BILL ANALYSIS

 

 

Senate Research Center	H.B. 3992
	By: Murphy (Perry)
	Finance
	5/16/2017
	Engrossed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Interested parties note the need to clarify in statute that a certain type of agricultural cooperative is exempt from the franchise tax. H.B. 3992 seeks to provide such clarification.

 

H.B. 3992 amends current law relating to a franchise tax exemption for certain cooperatives with a member that has farmer-fruit grower members.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Section 171.071, Tax Code, as follows:

 

Sec. 171.071. EXEMPTION--FARMERS' COOPERATIVE SOCIETY. Provides that a cooperative that is either a farmers' cooperative society incorporated under Chapter 51 (Farmers' Cooperative Societies), Agriculture Code, or a cooperative whose single member is a farmers' cooperative described in Section 521(b)(1), Internal Revenue Code, that has at least 500 farmer-fruit grower members, is exempted from the franchise tax, rather than providing that a farmers' cooperative society incorporated under Chapter 51, Agriculture Code, is exempted from the franchise tax.

 

SECTION 2. Provides that the amendment made by this Act to Section 171.071, Tax Code, is a clarification of existing law.

 

SECTION 3. Effective date: upon passage or September 1, 2017.