Sec. 171.105. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
350	350	BUSINESS FOR TAXABLE CAPITAL. (a) In apportioning taxable
351	351	capital, the gross receipts of a corporation from its entire
352	352	business is the sum of the corporation's receipts from:
353	353	(1) each sale of the corporation's tangible personal
354	354	property;
355	355	(2) each service, rental, or royalty; and
356	356	(3) other business.
357	357	(b) If a corporation sells an investment or capital asset,
358	358	the corporation's gross receipts from its entire business for
359	359	taxable capital include only the net gain from the sale.
360	360	Sec. 171.1051. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
361	361	BUSINESS FOR TAXABLE EARNED SURPLUS [MARGIN]. (a) Except for the
362	362	gross receipts of a corporation that are subject to Section
363	363	171.1061 [Subject to Section 171.1055], in apportioning taxable
364	364	earned surplus [margin], the gross receipts of a corporation
365	365	[taxable entity] from its entire business is the sum of the
366	366	corporation's [taxable entity's] receipts from:
367	367	(1) each sale of the corporation's [taxable entity's]
368	368	tangible personal property;
369	369	(2) each service, rental, or royalty; [and]
370	370	(3) each partnership and joint venture as provided by
371	371	Subsection (d); and
372	372	(4) other business.
373	373	(b) If a corporation [taxable entity] sells an investment or
374	374	capital asset, the corporation's [taxable entity's] gross receipts
375	375	from its entire business for taxable earned surplus [margin]
376	376	includes only the net gain from the sale.
377	377	(c) A corporation shall deduct from its gross receipts
378	378	computed under Subsection (a) any amount to the extent included in
379	379	Subsection (a) because of the application of Section 78 or Sections
380	380	951-964, Internal Revenue Code, any amount excludable under Section
381	381	171.110(k), and dividends received from a subsidiary, associate, or
382	382	affiliated corporation that does not transact a substantial portion
383	383	of its business or regularly maintain a substantial portion of its
384	384	assets in the United States.
385	385	(d) A corporation shall include in its gross receipts
386	386	computed under Subsection (a) the corporation's share of the gross
387	387	receipts of each partnership and joint venture of which the
388	388	corporation is a part [A combined group shall include in its gross
389	389	receipts computed under Subsection (a) the gross receipts of each
390	390	taxable entity that is a member of the combined group, without
391	391	regard to whether that entity has a nexus with this state for the
392	392	purpose of taxation].
393	393	SECTION 10. Subchapter C, Chapter 171, Tax Code, is amended
394	394	by amending Sections 171.106, 171.107, 171.108, and 171.1121, and
395	395	by adding Sections 171.1061, 171.109, 171.110, 171.112, and 171.113
396	396	to read as follows:
397	397	Sec. 171.106. APPORTIONMENT OF TAXABLE CAPITAL AND TAXABLE
398	398	EARNED SURPLUS [MARGIN] TO THIS STATE. (a) Except as provided by
399	399	Subsections (c) and (d), a corporation's taxable capital is
400	400	apportioned to this state to determine the amount of the tax imposed
401	401	under Section 171.002(b)(1) by multiplying the corporation's
402	402	taxable capital by a fraction, the numerator of which is the
403	403	corporation's gross receipts from business done in this state, as
404	404	determined under Section 171.103, and the denominator of which is
405	405	the corporation's gross receipts from its entire business, as
406	406	determined under Section 171.105.
407	407	(b) Except as provided by Subsections (c) and (d) [this
408	408	section], a corporation's taxable earned surplus [taxable entity's
409	409	margin] is apportioned to this state to determine the amount of tax
410	410	imposed under Section 171.002(b)(2) [171.002] by multiplying the
411	411	taxable earned surplus [margin] by a fraction, the numerator of
412	412	which is the corporation's [taxable entity's] gross receipts from
413	413	business done in this state, as determined under Section 171.1032
414	414	[171.103], and the denominator of which is the corporation's
415	415	[taxable entity's] gross receipts from its entire business, as
416	416	determined under Section 171.1051 [171.105].
417	417	(c) [(b)] A corporation's taxable capital or earned surplus
418	418	[taxable entity's margin] that is derived, directly or indirectly,
419	419	from the sale of management, distribution, or administration
420	420	services to or on behalf of a regulated investment company,
421	421	including a corporation [taxable entity] that includes trustees or
422	422	sponsors of employee benefit plans that have accounts in a
423	423	regulated investment company, is apportioned to this state to
424	424	determine the amount of the tax imposed under Section 171.002 by
425	425	multiplying the corporation's [taxable entity's] total taxable
426	426	capital or earned surplus [margin] from the sale of services to or
427	427	on behalf of a regulated investment company by a fraction, the
428	428	numerator of which is the average of the sum of shares owned at the
429	429	beginning of the year and the sum of shares owned at the end of the
430	430	year by the investment company shareholders who are commercially
431	431	domiciled in this state or, if the shareholders are individuals,
432	432	are residents of this state, and the denominator of which is the
433	433	average of the sum of shares owned at the beginning of the year and
434	434	the sum of shares owned at the end of the year by all investment
435	435	company shareholders. The corporation shall make a separate
436	436	computation to allocate taxable capital and earned surplus. In
437	437	this subsection, "regulated investment company" has the meaning
438	438	assigned by Section 851(a), Internal Revenue Code.
439	439	(d) [(c)] A corporation's taxable capital or taxable earned
440	440	surplus [taxable entity's margin] that is derived, directly or
441	441	indirectly, from the sale of management, administration, or
442	442	investment services to an employee retirement plan is apportioned
443	443	to this state to determine the amount of the tax imposed under
444	444	Section 171.002 by multiplying the corporation's [taxable entity's]
445	445	total taxable capital or earned surplus [margin] from the sale of
446	446	services to an employee retirement plan company by a fraction, the
447	447	numerator of which is the average of the sum of beneficiaries
448	448	domiciled in Texas at the beginning of the year and the sum of
449	449	beneficiaries domiciled in Texas at the end of the year, and the
450	450	denominator of which is the average of the sum of all beneficiaries
451	451	at the beginning of the year and the sum of all beneficiaries at the
452	452	end of the year. The corporation shall make a separate computation
453	453	to apportion taxable capital and earned surplus. In this section,
454	454	"employee retirement plan" means a plan or other arrangement that
455	455	is qualified under Section 401(a), Internal Revenue Code, or
456	456	satisfies the requirements of Section 403, Internal Revenue Code,
457	457	or a government plan described in Section 414(d), Internal Revenue
458	458	Code. The term does not include an individual retirement account or
459	459	individual retirement annuity within the meaning of Section 408,
460	460	Internal Revenue Code.
461	461	(e) [(d)] A banking corporation shall exclude from the
462	462	numerator of the bank's apportionment factor interest earned on
463	463	federal funds and interest earned on securities sold under an
464	464	agreement to repurchase that are held in this state in a
465	465	correspondent bank that is domiciled in this state. In this
466	466	subsection, "correspondent" has the meaning assigned by 12 C.F.R.
467	467	Section 206.2(c).
468	468	(f) [(e)] Receipts from services that a defense
469	469	readjustment project performs in a defense economic readjustment
470	470	zone are not receipts from business done in this state.
471	471	[(f) Notwithstanding Section 171.1055, if a loan or
472	472	security is treated as inventory of the seller for federal income
473	473	tax purposes, the gross proceeds of the sale of that loan or
474	474	security are considered gross receipts.]
475	475	Sec. 171.1061. ALLOCATION OF CERTAIN TAXABLE EARNED SURPLUS
476	476	TO THIS STATE. An item of income included in a corporation's
477	477	taxable earned surplus, except that portion derived from dividends
478	478	and interest, that a state, other than this state, or a country,
479	479	other than the United States, cannot tax because the activities
480	480	generating that item of income do not have sufficient unitary
481	481	connection with the corporation's other activities conducted
482	482	within that state or country under the United States Constitution,
483	483	is allocated to this state if the corporation's commercial domicile
484	484	is in this state. Income that can only be allocated to the state of
485	485	commercial domicile because the income has insufficient unitary
486	486	connection with any other state or country shall be allocated to
487	487	this state or another state or country net of expenses related to
488	488	that income. A portion of a corporation's taxable earned surplus
489	489	allocated to this state under this section may not be apportioned
490	490	under Section 171.110(a)(2).
491	491	Sec. 171.107. DEDUCTION OF COST OF SOLAR ENERGY DEVICE FROM
492	492	TAXABLE CAPITAL OR TAXABLE EARNED SURPLUS [MARGIN] APPORTIONED TO
493	493	THIS STATE. (a) In this section, "solar energy device" means a
494	494	system or series of mechanisms designed primarily to provide
495	495	heating or cooling or to produce electrical or mechanical power by
496	496	collecting and transferring solar-generated energy. The term
497	497	includes a mechanical or chemical device that has the ability to
498	498	store solar-generated energy for use in heating or cooling or in the
499	499	production of power.
500	500	(b) A corporation [taxable entity] may deduct from its
501	501	apportioned taxable capital the amortized cost of a solar energy
502	502	device or from its apportioned taxable earned surplus [margin] 10
503	503	percent of the amortized cost of a solar energy device if:
504	504	(1) the device is acquired by the corporation [taxable
505	505	entity] for heating or cooling or for the production of power;
506	506	(2) the device is used in this state by the corporation
507	507	[taxable entity]; and
508	508	(3) the cost of the device is amortized in accordance
509	509	with Subsection (c).
510	510	(c) The amortization of the cost of a solar energy device
511	511	must:
512	512	(1) be for a period of at least 60 months;
513	513	(2) provide for equal monthly amounts [or conform to
514	514	federal depreciation schedules];
515	515	(3) begin on the month in which the device is placed in
516	516	service in this state; and
517	517	(4) cover only a period in which the device is in use
518	518	in this state.
519	519	(d) A corporation [taxable entity] that makes a deduction
520	520	under this section shall file with the comptroller an amortization
521	521	schedule showing the period in which a deduction is to be made. On
522	522	the request of the comptroller, the corporation [taxable entity]
523	523	shall file with the comptroller proof of the cost of the solar
524	524	energy device or proof of the device's operation in this state.
525	525	(e) A corporation may elect to make the deduction authorized
526	526	by this section either from apportioned taxable capital or
527	527	apportioned taxable earned surplus for each separate regular annual
528	528	period. An election for an initial period applies to the second tax
529	529	period and to the first regular annual period.
530	530	Sec. 171.108. DEDUCTION OF COST OF CLEAN COAL PROJECT FROM
531	531	TAXABLE CAPITAL OR TAXABLE EARNED SURPLUS [MARGIN] APPORTIONED TO
532	532	THIS STATE. (a) In this section, "clean coal project" has the
533	533	meaning assigned by Section 5.001, Water Code.
534	534	(b) A corporation [taxable entity] may deduct from its
535	535	apportioned taxable capital the amortized cost of equipment or from
536	536	its apportioned taxable earned surplus [margin] 10 percent of the
537	537	amortized cost of equipment:
538	538	(1) that is used in a clean coal project;
539	539	(2) that is acquired by the corporation [taxable
540	540	entity] for use in generation of electricity, production of process
541	541	steam, or industrial production;
542	542	(3) that the corporation [taxable entity] uses in this
543	543	state; and
544	544	(4) the cost of which is amortized in accordance with
545	545	Subsection (c).
546	546	(c) The amortization of the cost of capital used in a clean
547	547	coal project must:
548	548	(1) be for a period of at least 60 months;
549	549	(2) provide for equal monthly amounts;
550	550	(3) begin in the month during which the equipment is
551	551	placed in service in this state; and
552	552	(4) cover only a period during which the equipment is
553	553	used in this state.
554	554	(d) A corporation [taxable entity] that makes a deduction
555	555	under this section shall file with the comptroller an amortization
556	556	schedule showing the period for which the deduction is to be made.
557	557	On the request of the comptroller, the corporation [taxable entity]
558	558	shall file with the comptroller proof of the cost of the equipment
559	559	or proof of the equipment's operation in this state.
560	560	(e) A corporation may elect to make the deduction authorized
561	561	by this section from apportioned taxable capital or apportioned
562	562	taxable earned surplus, but not from both, for each separate
563	563	regular annual period. An election for an initial period applies to
564	564	the second tax period and to the first regular annual period.
565	565	Sec. 171.109. SURPLUS. (a) In this chapter:
566	566	(1) "Surplus" means the net assets of a corporation
567	567	minus its stated capital. For a limited liability company,
568	568	"surplus" means the net assets of the company minus its members'
569	569	contributions. Surplus includes unrealized, estimated, or
570	570	contingent losses or obligations or any writedown of assets other
571	571	than those listed in Subsection (i) net of appropriate income tax
572	572	provisions. The definition under this subdivision does not apply
573	573	to earned surplus.
574	574	(2) "Net assets" means the total assets of a
575	575	corporation minus its total debts.
576	576	(3) "Debt" means any legally enforceable obligation
577	577	measured in a certain amount of money that must be performed or paid
578	578	within an ascertainable period or on demand.
579	579	(a-1) A legally enforceable obligation that requires the
580	580	return of a like-kind property that was borrowed will be considered
581	581	debt if it is a liability according to generally accepted
582	582	accounting principles and if the return must be made within an
583	583	ascertainable period or on demand. The amount that will be
584	584	considered debt is the fair market value measured on the last day on
585	585	which the report is based as required by Section 171.153. For
586	586	purposes of this subsection, "like-kind property" means the same
587	587	quantity, quality, and nature or character as the property
588	588	borrowed.
589	589	(b) Except as otherwise provided by this section, a
590	590	corporation must compute its surplus, assets, and debts according
591	591	to generally accepted accounting principles. If generally accepted
592	592	accounting principles are unsettled or do not specify an accounting
593	593	practice for a particular purpose related to the computation of
594	594	surplus, assets, or debts, the comptroller by rule may establish
595	595	rules to specify the applicable accounting practice for that
596	596	purpose.
597	597	(c) A corporation whose taxable capital is less than $1
598	598	million may report its surplus according to the method used in the
599	599	corporation's most recent federal income tax return originally due
600	600	on or before the date on which the corporation's franchise tax
601	601	report is originally due. In determining if taxable capital is less
602	602	than $1 million, the corporation shall apply the methods the
603	603	corporation used in computing that federal income tax return unless
604	604	another method is required under this chapter.
605	605	(d) A corporation shall report its surplus based solely on
606	606	its own financial condition. Consolidated reporting of surplus is
607	607	prohibited.
608	608	(e) Unless Section 171.111 applies due to election under
609	609	that section before that section's repeal, a corporation may not
610	610	change the accounting methods used to compute its surplus more
611	611	often than once every four years without the written consent of the
612	612	comptroller. A change in accounting methods is not justified
613	613	solely because it results in a reduction of tax liability.
614	614	(f) A corporation declaring dividends shall exclude those
615	615	dividends from its taxable capital, and a corporation receiving
616	616	dividends shall include those dividends in its gross receipts and
617	617	taxable capital as of the earlier of:
618	618	(1) the date the dividends are declared, if the
619	619	dividends are actually paid within one year after the declaration
620	620	date; or
621	621	(2) the date the dividends are actually paid.
622	622	(g) All oil and gas exploration and production activities
623	623	conducted by a corporation that reports its surplus according to
624	624	generally accepted accounting principles as required or permitted
625	625	by this chapter must be reported according to the successful
626	626	efforts or the full cost method of accounting.
627	627	(h) A parent or investor corporation must use the cost
628	628	method of accounting in reporting and calculating the franchise tax
629	629	on its investments in subsidiary corporations or other investees.
630	630	The retained earnings of a subsidiary corporation or other investee
631	631	before acquisition by the parent or investor corporation may not be
632	632	excluded from the cost of the subsidiary corporation or investee to
633	633	the parent or investor corporation and must be included by the
634	634	parent or investor corporation in calculating its surplus.
635	635	(i) The following accounts may also be excluded from
636	636	surplus, to the extent they are in conformance with generally
637	637	accepted accounting principles or the appropriate federal income
638	638	tax method, whichever is applicable:
639	639	(1) a reserve or allowance for uncollectable accounts;
640	640	and
641	641	(2) a contra-asset account for depletion,
642	642	depreciation, or amortization.
643	643	(j) A corporation may not exclude from surplus:
644	644	(1) liabilities for compensation and other benefits
645	645	provided to employees, other than wages, that are not debt as of the
646	646	end of the accounting period on which the taxable capital component
647	647	is based, including retirement, medical, insurance,
648	648	postretirement, and other similar benefits; and
649	649	(2) deferred investment tax credits.
650	650	(k) Notwithstanding any other provision in this chapter, a
651	651	corporation subject to the tax imposed by this chapter shall use
652	652	double entry bookkeeping to account for all transactions that
653	653	affect the computation of that tax.
654	654	(l) The "first in-first out" and "last in-first out" methods
655	655	of accounting are acceptable methods for computing surplus.
656	656	(m) A corporation may not use the push-down method of
657	657	accounting in computing or reporting its surplus.
658	658	(n) A corporation must use the equity method of accounting
659	659	when reporting an investment in a partnership or joint venture.
660	660	Sec. 171.110. DETERMINATION OF NET TAXABLE EARNED SURPLUS.
661	661	(a) The net taxable earned surplus of a corporation is computed by:
662	662	(1) determining the corporation's reportable federal
663	663	taxable income, subtracting from that amount any amount excludable
664	664	under Subsection (k), any amount included in reportable federal
665	665	taxable income under Section 78 or Sections 951-964, Internal
666	666	Revenue Code, and dividends received from a subsidiary, associate,
667	667	or affiliated corporation that does not transact a substantial
668	668	portion of its business or regularly maintain a substantial portion
669	669	of its assets in the United States, and adding to that amount any
670	670	compensation of officers or directors, or if a bank, any
671	671	compensation of directors and executive officers, to the extent
672	672	excluded in determining federal taxable income to determine the
673	673	corporation's taxable earned surplus;
674	674	(2) apportioning the corporation's taxable earned
675	675	surplus to this state as provided by Section 171.106(b), (c), or
676	676	(d), as applicable, to determine the corporation's apportioned
677	677	taxable earned surplus;
678	678	(3) adding the corporation's taxable earned surplus
679	679	allocated to this state as provided by Section 171.1061; and
680	680	(4) subtracting from that amount any allowable
681	681	deductions and any business loss that is carried forward to the tax
682	682	reporting period and deductible under Subsection (e).
683	683	(b) Except as provided by Subsection (c), a corporation is
684	684	not required to add the compensation of officers or directors as
685	685	required by Subsection (a)(1) if the corporation is:
686	686	(1) a corporation that has not more than 35
687	687	shareholders; or
688	688	(2) an S corporation, as that term is defined by
689	689	Section 1361, Internal Revenue Code.
690	690	(c) A subsidiary corporation may not claim the exclusion
691	691	under Subsection (b) if it has a parent corporation that does not
692	692	qualify for the exclusion. For purposes of this subsection, a
693	693	corporation qualifies as a parent if it ultimately controls the
694	694	subsidiary, even if the control arises through a series or group of
695	695	other subsidiaries or entities. Control is presumed if a parent
696	696	corporation directly or indirectly owns, controls, or holds a
697	697	majority of the outstanding voting stock of a corporation or
698	698	ownership interests in another entity.
699	699	(d) A corporation's reportable federal taxable income is
700	700	the corporation's federal taxable income after Schedule C special
701	701	deductions and before net operating loss deductions as computed
702	702	under the Internal Revenue Code, except that an S corporation's
703	703	reportable federal taxable income is the amount of the income
704	704	reportable to the Internal Revenue Service as taxable to the
705	705	corporation's shareholders.
706	706	(e) For purposes of this section, a business loss is any
707	707	negative amount after apportionment and allocation. The business
708	708	loss shall be carried forward to the year succeeding the loss year
709	709	as a deduction to net taxable earned surplus, then successively to
710	710	the succeeding four taxable years after the loss year or until the
711	711	loss is exhausted, whichever occurs first, but for not more than
712	712	five taxable years after the loss year. A business loss can be
713	713	carried forward only by the corporation that incurred the loss and
714	714	cannot be transferred to or claimed by any other entity, including
715	715	the survivor of a merger if the loss was incurred by the corporation
716	716	that did not survive the merger.
717	717	(f) A corporation may use either the "first in-first out" or
718	718	"last in-first out" method of accounting to compute its net taxable
719	719	earned surplus, but only to the extent that the corporation used
720	720	that method on its most recent federal income tax report originally
721	721	due on or before the date on which the corporation's franchise tax
722	722	report is originally due.
723	723	(g) For purposes of this section, an approved employee stock
724	724	ownership plan controlling a minority interest and voted through a
725	725	single trustee shall be considered one shareholder.
726	726	(h) A corporation shall report its net taxable earned
727	727	surplus based solely on its own financial condition. Consolidated
728	728	reporting is prohibited.
729	729	(i) For purposes of this section, any person designated as
730	730	an officer is presumed to be an officer if that person:
731	731	(1) holds an office created by the board of directors
732	732	or under the corporate charter or bylaws; and
733	733	(2) has legal authority to bind the corporation with
734	734	third parties by executing contracts or other legal documents.
735	735	(j) A corporation may rebut the presumption described in
736	736	Subsection (i) that a person is an officer if it conclusively shows,
737	737	through the person's job description or other documentation, that
738	738	the person does not participate or have authority to participate in
739	739	significant policymaking aspects of the corporate operations.
740	740	(k) Dividends and interest received from federal
741	741	obligations are not included in earned surplus or gross receipts
742	742	for earned surplus purposes.
743	743	(l) In this section:
744	744	(1) "Federal obligations" means:
745	745	(A) stocks and other direct obligations of, and
746	746	obligations unconditionally guaranteed by, the United States
747	747	government and United States government agencies; and
748	748	(B) direct obligations of a United States
749	749	government-sponsored agency.
750	750	(2) "Obligation" means any bond, debenture, security,
751	751	mortgage-backed security, pass-through certificate, or other
752	752	evidence of indebtedness of the issuing entity. The term does not
753	753	include a deposit, a repurchase agreement, a loan, a lease, a
754	754	participation in a loan or pool of loans, a loan collateralized by
755	755	an obligation of a United States government agency, or a loan
756	756	guaranteed by a United States government agency.
757	757	(3) "United States government" means any department or
758	758	ministry of the federal government, including a federal reserve
759	759	bank. The term does not include a state or local government, a
760	760	commercial enterprise owned wholly or partly by the United States
761	761	government, or a local governmental entity or commercial enterprise
762	762	whose obligations are guaranteed by the United States government.
763	763	(4) "United States government agency" means an
764	764	instrumentality of the United States government whose obligations
765	765	are fully and explicitly guaranteed as to the timely payment of
766	766	principal and interest by the full faith and credit of the United
767	767	States government. The term includes the Government National
768	768	Mortgage Association, the Department of Veterans Affairs, the
769	769	Federal Housing Administration, the Farmers Home Administration,
770	770	the Export-Import Bank of the United States, the Overseas Private
771	771	Investment Corporation, the Commodity Credit Corporation, the
772	772	Small Business Administration, and any successor agency.
773	773	(5) "United States government-sponsored agency" means
774	774	an agency originally established or chartered by the United States
775	775	government to serve public purposes specified by the United States
776	776	Congress but whose obligations are not explicitly guaranteed by the
777	777	full faith and credit of the United States government. The term
778	778	includes the Federal Home Loan Mortgage Corporation, the Federal
779	779	National Mortgage Association, the Farm Credit System, the Federal
780	780	Home Loan Bank System, the Student Loan Marketing Association, and
781	781	any successor agency.
782	782	Sec. 171.112. GROSS RECEIPTS FOR TAXABLE CAPITAL. (a) For
783	783	purposes of this section, "gross receipts" means all revenues that
784	784	would be recognized annually under a generally accepted accounting
785	785	principles method of accounting, without deduction for the cost of
786	786	property sold, materials used, labor performed, or other costs
787	787	incurred, unless otherwise specifically provided in this chapter.
788	788	(b) Except as otherwise provided by this section, a
789	789	corporation must compute gross receipts in accordance with
790	790	generally accepted accounting principles. If generally accepted
791	791	accounting principles are unsettled or do not specify an accounting
792	792	practice for a particular purpose related to the computation of
793	793	gross receipts, the comptroller by rule may establish rules to
794	794	specify the applicable accounting practice.
795	795	(c) A corporation whose taxable capital is less than $1
796	796	million may report its gross receipts according to the method used
797	797	in the corporation's most recent federal income tax return
798	798	originally due on or before the date on which the corporation's
799	799	franchise tax report is originally due. In determining if taxable
800	800	capital is less than $1 million, the corporation shall apply the
801	801	methods the corporation used in computing that federal income tax
802	802	return unless another method is required under this chapter.
803	803	(d) A corporation shall report its gross receipts based
804	804	solely on its own financial condition. Consolidated reporting is
805	805	prohibited.
806	806	(e) Unless Section 171.111 applies due to an election under
807	807	that section before that section's repeal, a corporation may not
808	808	change its accounting methods used to calculate gross receipts more
809	809	often than once every four years without the express written
810	810	consent of the comptroller. A change in accounting methods is not
811	811	justified solely because it results in a reduction of tax
812	812	liability.
813	813	(f) Notwithstanding any other provision in this chapter, a
814	814	corporation subject to the tax imposed by this chapter shall use
815	815	double entry bookkeeping to account for all transactions that
816	816	affect the computation of that tax.
817	817	(g) Chapter 141 does not apply to this chapter.
818	818	(h) Except as otherwise provided by this section, a
819	819	corporation shall use the same accounting methods to apportion its
820	820	taxable capital as it used to compute its taxable capital.
821	821	Sec. 171.1121. GROSS RECEIPTS FOR TAXABLE EARNED SURPLUS
822	822	[MARGIN]. (a) For purposes of this section, "gross receipts" means
823	823	all revenues reportable by a corporation [taxable entity] on its
824	824	federal tax return, without deduction for the cost of property
825	825	sold, materials used, labor performed, or other costs incurred,
826	826	unless otherwise specifically provided in this chapter. "Gross
827	827	receipts" does not include revenues that are not included in
828	828	taxable earned surplus. For example, Schedule C special deductions
829	829	and any amounts subtracted from reportable federal taxable income
830	830	under Section 171.110(a)(1) are not included in taxable earned
831	831	surplus and therefore are not considered gross receipts.
832	832	(b) Except as otherwise provided by this section, a
833	833	corporation [taxable entity] shall use the same accounting methods
834	834	to apportion taxable earned surplus [margin] as used in computing
835	835	reportable federal taxable income [margin].
836	836	(c) A corporation shall report its gross receipts based
837	837	solely on its own financial condition. Consolidated reporting is
838	838	prohibited.
839	839	(d) Unless Section 171.111 applies due to an election under
840	840	that section before that section's repeal, a corporation [A taxable
841	841	entity] may not change its accounting methods used to calculate
842	842	gross receipts more often than once every four years without the
843	843	express written consent of the comptroller. A change in accounting
844	844	methods is not justified solely because it results in a reduction of
845	845	tax liability.
846	846	(e) A corporation's share of a partnership's gross receipts
847	847	that is included in the corporation's federal taxable income must
848	848	be used in computing the corporation's gross receipts under this
849	849	section. Unless otherwise provided by this chapter, a corporation
850	850	may not deduct costs incurred from the corporation's share of a
851	851	partnership's gross receipts. The gross receipts must be
852	852	apportioned as though the corporation directly earned them.
853	853	Sec. 171.113. ALTERNATE METHOD OF DETERMINING TAXABLE
854	854	CAPITAL AND GROSS RECEIPTS FOR CERTAIN CORPORATIONS. (a) This
855	855	section applies only to:
856	856	(1) a corporation organized as a close corporation
857	857	under Part 12, Texas Business Corporation Act, that has not more
858	858	than 35 shareholders;
859	859	(2) a foreign corporation organized under the close
860	860	corporation law of another state that has not more than 35
861	861	shareholders; and
862	862	(3) an S corporation as that term is defined by Section
863	863	1361, Internal Revenue Code.
864	864	(b) A corporation to which this section applies may elect to
865	865	compute its surplus, assets, debts, and gross receipts according to
866	866	the method the corporation uses to report its federal income tax
867	867	instead of as provided by Sections 171.109(b) and (g) and Section
868	868	171.112(b). This section does not affect the application of the
869	869	other subsections of Sections 171.109 and 171.112 and other
870	870	provisions of this chapter to a corporation making the election.
871	871	(c) The comptroller may adopt rules as necessary to specify
872	872	the reporting requirements for corporations to which this section
873	873	applies.
874	874	(d) This section does not apply to a subsidiary corporation
875	875	unless it applies to the parent corporation of the subsidiary.
876	876	(e) The election under Subsection (b) becomes effective
877	877	when written notice of the election is received by the comptroller
878	878	from the corporation. An election under Subsection (b) must be
879	879	postmarked not later than the due date for the electing
880	880	corporation's franchise tax report to which the election applies.
881	881	SECTION 11. Subchapter D, Chapter 171, Tax Code, is amended
882	882	to read as follows:
883	883	SUBCHAPTER D. PAYMENT OF TAX
884	884	Sec. 171.151. PRIVILEGE PERIOD COVERED BY TAX. The
885	885	franchise tax shall be paid for each of the following:
886	886	(1) an initial period beginning on the corporation's
887	887	[taxable entity's] beginning date and ending on the day before the
888	888	first anniversary of the beginning date;
889	889	(2) a second period beginning on the first anniversary
890	890	of the beginning date and ending on December 31 following that date;
891	891	and
892	892	(3) after the initial and second periods have expired,
893	893	a regular annual period beginning each year on January 1 and ending
894	894	the following December 31.
895	895	Sec. 171.152. DATE ON WHICH PAYMENT IS DUE. (a) Payment of
896	896	the tax covering the initial period is due within 90 days after the
897	897	date that the initial period ends or, if applicable, within 91 days
898	898	after the date of the merger.
899	899	(b) Payment of the tax covering the second period is due on
900	900	the same date as the tax covering the initial period.
901	901	(c) Payment of the tax covering the regular annual period is
902	902	due May 15, of each year after the beginning of the regular annual
903	903	period. However, if the first anniversary of the corporation's
904	904	[taxable entity's] beginning date is after October 3 and before
905	905	January 1, the payment of the tax covering the first regular annual
906	906	period is due on the same date as the tax covering the initial
907	907	period.
908	908	Sec. 171.153. BUSINESS ON WHICH TAX ON NET TAXABLE CAPITAL
909	909	IS BASED. (a) The tax covering the initial period is reported on
910	910	the initial report and is based on the business done by the
911	911	corporation during the period beginning on the corporation's
912	912	beginning date and:
913	913	(1) ending on the last accounting period ending date
914	914	that is at least six months after the beginning date and at least 60
915	915	days before the original due date of the initial report;
916	916	(2) if there is no such period ending date in
917	917	Subdivision (1), then ending on the day that is the last day of a
918	918	calendar month and that is nearest to the end of the corporation's
919	919	first year of business; or
920	920	(3) ending on the day after the merger occurs, for the
921	921	survivor of a merger that occurs after the ending date prescribed by
922	922	Subdivision (1) or (2), whichever is applicable, and before January
923	923	1, of the year an initial report is due by the survivor.
924	924	(b) The tax covering the second period is reported on the
925	925	initial report and is based on the same business on which the tax
926	926	covering the initial period is based and is to be prorated based on
927	927	the length of the second period.
928	928	(c) The tax covering the regular annual period is based on
929	929	the business done by the corporation during its last accounting
930	930	period that ends in the year before the year in which the tax is due.
931	931	If a corporation is the survivor of a merger that occurs between the
932	932	end of its last accounting period in the year before the report year
933	933	and January 1 of the report year, the tax will be based on the
934	934	financial condition of the surviving corporation for the 12-month
935	935	period ending on the day after the merger. However, if the first
936	936	anniversary of the corporation's beginning date is after October 3
937	937	and before January 1, the tax covering the first regular annual
938	938	period is based on the same business on which the tax covering the
939	939	initial period is based and is reported on the initial report.
940	940	Sec. 171.1531. CREDIT FOR SURVIVOR OF MERGER. (a) "Credit
941	941	period" means the period from the date of the merger or the date the
942	942	survivor was required to pay franchise tax, whichever is later,
943	943	through the end of the privilege period for which tax was actually
944	944	paid by the nonsurvivors.
945	945	(b) The survivor of a merger is entitled to a credit against
946	946	the tax computed on its net taxable capital under Section
947	947	171.002(b)(1) in the amount of the franchise tax computed on net
948	948	taxable capital paid by the nonsurvivors for the credit period,
949	949	provided the tax computed on net taxable capital paid by the
950	950	survivor for the credit period is based on the survivor's financial
951	951	condition after the merger. Only a survivor that is subject to the
952	952	franchise tax is entitled to the merger credit. The merger credit
953	953	shall be allocated among survivors based on net taxable capital
954	954	reported, and as provided by Section 171.153.
955	955	(c) The credit will be limited to the lesser of the amount of
956	956	tax on net taxable capital paid for the credit period by the
957	957	survivor or by the nonsurvivors.
958	958	Sec. 171.1532. BUSINESS ON WHICH TAX ON NET TAXABLE EARNED
959	959	SURPLUS [MARGIN] IS BASED. (a) The tax covering the privilege
960	960	periods included on the initial report, as required by Section
961	961	171.153, is based on the business done by the corporation [taxable
962	962	entity] during the period beginning on the corporation's [taxable
963	963	entity's] beginning date and:
964	964	(1) ending on the last accounting period ending date
965	965	that is at least 60 days before the original due date of the initial
966	966	report; or
967	967	(2) if there is no such period ending date in
968	968	Subdivision (1), then ending on the day that is the last day of a
969	969	calendar month and that is nearest to the end of the corporation's
970	970	[taxable entity's] first year of business.
971	971	(b) The tax covering the regular annual period, other than a
972	972	regular annual period included on the initial report, is based on
973	973	the business done by the corporation [taxable entity] during the
974	974	period beginning with the day after the last date upon which
975	975	[taxable margin or] net taxable earned surplus on a previous report
976	976	was based and ending with its last accounting period ending date for
977	977	federal income tax purposes in the year before the year in which the
978	978	report is originally due.
979	979	Sec. 171.154. PAYMENT TO COMPTROLLER. A corporation
980	980	[taxable entity] on which a tax is imposed by this chapter shall pay
981	981	the tax to the comptroller.
982	982	Sec. 171.158. PAYMENT BY FOREIGN CORPORATION [TAXABLE
983	983	ENTITY] BEFORE WITHDRAWAL FROM STATE. (a) Except as provided by
984	984	Subsection (b), a foreign corporation [taxable entity] holding a
985	985	[registration or] certificate of authority to do business in this
986	986	state may withdraw from doing business in this state by filing a
987	987	certificate of withdrawal with the secretary of state. The
988	988	secretary of state shall file the certificate of withdrawal as
989	989	provided by law.
990	990	(b) The foreign corporation [taxable entity] may not
991	991	withdraw from doing business in this state unless it has paid,
992	992	before filing the certificate of withdrawal, any tax or penalty
993	993	imposed by this chapter on the corporation [taxable entity].
994	994	SECTION 12. Sections 171.201, 171.202, 171.2022, 171.203,
995	995	171.204, 171.205, 171.206, 171.207, 171.208, 171.209, 171.211, and
996	996	171.212, Tax Code, are amended to read as follows:
997	997	Sec. 171.201. INITIAL REPORT. (a) Except as provided by
998	998	Section 171.2022, a corporation [taxable entity] on which the
999	999	franchise tax is imposed shall file an initial report with the
1000	1000	comptroller containing:
1001	1001	(1) [financial] information showing the financial
1002	1002	condition of the corporation on the day that is the last day of a
1003	1003	calendar month and that is nearest to the end of the corporation's
1004	1004	first year of business [of the taxable entity necessary to compute
1005	1005	the tax under this chapter];
1006	1006	(2) the name and address of[:
1007	1007	[(A)] each officer[,] and director[, and
1008	1008	manager] of the corporation [taxable entity;
1009	1009	[(B) for a limited partnership, each general
1010	1010	partner;
1011	1011	[(C) for a general partnership or limited
1012	1012	liability partnership, each managing partner or, if there is not a
1013	1013	managing partner, each partner; or
1014	1014	[(D) for a trust, each trustee];
1015	1015	(3) the name and address of the agent of the
1016	1016	corporation [taxable entity] designated under Section 171.354; and
1017	1017	(4) other information required by the comptroller.
1018	1018	(b) The corporation [taxable entity] shall file the report
1019	1019	on or before the date the payment is due under Section 171.152(a).
1020	1020	Sec. 171.202. ANNUAL REPORT. (a) Except as provided by
1021	1021	Section 171.2022, a corporation [taxable entity] on which the
1022	1022	franchise tax is imposed shall file an annual report with the
1023	1023	comptroller containing:
1024	1024	(1) financial information of the corporation [taxable
1025	1025	entity] necessary to compute the tax under this chapter;
1026	1026	(2) the name and address of each officer and director
1027	1027	of the corporation [taxable entity];
1028	1028	(3) the name and address of the agent of the
1029	1029	corporation [taxable entity] designated under Section 171.354; and
1030	1030	(4) other information required by the comptroller.
1031	1031	(b) The corporation [taxable entity] shall file the report
1032	1032	before May 16 of each year after the beginning of the regular annual
1033	1033	period. The report shall be filed on forms supplied by the
1034	1034	comptroller.
1035	1035	(c) The comptroller shall grant an extension of time to a
1036	1036	corporation [taxable entity] that is not required by rule to make
1037	1037	its tax payments by electronic funds transfer for the filing of a
1038	1038	report required by this section to any date on or before the next
1039	1039	November 15, if a corporation [taxable entity]:
1040	1040	(1) requests the extension, on or before May 15, on a
1041	1041	form provided by the comptroller; and
1042	1042	(2) remits with the request:
1043	1043	(A) not less than 90 percent of the amount of tax
1044	1044	reported as due on the report filed on or before November 15; or
1045	1045	(B) 100 percent of the tax reported as due for the
1046	1046	previous calendar year on the report due in the previous calendar
1047	1047	year and filed on or before May 14.
1048	1048	(d) In the case of a taxpayer whose previous return was its
1049	1049	initial report, the optional payment provided under Subsection
1050	1050	(c)(2)(B) or (e)(2)(B) must be equal to the greater of:
1051	1051	(1) an amount produced by multiplying the net taxable
1052	1052	capital [margin], as reported on the initial report filed on or
1053	1053	before May 14, by the rate of tax in Section 171.002(a)(1) [171.002]
1054	1054	that is effective January 1 of the year in which the report is due;
1055	1055	or
1056	1056	(2) an amount produced by multiplying the net taxable
1057	1057	earned surplus, as reported on the initial report filed on or before
1058	1058	May 14, by the rate of tax in Section 171.002(a)(2) that is
1059	1059	effective January 1 of the year in which the report is due.
1060	1060	(e) The comptroller shall grant an extension of time for the
1061	1061	filing of a report required by this section by a corporation
1062	1062	[taxable entity] required by rule to make its tax payments by
1063	1063	electronic funds transfer to any date on or before the next August
1064	1064	15, if the corporation [taxable entity]:
1065	1065	(1) requests the extension, on or before May 15, on a
1066	1066	form provided by the comptroller; and
1067	1067	(2) remits with the request:
1068	1068	(A) not less than 90 percent of the amount of tax
1069	1069	reported as due on the report filed on or before August 15; or
1070	1070	(B) 100 percent of the tax reported as due for the
1071	1071	previous calendar year on the report due in the previous calendar
1072	1072	year and filed on or before May 14.
1073	1073	(f) The comptroller shall grant an extension of time to a
1074	1074	corporation [taxable entity] required by rule to make its tax
1075	1075	payments by electronic funds transfer for the filing of a report due
1076	1076	on or before August 15 to any date on or before the next November 15,
1077	1077	if the corporation [taxable entity]:
1078	1078	(1) requests the extension, on or before August 15, on
1079	1079	a form provided by the comptroller; and
1080	1080	(2) remits with the request the difference between the
1081	1081	amount remitted under Subsection (e) and 100 percent of the amount
1082	1082	of tax reported as due on the report filed on or before November 15.
1083	1083	(h) If the sum of the amounts paid under Subsections (e)(2)
1084	1084	and (f)(2) is at least 99 percent of the amount reported as due on
1085	1085	the report filed on or before November 15, penalties for
1086	1086	underpayment with respect to the amount paid under Subsection
1087	1087	(f)(2) are waived.
1088	1088	(i) If a corporation [taxable entity] requesting an
1089	1089	extension under Subsection (c) or (e) does not file the report due
1090	1090	in the previous calendar year on or before May 14, the corporation
1091	1091	[taxable entity] may not receive an extension under Subsection (c)
1092	1092	or (e) unless the corporation [taxable entity] complies with
1093	1093	Subsection (c)(2)(A) or (e)(2)(A), as appropriate.
1094	1094	Sec. 171.2022. EXEMPTION FROM REPORTING REQUIREMENTS. A
1095	1095	corporation [taxable entity] that does not owe any tax under this
1096	1096	chapter for any period is not required to file a report under
1097	1097	Section 171.201 or 171.202. The exemption applies only to a period
1098	1098	for which no tax is due.
1099	1099	Sec. 171.203. PUBLIC INFORMATION REPORT. (a) A
1100	1100	corporation [or limited liability company] on which the franchise
1101	1101	tax is imposed, regardless of whether the corporation [or limited
1102	1102	liability company] is required to pay any tax, shall file a report
1103	1103	with the comptroller containing:
1104	1104	(1) the name of each corporation [or limited liability
1105	1105	company] in which the corporation [or limited liability company]
1106	1106	filing the report owns a 10 percent or greater interest and the
1107	1107	percentage owned by the corporation [or limited liability company];
1108	1108	(2) the name of each corporation [or limited liability
1109	1109	company] that owns a 10 percent or greater interest in the
1110	1110	corporation [or limited liability company] filing the report;
1111	1111	(3) the name, title, and mailing address of each
1112	1112	person who is an officer or director of the corporation [or limited
1113	1113	liability company] on the date the report is filed and the
1114	1114	expiration date of each person's term as an officer or director, if
1115	1115	any;
1116	1116	(4) the name and address of the agent of the
1117	1117	corporation [or limited liability company] designated under
1118	1118	Section 171.354; and
1119	1119	(5) the address of the corporation's [or limited
1120	1120	liability company's] principal office and principal place of
1121	1121	business.
1122	1122	(b) The corporation [or limited liability company] shall
1123	1123	file the report once a year on a form prescribed by the comptroller.
1124	1124	(c) The comptroller shall forward the report to the
1125	1125	secretary of state.
1126	1126	(d) The corporation [or limited liability company] shall
1127	1127	send a copy of the report to each person named in the report under
1128	1128	Subsection (a)(3) who is not currently employed by the corporation
1129	1129	[or limited liability company] or a related corporation [or limited
1130	1130	liability company] listed in Subsection (a)(1) or (2). An officer
1131	1131	or director of the corporation [or limited liability company] or
1132	1132	another authorized person must sign the report under a
1133	1133	certification that:
1134	1134	(1) all information contained in the report is true
1135	1135	and correct to the best of the person's knowledge; and
1136	1136	(2) a copy of the report has been mailed to each person
1137	1137	identified in this subsection on the date the return is filed.
1138	1138	(e) If a person's name is included in a report under
1139	1139	Subsection (a)(3) and the person is not an officer or director of
1140	1140	the corporation [or limited liability company] on the date the
1141	1141	report is filed, the person may file with the comptroller a sworn
1142	1142	statement disclaiming the person's status as shown on the report.
1143	1143	The comptroller shall maintain a record of statements filed under
1144	1144	this subsection and shall make that information available on
1145	1145	request using the same procedures the comptroller uses for other
1146	1146	requests for public information.
1147	1147	(f) A public information report that is filed
1148	1148	electronically complies with the signature and certification
1149	1149	requirements prescribed by Subsection (d).
1150	1150	Sec. 171.204. INFORMATION REPORT. (a) Except as provided
1151	1151	by Subsection (b), to determine eligibility for the exemption
1152	1152	provided by Section 171.2022, or to determine the amount of the
1153	1153	franchise tax or the correctness of a franchise tax report, the
1154	1154	comptroller may require an officer of a corporation [taxable
1155	1155	entity] that may be subject to the tax imposed under this chapter to
1156	1156	file an information report with the comptroller stating the amount
1157	1157	of the corporation's taxable capital and earned surplus [taxable
1158	1158	entity's margin], or any other information the comptroller may
1159	1159	request [that is necessary to make a determination under this
1160	1160	subsection].
1161	1161	(b) The comptroller may require an officer of a corporation
1162	1162	[taxable entity] that does not owe any tax because of the
1163	1163	application of Section 171.002(d)(2) to file an abbreviated
1164	1164	information report with the comptroller stating the amount of the
1165	1165	corporation's gross receipts [taxable entity's total revenue] from
1166	1166	its entire business. The comptroller may not require a corporation
1167	1167	[taxable entity] described by this subsection to file an
1168	1168	information report that requires the corporation [taxable entity]
1169	1169	to report or compute its earned surplus or taxable capital [margin.
1170	1170	[(c) The comptroller may require any entity to file
1171	1171	information as necessary to verify that the entity is not subject to
1172	1172	the tax imposed under this chapter].
1173	1173	Sec. 171.205. ADDITIONAL INFORMATION REQUIRED BY
1174	1174	COMPTROLLER. The comptroller may require a corporation [taxable
1175	1175	entity] on which the franchise tax is imposed to furnish to the
1176	1176	comptroller information from the corporation's [taxable entity's]
1177	1177	books and records that has not been filed previously and that is
1178	1178	necessary for the comptroller to determine the amount of the tax.
1179	1179	Sec. 171.206. CONFIDENTIAL INFORMATION. Except as provided
1180	1180	by Section 171.207, the following information is confidential and
1181	1181	may not be made open to public inspection:
1182	1182	(1) information that is obtained from a record or
1183	1183	other instrument that is required by this chapter to be filed with
1184	1184	the comptroller; or
1185	1185	(2) information, including information about the
1186	1186	business affairs, operations, profits, losses, [cost of goods sold,
1187	1187	compensation,] or expenditures of a corporation [taxable entity],
1188	1188	obtained by an examination of the books and records, officers,
1189	1189	[partners, trustees, agents,] or employees of a corporation
1190	1190	[taxable entity] on which a tax is imposed by this chapter.
1191	1191	Sec. 171.207. INFORMATION NOT CONFIDENTIAL. The following
1192	1192	information is not confidential and shall be made open to public
1193	1193	inspection:
1194	1194	(1) information contained in a document filed under
1195	1195	this chapter with a county clerk as notice of a tax lien; and
1196	1196	(2) information contained in a report required by
1197	1197	Section 171.203 [or 171.2035].
1198	1198	Sec. 171.208. PROHIBITION OF DISCLOSURE OF INFORMATION. A
1199	1199	person, including a state officer or employee or a shareholder [an
1200	1200	owner] of a corporation [taxable entity], who has access to a report
1201	1201	filed under this chapter may not make known in a manner not
1202	1202	permitted by law the amount or source of the corporation's [taxable
1203	1203	entity's] income, profits, losses, expenditures, [cost of goods
1204	1204	sold, compensation,] or other information in the report relating to
1205	1205	the financial condition of the corporation [taxable entity].
1206	1206	Sec. 171.209. RIGHT OF SHAREHOLDER [OWNER] TO EXAMINE OR
1207	1207	RECEIVE REPORTS. If a person owning at least one share of
1208	1208	outstanding stock [an owner] of a corporation [taxable entity] on
1209	1209	whom the franchise tax is imposed presents evidence of the
1210	1210	ownership to the comptroller, the person is entitled to examine or
1211	1211	receive a copy of an initial or annual report that is filed under
1212	1212	Section 171.201 or 171.202 and that relates to the corporation
1213	1213	[taxable entity].
1214	1214	Sec. 171.211. EXAMINATION OF CORPORATE RECORDS. To
1215	1215	determine the franchise tax liability of a corporation [taxable
1216	1216	entity], the comptroller may investigate or examine the records of
1217	1217	the corporation [taxable entity].
1218	1218	Sec. 171.212. REPORT OF CHANGES TO FEDERAL INCOME TAX
1219	1219	RETURN. (a) A corporation [taxable entity] must file an amended
1220	1220	report under this chapter if:
1221	1221	(1) the corporation's net [taxable entity's] taxable
1222	1222	earned surplus [margin] is changed as the result of an audit or
1223	1223	other adjustment by the Internal Revenue Service or another
1224	1224	competent authority; or
1225	1225	(2) the corporation [taxable entity] files an amended
1226	1226	federal income tax return or other return that changes the
1227	1227	corporation's net [taxable entity's] taxable earned surplus
1228	1228	[margin].
1229	1229	(b) The corporation [taxable entity] shall file the amended
1230	1230	report under Subsection (a)(1) not later than the 120th day after
1231	1231	the date the revenue agent's report or other adjustment is final.
1232	1232	For purposes of this subsection, a revenue agent's report or other
1233	1233	adjustment is final on the date on which all administrative appeals
1234	1234	with the Internal Revenue Service or other competent authority have
1235	1235	been exhausted or waived.
1236	1236	(c) The corporation [taxable entity] shall file the amended
1237	1237	report under Subsection (a)(2) not later than the 120th day after
1238	1238	the date the corporation [taxable entity] files the amended federal
1239	1239	income tax return or other return. For purposes of this subsection,
1240	1240	a corporation [taxable entity] is considered to have filed an
1241	1241	amended federal income tax return if the corporation [taxable
1242	1242	entity] is a member of an affiliated group during a period in which
1243	1243	an amended consolidated federal income tax report is filed.
1244	1244	(d) If a corporation [taxable entity] fails to comply with
1245	1245	this section, the corporation [taxable entity] is liable for a
1246	1246	penalty of 10 percent of the tax that should have been reported
1247	1247	under this section and that had not previously been reported to the
1248	1248	comptroller. The penalty prescribed by this subsection is in
1249	1249	addition to any other penalty provided by law.
1250	1250	SECTION 13. Section 171.309, Tax Code, is amended to read as
1251	1251	follows:
1252	1252	Sec. 171.309. FORFEITURE BY SECRETARY OF STATE. The
1253	1253	secretary of state may forfeit the charter or [,] certificate of
1254	1254	authority [, or registration] of a corporation [taxable entity] if:
1255	1255	(1) the secretary receives the comptroller's
1256	1256	certification under Section 171.302; [and]
1257	1257	(2) the corporation [taxable entity] does not revive
1258	1258	its forfeited corporate privileges within 120 days after the date
1259	1259	that the corporate privileges were forfeited; and
1260	1260	(3) the corporation does not have assets from which a
1261	1261	judgment for any tax, penalty, or court costs imposed by this
1262	1262	chapter may be satisfied.
1263	1263	SECTION 14. The heading to Subchapter F, Chapter 171, Tax
1264	1264	Code, is amended to read as follows:
1265	1265	SUBCHAPTER F. FORFEITURE OF CORPORATE [AND BUSINESS] PRIVILEGES
1266	1266	SECTION 15. Sections 171.351, 171.353, and 171.354, Tax
1267	1267	Code, are amended to read as follows:
1268	1268	Sec. 171.351. VENUE OF SUIT TO ENFORCE CHAPTER. Venue of a
1269	1269	civil suit against a corporation [taxable entity] to enforce this
1270	1270	chapter is either in a county where the corporation's [taxable
1271	1271	entity's] principal office is located according to its charter or
1272	1272	certificate of authority or in Travis County.
1273	1273	Sec. 171.353. APPOINTMENT OF RECEIVER. If a court forfeits
1274	1274	a corporation's [taxable entity's] charter or certificate of
1275	1275	authority, the court may appoint a receiver for the corporation
1276	1276	[taxable entity] and may administer the receivership under the laws
1277	1277	relating to receiverships.
1278	1278	Sec. 171.354. AGENT FOR SERVICE OF PROCESS. Each
1279	1279	corporation [taxable entity] on which a tax is imposed by this
1280	1280	chapter shall designate a resident of this state as the
1281	1281	corporation's [taxable entity's] agent for the service of process.
1282	1282	SECTION 16. Sections 171.362(a), (d), and (e), Tax Code,
1283	1283	are amended to read as follows:
1284	1284	(a) If a corporation [taxable entity] on which a tax is
1285	1285	imposed by this chapter fails to pay the tax when it is due and
1286	1286	payable or fails to file a report required by this chapter when it
1287	1287	is due, the corporation [taxable entity] is liable for a penalty of
1288	1288	five percent of the amount of the tax due.
1289	1289	(d) If a corporation [taxable entity] electing to remit
1290	1290	under Section 171.202(c)(2)(A) remits less than the amount
1291	1291	required, the penalties imposed by this section and the interest
1292	1292	imposed under Section 111.060 are assessed against the difference
1293	1293	between the amount required to be remitted under Section
1294	1294	171.202(c)(2)(A) and the amount actually remitted on or before May
1295	1295	15.
1296	1296	(e) If a corporation [taxable entity] remits the entire
1297	1297	amount required by Section 171.202(c), no penalties will be imposed
1298	1298	against the amount remitted on or before November 15.
1299	1299	SECTION 17. Sections 171.363(a) and (b), Tax Code, are
1300	1300	amended to read as follows:
1301	1301	(a) A corporation [taxable entity] commits an offense if the
1302	1302	corporation [taxable entity] is subject to the provisions of this
1303	1303	chapter and the corporation [taxable entity] wilfully:
1304	1304	(1) fails to file a report;
1305	1305	(2) fails to keep books and records as required by this
1306	1306	chapter;
1307	1307	(3) files a fraudulent report;
1308	1308	(4) violates any rule of the comptroller for the
1309	1309	administration and enforcement of the provisions of this chapter;
1310	1310	or
1311	1311	(5) attempts in any other manner to evade or defeat any
1312	1312	tax imposed by this chapter or the payment of the tax.
1313	1313	(b) A person commits an offense if the person is an
1314	1314	accountant or an agent for or an officer or employee of a
1315	1315	corporation [taxable entity] and the person knowingly enters or
1316	1316	provides false information on any report, return, or other document
1317	1317	filed by the corporation [taxable entity] under this chapter.
1318	1318	SECTION 18. Section 171.401, Tax Code, is amended to read as
1319	1319	follows:
1320	1320	Sec. 171.401. REVENUE DEPOSITED IN GENERAL REVENUE FUND.
1321	1321	The revenue from the tax imposed by this chapter on corporations
1322	1322	shall be deposited to the credit of the general revenue fund.
1323	1323	SECTION 19. Sections 313.024(a) and (b), Tax Code, are
1324	1324	amended to read as follows:
1325	1325	(a) This subchapter and Subchapters C and D apply only to
1326	1326	property owned by a corporation or limited liability company [an
1327	1327	entity] to which Chapter 171 applies.
1328	1328	(b) To be eligible for a limitation on appraised value under
1329	1329	this subchapter, the corporation or limited liability company
1330	1330	[entity] must use the property in connection with:
1331	1331	(1) manufacturing;
1332	1332	(2) research and development;
1333	1333	(3) a clean coal project, as defined by Section 5.001,
1334	1334	Water Code;
1335	1335	(4) an advanced clean energy project, as defined by
1336	1336	Section 382.003, Health and Safety Code;
1337	1337	(5) renewable energy electric generation;
1338	1338	(6) electric power generation using integrated
1339	1339	gasification combined cycle technology; or
1340	1340	(7) nuclear electric power generation.
1341	1341	SECTION 20. The following statutes are repealed:
1342	1342	(1) Section 171.0001, Tax Code;
1343	1343	(2) Section 171.0002, Tax Code;
1344	1344	(3) Section 171.0003, Tax Code;
1345	1345	(4) Section 171.0004, Tax Code;
1346	1346	(5) Section 171.0021, Tax Code;
1347	1347	(6) Section 171.003, Tax Code;
1348	1348	(7) Section 171.006, Tax Code;
1349	1349	(8) Section 171.088, Tax Code;
1350	1350	(9) Section 171.1011, Tax Code;
1351	1351	(10) Section 171.1012, Tax Code;
1352	1352	(11) Section 171.1013, Tax Code;
1353	1353	(12) Section 171.1014, Tax Code;
1354	1354	(13) Section 171.1015, Tax Code;
1355	1355	(14) Section 171.1016, Tax Code;
1356	1356	(15) Section 171.1055, Tax Code;
1357	1357	(16) Section 171.111, Tax Code;
1358	1358	(17) Section 171.2125, Tax Code;
1359	1359	(18) Section 171.214, Tax Code;
1360	1360	(19) Section 171.2515, Tax Code;
1361	1361	(20) Section 171.3015, Tax Code;
1362	1362	(21) Section 171.3125, Tax Code; and
1363	1363	(22) Section 171.4011, Tax Code.
1364	1364	SECTION 21. (a) The repeal of Section 171.111, Tax Code, by
1365	1365	this Act does not affect a credit that was established under that
1366	1366	section before the effective date of this Act.
1367	1367	(b) A corporation that has any unused credits established
1368	1368	before the effective date of this Act under Section 171.111, Tax
1369	1369	Code, may claim those unused credits on or with the tax report for
1370	1370	the period in which the credits were established, and the former law
1371	1371	under which the corporation established the credits is continued in
1372	1372	effect for purposes of determining the amount of the credits the
1373	1373	corporation may claim and the manner in which the corporation may
1374	1374	claim the credits.
1375	1375	SECTION 22. (a) This Act applies only to a report
1376	1376	originally due on or after the effective date of this Act.
1377	1377	(b) The change in law made by this Act does not affect the
1378	1378	obligation for or the payment, computation, and collection of the
1379	1379	franchise tax for a report originally due before the effective date
1380	1380	of this Act. The obligation for and the payment, computation, and
1381	1381	collection of the franchise tax for a report originally due before
1382	1382	the effective date of this Act is governed by the law in effect on
1383	1383	the date the report was originally due and that law is continued in
1384	1384	effect for those purposes.
1385	1385	SECTION 23. This Act takes effect January 1, 2010.