85R920 BEF-D     By: Huffines S.B. No. 112       A BILL TO BE ENTITLED   AN ACT   relating to the decrease of the rates of the franchise tax under   certain circumstances and the expiration of that tax.          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) In this   section, "maximum general revenue fund appropriations" means for a   state fiscal biennium the sum of:                (1)  the maximum amount of state tax revenues not   dedicated by the constitution that may be appropriated under   Sections 22(a) and (c), Article VIII, Texas Constitution, for that   biennium; and                (2)  the estimated amount of anticipated revenue to be   deposited to the credit of the general revenue fund during that   biennium that is not subject to the limit on appropriations under   Section 22(a), Article VIII, Texas Constitution, as specified in   the estimate prepared by the comptroller as required by Section   49a(a), Article III, Texas Constitution.          (b)  Beginning in 2020, on January 1 of each year if the   comptroller determines that the maximum general revenue fund   appropriations for the state fiscal biennium during which that date   occurs is at least $110 billion:                (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; and                 (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.          (c)  The tax rates determined under Subsection (b):                (1)  apply to a report originally due on or after the   date the determination is made; and                (2)  are considered for purposes of this chapter to be   the rates provided by and imposed under Section 171.002.          (d)  Notwithstanding Subsection (b), if an adjustment   otherwise required by Subsection (b) would reduce a rate of the   franchise tax to less than zero, the rate is instead reduced to   zero.          (e)  Notwithstanding any other law, if the rates of the   franchise tax are reduced to zero under Subsection (b) or (d), 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.          (f)  The comptroller shall make the determination required   by Subsection (b) 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.          (g)  In the state fiscal year in which the rates of the   franchise tax are reduced to zero under Subsection (b) or (d):                (1)  this chapter expires as provided by Section   171.9121; and                (2)  not later than January 15 of that year the   comptroller shall:                      (A)  publish notice in the Texas Register that an   entity previously subject to the tax imposed under this chapter is   no longer required to file a report or pay the tax; and                      (B)  provide any other notice relating to the   expiration of the tax that the comptroller considers appropriate.           (h)  An action taken by the comptroller under this section is   final and may not be appealed.          SECTION 3.  Chapter 171, Tax Code, is amended by adding   Subchapter Z to read as follows:   SUBCHAPTER Z. EXPIRATION          Sec. 171.9121.  EXPIRATION. This chapter expires on   December 31 of the year in which the rates of the franchise tax are   reduced to zero under Section 171.004(b) or (d).          SECTION 4.  (a)  Chapter 171, Tax Code, and Subtitle B,   Title 2, Tax Code, continue to apply to audits, deficiencies,   redeterminations, and refunds of any tax due or collected under   Chapter 171 until barred by limitations.          (b)  The expiration of Chapter 171, Tax Code, does not   affect:                (1)  the status of a taxable entity that has had its   corporate privileges, certificate of authority, certificate of   organization, certificate of limited partnership, corporate   charter, or registration revoked, a suit filed against it, or a   receiver appointed under Subchapter F, G, or H of that chapter;                (2)  the ability of the comptroller of public accounts,   secretary of state, or attorney general to take action against a   taxable entity under Subchapter F, G, or H of that chapter for   actions that took place before the chapter expired; or                (3)  the right of a taxable entity to contest a   forfeiture, revocation, lawsuit, or appointment of a receiver under   Subchapter F, G, or H of that chapter.          SECTION 5.  This Act applies only to a report originally due   on or after January 1, 2020.          SECTION 6.  This Act takes effect January 1, 2018.