| 1 | 1 | | By: Howard of Fort Bend, Paxton H.B. No. 4265 |
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| 2 | 2 | | (Senate Sponsor - Averitt) |
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| 3 | 3 | | (In the Senate - Received from the House May 7, 2009; |
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| 4 | 4 | | May 8, 2009, read first time and referred to Committee on Finance; |
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| 5 | 5 | | May 25, 2009, reported adversely, with favorable Committee |
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| 6 | 6 | | Substitute by the following vote: Yeas 11, Nays 0; May 25, 2009, |
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| 7 | 7 | | sent to printer.) |
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| 8 | 8 | | COMMITTEE SUBSTITUTE FOR H.B. No. 4265 By: Averitt |
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| 9 | 9 | | |
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| 10 | 10 | | |
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| 11 | 11 | | A BILL TO BE ENTITLED |
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| 12 | 12 | | AN ACT |
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| 13 | 13 | | relating to the definition of controlling interest for purposes of |
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| 14 | 14 | | the franchise tax. |
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| 15 | 15 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 16 | 16 | | SECTION 1. Section 171.0001(8), Tax Code, is amended to |
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| 17 | 17 | | read as follows: |
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| 18 | 18 | | (8) "Controlling interest" means: |
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| 19 | 19 | | (A) for a corporation, either more than 50 |
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| 20 | 20 | | percent, owned directly or indirectly, of the total combined voting |
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| 21 | 21 | | power of all classes of stock of the corporation, or more than 50 |
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| 22 | 22 | | percent, owned directly or indirectly, of the beneficial ownership |
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| 23 | 23 | | interest in the voting stock of the corporation; |
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| 24 | 24 | | (B) for a partnership, [association, trust, or |
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| 25 | 25 | | other entity other than a limited liability company,] more than 50 |
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| 26 | 26 | | percent, owned directly or indirectly, of the capital or[,] |
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| 27 | 27 | | profits[, or beneficial] interest in the partnership[, |
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| 28 | 28 | | association, trust, or other entity]; [and] |
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| 29 | 29 | | (C) for an association [for a limited liability |
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| 30 | 30 | | company], [either] more than 50 percent, owned directly or |
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| 31 | 31 | | indirectly, of the capital or profits interest in the association; |
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| 32 | 32 | | (D) for a trust, more than 50 percent, owned |
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| 33 | 33 | | directly or indirectly, of the current beneficial interest in the |
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| 34 | 34 | | trust corpus or income; |
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| 35 | 35 | | (E) for a limited liability company, either: |
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| 36 | 36 | | (i) more than 50 percent, owned directly or |
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| 37 | 37 | | indirectly, of the total membership interest of the limited |
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| 38 | 38 | | liability company; or |
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| 39 | 39 | | (ii) more than 50 percent, owned directly |
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| 40 | 40 | | or indirectly, of the beneficial ownership interest in the |
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| 41 | 41 | | membership interest of the limited liability company; or |
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| 42 | 42 | | (F) for any other entity, more than 50 percent, |
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| 43 | 43 | | owned directly or indirectly, of the capital or profits interest in |
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| 44 | 44 | | the entity [total membership interest of the limited liability |
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| 45 | 45 | | company or more than 50 percent, owned directly or indirectly, of |
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| 46 | 46 | | the beneficial ownership interest in the membership interest of the |
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| 47 | 47 | | limited liability company]. |
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| 48 | 48 | | SECTION 2. This Act applies only to a report originally due |
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| 49 | 49 | | on or after the effective date of this Act. |
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| 50 | 50 | | SECTION 3. This Act takes effect January 1, 2010. |
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| 51 | 51 | | * * * * * |
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