BILL ANALYSIS

Senate Research Center	S.B. 266
88R3292 RDS-F	By: Springer
	Finance
	3/8/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

To continue to build upon the Texas Miracle, we are experiencing; Texas should lead in the financial sector of the job market. Other states in the Union can levy a tax on financial transactions such as securities. For example, if Texas were to impose this fee or tax, the same economic activity would be subject to taxation multiple times and create a disincentive to invest in our economy. This bill creates a financial sector-friendly environment by prohibiting a punitive and regressive tax on the free exercise of trading, brokering, dealing, transferring, or acting as a clearing agency without the threat of incurring such fees or taxes on investment transactions in Texas. As an ancillary benefit, this bill would lower transaction costs relative to other states, increasing trading volume and liquidity as the fee or tax imposed by other states would not be applicable in Texas. This bill will protect the free enterprise of business relating to any registered securities market operator and promote the growth of financial institutions in the state that will serve the financial health of our economy. As an ancillary benefit, this bill would lower investment costs for those Texans who retired on fixed-income investments.

As proposed, S.B. 266 amends current law relating to a prohibition on the enactment of a law imposing an occupation tax on certain entities that enter into transactions conveying securities or imposing a tax on certain securities transactions.

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 Chapter 101, Tax Code, by adding Section 101.010, as follows:

Sec. 101.010. LIMITATION: TAXES IMPOSED ON SECURITIES TRANSACTIONS AND ENTITIES ENGAGING IN SECURITIES TRANSACTIONS. (a) Defines "registered securities market operator," "securities transaction," and "security."

(b) Prohibits the legislature, notwithstanding any other law, from enacting a law that imposes:

(1) an occupation tax on a registered securities market operator; or

(2) a tax on a securities transaction conducted by a registered securities market operator.

(c) Provides that this section does not prohibit:

(1) the imposition of:

(A) a general business tax measured by business activity;

(B) a tax on the production of minerals;

(C) a tax on insurance premiums;

(D) sales and use taxes on tangible personal property or services; or

(E) a fee based on the cost of processing or creating documents; or

(2) a change in the rate of a tax in existence on September 1, 2023.

SECTION 2. Effective date: September 1, 2023.