Floor Packet Page No. 36                                                    



	

Amend CSHB 3 as follows:                                                     

	On page 3 add a New Section (11) to Section 171.001, 

Subchapter A of the bill to read as follows and renumber 

accordingly:

		(11)  "Management company" means a corporation, limited 

liability company, or other limited liability entity that conducts 

all or part of the active trade or business of another entity (the 

"managed entity") in exchange for:

			(A)  a management fee, and                                            

			(B)  reimbursement of specified costs incurred in 

the conduct of the active trade or business of the managed entity 

including "wages and cash compensation" as determined under Sec. 

171.1013(a) and (b).

	On page 24 Add a new Section (n) to Sec. 171.1011 to read as 

follows and renumber accordingly:

	(m) A taxable entity that is a management company shall 

exclude from its total revenue reimbursements of specified costs 

incurred in its conduct of the active trade or business of a managed 

entity including "wages and cash compensation" as determined under 

Sec. 171.1013(a) and (b).

	On page 36 Add a new section (f) and (g) to Sec. 171.1013 to 

read as follows:

	(f)  A taxable entity that is a management company:                     

			(1)  may not include as wages or cash compensation 

any amounts reimbursed by a managed entity; and

			(2)  shall determine compensation as provided by 

this section for only those wage and compensation payments that are 

not reimbursed by a managed entity.

	(g)  A taxable entity that is a managed entity shall include 

reimbursements made to the management company for wages and 

compensation as if the reimbursed amounts had been paid to 

employees of the managed entity.