85R713 BEF-D
	By: Springer	H.B. No. 1613

	A BILL TO BE ENTITLED
	AN ACT
	relating to adjustment of the rates of the franchise tax; providing
	for decreases in tax rates.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 171.002(a) and (b), Tax Code, are
	amended to read as follows:
	(a)  Subject to Sections 171.003, 171.004, and 171.1016 and
	except as provided by Subsection (b), the rate of the franchise tax
	is 0.75 percent of taxable margin.
	(b)  Subject to Sections 171.003, 171.004, and 171.1016, the
	rate of the franchise tax is 0.375 percent of taxable margin for
	those taxable entities primarily engaged in retail or wholesale
	trade.
	SECTION 2.  Subchapter A, Chapter 171, Tax Code, is amended
	by adding Section 171.004 to read as follows:
	Sec. 171.004.  ADJUSTMENT OF TAX RATES.  (a)  Beginning in
	2018, on January 1 of each year of a biennium for which the
	comptroller's most recent certification estimate projects state
	tax revenues not dedicated by the constitution for that biennium
	will exceed the limit on appropriations in effect for the current
	biennium under Section 22(a), Article VIII, Texas Constitution:
	(1)  the rate of the franchise tax under Section
	171.002(a) is adjusted by subtracting 0.15 from the rate in effect
	on December 31 of the previous year;
	(2)  the rate of the franchise tax under Section
	171.002(b) is adjusted by subtracting 0.075 from the rate in effect
	on December 31 of the previous year; and
	(3)  the rate of the franchise tax under Section
	171.1016(b)(3) is adjusted by subtracting 0.0662 from the rate in
	effect on December 31 of the previous year.
	(b)  The tax rates determined under Subsection (a) apply to a
	report originally due on or after the date the determination is
	made.
	(c)  Notwithstanding Subsection (a), if an adjustment
	otherwise required by Subsection (a) would reduce a rate of the
	franchise tax to less than zero, the rate is instead reduced to
	zero.
	(d)  Notwithstanding any other law, if the rates of the
	franchise tax are reduced to zero under Subsection (a) or (c), a
	taxable entity does not owe any tax and is not required to file a
	report that would otherwise be originally due on or after the date
	the rates are reduced to zero.
	(e)  The comptroller shall make the determination required
	by Subsection (a) and may adopt rules related to making that
	determination. The comptroller shall publish the franchise tax
	rates determined under this section in the Texas Register and on the
	comptroller's Internet website not later than January 15 of each
	year.
	(f)  A determination by the comptroller under this section is
	final and may not be appealed.
	SECTION 3.  Sections 171.1016(b) and (e), Tax Code, are
	amended to read as follows:
	(b)  The amount of the tax for which a taxable entity that
	elects to pay the tax as provided by this section is liable is
	computed by:
	(1)  determining the taxable entity's total revenue
	from its entire business, as determined under Section 171.1011;
	(2)  apportioning the amount computed under
	Subdivision (1) to this state, as provided by Section 171.106, to
	determine the taxable entity's apportioned total revenue; and
	(3)  multiplying the amount computed under Subdivision
	(2) by the rate of 0.331 percent or, if applicable, an adjusted tax
	rate adopted by the comptroller under Section 171.004.
	(e)  A reference in this chapter or other law to the rate of
	the franchise tax means, as appropriate:
	(1)  [,] the rate under Section 171.002 or, for a
	taxable entity that elects to pay the tax as provided by this
	section, the rate under this section; or
	(2)  the adjusted rates under Section 171.004.
	SECTION 4.  This Act applies only to a report originally due
	on or after the effective date of this Act.
	SECTION 5.  This Act takes effect January 1, 2018.