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                                                                H.C.R. No. 51 



HOUSE CONCURRENT RESOLUTION
	WHEREAS, House Bill 3, as enrolled by the 79th Legislature of 
the State of Texas, 3rd Called Session, incorporates limited 
liability partnerships and limited partnerships into the franchise 
tax; and
	WHEREAS, House Bill 3 references incorrect lines of the 
Internal Revenue Service forms used for determining the "total 
revenue" of a partnership subject to the franchise tax; and
	WHEREAS, The incorrect references employ net rental income, 
rather than gross rental income, in determining the "total revenue" 
of a partnership subject to the franchise tax, while gross rental 
income is employed in determining the "total revenue" of a 
corporation subject to the franchise tax; and
	WHEREAS, These incorrect line references would grant an 
unfair advantage to a partnership over a similarly situated 
corporation in the calculation of the franchise tax, an advantage 
that could be tenfold; and
	WHEREAS, Proposed technical corrections to House Bill 3 to 
resolve this discrepancy would ensure equity in the determination 
of "total revenue" between corporations and partnerships subject to 
the franchise tax, level the playing field between partnerships and 
corporations, and circumvent the creation of a new loophole in the 
reformed franchise tax; and
	WHEREAS, These corrections would ensure that the value of 
guaranteed payments is not counted twice in the determination of 
"total revenue"; and
	WHEREAS, These corrections would also conform House Bill 3 to 
the Texas Tax Reform Commission's objective regarding the treatment 
of rental income and guaranteed payments for partnerships and 
corporations in determining "total revenue"; now, therefore, be it
	RESOLVED, That the 79th Legislature of the State of Texas, 
3rd Called Session, hereby express its intent for the 80th 
Legislature of the State of Texas to enact the following 
corrections to House Bill 3, as enrolled by the 79th Legislature of 
the State of Texas, 3rd Called Session:
	(1)  On page 23, line 3, strike "2" and substitute "3a and 5".   
	(2)  On page 23, between lines 4 and 5, insert a new 
Subparagraph (iv) as follows:  "(iv)  the amounts entered on line 
17, Internal Revenue Service Form 8825; and".

                                                                            Otto




______________________________              ______________________________
 
   President of the Senate                               Speaker of the House      

	I certify that H.C.R. No. 51 was adopted by the House on May 
15, 2006, by a non-record vote.

                                                  ______________________________
                                                     Chief Clerk of the House   

	I certify that H.C.R. No. 51 was adopted by the Senate on May 
15, 2006, by a viva-voce vote.

                                                  ______________________________
                                                      Secretary of the Senate   



APPROVED: __________________                                                
 
                Date                                                         




 
         __________________                                              
 
              Governor