Texas House Bill HB2684

Texas 2013 - 83rd Regular

Caption

Relating to an exemption from the franchise tax for certain political subdivision corporations.

Impact

If enacted, HB2684 will amend Subchapter B of Chapter 171 of the Texas Tax Code by adding a new section that categorically exempts political subdivision corporations, formed under Section 304.001 of the Local Government Code, from the franchise tax. This change will take effect on January 1, 2014, and will apply to reports due on or after that date. Such financial relief is expected to provide these entities with more resources to allocate toward community services and local needs.

Summary

House Bill 2684, introduced in the Texas legislature, specifically addresses the exemption from the franchise tax for certain political subdivision corporations. The bill aims to bolster the fiscal autonomy of these entities by relieving them from this financial obligation, thereby encouraging their formation and operation. This exemption is particularly significant for political subdivision corporations, which often serve essential roles in local governance and service delivery.

Contention

While the bill received unanimous support in the House, with a vote tally of 136 yeas to 0 nays, it may not be without contention within broader fiscal policy debates. Proponents argue that this exemption is a necessary step to support local governance and streamline operations for political subdivision corporations. However, critics of tax exemptions may contend that such measures could diminish state revenues, raising questions about the long-term fiscal implications and the balance between supporting local entities and ensuring adequate funding for statewide needs.