BILL ANALYSIS

Senate Research Center	S.B. 524
89R8577 CJC-D	By: Campbell
	Finance
	4/29/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

In 2021, the Texas Legislature passed S.B. 938 (87th Regular Session) to create a meaningful pathway for veterans to pursue entrepreneurship by offering a five-year exemption from the state franchise tax and certain filing fees for new veteran-owned businesses. This policy acknowledged the service of Texas veterans while promoting economic mobility, small business formation, and job creation.

Since the enactment of S.B. 938, the program has proven highly effective, with over 13,700 veteran-owned businesses established under the exemption. However, as originally structured, the program's provisions are set to expire on January 1, 2026, unless renewed or made permanent.

S.B. 524 builds on this success by proposing to make the franchise tax and filing fee exemptions for new veteran-owned businesses permanent, rather than temporary. The goal is to sustain and expand the positive impact this program has had on veterans, their families, and the broader Texas economy.

Legislative Intent:

The intent of S.B. 524 is to permanently codify the five-year exemption from the franchise tax and certain filing fees for new veteran-owned businesses. This measure is designed to consistently support veteran entrepreneurship, recognize the unique challenges veterans face during their transition to civilian life, honor their service by reducing barriers to business formation, and promote economic growth and job creation.

Key Provision

� Eliminates the expiration date (January 1, 2026) originally set under S.B. 938 (87th RS).

C.S.S.B. 524 has two provisions.

1. At least one of the owners is a Texas resident.

2. Only one veteran-owned business is authorized for the tax exemption.

As proposed, S.B. 524 amends current law relating to the exemption from the franchise tax and certain filing fees for certain businesses owned by veterans.

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. Repealer: Section 3 (relating to amending Section 171.0001(4), Tax Code), Chapter 859 (S.B. 938), Acts of the 87th Legislature, Regular Session, 2021, as effective January 1, 2026.

Repealer: Section 7 (relating to amending Section 171.063(g), Tax Code), Chapter 859 (S.B. 938), Acts of the 87th Legislature, Regular Session, 2021, as effective January 1, 2026; and

Repealers: Section 9 (relating to providing for the repeal of Section 12.005, Business Organizations Code, and Sections 171.0005, 171.001(d), and 171.204(d), Tax Code), Chapter 859 (S.B. 938), Acts of the 87th Legislature, Regular Session, 2021, as effective January 1, 2026.

SECTION 2.� Effective date: September 1, 2025.