Texas 2009 - 81st Regular

Texas House Bill HB4073 Compare Versions

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

Old	New	Differences
1	1	81R5447 KLA-D
2	2	By: Chavez H.B. No. 4073
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a franchise tax credit for certain research and
8	8	development activities.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 171, Tax Code, is amended by adding
11	11	Subchapter O-1 to read as follows:
12	12	SUBCHAPTER O-1. TAX CREDIT FOR CERTAIN RESEARCH AND DEVELOPMENT
13	13	ACTIVITIES
14	14	Sec. 171.741. DEFINITIONS. In this subchapter, "base
15	15	amount," "basic research payment," and "qualified research
16	16	expense" have the meanings assigned those terms by Section 41,
17	17	Internal Revenue Code, except that all of those payments and
18	18	expenses must be for research conducted within this state.
19	19	Sec. 171.742. ELIGIBILITY. A taxable entity is eligible
20	20	for a credit against the tax imposed under this chapter in the
21	21	amount and under the conditions and limitations provided by this
22	22	subchapter.
23	23	Sec. 171.743. CALCULATION OF CREDIT. (a) The credit for
24	24	any report equals five percent of the sum of:
25	25	(1) the excess of qualified research expenses incurred
26	26	in this state during the period on which the tax is based over the
27	27	base amount for this state; and
28	28	(2) the basic research payments determined under
29	29	Section 41(e)(1)(A), Internal Revenue Code, for this state during
30	30	the period on which the tax is based.
31	31	(b) A taxable entity may elect to compute the credit for
32	32	qualified research expenses incurred in this state in a manner
33	33	consistent with the alternative incremental credit described in
34	34	Section 41(c)(4), Internal Revenue Code, only if for the
35	35	corresponding federal tax period:
36	36	(1) a federal election was made to compute the federal
37	37	credit under Section 41(c)(4), Internal Revenue Code;
38	38	(2) the taxable entity was a member of a consolidated
39	39	group for which a federal election was made under Section 41(c)(4),
40	40	Internal Revenue Code; or
41	41	(3) the taxable entity did not claim the federal
42	42	credit under Section 41(a)(1), Internal Revenue Code.
43	43	(c) For purposes of the alternate credit computation method
44	44	in Subsection (b), the credit percentages applicable to qualified
45	45	research expenses described in Sections 41(c)(4)(A)(i), (ii), and
46	46	(iii), Internal Revenue Code, are 0.41 percent, 0.55 percent, and
47	47	0.69 percent, respectively.
48	48	(d) The burden of establishing entitlement to and the value
49	49	of the credit is on the taxable entity.
50	50	(e) For the purposes of this section, "gross receipts" as
51	51	used in Section 41, Internal Revenue Code, means gross receipts as
52	52	determined under Section 171.103.
53	53	Sec. 171.744. LIMITATIONS. The sum of the total credit
54	54	claimed under this subchapter for a report, including the amount of
55	55	any carryforward credit under Section 171.745, and the amount of
56	56	unused credits accrued under Subchapter O before its repeal on
57	57	January 1, 2008, and claimed on the report as authorized by Section
58	58	18(d), Chapter 1 (H.B. 3), Acts of the 79th Legislature, 3rd Called
59	59	Session, 2006, may not exceed 50 percent of the amount of franchise
60	60	tax due for the report before any other applicable tax credits.
61	61	Sec. 171.745. CARRYFORWARD. If a taxable entity is
62	62	eligible for a credit that exceeds the limitation under Section
63	63	171.744, the taxable entity may carry the unused credit forward for
64	64	not more than 20 consecutive reports. Credits, including credit
65	65	carryforwards, are considered to be used in the following order:
66	66	(1) a credit carryforward of unused credits accrued
67	67	under Subchapter O before its repeal on January 1, 2008, and claimed
68	68	as authorized by Section 18(d), Chapter 1 (H.B. 3), Acts of the 79th
69	69	Legislature, 3rd Called Session, 2006;
70	70	(2) a credit carryforward under this subchapter; and
71	71	(3) a current year credit.
72	72	Sec. 171.746. BIENNIAL REPORT BY COMPTROLLER. (a) Before
73	73	the beginning of each regular session of the legislature, the
74	74	comptroller shall submit to the governor, the lieutenant governor,
75	75	and the speaker of the house of representatives a report that
76	76	states:
77	77	(1) the total amount of expenses and payments incurred
78	78	by taxable entities that claim a credit under this subchapter;
79	79	(2) the total amount of credits applied against the
80	80	tax under this chapter and the amount of unused credits including:
81	81	(A) the total amount of franchise tax due by
82	82	taxable entities claiming a credit under this subchapter before and
83	83	after the application of the credit;
84	84	(B) the average percentage reduction in
85	85	franchise tax due by taxable entities claiming a credit under this
86	86	subchapter;
87	87	(C) the percentage of tax credits that were
88	88	awarded to taxable entities with fewer than 100 employees; and
89	89	(D) the two-digit standard industrial
90	90	classification of taxable entities claiming a credit under this
91	91	subchapter;
92	92	(3) the geographical distribution of expenses and
93	93	payments giving rise to a credit authorized by this subchapter;
94	94	(4) the effect of the credit provided by this
95	95	subchapter on the amount of research and development performed in
96	96	this state and employment in research and development in this
97	97	state; and
98	98	(5) the effect of the credit provided under this
99	99	subchapter on employment, capital investment, and personal income
100	100	in this state and on state tax revenues.
101	101	(b) The final report issued prior to the expiration of this
102	102	subchapter shall include historical information on the credit
103	103	authorized under this subchapter.
104	104	(c) The comptroller may not include in the report
105	105	information that is confidential by law.
106	106	(d) For purposes of this section, the comptroller may
107	107	require a taxable entity that claims a credit under this subchapter
108	108	to submit information, on a form provided by the comptroller, on the
109	109	location of the taxable entity's research expenses and payments in
110	110	this state and any other information necessary to complete the
111	111	report required by this section.
112	112	Sec. 171.747. COMPTROLLER POWERS AND DUTIES. The
113	113	comptroller shall adopt rules and forms necessary to implement this
114	114	subchapter.
115	115	Sec. 171.748. ASSIGNMENT PROHIBITED. A taxable entity may
116	116	not convey, assign, or transfer the credit allowed under this
117	117	subchapter to another entity unless all of the assets of the taxable
118	118	entity are conveyed, assigned, or transferred in the same
119	119	transaction.
120	120	Sec. 171.749. EXPIRATION. (a) This subchapter expires
121	121	December 31, 2019.
122	122	(b) The expiration of this subchapter does not affect the
123	123	carryforward of a credit under Section 171.745 that was accrued
124	124	before the date this subchapter expires.
125	125	SECTION 2. Section 403.030(a), Government Code, as
126	126	effective April 1, 2009, is amended to read as follows:
127	127	(a) For purposes of evaluating the effect on economic
128	128	development in this state, the comptroller, before each regular
129	129	session of the legislature, shall collect and make available
130	130	information that:
131	131	(1) lists the strategies in the General Appropriations
132	132	Act identified as meeting the statewide priority goal or service
133	133	category of economic development, if any, of each state agency and
134	134	institution of higher education, as defined by Section 61.003,
135	135	Education Code, including:
136	136	(A) legislative appropriations or actual
137	137	expenditures, as applicable, for each strategy;
138	138	(B) the method of financing of each strategy; and
139	139	(C) outcome measures associated with each
140	140	appropriate strategy that are listed in the General Appropriations
141	141	Act or the Automated Budget and Evaluation System of Texas (ABEST);
142	142	(2) lists all investments financed with money from the
143	143	Texas growth fund created by Section 70, Article XVI, Texas
144	144	Constitution;
145	145	(3) contains a summary of the information reported
146	146	under Subchapter D, Chapter 502, Local Government Code, by each
147	147	corporation created under Chapter 504 or 505, Local Government
148	148	Code, and a copy of the report submitted by each of the 10
149	149	corporations with the largest total revenue in the most recent
150	150	fiscal year ending before the date the information compiled under
151	151	this section is made available;
152	152	(4) contains a summary of the report required by
153	153	Section 403.014 and information on the effect on revenues of
154	154	[allocation or] apportionment under Section [Sections] 171.106
155	155	[and 171.1061], Tax Code;
156	156	(5) contains a summary of reports the comptroller is
157	157	required to submit by other law to evaluate the effectiveness of Tax
158	158	Code provisions, including a report [reports] required by Section
159	159	171.746 [Sections 171.707, 171.727, 171.759, and 171.809], Tax
160	160	Code; and
161	161	(6) to the extent practicable, contains information on
162	162	employment, capital investment, and personal income relating to:
163	163	(A) at least two tax provisions described by
164	164	Section 403.014; and
165	165	(B) changes in school district property tax law
166	166	or Tax Code provisions enacted by the most recent legislature.
167	167	SECTION 3. (a) This Act applies only to a report originally
168	168	due on or after the effective date of this Act.
169	169	(b) The change in law made by this Act does not affect the
170	170	obligation for or the payment, computation, and collection of the
171	171	franchise tax for a report originally due before the effective date
172	172	of this Act. The obligation for and the payment, computation, and
173	173	collection of the franchise tax for a report originally due before
174	174	the effective date of this Act is governed by the law in effect on
175	175	the date the report was originally due and that law is continued in
176	176	effect for those purposes.
177	177	SECTION 4. This Act takes effect January 1, 2010.