Floor Packet Page No. 221
      Amend CSHB 4 as follows:
      (1)  On page 150, line 1, add a new (12), renumbering present
(12) and all succeeding subsections accordingly, as follows:
                  (12)  "Partnership" means any taxable entity
taxed as a partnership for United States federal income tax
purposes.
      (2)  On page 173, line 19, at the beginning of new subsection
(E), before "adding", insert "for a taxable entity with more than
35 owners, directly or indirectly,".
      (3)  On page 173, line 23, after ";", insert "and".
      (4)  On page 173, line 24, through page 174, line 7, strike
"and", strike the added contents of subsection (iii), and strike
subsection (F), in full.
      (5)  On page 175, line 20, between "owners" and "for", insert
"(other than amounts eligible to be treated as net earnings from
self-employment as defined in Section 1402(a) of the Internal
Revenue Code)".
      (6)  On page 176, line 27, between "partnership" and "that",
insert "or S corporation (as defined in Section 1361 of the
Internal Revenue Code)".
      (7)  On page 177, lines 6-8, strike subsection (C) in full
and substitute:
            (C)  subtracting 100 percent of the amount of the
income of the partnership reportable to the Internal Revenue
Service as eligible to be treated as taxable to the partners as
compensation, other than any partner who is an officer or director
of a partnership that has more than 35 partners;.
      (8)  On page 177, lines 22-23, between "has" and "partners",
strike "35 or fewer" and substitute "more than 35".
      (9)  On page 177, line 25, between "income" and "reportable",
insert "of the partnership".
      (10)  On page 177, lines 26-27, between "payments" and ".",
strike ", if taxed as a partnership for federal income tax
purposes".
      (11)  On page 178, line 1, insert a new subsection (d),
relettering present subsection (d) as subsection (e) as follows:
            (d)  In this section, "compensation" means income
reportable by the partnership to the Internal Revenue Service as
income of the partners that is eligible to be treated as net
earnings from self-employment as defined in Section 1402(a) of the
Internal Revenue Code. "Compensation" does not include an amount
precluded from state taxation by federal law.