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Committee hears ‘capital markets’ package targeting shareholder proposal thresholds and tax treatment for exchanges
Summary
A cluster of bills would raise shareholder proposal thresholds, adjust franchise‑tax treatment for exchanges, and seek a constitutional ban on transaction taxes — all pitched as measures to attract exchanges and protect ordinary shareholders from frivolous proposals.
Lede: The committee heard a multi‑bill pitch from Sen. Parker intended to strengthen Texas as a capital‑markets hub, including higher thresholds for shareholders who may force proposals onto corporate ballots, tax rules to avoid double taxation of exchange rebates, and a constitutional amendment to bar a state financial‑transaction tax.
Nut graf: Supporters — including industry groups and the Texas Stock Exchange proponents — said raising eligibility and clarifying tax rules would deter frivolous shareholder proposals, reduce compliance costs, and attract exchanges to locate in Texas. Critics and some members asked constitutional and federal‑preemption questions, and members requested more technical briefings.
Body: Sen. Parker described committee substitute SB 10 57 as raising the ownership and holding‑period thresholds for shareholders to put proposals on the ballot for Texas‑organized public companies: the substitute requires at least $1,000,000 in voting securities or 3% of voting stock held for at least six months (with aggregation allowed). The goal, Parker said, is to reduce low‑stake activist proposals that impose costs on the company and its shareholders.
He framed SB 10 58 (committee substitute) as a tax‑code fix to allow exchanges and broker‑dealers to exclude maker‑taker rebate payments when calculating taxable margin so exchanges are taxed on true net revenue. Witnesses from the prospective Texas Stock Exchange and the comptroller’s office explained the mechanics and said the language is meant to avoid double taxation and align tax treatment with economic realities of modern exchange models.
Sen. Parker also laid out SJR 50, a proposed constitutional amendment to prohibit the legislature from imposing a tax on transfers of securities or processing of financial transactions. He said the goal is to offer certainty to investors and exchanges (citing prior threats of transaction taxes in other states) and to support the state’s efforts to attract major exchanges.
Public testimony came from Bill Lauderback (Texas Stock Exchange Group), representatives of the NYSE/Nasdaq second‑headquarters announcements (cited as market signals), and industry trade groups. Comptroller staff participated as a resource on the tax language for SB 10 58. Senators asked constitutional and federal preemption questions and requested additional technical briefings and a packaged spreadsheet of related statutes.
Ending: The committee left the bills pending after testimony; authors committed to provide technical materials and to coordinate further with the comptroller and exchange proponents.
