HBA-JRA H.B. 219 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 219 By: Hilderbran Ways & Means 3/3/1999 Introduced BACKGROUND AND PURPOSE Currently, the Tax Code exempts a Texas business from paying the franchise tax if the business owes less than $100 in tax. This exemption benefits a small business which operates on small profit margins. An exemption threshold based on a net taxable earned surplus of $100,000 would relieve more companies of their current franchise tax liability. H.B. 219 establishes a new threshold for an exemption to the franchise tax based on a net taxable earned surplus of $100,000 or less. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 171.002(d), Tax Code, to exempt from the franchise tax, a corporation with a net taxable earned surplus of $100,000 or less, rather than a computed franchise tax of less than $100, regardless of the amount of the corporation's net taxable capital. SECTION 2. Effective date: January 1, 2000. Makes application of this Act prospective. SECTION 3. Emergency clause.