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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.