Monitoring the Session

HB 3684

Capriglione Bill Cuts Franchise Tax For Securities Exchanges

Companion SB 1058 became law

Verdict: No flags

No flagsInitial review
Rep. Giovanni CapriglioneRHouse 98

Initial review · graded Oct 22, 2026 · Headline, summary and grade are analysis of the bill text, not a finding about any person · How we grade

Caption

relating to the exclusion of certain securities transaction payments from the total revenue of a taxable entity that is a registered securities market operator.

Caption from analyzed text · version H.

Summary

Rebates paid to brokers who supply trading liquidity come off taxable revenue, from 2026 reports.

The bill lets securities exchanges leave out of their Texas franchise tax revenue the rebate payments they make to brokers and dealers who supply trading liquidity. It touches only entities in the securities and commodity exchange industry code that are registered with federal securities or commodities regulators. Those exchanges report lower taxable revenue, and so owe less franchise tax, on reports due on or after January 1, 2026.

Labels

Labels: ACROSS THE AISLE. Joint authors: 2 Republicans, 1 Democrat. Party as the Legislative Reference Library lists it for the 89th Legislature.

Receipt

The receipt

89R-HB3684 · 2025-03-04

SOLD BY

Rep. Giovanni CapriglioneRHouse 98 Rep. Angie Chen ButtonRHouse 112 Rep. Linda GarciaDHouse 107

ITEM

relating to the exclusion of certain securities transaction payments from the total revenue of a taxable entity that is a registered securities market operator.

WHAT IT DOES

Rebates paid to brokers who supply trading liquidity come off taxable revenue, from 2026 reports.

The bill lets securities exchanges leave out of their Texas franchise tax revenue the rebate payments they make to brokers and dealers who supply trading liquidity. It touches only entities in the securities and commodity exchange industry code that are registered with federal securities or commodities regulators. Those exchanges report lower taxable revenue, and so owe less franchise tax, on reports due on or after January 1, 2026.

CHARGES

[ ] NONE FOUND

TOTAL

Net to General Revenue · FY 2026$0

LBB estimate, flow · fiscal note version H · ( ) = negative · source

Sources

Fiscal note · version H · April 4, 2025

Estimated Two-year Net Impact to General Revenue Related Funds for HB3684, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($560,000) for the 2026-27 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.

First year · FY 2026 · $0

Probable Net Positive/(Negative) Impact to General Revenue Related Funds

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

HISTORY

  1. Filed
  2. Read first time
  3. Referred to Ways & Means
  4. Scheduled for public hearing on . . .
  5. Considered in public hearing
  6. Committee substitute considered in committee
  7. Testimony taken/registration(s) recorded in committee
  8. Left pending in committee
  9. Considered in formal meeting
  10. Committee substitute considered in committee
  11. Reported favorably as substituted
  12. Comte report filed with Committee Coordinator
  13. Committee report distributed
  14. Committee report sent to Calendars
  15. Considered in Calendars
  16. Placed on General State Calendar
  17. Read 2nd time
  18. Postponed 4/25/25 10:00 AM
  19. Companion considered in lieu of SB 1058
  20. Laid on the table subject to call
FILED UNDER

CORPORATE WELFARE

THE TEXT

…“operator shall exclude from its total revenue transaction rebate”…

Bill text, House committee report version (H)

The bill gives one industry, securities exchange operators, a franchise tax exclusion for the rebates they pay brokers and dealers.

No flags

THANK YOU FOR CHECKING THE RECEIPT

CAMPAIGN PAID FOR BY

CAMPAIGN PAID FOR BY

Giovanni Capriglione

Donors

Capital One Financial Corporation Associates Political Fund$5KMurt Arnold$5,000Jason Itkin$5,000

Not tied to this bill.

Sources

The author's campaign account only. Own money and internal transfers are separate on the member page.

Derived itemized flow · Oct 31, 2024 to Oct 29, 2025. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Capital One Financial Corporation Associates Political Fund$5,000.00

Capital One Financial Corporation Associates Political Fund

$5,000.00

Cash
$5,000.00
Paid by others
$0.00
Total
$5,000.00

Also funds 1 other sitting lawmakers.

Derived recipient stock · Dec 14, 2024 to Jul 14, 2025. State data as of Nov 4, 2026.

Name match, not a verified identity: normalized filed name and state.

Sources

Derived itemized flow · on Jul 14, 2025. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101030508.

Murt Arnold$5,000.00
Jason Itkin$5,000.00
Money

Missing data does not establish zero giving. Display amounts are rounded.

×

Capital One Financial Corporation Associates Political Fund

$5,000.00

Cash
$5,000.00
Paid by others
$0.00
Total
$5,000.00

Also funds 1 other sitting lawmakers.

Derived recipient stock · Dec 14, 2024 to Jul 14, 2025. State data as of Nov 4, 2026.

Name match, not a verified identity: normalized filed name and state.

Sources

Derived itemized flow · on Jul 14, 2025. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101030508.

Votes

No floor vote loaded for this bill.

Witnesses3
For
2
Against
0
On
1
Names

For

  • Texas Stock Exchange1 registration
  • TXSE Group Inc (Texas Stock Exchange)1 registration

On

  • Comptroller of Public Accounts1 registration
Sources

3 parsed registrations across the loaded witness lists.

Derived stock of witness registrations. Repeated appearances count separately. Organizations and self-representation appear as printed.

House witness list. Source snapshot 2026-10-20, Central time.

Fiscal
Net to General Revenue · FY 2026$0

LBB estimate, flow · fiscal note version H · ( ) = negative · source

Sources

Fiscal note · version H · April 4, 2025

Estimated Two-year Net Impact to General Revenue Related Funds for HB3684, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($560,000) for the 2026-27 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.

First year · FY 2026 · $0

Probable Net Positive/(Negative) Impact to General Revenue Related Funds

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

How this was graded

Analysis of text version H by claude-opus-5-5, Oct 22, 2026, against the published rubric.

Sources

Texas House · Filed Mar 4, 2025

04/28/2025 H Laid on the table subject to call

Texas Legislature Online · Introduced · House Committee Report

Data snapshot Oct 26, 2026 at 4:19 AM CDT. Grades, charges, quotes and corrections follow the published record.

House committee · Ways & Means · Committee vote 12 aye, 0 nay, 1 absent · Out of committee

Companion

SB 1058 by Parker (identical)

Subjects

Financial--General

Taxation--Franchise

Text

The text as introduced · 287 words

89R8403 SRA-F

By: Capriglione
H.B. No. 3684

A BILL TO BE ENTITLED

AN ACT

relating to the exclusion of certain securities transaction

payments from the total revenue of a taxable entity that is an

exchange or a member of an exchange for purposes of the franchise

tax.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 171.0001(13-a), Tax Code, is amended to

read as follows:

(13-a) "Security," for purposes of Sections

171.1011(g), 171.1011(g-2), 171.1011(y), 171.1011(z), and

171.106(f) only, has the meaning assigned by Section 475(c)(2),

Internal Revenue Code, and includes instruments described by

Sections 475(e)(2)(B), (C), and (D) of that code.

SECTION 2. Section 171.1011, Tax Code, is amended by adding

Subsections (y) and (z) to read as follows:

(y) A taxable entity shall exclude from its total revenue:

(1) if the entity is an exchange, transaction rebate

payments made by the exchange to a member of the exchange as part of

a securities transaction; and

(2) if the entity is a member of an exchange,

transaction rebate payments made to the member by the exchange as

part of a securities transaction.

(z) For purposes of Subsection (y):

(1) "Exchange" has the meaning assigned by 15 U.S.C.

Section 78C(a)(1).

(2) "Member" has the meaning assigned by 15 U.S.C.

Section 78C(a)(3)(A).

(3) "Securities transaction" means the purchase or

sale of a security on an exchange by a member of the exchange.

(4) "Transaction rebate payment" means an amount paid

to compensate a member of the exchange in order to provide liquidity

to the market.

SECTION 3. This Act applies only to a report originally due

on or after the effective date of this Act.

SECTION 4. This Act takes effect January 1, 2026.