Texas House Bill HB2103

Texas 2009 - 81st Regular

Caption

Relating to a franchise tax credit for certain research and development activities.

Impact

The introduction of HB 2103 is expected to have a significant impact on state laws relating to tax credits and economic development strategies. By providing financial incentives for research and development activities, the bill could enhance Texas's competitive edge in attracting and retaining businesses that prioritize innovation. Additionally, the amendment includes mechanisms for the comptroller to report on the effectiveness of the proposed tax credits, ensuring oversight and assessment of the bill's outcomes on state revenues and employment levels in the research sector.

Summary

House Bill 2103 seeks to amend the Texas Tax Code by introducing a franchise tax credit aimed at encouraging research and development activities within the state. Designed to support both small and large enterprises, the bill outlines specific provisions under which taxable entities can claim credits for qualified research expenses and basic research payments conducted within the state. The incentive is particularly focused on areas identified as 'strategic investment areas', which include regions with above-average unemployment rates or designated urban enterprise communities. This approach aims to stimulate growth and innovation in economically challenged regions of Texas.

Contention

While HB 2103 is primarily framed as a tool for economic growth, there may be contention around its implementation and the allocation of resources for tax credits. Critics may argue that while the intent is noble, the effectiveness of tax credits in genuinely fostering long-term employment and innovation remains to be seen. Moreover, concerns could arise regarding the designation of certain areas as strategic investment zones, questioning whether the criteria accurately reflect the needs for economic development across diverse communities. The bill also carries a sunset provision, expiring on December 31, 2013, which could spark discussions about the need for ongoing evaluations and potential extensions.