By Craddick, Junell, et al. H.B. No. 4
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to funding public elementary and secondary schools and
1-3 providing property tax relief and equity and to the imposition,
1-4 administration, enforcement, and collection of, and allocation of
1-5 the revenue from, various state and local taxes; providing for a
1-6 cost control committee; providing penalties.
1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-8 ARTICLE 1. SCHOOL FINANCE
1-9 SECTION 1.01. The following provisions of the Education Code
1-10 are repealed:
1-11 (1) Chapter 41; and
1-12 (2) Sections 7.055(a)(34), 12.107, 31.021(c), and
1-13 56.208(d).
1-14 SECTION 1.02. Chapter 42, Education Code, is amended to read
1-15 as follows:
1-16 CHAPTER 42. FOUNDATION SCHOOL PROGRAM
1-17 SUBCHAPTER A. GENERAL PROVISIONS
1-18 Sec. 42.001. STATE POLICY. (a) It is the policy of this
1-19 state that the provision of public education is a state
1-20 responsibility and that a thorough and efficient system be provided
1-21 and substantially financed through state revenue sources so that
1-22 each student enrolled in the public school system shall have access
1-23 to programs and services that are appropriate to the student's
1-24 educational needs and that are substantially equal to those
2-1 available to any similar student, notwithstanding varying local
2-2 economic factors.
2-3 (b) The public school finance system of this state shall
2-4 adhere to a standard of neutrality that provides for substantially
2-5 equal access to similar revenue per student at similar tax effort,
2-6 considering all state and local tax revenues of districts after
2-7 acknowledging all legitimate student and district cost differences.
2-8 Sec. 42.002. PURPOSES OF FOUNDATION SCHOOL PROGRAM.
2-9 (a) The purposes of the Foundation School Program set forth in
2-10 this chapter are to guarantee that each school district in the
2-11 state has:
2-12 (1) adequate resources to provide each eligible
2-13 student a basic instructional program and facilities suitable to
2-14 the student's educational needs; and
2-15 (2) access to a substantially equalized program of
2-16 financing in excess of basic costs for certain services, as
2-17 provided by this chapter.
2-18 (b) The Foundation School Program consists of[:]
2-19 [(1)] two tiers that in combination provide for:
2-20 (1) [(A)] sufficient financing for all school
2-21 districts to provide a basic program of education that is rated
2-22 academically acceptable or higher under Section 39.072 and meets
2-23 other applicable legal standards; and
2-24 (2) [(B)] substantially equal access to funds to
2-25 provide an enriched program and additional funds for facilities.
2-26 (c) The Foundation School Program is supplemented by[; and]
2-27 [(2)] a facilities component as provided by Chapter
3-1 46.
3-2 Sec. 42.003. STUDENT ELIGIBILITY. (a) A student is
3-3 entitled to the benefits of the Foundation School Program if the
3-4 student is 5 years of age or older and under 21 years of age on
3-5 September 1 of the school year and has not graduated from high
3-6 school and is not an out-of-state resident incarcerated in a
3-7 private detention facility located in the state.
3-8 (b) A student to whom Subsection (a) does not apply is
3-9 entitled to the benefits of the Foundation School Program if the
3-10 student is enrolled in a prekindergarten class under Section
3-11 29.153.
3-12 (c) A child may be enrolled in the first grade if the child
3-13 is at least six years of age at the beginning of the school year of
3-14 the district or has been enrolled in the first grade or has
3-15 completed kindergarten in the public schools in another state
3-16 before transferring to a public school in this state.
3-17 (d) Notwithstanding Subsection (a), a student younger than
3-18 five years of age is entitled to the benefits of the Foundation
3-19 School Program if:
3-20 (1) the student performs satisfactorily on the
3-21 assessment instrument administered under Section 39.023(a) to
3-22 students in the third grade; and
3-23 (2) the district has adopted a policy for admitting
3-24 students younger than five years of age.
3-25 Sec. 42.004. ADMINISTRATION OF THE PROGRAM. The
3-26 commissioner, in accordance with [the] rules adopted by the
3-27 commissioner [of the State Board of Education], shall take such
4-1 action and require such reports consistent with this chapter as may
4-2 be necessary to implement and administer the Foundation School
4-3 Program.
4-4 Sec. 42.005. AVERAGE DAILY ATTENDANCE. (a) In this
4-5 chapter, average daily attendance is the quotient of the sum of
4-6 attendance for each day of the minimum number of days of
4-7 instruction as described under Section 25.081(a) [and for each day
4-8 approved by the commissioner for an extended year program under
4-9 Section 29.082] divided by the minimum number of days of
4-10 instruction.
4-11 [(a-1) Subsection (a) applies beginning with the 1997-1998
4-12 school year. For the 1995-1996 and 1996-1997 school years, average
4-13 daily attendance is the quotient of the sum of attendance for each
4-14 day of the minimum number of days of instruction as described under
4-15 Section 25.081(a) divided by the minimum number of days of
4-16 instruction. This subsection expires September 1, 1997.]
4-17 (b) A school district that experiences a decline of two
4-18 percent or more in average daily attendance as a result of the
4-19 closing or reduction in personnel of a military base shall be
4-20 funded on the basis of the actual average daily attendance of the
4-21 preceding school year.
4-22 (c) The commissioner shall adjust the average daily
4-23 attendance of a school district that has a significant percentage
4-24 of students who are migratory children as defined by 20 U.S.C.
4-25 Section 6399.
4-26 (d) The commissioner may adjust the average daily attendance
4-27 of a school district in which a disaster, flood, extreme weather
5-1 condition, fuel curtailment, or other calamity has a significant
5-2 effect on the district's attendance.
5-3 Sec. 42.006. PUBLIC EDUCATION INFORMATION MANAGEMENT SYSTEM
5-4 (PEIMS). (a) Each school district shall participate in the Public
5-5 Education Information Management System (PEIMS) and shall provide
5-6 through that system information required for the administration of
5-7 this chapter and of other appropriate provisions of this code.
5-8 (b) Each school district shall use a uniform accounting
5-9 system adopted by the commissioner for the data required to be
5-10 reported for the Public Education Information Management System.
5-11 (c) Annually, the commissioner shall review the Public
5-12 Education Information Management System and shall repeal or amend
5-13 rules that require school districts to provide information through
5-14 the Public Education Information Management System that is not
5-15 necessary. In reviewing and revising the Public Education
5-16 Information Management System, the commissioner shall develop rules
5-17 to ensure that the system:
5-18 (1) provides useful, accurate, and timely information
5-19 on student demographics and academic performance, personnel, and
5-20 school district finances;
5-21 (2) contains only the data necessary for the
5-22 legislature and the agency to perform their legally authorized
5-23 functions in overseeing the public education system; and
5-24 (3) does not contain any information related to
5-25 instructional methods, except as required by federal law.
5-26 Sec. 42.007. EQUALIZED FUNDING ELEMENTS. (a) The
5-27 Legislative Budget Board shall adopt rules, subject to appropriate
6-1 notice and opportunity for public comment, for the calculation for
6-2 each year of a biennium [of] the qualified funding elements, in
6-3 accordance with Subsection (c), [under Section 42.256(e)] necessary
6-4 to achieve the state policy under Section 42.001.
6-5 (b) Before [Not later than October 1 preceding] each regular
6-6 session of the legislature, the board shall report the equalized
6-7 funding elements to [the foundation school fund budget committee,]
6-8 the commissioner[,] and the legislature.
6-9 (c) [Sec. 42.256. FOUNDATION SCHOOL FUND BUDGET COMMITTEE.
6-10 (a) The foundation school fund budget committee is composed of the
6-11 governor, the lieutenant governor, and the comptroller.]
6-12 [(b) On or before December 1 before each regular session of
6-13 the legislature, the budget committee shall determine and certify
6-14 to the comptroller an amount of money to be placed in the
6-15 foundation school fund for the succeeding biennium for the purpose
6-16 of financing the Foundation School Program.]
6-17 [(c) The budget committee may, during the biennium, change
6-18 the estimate of money necessary to finance the Foundation School
6-19 Program.]
6-20 [(d) The foundation school fund budget committee shall adopt
6-21 rules for the calculation for each year of a biennium of the
6-22 qualified funding elements necessary to achieve the state funding
6-23 policy under Section 42.001. In the calculation of these funding
6-24 elements, the committee shall consider the report of the
6-25 Legislative Budget Board prescribed under Section 42.007.]
6-26 [(e)] The funding elements shall include:
6-27 (1) an amount [a basic allotment] for the purposes of
7-1 Section 42.101 that[, when combined with the guaranteed yield
7-2 component provided by Subchapter F,] represents the cost per
7-3 student of a regular education program that meets all mandates of
7-4 law and regulation;
7-5 (2) adjustments designed to reflect the variation in
7-6 known resource costs and costs of education beyond the control of
7-7 school districts; and
7-8 (3) appropriate program cost differentials and other
7-9 funding elements for the programs required by Subchapters A-D and
7-10 F, Chapter 29 [authorized under Subchapter C], with the program
7-11 funding level expressed as dollar amounts and as student
7-12 multipliers [weights] applied to the guaranteed level of state and
7-13 local funds per student [adjusted basic allotment] for the
7-14 appropriate year[;]
7-15 [(4) the maximum guaranteed level of qualified state
7-16 and local funds per student for the purposes of Subchapter F;]
7-17 [(5) the enrichment and facilities tax rate under
7-18 Subchapter F];
7-19 [(6) the calculation of students in weighted average
7-20 daily attendance under Section 42.302; and]
7-21 [(7) the amount to be appropriated for the school
7-22 facilities assistance program under Subchapter H].
7-23 (d) The board shall conduct a study on the funding elements
7-24 each biennium, as appropriate.
7-25 (e) The board may not recommend and the legislature may not
7-26 appropriate, for any biennium, an amount of state funds for the
7-27 maintenance and operation of public schools and for the erection
8-1 and equipment of public school buildings that is less than the
8-2 amount appropriated for those purposes in the preceding biennium,
8-3 adjusted for student population growth.
8-4 [(f) Not later than December 1 preceding each regular
8-5 session of the legislature, the foundation school fund budget
8-6 committee shall publish and report the equalized funding elements
8-7 calculated under this section to the commissioner and the
8-8 legislature. Before the committee adopts the elements, the
8-9 committee or the committee's designees shall hold a public hearing
8-10 on the recommendations of the Legislative Budget Board.]
8-11 (Sections 42.008-42.100 reserved for expansion)
8-12 SUBCHAPTER B. BASIC PROGRAM [ENTITLEMENT]
8-13 [SUBCHAPTER F. GUARANTEED YIELD PROGRAM]
8-14 [Sec. 42.301. PURPOSE. The purpose of the guaranteed yield
8-15 component of the Foundation School Program is to provide each
8-16 school district with the opportunity to provide the basic program
8-17 and to supplement that program at a level of its own choice and
8-18 with access to additional funds for facilities. An allotment under
8-19 this subchapter may be used for any legal purpose, including
8-20 capital outlay and debt service.]
8-21 Sec. 42.101. BASIC PROGRAM [42.302. ALLOTMENT]. (a) Each
8-22 school district is guaranteed a specified amount per [weighted]
8-23 student in state and local funds for each cent of tax effort [over
8-24 that required for the district's local fund assignment] up to the
8-25 maximum level specified in this subchapter. Except as provided by
8-26 Subchapter C, funds allocated under this section may be used for
8-27 any legal purpose. The amount of state and local funds for each
9-1 educational program for which a student multiplier is provided
9-2 under Subsection (b) [support, subject only to the maximum amount
9-3 under Section 42.303,] is determined by the formula:
9-4 GYA = [(]GL X S X SM [WADA] X DTR X 100[) - LR]
9-5 where:
9-6 "GYA" is the guaranteed yield amount of state and local funds
9-7 [to be] allocated to the district for the educational program;
9-8 "GL" is the dollar amount guaranteed level of state and local
9-9 funds per [weighted] student per cent of tax effort, which is
9-10 $49.60 [$20.55] or a greater amount for any year provided by
9-11 appropriation[, or a greater amount adopted by the foundation
9-12 school fund budget committee under Section 42.256(d)];
9-13 "S" ["WADA"] is the number of students in [weighted] average
9-14 daily attendance, number of full-time equivalent students, or
9-15 number of students enrolled, as appropriate, in the educational
9-16 program for which the computation is made[, which is calculated by
9-17 dividing the sum of the school district's allotments under
9-18 Subchapters B and C, less any allotment to the district for
9-19 transportation and 50 percent of the adjustment under Section
9-20 42.102, by the basic allotment for the applicable year];
9-21 "SM" is the student multiplier for the educational program,
9-22 as provided by Subsection (b); and
9-23 "DTR" is the district maintenance and operations [enrichment
9-24 and facilities] tax rate of the school district[, which is
9-25 determined by subtracting the amounts specified by Subsection (b)
9-26 from the total amount of taxes collected by the school district for
9-27 the applicable school year and dividing the difference by the
10-1 quotient of the district's taxable value of property as determined
10-2 under Subchapter M, Chapter 403, Government Code, divided by 100;
10-3 and]
10-4 ["LR" is the local revenue, which is determined by
10-5 multiplying "DTR" by the quotient of the district's taxable value
10-6 of property as determined under Subchapter M, Chapter 403,
10-7 Government Code, divided by 100].
10-8 (b) The student multipliers are:
10-9 (1) 1.0 for a student in average daily attendance, not
10-10 including time the student spends each day in a special education
10-11 program in an instructional arrangement other than mainstream or in
10-12 career and technology education programs;
10-13 (2) 1.1 for a student in a special education program
10-14 in a mainstream instructional arrangement;
10-15 (3) 5.0 for a full-time equivalent student in a
10-16 special education program in a homebound instructional arrangement;
10-17 (4) 3.0 for a full-time equivalent student in a
10-18 special education program in a hospital class instructional
10-19 arrangement;
10-20 (5) 5.0 for a full-time equivalent student in a
10-21 special education program in a speech therapy instructional
10-22 arrangement;
10-23 (6) 3.0 for a full-time equivalent student in a
10-24 special education program in a resource room instructional
10-25 arrangement;
10-26 (7) 3.0 for a full-time equivalent student in a
10-27 special education program in a self-contained, mild and moderate,
11-1 regular campus instructional arrangement;
11-2 (8) 3.0 for a full-time equivalent student in a
11-3 special education program in a self-contained, severe, regular
11-4 campus instructional arrangement;
11-5 (9) 2.7 for a full-time equivalent student in a
11-6 special education program in an off-home campus instructional
11-7 arrangement;
11-8 (10) 1.7 for a full-time equivalent student in a
11-9 special education program in a nonpublic day school;
11-10 (11) 2.3 for a full-time equivalent student in a
11-11 special education program vocational adjustment class;
11-12 (12) 4.0 for a student in a special education program
11-13 who resides in a residential care and treatment facility, other
11-14 than a state school, whose parent or guardian does not reside in
11-15 the district and who receives educational services from a local
11-16 school district;
11-17 (13) 2.8 for a student in a special education program
11-18 who resides in a state school;
11-19 (14) 0.2 for a student who is educationally
11-20 disadvantaged or who is a student who does not have a disability
11-21 and resides in a residential placement facility in a district in
11-22 which the student's parent or guardian does not reside;
11-23 (15) 2.41 for a student who is in a remedial and
11-24 support program under Section 29.081 because the student is
11-25 pregnant;
11-26 (16) 0.1 for a student who is in a bilingual education
11-27 or special language program under Subchapter B, Chapter 29;
12-1 (17) 1.37 for a full-time equivalent student in an
12-2 approved career and technology education program in grades nine
12-3 through 12 or in a career and technology program for students with
12-4 disabilities in grades seven through 12; and
12-5 (18) 0.12 for a student in a program for gifted and
12-6 talented students that the district certifies to the commissioner
12-7 as complying with Subchapter D, Chapter 29.
12-8 (c) The sum of the guaranteed yield amounts for each
12-9 educational program allocated to the district constitute the
12-10 district's basic program.
12-11 (d) In this section:
12-12 (1) "Career and technology education program" means a
12-13 program under Subchapter F, Chapter 29.
12-14 (2) "Full-time equivalent student" means 30 hours of
12-15 contact a week between a student and program personnel.
12-16 (3) "Special education program" means a program under
12-17 Subchapter A, Chapter 29 [In computing the district enrichment and
12-18 facilities tax rate of a school district, the total amount of
12-19 taxes collected by the school district does not include the amount
12-20 of:]
12-21 [(1) the district's local fund assignment under
12-22 Section 42.252; or]
12-23 [(2) taxes collected to pay the local share of the
12-24 cost of an instructional facility for which the district receives
12-25 state assistance under Subchapter H].
12-26 Sec. 42.102 [42.303]. LIMITATION ON MAINTENANCE AND
12-27 OPERATIONS [ENRICHMENT AND FACILITIES] TAX RATE. (a) The district
13-1 maintenance and operations [enrichment and facilities] tax rate
13-2 ("DTR") under Section 42.101 [42.302] may not exceed 75 cents
13-3 [$0.64] per $100 of valuation[, or a greater amount adopted by the
13-4 foundation school fund budget committee under Section 42.256(d)].
13-5 (b) A district that grants an additional homestead exemption
13-6 under Section 11.13(d) or (n), Tax Code, shall compute and report
13-7 the amount of the value exempted under those sections from the
13-8 district's taxable value of property under Section 403.302(d),
13-9 Government Code, in accordance with procedures adopted by the
13-10 comptroller. For purposes of this section and Section 42.352, a
13-11 district may not receive state aid for that portion of the
13-12 district's total maintenance and operations rate that, when applied
13-13 to the taxable value of property in the district as determined
13-14 under Section 403.302(d), Government Code, equals the amount of the
13-15 tax that would have been levied on the value of property exempted
13-16 under Section 11.13(d) or (n), Tax Code.
13-17 [Sec. 42.101. BASIC ALLOTMENT. For each student in average
13-18 daily attendance, not including the time students spend each day in
13-19 special education programs in an instructional arrangement other
13-20 than mainstream or career and technology education programs, for
13-21 which an additional allotment is made under Subchapter C, a
13-22 district is entitled to an allotment of $2,387 or a greater amount
13-23 adopted by the foundation school fund budget committee under
13-24 Section 42.256. A greater amount for any school year may be
13-25 provided by appropriation.]
13-26 Sec. 42.103 [42.102]. COST OF EDUCATION ADJUSTMENT.
13-27 (a) The basic program [allotment] for each district is adjusted to
14-1 reflect the geographic variation in known resource costs and costs
14-2 of education due to factors beyond the control of the school
14-3 district.
14-4 (b) The [foundation school fund budget committee shall
14-5 determine the] cost of education adjustment is determined by the
14-6 following formula:
14-7 CEA = ((CEI - 1) X .58) + 1
14-8 where:
14-9 "CEA" is the cost of education adjustment; and
14-10 "CEI" is the cost of education index adjustment adopted by
14-11 the foundation school fund budget committee and contained in
14-12 Chapter 203, Title 19, Texas Administrative Code, as that chapter
14-13 existed on January 1, 1997 [under Section 42.256].
14-14 [(c) Beginning with the 1996-1997 school year, the
14-15 commissioner shall recompute the cost of education index, excluding
14-16 from the computation the calculation for the diseconomies of scale
14-17 component and substituting a value of 1.00.]
14-18 Sec. 42.104 [42.103]. SMALL AND MID-SIZED DISTRICT
14-19 ADJUSTMENT. (a) The basic program [allotment] for certain small
14-20 and mid-sized districts is adjusted in accordance with this
14-21 section. In this section:
14-22 (1) "AP" ["AA"] is the district's adjusted program
14-23 [allotment per student];
14-24 (2) "ADA" is the number of students in average daily
14-25 attendance for which the district is entitled to state funds [an
14-26 allotment] under Section 42.101; and
14-27 (3) "ABP" ["ABA"] is the adjusted basic program
15-1 [allotment] determined under Section 42.103 [42.102].
15-2 (b) The basic program [allotment] of a school district that
15-3 contains at least 300 square miles and has not more than 1,600
15-4 students in average daily attendance is adjusted by applying the
15-5 formula:
15-6 AP [AA] = (1 + ((1,600 - ADA) X .0004)) X ABP [ABA]
15-7 (c) The basic program [allotment] of a school district that
15-8 contains less than 300 square miles and has not more than 1,600
15-9 students in average daily attendance is adjusted by applying the
15-10 formula:
15-11 AP [AA] = (1 + ((1,600 - ADA) X .00025)) X ABP [ABA]
15-12 (d) The basic program [allotment] of a school district that
15-13 offers a kindergarten through grade 12 program and has less than
15-14 5,000 students in average daily attendance is adjusted by applying
15-15 the formula, of the following formulas, that results in the
15-16 greatest adjusted allotment:
15-17 (1) the formula in Subsection (b) or (c) for which the
15-18 district is eligible;
15-19 (2) AP [AA] = 1 X ABP [ABA]; or
15-20 (3) depending on the school year:
15-21 (A) [for the 1996-1997 school year,]
15-22 [AA = (1 + ((5,000 - ADA) X .0000045)) X ABA;]
15-23 [(B)] for the 1997-1998 school year,
15-24 AP [AA] = (1 + ((5,000 - ADA) X .0000090)) X ABP [ABA];
15-25 (B) [(C)] for the 1998-1999 school year,
15-26 AP [AA] = (1 + ((5,000 - ADA) X .000015)) X ABP [ABA];
15-27 (C) [(D)] for the 1999-2000 school year,
16-1 AP [AA] = (1 + ((5,000 - ADA) X .000020)) X ABP [ABA];
16-2 (D) [(E)] for the 2000-2001 school year,
16-3 AP [AA] = (1 + ((5,000 - ADA) X .000025)) X ABP [ABA].
16-4 [(e) The commissioner may make the adjustment authorized by
16-5 Subsection (d)(3) only if the district's wealth per student does
16-6 not exceed the equalized wealth level under Section 41.002. For
16-7 purposes of this subsection, a district's wealth per student is
16-8 determined in the manner provided by Section 41.001, except that
16-9 the adjustment provided by Subsection (d)(3) is not used in
16-10 computing the number of students in weighted average daily
16-11 attendance.]
16-12 [Sec. 42.104. USE OF SMALL OR MID-SIZED DISTRICT ADJUSTMENT
16-13 IN CALCULATING SPECIAL ALLOTMENTS. In determining the amount of a
16-14 special allotment under Subchapter C for a district to which
16-15 Section 42.103 applies, a district's adjusted basic allotment is
16-16 considered to be the district's adjusted allotment determined under
16-17 Section 42.103.]
16-18 Sec. 42.105. SPARSITY ADJUSTMENT. Notwithstanding Sections
16-19 42.101, [42.102, and] 42.103, and 42.104, a school district that
16-20 has fewer than 130 students in average daily attendance shall be
16-21 provided an adjusted basic program [allotment] on the basis of 130
16-22 students in average daily attendance if it offers a kindergarten
16-23 through grade 12 program and has preceding or current year's
16-24 average daily attendance of at least 90 students or is 30 miles or
16-25 more by bus route from the nearest high school district. A
16-26 district offering a kindergarten through grade 8 program whose
16-27 preceding or current year's average daily attendance was at least
17-1 50 students or which is 30 miles or more by bus route from the
17-2 nearest high school district shall be provided an adjusted basic
17-3 program [allotment] on the basis of 75 students in average daily
17-4 attendance. An average daily attendance of 60 students shall be
17-5 the basis of providing the adjusted basic program [allotment] if a
17-6 district offers a kindergarten through grade 6 program and has
17-7 preceding or current year's average daily attendance of at least 40
17-8 students or is 30 miles or more by bus route from the nearest high
17-9 school district.
17-10 Sec. 42.106 [42.304]. COMPUTATION OF AID FOR CERTAIN
17-11 DISTRICTS [DISTRICT ON MILITARY RESERVATION] OR AT STATE SCHOOL.
17-12 State assistance under this chapter [subchapter] for a school
17-13 district located on a federal military installation or at Moody
17-14 State School or for the South Texas Independent School District or
17-15 the Boys Ranch Independent School District is computed using the
17-16 average maintenance and operations tax rate [and property value per
17-17 student] of school districts in the county, as determined by the
17-18 commissioner.
17-19 (Sections 42.107 [42.106]-42.150 reserved for expansion)
17-20 SUBCHAPTER C. CONDITIONS APPLICABLE TO FUNDING BASED ON
17-21 SPECIAL STUDENT MULTIPLIERS [SPECIAL ALLOTMENTS]
17-22 Sec. 42.151. SPECIAL EDUCATION PROGRAMS. (a) [For each
17-23 student in average daily attendance in a special education program
17-24 under Subchapter A, Chapter 29, in a mainstream instructional
17-25 arrangement, a school district is entitled to an annual allotment
17-26 equal to the adjusted basic allotment multiplied by 1.1. For each
17-27 full-time equivalent student in average daily attendance in a
18-1 special education program under Subchapter A, Chapter 29, in an
18-2 instructional arrangement other than a mainstream instructional
18-3 arrangement, a district is entitled to an annual allotment equal to
18-4 the adjusted basic allotment multiplied by a weight determined
18-5 according to instructional arrangement as follows:]
18-6 [Homebound ........................................ 5.0]
18-7 [Hospital class ................................... 3.0]
18-8 [Speech therapy ................................... 5.0]
18-9 [Resource room .................................... 3.0]
18-10 [Self-contained, mild and moderate, regular
18-11 campus ............................................ 3.0]
18-12 [Self-contained, severe, regular campus ........... 3.0]
18-13 [Off home campus .................................. 2.7]
18-14 [Nonpublic day school ............................. 1.7]
18-15 [Vocational adjustment class ...................... 2.3]
18-16 [(b) A special instructional arrangement for students with
18-17 disabilities residing in care and treatment facilities, other than
18-18 state schools, whose parents or guardians do not reside in the
18-19 district providing education services shall be established under
18-20 the rules of the State Board of Education. The funding weight for
18-21 this arrangement shall be 4.0 for those students who receive their
18-22 education service on a local school district campus. A special
18-23 instructional arrangement for students with disabilities residing
18-24 in state schools shall be established under the rules of the State
18-25 Board of Education with a funding weight of 2.8.]
18-26 [(c)] For funding purposes, the number of contact hours
18-27 credited per day for each student in the off home campus
19-1 instructional arrangement may not exceed the contact hours credited
19-2 per day for the multidistrict class instructional arrangement in
19-3 the 1992-1993 school year.
19-4 (b) [(d)] For funding purposes, the number of contact hours
19-5 credited per day for each student in the resource room;
19-6 self-contained, mild and moderate; and self-contained, severe,
19-7 instructional arrangements may not exceed the average of the
19-8 statewide total contact hours credited per day for those three
19-9 instructional arrangements in the 1992-1993 school year.
19-10 (c) [(e)] The commissioner [State Board of Education] by
19-11 rule shall prescribe the qualifications an instructional
19-12 arrangement must meet in order to be funded as a particular
19-13 instructional arrangement under this chapter [section]. In
19-14 prescribing the qualifications that a mainstream instructional
19-15 arrangement must meet, the commissioner [board] shall establish
19-16 requirements that students with disabilities and their teachers
19-17 receive the direct, indirect, and support services that are
19-18 necessary to enrich the regular classroom and enable student
19-19 success.
19-20 (d) [(f) In this section, "full-time equivalent student"
19-21 means 30 hours of contact a week between a special education
19-22 student and special education program personnel.]
19-23 [(g)] The commissioner [State Board of Education] shall
19-24 adopt rules and procedures governing contracts for residential
19-25 placement of special education students. The legislature shall
19-26 provide by appropriation for the state's share of the costs of
19-27 those placements.
20-1 (e) [(h)] Funds allocated under this chapter for special
20-2 education programs [section], other than an indirect cost allotment
20-3 established under rules adopted by the commissioner [State Board of
20-4 Education rule], must be used in the special education program
20-5 under Subchapter A, Chapter 29.
20-6 (f) [(i)] The agency shall encourage the placement of
20-7 students in special education programs, including students in
20-8 residential instructional arrangements, in the least restrictive
20-9 environment appropriate for their educational needs.
20-10 (g) [(j)] A school district that maintains for two
20-11 successive years a ratio of full-time equivalent students placed in
20-12 partially or totally self-contained classrooms to the number of
20-13 full-time equivalent students placed in resource room or mainstream
20-14 instructional arrangements that is 25 percent higher than the
20-15 statewide average ratio shall be reviewed by the agency to
20-16 determine the appropriateness of student placement. The
20-17 commissioner may reduce the guaranteed yield amounts for special
20-18 education [allotment the district receives] to the level to which
20-19 the district would be entitled if the district's ratio was not more
20-20 than 25 percent higher than the statewide average ratio.
20-21 (h) [(k)] A school district that provides an extended year
20-22 program required by federal law for special education students who
20-23 may regress is entitled to receive funds in an amount equal to 75
20-24 percent, or a lesser percentage determined by the commissioner, of
20-25 the dollar amount guaranteed level of state and local funds per
20-26 student per cent of tax effort [adjusted basic allotment or
20-27 adjusted allotment, as applicable], for each full-time equivalent
21-1 student in average daily attendance, multiplied by the amount
21-2 designated for the student's instructional arrangement under
21-3 Section 42.101(b) [this section], for each day the program is
21-4 provided divided by the number of days in the minimum school year.
21-5 For purposes of this subsection, the dollar amount guaranteed level
21-6 of state and local funds per student per cent of tax effort is
21-7 adjusted in the same manner as a district's basic program under
21-8 Sections 42.103 and 42.104. The total amount of state funding for
21-9 extended year services under this section may not exceed $10
21-10 million per year. A school district may use funds received under
21-11 this section only in providing an extended year program.
21-12 [(l) From the total amount of funds appropriated for special
21-13 education under this section, the commissioner shall withhold an
21-14 amount specified in the General Appropriations Act, and distribute
21-15 that amount to school districts for programs under Section 29.014.
21-16 The program established under that section is required only in
21-17 school districts in which the program is financed by funds
21-18 distributed under this subsection and any other funds available for
21-19 the program. After deducting the amount withheld under this
21-20 subsection from the total amount appropriated for special
21-21 education, the commissioner shall reduce each district's allotment
21-22 proportionately and shall allocate funds to each district
21-23 accordingly.]
21-24 Sec. 42.152. COMPENSATORY EDUCATION PROGRAMS [ALLOTMENT].
21-25 (a) [For each student who is educationally disadvantaged or who
21-26 is a student who does not have a disability and resides in a
21-27 residential placement facility in a district in which the student's
22-1 parent or legal guardian does not reside, a district is entitled to
22-2 an annual allotment equal to the adjusted basic allotment
22-3 multiplied by 0.2, and by 2.41 for each full-time equivalent
22-4 student who is in a remedial and support program under Section
22-5 29.081 because the student is pregnant.]
22-6 [(b)] For purposes of Section 42.101 [this section], the
22-7 number of educationally disadvantaged students is determined by
22-8 averaging the best six months' enrollment in the national school
22-9 lunch program of free or reduced-price lunches for the preceding
22-10 school year.
22-11 (b)(1) [(c)] Funds allocated under this chapter for
22-12 compensatory education programs [section], other than an indirect
22-13 cost allotment established under rules adopted by the commissioner
22-14 [State Board of Education rule], which may not exceed 15 percent,
22-15 must be used only in providing compensatory education and
22-16 accelerated instruction programs under Section 29.081 and may only
22-17 be expended to improve and enhance programs and services funded
22-18 under the regular education program.
22-19 (2) A district's compensatory education allotment may
22-20 only be used for costs supplementary to the regular program:
22-21 program and student evaluation, instructional materials and
22-22 equipment, supplemental staff expenses, salary supplements for
22-23 teachers, other supplies required for quality instruction, smaller
22-24 class size, and individualized instruction.
22-25 (3) A [, and the] district must account for the
22-26 expenditure of [state] funds allocated under this chapter for
22-27 compensatory education programs by program and by campus under
23-1 existing agency reporting and auditing procedures for the 1997-1998
23-2 school year.
23-3 (4) During the 1997-1998 school year, the
23-4 commissioner, with the assistance of the state auditor and the
23-5 comptroller of public accounts, shall develop and implement by rule
23-6 in the 1998-1999 school year an annual reporting and auditing
23-7 system of district and campus compensatory education funds to
23-8 ensure that compensatory education funds, other than the indirect
23-9 cost allotment, are expended only to supplement the regular
23-10 program.
23-11 (5) The commissioner, in the year following an audit,
23-12 shall withhold from a district's foundation school fund payment an
23-13 amount equal to the amount of funds determined by agency audit not
23-14 to have been used to supplement the regular program. The
23-15 commissioner shall release such funds to a district when it has
23-16 provided a detailed plan to expend those funds appropriately
23-17 according to this subsection.
23-18 (6) [Funds allocated under this section, other than
23-19 the indirect cost allotment, shall only be expended to improve and
23-20 enhance programs and services funded under the regular program.] A
23-21 home-rule school district or an open-enrollment charter school must
23-22 use funds allocated under this chapter for compensatory education
23-23 programs [Subsection (a)] to provide compensatory education
23-24 services but is not otherwise subject to Subchapter C, Chapter 29.
23-25 (c) [(d)] The agency shall evaluate the effectiveness of
23-26 accelerated instruction and support programs provided under Section
23-27 29.081 for students at risk of dropping out of school.
24-1 [(e) The commissioner may:]
24-2 [(1) retain a portion of the total amount allotted
24-3 under Subsection (a) that the commissioner considers appropriate
24-4 to finance intensive accelerated instruction programs and study
24-5 guides provided under Sections 39.024(b) and (c); and]
24-6 [(2) reduce each district's tier one allotments in the
24-7 same manner described for a reduction in allotments under Section
24-8 42.253.]
24-9 [(f) From the total amount of funds appropriated for
24-10 allotments under this section, the commissioner shall, each fiscal
24-11 year, withhold an amount to be determined by the commissioner, but
24-12 not less than $10,000,000, and distribute that amount for programs
24-13 under Section 29.085. In distributing those funds, preference
24-14 shall be given to a school district that received funds for a
24-15 program under Section 29.085 for the preceding school year. The
24-16 program established under that section is required only in school
24-17 districts in which the program is financed by funds distributed
24-18 under this section and any other funds available for the program.]
24-19 [(g) The commissioner shall coordinate the funds withheld
24-20 under Subsection (f) and any other funds available for the program
24-21 and shall distribute those funds. To receive funds for the
24-22 program, a school district must apply to the commissioner. The
24-23 commissioner shall give a preference to the districts that apply
24-24 that have the highest concentration of students who are pregnant or
24-25 who are parents.]
24-26 [(h) After deducting the amount withheld under Subsection
24-27 (f) from the total amount appropriated for the allotment under
25-1 Subsection (a), the commissioner shall reduce each district's tier
25-2 one allotments in the same manner described for a reduction in
25-3 allotments under Section 42.253 and shall allocate funds to each
25-4 district accordingly.]
25-5 [(i) From the total amount of funds appropriated for
25-6 allotments under this section, the commissioner shall, each fiscal
25-7 year, withhold $7,500,000 or a greater amount as determined in the
25-8 General Appropriations Act and distribute that amount for programs
25-9 under Subchapter A, Chapter 33. A program established under that
25-10 subchapter is required only in school districts in which the
25-11 program is financed by funds distributed under this section or
25-12 other funds distributed by the commissioner for a program under
25-13 that subchapter. In distributing those funds, preference shall be
25-14 given to a school district that received funds for a program under
25-15 this subsection for the preceding school year.]
25-16 [(j) The commissioner shall coordinate the funds withheld
25-17 under Subsection (i) and any other funds available for the program
25-18 and shall distribute those funds. To receive funds for the
25-19 program, a school district must apply to the commissioner. The
25-20 commissioner shall give a preference to the districts that apply
25-21 that have the highest concentration of at-risk students. For each
25-22 school year that a school district receives funds under this
25-23 section, the district shall allocate an amount of local funds for
25-24 school guidance and counseling programs that is equal to or greater
25-25 than the amount of local funds that the school district allocated
25-26 for that purpose during the preceding school year.]
25-27 [(k) After deducting the amount withheld under Subsection
26-1 (i) from the total amount appropriated for the allotment under
26-2 Subsection (a), the commissioner shall reduce each district's tier
26-3 one allotments in the same manner described for a reduction in
26-4 allotments under Section 42.253.]
26-5 [(l) From the total amount of funds appropriated for
26-6 allotments under this section, the commissioner shall, each fiscal
26-7 year, withhold the amount of $2.5 million for transfer to the
26-8 investment capital fund under Section 7.024.]
26-9 [(m) From the total amount of funds appropriated for
26-10 allotments under this section, the commissioner may withhold an
26-11 amount not exceeding $1 million each fiscal year and distribute the
26-12 funds to school districts that incur unanticipated expenditures
26-13 resulting from a significant increase in the enrollment of students
26-14 who do not have disabilities and who reside in residential
26-15 placement facilities.]
26-16 [(n) After deducting the amount withheld under Subsection
26-17 (l) from the total amount appropriated for the allotment under
26-18 Subsection (a), the commissioner shall reduce each district's
26-19 allotment under Subsection (a) proportionately and shall allocate
26-20 funds to each district accordingly.]
26-21 [(o) After deducting the amount withheld under Subsection
26-22 (m) from the total amount appropriated for the allotment under
26-23 Subsection (a), the commissioner shall reduce each district's
26-24 allotment under Subsection (a) proportionately.]
26-25 [(p) The commissioner shall:]
26-26 [(1) withhold, from the total amount of funds
26-27 appropriated for allotments under this section, an amount
27-1 sufficient to finance extended year programs under Section 29.082
27-2 not to exceed five percent of the amounts allocated under this
27-3 section; and]
27-4 [(2) give priority to applications for extended year
27-5 programs to districts with high concentrations of educationally
27-6 disadvantaged students.]
27-7 Sec. 42.153. BILINGUAL EDUCATION PROGRAMS [ALLOTMENT].
27-8 (a) [For each student in average daily attendance in a bilingual
27-9 education or special language program under Subchapter B, Chapter
27-10 29, a district is entitled to an annual allotment equal to the
27-11 adjusted basic allotment multiplied by 0.1.]
27-12 [(b)] Funds allocated under this chapter for bilingual
27-13 education programs [section], other than an indirect cost allotment
27-14 established under rules adopted by the commissioner [State Board of
27-15 Education rule], must be used in providing bilingual education or
27-16 special language programs under Subchapter B, Chapter 29, and must
27-17 be accounted for under existing agency reporting and auditing
27-18 procedures.
27-19 (b) [(c)] A district's bilingual education or special
27-20 language allocation may be used only for program and student
27-21 evaluation, instructional materials and equipment, staff
27-22 development, supplemental staff expenses, salary supplements for
27-23 teachers, and other supplies required for quality instruction and
27-24 smaller class size.
27-25 Sec. 42.154. CAREER AND TECHNOLOGY EDUCATION [ALLOTMENT].
27-26 [(a) For each full-time equivalent student in average daily
27-27 attendance in an approved career and technology education program
28-1 in grades nine through 12 or in career and technology education
28-2 programs for students with disabilities in grades seven through 12,
28-3 a district is entitled to an annual allotment equal to the adjusted
28-4 basic allotment multiplied by a weight of 1.37.]
28-5 [(b) In this section, "full-time equivalent student" means
28-6 30 hours of contact a week between a student and career and
28-7 technology education program personnel.]
28-8 [(c)] Funds allocated under this chapter for career and
28-9 technology education [section], other than an indirect cost
28-10 allotment established under rules adopted by the commissioner
28-11 [State Board of Education rule], must be used in providing career
28-12 and technology education programs in grades nine through 12 or
28-13 career and technology education programs for students with
28-14 disabilities in grades seven through 12 under Sections 29.182,
28-15 29.183, and 29.184.
28-16 [(d) The commissioner shall conduct a cost-benefit
28-17 comparison between career and technology education programs and
28-18 mathematics and science programs.]
28-19 [(e) Out of the total statewide allotment for career and
28-20 technology education under this section, the commissioner shall set
28-21 aside an amount specified in the General Appropriations Act, which
28-22 may not exceed an amount equal to one percent of the total amount
28-23 appropriated, to support regional career and technology education
28-24 planning. After deducting the amount set aside under this
28-25 subsection from the total amount appropriated for career and
28-26 technology education under this section, the commissioner shall
28-27 reduce each district's tier one allotments in the same manner
29-1 described for a reduction in allotments under Section 42.253.]
29-2 Sec. 42.155 [42.156]. GIFTED AND TALENTED STUDENT PROGRAMS
29-3 [ALLOTMENT]. (a) [For each identified student a school district
29-4 serves in a program for gifted and talented students that the
29-5 district certifies to the commissioner as complying with Subchapter
29-6 D, Chapter 29, a district is entitled to an annual allotment equal
29-7 to the district's adjusted basic allotment as determined under
29-8 Section 42.102 or Section 42.103, as applicable, multiplied by .12
29-9 for each school year or a greater amount provided by appropriation.]
29-10 [(b)] Funds allocated under this chapter for gifted and
29-11 talented student programs [section], other than the amount that
29-12 represents the program's share of general administrative costs,
29-13 must be used in providing programs for gifted and talented students
29-14 under Subchapter D, Chapter 29, including programs sanctioned by
29-15 International Baccalaureate and Advanced Placement, or in
29-16 developing programs for gifted and talented students. Each
29-17 district must account for the expenditure of state funds as
29-18 provided by rules adopted by the commissioner [rule of the State
29-19 Board of Education]. If by the end of the 12th month after
29-20 receiving an allotment for developing a program a district has
29-21 failed to implement a program, the district must refund the amount
29-22 of the allotment to the agency within 30 days.
29-23 (b) [(c)] Not more than five percent of a district's
29-24 students in average daily attendance are eligible for funding under
29-25 this chapter for attendance in a gifted and talented program
29-26 [section].
29-27 [(d) If the amount of state funds for which school districts
30-1 are eligible under this section exceeds the amount of state funds
30-2 appropriated in any year for the programs, the commissioner shall
30-3 reduce each district's tier one allotments in the same manner
30-4 described for a reduction in allotments under Section 42.253.]
30-5 [(e) If the total amount of funds allotted under this
30-6 section before a date set by rule of the State Board of Education
30-7 is less than the total amount appropriated for a school year, the
30-8 commissioner shall transfer the remainder to any program for which
30-9 an allotment under Section 42.152 may be used.]
30-10 [(f) After each district has received allotted funds for
30-11 this program, the State Board of Education may use up to $500,000
30-12 of the funds allocated under this section for programs such as
30-13 MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and
30-14 Academic Decathlon, as long as these funds are used to train
30-15 personnel and provide program services. To be eligible for funding
30-16 under this subsection, a program must be determined by the State
30-17 Board of Education to provide services that are effective and
30-18 consistent with the state plan for gifted and talented education.]
30-19 (Sections 42.156 [42.157]-42.200 reserved for expansion)
30-20 SUBCHAPTER D. TRANSPORTATION ALLOTMENT
30-21 Sec. 42.201 [42.155]. TRANSPORTATION ALLOTMENT. [(a)] Each
30-22 district or county operating a transportation system is entitled to
30-23 allotments for transportation costs as provided by this subchapter
30-24 [section].
30-25 Sec. 42.202. DEFINITIONS. In [(b) As used in] this
30-26 subchapter [section]:
30-27 (1) "Regular eligible student" means a student who
31-1 resides two or more miles from the student's campus of regular
31-2 attendance, measured along the shortest route that may be traveled
31-3 on public roads, and who is not classified as a student eligible
31-4 for special education services.
31-5 (2) "Eligible special education student" means a
31-6 student who is eligible for special education services under
31-7 Section 29.003 and who would be unable to attend classes without
31-8 special transportation services.
31-9 (3) "Linear density" means the average number of
31-10 regular eligible students transported daily, divided by the
31-11 approved daily route miles traveled by the respective
31-12 transportation system.
31-13 Sec. 42.203. REGULAR TRANSPORTATION ALLOTMENT.
31-14 (a) [(c)] Each district or county operating a regular
31-15 transportation system is entitled to an allotment based on the
31-16 daily cost per regular eligible student of operating and
31-17 maintaining the regular transportation system and the linear
31-18 density of that system.
31-19 (b) In determining the cost, the commissioner shall give
31-20 consideration to factors affecting the actual cost of providing
31-21 these transportation services in each district or county. The
31-22 average actual cost is to be computed by the commissioner and
31-23 included for consideration by [the foundation school fund budget
31-24 committee and] the legislature in the General Appropriations Act.
31-25 (c) The allotment per mile of approved route may not exceed
31-26 the amount set by appropriation.
31-27 Sec. 42.204. HAZARDOUS CONDITIONS TRANSPORTATION ALLOTMENT.
32-1 (a) [(d)] A district or county may apply for and on approval of
32-2 the commissioner receive an additional amount of up to 10 percent
32-3 of its regular transportation allotment to be used for the
32-4 transportation of children living within two miles of the school
32-5 they attend who would be subject to hazardous traffic conditions if
32-6 they walked to school.
32-7 (b) Each board of trustees shall provide to the commissioner
32-8 the definition of hazardous conditions applicable to that district
32-9 and shall identify the specific hazardous areas for which the
32-10 allocation is requested. A hazardous condition exists where no
32-11 walkway is provided and children must walk along or cross a freeway
32-12 or expressway, an underpass, an overpass or a bridge, an
32-13 uncontrolled major traffic artery, an industrial or commercial
32-14 area, or another comparable condition.
32-15 Sec. 42.205. COMMERCIAL TRANSPORTATION ALLOTMENT.
32-16 (a) [(e)] The commissioner may grant an amount set by
32-17 appropriation for private or commercial transportation for eligible
32-18 students from isolated areas. The need for this type of
32-19 transportation grant shall be determined on an individual basis and
32-20 the amount granted shall not exceed the actual cost.
32-21 (b) The grants may be made only in extreme hardship cases.
32-22 A grant may not be made if the students live within two miles of an
32-23 approved school bus route.
32-24 Sec. 42.206. TRANSPORTATION OF CAREER AND TECHNOLOGY
32-25 EDUCATION STUDENTS. [(f)] The cost of transporting career and
32-26 technology education students from one campus to another inside a
32-27 district or from a sending district to another secondary public
33-1 school for a career and technology program or an area career and
33-2 technology school or to an approved post-secondary institution
33-3 under a contract for instruction approved by the agency shall be
33-4 reimbursed based on the number of actual miles traveled times the
33-5 district's official extracurricular travel per mile rate as set by
33-6 the board of trustees and approved by the agency.
33-7 Sec. 42.207. TRANSPORTATION OF SPECIAL EDUCATION STUDENTS.
33-8 (a) [(g)] A school district or county that provides special
33-9 transportation services for eligible special education students is
33-10 entitled to a state allocation paid on a previous year's
33-11 cost-per-mile basis. The maximum rate per mile allowable shall be
33-12 set by appropriation based on data gathered from the first year of
33-13 each preceding biennium.
33-14 (b) Districts may use a portion of their support allocation
33-15 to pay transportation costs, if necessary. The commissioner may
33-16 grant an amount set by appropriation for private transportation to
33-17 reimburse parents or their agents for transporting eligible special
33-18 education students. The mileage allowed shall be computed along
33-19 the shortest public road from the student's home to school and
33-20 back, morning and afternoon. The need for this type transportation
33-21 shall be determined on an individual basis and shall be approved
33-22 only in extreme hardship cases.
33-23 Sec. 42.208. USE OF TRANSPORTATION ALLOTMENTS. [(h)] Funds
33-24 allotted under this subchapter [section] must be used in providing
33-25 transportation services.
33-26 Sec. 42.209. DETERMINATION OF TRANSPORTATION ALLOTMENTS OF
33-27 DISTRICT BELONGING TO COUNTY TRANSPORTATION SYSTEM. [(i)] In the
34-1 case of a district belonging to a county transportation system, the
34-2 district's transportation allotment for purposes of determining a
34-3 district's foundation school program allocations is determined on
34-4 the basis of the number of approved daily route miles in the
34-5 district multiplied by the allotment per mile to which the county
34-6 transportation system is entitled.
34-7 Sec. 42.210. TRANSPORTATION ALLOTMENT FOR TEXAS SCHOOL FOR
34-8 THE DEAF. [(j)] The Texas School for the Deaf is entitled to an
34-9 allotment under this subchapter [section]. The commissioner shall
34-10 determine the appropriate allotment.
34-11 (Sections 42.211 [42.202]-42.250 reserved for expansion)
34-12 SUBCHAPTER E. FINANCING THE PROGRAM
34-13 Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the
34-14 adjusted basic program [allotment] under Subchapter B and the
34-15 transportation allotment [special allotments] under Subchapter D
34-16 [C], computed in accordance with this chapter, [constitute the tier
34-17 one allotments. The sum of the tier one allotments, the guaranteed
34-18 yield allotments under Subchapter F, and assistance provided under
34-19 the school facilities assistance program under Subchapter H,
34-20 computed in accordance with this chapter,] constitute the total
34-21 cost of the Foundation School Program.
34-22 (b) The program shall be financed by:
34-23 (1) ad valorem tax revenue generated by an equalized
34-24 [uniform] school district effort;
34-25 (2) [ad valorem tax revenue generated by local school
34-26 district effort in excess of the equalized uniform school district
34-27 effort;]
35-1 [(3)] state available school funds distributed in
35-2 accordance with law; and
35-3 (3) [(4)] state funds appropriated for the purposes of
35-4 public school education and allocated to each district in an amount
35-5 sufficient to finance the cost of each district's Foundation School
35-6 Program not covered by other funds specified in this subsection.
35-7 [(c) The commissioner shall compute for each school district
35-8 the total amount, if any, by which the district's total revenue is
35-9 reduced from one school year to the next because of a change in the
35-10 method of finance under this chapter. The commissioner shall
35-11 certify the amount of the reduction to the school district for use
35-12 in determining the school district's rollback rate under Section
35-13 26.08, Tax Code.]
35-14 Sec. 42.252. LOCAL SHARE OF PROGRAM COST [(TIER ONE)].
35-15 (a) Each school district's share of the Foundation School Program
35-16 is determined by the following formula:
35-17 LS [LFA] = DTR [TR] X DPV
35-18 where:
35-19 "LS" ["LFA"] is the school district's local share;
35-20 "DTR" ["TR"] is the district's [a] tax rate for maintenance
35-21 and operations used in computing the district's basic program under
35-22 Section 42.101 [which for each hundred dollars of valuation is an
35-23 effective tax rate of $0.86]; and
35-24 "DPV" is the taxable value of property in the school district
35-25 for the current [preceding] tax year for purposes of maintenance
35-26 and operations taxes determined under Section 403.302(d)
35-27 [Subchapter M, Chapter 403], Government Code.
36-1 (b) The commissioner shall adjust the values reported in the
36-2 official report of the comptroller as required by Section 5.09(a),
36-3 Tax Code, to reflect reductions in taxable value of property
36-4 resulting from natural or economic disaster after January 1 in the
36-5 year in which the valuations are determined. The decision of the
36-6 commissioner is final. An adjustment does not affect the local
36-7 share [fund assignment] of any other school district.
36-8 (c) Appeals of district values shall be held pursuant to
36-9 Section 403.303, Government Code.
36-10 [(d) A school district must raise its total local share of
36-11 the Foundation School Program to be eligible to receive foundation
36-12 school fund payments.]
36-13 [(e) The commissioner shall hear appeals from school
36-14 districts that have experienced a rapid decline in tax base used in
36-15 calculating the local fund assignment, exceeding four percent of
36-16 the preceding year, that is beyond the control of the board of
36-17 trustees of the district. The commissioner may adjust the
36-18 district's taxable values for local fund assignment purposes for
36-19 such losses in value exceeding four percent and thereby adjust the
36-20 local fund assignment to reflect the local current year taxable
36-21 value. The decision of the commissioner is final. An adjustment
36-22 does not affect the local fund assignment of any other school
36-23 district. This subsection applies to determinations by the
36-24 commissioner in identifying districts with wealth per student
36-25 exceeding the equalized wealth level pursuant to Section 41.004.]
36-26 Sec. 42.253. DISTRIBUTION OF FOUNDATION SCHOOL FUND.
36-27 (a) For each school year the commissioner shall determine:
37-1 (1) the amount of money to which a school district is
37-2 entitled under Subchapters B and D [C];
37-3 (2) [the amount of money to which a school district is
37-4 entitled under Subchapter F;]
37-5 [(3)] the amount of money allocated to the district
37-6 from the available school fund; and
37-7 (3) [(4)] the amount of each district's [tier one]
37-8 local share under Section 42.252[; and]
37-9 [(5) the amount of each district's tier two local
37-10 share under Section 42.302].
37-11 (b) Except as provided by this subsection, the commissioner
37-12 shall base the determinations under Subsection (a) on the estimates
37-13 provided to the legislature under Section 42.254, or if the General
37-14 Appropriations Act provides estimates for that purpose, on the
37-15 estimates provided under that Act, for each school district for
37-16 each school year. The commissioner shall reduce the entitlement of
37-17 each district that has a final taxable value of property for the
37-18 second year of a state fiscal biennium that is higher than the
37-19 estimate under Section 42.254 or the General Appropriations Act, as
37-20 applicable. A reduction under this subsection may not reduce the
37-21 district's entitlement below the amount to which it is entitled at
37-22 its actual taxable value of property. The sum of the reductions
37-23 under this subsection may not be greater than the amount necessary
37-24 to fully fund the entitlement of each district.
37-25 (c) Each school district is entitled to an amount equal to
37-26 the difference for that district between the amount of Subsection
37-27 [sum of Subsections] (a)(1) [and (a)(2)] and the sum of Subsections
38-1 (a)(2) and (a)(3)[, (a)(4), and (a)(5)].
38-2 (d) The commissioner shall approve warrants to each school
38-3 district equaling the amount of its entitlement except as provided
38-4 by this section. Warrants for all money expended according to this
38-5 chapter shall be approved and transmitted to treasurers or
38-6 depositories of school districts in the same manner that warrants
38-7 for state payments are transmitted. The total amount of the
38-8 warrants issued under this section may not exceed the total amount
38-9 appropriated for Foundation School Program purposes for that fiscal
38-10 year.
38-11 (e) The commissioner shall recompute the amount to which the
38-12 district is entitled under Subsection (c) if a school district's
38-13 tax rate is less than the limit authorized under this subsection.
38-14 The amount to which a district is entitled under this section may
38-15 not exceed the amount to which the district would be entitled at
38-16 the district's tax rate for the final year of the preceding
38-17 biennium, or a different tax rate provided by appropriation. The
38-18 commissioner shall recompute the amount to which a district is
38-19 entitled to the extent necessary under this section. The
38-20 commissioner shall approve warrants to the school in the amount
38-21 that results from the new computation. An amount equal to the
38-22 difference between the initial allocation and the amount of the
38-23 warrants shall be transferred to a special account in the
38-24 foundation school fund known as the reserve account.
38-25 (e-1) Notwithstanding Subsection (e), the amount to which a
38-26 district is entitled under this section for the 1997-1998 and
38-27 1998-1999 school years may not exceed the amount to which the
39-1 district would be entitled at the lesser of the rate of 75 cents or
39-2 the maximum rate permitted under Section 26.08(g)(2)(A), Tax Code,
39-3 for the district for the 1997 tax year. This subsection expires
39-4 September 1, 1999.
39-5 (e-2) Notwithstanding Subsection (e), the amount to which a
39-6 district is entitled under this section for the 1999-2000 and
39-7 2000-2001 school years may not exceed the amount to which the
39-8 district would be entitled at the lesser of the rate of 75 cents or
39-9 the maximum rate permitted under Section 26.08(g-1)(2)(A), Tax
39-10 Code, for the district for the 1999 tax year. This subsection
39-11 expires September 1, 2002.
39-12 (f) Amounts transferred to the reserve account under
39-13 Subsection (e) shall be used in the succeeding fiscal year to
39-14 finance increases in allocations to school districts under
39-15 Subsection (i). If the amount in the reserve account is less than
39-16 the amount of the increases under Subsection (i) for the second
39-17 year of a state fiscal biennium, the commissioner shall certify the
39-18 amount of the difference to the Legislative Budget Board
39-19 [foundation school fund budget committee] not later than January 1
39-20 of the second year of the state fiscal biennium. The Legislative
39-21 Budget Board [committee] shall propose to the legislature that the
39-22 certified amount be transferred to the foundation school fund from
39-23 the economic stabilization fund and appropriated for the purpose of
39-24 increases in allocations under Subsection (h).
39-25 (g) If a school district demonstrates to the satisfaction of
39-26 the commissioner that the estimate of the district's tax rate,
39-27 student enrollment, or taxable value of property used in
40-1 determining the amount of state funds to which the district is
40-2 entitled are so inaccurate as to result in undue financial hardship
40-3 to the district, the commissioner may adjust funding to that
40-4 district in that school year to the extent that funds are available
40-5 for that year, including funds in the reserve account. Funds in
40-6 the reserve account may not be used under this subsection until any
40-7 reserve funds have been used for purposes of Subsection (f).
40-8 (h) If the legislature fails during the regular session to
40-9 enact the transfer and appropriation proposed under Subsection (f)
40-10 and there are not funds available under Subsection (j), the
40-11 commissioner shall reduce the total amount of state funds allocated
40-12 to each district by an amount determined by a method under which
40-13 the application of the same number of cents of increase in tax rate
40-14 in all districts applied to the taxable value of property of each
40-15 district for purposes of maintenance and operations taxes, as
40-16 determined under Section 403.302(d) [Subchapter M, Chapter 403],
40-17 Government Code, results in a total levy equal to the total
40-18 reduction. The following fiscal year, a district's entitlement
40-19 under this section is increased by an amount equal to the reduction
40-20 made under this subsection.
40-21 (i) Not later than March 1 each year, the commissioner shall
40-22 determine the actual amount of state funds to which each school
40-23 district is entitled under the allocation formulas in this chapter
40-24 for the current school year and shall compare that amount with the
40-25 amount of the warrants issued to each district for that year. If
40-26 the amount of the warrants differs from the amount to which a
40-27 district is entitled because of variations in the district's tax
41-1 rate, student enrollment, or taxable value of property, the
41-2 commissioner shall adjust the district's entitlement for the next
41-3 fiscal year accordingly.
41-4 (j) The legislature may appropriate funds necessary for
41-5 increases under Subsection (i) from funds that the comptroller, at
41-6 any time during the fiscal year, finds are available.
41-7 (k) The commissioner shall compute for each school district
41-8 the total amount by which the district's allocation of state funds
41-9 is increased or reduced under Subsection (i) and shall certify that
41-10 amount to the district.
41-11 Sec. 42.2531. ADDITIONAL STATE AID FOR CERTAIN SCHOOL
41-12 DISTRICTS. (a) Notwithstanding any other provision of this
41-13 chapter, a school district that imposes a tax for purposes of
41-14 maintenance and operations at a tax rate of at least 75 cents on
41-15 the $100 valuation of property is entitled, for the 1997-1998,
41-16 1998-1999, 1999-2000, and 2000-2001 school years, to an amount of
41-17 state and local funding per student, using the student multipliers
41-18 under Section 42.101(b), that is equal to the state and local
41-19 funding per weighted student for maintenance and operations to
41-20 which the district would have been entitled for each of those years
41-21 at the district's tax rate for the 1996 tax year under:
41-22 (1) this code as it would have been in effect for the
41-23 appropriate school year before amendment by H.B. No. 4, Acts of the
41-24 75th Legislature, Regular Session, 1997, except as provided by
41-25 Subsection (b) or (c); and
41-26 (2) the General Appropriations Act.
41-27 (b) For purposes of Subsection (a), for the 1998-1999,
42-1 1999-2000, and 2000-2001 school years, the amount of state and
42-2 local funding to which a school district would have been entitled
42-3 includes any amount to which the district would have been entitled
42-4 for that year if former Section 41.002(e) had been in effect for
42-5 that year.
42-6 (c) Notwithstanding Subsection (a), a school district is not
42-7 entitled to additional state aid based on the computation of
42-8 average daily attendance under Section 42.005(a) as that subsection
42-9 would have been in effect on September 1, 1997, before amendment of
42-10 this chapter by H.B. No. 4, Acts of the 75th Legislature, Regular
42-11 Session, 1997.
42-12 (d) The commissioner shall determine the amount of
42-13 additional state aid to which a district is entitled by subtracting
42-14 the amount to which the district is entitled under Section
42-15 42.253(a)(1) from the amount to which the district is entitled
42-16 under Subsection (a) and shall award that amount to the district.
42-17 (e) A determination by the commissioner under this section
42-18 is final and not appealable.
42-19 (f) This section expires September 1, 2001.
42-20 Sec. 42.2532. EXPERIENCED TEACHER ALLOTMENT. (a) A
42-21 district in which the average of the minimum salaries of classroom
42-22 teachers and full-time librarians required under the minimum salary
42-23 schedule provided by Section 21.4011 or 21.402 exceeds the average
42-24 minimum salary for classroom teachers and full-time librarians in
42-25 the state multiplied by 1.03 is entitled to an additional allotment
42-26 computed as provided by Subsection (b).
42-27 (b) The amount of the allotment under this section is the
43-1 difference between the total amount of all minimum salaries of
43-2 classroom teachers and full-time librarians in the district less an
43-3 amount equal to the amount those salaries would be if each
43-4 classroom teacher and full-time librarian in the district were paid
43-5 a salary equal to the state average minimum salary multiplied by
43-6 1.03.
43-7 (c) An allotment under this section is payable in the manner
43-8 provided by this chapter for payment of a school district's
43-9 entitlement under the basic program.
43-10 [(l) In this section, the number of students in weighted
43-11 average daily attendance is calculated in the manner provided by
43-12 Section 42.302.]
43-13 Sec. 42.254. ESTIMATES REQUIRED. (a) Not later than
43-14 October 1 of each even-numbered year:
43-15 (1) the agency shall submit to [the foundation school
43-16 fund budget committee and] the legislature an estimate of:
43-17 (A) the tax rate and student enrollment of each
43-18 school district for the following biennium; and
43-19 (B) the expected cost of teacher salaries for
43-20 the following biennium, based on the minimum salary schedule
43-21 provided by Section 21.402 and excluding any projected increase in
43-22 the number of teachers due to growth in student enrollment; and
43-23 (2) the comptroller shall submit to [the foundation
43-24 school fund budget committee and] the legislature an estimate of
43-25 the total taxable value of all property in the state as determined
43-26 under Subchapter M, Chapter 403, Government Code, for the following
43-27 biennium.
44-1 (b) The agency and the comptroller shall update the
44-2 information provided to the legislature under Subsection (a) not
44-3 later than March 1 of each odd-numbered year.
44-4 (c) Not later than September 1 of each year, each school
44-5 district shall submit to the Legislative Budget Board an estimate
44-6 of:
44-7 (1) the district's tax rate that will be in effect for
44-8 that fiscal year;
44-9 (2) the district's student enrollment for that school
44-10 year; and
44-11 (3) the number of teachers in the district for that
44-12 school year at each step of the minimum salary schedule provided by
44-13 Section 21.402.
44-14 Sec. 42.255. FALSIFICATION OF RECORDS; REPORT. When, in the
44-15 opinion of the agency's director of school audits, audits or
44-16 reviews of accounting, enrollment, or other records of a school
44-17 district reveal deliberate falsification of the records, or
44-18 violation of the provisions of this chapter, through which the
44-19 district's share of state funds allocated under the authority of
44-20 this chapter would be, or has been, illegally increased, the
44-21 director shall promptly and fully report the fact to the State
44-22 Board of Education, the state auditor, and the appropriate county
44-23 attorney, district attorney, or criminal district attorney.
44-24 Sec. 42.256 [42.257]. EFFECT OF APPRAISAL APPEAL. (a) If
44-25 the final determination of an appeal under Chapter 42, Tax Code,
44-26 results in a reduction in the taxable value of property that
44-27 exceeds five percent of the total taxable value of property in the
45-1 school district for the same tax year determined under Section
45-2 403.302(d) or (e) [Subchapter M, Chapter 403], Government Code, the
45-3 commissioner shall request the comptroller to adjust the
45-4 comptroller's [its] taxable property value findings for that year
45-5 consistent with the final determination of the appraisal appeal.
45-6 (b) If the district would have received a greater amount
45-7 from the foundation school fund for the applicable school year
45-8 using the adjusted value, the commissioner shall add the difference
45-9 to subsequent distributions to the district from the foundation
45-10 school fund. An adjustment does not affect the local share [fund
45-11 assignment] of any other district.
45-12 Sec. 42.257 [42.258]. RECOVERY OF OVERALLOCATED FUNDS.
45-13 (a) If a school district has received an overallocation of state
45-14 funds, the agency shall, by withholding from subsequent allocations
45-15 of state funds or by requesting and obtaining a refund, recover
45-16 from the district an amount equal to the overallocation.
45-17 (b) If a district fails to comply with a request for a
45-18 refund under Subsection (a), the agency shall certify to the
45-19 comptroller that the amount constitutes a debt for purposes of
45-20 Section 403.055, Government Code. The agency shall provide to the
45-21 comptroller the amount of the overallocation and any other
45-22 information required by the comptroller. The comptroller may
45-23 certify the amount of the debt to the attorney general for
45-24 collection.
45-25 (c) Any amounts recovered under this section shall be
45-26 deposited in the foundation school fund.
45-27 Sec. 42.258. PENALTY FOR FAILURE TO FULLY COLLECT TAXES.
46-1 (a) As provided by comptroller's rule, the comptroller shall
46-2 determine for each school district the amount of taxes for purposes
46-3 of maintenance and operations that the district would have
46-4 collected during the preceding tax year if:
46-5 (1) the values of the district's appraisals were the
46-6 same as the values determined under Section 403.302(d), Government
46-7 Code, less the total dollar amount of any exemptions of part but
46-8 not all of the value of taxable property required by the
46-9 constitution or a statute that the district lawfully granted in the
46-10 year; and
46-11 (2) the district had collected all the taxes the
46-12 district levied.
46-13 (b) The comptroller shall certify to the commissioner any
46-14 difference between the amount determined under Subsection (a) and
46-15 the amount of taxes for purposes of maintenance and operations the
46-16 district actually collected in the preceding tax year.
46-17 (c) The commissioner shall reduce a district's state aid
46-18 under this chapter for the current year by any amount certified
46-19 under Subsection (b).
46-20 (d) A school district may appeal to the comptroller the
46-21 comptroller's determination under Subsection (a) if the district's
46-22 failure to collect all the taxes the district levied was due to a
46-23 factor beyond the district's control.
46-24 (e) The commissioner shall reduce state aid under this
46-25 chapter in an amount equal to the reduction in state revenue under
46-26 Section 11.28(b), Tax Code, as a result of recognition of tax
46-27 abatements entered into by school districts under Chapter 312, Tax
47-1 Code, on or after May 31, 1993.
47-2 Sec. 42.259. FOUNDATION SCHOOL FUND TRANSFERS. (a) [In
47-3 this section:]
47-4 [(1) "Category 1 school district" means a school
47-5 district having a wealth per student of less than one-half of the
47-6 statewide average wealth per student.]
47-7 [(2) "Category 2 school district" means a school
47-8 district having a wealth per student of at least one-half of the
47-9 statewide average wealth per student but not more than the
47-10 statewide average wealth per student.]
47-11 [(3) "Category 3 school district" means a school
47-12 district having a wealth per student of more than the statewide
47-13 average wealth per student.]
47-14 [(4) "Wealth per student" means the taxable property
47-15 values reported by the comptroller to the commissioner under
47-16 Section 42.252 divided by the number of students in average daily
47-17 attendance.]
47-18 [(b)] Payments from the foundation school fund to each
47-19 [category 1] school district shall be made as follows:
47-20 (1) 30 [15] percent of the yearly entitlement of the
47-21 district shall be paid in two equal installments [an installment]
47-22 to be made on or before the 25th day of August and September [of a
47-23 fiscal year]; and
47-24 (2) 70 [80] percent of the yearly entitlement of the
47-25 district shall be paid in 10 [eight] equal installments to be made
47-26 on or before the 25th day of October, November, December, January,
47-27 February, March, April, May, June, and July[; and]
48-1 [(3) five percent of the yearly entitlement of the
48-2 district shall be paid in an installment to be made on or before
48-3 the 25th day of February].
48-4 (b) [(c) Payments from the foundation school fund to each
48-5 category 2 school district shall be made as follows:]
48-6 [(1) 22 percent of the yearly entitlement of the
48-7 district shall be paid in an installment to be made on or before
48-8 the 25th day of September of a fiscal year;]
48-9 [(2) 18 percent of the yearly entitlement of the
48-10 district shall be paid in an installment to be made on or before
48-11 the 25th day of October;]
48-12 [(3) 9.5 percent of the yearly entitlement of the
48-13 district shall be paid in an installment to be made on or before
48-14 the 25th day of November;]
48-15 [(4) 7.5 percent of the yearly entitlement of the
48-16 district shall be paid in an installment to be made on or before
48-17 the 25th day of April;]
48-18 [(5) five percent of the yearly entitlement of the
48-19 district shall be paid in an installment to be made on or before
48-20 the 25th day of May;]
48-21 [(6) 10 percent of the yearly entitlement of the
48-22 district shall be paid in an installment to be made on or before
48-23 the 25th day of June;]
48-24 [(7) 13 percent of the yearly entitlement of the
48-25 district shall be paid in an installment to be made on or before
48-26 the 25th day of July; and]
48-27 [(8) 15 percent of the yearly entitlement of the
49-1 district shall be paid in an installment to be made on or before
49-2 the 25th day of August.]
49-3 [(d) Payments from the foundation school fund to each
49-4 category 3 school district shall be made as follows:]
49-5 [(1) 45 percent of the yearly entitlement of the
49-6 district shall be paid in an installment to be made on or before
49-7 the 25th day of September of a fiscal year;]
49-8 [(2) 35 percent of the yearly entitlement of the
49-9 district shall be paid in an installment to be made on or before
49-10 the 25th day of October; and]
49-11 [(3) 20 percent of the yearly entitlement of the
49-12 district shall be paid in an installment to be made on or before
49-13 the 25th day of August.]
49-14 [(e)] The amount of any installment required by this section
49-15 may be modified to provide a school district with the proper amount
49-16 to which the district may be entitled by law and to correct errors
49-17 in the allocation or distribution of funds. If an installment
49-18 under this section is required to be equal to other installments,
49-19 the amount of other installments may be adjusted to provide for
49-20 that equality. A payment under this section is not invalid because
49-21 it is not equal to other installments.
49-22 (c) [(f)] Any previously unpaid additional funds from prior
49-23 years owed to a district shall be paid to the district together
49-24 with the September payment of the current year entitlement.
49-25 (Sections 42.260-42.300 reserved for expansion)
49-26 SUBCHAPTER F [D]. ADMINISTRATIVE COSTS
49-27 Sec. 42.301 [42.201]. LIMIT ON ADMINISTRATIVE COSTS.
50-1 (a) The commissioner by rule shall determine annually:
50-2 (1) an administrative cost ratio for school districts
50-3 with fewer than 500 students in average daily attendance;
50-4 (2) an administrative cost ratio for school districts
50-5 with 500 to 999 students in average daily attendance;
50-6 (3) an administrative cost ratio for school districts
50-7 with 1,000 to 4,999 students in average daily attendance;
50-8 (4) an administrative cost ratio for school districts
50-9 with 5,000 to 9,999 students in average daily attendance; and
50-10 (5) an administrative cost ratio for school districts
50-11 with more than 10,000 students in average daily attendance.
50-12 (b) The commissioner may adjust the administrative cost
50-13 ratio of a district to allow for additional administrative costs
50-14 required by:
50-15 (1) the sparsity of the district; or
50-16 (2) students with special needs.
50-17 (c) Not later than February 1 of each year, the commissioner
50-18 shall notify all districts of the requirements and standards for
50-19 determining administrative cost ratios for the following year. Not
50-20 later than May 1 of each year, agency staff shall conduct a desk
50-21 audit of prior-year expenditure data available through the Public
50-22 Education Information Management System (PEIMS) to identify those
50-23 districts whose administrative cost ratio in the preceding year
50-24 exceeded their adjusted group standard. Districts with an
50-25 administrative cost ratio in excess of their adjusted group
50-26 standard shall be notified not later than May 15 that they have
50-27 excessive administrative costs and that they are required to reduce
51-1 these costs to the level of the adjusted group standard for the
51-2 following school year. Not later than the 60th day after receiving
51-3 notification, a district shall respond to the commissioner by
51-4 submitting a description of the district's plan to comply with the
51-5 standard for the following year or request a waiver from the
51-6 commissioner explaining why the district cannot comply with the
51-7 standard. Not later than August 15, the commissioner shall notify
51-8 responding districts if further action is needed.
51-9 (d) If a school district fails to reduce administrative
51-10 costs to the level required by this section, the commissioner shall
51-11 deduct from a school district's foundation school program
51-12 allocations [tier one allotments] an amount equal to the amount by
51-13 which the district's administrative costs exceed the amount
51-14 permitted by its administrative cost ratio, unless the commissioner
51-15 has granted a waiver in response to the district's request. The
51-16 commissioner shall make a deduction under this subsection from the
51-17 foundation school fund payments to the district in the school year
51-18 following the school year in which the plan to reduce costs was to
51-19 be implemented. If a school district does not receive a foundation
51-20 school program allocation [tier one allotment], the district shall
51-21 remit an amount equal to the excess to the comptroller for deposit
51-22 to the credit of the foundation school fund.
51-23 (e) The commissioner may grant a waiver to a school district
51-24 that exceeds its administrative cost ratio if the excess is
51-25 justified by unusual circumstances.
51-26 (f) A school district shall include a statement of any
51-27 amount withheld or remitted under Subsection (d) in the district
52-1 report required by Section 39.053.
52-2 (g) In this section:
52-3 (1) "Administrative cost ratio" means a school
52-4 district's administrative costs divided by its instructional costs,
52-5 expressed as a percentage.
52-6 (2) "Administrative costs" are defined as operating
52-7 expenses made from funds other than federal funds associated with
52-8 managing, planning, directing, coordinating, and evaluating a
52-9 school district in accordance with Accounting functions 21 --
52-10 Instructional Leadership, and 41 -- General Administration, as
52-11 described in the Financial Accountability Resource guide, Bulletin
52-12 679, Module 1: Financial Accounting and Reporting, First Edition,
52-13 published by the Texas Education Agency.
52-14 (3) "Instructional costs" are defined as operating
52-15 expenses made from funds other than federal funds associated with
52-16 teacher-student instruction in accordance with Accounting functions
52-17 11 -- Instruction, 12 -- Instructional Resources and Media
52-18 Services, 13 -- Curriculum Development and Instructional Staff
52-19 Development, and 31 -- Guidance and Counseling Services, as
52-20 described in the Financial Accountability Resource guide, Bulletin
52-21 679, Module 1: Financial Accounting and Reporting, First Edition,
52-22 published by the Texas Education Agency.
52-23 (4) "Adjusted group standard" is the acceptable
52-24 administrative cost ratio for each district as determined in
52-25 accordance with Subsections (a) and (b).
52-26 (Sections 42.302 [42.305]-42.350 reserved for expansion)
52-27 SUBCHAPTER G. ENRICHMENT GUARANTEED YIELD
53-1 Sec. 42.351. PURPOSE. The purpose of the enrichment
53-2 guaranteed yield component of the Foundation School Program is to
53-3 provide each school district with the opportunity to supplement the
53-4 basic program at a level of its own choice. Except as provided by
53-5 Section 42.354, an allotment under this subchapter may be used for
53-6 any legal purpose, including capital outlay and debt service.
53-7 Sec. 42.352. ALLOTMENT. Each school district is guaranteed
53-8 a specified amount per student in state and local funds for each
53-9 cent of tax effort up to the maximum level specified in this
53-10 subchapter. The amount of state support is determined by the
53-11 formula:
53-12 GYA = (GL X AADA X DTR X 100) - LR
53-13 where:
53-14 "GYA" is the guaranteed yield amount of state funds to be
53-15 allocated to the district;
53-16 "GL" is the dollar amount guaranteed level of state and local
53-17 funds per student per cent of tax effort, which is $9 or a greater
53-18 amount for any year provided by appropriation;
53-19 "AADA" is the number of students in adjusted average daily
53-20 attendance, which is computed by dividing the amount of the
53-21 district's adjusted basic program under Subchapter B by the
53-22 guaranteed level of state and local funds per student per cent of
53-23 tax effort provided by Section 42.101;
53-24 "DTR" is the rate of the district educational enrichment tax
53-25 levied in accordance with Section 45.0031(b); and
53-26 "LR" is the local revenue, which is determined by multiplying
53-27 "DTR" by the quotient of the district's taxable value of property
54-1 for the current year for purposes of maintenance and operations
54-2 taxes determined under Section 403.302(d), Government Code, as
54-3 applicable, divided by 100.
54-4 Sec. 42.353. DISTRIBUTION OF SUPPLEMENTAL GUARANTEED YIELD.
54-5 (a) For each school year the commissioner shall determine the
54-6 guaranteed yield amount of state funds to which a school district
54-7 is entitled under Section 42.352.
54-8 (b) Except as otherwise provided by this subsection, the
54-9 commissioner shall base the determination under Subsection (a) on
54-10 the estimates provided to the legislature under Section 42.254 for
54-11 each school district for each school year. The commissioner shall
54-12 reduce the entitlement of each district that has a final taxable
54-13 value of property for the second year of a state fiscal biennium
54-14 that is higher than the estimate under Section 42.254. A reduction
54-15 under this subsection may not reduce the district's entitlement
54-16 below the amount to which it is entitled at its actual taxable
54-17 value of property. The sum of the reductions under this subsection
54-18 may not be greater than the amount necessary to fully fund the
54-19 entitlement of each district.
54-20 (c) The amount to which a district is entitled under this
54-21 section may not exceed the amount to which the district would be
54-22 entitled at the district's tax rate for the final year of the
54-23 preceding biennium, or a different tax rate provided by
54-24 appropriation.
54-25 (c-1) Notwithstanding Subsection (c), the amount to which a
54-26 district is entitled under this section for the 1997-1998 and
54-27 1998-1999 school years may not exceed the amount to which the
55-1 district would be entitled at the maximum tax rate permitted under
55-2 Section 26.08(g)(1) or (2)(A), Tax Code, for the district for the
55-3 1997 tax year. This subsection expires September 1, 1999.
55-4 (d) The commissioner shall approve warrants to each school
55-5 district equaling the amount of the district's entitlement as
55-6 determined under Subsection (a) except as otherwise provided by
55-7 this section. Warrants for all money spent according to this
55-8 chapter shall be approved and transmitted as provided by Subchapter
55-9 E. The total amount of the warrants issued under this section may
55-10 not exceed the total amount appropriated for purposes of the
55-11 supplemental guaranteed yield for that fiscal year.
55-12 (e) If the total amount of state funds allocated to
55-13 districts under this subchapter for a fiscal year exceeds the
55-14 amount appropriated for that year and there are not funds available
55-15 under Subsection (g), the commissioner shall reduce the total
55-16 amount of state funds allocated to each district by an amount
55-17 determined by a method under which the application of the same
55-18 number of cents of increase in tax rate in all districts applied to
55-19 the taxable value of property of each district for purposes of
55-20 maintenance and operations, as determined under Section 403.302(d),
55-21 Government Code, results in a total levy equal to the total
55-22 reduction. The following fiscal year, a district's entitlement
55-23 under this section is increased by an amount equal to the reduction
55-24 made under this subsection.
55-25 (f) Not later than March 1 each year, the commissioner shall
55-26 determine the actual amount of state funds to which each school
55-27 district is entitled under this subchapter for the current school
56-1 year and shall compare that amount with the amount of the warrants
56-2 issued to the district under this section for that year. If the
56-3 amount of the warrants differs from the amount to which a district
56-4 is entitled because of variations in the district's tax rate,
56-5 student enrollment, or taxable value of property, the commissioner
56-6 shall adjust the district's entitlement for the next fiscal year
56-7 accordingly.
56-8 (g) The legislature may appropriate funds necessary for
56-9 increases under Subsection (f) from funds that the comptroller, at
56-10 any time during the fiscal year, finds are available.
56-11 (h) Section 42.258 applies to district educational
56-12 enrichment taxes in the same manner as it applies to maintenance
56-13 and operations taxes.
56-14 Sec. 42.354. ALLOTMENT FOR EXISTING DEBT. (a) Each school
56-15 district is guaranteed a specified amount in state and local funds
56-16 for each cent of tax effort levied for purposes of debt service on
56-17 bonds authorized before September 1, 1997, up to the maximum level
56-18 specified by this section. The amount of state support is
56-19 determined by the formula:
56-20 GYA = (GL X ADA X DTR X 100) - LR
56-21 where:
56-22 "GYA" is the guaranteed yield amount of state funds to be
56-23 allocated to the district;
56-24 "GL" is $21.35 or a greater amount for any year provided by
56-25 appropriation;
56-26 "ADA" is the number of students in average daily attendance
56-27 as determined under Section 42.005;
57-1 "DTR" is the district existing debt tax rate; and
57-2 "LR" is determined by multiplying "DTR" by the quotient of
57-3 the district's taxable value of property for the current year for
57-4 purposes of debt service taxes determined under Section 403.302(e),
57-5 Government Code, divided by 100.
57-6 (b) Sections 46.003(b) and (c) apply to taxes for which a
57-7 district receives state assistance under this section.
57-8 (c) If the amount appropriated for purposes of this section
57-9 for a year is less than the total amount to which each school
57-10 district is entitled under Subsection (a) for that year, the
57-11 commissioner shall:
57-12 (1) transfer from the basic program to the enrichment
57-13 program the amount by which the total amount to which districts are
57-14 entitled under Subsection (a) exceeds the amount appropriated; and
57-15 (2) reduce each district's basic program allocations
57-16 in the manner provided by Section 42.253.
57-17 (d) A district may use state funds received under this
57-18 section only to pay the principal of and interest on the bonds for
57-19 which the district receives the funds.
57-20 (e) As soon as practicable after September 1 of each year,
57-21 the commissioner shall distribute to each school district the
57-22 amount of state assistance under this section to which the
57-23 commissioner has determined the district is entitled for the school
57-24 year. The district shall deposit the money in the interest and
57-25 sinking fund for the bonds for which the assistance is received and
57-26 shall adopt a tax rate for purposes of debt service that takes into
57-27 account the balance of the interest and sinking fund.
58-1 Sec. 42.355. LIMITATION ON TAX RATE. The sum of the
58-2 district enrichment tax rate under Section 42.352 and the existing
58-3 debt tax rate under Section 42.354 may not exceed $0.10 per $100 of
58-4 valuation.
58-5 [SUBCHAPTER G. SCHOOL FACILITIES INVENTORY AND STANDARDS]
58-6 [Sec. 42.351. INVENTORY OF SCHOOL FACILITIES. (a) The
58-7 State Board of Education shall establish a statewide inventory of
58-8 school facilities and shall update the inventory on a periodic
58-9 basis.]
58-10 [(b) The inventory shall include information on the
58-11 condition, use, type, and replacement cost of public school
58-12 facilities in this state.]
58-13 [Sec. 42.352. STANDARDS. The State Board of Education shall
58-14 establish standards for adequacy of school facilities. The
58-15 standards shall include requirements related to space, educational
58-16 adequacy, and construction quality. All facilities constructed
58-17 after September 1, 1992, must meet the standards in order to be
58-18 financed with state or local tax funds.]
58-19 [SUBCHAPTER H. SCHOOL FACILITIES ASSISTANCE PROGRAM]
58-20 [Sec. 42.401. DEFINITIONS. In this subchapter:]
58-21 [(1) "Effective tax rate" means a tax rate that is
58-22 determined by dividing the amount of taxes collected by a school
58-23 district by the quotient of the district's taxable value of
58-24 property, as determined under Subchapter M, Chapter 403, Government
58-25 Code, divided by 100.]
58-26 [(2) "Guaranteed wealth level" means a wealth per
58-27 student determined by the following formula:]
59-1 [GWL = (GL X 10,000) X (SWADA/SADA)]
59-2 [where:]
59-3 ["GWL" is the guaranteed wealth level;]
59-4 ["GL" is the dollar amount guaranteed level of state and
59-5 local funds per weighted student per cent of tax effort, as
59-6 provided by Section 42.302;]
59-7 ["SWADA" is the total weighted average daily attendance,
59-8 determined in the manner provided by Section 42.302, for all school
59-9 districts in the state; and]
59-10 ["SADA" is the total average daily attendance for all school
59-11 districts in the state.]
59-12 [(3) "Instructional facility" means real property, an
59-13 improvement to real property, or a necessary fixture of an
59-14 improvement to real property that is used predominantly for
59-15 teaching the curriculum required under Section 28.002.]
59-16 [(4) "Wealth per student" means a school district's
59-17 taxable value of property, as determined under Subchapter M,
59-18 Chapter 403, Government Code, divided by the district's average
59-19 daily attendance.]
59-20 [Sec. 42.402. DISTRICT ELIGIBILITY. A school district is
59-21 eligible for state assistance under this subchapter if the district
59-22 has:]
59-23 [(1) a wealth per student less than the guaranteed
59-24 wealth level; and]
59-25 [(2) a total effective tax rate that is at least $1.30
59-26 per $100 of valuation of taxable property or an effective tax rate
59-27 for the payment of principal of and interest on bonds that is at
60-1 least $0.20 per $100 of valuation of taxable property.]
60-2 [Sec. 42.403. AMOUNT OF STATE ASSISTANCE. Except as
60-3 provided by Section 42.404, the amount of state assistance to which
60-4 a school district is entitled for an eligible project is determined
60-5 by the following formula:]
60-6 [SA = (1 - (WPS/GWL)) X PC]
60-7 [where:]
60-8 ["SA" is the amount of state assistance;]
60-9 ["WPS" is the district's wealth per student;]
60-10 ["GWL" is the guaranteed wealth level; and]
60-11 ["PC" is the total cost of the project, excluding financing
60-12 costs.]
60-13 [Sec. 42.404. SUPPLEMENTAL STATE ASSISTANCE FOR SMALL SCHOOL
60-14 DISTRICTS. (a) In addition to the amount determined under Section
60-15 42.403, a district is entitled to supplemental state assistance if
60-16 the district's average daily attendance is less than the product of
60-17 the quotient of the average daily attendance for all school
60-18 districts in the state, as determined under Section 42.401, divided
60-19 by the weighted average daily attendance for all school districts
60-20 in the state, as determined under Section 42.401, multiplied by
60-21 2,500. The amount of supplemental state assistance to which a
60-22 school district is entitled is the lesser of the amounts determined
60-23 by the following formulas:]
60-24 [SSA = PC - SA - (.002 X DPV X PC/500,000)]
60-25 [where:]
60-26 ["SSA" is the amount of supplemental state assistance;]
60-27 ["SA" is the amount of state assistance determined under
61-1 Section 42.403;]
61-2 ["DPV" is the district's taxable value of property, as
61-3 determined under Subchapter M, Chapter 403, Government Code; and]
61-4 ["PC" is the total cost of the project; or]
61-5 [SSA = PC - SA - (0.15 X PC)]
61-6 [where:]
61-7 ["SSA" is the amount of supplemental state assistance;]
61-8 ["SA" is the amount of state assistance determined under
61-9 Section 42.403; and]
61-10 ["PC" is the total cost of the project.]
61-11 [(b) If the lesser of the amounts determined by the formulas
61-12 in Subsection (a) is less than zero, the district is not entitled
61-13 to supplemental state assistance.]
61-14 [Sec. 42.405. PROJECT ELIGIBILITY AND APPROVAL. (a) A
61-15 project must be an instructional facility to be eligible for state
61-16 assistance under this subchapter.]
61-17 [(b) A district is entitled to state assistance under this
61-18 subchapter for only one project in a state fiscal biennium.]
61-19 [(c) To receive state assistance under this subchapter, a
61-20 school district must submit to the commissioner a proposal that
61-21 contains the information required by rule of the commissioner.]
61-22 [(d) A school district must submit a proposal by the date
61-23 established by rule of the commissioner.]
61-24 [(e) The commissioner shall review each proposal and approve
61-25 those proposals that meet the requirements of this subchapter and
61-26 the commissioner's rules.]
61-27 [(f) If the amount of state assistance for an approved
62-1 project is insufficient to enable the school district to finance
62-2 the remainder from other funds, the district may modify the project
62-3 to reduce its cost and may resubmit the proposal.]
62-4 [Sec. 42.406. LIMITATION ON ASSISTANCE. (a) The cost of a
62-5 project for which a district may receive assistance under this
62-6 subchapter may not exceed the greater of:]
62-7 [(1) $500,000; or]
62-8 [(2) the product of the number of students in average
62-9 daily attendance in the district multiplied by $266.]
62-10 [(b) For purposes of Sections 42.403, 42.404, and 42.407, a
62-11 project that has a cost that exceeds the limit prescribed by
62-12 Subsection (a) is treated as if the cost equals the applicable
62-13 limit.]
62-14 [Sec. 42.407. SHORTAGE OF APPROPRIATED FUNDS. If the total
62-15 state assistance for approved projects in a state fiscal biennium
62-16 exceeds the amount appropriated for that biennium, the commissioner
62-17 shall remove from the list of approved projects one or more
62-18 projects in ascending order of the proportion of state assistance
62-19 to project cost, beginning with the project that has the lowest
62-20 proportion of state assistance to project cost, until the total
62-21 state assistance for approved projects is less than or equal to the
62-22 amount appropriated. If, after removing approved projects from the
62-23 list, the total state assistance is less than the amount
62-24 appropriated, the commissioner shall grant the difference to the
62-25 district that proposed the last project removed from the list.]
62-26 [Sec. 42.408. USE OF EXCESS APPROPRIATED FUNDS. If the
62-27 total state assistance for approved projects in a state fiscal
63-1 biennium is less than the amount appropriated for that biennium,
63-2 the commissioner may use the excess amount for any purpose under
63-3 the Foundation School Program.]
63-4 [Sec. 42.409. PAYMENT OF STATE ASSISTANCE. (a) The
63-5 commissioner shall approve warrants to a school district that
63-6 receives state assistance under this subchapter as necessary to
63-7 permit the district to meet contractual obligations as construction
63-8 or renovation progresses.]
63-9 [(b) The commissioner may not approve a warrant for
63-10 assistance under this subchapter until the district provides the
63-11 commissioner with information concerning the manner in which the
63-12 district will pay the local share of the project cost. The
63-13 information must include the number of years:]
63-14 [(1) for which the district will have bonds
63-15 outstanding in connection with the project; or]
63-16 [(2) in which the district will be making payments
63-17 under a lease-purchase agreement in connection with the project.]
63-18 [(c) If the commissioner determines that a district has
63-19 altered a project in a manner that reduces the cost of the project
63-20 below the cost stated in the proposal, the commissioner shall
63-21 recompute the amount of state assistance to which the district is
63-22 entitled based on the reduced project cost and approve warrants to
63-23 the district accordingly.]
63-24 [Sec. 42.410. ADDITIONAL STATE ASSISTANCE. (a) If the
63-25 guaranteed wealth level is increased over the level for the year in
63-26 which a school district received assistance under this subchapter,
63-27 for each year to which the increased level applies and in which the
64-1 district levies a tax to pay for the local share of the cost of the
64-2 project for which the district received state assistance under this
64-3 subchapter, the district is entitled to additional state assistance
64-4 determined by the formula:]
64-5 [ASA = (GL X (SWADA/SADA) X ADA X PTR X 100) - LPR - ((SA +
64-6 SSA)/PY)]
64-7 [where:]
64-8 ["ASA" is the amount of additional state assistance;]
64-9 ["GL" is the dollar amount guaranteed level of state and
64-10 local funds per weighted student per cent of tax effort, as
64-11 provided by Section 42.302;]
64-12 ["SWADA" is the total number of students in weighted average
64-13 daily attendance in the district, determined in the manner provided
64-14 by Section 42.302, for all school districts in the state;]
64-15 ["SADA" is the total average daily attendance for all school
64-16 districts in the state;]
64-17 ["ADA" is the district's average daily attendance;]
64-18 ["PTR" is the project tax rate of the district, which is
64-19 calculated by dividing the amount necessary for annual payments:]
64-20 [(1) on the principal and interest of bonds issued to
64-21 finance the local share of the project; or]
64-22 [(2) under a lease-purchase agreement for the local
64-23 share of the project;]
64-24 [by the DPV as defined in Section 42.404;]
64-25 ["LPR" is the local project revenue, which is determined by
64-26 multiplying "PTR" by the quotient of the district's taxable value
64-27 of property, as determined under Subchapter M, Chapter 403,
65-1 Government Code, divided by 100;]
65-2 ["SA" is the state assistance allocated to the district under
65-3 Section 42.403;]
65-4 ["SSA" is the supplemental state assistance allocated to the
65-5 district under Section 42.404; and]
65-6 ["PY" is the number of years for which the district must levy
65-7 a tax to pay for the local share of the project cost, as reported
65-8 to the commissioner under Section 42.409(b).]
65-9 [(b) A district may use assistance received under this
65-10 section for any legal purpose.]
65-11 [(c) Assistance under this subsection shall be paid in the
65-12 manner prescribed by Section 42.253.]
65-13 [Sec. 42.411. PROJECTS BY MORE THAN ONE DISTRICT. (a) Two
65-14 or more eligible districts may submit a proposal for a joint
65-15 project at a single location.]
65-16 [(b) The state assistance for a joint project is the amount
65-17 specified by Section 42.403, except that wealth per student is the
65-18 quotient of the sum of the taxable values of property of the
65-19 districts divided by the sum of the districts' average daily
65-20 attendances.]
65-21 [(c) The supplemental state assistance for a joint project
65-22 is the sum of the assistance under Section 42.404 for each district
65-23 participating in the joint project that is eligible under Section
65-24 42.404, except that:]
65-25 [(1) the result of the applicable formula in that
65-26 section for each district is multiplied by the ratio of the
65-27 district's average daily attendance to the total average daily
66-1 attendance for all the districts in the project; and]
66-2 [(2) "500,000" is replaced by (600,000 x N), where "N"
66-3 is the number of districts in the project.]
66-4 [(d) The limitation on assistance for a joint project is 20
66-5 percent greater than the sum of the limitations for each district
66-6 prescribed by Section 42.406.]
66-7 SECTION 1.03. Title 2, Education Code, is amended by adding
66-8 Chapter 46 to read as follows:
66-9 CHAPTER 46. INSTRUCTIONAL FACILITIES ALLOTMENT
66-10 Sec. 46.001. DEFINITION. In this chapter, "instructional
66-11 facility" means real property, an improvement to real property, or
66-12 a necessary fixture of an improvement to real property that is used
66-13 predominantly for teaching the curriculum required under Section
66-14 28.002.
66-15 Sec. 46.002. RULES. (a) The commissioner may adopt rules
66-16 for the administration of this chapter.
66-17 (b) The commissioner's rules may limit the amount of an
66-18 allotment under this chapter that is to be used to construct,
66-19 acquire, renovate, or improve an instructional facility that may
66-20 also be used for noninstructional or extracurricular activities.
66-21 Sec. 46.003. SCHOOL FACILITIES ALLOTMENT. (a) For each
66-22 year, except as provided by Sections 46.005 and 46.006, a school
66-23 district is guaranteed a specified amount per student in state and
66-24 local funds for each cent of tax effort, up to the maximum rate
66-25 under Subsection (b), to pay the principal of and interest on
66-26 eligible bonds issued to construct, acquire, renovate, or improve
66-27 an instructional facility. The amount of state support is
67-1 determined by the formula:
67-2 FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
67-3 where:
67-4 "FYA" is the guaranteed facilities yield amount of state
67-5 funds allocated to the district for the year;
67-6 "FYL" is the dollar amount guaranteed level of state and
67-7 local funds per student per cent of tax effort, which is $36.40 or
67-8 a greater amount for any year provided by appropriation;
67-9 "ADA" is the number of students in average daily attendance,
67-10 as determined under Section 42.005, in the district;
67-11 "BTR" is the district's bond tax rate for the current year,
67-12 determined as provided by Subsection (b); and
67-13 "DPV" is the district's taxable value of property for the
67-14 current year for purposes of debt service taxes as determined under
67-15 Section 403.302(e), Government Code.
67-16 (b) The bond tax rate under Subsection (a) may not exceed
67-17 the rate that would be necessary for the current year, using state
67-18 funds under Subsection (a), to make payments of principal and
67-19 interest on the bonds for which the tax is pledged if:
67-20 (1) the values of the district's appraisals were the
67-21 same as the values determined under Section 403.302(e), Government
67-22 Code; and
67-23 (2) the district had collected all the bond taxes the
67-24 district levied.
67-25 (c) To enable the district to collect local funds sufficient
67-26 to pay the district's share of the debt service, a district may
67-27 levy a bond tax at a rate higher than the maximum rate for which it
68-1 may receive state assistance.
68-2 (d) Bonds are eligible to be paid with state and local funds
68-3 under this section if the bonds:
68-4 (1) are authorized on or after September 1, 1997; and
68-5 (2) do not have a weighted average maturity of less
68-6 than eight years and may not be called for redemption earlier than
68-7 10 years after the date of issuance.
68-8 (e) A district may use state funds received under this
68-9 section only to pay the principal of and interest on the bonds for
68-10 which the district received the funds.
68-11 (f) The board of trustees and voters of a school district
68-12 shall determine district needs concerning construction,
68-13 acquisition, renovation, or improvement of instructional
68-14 facilities.
68-15 (g) To receive state assistance under this chapter, a school
68-16 district must apply to the commissioner in accordance with rules
68-17 adopted by the commissioner before issuing bonds that will be paid
68-18 with state assistance. Until the bonds are fully paid or the
68-19 instructional facility is sold:
68-20 (1) a school district is entitled to continue
68-21 receiving state assistance without reapplying to the commissioner;
68-22 and
68-23 (2) the guaranteed level of state and local funds per
68-24 student per cent of tax effort applicable to the bonds may not be
68-25 reduced below the level provided for the year in which the bonds
68-26 were issued.
68-27 Sec. 46.004. LEASE-PURCHASE AGREEMENTS. (a) A district may
69-1 receive state assistance in connection with a lease-purchase
69-2 agreement concerning an instructional facility. For purposes of
69-3 this chapter:
69-4 (1) taxes levied for purposes of maintenance and
69-5 operations that are necessary to pay a district's share of the
69-6 payments under a lease-purchase agreement for which the district
69-7 receives state assistance under this chapter are considered to be
69-8 bond taxes; and
69-9 (2) payments under a lease-purchase agreement are
69-10 considered to be payments of principal of and interest on bonds.
69-11 (b) Section 46.003(b) applies to taxes levied to pay a
69-12 district's share of the payments under a lease-purchase agreement
69-13 for which the district receives state assistance under this
69-14 chapter.
69-15 (c) A lease-purchase agreement must be for a term of at
69-16 least eight years to be eligible to be paid with state and local
69-17 funds under this chapter.
69-18 Sec. 46.005. LIMITATION ON GUARANTEED AMOUNT. The
69-19 guaranteed amount of state and local funds for a new project that a
69-20 district may be awarded in any state fiscal biennium under Section
69-21 46.003 for a school district may not exceed the lesser of:
69-22 (1) the amount the actual debt service payments the
69-23 district makes in the biennium in which the bonds are issued; or
69-24 (2) the greater of:
69-25 (A) $100,000; or
69-26 (B) the product of the number of students in
69-27 average daily attendance in the district multiplied by $250.
70-1 Sec. 46.006. SHORTAGE OR EXCESS OF FUNDS APPROPRIATED FOR
70-2 NEW PROJECTS. (a) If the total amount appropriated for a year for
70-3 new projects is less than the amount of money to which school
70-4 districts applying for state assistance are entitled for that year,
70-5 the commissioner shall rank each school district applying by wealth
70-6 per student. For purposes of this section, a district's wealth per
70-7 student is reduced by 10 percent for each state fiscal biennium in
70-8 which the district did not receive assistance under this chapter.
70-9 The commissioner shall adjust the rankings after making the
70-10 reductions in wealth per student required by this subsection.
70-11 (b) Beginning with the district with the lowest adjusted
70-12 wealth per student that has applied for state assistance for the
70-13 year, the commissioner shall award state assistance to districts
70-14 that have applied for state assistance in ascending order of
70-15 adjusted wealth per student. The commissioner shall award the full
70-16 amount of state assistance to which a district is entitled under
70-17 this chapter, except that the commissioner may award less than the
70-18 full amount to the last district for which any funds are available.
70-19 (c) Any amount appropriated for the first year of a fiscal
70-20 biennium that is not awarded to a school district may be used to
70-21 provide assistance in the following fiscal year.
70-22 (d) In this section, "wealth per student" means a school
70-23 district's taxable value of property for purposes of debt service
70-24 taxes, as determined under Section 403.302(e), Government Code,
70-25 divided by the district's average daily attendance as determined
70-26 under Section 42.005.
70-27 Sec. 46.007. REFUNDING BONDS. A school district may use
71-1 state funds received under this chapter to pay the principal of and
71-2 interest on refunding bonds that:
71-3 (1) are issued to refund bonds eligible under Section
71-4 46.003;
71-5 (2) do not have a final maturity date later than the
71-6 final maturity date of the bonds being refunded;
71-7 (3) may not be called for redemption earlier than the
71-8 earliest call date of the bonds being refunded; and
71-9 (4) result in a present value savings, which is
71-10 determined by computing the net present value of the difference
71-11 between each scheduled payment on the original bonds and each
71-12 scheduled payment on the refunding bonds. The present value
71-13 savings shall be computed at the true interest cost of the
71-14 refunding bonds.
71-15 Sec. 46.008. STANDARDS. The commissioner shall establish
71-16 standards for adequacy of school facilities. The standards must
71-17 include requirements related to space, educational adequacy, and
71-18 construction quality. All facilities constructed after September
71-19 1, 1998, must meet the standards to be eligible to be financed with
71-20 state or local tax funds.
71-21 Sec. 46.009. PAYMENT OF SCHOOL FACILITIES ALLOTMENTS. (a)
71-22 For each school year, the commissioner shall determine the amount
71-23 of money to which each school district is entitled under this
71-24 chapter.
71-25 (b) If the amount appropriated for purposes of Section
71-26 46.003 for a year is less than the total amount determined under
71-27 Subsection (a) for that year, the commissioner shall:
72-1 (1) transfer from the Foundation School Program to the
72-2 instructional facilities program the amount by which the total
72-3 amount determined under Subsection (a) exceeds the amount
72-4 appropriated; and
72-5 (2) reduce each district's foundation school fund
72-6 allocations in the manner provided by Section 42.253.
72-7 (c) Warrants for payments under this chapter shall be
72-8 approved and transmitted to school district treasurers or
72-9 depositories in the same manner as warrants for payments under
72-10 Chapter 42.
72-11 (d) As soon as practicable after September 1 of each year,
72-12 the commissioner shall distribute to each school district the
72-13 amount of state assistance under this chapter to which the
72-14 commissioner has determined the district is entitled for the school
72-15 year. The district shall deposit the money in the interest and
72-16 sinking fund for the bonds for which the assistance is received and
72-17 shall adopt a tax rate for purposes of debt service that takes into
72-18 account the balance of the interest and sinking fund.
72-19 (e) Section 42.257 applies to payments under this chapter.
72-20 (f) If a school district would have received a greater
72-21 amount under this chapter for the applicable school year using the
72-22 adjusted value determined under Section 42.256, the commissioner
72-23 shall add the difference between the adjusted value and the amount
72-24 the district received under this chapter to subsequent
72-25 distributions to the district under this chapter.
72-26 Sec. 46.010. PENALTY FOR FAILURE TO FULLY COLLECT TAXES.
72-27 (a) As provided by comptroller's rule, the comptroller shall
73-1 determine for each school district the amount of taxes for purposes
73-2 of eligible debt service that the district would have collected
73-3 during the preceding tax year if:
73-4 (1) the values of the district's appraisals were the
73-5 same as the values determined under Section 403.302(e), Government
73-6 Code, less the total dollar amount of any exemptions of part but
73-7 not all of the value of taxable property required by the
73-8 constitution or a statute that the district lawfully granted in the
73-9 year; and
73-10 (2) the district had collected all the taxes the
73-11 district levied.
73-12 (b) The comptroller shall certify to the commissioner any
73-13 difference between the amount determined under Subsection (a) and
73-14 the amount of taxes for purposes of debt service the district
73-15 actually collected in the preceding tax year.
73-16 (c) The commissioner shall reduce a district's state aid
73-17 under Chapter 42 for the current year by any amount certified under
73-18 Subsection (b).
73-19 (d) A school district may appeal to the comptroller the
73-20 comptroller's determination under Subsection (a) if the district's
73-21 failure to collect all the taxes the district levied was due to a
73-22 factor beyond the district's control.
73-23 Sec. 46.011. PROJECTS BY MORE THAN ONE DISTRICT. If two or
73-24 more districts apply for state assistance in connection with a
73-25 joint project at a single location, each district is entitled to a
73-26 guaranteed facilities yield amount of state and local funds that is
73-27 20 percent higher than the amount to which the district would
74-1 otherwise be entitled under Section 46.005.
74-2 Sec. 46.012. SALE OF INSTRUCTIONAL FACILITY FINANCED WITH
74-3 INSTRUCTIONAL FACILITIES ALLOTMENT. (a) If an instructional
74-4 facility financed by bonds paid with state and local funds under
74-5 this chapter is sold before the bonds are fully paid, the school
74-6 district shall send to the comptroller an amount equal to the
74-7 district's net proceeds from the sale multiplied by a percentage
74-8 determined by dividing the amount of state funds under this
74-9 subchapter used to pay the principal of and interest on the bonds
74-10 by the total amount of principal and interest paid on the bonds
74-11 with funds other than the proceeds of the sale.
74-12 (b) In this section, "net proceeds" means the difference
74-13 between the total amount received from the sale less:
74-14 (1) the amount necessary to fully pay the outstanding
74-15 principal of and interest on the bonds; and
74-16 (2) the school district's costs of the sale, as
74-17 approved by the commissioner.
74-18 SECTION 1.04. Section 7.024(a), Education Code, is amended
74-19 to read as follows:
74-20 (a) The investment capital fund consists of money
74-21 appropriated [transferred] to the fund [as provided by Section
74-22 42.152(l)]. The agency shall administer the fund. The purposes
74-23 of this fund are to assist eligible public schools to implement
74-24 practices and procedures consistent with deregulation and school
74-25 restructuring in order to improve student achievement and to help
74-26 schools identify and train parents and community leaders who will
74-27 hold the school and the school district accountable for achieving
75-1 high academic standards.
75-2 SECTION 1.05. Section 12.013(b), Education Code, is amended
75-3 to read as follows:
75-4 (b) A home-rule school district is subject to:
75-5 (1) a provision of this title establishing a criminal
75-6 offense;
75-7 (2) a provision of this title relating to limitations
75-8 on liability; and
75-9 (3) a prohibition, restriction, or requirement, as
75-10 applicable, imposed by this title or a rule adopted under this
75-11 title, relating to:
75-12 (A) the Public Education Information Management
75-13 System (PEIMS) to the extent necessary to monitor compliance with
75-14 this subchapter as determined by the commissioner;
75-15 (B) educator certification under Chapter 21 and
75-16 educator rights under Sections 21.407, 21.408, and 22.001;
75-17 (C) criminal history records under Subchapter C,
75-18 Chapter 22;
75-19 (D) student admissions under Section 25.001;
75-20 (E) school attendance under Sections 25.085,
75-21 25.086, and 25.087;
75-22 (F) inter-district or inter-county transfers of
75-23 students under Subchapter B, Chapter 25;
75-24 (G) elementary class size limits under Section
75-25 25.112, in the case of any campus in the district that is
75-26 considered low-performing under Section 39.131(b);
75-27 (H) high school graduation under Section 28.025;
76-1 (I) special education programs under Subchapter
76-2 A, Chapter 29;
76-3 (J) bilingual education under Subchapter B,
76-4 Chapter 29;
76-5 (K) prekindergarten programs under Subchapter E,
76-6 Chapter 29;
76-7 (L) safety provisions relating to the
76-8 transportation of students under Sections 34.002, 34.003, 34.004,
76-9 and 34.008;
76-10 (M) computation and distribution of state aid
76-11 under Chapters 31, 42, and 43;
76-12 (N) extracurricular activities under Section
76-13 33.081;
76-14 (O) health and safety under Chapter 38;
76-15 (P) public school accountability under
76-16 Subchapters B, C, D, and G, Chapter 39;
76-17 (Q) [equalized wealth under Chapter 41;]
76-18 [(R)] a bond or other obligation or tax rate
76-19 under Chapters 42, 43, and 45; and
76-20 (R) [(S)] purchasing under Chapter 44.
76-21 SECTION 1.06. Section 12.016, Education Code, is amended to
76-22 read as follows:
76-23 Sec. 12.016. CONTENT. Each home-rule school district
76-24 charter must:
76-25 (1) describe the educational program to be offered;
76-26 (2) provide that continuation of the home-rule school
76-27 district charter is contingent on:
77-1 (A) acceptable student performance on assessment
77-2 instruments adopted under Subchapter B, Chapter 39; and
77-3 (B) compliance with other applicable
77-4 accountability provisions under Chapter 39;
77-5 (3) specify any basis, in addition to a basis
77-6 specified by this subchapter, on which the charter may be placed on
77-7 probation or revoked;
77-8 (4) describe the governing structure of the district
77-9 and campuses;
77-10 (5) specify any procedure or requirement, in addition
77-11 to those under Chapter 38, that the district will follow to ensure
77-12 the health and safety of students and employees;
77-13 (6) describe the process by which the district will
77-14 adopt an annual budget, including a description of the use of
77-15 [program-weight] funds for programs under Subchapters A-D and F,
77-16 Chapter 29;
77-17 (7) describe the manner in which an annual audit of
77-18 financial and programmatic operations of the district is to be
77-19 conducted, including the manner in which the district will provide
77-20 information necessary for the district to participate in the Public
77-21 Education Information Management System (PEIMS) to the extent
77-22 required by this subchapter; and
77-23 (8) include any other provision the charter commission
77-24 considers necessary.
77-25 SECTION 1.07. Section 12.029(b), Education Code, is amended
77-26 to read as follows:
77-27 (b) If [Except as provided by Subchapter H, Chapter 41, if]
78-1 two or more school districts having different status, one of which
78-2 is home-rule school district status, consolidate into a single
78-3 district, the petition under Section 13.003 initiating the
78-4 consolidation must state the status for the consolidated district.
78-5 The ballot shall be printed to permit voting for or against the
78-6 proposition: "Consolidation of (names of school districts) into a
78-7 single school district governed as (status of school district
78-8 specified in the petition)."
78-9 SECTION 1.08. Section 12.106, Education Code, is amended to
78-10 read as follows:
78-11 Sec. 12.106. [STATE] FUNDING. [(a)] An open-enrollment
78-12 charter school is entitled to funding under Chapter 42 as if the
78-13 open-enrollment charter school were a school district to which
78-14 Section 42.106 applies. In determining funding for an
78-15 open-enrollment charter school, adjustments under Sections 42.103,
78-16 42.104, and 42.105 are based on the average adjustment for the
78-17 county in which the open-enrollment charter school is located [the
78-18 distribution from the available school fund for a student attending
78-19 the open-enrollment charter school to which the district in which
78-20 the student resides would be entitled].
78-21 [(b) A student attending an open-enrollment charter school
78-22 who is eligible under Section 42.003 is entitled to the benefits of
78-23 the Foundation School Program under Chapter 42. The commissioner
78-24 shall distribute from the foundation school fund to each school an
78-25 amount equal to the cost of a Foundation School Program provided by
78-26 the program for which the charter is granted as determined under
78-27 Section 42.251, including the transportation allotment under
79-1 Section 42.155, for the student that the district in which the
79-2 student resides would be entitled to, less an amount equal to the
79-3 sum of the school's tuition receipts under Section 12.107 plus the
79-4 school's distribution from the available school fund.]
79-5 SECTION 1.09. Section 12.108, Education Code, is amended to
79-6 read as follows:
79-7 Sec. 12.108. TUITION RESTRICTED. An [Except as provided by
79-8 Section 12.106, an] open-enrollment charter school may not charge
79-9 tuition to an eligible student who applies under Section 12.117.
79-10 SECTION 1.10. Section 13.054(f), Education Code, is amended
79-11 to read as follows:
79-12 (f) For five years beginning with the school year in which
79-13 the annexation occurs, the commissioner shall annually adjust the
79-14 local share [fund assignment] of a district to which territory is
79-15 annexed under this section by multiplying the enlarged district's
79-16 local share [fund assignment] computed under Section 42.252 by a
79-17 fraction, the numerator of which is the number of students residing
79-18 in the district preceding the date of the annexation and the
79-19 denominator of which is the number of students residing in the
79-20 district as enlarged on the date of the annexation.
79-21 SECTION 1.11. Section 13.285, Education Code, is amended to
79-22 read as follows:
79-23 Sec. 13.285. COST. The cost of incentive aid payments
79-24 authorized by this subchapter shall be paid from the foundation
79-25 school fund. [The costs shall be considered and included by the
79-26 foundation school fund budget committee in estimating the funds
79-27 needed for purposes of the Foundation School Program.]
80-1 SECTION 1.12. Section 19.007(b), Education Code, is amended
80-2 to read as follows:
80-3 (b) The costs for persons eligible under Section 19.005
80-4 shall be paid from the foundation school fund. [Those costs shall
80-5 be considered annually by the foundation school fund budget
80-6 committee and included in estimating the funds needed for purposes
80-7 of the Foundation School Program.]
80-8 SECTION 1.13. Section 21.401, Education Code, is amended to
80-9 read as follows:
80-10 Sec. 21.401. MINIMUM SERVICE REQUIRED. (a) A contract
80-11 between a school district and an educator must be for a minimum of
80-12 10 months' service.
80-13 (a-1) For the 1997-1998 and 1998-1999 school years
80-14 [1995-1996 school year], an educator employed under a 10-month
80-15 contract must provide a minimum of 185 [183] days of service. This
80-16 subsection expires September 1, 1999 [1997].
80-17 [(a-2) For the 1996-1997 school year, an educator employed
80-18 under a 10-month contract must provide a minimum of 185 days of
80-19 service. This subsection expires September 1, 1997.]
80-20 (b) An educator employed under a 10-month contract must
80-21 provide a minimum number of days of service as determined by the
80-22 following formula:
80-23 MDS = 185 + (0.33 X (GL1 - GL2)(GL2/185)
80-24 [(R1 - R2)/(R2/183)])
80-25 where:
80-26 "MDS" is the minimum number of days of service;
80-27 "GL1" ["R1"] is equal to the guaranteed level of state and
81-1 local funds per student per cent of tax effort as provided by
81-2 Section 42.101 [FSP/ADA as determined under Section 21.402] for the
81-3 fiscal year; and
81-4 "GL2" ["R2"] is equal to the guaranteed level of state and
81-5 local funds per student per cent of tax effort as provided by
81-6 Section 42.101 [FSP/ADA as determined under Section 21.402] for the
81-7 1998-1999 [1994-1995] school year.
81-8 (b-1) Subsection (b) applies beginning with the 1999-2000
81-9 [1997-1998] school year. This subsection expires January 1, 2000
81-10 [1998].
81-11 (c) The result of the formula prescribed by Subsection (b)
81-12 shall be rounded to the nearest whole number.
81-13 (d) The commissioner, as provided by Section 25.081(b), may
81-14 reduce the number of days of service required by this section. A
81-15 reduction by the commissioner does not reduce an educator's salary.
81-16 SECTION 1.14. Subchapter I, Chapter 21, Education Code, is
81-17 amended by adding Section 21.4011 to read as follows:
81-18 Sec. 21.4011. MINIMUM SALARY SCHEDULE FOR CLASSROOM TEACHERS
81-19 AND FULL-TIME LIBRARIANS FOR 1997-1998 AND 1998-1999 SCHOOL YEARS.
81-20 (a) This section applies only to the 1997-1998 and 1998-1999
81-21 school years.
81-22 (b) Except as provided by Subsection (d), a school district
81-23 must pay each classroom teacher or full-time librarian not less
81-24 than the minimum monthly salary, based on the employee's level of
81-25 experience, as follows:
81-26 Years Experience 0 1 2 3 4
81-27 Minimum Salary 1,995 2,049 2,103 2,157 2,271
82-1 Years Experience 5 6 7 8 9
82-2 Minimum Salary 2,384 2,498 2,604 2,704 2,798
82-3 Years Experience 10 11 12 13 14
82-4 Minimum Salary 2,887 2,972 3,052 3,127 3,198
82-5 Years Experience 15 16 17 18 19
82-6 Minimum Salary 3,265 3,329 3,389 3,446 3,500
82-7 Years Experience 20 and over
82-8 Minimum Salary 3,551
82-9 (c) Placement of a classroom teacher or full-time librarian
82-10 on the minimum salary schedule provided by this section is
82-11 determined in accordance with Section 21.403.
82-12 (d) Notwithstanding Subsection (b), a teacher or librarian
82-13 who received a career ladder supplement on August 31, 1993, is
82-14 entitled to at least the same gross monthly salary the teacher or
82-15 librarian received for the 1994-1995 school year as long as the
82-16 teacher or librarian is employed by the same district.
82-17 (e) In this section, "gross monthly salary" must include the
82-18 amount a teacher or librarian received that represented a career
82-19 ladder salary supplement under Section 16.057, as that section
82-20 existed January 1, 1993.
82-21 (f) This section expires September 1, 1999.
82-22 SECTION 1.15. Section 21.402, Education Code, is amended to
82-23 read as follows:
82-24 Sec. 21.402. MINIMUM SALARY SCHEDULE FOR CLASSROOM TEACHERS
82-25 AND FULL-TIME LIBRARIANS. (a) Except as provided by Subsection
82-26 (c) or (d) [or (e)], a school district must pay each classroom
82-27 teacher or full-time librarian not less than the minimum monthly
83-1 salary, based on the employee's level of experience, determined by
83-2 the following formula:
83-3 MS = SF X GL [(FSP/ADA)]
83-4 where:
83-5 "MS" is the minimum monthly salary;
83-6 "SF" is the applicable salary factor specified by Subsection
83-7 (c); and
83-8 "GL" is the guaranteed level of state and local funds per
83-9 student per cent of tax effort provided by Section 42.101 ["FSP" is
83-10 the amount appropriated in the General Appropriations Act for the
83-11 fiscal year for the Foundation School Program, as determined by the
83-12 commissioner as provided by Subsection (b); and]
83-13 ["ADA" is the total estimated average daily attendance, as
83-14 defined by Section 42.005, used for purposes of the General
83-15 Appropriations Act for the fiscal year].
83-16 (b) [Not later than June 1 of each year, the commissioner
83-17 shall determine the amount appropriated for purposes of Chapter 42
83-18 for the state fiscal year beginning September 1. The commissioner
83-19 shall exclude from the determination:]
83-20 [(1) amounts designated solely for use in connection
83-21 with school facilities or for payment of principal of and interest
83-22 on bonds; and]
83-23 [(2) local funds received under Subchapter D, Chapter
83-24 41.]
83-25 [(c)] The salary factors per step are as follows:
83-26 Years Experience 0 1 2
83-27 Salary Factor 37.5353 [.8470] 38.5513 [.8699] 39.5673 [.8928]
84-1 Years Experience 3 4 5
84-2 Salary Factor 40.5833 [.9156] 42.7281 [.9639] 44.8542 [1.0122]
84-3 Years Experience 6 7 8
84-4 Salary Factor 46.9991 [1.0605] 46.9934 [1.1054] 50.8749 [1.1477]
84-5 Years Experience 9 10 11
84-6 Salary Factor 52.6435 [1.1879] 54.3180 [1.2256] 55.9172 [1.2616]
84-7 Years Experience 12 13 14
84-8 Salary Factor 57.4224 [1.2955] 58.8335 [1.3273] 60.1693 [1.3578]
84-9 Years Experience 15 16 17
84-10 Salary Factor 61.4299 [1.3862] 62.6341 [1.4133] 63.7629 [1.4387]
84-11 Years Experience 18 19 20 and over
84-12 Salary Factor 64.8354 [1.4628] 65.8514 [1.4857] 66.8109 [1.5073]
84-13 (c) [(d)] If the minimum monthly salary determined under
84-14 Subsection (a) for a particular level of experience is less than
84-15 the minimum monthly salary for that level of experience in the
84-16 preceding year, the minimum monthly salary is the minimum monthly
84-17 salary for the preceding year.
84-18 (d) [(e)] Notwithstanding Subsection (a), a teacher or
84-19 librarian who received a career ladder supplement on August 31,
84-20 1993, is entitled to at least the same gross monthly salary the
84-21 teacher or librarian received for the 1994-1995 school year as long
84-22 as the teacher or librarian is employed by the same district.
84-23 (e) [(f)] In this section, "gross monthly salary" must
84-24 include the amount a teacher or librarian received that represented
84-25 a career ladder salary supplement under Section 16.057, as that
84-26 section existed January 1, 1993.
84-27 (f) This section applies beginning with the 1999-2000 school
85-1 year. This subsection expires January 1, 2000.
85-2 SECTION 1.16. Section 29.002, Education Code, is amended to
85-3 read as follows:
85-4 Sec. 29.002. DEFINITION. In this subchapter, "special
85-5 services" means:
85-6 (1) special instruction, which may be provided by
85-7 professional and paraprofessional personnel in the regular
85-8 classroom or in an instructional arrangement described by Sections
85-9 42.101(b)(2)-(13) [Section 42.151]; or
85-10 (2) related services, which are developmental,
85-11 corrective, supportive, or evaluative services, not instructional
85-12 in nature, that may be required for the proper development and
85-13 implementation of a student's individualized education program.
85-14 SECTION 1.17. Section 29.008(b), Education Code, is amended
85-15 to read as follows:
85-16 (b) Except as provided by Subsection (c), costs of an
85-17 approved contract for residential placement may be paid from a
85-18 combination of federal, state, and local funds. The local share
85-19 under this section of the total contract cost for each student is
85-20 that portion of the local tax effort that exceeds the district's
85-21 local share [fund assignment] under Section 42.252, divided by the
85-22 average daily attendance in the district. If the contract involves
85-23 a private facility, the state share of the total contract cost is
85-24 that amount remaining after subtracting the local share under this
85-25 section. If the contract involves a public facility, the state
85-26 share is that amount remaining after subtracting the local share
85-27 from the portion of the contract that involves the costs of
86-1 instructional and related services. For purposes of this
86-2 subsection, "local tax effort" means the total amount of money
86-3 generated by taxes imposed for debt service and maintenance and
86-4 operation.
86-5 SECTION 1.18. Section 29.014, Education Code, is amended by
86-6 amending Subsection (d) and adding Subsection (e) to read as
86-7 follows:
86-8 (d) The guaranteed level of state and local funds per
86-9 student [basic allotment] for a student enrolled in a district to
86-10 which this section applies is adjusted by:
86-11 (1) the cost of education adjustment under Section
86-12 42.103 [42.102] for the school district in which the district is
86-13 geographically located; and
86-14 (2) the student multiplier [weight] for a homebound
86-15 student under Section 42.101(b)(3) [42.151(a)].
86-16 (e) The commissioner shall distribute to school districts
86-17 funds appropriated for programs under this section. The program
86-18 established under this section is required only in school districts
86-19 in which the program is financed by funds distributed under this
86-20 subsection and any other funds available for the program.
86-21 SECTION 1.19. Section 29.081, Education Code, is amended by
86-22 adding Subsection (g) to read as follows:
86-23 (g) The commissioner shall distribute funds appropriated for
86-24 purposes of this subsection to school districts that incur
86-25 unanticipated expenditures resulting from a significant increase in
86-26 the enrollment of students who do not have disabilities and who
86-27 reside in residential placement facilities.
87-1 SECTION 1.20. Section 29.082(a), Education Code, is amended
87-2 to read as follows:
87-3 (a) A school district may set aside an amount from the
87-4 district's allotment for compensatory education under Chapter 42
87-5 [Section 42.152] or may apply to the commissioner [agency] for
87-6 funding of an extended year program for a period not to exceed 30
87-7 instructional days for students in kindergarten through grade 8 who
87-8 are identified as likely not to be promoted to the next grade level
87-9 for the succeeding school year. Funding distributed by the
87-10 commissioner under this subsection shall be from amounts
87-11 appropriated for extended year programs. In distributing funds
87-12 under this subsection, the commissioner shall give priority to
87-13 applications submitted by districts that have high concentrations
87-14 of educationally disadvantaged students.
87-15 SECTION 1.21. Section 29.085, Education Code, is amended by
87-16 adding Subsections (e) and (f) to read as follows:
87-17 (e) The commissioner shall, each fiscal year, distribute to
87-18 school districts funds appropriated for programs under this
87-19 section. In distributing those funds, preference shall be given
87-20 to a school district that received funds for a program under this
87-21 section for the preceding school year. The program established
87-22 under this section is required only in school districts in which
87-23 the program is financed by funds distributed under this subsection
87-24 and any other funds available for the program.
87-25 (f) The commissioner shall coordinate the funds distributed
87-26 under Subsection (e) with any other funds available for the
87-27 program. To receive funds for the program, a school district must
88-1 apply to the commissioner. The commissioner shall give a
88-2 preference to the districts that apply that have the highest
88-3 concentration of students who are pregnant or who are parents.
88-4 SECTION 1.22. Subchapter D, Chapter 29, Education Code, is
88-5 amended by adding Section 29.124 to read as follows:
88-6 Sec. 29.124. FUNDING OF ADDITIONAL PROGRAMS. The
88-7 commissioner shall distribute to school districts funds
88-8 appropriated for programs such as MATHCOUNTS, Future Problem
88-9 Solving, Odyssey of the Mind, and Academic Decathlon, as long as
88-10 these funds are used to train personnel and provide program
88-11 services. To be eligible for funding under this section, a program
88-12 must be determined by the State Board of Education to provide
88-13 services that are effective and consistent with the state plan for
88-14 gifted and talented education.
88-15 SECTION 1.23. Section 29.203(b), Education Code, is amended
88-16 to read as follows:
88-17 (b) A student's public education grant is the total state
88-18 and local funding per student for the school district in which the
88-19 student resides. Total funding from state and local sources
88-20 includes funding based on student multipliers under Section
88-21 42.101(b) [special allotments under Subchapter C, Chapter 42], but
88-22 does not include small district, sparsity, and cost of education
88-23 adjustments and allotments for technology and transportation. A
88-24 student's public education grant is the entitlement of the student,
88-25 under the supervision of the student's parent, guardian, or
88-26 custodian, is not an entitlement of any school district, and is
88-27 paid to a school district solely as a means of administrative
89-1 convenience.
89-2 SECTION 1.24. Section 29.256(c), Education Code, is amended
89-3 to read as follows:
89-4 (c) The cost to the state shall be paid from the foundation
89-5 school fund. [The foundation school fund budget committee shall
89-6 consider that cost in estimating the funds needed for Foundation
89-7 School Program purposes.]
89-8 SECTION 1.25. Section 29.257(a), Education Code, is amended
89-9 to read as follows:
89-10 (a) The legislature may appropriate money from the
89-11 foundation school fund to the agency for developing and
89-12 implementing community education projects. [The foundation school
89-13 fund budget committee shall consider the cost of community
89-14 education development projects in estimating the money needed for
89-15 foundation school fund purposes.] The agency shall actively seek
89-16 gifts, grants, or other donations for purposes related to community
89-17 education development projects, unless the acceptance is prohibited
89-18 by other law. Money received under this subsection shall be
89-19 deposited in the account established under Subsection (b) and may
89-20 be appropriated only for the purpose for which the money was given.
89-21 SECTION 1.26. Section 30.087(b), Education Code, is amended
89-22 to read as follows:
89-23 (b) From the amount appropriated for regional day school
89-24 programs, the commissioner shall allocate funds to each program
89-25 based on the number of [weighted] full-time equivalent students,
89-26 adjusted by the appropriate student multiplier under Section
89-27 42.101(b), served. The commissioner may consider local resources
90-1 available in allocating funds under this subsection.
90-2 SECTION 1.27. Section 31.021(b), Education Code, is amended
90-3 to read as follows:
90-4 (b) The State Board of Education shall annually set aside
90-5 out of the available school fund of the state an amount sufficient
90-6 for the board, school districts, and open-enrollment charter
90-7 schools to purchase and distribute the necessary textbooks for the
90-8 use of the students of this state for the following school year.
90-9 The board shall determine the amount of the available school fund
90-10 to set aside for the state textbook fund based on:
90-11 (1) a report by the commissioner issued on July 1 or,
90-12 if that date is a Saturday or Sunday, on the following Monday,
90-13 stating the amount of unobligated money in the fund;
90-14 (2) a requirement to provide an allotment to be
90-15 distributed to each district equal to $30 per student in average
90-16 daily attendance, or a greater amount for any year provided by
90-17 appropriation [as determined under Subsection (c)], to be used only
90-18 to:
90-19 (A) provide for the purchase by school districts
90-20 of electronic textbooks or technological equipment that contributes
90-21 to student learning; and
90-22 (B) pay for training educational personnel
90-23 directly involved in student learning in the appropriate use of
90-24 electronic textbooks and for providing for access to technological
90-25 equipment for instructional use;
90-26 (3) the commissioner's estimate, based on textbooks
90-27 selected under Section 31.101 and on attendance reports submitted
91-1 under Section 31.103 by school districts and open-enrollment
91-2 charter schools, of the amount of funds, in addition to funds
91-3 reported under Subdivision (1), that will be necessary for purchase
91-4 and distribution of textbooks for the following school year; and
91-5 (4) any amount the board determines should be set
91-6 aside for emergency purposes caused by unexpected increases in
91-7 attendance.
91-8 SECTION 1.28. Section 33.001, Education Code, is amended to
91-9 read as follows:
91-10 Sec. 33.001. APPLICABILITY OF SUBCHAPTER; FUNDING. (a)
91-11 This subchapter applies only to a school district that receives
91-12 funds under this section [as provided by Section 42.152(i)].
91-13 (b) The commissioner shall, each fiscal year, distribute
91-14 funds appropriated for the purpose of programs under this
91-15 subchapter. In distributing those funds, preference shall be given
91-16 to a school district that received funds for a program under this
91-17 subsection for the preceding school year.
91-18 (c) The commissioner shall coordinate the funds distributed
91-19 under Subsection (b) with any other funds available for the
91-20 program. To receive funds for the program, a school district must
91-21 apply to the commissioner. The commissioner shall give a
91-22 preference to the districts that have the highest concentration of
91-23 at-risk students. For each school year that a school district
91-24 receives funds under this section, the district shall allocate an
91-25 amount of local funds for school guidance and counseling programs
91-26 that is equal to or greater than the amount of local funds that the
91-27 school district allocated for that purpose during the preceding
92-1 school year.
92-2 SECTION 1.29. Section 34.002(c), Education Code, is amended
92-3 to read as follows:
92-4 (c) A school district that fails or refuses to comply with
92-5 the safety standards established under this section is ineligible
92-6 to share in the transportation allotment under Subchapter D,
92-7 Chapter 42, [Section 42.155] until the first anniversary of the
92-8 date the district begins complying with the safety standards.
92-9 SECTION 1.30. Section 39.024(c), Education Code, is amended
92-10 to read as follows:
92-11 (c) The agency shall develop and distribute study guides to
92-12 assist parents in providing assistance during the period that
92-13 school is recessed for summer to students who do not perform
92-14 satisfactorily on one or more parts of an assessment instrument
92-15 administered under this subchapter. The commissioner shall use
92-16 funds appropriated for that purpose [retain a portion of the total
92-17 amount of funds allotted under Section 42.152(a) that the
92-18 commissioner considers appropriate] to finance the development and
92-19 distribution of the study guides [and shall reduce each district's
92-20 allotment proportionately].
92-21 SECTION 1.31. Section 39.031, Education Code, is amended to
92-22 read as follows:
92-23 Sec. 39.031. COST. [(a)] The cost of preparing,
92-24 administering, or grading the assessment instruments and the [shall
92-25 be paid from the funds allotted under Section 42.152, and each
92-26 district shall bear the cost in the same manner described for a
92-27 reduction in allotments under Section 42.253. If a district does
93-1 not receive an allotment under Section 42.152, the commissioner
93-2 shall subtract the cost from the district's other foundation school
93-3 fund allotments.]
93-4 [(b) The] cost of releasing the question and answer keys
93-5 under Section 39.023(d) shall be paid from amounts appropriated to
93-6 the agency for those purposes.
93-7 SECTION 1.32. Section 39.182(a), Education Code, is amended
93-8 to read as follows:
93-9 (a) The agency shall prepare and deliver to the governor,
93-10 the lieutenant governor, the speaker of the house of
93-11 representatives, each member of the legislature, the Legislative
93-12 Budget Board, and the clerks of the standing committees of the
93-13 senate and house of representatives with primary jurisdiction over
93-14 the public school system a comprehensive report covering the
93-15 preceding two school years and containing:
93-16 (1) an evaluation of the achievements of the state
93-17 educational program in relation to the statutory goals for the
93-18 public education system under Section 4.002;
93-19 (2) an evaluation of the status of education in the
93-20 state as reflected by the academic excellence indicators adopted
93-21 under Section 39.051;
93-22 (3) a summary compilation of overall student
93-23 performance on academic skills assessment instruments required by
93-24 Section 39.023, aggregated by grade level, subject area, campus,
93-25 and district, with appropriate interpretations and analysis and
93-26 disaggregated by race, ethnicity, sex, and socioeconomic status;
93-27 (4) an evaluation of the correlation between student
94-1 grades and student performance on academic skills assessment
94-2 instruments required by Section 39.023;
94-3 (5) a statement of the dropout rate of students in
94-4 grade levels 7 through 12, expressed in the aggregate and by grade
94-5 level;
94-6 (6) a statement of the projected cross-sectional and
94-7 longitudinal dropout rates for grade levels 7 through 12 for the
94-8 next five years, assuming no state action is taken to reduce the
94-9 dropout rate;
94-10 (7) a description of a systematic plan for reducing
94-11 the projected cross-sectional and longitudinal dropout rates to
94-12 five percent or less for the 1997-1998 school year;
94-13 (8) a summary of the information required by Section
94-14 29.083 regarding grade level retention of students;
94-15 (9) a list of each school district or campus that does
94-16 not satisfy performance standards, with an explanation of the
94-17 actions taken by the commissioner to improve student performance in
94-18 the district or campus and an evaluation of the results of those
94-19 actions;
94-20 (10) an evaluation of the status of the curriculum
94-21 taught in public schools, with recommendations for legislative
94-22 changes necessary to improve or modify the curriculum required by
94-23 Section 28.002;
94-24 (11) a description of all funds received by and each
94-25 activity and expenditure of the agency;
94-26 (12) a summary and analysis of the compliance of
94-27 school districts with administrative cost ratios set by the
95-1 commissioner under Section 42.301 [42.201], including any
95-2 improvements and cost savings achieved by school districts;
95-3 (13) a summary of the effect of deregulation,
95-4 including exemptions and waivers granted under Section 7.056 or
95-5 39.112;
95-6 (14) a statement of the total number and length of
95-7 reports that school districts and school district employees must
95-8 submit to the agency, identifying which reports are required by
95-9 federal statute or rule, state statute, or agency rule, and a
95-10 summary of the agency's efforts to reduce overall reporting
95-11 requirements; and
95-12 (15) any additional information considered important
95-13 by the commissioner or the State Board of Education.
95-14 SECTION 1.33. Section 43.002, Education Code, is amended to
95-15 read as follows:
95-16 Sec. 43.002. TRANSFERS FROM GENERAL REVENUE FUND TO
95-17 AVAILABLE FUND. Of the amounts available for transfer from the
95-18 general revenue fund to the available school fund for the months of
95-19 January and February of each fiscal year, no more than the amount
95-20 necessary to enable the comptroller to distribute from the
95-21 available school fund an amount equal to 9-1/2 percent of the
95-22 estimated annual available school fund apportionment to [category
95-23 1] school districts[, as defined by Section 42.259, and 3-1/2
95-24 percent of the estimated annual available school fund apportionment
95-25 to category 2 school districts, as defined by Section 42.259,] may
95-26 be transferred from the general revenue fund to the available
95-27 school fund. Any remaining amount that would otherwise be
96-1 available for transfer for the months of January and February shall
96-2 be transferred from the general revenue fund to the available
96-3 school fund in equal amounts in June and in August of the same
96-4 fiscal year.
96-5 SECTION 1.34. Section 45.002, Education Code, is amended to
96-6 read as follows:
96-7 Sec. 45.002. MAINTENANCE AND OPERATIONS TAXES. (a) The
96-8 governing board of an independent school district, including the
96-9 city council or commission that has jurisdiction over a municipally
96-10 controlled independent school district, the governing board of a
96-11 rural high school district, and the commissioners court of a
96-12 county, on behalf of each common school district under its
96-13 jurisdiction, may levy, assess, and collect annual ad valorem taxes
96-14 on all residential property in the district for the further
96-15 maintenance and operations of public schools in the district,
96-16 subject to Sections [Section] 45.003 and 45.0031.
96-17 (b) In this section, "residential property" means that
96-18 portion of real property used primarily for residential purposes
96-19 and on which a structure used for a residential purpose is located.
96-20 The term includes a single-family residence, a multifamily
96-21 residence, a mobile home, and the residential portion, not
96-22 exceeding 20 acres, of farm and ranch property. The term does not
96-23 include:
96-24 (1) a hotel or motel; or
96-25 (2) land qualified for appraisal under Subchapter C,
96-26 D, or E, Chapter 23, Tax Code.
96-27 SECTION 1.35. Sections 45.003(d) and (e), Education Code,
97-1 are amended to read as follows:
97-2 (d) A proposition submitted to authorize the levy of
97-3 maintenance taxes must include the question of whether the
97-4 governing board or commissioners court may levy, assess, and
97-5 collect annual ad valorem taxes for the further maintenance of
97-6 public schools, at a rate not to exceed the rate[, which may be not
97-7 more than $1.50 on the $100 valuation of taxable property in the
97-8 district,] stated in the proposition.
97-9 (e) Before issuing bonds, a district must demonstrate to the
97-10 attorney general with respect to the proposed issuance that the
97-11 district has a projected ability to pay the principal of and
97-12 interest on the proposed bonds and all previously issued bonds
97-13 other than bonds authorized to be issued at an election held on or
97-14 before April 1, 1991, and issued before September 1, 1992, from a
97-15 tax at a rate not to exceed $0.50 per $100 of valuation. A
97-16 district that demonstrates to the attorney general that the
97-17 district's ability to comply with this subsection is contingent on
97-18 receiving state assistance may not adopt a tax rate for a year for
97-19 purposes of paying the principal of and interest on the bonds
97-20 unless the district credits to the account of the interest and
97-21 sinking fund of the bonds the amount of state assistance received
97-22 or to be received in that year.
97-23 SECTION 1.36. Subchapter A, Chapter 45, Education Code, is
97-24 amended by adding Section 45.0031 to read as follows:
97-25 Sec. 45.0031. RATE LIMIT. (a) Except as provided by
97-26 Subsection (b), a school district may not levy a tax for purposes
97-27 of maintenance and operations at a rate that exceeds 75 cents on
98-1 the $100 valuation of taxable property.
98-2 (b) A school district may levy a tax for purposes of
98-3 maintenance and operations at a rate that exceeds 75 cents but does
98-4 not exceed 85 cents on the $100 valuation of taxable property if
98-5 the rate is approved by the voters of the district at an election
98-6 conducted after September 1, 1997, as provided by Section 45.003
98-7 and this section. The election shall be held on a standard
98-8 election date, per Subchapter A, Chapter 41, Election Code.
98-9 (b-1) To the extent necessary to replace revenue lost to an
98-10 additional homestead exemption under Section 11.13(d) or (n), Tax
98-11 Code, for the 1997-1998 school year, as authorized by Section
98-12 26.08(g)(2)(C), Tax Code, a district may levy a tax at a rate
98-13 greater than 75 cents but not to exceed 85 cents without holding
98-14 the election required by Subsection (b). This subsection does not
98-15 authorize a tax rate in excess of 75 cents for any other purpose.
98-16 This subsection expires September 1, 1998.
98-17 (b-2) For the 1997 and 1998 tax years, a school district may
98-18 levy a tax at a rate that exceeds 75 cents but not to exceed 83
98-19 cents to the extent necessary to set a rate equal to the rate
98-20 allowed under Section 26.08(g)(2)(A), Tax Code, without holding the
98-21 election required under Subsection (b). This subsection does not
98-22 authorize a rate in excess of 75 cents for any other purpose. This
98-23 subsection expires September 1, 1999.
98-24 (c) Revenue received from a tax levied under Subsection (b)
98-25 may only be used to provide educational enrichment beyond the basic
98-26 program under Chapter 42.
98-27 (d) At an election under Subsection (b), the ballot shall be
99-1 printed to permit voting for or against the proposition:
99-2 "Authorizing the board of trustees of _____ School District to levy
99-3 a tax on residential property at a rate not to exceed _____ (rate
99-4 stated in proposition) for purposes of educational enrichment."
99-5 (e) A school district is not subject to Section 26.08, Tax
99-6 Code, in connection with an increase in the district's tax rate for
99-7 which the district conducts an election under Subsection (b).
99-8 SECTION 1.37. Section 45.105(c), Education Code, is amended
99-9 to read as follows:
99-10 (c) Local school funds from district taxes, tuition fees of
99-11 students not entitled to a free education, and other local sources
99-12 may be used for the purposes listed for state and county funds and
99-13 for purchasing appliances and supplies, paying insurance premiums,
99-14 paying janitors and other employees, buying school sites, buying,
99-15 building, repairing, and renting school buildings, including
99-16 acquiring school buildings and sites by leasing through annual
99-17 payments with an ultimate option to purchase, and [paying] for
99-18 other purposes [goods and services] necessary in the conduct of the
99-19 public schools determined by the board of trustees. The accounts
99-20 and vouchers for county districts must be approved by the county
99-21 superintendent. If the state available school fund in any
99-22 municipality or district is sufficient to maintain the schools in
99-23 any year for at least eight months and leave a surplus, the surplus
99-24 may be spent for the purposes listed in this subsection.
99-25 SECTION 1.38. Sections 74.066(a) and (b), Education Code,
99-26 are amended to read as follows:
99-27 (a) To provide for the continuance of educational programs
100-1 for persons who are inpatients and outpatients at The University of
100-2 Texas Medical Branch at Galveston and for students in the Moody
100-3 State School for Cerebral Palsied Children, the commissioner of
100-4 education shall develop and the State Board of Education shall
100-5 adopt a formula for the allocation of state special education funds
100-6 on a basis similar to that provided for independent school
100-7 districts, except that no local share [fund assignment] shall be
100-8 charged to the schools.
100-9 (b) State funds for the support of the special school and
100-10 the Moody State School shall be paid from the foundation school
100-11 fund [and shall be considered by the Foundation School Fund Budget
100-12 Committee in estimating the funds needed for Foundation School
100-13 Program purposes].
100-14 SECTION 1.39. Section 96.707, Education Code, is amended by
100-15 adding Subsection (k) to read as follows:
100-16 (k) For each student enrolled in the academy, the academy is
100-17 entitled to allotments from the Foundation School Program under
100-18 Chapter 42 as if the academy were a school district, except that
100-19 the academy has a local share applied that is equivalent to the
100-20 local share of the Beaumont Independent School District.
100-21 SECTION 1.40. Section 105.95(e), Education Code, is amended
100-22 to read as follows:
100-23 (e) The academy is not subject to the provisions of this
100-24 code, or to the rules of the Texas Education Agency, regulating
100-25 public schools, except that:
100-26 (1) professional employees of the academy are entitled
100-27 to the limited liability of an employee under Section 22.051 or
101-1 22.052;
101-2 (2) a student's attendance at the academy satisfies
101-3 compulsory school attendance requirements; and
101-4 (3) for each student enrolled, the academy is entitled
101-5 to allotments from the foundation school program under Chapter 42
101-6 as if the academy were a school district, except that the academy
101-7 has a local share applied that is equivalent to the local share
101-8 [fund assignment] of the Denton Independent School District.
101-9 SECTION 1.41. Section 316.002(a), Government Code, is
101-10 amended to read as follows:
101-11 (a) Before the Legislative Budget Board submits the budget
101-12 as prescribed by Section 322.008(c) [322.008(b)], the board shall
101-13 establish:
101-14 (1) the estimated rate of growth of the state's
101-15 economy from the current biennium to the next biennium;
101-16 (2) the level of appropriations for the current
101-17 biennium from state tax revenues not dedicated by the constitution;
101-18 and
101-19 (3) the amount of state tax revenues not dedicated by
101-20 the constitution that could be appropriated for the next biennium
101-21 within the limit established by the estimated rate of growth of the
101-22 state's economy.
101-23 SECTION 1.42. Section 317.005(f), Government Code, is
101-24 amended to read as follows:
101-25 (f) The governor or board may adopt an order under this
101-26 section withholding or transferring any portion of the total amount
101-27 appropriated to finance the foundation school program for a fiscal
102-1 year. The governor or board may not adopt such an order if it
102-2 would result in an allocation of money between particular programs
102-3 or statutory allotments under the foundation school program
102-4 contrary to the statutory proration formula provided by Section
102-5 42.253(h) [16.254(h)], Education Code. The governor or board may
102-6 transfer an amount to the total amount appropriated to finance the
102-7 foundation school program for a fiscal year and may increase the
102-8 guaranteed level of state and local funds per student [basic
102-9 allotment]. The governor or board may adjust allocations of
102-10 amounts between particular programs or statutory allotments under
102-11 the foundation school program only for the purpose of conforming
102-12 the allocations to actual student [pupil] enrollments or
102-13 attendance.
102-14 SECTION 1.43. Section 322.008(b), Government Code, is
102-15 amended to read as follows:
102-16 (b) The [Not later than the 1994-1995 school year, the]
102-17 general appropriations bill may [shall] include for purposes of
102-18 information the funding elements computed [adopted] by the
102-19 Legislative Budget Board [foundation school fund budget committee]
102-20 under Section 42.007 [16.256(e)], Education Code, excluding the
102-21 values for each school district calculated under Section
102-22 42.007(c)(2), Education Code [Subdivision (2) of that subsection].
102-23 If the funding elements are included, the [The] funding elements
102-24 under Section 42.007(c)(3) [16.256(e)(3)], Education Code, shall be
102-25 reported in dollar amounts per student [pupil].
102-26 SECTION 1.44. Section 403.302, Government Code, is amended
102-27 to read as follows:
103-1 Sec. 403.302. DETERMINATION OF SCHOOL DISTRICT PROPERTY
103-2 VALUES. (a) The comptroller shall conduct an annual study using
103-3 comparable sales and generally accepted auditing and sampling
103-4 techniques to determine the total value of all taxable property in
103-5 each school district for purposes of maintenance and operations
103-6 taxes and the total value of all taxable property in each school
103-7 district for purposes of debt service taxes. The study shall
103-8 determine the taxable value of all property and of each category of
103-9 property in the district and the productivity value of all land
103-10 that qualifies for appraisal on the basis of its productive
103-11 capacity and for which the owner has applied for and received a
103-12 productivity appraisal. [The comptroller shall make appropriate
103-13 adjustments in the study to account for actions taken under Chapter
103-14 41, Education Code.]
103-15 (b) In conducting the study, the comptroller shall review
103-16 the appraisal standards, procedures, and methodology used by each
103-17 appraisal district to determine the taxable value of property in
103-18 each school district. The review must test the validity of the
103-19 taxable values assigned to each category of property by the
103-20 appraisal district:
103-21 (1) using, if appropriate, samples selected through
103-22 generally accepted sampling techniques; and
103-23 (2) according to generally accepted standard
103-24 valuation, statistical compilation, and analysis techniques.
103-25 (c) If the comptroller finds in the annual study that
103-26 generally accepted appraisal standards and practices were used by
103-27 the appraisal district in valuing a particular category of
104-1 property, and that the taxable values assigned to each category of
104-2 property by the appraisal district are valid, the appraisal roll
104-3 value of that category of property is presumed to represent taxable
104-4 value. In the absence of such a presumption, the comptroller shall
104-5 estimate the taxable value of that category of property using
104-6 generally accepted standard valuation, statistical compilation, and
104-7 analysis techniques.
104-8 (d) In this section, "taxable value" for purposes of
104-9 maintenance and operations taxes means the market value of
104-10 residential property less:
104-11 (1) the total dollar amount of any exemptions of part
104-12 but not all of the value of taxable property required by the
104-13 constitution in the year that is the subject of the study; and
104-14 (2) the portion of the appraised value of residence
104-15 homesteads of the elderly on which school district taxes are not
104-16 imposed in the year that is the subject of the study, calculated as
104-17 if the residence homesteads were appraised at the full value
104-18 required by law.
104-19 (e) In [For the purposes of] this section, "taxable value"
104-20 for purposes of debt service taxes means market value less:
104-21 (1) the total dollar amount of any exemptions of part
104-22 but not all of the value of taxable property required by the
104-23 constitution or a statute that a district lawfully granted in the
104-24 year that is the subject of the study;
104-25 (2) the total dollar amount of any exemptions granted
104-26 before May 31, 1993, within a reinvestment zone under agreements
104-27 authorized by Chapter 312, Tax Code;
105-1 (3) the total dollar amount of any captured appraised
105-2 value of property that is located in a reinvestment zone and that
105-3 is eligible for tax increment financing under Chapter 311, Tax
105-4 Code;
105-5 (4) the total dollar amount of any exemptions granted
105-6 under Section 11.251, Tax Code;
105-7 (5) the difference between the market value and the
105-8 productivity value of land that qualifies for appraisal on the
105-9 basis of its productive capacity, except that the productivity
105-10 value may not exceed the fair market value of the land;
105-11 (6) the portion of the appraised value of residence
105-12 homesteads of the elderly on which school district taxes are not
105-13 imposed in the year that is the subject of the study, calculated as
105-14 if the residence homesteads were appraised at the full value
105-15 required by law;
105-16 (7) a portion of the market value of property not
105-17 otherwise fully taxable by the district at market value because of
105-18 action required by statute or the constitution of this state that,
105-19 if the tax rate adopted by the district is applied to it, produces
105-20 an amount equal to the difference between the tax that the district
105-21 would have imposed on the property if the property were fully
105-22 taxable at market value and the tax that the district is actually
105-23 authorized to impose on the property; [and]
105-24 (8) the market value of all tangible personal
105-25 property, other than manufactured homes, owned by a family or
105-26 individual and not held or used for the production of income; and
105-27 (9) the amount by which the market value of a
106-1 residence homestead to which Section 23.21 or 23.22, Tax Code,
106-2 applies exceeds the appraised value of that property as calculated
106-3 under that section.
106-4 (f) [(e)] The study shall determine the values as of January
106-5 1 of each year.
106-6 (g) [(f)] The comptroller shall publish preliminary
106-7 findings, listing values by district, before February 1 of the year
106-8 following the year of the study. Preliminary findings shall be
106-9 delivered to each school district and shall be certified to the
106-10 commissioner of education.
106-11 (h) [(g)] On request of the commissioner of education or a
106-12 school district, the comptroller may audit a school district to
106-13 determine the total taxable value of property in the school
106-14 district, including the productivity values of land only if the
106-15 land qualifies for appraisal on that basis and the owner of the
106-16 land has applied for and received a productivity appraisal. The
106-17 comptroller shall certify the comptroller's findings to the
106-18 commissioner.
106-19 (i) In this section, "residential property" has the meaning
106-20 assigned by Section 45.002, Education Code.
106-21 SECTION 1.45. Sections 825.405(b), (h), and (i), Government
106-22 Code, are amended to read as follows:
106-23 (b) For purposes of this section, the statutory minimum
106-24 salary is the salary provided by Section 21.402 or the former
106-25 Sections 16.056 and 16.058, Education Code, multiplied by the cost
106-26 of education adjustment applicable under Section 42.103 [42.102],
106-27 Education Code, to the district in which the member is employed.
107-1 (h) This section does not apply to state contributions for
107-2 members employed by a school district in a school year if the
107-3 district's [effective] tax rate for maintenance and operation
107-4 revenues for the tax year that ended in the preceding school year
107-5 equals or exceeds 125 percent of the statewide average [effective]
107-6 tax rate for school district maintenance and operation revenues for
107-7 that tax year. For a tax year, the statewide average [effective]
107-8 tax rate for school district maintenance and operation revenues is
107-9 the tax rate that, if applied to the statewide total appraised
107-10 value of taxable property for purposes of maintenance and
107-11 operations taxes for every school district in the state determined
107-12 under Section 403.302(d), would produce an amount equal to the
107-13 statewide total amount of maintenance and operation taxes imposed
107-14 in the tax year for every school district in the state.
107-15 (i) Not later than the seventh day after the final date the
107-16 comptroller certifies to the commissioner of education changes to
107-17 the property value study conducted under Subchapter M, Chapter 403
107-18 [Section 11.86, Education Code], the comptroller shall certify to
107-19 the retirement system [Teacher Retirement System of Texas]:
107-20 (1) the [effective] tax rate for school district
107-21 maintenance and operation revenues for each school district in the
107-22 state for the [immediately] preceding tax year; and
107-23 (2) the statewide average [effective] tax rate for
107-24 school district maintenance and operation revenues for the
107-25 [immediately] preceding tax year.
107-26 SECTION 1.46. The foundation school fund budget committee is
107-27 abolished.
108-1 SECTION 1.47. This article applies beginning with the
108-2 1997-1998 school year.
108-3 SECTION 1.48. An obligation or entitlement of a school
108-4 district in connection with state funding for the 1996-1997 or an
108-5 earlier school year under Chapters 41 and 42, Education Code, as
108-6 those chapters existed before amendment or repeal by this article,
108-7 is not affected by this Act, and the prior law is continued in
108-8 effect for that purpose.
108-9 SECTION 1.49. (a) For the 1997 tax year, a school district
108-10 may not:
108-11 (1) adopt a tax rate for purposes of maintenance and
108-12 operations before September 1, 1997; or
108-13 (2) levy or collect a tax for purposes of maintenance
108-14 and operations at a rate adopted before September 1, 1997.
108-15 (b) This Act does not affect the validity of a tax imposed
108-16 by a school district for the 1996 tax year or an earlier tax year.
108-17 ARTICLE 2. STATE PROPERTY TAX
108-18 SECTION 2.01. Section 1.12, Tax Code, is amended by adding
108-19 Subsection (d) to read as follows:
108-20 (d) For purposes of this section, the appraisal ratio of a
108-21 homestead to which Section 23.21 or 23.22 applies is the ratio of
108-22 the property's market value as determined by the appraisal district
108-23 or appraisal review board, as applicable, to the market value of
108-24 the property according to law. The appraisal ratio is not
108-25 calculated according to the appraised value of the property as
108-26 limited by Section 23.21.
108-27 SECTION 2.02. The Tax Code is amended by adding Title 4 to
109-1 read as follows:
109-2 TITLE 4. STATE AD VALOREM TAX
109-3 CHAPTER 501. STATE AD VALOREM TAX
109-4 Sec. 501.001. STATE AD VALOREM TAX. (a) A state ad valorem
109-5 tax for elementary and secondary public school purposes is levied
109-6 on all taxable real and tangible personal property in each county
109-7 of this state that is not taxable for maintenance and operations
109-8 purposes by a school district under Section 45.002, Education Code.
109-9 (b) The state ad valorem tax rate is $1.05 on the $100
109-10 valuation of taxable property.
109-11 (c) Except as otherwise provided by law, the state shall be
109-12 treated, for purposes of the state ad valorem tax, as a taxing unit
109-13 under Title 1.
109-14 Sec. 501.002. APPRAISAL OF PROPERTY. (a) Property subject
109-15 to the state ad valorem tax shall be appraised by the appraisal
109-16 district for the county in which the property is located.
109-17 (b) Property subject to the state ad valorem tax shall be
109-18 appraised in the manner provided by Title 1 for the appraisal of
109-19 property that is subject to ad valorem taxation by a county.
109-20 Sec. 501.003. TAX COLLECTION. (a) In each county, the
109-21 assessor-collector for the county shall assess and collect state ad
109-22 valorem taxes imposed on property in that county.
109-23 (b) If the commissioners court of a county contracts with an
109-24 official, taxing unit, or political subdivision of this state for
109-25 the assessment or collection of the ad valorem taxes of the county,
109-26 the official, taxing unit, or political subdivision shall collect
109-27 the state ad valorem taxes imposed on property in that county.
110-1 (c) Each assessor or collector of state ad valorem taxes is
110-2 entitled to be reimbursed by the comptroller for the actual costs
110-3 incurred by the assessor or collector in assessing or collecting
110-4 state ad valorem taxes. However, an assessor or collector is not
110-5 entitled to be reimbursed for any amount that is greater than the
110-6 additional incremental costs incurred in assessing or collecting
110-7 the state ad valorem taxes.
110-8 (d) The comptroller shall:
110-9 (1) prescribe methods of accounting for and remitting
110-10 state ad valorem taxes;
110-11 (2) prescribe methods for establishing an assessor's
110-12 or collector's additional incremental costs incurred in assessing
110-13 or collecting state ad valorem taxes;
110-14 (3) prescribe and furnish forms for periodic reports
110-15 relating to state ad valorem taxes; and
110-16 (4) periodically examine the records of each assessor
110-17 or collector of state ad valorem taxes to verify the accuracy of
110-18 any reports required under this subsection.
110-19 Sec. 501.004. DUTIES AND POWERS OF COMPTROLLER. Except as
110-20 otherwise provided by this chapter, a duty or power imposed on or
110-21 granted to the governing body of a taxing unit by Title 1 may, for
110-22 purposes of the state ad valorem tax, be exercised by the
110-23 comptroller, and a reference to the presiding officer of a
110-24 governing body in Title 1 is a reference to the comptroller for the
110-25 purposes of the state tax.
110-26 Sec. 501.005. IDENTIFICATION OF PROPERTY SUBJECT TO TAX.
110-27 (a) The chief appraiser of each appraisal district shall identify
111-1 the property in the county for which the appraisal district is
111-2 established that is subject to the state ad valorem tax.
111-3 (b) The comptroller by rule shall establish guidelines to
111-4 assist in making those identifications and to provide uniformity in
111-5 the application of this chapter throughout the state.
111-6 Sec. 501.006. ADMINISTRATION AND REFUND ACCOUNTS. The
111-7 comptroller shall deposit to the credit of the general revenue fund
111-8 in appropriately designated accounts an amount of revenue collected
111-9 from the state ad valorem tax to pay for the comptroller's expenses
111-10 in administering this chapter and for the payment of tax refunds
111-11 that may become payable.
111-12 Sec. 501.007. NONAPPLICABILITY OF CERTAIN OTHER TAX LAWS.
111-13 Title 2 does not apply to the state ad valorem tax imposed under
111-14 this chapter.
111-15 Sec. 501.008. TAX INCREMENT FINANCING. The state shall pay
111-16 into the tax increment fund for a reinvestment zone designated
111-17 under Chapter 311 before February 1, 1997, an amount equal to the
111-18 tax increment produced by the state. The state may not pay money
111-19 into a tax increment fund for a reinvestment zone designated under
111-20 Chapter 311 on or after February 1, 1997, but the state shall pay
111-21 money into a tax increment fund for a reinvestment zone designated
111-22 under Chapter 311 that was in existence on February 1, 1997, and
111-23 expanded before June 30, 1997, to include the site for a public
111-24 school.
111-25 SECTION 2.03. Chapter 1, Tax Code, is amended by adding
111-26 Section 1.16 to read as follows:
111-27 Sec. 1.16. ALTERNATIVE TAX. (a) The owner of an interest
112-1 in property consisting of a separate interest in oil or gas and
112-2 from which oil or gas is produced may elect to pay the gross
112-3 receipts tax imposed under Chapter 205 in lieu of ad valorem taxes
112-4 imposed by the state or a taxing unit on that oil or gas interest.
112-5 If the oil or gas interest is owned by more than one owner, all of
112-6 the owners must elect to pay the gross receipts tax.
112-7 (b) The operator of the oil or gas interest designated with
112-8 the Railroad Commission of Texas shall notify the comptroller of
112-9 the election to pay the gross receipts tax. A notice of election
112-10 must be filed with the comptroller before December 1 of the year in
112-11 which the election is made. The notice must be in the form and
112-12 manner specified by the comptroller. The election takes effect
112-13 January 1 of the year following the year in which the notice is
112-14 filed.
112-15 (c) The election remains in effect until the operator
112-16 notifies the comptroller that the election has been rescinded by
112-17 the owner or all owners of the oil or gas interest. A notice of
112-18 recision must be filed with the comptroller before December 1 of
112-19 the year in which the election is rescinded. The notice must be in
112-20 the form and manner specified by the comptroller. The recision
112-21 takes effect January 1 of the year following the year in which the
112-22 notice is filed.
112-23 (d) The comptroller shall send a copy of each notice of
112-24 election or recision to the chief appraiser of the appraisal
112-25 district established for the county in which the subject property
112-26 is located and to each taxing unit in that county.
112-27 (e) The comptroller shall adopt forms and rules to
113-1 administer this section.
113-2 (f) In the absence of an election for a tax year under this
113-3 section, including an attempted election, that does not conform to
113-4 the requirements of this section or the rules of the comptroller,
113-5 the ad valorem taxes imposed by the state and taxing units of this
113-6 state apply.
113-7 SECTION 2.04. (a) Section 5.05(a), Tax Code, is amended to
113-8 read as follows:
113-9 (a) The comptroller shall prepare and issue:
113-10 (1) [a general appraisal manual;]
113-11 [(2) special appraisal manuals;]
113-12 [(3)] cost, price, and depreciation schedules, with
113-13 provision for inserting local market index factors and with a
113-14 standard procedure for determining local market index factors;
113-15 (2) [(4)] news and reference bulletins;
113-16 (3) [(5)] annotated digests of all laws relating to
113-17 property taxation; and
113-18 (4) [(6)] a handbook of all rules promulgated by the
113-19 comptroller relating to the property tax and its administration.
113-20 (b) Section 5.05(d), Tax Code, is repealed.
113-21 SECTION 2.05. Section 6.03, Tax Code, is amended by amending
113-22 Subsections (a), (b), (c), and (l), and adding Subsection (n) to
113-23 read as follows:
113-24 (a) The appraisal district is governed by a board of six
113-25 [five] directors. Five directors are appointed by the taxing units
113-26 that participate in the district as provided by this section. The
113-27 county assessor-collector is an ex officio director. To be
114-1 eligible to serve on the board of directors, an individual other
114-2 than the county assessor-collector must be a resident of the
114-3 district and must have resided in the district for at least two
114-4 years immediately preceding the date the individual takes office.
114-5 [To be eligible to serve on the board of an appraisal district
114-6 established for a county having a population of at least 200,000
114-7 bordering a county having a population of at least 2,000,000 and
114-8 the Gulf of Mexico, an individual must be a member of the governing
114-9 body or an elected officer of a taxing unit entitled to vote on the
114-10 appointment of board members under this section. However, an
114-11 employee of a taxing unit that participates in the district is not
114-12 eligible to serve on the board unless the individual is also a
114-13 member of the governing body or an elected official of a taxing
114-14 unit that participates in the district.]
114-15 (b) Members of the board of directors other than the county
114-16 assessor-collector serve two-year terms beginning on January 1 of
114-17 even-numbered years.
114-18 (c) Members of the board of directors other than the county
114-19 assessor-collector are appointed by vote of the governing bodies of
114-20 the incorporated cities and towns, the school districts, and, if
114-21 entitled to vote, the conservation and reclamation districts that
114-22 participate in the district and of the county. A governing body
114-23 may cast all its votes for one candidate or distribute them among
114-24 candidates for any number of directorships. Conservation and
114-25 reclamation districts are not entitled to vote unless at least one
114-26 conservation and reclamation district in the district delivers to
114-27 the chief appraiser a written request to nominate and vote on the
115-1 board of directors by June 1 of each odd-numbered year. On receipt
115-2 of a request, the chief appraiser shall certify a list by June 15
115-3 of all eligible conservation and reclamation districts that are
115-4 imposing taxes and that participate in the district.
115-5 (l) If a vacancy occurs on the board of directors other than
115-6 a vacancy in the position held by the county assessor-collector,
115-7 each taxing unit that is entitled to vote by this section may
115-8 nominate by resolution adopted by its governing body a candidate to
115-9 fill the vacancy. The unit shall submit the name of its nominee to
115-10 the chief appraiser within 10 days after notification from the
115-11 board of directors of the existence of the vacancy, and the chief
115-12 appraiser shall prepare and deliver to the board of directors
115-13 within the next five days a list of the nominees. The board of
115-14 directors shall elect by majority vote of its members one of the
115-15 nominees to fill the vacancy.
115-16 (n) For purposes of this section, the voting entitlement of
115-17 a school district is calculated as if the state ad valorem taxes
115-18 imposed for the preceding year on property appraised by the
115-19 appraisal district for taxation by the school district were taxes
115-20 imposed in the appraisal district by the school district.
115-21 SECTION 2.06. Section 6.034(a), Tax Code, is amended to read
115-22 as follows:
115-23 (a) The taxing units participating in an appraisal district
115-24 may provide that the terms of the appointed members of the board of
115-25 directors be staggered if the governing bodies of at least
115-26 three-fourths of the taxing units that are entitled to vote on the
115-27 appointment of board members adopt resolutions providing for the
116-1 staggered terms. A change to staggered terms may be adopted only
116-2 if the method or procedure for appointing board members is changed
116-3 under Section 6.031 of this code to eliminate or have the effect of
116-4 eliminating cumulative voting for board members as provided by
116-5 Section 6.03 of this code. A change to staggered terms may be
116-6 proposed concurrently with a change that eliminates or has the
116-7 effect of eliminating cumulative voting.
116-8 SECTION 2.07. Subchapter A, Chapter 6, Tax Code, is amended
116-9 by adding Section 6.038 to read as follows:
116-10 Sec. 6.038. STATE PARTICIPATION. (a) The comptroller and
116-11 the state do not participate in the election of the board of
116-12 directors of an appraisal district, the governance or management of
116-13 the district, or the determination of the district's finances and
116-14 budget.
116-15 (b) The comptroller by rule shall establish guidelines and
116-16 criteria under which, if the comptroller finds that generally
116-17 accepted appraisal standards and practices were not used by the
116-18 appraisal district appraising property subject to the state ad
116-19 valorem tax or that the appraised values assigned to property
116-20 subject to that tax are invalid, the comptroller may:
116-21 (1) withhold payment of all or part of the portion of
116-22 the amount of the budget of the appraisal district that is
116-23 allocated to the state until the district takes appropriate actions
116-24 to remedy the deficiencies in appraisals found by the comptroller;
116-25 or
116-26 (2) direct that all or any part of the portion of the
116-27 amount of the budget of the district allocated to the state be
117-1 applied to remedying those deficiencies.
117-2 SECTION 2.08. Section 6.04(a), Tax Code, is amended to read
117-3 as follows:
117-4 (a) A majority of the appraisal district board of directors
117-5 constitutes a quorum. The county assessor-collector is the
117-6 chairman of the board. At its first meeting each calendar year,
117-7 the board shall elect from its members a [chairman and a]
117-8 secretary.
117-9 SECTION 2.09. Section 6.06, Tax Code, is amended by amending
117-10 Subsection (d) and adding Subsection (l) to read as follows:
117-11 (d) The state and each [Each] taxing unit participating in
117-12 the district is allocated a portion of the amount of the budget
117-13 equal to the proportion that the total dollar amount of property
117-14 taxes imposed in the district by the state or taxing unit for the
117-15 tax year in which the budget proposal is prepared bears to the sum
117-16 of the total dollar amount of property taxes imposed in the
117-17 district by the state and each participating unit for that year.
117-18 For purposes of this subsection, only state ad valorem taxes
117-19 imposed in the county for which the district is established are
117-20 considered as state ad valorem taxes imposed in the district. If a
117-21 taxing unit participates in two or more districts, only the taxes
117-22 imposed in a district are used to calculate the unit's cost
117-23 allocations in that district. If the number of real property
117-24 parcels in a taxing unit is less than 5 percent of the total number
117-25 of real property parcels in the district and the taxing unit
117-26 imposes in excess of 25 percent of the total amount of the property
117-27 taxes imposed in the district by all of the participating taxing
118-1 units for a year, the unit's allocation may not exceed a percentage
118-2 of the appraisal district's budget equal to three times the unit's
118-3 percentage of the total number of real property parcels appraised
118-4 by the district.
118-5 (l) For the 1997 budget of an appraisal district, the state
118-6 is not required to contribute to the budget of the district. The
118-7 allocation of the 1997 budget shall be made as provided by
118-8 Subsection (d) as that subsection existed on January 1, 1997. This
118-9 subsection expires January 1, 1998.
118-10 SECTION 2.10. Section 6.41(c), Tax Code, is amended to read
118-11 as follows:
118-12 (c) To be eligible to serve on the board, an individual must
118-13 be a resident of the district and must have resided in the district
118-14 for at least two years. A member of the appraisal district board
118-15 of directors or an officer or employee of the comptroller, the
118-16 appraisal office, or a taxing unit is ineligible to serve on the
118-17 board. In an appraisal district established for a county having a
118-18 population of more than 300,000, an individual who has served for
118-19 all or part of three previous terms as a board member or auxiliary
118-20 board member on the appraisal review board or is a former officer
118-21 or employee of a taxing unit is ineligible to serve on the
118-22 appraisal review board. In an appraisal district established for
118-23 any other county, an individual who has served for all or part of
118-24 three consecutive terms as a board member or auxiliary board member
118-25 on the appraisal review board is ineligible to serve on the
118-26 appraisal review board during a term that begins on the next
118-27 January 1 following the third of those consecutive terms.
119-1 SECTION 2.11. Section 6.411, Tax Code, is amended to read as
119-2 follows:
119-3 Sec. 6.411. AUXILIARY [BOARD] MEMBERS IN CERTAIN COUNTIES.
119-4 (a) The board of directors of an appraisal district may appoint
119-5 auxiliary members to [the appraisal review board to] hear taxpayer
119-6 protests before the appraisal review board and to assist the board
119-7 in performing its other duties.
119-8 (b) The number of auxiliary members that may be appointed
119-9 is:
119-10 (1) for a county with a population of 1,000,000 or
119-11 more, not more than 66 [30] auxiliary members;
119-12 (2) for a county with a population of at least 500,000
119-13 but less than 1,000,000, not more than 45 [20] auxiliary members;
119-14 (3) for a county with a population of at least 250,000
119-15 but less than 500,000, not more than 25 [10] auxiliary members; and
119-16 (4) for a county with a population of less than
119-17 250,000, not more than 10 [6] auxiliary members.
119-18 (c) Sections 6.41(c), (d), and (e) and Sections 6.412 and
119-19 6.413 apply to auxiliary [board] members [appointed under this
119-20 section].
119-21 (d) An auxiliary member [of the appraisal review board
119-22 appointed under this section] may not vote in a determination made
119-23 by the board, may not serve as chairman or secretary of the board,
119-24 and is not included in determining what constitutes a quorum of the
119-25 board or whether a quorum is present at any meeting of the board.
119-26 (e) An auxiliary member [of the appraisal review board
119-27 appointed under this section] is entitled to make a recommendation
120-1 to the board in a protest heard by the member but is not entitled
120-2 to vote on the determination of the protest by the board.
120-3 (f) An auxiliary member [of the appraisal review board
120-4 appointed under this section] is entitled to the per diem set by
120-5 the appraisal district budget for each day on which the member
120-6 actively engages in performing the member's duties under Subsection
120-7 (a) or (e) and is entitled to actual and necessary expenses
120-8 incurred in performing those duties in the same manner as [other]
120-9 members of the appraisal review board.
120-10 SECTION 2.12. Section 11.13(h), Tax Code, is amended to
120-11 read as follows:
120-12 (h) Joint or community owners may not each receive the same
120-13 exemption provided by or pursuant to this section for the same
120-14 residence homestead in the same year. An eligible disabled person
120-15 who is 65 or older may not receive both a disabled and an elderly
120-16 residence homestead exemption but may choose either. A person may
120-17 not receive an exemption under this section for more than one
120-18 residence homestead in the same year.
120-19 SECTION 2.13. Section 11.13(q), Tax Code, is amended to read
120-20 as follows:
120-21 (q) The surviving spouse of an individual who qualifies for
120-22 [received] an exemption under Subsection (d) for the residence
120-23 homestead of a person 65 or older is entitled to an exemption for
120-24 the same property from the same taxing unit in an amount equal to
120-25 that of the exemption for which [received by] the deceased spouse
120-26 qualified if:
120-27 (1) the deceased spouse died in a year in which the
121-1 deceased spouse qualified for [received] the exemption;
121-2 (2) the surviving spouse was 55 or older when the
121-3 deceased spouse died; and
121-4 (3) the property was the residence homestead of the
121-5 surviving spouse when the deceased spouse died and remains the
121-6 residence homestead of the surviving spouse.
121-7 SECTION 2.14. Section 11.14, Tax Code, is amended by adding
121-8 Subsection (f) to read as follows:
121-9 (f) Subsection (c) does not apply to the comptroller or to
121-10 the state ad valorem tax.
121-11 SECTION 2.15. Section 11.251(i), Tax Code, is amended to
121-12 read as follows:
121-13 (i) The exemption provided by Subsection (b) does not apply
121-14 to:
121-15 (1) taxation by a taxing unit that took [takes] action
121-16 to tax the property under Article VIII, Section 1-j, Subsection
121-17 (b), [of the] Texas Constitution, which has not been subsequently
121-18 rescinded under Article VIII, Section 1-j, Subsection (b)(4), Texas
121-19 Constitution; or
121-20 (2) that property described in Subsection (b) which is
121-21 located in a school district that for the tax year is authorized
121-22 and taxes such property and is also subject to taxation under
121-23 Article VIII, Section 1-e, Texas Constitution.
121-24 SECTION 2.16. Section 11.26, Tax Code, is amended by
121-25 amending Subsection (b) and adding Subsections (g), (h), and (i) to
121-26 read as follows:
121-27 (b) If an individual makes improvements to the individual's
122-1 [his] residence homestead, other than improvements required to
122-2 comply with governmental requirements or repairs, the school
122-3 district may increase the tax on the homestead in the first year
122-4 the value of the homestead is increased on the appraisal roll
122-5 because of the enhancement of value by the improvements. The
122-6 amount of the tax increase is determined by applying the current
122-7 applicable tax rates [rate] to the difference in the assessed value
122-8 of the homestead with the improvements and the assessed value it
122-9 would have had without the improvements. The limitations imposed
122-10 by Subsection (a), (g), or (h), as applicable, [of this section]
122-11 then apply to the increased amount of tax until more improvements,
122-12 if any, are made.
122-13 (g) This subsection applies only to an individual 65 years
122-14 of age or older who qualified the individual's residence homestead
122-15 for the limitation provided by Section 1-b(d), Article VIII, Texas
122-16 Constitution, before January 1, 1998, or to a surviving spouse who
122-17 qualified for the limitation provided by Section 1-b(d) for a
122-18 surviving spouse before that date. Except as provided by
122-19 Subsection (b), the maximum amount of tax that a school district
122-20 may impose on the residence homestead of the individual or the
122-21 surviving spouse is the lesser of:
122-22 (1) the total amount of taxes the district imposed on
122-23 the residence homestead in the first year the individual or
122-24 surviving spouse qualified the residence homestead for the
122-25 applicable limitation; or
122-26 (2) the amount computed by multiplying the district's
122-27 1997 tax rate for maintenance and operations purposes by the 1997
123-1 taxable value of the residence homestead for maintenance and
123-2 operations purposes, multiplying the district's 1997 tax rate for
123-3 debt service purposes by the 1997 taxable value of the residence
123-4 homestead for debt services purposes, and adding the products.
123-5 (h) Except as provided by Subsection (b), if an individual
123-6 who receives a limitation on tax increases imposed by this section
123-7 subsequently qualifies a different residence homestead for an
123-8 exemption under Section 11.13, a school district may not impose ad
123-9 valorem taxes on the subsequently qualified homestead in a year in
123-10 an amount that exceeds the amount of taxes the school district
123-11 would have imposed on the subsequently qualified homestead in the
123-12 first year in which the individual receives that exemption for the
123-13 subsequently qualified homestead had the limitation on tax
123-14 increases imposed by this section not been in effect, multiplied by
123-15 a fraction the numerator of which is the total amount of school
123-16 district taxes imposed on the former homestead in the last year in
123-17 which the individual received that exemption for the former
123-18 homestead and the denominator of which is the total amount of
123-19 school district taxes that would have been imposed on the former
123-20 homestead in the last year in which the individual received that
123-21 exemption for the former homestead had the limitation on tax
123-22 increases imposed by this section not been in effect.
123-23 (i) An individual who receives a limitation on tax increases
123-24 under this section and who subsequently qualifies a different
123-25 residence homestead for an exemption under Section 11.13, or an
123-26 agent of the individual, is entitled to receive from the chief
123-27 appraiser of the appraisal district in which the former homestead
124-1 was located a written certificate providing the information
124-2 necessary to determine whether the individual may qualify for a
124-3 limitation on the subsequently qualified homestead under Subsection
124-4 (h) and to calculate the amount of taxes the school district may
124-5 impose on the subsequently qualified homestead.
124-6 SECTION 2.17. Section 11.26, Tax Code, is amended by adding
124-7 Subsections (j), (k), and (l) to read as follows:
124-8 (j) If an individual who qualifies for the exemption
124-9 provided by Section 11.13(c) for an individual 65 years of age or
124-10 older dies, the surviving spouse of the individual is entitled to
124-11 the limitation applicable to the residence homestead of the
124-12 individual if:
124-13 (1) the surviving spouse is 55 years of age or older
124-14 when the individual dies; and
124-15 (2) the residence homestead of the individual:
124-16 (A) is the residence homestead of the surviving
124-17 spouse on the date that the individual dies; and
124-18 (B) remains the residence homestead of the
124-19 surviving spouse.
124-20 (k) If the individual who qualifies for an exemption
124-21 provided by Section 11.13(c) for an individual 65 years of age or
124-22 older dies in the year in which the person turned 65 years of age,
124-23 except as provided by Subsection (i), the amount to which the
124-24 surviving spouse's school district taxes are limited under
124-25 Subsection (g) is the amount of school district taxes imposed on
124-26 the residence homestead in that year calculated under Section
124-27 26.112 as if the individual qualifying for the exemption had lived
125-1 for the entire year.
125-2 (l) If in the first tax year after the individual died, the
125-3 amount of school district taxes imposed on the residence homestead
125-4 of the surviving spouse is less than the amount of school district
125-5 taxes imposed in the preceding year as limited by Subsection (h),
125-6 in a subsequent tax year the surviving spouse's school district
125-7 taxes on that residence homestead are limited to the taxes imposed
125-8 by the district in that first tax year.
125-9 SECTION 2.18. Section 11.28, Tax Code, is amended to read as
125-10 follows:
125-11 Sec. 11.28. PROPERTY EXEMPTED FROM [CITY] TAXATION BY TAX
125-12 ABATEMENT AGREEMENT. (a) The owner of property to which an
125-13 agreement made under the Property Redevelopment and Tax Abatement
125-14 Act (Chapter 312 [of this code]) applies is entitled to exemption
125-15 from taxation by an incorporated city or town or other taxing unit
125-16 of all or part of the value of the property as provided by the
125-17 agreement.
125-18 (b) In each tax year after 1996 in which school district
125-19 taxes are abated on property covered by this subsection, the owner
125-20 of the property is entitled to an exemption from the state ad
125-21 valorem tax imposed by Chapter 501 of the portion of the value of
125-22 the property that is exempt from school district taxes according to
125-23 the agreement. This subsection applies only to property subject to
125-24 the state ad valorem tax for which the agreement under Chapter 312
125-25 to abate school district taxes on the property was executed:
125-26 (1) before January 1, 1997; or
125-27 (2) on or after January 1, 1997, if:
126-1 (A) the property is located in a reinvestment
126-2 zone created by a municipality that by ordinance or resolution
126-3 adopted on or before April 1, 1997, expressed an intent to enter
126-4 into an agreement to abate municipal taxes on the property;
126-5 (B) the municipality executed the agreement to
126-6 abate municipal taxes on the property on or before July 1, 1997;
126-7 and
126-8 (C) the agreement by the school district to
126-9 abate school district taxes on the property is executed in the time
126-10 permitted by Section 312.206(a) after the date the municipal
126-11 agreement described by Paragraph (B) is executed.
126-12 (c) The abatement recognized under Subsection (b) from the
126-13 state ad valorem tax imposed under Chapter 501 does not apply to
126-14 the extent an abatement is increased, extended, or otherwise
126-15 modified on or after the effective date of this subsection in a
126-16 manner which decreases the amount of the state ad valorem tax.
126-17 SECTION 2.19. Section 11.41, Tax Code, is amended to read as
126-18 follows:
126-19 Sec. 11.41. PARTIAL OWNERSHIP OF EXEMPT PROPERTY. (a) If
126-20 [Except as provided by Subsection (b) of this section, if] a person
126-21 who qualifies for an exemption as provided by this chapter is not
126-22 the sole owner of the property to which the exemption applies, the
126-23 exemption shall be multiplied by a fraction, the numerator of which
126-24 is [limited to] the value of the property interest the person owns
126-25 and the denominator of which is the value of the property.
126-26 (b) [If a person who qualifies for an exemption as provided
126-27 by Section 11.13 or 11.22 of this code is not the sole owner of the
127-1 property to which the exemption applies, the amount of the
127-2 exemption is calculated on the basis of the value of the property
127-3 interest the person owns.]
127-4 [(c)] In the application of this section, community
127-5 ownership by a person who qualifies for the exemption and the
127-6 person's [his] spouse is treated as if the person owns the
127-7 community interest of the person's [his] spouse.
127-8 SECTION 2.20. Section 11.43, Tax Code, is amended by
127-9 amending Subsection (f) and adding Subsection (j) to read as
127-10 follows:
127-11 (f) The comptroller, in prescribing the contents of the
127-12 application form for each kind of exemption, shall ensure that the
127-13 form requires an applicant to furnish the information necessary to
127-14 determine the validity of the exemption claim. The form must
127-15 require an applicant to provide the applicant's name and driver's
127-16 license number, personal identification certificate number, or
127-17 social security account number. The comptroller shall include on
127-18 the forms a notice of the penalties prescribed by Section 37.10,
127-19 Penal Code, for making or filing an application containing a false
127-20 statement. The comptroller shall include, on application forms for
127-21 exemptions that do not have to be claimed annually, a statement
127-22 explaining that the application need not be made annually and that
127-23 if the exemption is allowed, the applicant has a duty to notify the
127-24 chief appraiser when the applicant's [his] entitlement to the
127-25 exemption ends. In this subsection:
127-26 (1) "Driver's license" has the meaning assigned that
127-27 term by Section 521.001, Transportation Code.
128-1 (2) "Personal identification certificate" means a
128-2 certificate issued by the Department of Public Safety under
128-3 Subchapter E, Chapter 521, Transportation Code.
128-4 (j) An application for an exemption under Section 11.13
128-5 must:
128-6 (1) list each owner of the residence homestead and the
128-7 interest of each owner;
128-8 (2) state that the applicant does not claim an
128-9 exemption under that section on another residence homestead;
128-10 (3) state that each fact contained in the application
128-11 is true; and
128-12 (4) include a signed statement that the applicant has
128-13 read and understands the notice of the penalties required by
128-14 Subsection (f).
128-15 SECTION 2.21. Section 11.42(b), Tax Code, is amended to read
128-16 as follows:
128-17 (b) An exemption authorized by Section 11.11 or by Section
128-18 11.13(c) or (d) for an individual 65 years of age or older [of this
128-19 code] is effective immediately on qualification for the exemption.
128-20 SECTION 2.22. Section 11.43, Tax Code, is amended by
128-21 amending Subsection (d) and adding Subsection (j) to read as
128-22 follows:
128-23 (d) Except as provided by Subsection (j), a [A] person
128-24 required to claim an exemption must file a completed exemption
128-25 application form before May 1 and must furnish the information
128-26 required by the form. For good cause shown the chief appraiser may
128-27 extend the deadline for filing an exemption application by written
129-1 order for a single period not to exceed 60 days.
129-2 (j) A person who qualifies for the exemption authorized by
129-3 Section 11.13(c) or (d) for an individual 65 years of age or older
129-4 for a portion of a tax year shall notify the chief appraiser of the
129-5 person's qualification for the exemption no later than the first
129-6 anniversary of the date the person qualified for the exemption.
129-7 SECTION 2.23. Section 21.03(a), Tax Code, is amended to read
129-8 as follows:
129-9 (a) If personal property that is taxable by this state or a
129-10 taxing unit of this state is used continually outside this state,
129-11 whether regularly or irregularly, the appraisal office shall
129-12 allocate to this state the portion of the total market value of the
129-13 property that fairly reflects its use in this state.
129-14 SECTION 2.24. Section 21.031(a), Tax Code, is amended to
129-15 read as follows:
129-16 (a) If a vessel or other watercraft that is taxable by this
129-17 state or a taxing unit of this state is used continually outside
129-18 this state, whether regularly or irregularly, the appraisal office
129-19 shall allocate to this state the portion of the total market value
129-20 of the vessel or watercraft that fairly reflects its use in this
129-21 state. The appraisal office shall not allocate to this state the
129-22 portion of the total market value of the vessel or watercraft that
129-23 fairly reflects its use in another state or country, in
129-24 international waters, or beyond the Gulfward boundary of this
129-25 state.
129-26 SECTION 2.25. Section 23.01(b), Tax Code, is amended to read
129-27 as follows:
130-1 (b) The market value of property shall be determined by the
130-2 application of generally accepted appraisal methods and techniques,
130-3 including the mass appraisal standards recognized by the Uniform
130-4 Standards of Professional Appraisal Practice. The [and the] same
130-5 or similar appraisal methods and techniques shall be used in
130-6 appraising the same or similar kinds of property. However, each
130-7 property shall be appraised based upon the individual
130-8 characteristics that affect the property's market value.
130-9 SECTION 2.26. Subchapter A, Chapter 23, Tax Code, is amended
130-10 by adding Sections 23.011-23.013 to read as follows:
130-11 Sec. 23.011. COST METHOD OF APPRAISAL. If the chief
130-12 appraiser uses the cost method of appraisal to determine the market
130-13 value of real property, the chief appraiser shall:
130-14 (1) use cost data obtained from generally accepted
130-15 sources;
130-16 (2) make any appropriate adjustment for physical,
130-17 functional, or economic obsolescence;
130-18 (3) make available to the public on request cost data
130-19 developed and used by the chief appraiser and may charge a
130-20 reasonable fee to the public for the data;
130-21 (4) clearly state the reason for any variation between
130-22 generally accepted cost data and locally produced cost data if the
130-23 data vary by more than 10 percent; and
130-24 (5) make available on request all applicable market
130-25 data that demonstrate the difference between the replacement cost
130-26 of the improvements to the property and the depreciated value of
130-27 the improvements.
131-1 Sec. 23.012. INCOME METHOD OF APPRAISAL. If the chief
131-2 appraiser uses the income method of appraisal to determine the
131-3 market value of real property, the chief appraiser shall:
131-4 (1) use rental income and expense data pertaining to
131-5 the property if possible and applicable;
131-6 (2) make any projections of future rental income and
131-7 expenses only from clear and appropriate evidence;
131-8 (3) use data from generally accepted sources in
131-9 determining an appropriate capitalization rate; and
131-10 (4) determine a capitalization rate for
131-11 income-producing property that includes a reasonable return on
131-12 investment, taking into account the risk associated with the
131-13 investment.
131-14 Sec. 23.013. MARKET DATA COMPARISON METHOD OF APPRAISAL. If
131-15 the chief appraiser uses the market data comparison method of
131-16 appraisal to determine the market value of real property, the chief
131-17 appraiser shall use comparable sales data if possible.
131-18 SECTION 2.27. Section 23.02, Tax Code, is amended by adding
131-19 Subsection (e) to read as follows:
131-20 (e) This section does not apply to the state ad valorem tax
131-21 imposed under Chapter 501.
131-22 SECTION 2.28. Subchapter B, Chapter 23, Tax Code, is amended
131-23 by adding Section 23.176 to read as follows:
131-24 Sec. 23.176. APPRAISAL METHOD USED TO CALCULATE VALUE OF OIL
131-25 OR GAS PRODUCING PROPERTY. (a) This section applies only to
131-26 property consisting of a separate interest in oil or gas and from
131-27 which oil or gas is produced.
132-1 (b) Each year, the owner of property who renders the
132-2 property under Section 22.01 may request the chief appraiser to
132-3 calculate the market value of the property using:
132-4 (1) a discounted cash-flow analysis;
132-5 (2) a gross-income multiplier;
132-6 (3) another generally recognized appraisal method; or
132-7 (4) any combination of Subdivisions (1)-(3).
132-8 (c) The owner shall include the owner's proposed appraisal
132-9 method or combination of methods on the rendition statement or
132-10 property report filed with the chief appraiser. If the property is
132-11 owned by more than one person, all of the owners must join in the
132-12 request.
132-13 (d) If the chief appraiser determines that use of the
132-14 appraisal method or combination of methods requested by the owner
132-15 of the property will result in an accurate calculation of the
132-16 market value of the property, the chief appraiser shall calculate
132-17 the market value of the property using that method or combination.
132-18 (e) If the chief appraiser determines that use of the
132-19 appraisal method or combination of methods requested by the owner
132-20 of the property will not result in an accurate calculation of the
132-21 market value of the property, the chief appraiser shall:
132-22 (1) notify the owner that the chief appraiser will not
132-23 calculate the market value of the property using that method or
132-24 combination; and
132-25 (2) inform the owner of the alternative appraisal
132-26 method or combination of methods that the chief appraiser intends
132-27 to use to calculate the market value of the property.
133-1 (f) Notice to the owner must:
133-2 (1) be in writing and delivered before the 15th day
133-3 after the date the rendition statement or property report is filed;
133-4 and
133-5 (2) inform the owner that the owner is entitled to
133-6 appeal the chief appraiser's determination to the appraisal review
133-7 board of the appraisal district by filing a notice of appeal with
133-8 the board before the 15th day after the date the notice is
133-9 delivered to the owner.
133-10 (g) If an appeal is timely filed with the appraisal review
133-11 board, the board shall hold a hearing on the appeal. The board
133-12 shall hold the hearing no later than the 15th day after the date
133-13 that the notice of appeal is filed. The hearing shall be conducted
133-14 in the manner provided by Subchapter C, Chapter 41.
133-15 (h) The board shall determine whether the taxable value of
133-16 the property shall be calculated by use of:
133-17 (1) the appraisal method or combination of methods
133-18 requested by the owner;
133-19 (2) the appraisal method or combination of methods
133-20 proposed by the chief appraiser; or
133-21 (3) if the board determines that neither of those
133-22 methods will result in an accurate calculation of the market value
133-23 of the property, another method determined by the chief appraiser
133-24 and approved by the board at the hearing.
133-25 (i) The determination of the appraisal review board on the
133-26 appeal is final and may not be appealed by the property owner or
133-27 the chief appraiser.
134-1 (j) The comptroller shall adopt rules and forms to implement
134-2 this section and provide sufficient copies to each appraisal office
134-3 in this state. The rules must include a definition of each
134-4 appraisal method listed in Subsections (b)(1) and (2). An
134-5 appraisal office shall provide, without charge, a copy of the
134-6 definitions adopted by the comptroller under this section to a
134-7 person requesting the definitions.
134-8 SECTION 2.29. Subchapter B, Chapter 23, Tax Code, is
134-9 amended by adding Section 23.21 to read as follows:
134-10 Sec. 23.21. LIMITATIONS ON APPRAISED VALUE OF RESIDENCE
134-11 HOMESTEADS. (a) The appraised value of a residence homestead for
134-12 a tax year may not exceed the lesser of:
134-13 (1) the market value of the property; or
134-14 (2) the sum of:
134-15 (A) 105 percent of the appraised value of the
134-16 property for the preceding year; and
134-17 (B) the market value of all new improvements to
134-18 the property.
134-19 (b) When appraising a residence homestead, the chief
134-20 appraiser shall:
134-21 (1) appraise the property at its market value; and
134-22 (2) include in the appraisal records both the market
134-23 value of the property and the amount computed under Subsection
134-24 (a)(2).
134-25 (c) The limitation provided by Subsection (a) takes effect
134-26 as to a residence homestead on January 1 of the tax year following
134-27 the first tax year the owner qualifies the property for an
135-1 exemption under Section 11.13. The limitation expires on January 1
135-2 of the first tax year that neither the owner of the property when
135-3 the limitation took effect, the owner's spouse or surviving spouse,
135-4 nor a minor child of the owner qualifies for an exemption under
135-5 Section 11.13.
135-6 (d) This section does not apply to property appraised under
135-7 Subchapter C, D, E, F, or G.
135-8 (e) In this section, "new improvement" means an improvement
135-9 to a residence homestead that is made after the appraisal of the
135-10 property for the preceding year and that increases the market value
135-11 of the property. The term does not include ordinary maintenance of
135-12 an existing structure or the grounds or another feature of the
135-13 property.
135-14 SECTION 2.30. Subchapter B, Chapter 23, Tax Code, is
135-15 amended by adding Section 23.22 to read as follows:
135-16 Sec. 23.22. LIMITATIONS ON FREQUENCY OF APPRAISAL RESIDENCE
135-17 HOMESTEAD. (a) Except as provided by Subsection (b), the
135-18 appraiser may not recognize an increase in the appraised value of
135-19 residential property more than once every three years.
135-20 (b) The chief appraiser shall recognize an increase in the
135-21 appraised value of residential property before the third
135-22 anniversary of the date of the preceding recognition of an increase
135-23 in the appraised value of the property if, after the date, the
135-24 property owner makes an improvement to the property that increases
135-25 the market value of the property at least 10 percent.
135-26 (c) An application is not required for an owner of
135-27 residential property to receive a benefit under this section.
136-1 (d) The chief appraiser shall include in the appraisal
136-2 records both the market value of the property and its appraised
136-3 value as determined by this section.
136-4 (e) This section does not apply to property appraised under
136-5 Subchapter C, D, E, F, or G.
136-6 SECTION 2.31. (Blank.)
136-7 SECTION 2.32. (Blank.)
136-8 SECTION 2.33. Section 23.46(d), Tax Code, is amended to read
136-9 as follows:
136-10 (d) A tax lien attaches to the land on the date the sale or
136-11 change of use occurs to secure payment of the additional tax and
136-12 interest imposed by Subsection (c) [of this section] and any
136-13 penalties incurred. The lien exists in favor of the state and all
136-14 taxing units for which the additional tax is imposed.
136-15 SECTION 2.34. Section 23.55(b), Tax Code, is amended to read
136-16 as follows:
136-17 (b) A tax lien attaches to the land on the date the change
136-18 of use occurs to secure payment of the additional tax and interest
136-19 imposed by this section and any penalties incurred. The lien
136-20 exists in favor of the state and all taxing units for which the
136-21 additional tax is imposed.
136-22 SECTION 2.35. Section 23.76(b), Tax Code, is amended to read
136-23 as follows:
136-24 (b) A tax lien attaches to the land on the date the change
136-25 of use occurs to secure payment of the additional tax and interest
136-26 imposed by this section and any penalties incurred. The lien
136-27 exists in favor of the state and all taxing units for which the
137-1 additional tax is imposed.
137-2 SECTION 2.36. Section 23.86(b), Tax Code, is amended to read
137-3 as follows:
137-4 (b) A tax lien attaches to the land on the date the change
137-5 of use occurs or the deed restriction expires to secure payment of
137-6 the additional tax and interest imposed by this section and any
137-7 penalties incurred. The lien exists in favor of the state and all
137-8 taxing units for which the additional tax is imposed.
137-9 SECTION 2.37. Section 23.96(b), Tax Code, is amended to read
137-10 as follows:
137-11 (b) A tax lien attaches to the property on the date the deed
137-12 restriction expires to secure payment of the additional tax and
137-13 interest imposed by this section and any penalties incurred. The
137-14 lien exists in favor of the state and all taxing units for which
137-15 the additional tax is imposed.
137-16 SECTION 2.38. Section 24.39, Tax Code, is amended to read as
137-17 follows:
137-18 Sec. 24.39. Imposition of Tax. (a) The county
137-19 assessor-collector and commissioners court may not change the
137-20 apportioned values certified as provided by this subchapter.
137-21 (b) The county assessor-collector shall add each owner's
137-22 rolling stock and the value apportioned to the county as certified
137-23 to that official [him] to the appraisal roll certified to that
137-24 official [him] by the chief appraiser as provided by Section 26.01
137-25 [of this code] for county tax purposes and to the appraisal roll
137-26 for state ad valorem taxes. The county assessor-collector [He]
137-27 shall calculate the county and state taxes [tax] due on the rolling
138-1 stock as provided by Section 26.09 [of this code].
138-2 SECTION 2.39. Section 25.19, Tax Code, is amended by
138-3 amending Subsections (b) and (i) and adding Subsections (j) and (k)
138-4 to read as follows:
138-5 (b) The chief appraiser shall separate real from personal
138-6 property and include in the notice for each:
138-7 (1) a list of the taxing units in which the property
138-8 is taxable and, for property subject to the state ad valorem tax, a
138-9 statement that the property is subject to the state tax;
138-10 (2) the appraised value of the property in the
138-11 preceding year;
138-12 (3) the [assessed and] taxable value of the property
138-13 in the preceding year for each taxing unit taxing the property and
138-14 for state taxation, if applicable;
138-15 (4) the appraised value of the property for the
138-16 current year and the kind and amount of each partial exemption, if
138-17 any, approved for the current year;
138-18 (5) if the appraised value is greater than it was in
138-19 the preceding year:
138-20 (A) the effective tax rate or rates for local
138-21 taxes that would be announced pursuant to Chapter 26 [Section 26.04
138-22 of this code] if the total values being submitted to the appraisal
138-23 review board were to be approved by the board with an explanation
138-24 that that rate would raise the same amount of revenue from property
138-25 taxed in the preceding year as the unit raised for those purposes
138-26 in the preceding year;
138-27 (B) the amount of local tax that would be
139-1 imposed on the property on the basis of the rate or rates described
139-2 by Paragraph (A) [of this subdivision]; and
139-3 (C) a statement that the governing body of a
139-4 local taxing [the] unit may not adopt a rate that will increase tax
139-5 revenues for operating purposes from properties taxed in the
139-6 preceding year without publishing notice in a newspaper that it is
139-7 considering a tax increase and holding a hearing for taxpayers to
139-8 discuss the tax increase;
139-9 (6) in italic typeface, the following statement: "The
139-10 Texas Legislature does not set the amount of your local taxes.
139-11 Your local property tax burden is decided by your locally elected
139-12 officials, and all inquiries concerning your local taxes should be
139-13 directed to those officials";
139-14 (7) a detailed [brief] explanation of the time and
139-15 procedure for protesting the value;
139-16 (8) the date and place the appraisal review board will
139-17 begin hearing protests; and
139-18 (9) a brief explanation that:
139-19 (A) the governing body of each taxing unit
139-20 decides whether or not local taxes on the property will increase
139-21 and the appraisal district only determines the value of the
139-22 property; and
139-23 (B) a taxpayer who objects to increasing local
139-24 taxes and government expenditures should complain to the governing
139-25 bodies of the taxing units and only complaints about value should
139-26 be presented to the appraisal office and the appraisal review
139-27 board.
140-1 (i) By May 15 or as soon thereafter as practicable, the
140-2 chief appraiser shall deliver a written notice to the owner of each
140-3 property not included in a notice required to be delivered under
140-4 Subsection (a), if the property was reappraised in the current tax
140-5 year, if the ownership of the property changed during the preceding
140-6 year, or if the property owner or the agent of a property owner
140-7 authorized under Section 1.111 makes a written request for the
140-8 notice. The chief appraiser shall separate real from personal
140-9 property and include in the notice for each property:
140-10 (1) the appraised value of the property in the
140-11 preceding year;
140-12 (2) the appraised value of the property for the
140-13 current year and the kind of each partial exemption, if any,
140-14 approved for the current year;
140-15 (3) a detailed [brief] explanation of the time and
140-16 procedure for protesting the value; and
140-17 (4) the date and place the appraisal review board will
140-18 begin hearing protests.
140-19 (j) Delivery with a notice required by Subsection (a) or (i)
140-20 of a copy of the pamphlet published by the comptroller under
140-21 Section 5.06 is sufficient to comply with the requirement that the
140-22 notice include the information specified by Subsection (b)(7) or
140-23 (i)(3), as applicable.
140-24 (k) In a notice for a tax year that begins before January 1,
140-25 1998, the chief appraiser is not required to include information
140-26 relating to taxation of property by the state. This subsection
140-27 expires January 1, 1999.
141-1 SECTION 2.40. Section 25.24, Tax Code, is amended to read as
141-2 follows:
141-3 Sec. 25.24. APPRAISAL ROLL. The appraisal records, as
141-4 changed by order of the appraisal review board and approved by that
141-5 board, constitute the appraisal roll for the district. The
141-6 appraisal roll for the district for the purpose of a school
141-7 district includes for each property two values: a value for the
141-8 levy of district maintenance and operations taxes and a value for
141-9 the levy of debt service taxes.
141-10 SECTION 2.41. Section 26.01(b), Tax Code, is amended to read
141-11 as follows:
141-12 (b) When a chief appraiser submits an appraisal roll for
141-13 county taxes to a county assessor-collector, the chief appraiser
141-14 [he] also shall certify that appraisal [the] roll to the
141-15 comptroller in the form and manner prescribed by the comptroller
141-16 and shall identify the property on that appraisal roll that is
141-17 subject to the state ad valorem tax. Property identified on a
141-18 county appraisal roll by the chief appraiser as subject to the
141-19 state ad valorem tax constitutes the state appraisal roll for
141-20 purposes of the assessment of the state ad valorem tax on property
141-21 in that county. [However, the comptroller by rule may provide for
141-22 submission of only a summary of the appraisal roll. In that event,
141-23 the chief appraiser shall certify the summary in the form and
141-24 manner prescribed by the comptroller's rule.]
141-25 SECTION 2.42. Chapter 26, Tax Code, is amended by adding
141-26 Section 26.011 to read as follows:
141-27 Sec. 26.011. PROVISIONS EXCLUDED FOR STATE TAX. Sections
142-1 26.04, 26.041, 26.05, 26.051, 26.06, 26.07, and 26.08 do not apply
142-2 to the state ad valorem tax or to the comptroller.
142-3 SECTION 2.43. Sections 26.04(a) and (b), Tax Code, are
142-4 amended to read as follows:
142-5 (a) On receipt of the appraisal roll, the assessor for a
142-6 taxing unit shall determine the total appraised value[, the total
142-7 assessed value,] and the total taxable value of property taxable by
142-8 the unit and for a school district the total taxable value for each
142-9 tax rate imposed by the district. The assessor [He] shall also
142-10 determine, using information provided by the appraisal office, the
142-11 appraised, assessed, and taxable values [value] of new property.
142-12 (b) The assessor shall submit the appraisal roll for the
142-13 unit showing the total appraised, assessed, and taxable values of
142-14 all property and the total taxable values [value] of new property
142-15 to the governing body of the unit by August 1 or as soon thereafter
142-16 as practicable. By August 1 or as soon thereafter as practicable,
142-17 the taxing unit's collector shall certify an estimate of the
142-18 collection rate for the current year to the governing body. If the
142-19 collector certified an anticipated collection rate in the preceding
142-20 year and the actual collection rate in that year exceeded the
142-21 anticipated rate, the collector shall also certify the amount of
142-22 debt taxes collected in excess of the anticipated amount in the
142-23 preceding year.
142-24 SECTION 2.44. Chapter 26, Tax Code, is amended by adding
142-25 Section 26.046 to read as follows:
142-26 Sec. 26.046. EFFECTIVE TAX RATES: SCHOOL DISTRICTS.
142-27 Notwithstanding Section 26.04, the officer or employee designated
143-1 under that section to make the calculations for a school district
143-2 shall determine an effective tax rate for the school district for
143-3 maintenance and operations and an effective tax rate for the school
143-4 district for debt service according to formulas prescribed by the
143-5 comptroller. The formulas shall require the effective tax rates to
143-6 be calculated in the manner provided by Section 26.04, except as
143-7 provided by this section. The effective tax rate for maintenance
143-8 and operations shall be calculated on the value of property on the
143-9 appraisal roll for maintenance and operations taxation, and the
143-10 effective tax rate for debt service taxation shall be calculated on
143-11 the value of property on the appraisal roll for debt service
143-12 taxation.
143-13 SECTION 2.45. Section 26.05(a), Tax Code, is amended to read
143-14 as follows:
143-15 (a) Except as provided by Subsection (c), the governing body
143-16 of each taxing unit before September 1 or as soon thereafter as
143-17 practicable shall adopt a tax rate for the current tax year and
143-18 shall notify the assessor for the unit of the rate adopted. The
143-19 tax rate consists of two components, each of which must be approved
143-20 separately. The components are:
143-21 (1) the rate that, if applied to the total taxable
143-22 value or for a school district the total taxable value for debt
143-23 taxation, will impose the total amount published under Section
143-24 26.04(e)(3)(C) [of this code], less any amount of additional sales
143-25 and use tax revenue that will be used to pay debt service; and
143-26 (2) the rate that, if applied to the total taxable
143-27 value or for a school district the total taxable value for
144-1 maintenance and operations taxation, will impose the amount of
144-2 taxes needed to fund maintenance and operation expenditures of the
144-3 unit for the next year.
144-4 SECTION 2.46. Section 26.05(d), Tax Code, is amended to
144-5 read as follows:
144-6 (d) The governing body may not adopt a tax rate that if
144-7 applied to the total taxable value would impose an amount of taxes
144-8 that exceeds last year's levy [exceeds the lower of the rollback
144-9 tax rate or 103 percent of the effective tax rate calculated as
144-10 provided by Section 26.04 of this code] until it has held a public
144-11 hearing [on the proposed increase] and has otherwise complied with
144-12 Section 26.06 [of this code]. [The governing body of a taxing unit
144-13 shall reduce a tax rate set by law or by vote of the electorate to
144-14 the lower of the rollback tax rate or 103 percent of the effective
144-15 tax rate and may not adopt a higher rate unless it first complies
144-16 with Section 26.06 of this code.]
144-17 SECTION 2.47. Section 26.06(b), Tax Code, as amended by
144-18 Chapters 456 and 947, Acts of the 70th Legislature, Regular
144-19 Session, 1987, is amended to read as follows:
144-20 (b) The notice of a public hearing may not be smaller than
144-21 one-quarter page of a standard-size or a tabloid-size newspaper,
144-22 and the headline on the notice must be in 18-point or larger type.
144-23 The notice must:
144-24 (1) contain a statement in the following form:
144-25 "NOTICE OF PUBLIC HEARING ON TAX [RATE] INCREASE
144-26 "The (name of the taxing unit) will hold a public hearing on
144-27 a proposal to increase total tax revenues from properties on the
145-1 tax roll [in (the preceding year)] by (percentage by which taxes to
145-2 be imposed under proposed tax rate exceed last year's levy [of
145-3 increase over the lower of the effective or rollback tax rates])
145-4 percent. Your individual taxes may increase [at a greater or lesser
145-5 rate,] or [even] decrease, depending on the change in the taxable
145-6 value of your property in relation to the change in taxable value
145-7 of all other property and the tax rate that is adopted.
145-8 "The public hearing will be held on (date and time) at
145-9 (meeting place).
145-10 "(Names of all members of the governing body, showing how
145-11 each voted on the proposal to consider the [tax] increase in total
145-12 tax revenues or, if one or more were absent, [or] indicating the
145-13 absences.)"; and
145-14 (2) contain the following information:
145-15 (A) the unit's adopted tax rate for the
145-16 preceding year and the proposed tax rate, expressed as an amount
145-17 per $100;
145-18 (B) the difference, expressed as an amount per
145-19 $100 and as a percent increase or decrease, as applicable, in the
145-20 proposed tax rate compared to the adopted tax rate for the
145-21 preceding year;
145-22 (C) the average appraised value of a residence
145-23 homestead in the taxing unit in the preceding year and in the
145-24 current year; the unit's homestead exemption, other than an
145-25 exemption available only to disabled persons or persons 65 years of
145-26 age or older, applicable to that appraised value in each of those
145-27 years; and the average taxable value of a residence homestead in
146-1 the unit in each of those years, disregarding any homestead
146-2 exemption available only to disabled persons or persons 65 years of
146-3 age or older;
146-4 (D) the amount of tax that would have been
146-5 imposed by the unit in the preceding year on a residence homestead
146-6 appraised at the average appraised value of a residence homestead
146-7 in that year, disregarding any homestead exemption available only
146-8 to disabled persons or persons 65 years of age or older;
146-9 (E) the amount of tax that would be imposed by
146-10 the unit in the current year on a residence homestead appraised at
146-11 the average appraised value of a residence homestead in the current
146-12 year, disregarding any homestead exemption available only to
146-13 disabled persons or persons 65 years of age or older, if the
146-14 proposed tax rate is adopted; and
146-15 (F) the difference between the amounts of tax
146-16 calculated under Paragraphs (D) and (E) of this subdivision,
146-17 expressed in dollars and cents and described as the annual increase
146-18 or decrease, as applicable, in the tax to be imposed by the unit on
146-19 the average residence homestead in the unit in the current year if
146-20 the proposed tax rate is adopted.
146-21 SECTION 2.48. Sections 26.06(d), (e), and (g), Tax Code,
146-22 are amended to read as follows:
146-23 (d) At the public hearing the governing body shall announce
146-24 the date, time, and place of the meeting at which it will vote on
146-25 the proposed increase in total tax revenues [rate increase]. After
146-26 the hearing it shall give notice of the meeting at which it will
146-27 vote on the proposed increase in total tax revenues [rate] and the
147-1 notice shall be in the same form as prescribed by Subsections (b)
147-2 and (c) [of this section], except that it must state the following:
147-3 "NOTICE OF VOTE ON TAX INCREASE [RATE]
147-4 "The (name of the taxing unit) conducted a public hearing on
147-5 a proposal to increase the total tax revenues of the (name of the
147-6 taxing unit) [your property taxes] by (percentage by which taxes to
147-7 be imposed under proposed tax rate exceed last year's levy [of
147-8 increase over the lower of the effective tax rate or rollback tax
147-9 rate]) percent on (date and time public hearing was conducted).
147-10 "The (governing body of the taxing unit) is scheduled to vote
147-11 on the tax rate that will result in that tax increase at a public
147-12 meeting to be held on (date and time) at (meeting place)."
147-13 (e) The meeting to vote on the increase may not be earlier
147-14 than the third day or later than the 14th day after the date of the
147-15 public hearing. The meeting must be held inside the boundaries of
147-16 the unit in a publicly owned building or, if a suitable publicly
147-17 owned building is not available, in a suitable building to which
147-18 the public normally has access. If the governing body does not
147-19 adopt a [an increased] rate that would impose an amount of taxes
147-20 that exceeds last year's levy by the 14th day, it must give a new
147-21 notice under Subsection (d) [of this section] before it may adopt a
147-22 rate that would impose an amount of taxes that exceeds last year's
147-23 levy [exceeds the tax rate calculated as provided by Section 26.04
147-24 of this code].
147-25 (f) [(g)] The comptroller by rule shall prescribe the
147-26 language and format to be used in the part of the notice required
147-27 by Subsection (b)(2) [of this section]. A notice under Subsection
148-1 (b) is not valid if it does not substantially conform to the
148-2 language and format prescribed by the comptroller under this
148-3 subsection.
148-4 SECTION 2.49. Section 26.08, Tax Code, is amended to read as
148-5 follows:
148-6 Sec. 26.08. ELECTION TO LIMIT SCHOOL TAXES. (a) If the
148-7 governing body of a school district adopts a maintenance and
148-8 operations tax rate that exceeds the sum of the district's
148-9 [effective] maintenance and operations rate for the preceding year
148-10 and[,] the rate of $0.025 per $100 of taxable value [$0.08, and the
148-11 district's current debt rate], the registered voters of the
148-12 district at an election held for that purpose must determine
148-13 whether to limit the maintenance and operations tax rate the
148-14 governing body may adopt for the current year to the [school
148-15 district rollback] tax rate calculated by adding the district's
148-16 maintenance and operations tax rate for the preceding year and the
148-17 rate of $0.025 per $100 of taxable value. When increased
148-18 expenditure of money by a school district is necessary to respond
148-19 to a disaster, including a tornado, hurricane, flood, or other
148-20 calamity, but not including a drought, that has impacted a school
148-21 district and the governor has requested federal disaster assistance
148-22 for the area in which the school district is located, an election
148-23 is not required under this section to limit the maintenance and
148-24 operations tax rate the governing body may adopt for the year
148-25 following the year in which the disaster occurs.
148-26 (b) If an election is required under Subsection (a), the
148-27 [The] governing body shall order that an election be held in the
149-1 school district on a date not less than 30 or more than 90 days
149-2 after the day on which it adopted the maintenance and operations
149-3 tax rate. Section 41.001, Election Code, does not apply to the
149-4 election unless a date specified by that section falls within the
149-5 time permitted by this section. At the election, the ballots shall
149-6 be prepared to permit voting for or against the proposition:
149-7 "Limiting the ad valorem tax rate for maintenance and operations
149-8 revenue in (name of school district) for the current year from (the
149-9 rate adopted) to (the [school district rollback] tax rate
149-10 calculated under Subsection (a))."
149-11 (c) If a majority of the votes cast in the election
149-12 favor the proposition, the governing body may not adopt a
149-13 maintenance and operations tax rate for the school district
149-14 for the current year that exceeds the sum of the district's
149-15 effective maintenance and operations rate and the rate of
149-16 $0.025 per $100 of taxable value [school district rollback
149-17 tax rate calculated for that year using the following
149-18 formula:]
149-19 [ROLLBACK TAX RATE = (ENROLLMENT ADJUSTMENT) (EFFECTIVE MAINTENANCE
149-20 AND OPERATIONS RATE FOR TAX YEAR) + $0.08 + CURRENT DEBT RATE]
149-21 [where:]
149-22 [(1) "tax year" denotes amounts used in calculating
149-23 the rollback tax rate in the year immediately preceding the year in
149-24 which the tax increase that initiated the referendum occurred
149-25 rather than the year in which the calculation occurs; and]
149-26 [(2) "enrollment adjustment" is computed by dividing
149-27 the current year's projected fall enrollment, as defined by the
150-1 Texas Education Agency, by last year's enrollment but may not be
150-2 less than 1.0].
150-3 (d) For purposes of this section, local tax funds dedicated
150-4 to a junior college district under Section 45.105(e), Education
150-5 Code, shall be eliminated from the calculation of the maintenance
150-6 and operations tax rate adopted by the governing body of the school
150-7 district. However, the funds dedicated to the junior college
150-8 district are subject to Section 26.085.
150-9 (e) [If a school district is certified by the commissioner
150-10 of education under Section 42.251(c), Education Code, to have been
150-11 subject to a reduction in total revenue for the school year ending
150-12 on August 31 of the tax year:]
150-13 [(1) the district's effective maintenance and
150-14 operations rate for the tax year is calculated as provided by
150-15 Section 26.012, except that last year's levy is reduced by the
150-16 amount of taxes imposed in the preceding year, if any, to offset
150-17 the amount of the reduction certified by the commissioner; and]
150-18 [(2) the district's rollback tax rate for the tax year
150-19 calculated as provided by Section 26.04 or by Subsection (c), as
150-20 applicable, is increased by the tax rate that, if applied to the
150-21 current total value for the school district, would impose taxes in
150-22 an amount equal to the amount of the reduction certified by the
150-23 commissioner.]
150-24 [(f)] In a school district that received distributions from
150-25 an equalization tax imposed under former Chapter 18, Education
150-26 Code, the effective maintenance and operations rate of that tax as
150-27 of the date of the county unit system's abolition is added to the
151-1 district's effective maintenance and operations rate under
151-2 Subsections (a) and (c) [of this section in the calculation of the
151-3 district's rollback tax rate].
151-4 (f) [(i)] For purposes of this section, increases in taxable
151-5 values and tax levies occurring within a reinvestment zone under
151-6 the provisions of Chapter 311 (Tax Increment Financing Act), in
151-7 which the district is a participant, shall be eliminated from the
151-8 calculation of the maintenance and operations tax rate adopted by
151-9 the governing body of the school district.
151-10 (g) Subsection (a) does not apply to the 1997 and 1998 tax
151-11 years. For the 1997 or 1998 tax year, a school district may not
151-12 adopt a tax rate for maintenance and operations purposes that
151-13 exceeds the lesser of:
151-14 (1) 83 cents on the $100 valuation of property; or
151-15 (2) a rate equal to the sum of:
151-16 (A) the rate necessary for the district to
151-17 receive an amount of state and local funding per student, using the
151-18 student multipliers under Section 42.101(b), Education Code, that
151-19 is equal to the state and local funding per weighted student for
151-20 maintenance and operations to which the district would have been
151-21 entitled for each of those years at the district's tax rate for the
151-22 1996 tax year under:
151-23 (i) the Education Code as it would have
151-24 been in effect for the appropriate school year before amendment by
151-25 H.B. No. 4, Acts of the 75th Legislature, Regular Session, 1997,
151-26 excluding any amount that results from an adjustment under Section
151-27 42.253(i), Education Code, and except as provided by Subsection (h)
152-1 or (i); and
152-2 (ii) the General Appropriations Act; plus
152-3 (B) 4 cents; plus
152-4 (C) any amount necessary to pay for maintenance
152-5 and operations expenses budgeted on January 1, 1997, to be paid
152-6 from general fund balances, computed in accordance with guidelines
152-7 adopted by the commissioner of education.
152-8 (g-1) Subsection (a) does not apply to the 1999 tax year.
152-9 For that tax year, a school district may not adopt a tax rate for
152-10 maintenance and operations purposes that exceeds the lesser of:
152-11 (1) 75 cents on the $100 valuation of property, except
152-12 as authorized by an election held under Section 45.0031, Education
152-13 Code; or
152-14 (2) a rate equal to the sum of:
152-15 (A) the lesser of:
152-16 (i) the maintenance and operations rate
152-17 levied by the district for the 1998 tax year; or
152-18 (ii) the rate necessary for the district
152-19 to receive an amount of state and local funds per student, using
152-20 the student multipliers under Section 42.101(b), Education Code,
152-21 that is equal to the state and local funding per weighted student
152-22 for maintenance and operations to which the district would have
152-23 been entitled for that year at a rate that is five cents greater
152-24 than the rate authorized under Subsection (g)(2)(A) for the 1997
152-25 tax year; plus
152-26 (B) 2.5 cents.
152-27 (h) For purposes of Subsection (g), for the 1998-1999 school
153-1 year, the amount of state and local funding to which a school
153-2 district would have been entitled includes any amount to which the
153-3 district would have been entitled for that year if former Section
153-4 41.002(e), Education Code, had been in effect for that year.
153-5 (i) Notwithstanding Subsection (g), the amount of state and
153-6 local funding to which a district would have been entitled does not
153-7 include funding based on the computation of average daily
153-8 attendance under Section 42.005(a), Education Code, as that
153-9 subsection would have been in effect on September 1, 1997, before
153-10 amendment of Chapter 42, Education Code, by H.B. No. 4, Acts of the
153-11 75th Legislature, Regular Session, 1997.
153-12 (j) Subsections (g)-(i) and this subsection expire January
153-13 1, 2001.
153-14 SECTION 2.50. Sections 26.09(b) and (c), Tax Code, are
153-15 amended to read as follows:
153-16 (b) The county assessor-collector shall add the properties
153-17 and their values certified to that official [him] as provided by
153-18 Chapter 24 [of this code] to the appraisal roll for county tax
153-19 purposes and to the appraisal roll for state ad valorem taxes. The
153-20 county assessor-collector shall use the appropriate appraisal roll
153-21 certified to that official [him] as provided by Section 26.01 with
153-22 the added properties and values to calculate county and state
153-23 taxes.
153-24 (c) The tax is calculated by:
153-25 (1) subtracting from the appraised value of a property
153-26 as shown on the appraisal roll for a taxing [the] unit or the state
153-27 the amount of any partial exemption allowed the property owner that
154-1 applies to appraised value to determine taxable [net appraised]
154-2 value; and
154-3 (2) [multiplying the net appraised value by the
154-4 assessment ratio to determine assessed value;]
154-5 [(3) subtracting from the assessed value the amount of
154-6 any partial exemption allowed the property owner to determine
154-7 taxable value; and]
154-8 [(4)] multiplying the taxable value by the applicable
154-9 tax rate, or for a school district as defined by Section
154-10 11.13(m)(2), multiplying the taxable value for maintenance and
154-11 operations taxation by the maintenance and operations tax rate,
154-12 multiplying the taxable value for debt service taxation by the debt
154-13 service tax rate, and adding the products.
154-14 SECTION 2.51. Section 26.10, Tax Code, is amended to read as
154-15 follows:
154-16 Sec. 26.10. PRORATING TAXES--LOSS OF EXEMPTION. (a) If the
154-17 appraisal roll shows that a property is eligible for taxation for
154-18 only part of a year because an exemption, other than a residence
154-19 homestead exemption, applicable on January 1 of that year
154-20 terminated during the year, the tax due against the property is
154-21 calculated by multiplying the tax due for the entire year as
154-22 determined as provided by Section 26.09 of this code by a fraction,
154-23 the denominator of which is 365 and the numerator of which is the
154-24 number of days the exemption is not applicable.
154-25 (b) If the appraisal roll shows that a property is eligible
154-26 for taxation at its full appraised value for only part of a year
154-27 because a residence homestead exemption for an individual 65 years
155-1 of age or older applicable on January 1 of that year terminated
155-2 during the year, the tax due against the property is calculated by:
155-3 (1) subtracting from:
155-4 (A) the amount of the taxes that otherwise would
155-5 be imposed on the residence homestead for the entire year had the
155-6 individual not qualified for the residence homestead exemption on
155-7 January 1;
155-8 (B) the amount of the taxes that otherwise would
155-9 be imposed on the residence homestead for the entire year had the
155-10 individual qualified for the residence homestead exemption for the
155-11 entire year;
155-12 (2) multiplying the remainder determined under
155-13 Subdivision (1) by a fraction, the denominator of which is 365 and
155-14 the numerator of which is the number of days that elapsed after the
155-15 date the exemption terminated; and
155-16 (3) adding the product determined under Subdivision
155-17 (2) and the amount described by Subdivision (1)(B).
155-18 SECTION 2.52. Chapter 26, Tax Code, is amended by adding
155-19 Section 26.112 to read as follows:
155-20 Sec. 26.112. PRORATING TAXES--QUALIFICATION BY ELDERLY
155-21 PERSON FOR 65 OR OVER RESIDENCE HOMESTEAD EXEMPTION. If an
155-22 individual qualifies for the exemption under Section 11.13(c) or
155-23 (d) for an individual 65 years of age or older after the beginning
155-24 of a tax year, the amount of the taxes due on the residence
155-25 homestead of the individual for the tax year is calculated by:
155-26 (1) subtracting:
155-27 (A) the amount of the taxes that otherwise would
156-1 be imposed on the residence homestead for the entire year had the
156-2 individual qualified for the residence homestead exemption on
156-3 January 1; from
156-4 (B) the amount of the taxes that otherwise would
156-5 be imposed on the residence homestead for the entire year had the
156-6 individual not qualified for the residence homestead exemption;
156-7 (2) multiplying the remainder determined under
156-8 Subdivision (1) by a fraction, the denominator of which is 365 and
156-9 the numerator of which is the number of days that elapsed prior to
156-10 the date that the individual qualified for the exemption; and
156-11 (3) adding the product determined under Subdivision
156-12 (2) and the amount described by Subdivision (1)(A).
156-13 SECTION 2.53. Section 26.12, Tax Code, is amended by adding
156-14 Subsection (e) to read as follows:
156-15 (e) For purposes of this section, the state is not a taxing
156-16 unit.
156-17 SECTION 2.54. Section 26.15(c), Tax Code, is amended to read
156-18 as follows:
156-19 (c) At any time, the governing body of a taxing unit, on
156-20 motion of the assessor for the unit or of a property owner, shall
156-21 direct by written order changes in the tax roll to correct errors
156-22 in the mathematical computation of a tax. The assessor shall enter
156-23 the corrections ordered by the governing body. The comptroller may
156-24 order changes on the state tax roll to correct errors in the
156-25 mathematical computation of the state tax.
156-26 SECTION 2.55. Section 31.01(c), Tax Code, is amended to read
156-27 as follows:
157-1 (c) The tax bill or a separate statement accompanying the
157-2 tax bill shall:
157-3 (1) identify the property subject to the tax;
157-4 (2) state the appraised value[, assessed value,] and
157-5 taxable value of the property for each type of tax levy the taxing
157-6 unit imposes on a different value;
157-7 (3) if the property is land appraised as provided by
157-8 Subchapter C, D, or E, Chapter 23 [of this code], state the market
157-9 value and the taxable value for purposes of deferred or additional
157-10 taxation as provided by Section 23.46, 23.55, or 23.76, as
157-11 applicable[, of this code];
157-12 (4) [state the assessment ratio for the unit;]
157-13 [(5)] state the type and amount of any partial
157-14 exemption applicable to the property[, indicating whether it
157-15 applies to appraised or assessed value];
157-16 (5) [(6)] state the total tax rate or rates for the
157-17 unit;
157-18 (6) [(7)] state the amount of tax due, the due date,
157-19 and the delinquency date;
157-20 (7) [(8)] explain the payment option and discounts
157-21 provided by Sections 31.03 and 31.05 [of this code], if available
157-22 to the unit's taxpayers, and state the date on which each of the
157-23 discount periods provided by Section 31.05 concludes, if the
157-24 discounts are available;
157-25 (8) [(9)] state the rates of penalty and interest
157-26 imposed for delinquent payment of the tax; and
157-27 (9) [(10)] include any other information required by
158-1 the comptroller.
158-2 SECTION 2.56. Section 31.01, Tax Code, is amended by adding
158-3 Subsection (k) to read as follows:
158-4 (k) In addition to the information specified by Subsection
158-5 (c), a tax bill for 1997 school district taxes or the separate
158-6 statement accompanying a tax bill for 1997 school district taxes
158-7 shall include an explanation of the effect on the school district's
158-8 1997 tax rates caused by House Bill No. 4, Acts of the 75th
158-9 Legislature, Regular Session, 1997, and an estimate of any amount
158-10 by which the school district's 1997 taxes on the property are
158-11 reduced from the school district's 1996 taxes on the property
158-12 because of that Act. If a tax bill for school district taxes
158-13 containing an explanation required by this subsection is mailed to
158-14 a mortgagee of a property, the mortgagee shall mail a copy of the
158-15 tax bill or accompanying statement containing the explanation to
158-16 the owner of the property before the 31st day after the date the
158-17 mortgagee receives the tax bill. This subsection expires January
158-18 1, 1999.
158-19 SECTION 2.57. Section 31.01, Tax Code, is amended by adding
158-20 Subsection (l) to read as follows:
158-21 (l) This subsection applies only to a taxing unit in which
158-22 the voters of the unit, at an election held on the question of the
158-23 use of revenue from an expanded sales tax base, required the
158-24 expanded sales tax base to be used to reduce ad valorem taxes of
158-25 the taxing unit, as required by House Bill No. 4, Acts of the 75th
158-26 Legislature, Regular Session, 1997. In addition to the information
158-27 specified by Subsection (c), a tax bill for 1997 or 1998 taxes of a
159-1 taxing unit or the separate statement accompanying a tax bill for
159-2 1997 or 1998 taxes of the unit shall include an explanation of any
159-3 effect on the 1997 or 1998 tax rate of the unit caused by the
159-4 results of the election, and an estimate of any amount by which the
159-5 unit's 1997 or 1998 taxes on the property are reduced from the
159-6 taxes on the property in the preceding year because of that
159-7 election. If a tax bill for taxes containing an explanation
159-8 required by this subsection is mailed to a mortgagee of a property,
159-9 the mortgagee shall mail a copy of the tax bill or accompanying
159-10 statement containing the explanation to the owner of the property
159-11 before the 31st day after the date the mortgagee receives the tax
159-12 bill. This subsection expires January 1, 1999.
159-13 SECTION 2.58. Section 31.11(a), Tax Code, is amended to read
159-14 as follows:
159-15 (a) If a taxpayer applies to the tax collector of a taxing
159-16 unit for a refund of an overpayment or erroneous payment of taxes
159-17 and the auditor for the unit or the comptroller in the case of the
159-18 state ad valorem tax determines that the payment was erroneous or
159-19 excessive, the tax collector shall refund the amount of the
159-20 excessive or erroneous payment from available current tax
159-21 collections or from funds appropriated by the unit for making
159-22 refunds. For taxes other than state ad valorem taxes [However], if
159-23 the amount of the refund exceeds $500, the collector may not make
159-24 the refund unless the governing body of the taxing unit also
159-25 determines that the payment was erroneous or excessive and approves
159-26 the refund.
159-27 SECTION 2.59. Sections 32.01(a) and (c), Tax Code, are
160-1 amended to read as follows:
160-2 (a) On January 1 of each year, a tax lien attaches to
160-3 property to secure the payment of all taxes, penalties, and
160-4 interest ultimately imposed for the year by the state or a taxing
160-5 unit on the property, whether or not the taxes are imposed in the
160-6 year the lien attaches. The lien to secure the payment of state ad
160-7 valorem taxes and applicable penalties and interest exists in favor
160-8 of the state. The lien to secure the payment of taxes imposed by a
160-9 taxing unit and applicable penalties and interest exists in favor
160-10 of the [each] taxing unit having power to tax the property.
160-11 (c) The lien under this section is perfected on attachment
160-12 and, except as provided by Section 32.03(b), perfection requires no
160-13 further action by the state or taxing unit.
160-14 SECTION 2.60. Section 33.01, Tax Code, is amended by
160-15 amending Subsection (a) and adding Subsections (d) and (e) to read
160-16 as follows:
160-17 (a) A delinquent tax, including a delinquent state ad
160-18 valorem tax, incurs a penalty of six percent of the amount of the
160-19 tax for the first calendar month it is delinquent plus one percent
160-20 for each additional month or portion of a month the tax remains
160-21 unpaid prior to July 1 of the year in which it becomes delinquent.
160-22 However, a tax delinquent on July 1 incurs a total penalty of
160-23 twelve percent of the amount of the delinquent tax without regard
160-24 to the number of months the tax has been delinquent.
160-25 (d) In lieu of the penalty imposed under Subsection (a), a
160-26 delinquent tax incurs a penalty of 50 percent of the amount of the
160-27 tax without regard to the number of months the tax has been
161-1 delinquent if the tax is delinquent because the property owner
161-2 received an exemption under:
161-3 (1) Section 11.13 and the chief appraiser subsequently
161-4 cancels the exemption because the residence was not the principal
161-5 residence of the property owner and the property owner received an
161-6 exemption for two or more additional residence homesteads for the
161-7 tax year in which the tax was imposed;
161-8 (2) Section 11.13(c) or (d) for a person who is 65 or
161-9 older and the chief appraiser subsequently cancels the exemption
161-10 because the property owner was younger than 65 on the exemption
161-11 qualification date; or
161-12 (3) Section 11.13(q) and the chief appraiser
161-13 subsequently cancels the exemption because the property owner was
161-14 younger than 55 when the property owner's spouse died.
161-15 (e) A penalty imposed under Subsection (d) does not apply
161-16 if, at any time before the date the tax becomes delinquent, the
161-17 property owner gives to the chief appraiser of the appraisal
161-18 district in which the property is located written notice of
161-19 circumstances that would disqualify the owner for the exemption.
161-20 SECTION 2.61. The heading to Section 33.06, Tax Code, is
161-21 amended to read as follows:
161-22 Sec. 33.06. DEFERRED COLLECTION OF [CERTAIN] TAXES ON
161-23 RESIDENCE HOMESTEAD OF ELDERLY PERSON.
161-24 SECTION 2.62. Subchapter A, Chapter 33, Tax Code, is amended
161-25 by adding Sections 33.065 and 33.08 to read as follows:
161-26 Sec. 33.065. DEFERRED COLLECTION OF TAXES ON APPRECIATING
161-27 RESIDENCE HOMESTEAD. (a) An individual is entitled to defer or
162-1 abate a suit to collect a delinquent tax imposed on the portion of
162-2 the appraised value of property the individual owns and occupies as
162-3 the individual's residence homestead that exceeds the sum of:
162-4 (1) 105 percent of the appraised value of the property
162-5 for the preceding year; and
162-6 (2) the market value of all new improvements to the
162-7 property.
162-8 (b) An individual may not obtain a deferral or abatement
162-9 under this section if the taxes on the portion of the appraised
162-10 value of the property that does not exceed the amount provided by
162-11 Subsection (a) are delinquent.
162-12 (c) To obtain a deferral, an individual must file with the
162-13 chief appraiser for the appraisal district in which the property is
162-14 located an affidavit stating the facts required to be established
162-15 by Subsection (a). The chief appraiser shall notify each taxing
162-16 unit participating in the district of the filing. After an
162-17 affidavit is filed under this subsection, a taxing unit may not
162-18 file suit to collect delinquent taxes on the property for which
162-19 collection is deferred until the individual no longer owns and
162-20 occupies the property as a residence homestead.
162-21 (d) To obtain an abatement, the individual must file in the
162-22 court in which the delinquent tax suit is pending an affidavit
162-23 stating the facts required to be established by Subsection (a). If
162-24 the taxing unit that filed the suit does not file a controverting
162-25 affidavit or if, after a hearing, the court finds the individual is
162-26 entitled to the deferral, the court shall abate the suit until the
162-27 individual no longer owns and occupies the property as the
163-1 individual's residence homestead.
163-2 (e) A deferral or abatement under this section applies only
163-3 to ad valorem taxes imposed beginning with the tax year following
163-4 the first tax year the individual entitled to the deferral or
163-5 abatement qualifies the property for an exemption under Section
163-6 11.13. For purposes of this subsection, the owner of a residence
163-7 homestead that is qualified for an exemption under Section 11.13 on
163-8 January 1, 1998, is considered to have qualified the property for
163-9 the first time in the 1997 tax year.
163-10 (f) A tax lien remains on the property and interest
163-11 continues to accrue during the period collection of delinquent
163-12 taxes is deferred as provided by this section. The annual interest
163-13 rate during the deferral period is eight percent instead of the
163-14 rate provided by Section 33.01. A penalty may not be imposed on
163-15 the delinquent taxes for which collection is deferred during a
163-16 deferral period. The additional penalty provided by Section 33.07
163-17 may be imposed only if the delinquent taxes for which collection is
163-18 deferred remain delinquent on or after the 91st day after the date
163-19 the deferral period expires. A plea of limitation, laches, or want
163-20 of prosecution does not apply against the taxing unit because of
163-21 deferral of collection as provided by this section.
163-22 (g) Each year the chief appraiser for each appraisal
163-23 district shall publicize in a manner reasonably designed to notify
163-24 all residents of the district or county of the provisions of this
163-25 section and, specifically, the method by which eligible persons may
163-26 obtain a deferral.
163-27 (h) In this section:
164-1 (1) "New improvement" means an improvement to a
164-2 residence homestead that is made after the appraisal of the
164-3 property for the preceding year and that increases the market value
164-4 of the property. The term does not include ordinary maintenance of
164-5 an existing structure or the grounds or another feature of the
164-6 property.
164-7 (2) "Residence homestead" has the meaning assigned
164-8 that term by Section 11.13.
164-9 Sec. 33.08. COLLECTION OF DELINQUENT STATE AD VALOREM TAXES;
164-10 PENALTY. (a) Except as provided by Subsection (b), the attorney
164-11 general shall represent the state to enforce the collection of
164-12 delinquent state ad valorem taxes. The attorney general may
164-13 delegate the attorney general's duties under this subsection to a
164-14 county or district attorney or may contract with a private attorney
164-15 for the performance of those duties.
164-16 (b) If the commissioners court of a county contracts with a
164-17 private attorney for the collection of delinquent county ad valorem
164-18 taxes, the contract applies to the collection of delinquent state
164-19 ad valorem taxes on property taxable in that county without further
164-20 action. The compensation of the private attorney for collecting
164-21 delinquent state ad valorem taxes is equal to a percentage of the
164-22 amount collected that represents the portion of that amount
164-23 attributable to the additional penalty provided by Subsection (c).
164-24 If the commissioners court of a county contracts with an official,
164-25 taxing unit, or political subdivision of this state for the
164-26 collection of the ad valorem taxes of the county, the contract
164-27 applies to the collection of delinquent state ad valorem taxes on
165-1 property taxable in that county without further action.
165-2 (c) State ad valorem taxes that remain delinquent on July 1
165-3 of the year in which they become delinquent incur an additional
165-4 penalty to defray costs of collection if the collection of the
165-5 delinquent taxes is covered by a contract with a private attorney
165-6 under Subsection (a) or (b). The amount of the penalty is 15
165-7 percent of the amount of the taxes, penalty, and interest due.
165-8 (d) A tax lien attaches in favor of the state to the
165-9 property on which the tax is imposed to secure payment of the
165-10 penalty.
165-11 (e) The attorney general or the person responsible for
165-12 collecting the delinquent tax shall deliver a notice of delinquency
165-13 and of the penalty to the property owner at least 30 and not more
165-14 than 60 days before July 1.
165-15 (f) Sections 6.30 and 33.07 do not apply to the state ad
165-16 valorem tax.
165-17 SECTION 2.63. Sections 33.21(a) and (b), Tax Code, are
165-18 amended to read as follows:
165-19 (a) A person's personal property is subject to seizure for
165-20 the payment of a delinquent tax, penalty, and interest the person
165-21 [he] owes the state or a taxing unit on property.
165-22 (b) A person's personal property is subject to seizure for
165-23 the payment of a tax imposed by the state or a taxing unit on the
165-24 person's [his] property before the tax becomes delinquent if:
165-25 (1) the collector discovers that property on which the
165-26 tax has been or will be imposed is about to be removed from the
165-27 county; and
166-1 (2) the collector knows of no other personal property
166-2 in the county from which the tax may be satisfied.
166-3 SECTION 2.64. Section 33.23(b), Tax Code, is amended to read
166-4 as follows:
166-5 (b) A bond may not be required of the state or a taxing unit
166-6 for issuance or delivery of a tax warrant, and a fee or court cost
166-7 may not be charged for issuance or delivery of a warrant.
166-8 SECTION 2.65. Section 33.44(b), Tax Code, is amended to read
166-9 as follows:
166-10 (b) For purposes of joining a county, citation may be served
166-11 on the county tax assessor-collector. For purposes of joining any
166-12 other taxing unit, citation may be served on the officer charged
166-13 with collecting taxes for the unit or on the presiding officer or
166-14 secretary of the governing body of the unit. For purposes of
166-15 joining the state, citation shall be served on the comptroller.
166-16 Citation may be served by certified mail, return receipt requested.
166-17 A person on whom service is authorized by this subsection may waive
166-18 the issuance and service of citation in behalf of the person's
166-19 [his] taxing unit.
166-20 SECTION 2.66. Section 34.04(b), Tax Code, is amended to read
166-21 as follows:
166-22 (b) A copy of the petition shall be served on the county
166-23 attorney or, if there is no county attorney, the district attorney
166-24 and on all parties to the suit that ordered the sale, if any, not
166-25 later than the 20th day before the date set for a hearing on the
166-26 petition. The attorney general represents the state at the hearing
166-27 unless the attorney general delegates that duty to the county or
167-1 district attorney.
167-2 SECTION 2.67. The heading to Chapter 41, Tax Code, is
167-3 amended to read as follows:
167-4 CHAPTER 41. ADMINISTRATIVE [LOCAL] REVIEW
167-5 SECTION 2.68. Section 41.03, Tax Code, is amended to read as
167-6 follows:
167-7 Sec. 41.03. Challenge by State or Taxing Unit. The state or
167-8 a [A] taxing unit is entitled to challenge before the appraisal
167-9 review board:
167-10 (1) the level of appraisals of any category of
167-11 property in the district or in any territory in the district, but
167-12 not the appraised value of a single taxpayer's property;
167-13 (2) an exclusion of property from the appraisal
167-14 records;
167-15 (3) a grant in whole or in part of a partial
167-16 exemption;
167-17 (4) a determination that land qualifies for appraisal
167-18 as provided by Subchapter C, D, or E, Chapter 23 [of this code]; or
167-19 (5) failure to identify the taxing unit as one in
167-20 which a particular property is taxable.
167-21 SECTION 2.69. Subchapter A, Chapter 41, Tax Code, is amended
167-22 by adding Sections 41.031 and 41.032 to read as follows:
167-23 Sec. 41.031. CHALLENGE BY SCHOOL DISTRICT. A school
167-24 district is entitled to challenge before the appraisal review board
167-25 the exclusion of property from the appraisal roll for the
167-26 maintenance and operations taxes or debt service taxes of the
167-27 district.
168-1 Sec. 41.032. CHALLENGE BY COMPTROLLER. The comptroller is
168-2 entitled to challenge before the appraisal review board the
168-3 exclusion of property from the appraisal roll for state ad valorem
168-4 taxes.
168-5 SECTION 2.70. Section 41.06(a), Tax Code, is amended to read
168-6 as follows:
168-7 (a) The secretary of the appraisal review board shall
168-8 deliver to the comptroller and the presiding officer of the
168-9 governing body of each taxing unit entitled to appear at a
168-10 challenge hearing written notice of the date, time, and place fixed
168-11 for the hearing. The secretary shall deliver the notice not later
168-12 than the 10th day before the date of the hearing.
168-13 SECTION 2.71. Section 41.07(d), Tax Code, is amended to read
168-14 as follows:
168-15 (d) The board shall deliver by certified mail a notice of
168-16 the issuance of the order and a copy of the order to the taxing
168-17 unit. If the order of the board excludes property from the
168-18 appraisal roll for state ad valorem taxes, the board shall also
168-19 deliver a notice of issuance and a copy of the order to the
168-20 comptroller in the manner prescribed by the comptroller.
168-21 SECTION 2.72. Section 41.12, Tax Code, is amended by adding
168-22 Subsection (c) to read as follows:
168-23 (c) A protest upon which a determination is pending under
168-24 Subchapter E is not considered to be an undetermined protest for
168-25 the purposes of Subsection (b) of this section.
168-26 SECTION 2.73. Section 41.47(d), Tax Code, is amended to read
168-27 as follows:
169-1 (d) The board shall deliver by certified mail a notice of
169-2 issuance of the order and a copy of the order to the property owner
169-3 and the chief appraiser. If the order of the board excludes
169-4 property from the appraisal roll for state ad valorem taxes, the
169-5 board shall also deliver a notice of issuance and a copy of the
169-6 order to the comptroller in the manner prescribed by the
169-7 comptroller.
169-8 SECTION 2.74. Section 41.41, Tax Code, is amended to read as
169-9 follows:
169-10 Sec. 41.41. Right of Protest. A property owner is entitled
169-11 to protest before the appraisal review board the following actions:
169-12 (1) determination of the appraised value of the
169-13 owner's property or, in the case of land appraised as provided by
169-14 Subchapter C, D, or E, Chapter 23, determination of its appraised
169-15 or market value;
169-16 (2) unequal appraisal of the owner's property;
169-17 (3) inclusion of the owner's property on the appraisal
169-18 records;
169-19 (4) denial to the property owner in whole or in part
169-20 of a partial exemption;
169-21 (5) determination that the owner's land does not
169-22 qualify for appraisal as provided by Subchapter C, D, or E, Chapter
169-23 23;
169-24 (6) identification of the taxing units in which the
169-25 owner's property is taxable in the case of the appraisal district's
169-26 appraisal roll;
169-27 (7) determination that the property owner is the owner
170-1 of property;
170-2 (8) a determination that a change in use of land
170-3 appraised under Subchapter C, D, or E, Chapter 23, has occurred;
170-4 [or]
170-5 (9) the inclusion of the property on or the exclusion
170-6 of the property from the appraisal roll for the maintenance and
170-7 operations or debt service taxes of a school district;
170-8 (10) the inclusion of the property on or the exclusion
170-9 of the property from the appraisal roll for state ad valorem taxes;
170-10 or
170-11 (11) any other action of the chief appraiser,
170-12 appraisal district, or appraisal review board that applies to and
170-13 adversely affects the property owner.
170-14 SECTION 2.75. Section 41.43, Tax Code, is amended to read as
170-15 follows:
170-16 Sec. 41.43. PROTEST OF DETERMINATION OF VALUE OR INEQUALITY
170-17 OF APPRAISAL. (a) In a protest authorized by Section 41.41(1) or
170-18 (2), the appraisal district has the burden of establishing the
170-19 value of the property by a preponderance of the evidence presented
170-20 at the hearing. If the appraisal district fails to present
170-21 evidence, the protest shall be determined in favor of the property
170-22 owner.
170-23 (b) A protest on the ground of unequal appraisal of property
170-24 shall be determined in favor of the protesting party unless [if]
170-25 the appraisal district [protesting party] establishes that the
170-26 appraisal ratio of the property is not greater than the median
170-27 level of appraisal of:
171-1 (1) a reasonable and representative sample of other
171-2 properties in the appraisal district; or
171-3 (2) a sample of properties in the appraisal district
171-4 consisting of a reasonable number of other properties similarly
171-5 situated to, or of the same general kind or character as, the
171-6 property subject to the protest.
171-7 (c) For purposes of this section, evidence shall include the
171-8 data, schedules, formulas, or other information used to establish
171-9 the matter at issue.
171-10 SECTION 2.76. Section 41.46(a), Tax Code, is amended to read
171-11 as follows:
171-12 (a) The appraisal review board before which a protest
171-13 hearing is scheduled shall deliver written notice to the property
171-14 owner initiating a protest of the date, time, and place fixed for
171-15 the hearing on the protest unless the property owner waives in
171-16 writing notice of the hearing. The board shall deliver the notice
171-17 not later than the 15th day before the date of the hearing.
171-18 SECTION 2.77. Subchapter D, Chapter 41, Tax Code, is amended
171-19 by adding Section 41.71 to read as follows:
171-20 Sec. 41.71. EVENING AND WEEKEND HEARINGS. At the request of
171-21 a property owner, an appraisal review board shall schedule a
171-22 hearing on a protest in the evening or on a Saturday or Sunday.
171-23 SECTION 2.78. Subchapter D, Chapter 41, Tax Code, is amended
171-24 by adding Section 41.72 to read as follows:
171-25 Sec. 41.72. TIME OF HEARINGS. At the request of the
171-26 property owner, an appraisal review board shall schedule a hearing
171-27 on the protest in the evening.
172-1 SECTION 2.79. Chapter 41, Tax Code, is amended by adding
172-2 Subchapter E to read as follows:
172-3 SUBCHAPTER E. DETERMINATION OF PROTEST BY STATE
172-4 OFFICE OF ADMINISTRATIVE HEARINGS
172-5 Sec. 41.91. DEFINITION. In this subchapter, "office" means
172-6 the State Office of Administrative Hearings.
172-7 Sec. 41.92. RULES. The office shall adopt rules of practice
172-8 and procedure for protest proceedings under this subchapter.
172-9 Sec. 41.93. ELECTION OF REMEDIES. (a) A property owner is
172-10 entitled to have the office conduct a hearing and determine a
172-11 protest if:
172-12 (1) the property has an appraised value of at least $1
172-13 million as determined by the chief appraiser; and
172-14 (2) the property owner:
172-15 (A) files a notice of protest with the appraisal
172-16 review board under Section 41.44;
172-17 (B) is entitled to a hearing and determination
172-18 of a protest under that section;
172-19 (C) requests in the notice of protest that the
172-20 office conduct the hearing and determine the protest;
172-21 (D) states in the notice of protest the
172-22 appraised value of the property in the opinion of the property
172-23 owner; and
172-24 (E) pays a filing fee of $100 with the notice of
172-25 protest.
172-26 (b) A property owner who submits a request under this
172-27 section waives the right to a hearing and determination of the
173-1 protest by the appraisal review board.
173-2 (c) A property owner forfeits the right to a determination
173-3 by the office of a protest under this subchapter if the property
173-4 owner does not pay before the delinquency date each taxing unit the
173-5 amount of taxes the property owner would be required to pay under
173-6 Section 42.08 to preserve the right to judicial review of a
173-7 determination by the appraisal review board.
173-8 Sec. 41.94. FORWARDING OF NOTICE OF PROTEST AND FILING FEE
173-9 TO OFFICE. On receipt of a notice under Section 41.93 and the
173-10 required filing fee, the appraisal review board shall forward the
173-11 notice and the filing fee to the office.
173-12 Sec. 41.95. CONTESTED CASE. Except as otherwise provided by
173-13 this subchapter, the provisions of Chapter 2001, Government Code,
173-14 applicable to a contested case apply to the determination of a
173-15 protest under this subchapter.
173-16 Sec. 41.96. BURDEN OF PROOF. Section 41.43 applies to the
173-17 determination of a protest under this subchapter.
173-18 Sec. 41.97. HEARING ON AND DETERMINATION OF PROTEST.
173-19 (a) The administrative law judge to whom the protest is assigned
173-20 shall conduct a hearing on the protest.
173-21 (b) The hearing shall be held at:
173-22 (1) the appraisal office; or
173-23 (2) another location convenient to the property owner
173-24 and the chief appraiser.
173-25 (c) The administrative law judge shall issue a final order
173-26 determining the protest. The final order is binding on the parties
173-27 and the appraisal review board.
174-1 Sec. 41.98. NOTIFICATION OF DETERMINATION; CORRECTION OF
174-2 APPRAISAL RECORDS. (a) The office shall notify the property
174-3 owner, chief appraiser, and appraisal review board of the final
174-4 order determining the protest.
174-5 (b) The appraisal review board by written order shall
174-6 determine the protest in accordance with the final order and shall
174-7 correct the appraisal records as necessary to conform to the order.
174-8 Sec. 41.99. COSTS OF HEARING. The appraisal district shall
174-9 reimburse the office for the office's costs of conducting hearings
174-10 under this subchapter.
174-11 Sec. 41.100. SANCTIONS. The administrative law judge may
174-12 impose sanctions against a party or its representative as provided
174-13 by Sections 2003.047(i) and (j), Government Code, as added by
174-14 Chapter 765, Acts of the 74th Legislature, 1995.
174-15 Sec. 41.101. APPEAL. An order of the appraisal review board
174-16 determining a protest under this subchapter is considered to have
174-17 been issued under Subchapter C for purposes of appeal under Chapter
174-18 42, except that judicial review of the protest is under the
174-19 substantial evidence rule.
174-20 SECTION 2.80. Subchapter A, Chapter 42, Tax Code, is amended
174-21 by adding Section 42.032 to read as follows:
174-22 Sec. 42.032. RIGHT OF APPEAL BY COMPTROLLER. (a) The
174-23 comptroller is entitled to appeal an order of the appraisal review
174-24 board excluding property from the appraisal roll for state ad
174-25 valorem taxes.
174-26 (b) The attorney general shall represent the comptroller in
174-27 an appeal under this section. The attorney general may delegate
175-1 its duties under this section to a county or district attorney or
175-2 may contract with a private attorney for the performance of those
175-3 duties.
175-4 SECTION 2.81. Sections 42.06(a) and (d), Tax Code, are
175-5 amended to read as follows:
175-6 (a) To exercise the party's right to appeal an order of an
175-7 appraisal review board, a party other than a property owner must
175-8 file written notice of appeal within 15 days after the date the
175-9 party receives the notice required by Section 41.47 or, in the case
175-10 of a taxing unit or the comptroller, by Section 41.07 that the
175-11 order appealed has been issued. To exercise the right to appeal an
175-12 order of the comptroller, a party other than a property owner must
175-13 file written notice of appeal within 15 days after the date the
175-14 party receives the comptroller's order.
175-15 (d) If the chief appraiser, a taxing unit, [or] a county, or
175-16 the comptroller appeals, the chief appraiser, if the appeal is of
175-17 an order of the appraisal review board, or the comptroller, if the
175-18 appeal is of an order of the comptroller, shall deliver a copy of
175-19 the notice to the property owner whose property is involved in the
175-20 appeal within 10 days after the date the notice is filed.
175-21 SECTION 2.82. Section 42.43, Tax Code, is amended to read as
175-22 follows:
175-23 Sec. 42.43. Refund. (a) If the final determination of an
175-24 appeal that decreases a property owner's tax liability occurs after
175-25 the property owner has paid his taxes, the taxing unit and the
175-26 comptroller, if the property is subject to a state tax, shall
175-27 refund to the property owner the difference between the amount of
176-1 taxes paid and amount of taxes for which the property owner is
176-2 liable.
176-3 (b) For a refund made under this section because an
176-4 exemption under Section 11.20 that was denied by the chief
176-5 appraiser or appraisal review board is granted, the state or taxing
176-6 unit shall include with the refund interest on the amount refunded
176-7 calculated at an annual rate that is equal to the auction average
176-8 rate quoted on a bank discount basis for three-month treasury bills
176-9 issued by the United States government, as published by the Federal
176-10 Reserve Board, for the week in which the taxes became delinquent,
176-11 but not more than 10 percent, calculated from the delinquency date
176-12 for the taxes until the date the refund is made. For any other
176-13 refund made under this section, the state or taxing unit shall
176-14 include with the refund interest on the amount refunded at an
176-15 annual rate that is equal to the auction average rate quoted on a
176-16 bank discount basis for three-month treasury bills issued by the
176-17 United States government, as published by the Federal Reserve
176-18 Board, for the week in which the taxes became delinquent, but not
176-19 more than eight percent, calculated from the delinquency date for
176-20 the taxes until the date the refund is made.
176-21 SECTION 2.83. Sections 43.01 and 43.04, Tax Code, are
176-22 amended to read as follows:
176-23 Sec. 43.01. Authority to Bring Suit. The comptroller or a
176-24 [A] taxing unit may sue the appraisal district that appraises
176-25 property for the unit to compel the appraisal district to comply
176-26 with the provisions of this title, rules of the comptroller, or
176-27 other applicable law.
177-1 Sec. 43.04. Suit to Compel Compliance With Deadlines. The
177-2 comptroller or the governing body of a taxing unit may sue the
177-3 chief appraiser or members of the appraisal review board, as
177-4 applicable, for failure to comply with the deadlines imposed by
177-5 Section 25.22(a), 26.01(a), or 41.12. If the court finds that the
177-6 chief appraiser or appraisal review board failed to comply for good
177-7 cause shown, the court shall enter an order fixing a reasonable
177-8 deadline for compliance. If the court finds that the chief
177-9 appraiser or appraisal review board failed to comply without good
177-10 cause, the court shall enter an order requiring the chief appraiser
177-11 or appraisal review board to comply with the deadline not later
177-12 than the 10th day after the date the judgment is signed. In a suit
177-13 brought under this section, the court may enter any other order the
177-14 court considers necessary to ensure compliance with the court's
177-15 deadline or the applicable statutory requirements. Failure to obey
177-16 an order of the court is punishable as contempt.
177-17 SECTION 2.84. Section 23.56, Tax Code, is amended to read as
177-18 follows:
177-19 Sec. 23.56. LAND INELIGIBLE FOR APPRAISAL AS OPEN-SPACE
177-20 LAND. (a) Land is not eligible for appraisal as provided by this
177-21 subchapter if:
177-22 (1) the land is located inside the corporate limits of
177-23 an incorporated city or town, unless:
177-24 (A) the city or town is not providing the land
177-25 with governmental and proprietary services substantially equivalent
177-26 in standard and scope to those services it provides in other parts
177-27 of the city or town with similar topography, land utilization, and
178-1 population density; or
178-2 (B) the land has been devoted principally to
178-3 agricultural use continuously for the preceding five years;
178-4 (2) the land is owned by an individual who is a
178-5 nonresident alien or by a foreign government if that individual or
178-6 government is required by federal law or by rule adopted pursuant
178-7 to federal law to register his ownership or acquisition of that
178-8 property; [or]
178-9 (3) the land is owned by a corporation, partnership,
178-10 trust, or other legal entity if the entity is required by federal
178-11 law or by rule adopted pursuant to federal law to register its
178-12 ownership or acquisition of that land and a nonresident alien or a
178-13 foreign government or any combination of nonresident aliens and
178-14 foreign governments own a majority interest in the entity; or
178-15 (4) the land consists of a parcel of real property
178-16 that is contiguous to one or more parcels of real property owned by
178-17 the same person and all parcels taken together would not be
178-18 eligible for appraisal under this subchapter.
178-19 (b) A parcel is not ineligible for appraisal under this
178-20 subchapter under Subsection (a)(4) because one of the contiguous
178-21 parcels is the residence homestead of the person.
178-22 (c) In this section, "same person" includes:
178-23 (1) an individual's spouse or an individual related
178-24 within the first degree of consanguinity; or
178-25 (2) affiliated legal entities.
178-26 SECTION 2.85. Subtitle E, Title II, Public Utility
178-27 Regulatory Act of 1995 (Article 1446c-0, Vernon's Texas Civil
179-1 Statutes), is amended by adding Section 2.2125 to read as follows:
179-2 Sec. 2.2125. ADJUSTMENT FOR CHANGES IN STATE AND LOCAL TAX
179-3 LIABILITY. (a) The commission, on its own motion or on the
179-4 petition of an electric utility, including an electric cooperative
179-5 corporation, shall provide for the adjustment of the utility's
179-6 billing to reflect a net increase or decrease in the utility's
179-7 state and local tax liability, including reductions to ad valorem
179-8 taxes, if the increase or decrease:
179-9 (1) results from H.B. No. 4, Acts of the 75th
179-10 Legislature, Regular Session, 1997; and
179-11 (2) is attributable to an activity subject to the
179-12 commission's jurisdiction.
179-13 (b) The commission shall apportion pro rata to each type and
179-14 class of service provided by the utility any billing adjustment
179-15 under this section. The adjustment, if required:
179-16 (1) shall be made effective January 31, 1998; and
179-17 (2) remains effective only until the commission alters
179-18 the adjustment as provided by this section or enters an order for
179-19 the utility under Section 2.211 or 2.212 of this Act.
179-20 (c) Each year after an original adjustment, the commission
179-21 shall:
179-22 (1) review the utility's increase or decrease of tax
179-23 liability described by Subsection (a)(1) of this section; and
179-24 (2) alter the adjustment as necessary to reflect any
179-25 additional increase or decrease.
179-26 (d) A proceeding under this section is not a rate case under
179-27 Section 2.212 of this Act.
180-1 (e) This section does not require an electric utility that
180-2 is under an order issued by a federal bankruptcy court to adjust
180-3 its billings to reflect a decrease in its tax liability. The
180-4 utility shall apply the decrease to the pay-down of the utility's
180-5 debt.
180-6 SECTION 2.86. Section 26.052, Tax Code, is repealed.
180-7 SECTION 2.87. The comptroller shall:
180-8 (1) conduct a study for the 1997 and 1998 tax years of
180-9 the appraisal by local appraisal officials of property that is
180-10 subject to the state ad valorem tax imposed under Chapter 501, Tax
180-11 Code, as added by this article; and
180-12 (2) not later than January 15, 1999, submit a report
180-13 to the 76th Legislature that includes recommendations for the equal
180-14 and uniform appraisal of property that is subject to the state ad
180-15 valorem tax.
180-16 SECTION 2.88. (a) If an escrow account is required to be
180-17 maintained in connection with a loan secured by a mortgage or other
180-18 security interest in real property consisting of a residence
180-19 homestead from which ad valorem taxes are paid, the person who
180-20 controls the account, before March 31, 1998, shall:
180-21 (1) analyze the escrow requirements of the loan,
180-22 taking into account information provided by the comptroller, the
180-23 school district tax assessor-collector, or both relating to the
180-24 reduction of school district ad valorem taxes on the homestead;
180-25 (2) using the result of the calculation under
180-26 Subdivision (1) of this subsection, adjust the amount of the
180-27 payments to be made to the credit of the account and advise the
181-1 person who pays the money into the account; and
181-2 (3) refund to the person who pays money into the
181-3 account any excess in the account beyond the maximum permitted by
181-4 federal law.
181-5 (b) This section applies only to an escrow account
181-6 maintained in connection with a residence homestead that on the
181-7 effective date of this article qualifies for a residence homestead
181-8 exemption from school district ad valorem taxes under Section
181-9 11.13, Tax Code.
181-10 SECTION 2.89. (a) This article takes effect September 1,
181-11 1997.
181-12 (b) This article applies to each tax year that begins on or
181-13 after January 1, 1997. The changes in law made by this article do
181-14 not apply to ad valorem taxes imposed before January 1, 1997, and
181-15 the law as it existed before January 1, 1997, is continued in
181-16 effect for those purposes.
181-17 (c) The change in law made by this article to Section 6.41,
181-18 Tax Code, relating to the qualifications of an appraisal review
181-19 board member applies only to the appointment of a member on or
181-20 after September 1, 1997.
181-21 (d) The change in law made by this article to Section 11.43,
181-22 Tax Code, applies only to an application for an exemption from ad
181-23 valorem taxation filed on or after September 1, 1997. An
181-24 application for an exemption from ad valorem taxation filed before
181-25 September 1, 1997, is covered by the law in effect on the date the
181-26 application was filed, and that law is continued in effect for that
181-27 purpose.
182-1 (e) The change in law made by this article to Section
182-2 33.01(d), Tax Code, applies only to a penalty incurred on ad
182-3 valorem taxes that become delinquent on or after September 1, 1997.
182-4 A penalty incurred on ad valorem taxes that became delinquent
182-5 before September 1, 1997, is covered by the law in effect when the
182-6 taxes became delinquent, and that law is continued in effect for
182-7 that purpose.
182-8 SECTION 2.90. Sections 2.67, 2.72, 2.75, 2.78, and 2.79 of
182-9 this Act apply only to a protest of a property appraisal the notice
182-10 of which is filed on or after the effective date of this Act. A
182-11 protest of a property appraisal the notice of which is filed before
182-12 the effective date of this Act is covered by the law in effect when
182-13 the notice of protest was filed, and the former law is continued in
182-14 effect for that purpose.
182-15 ARTICLE 3. FRANCHISE TAX
182-16 SECTION 3.01. Sections 171.001(a) and (b), Tax Code, are
182-17 amended to read as follows:
182-18 (a) A franchise tax is imposed on[:]
182-19 [(1)] each taxable entity [corporation] that does
182-20 business in this state or that is chartered, organized, or
182-21 authorized to do business in this state[, and]
182-22 [(2) each limited liability company that does business
182-23 in this state or that is organized under the laws of this state or
182-24 is authorized to do business in this state].
182-25 (b) In this chapter:
182-26 (1) "Banking corporation" means each state, national,
182-27 domestic, or foreign bank, including a limited banking association,
183-1 as defined by Section 1.002(a), Texas Banking Act (Article
183-2 342-1.002, Vernon's Texas Civil Statutes), and each bank organized
183-3 under Section 25A [25(a)], Federal Reserve Act (12 U.S.C. Secs.
183-4 611-631) (edge corporations), but does not include a bank holding
183-5 company as that term is defined by Section 2, Bank Holding Company
183-6 Act of 1956 (12 U.S.C. Sec. 1841).
183-7 (2) "Beginning date" means:
183-8 (A) for a taxable entity [corporation] chartered
183-9 or organized in this state, the date on which the taxable entity's
183-10 [corporation's] charter or organization takes effect; and
183-11 (B) for any other taxable entity without regard
183-12 to whether the entity is foreign or domestic or whether it is
183-13 formally organized or chartered [a foreign corporation], the
183-14 earlier of the date on which:
183-15 (i) the corporation's certificate of
183-16 authority takes effect; or
183-17 (ii) the taxable entity [corporation]
183-18 begins doing business in this state.
183-19 (3) "Business trust" means a trust for carrying on a
183-20 business operation. ["Corporation" includes:]
183-21 [(A) a limited liability company, as defined
183-22 under the Texas Limited Liability Company Act; and]
183-23 [(B) a state or federal savings and loan
183-24 association.]
183-25 (4) "Charter" includes a limited liability company's
183-26 certificate of organization, a limited partnership's certificate of
183-27 limited partnership, and the registration of a limited liability
184-1 partnership.
184-2 (5) "Compensation" means amounts paid to or for the
184-3 benefit of an officer, director, or owner and that:
184-4 (A) are subject to withholding under the
184-5 Internal Revenue Code; or
184-6 (B) would be subject to withholding if the
184-7 person were considered an employee and the amounts paid were
184-8 considered salaries.
184-9 (6) "Does business in this state" means the taxable
184-10 entity is subject to taxation by this state without the state
184-11 violating the United States Constitution and the federal law
184-12 adopted under the United States Constitution.
184-13 (7) "Income or equity partner" includes a partner who
184-14 is entitled to a distributive share of the partnership's income or
184-15 loss or who becomes entitled to a share of the partnership's assets
184-16 or liabilities on termination of the partnership.
184-17 (8) "Internal Revenue Code" means the Internal Revenue
184-18 Code of 1986 in effect for the federal tax year beginning on or
184-19 after January 1, 1996 [1994], and before January 1, 1997 [1995],
184-20 and any regulations adopted under that code applicable to that
184-21 period.
184-22 (9) [(6)] "Officer" and "director" include a limited
184-23 liability company's directors and managers, [and] a limited banking
184-24 association's directors and managers and participants if there are
184-25 no directors or managers, and persons holding comparable positions
184-26 of authority in a noncorporate taxable entity.
184-27 (10) "Owner" includes a shareholder, an income or
185-1 equity partner of a partnership, and an owner of equity in any
185-2 other taxable entity.
185-3 (11) "Passive income" means:
185-4 (A) interest;
185-5 (B) dividends;
185-6 (C) rents;
185-7 (D) royalties, including overriding royalties;
185-8 (E) income from the disposition of a capital
185-9 asset or property held for investment;
185-10 (F) income from any of the following entities or
185-11 any entity controlled, directly or indirectly, by any of the
185-12 following entities:
185-13 (i) a real estate investment trust;
185-14 (ii) a regulated investment company;
185-15 (iii) a real estate mortgage investment
185-16 conduit; or
185-17 (iv) a common trust fund; or
185-18 (G) income from oil and gas working interests
185-19 held by the taxable entity if the taxable entity is not an operator
185-20 of oil and gas properties.
185-21 (12) "Passive income asset" means an asset owned by a
185-22 taxable entity if any income generated by the asset, including on
185-23 disposition of the asset, is passive income.
185-24 (13) "Passive income capital" for a taxable entity
185-25 means an amount that is the product of the passive income ratio for
185-26 the taxable entity and the entity's apportioned taxable capital
185-27 under Section 171.101(d)(3).
186-1 (14) "Passive income ratio" means the ratio, expressed
186-2 as a percentage, in which:
186-3 (A) the numerator is the aggregate cost of all
186-4 of the taxable entity's passive income assets; and
186-5 (B) the denominator is the aggregate cost of the
186-6 taxable entity's total assets.
186-7 (15) [(7)] "Savings and loan association" includes a
186-8 state or federal savings bank.
186-9 (16) [(8)] "Shareholder" includes a limited liability
186-10 company's member and a limited banking association's participant.
186-11 (17) "Small business entity" means a taxable entity
186-12 the gross receipts of which are $500,000 or less for the period on
186-13 which the net taxable earned surplus is based. For the purposes of
186-14 this definition, "gross receipts" has the meaning given that term
186-15 by Sections 171.1051 and 171.1121.
186-16 (18) "Taxable entity" does not include a sole
186-17 proprietorship. "Taxable entity" means:
186-18 (A) a banking corporation;
186-19 (B) a business trust that is required to file a
186-20 federal tax return as a corporation or a partnership;
186-21 (C) a corporation;
186-22 (D) a limited liability company;
186-23 (E) a limited liability partnership;
186-24 (F) a limited partnership;
186-25 (G) a partnership that is required to file a
186-26 federal tax return as a corporation or a partnership;
186-27 (H) a registered limited liability partnership;
187-1 (I) a state or federal savings and loan
187-2 association;
187-3 (J) a professional association;
187-4 (K) a professional corporation; and
187-5 (L) any other kind of business association,
187-6 joint venture, or other combination of entities or persons engaged
187-7 in business, other than an oil and gas joint operating agreement.
187-8 SECTION 3.02. Sections 171.0011(a), (b), and (c), Tax Code,
187-9 are amended to read as follows:
187-10 (a) An additional tax is imposed on a taxable entity
187-11 [corporation] that for any reason becomes no longer subject to the
187-12 earned surplus component of the tax, without regard to whether the
187-13 taxable entity [corporation] remains subject to the taxable
187-14 capital component of the tax.
187-15 (b) The additional tax is equal to 4.5 percent of the
187-16 taxable entity's [corporation's] net taxable earned surplus
187-17 computed on the period beginning on the day after the last day for
187-18 which the tax imposed on net taxable earned surplus was computed
187-19 under Section 171.1532 and ending on the date the taxable entity
187-20 [corporation] is no longer subject to the earned surplus component
187-21 of the tax.
187-22 (c) The additional tax imposed and any report required by
187-23 the comptroller are due on the 60th day after the date the taxable
187-24 entity [corporation] becomes no longer subject to the earned
187-25 surplus component of the tax.
187-26 SECTION 3.03. Sections 171.002(b) and (d), Tax Code, are
187-27 amended to read as follows:
188-1 (b) The amount of franchise tax on each taxable entity
188-2 [corporation], except as provided in Subsection (d), is computed by
188-3 adding the following:
188-4 (1) the amount calculated by applying the tax rate
188-5 prescribed by Subsection (a)(1) to the taxable entity's
188-6 [corporation's] net taxable capital; and
188-7 (2) the difference between:
188-8 (A) the amount calculated by applying the tax
188-9 rate prescribed by Subsection (a)(2) to the taxable entity's
188-10 [corporation's] net taxable earned surplus; and
188-11 (B) the amount determined under Subdivision (1).
188-12 (d) If the amount of tax computed under Subsection (b) for a
188-13 taxable entity [corporation] is less than $500 [$100], the taxable
188-14 entity [corporation] is not required to pay that amount and is not
188-15 considered to owe any tax for that period.
188-16 SECTION 3.04. Subchapter A, Chapter 171, Tax Code, is
188-17 amended by adding Section 171.003 to read as follows:
188-18 Sec. 171.003. TERMINATION, MERGER, AND DIVISION OF
188-19 PARTNERSHIP. (a) For purposes of this chapter, an existing
188-20 partnership shall be considered as continuing if it is not
188-21 terminated.
188-22 (b) A partnership shall be considered as terminated only if:
188-23 (1) no part of any business, financial operation, or
188-24 venture of the partnership continues to be carried on by any of its
188-25 partners in a partnership; or
188-26 (2) within a 12-month period there is a sale or
188-27 exchange of 50 percent or more of the total interest in partnership
189-1 capital and profits.
189-2 (c) In the case of a merger or consolidation of two or more
189-3 partnerships, the resulting partnership shall, for purposes of this
189-4 chapter, be considered the continuation of any merging or
189-5 consolidating partnership whose members own an interest of more
189-6 than 50 percent in the capital and profits of the resulting
189-7 partnership.
189-8 (d) In the case of a division of a partnership into two or
189-9 more partnerships, the resulting partnerships (other than any
189-10 resulting partnership the members of which had an interest of 50
189-11 percent or less in the capital and profits of the prior
189-12 partnership) shall, for purposes of this chapter, be considered a
189-13 continuation of the prior partnership.
189-14 SECTION 3.05. Subchapter B, Chapter 171, Tax Code, is
189-15 amended by adding Section 171.0515 to read as follows:
189-16 Sec. 171.0515. UNRELATED BUSINESS TAXABLE INCOME OF AN
189-17 EXEMPT TAXABLE ENTITY. A taxable entity, otherwise exempt from the
189-18 tax imposed by this chapter, is subject to the net taxable earned
189-19 surplus component of the franchise tax to the extent of its
189-20 unrelated business taxable income, as defined by the Internal
189-21 Revenue Code.
189-22 SECTION 3.06. Subchapter B, Chapter 171, Tax Code, is
189-23 amended by adding Section 171.054 to read as follows:
189-24 Sec. 171.054. EXEMPTION--NONCORPORATE TAXABLE ENTITY
189-25 ELIGIBLE FOR CERTAIN EXEMPTIONS. A taxable entity that is not a
189-26 corporation but that, because of its activities, would qualify for
189-27 a specific exemption under this subchapter if it were a
190-1 corporation, qualifies for the exemption and is exempt from the tax
190-2 in the same manner and under the same conditions as a corporation.
190-3 SECTION 3.07. Section 171.063(a), Tax Code, is amended to
190-4 read as follows:
190-5 (a) The following corporations are exempt from the franchise
190-6 tax:
190-7 (1) a nonprofit corporation exempted from the federal
190-8 income tax under Section 501(c)(3), (4), [(5), (6), (7),] (8),
190-9 (10), or (19), Internal Revenue Code, which in the case of a
190-10 nonprofit hospital means a hospital providing charity care and
190-11 community benefits as set forth in Paragraph (A), (B), (C), (D),
190-12 (E), (F), or (G):
190-13 (A) charity care and government-sponsored
190-14 indigent health care are provided at a level which is reasonable in
190-15 relation to the community needs, as determined through the
190-16 community needs assessment, the available resources of the hospital
190-17 or hospital system, and the tax-exempt benefits received by the
190-18 hospital or hospital system;
190-19 (B) charity care and government-sponsored
190-20 indigent health care are provided in an amount equal to at least
190-21 four percent of the hospital's or hospital system's net patient
190-22 revenue;
190-23 (C) charity care and government-sponsored
190-24 indigent health care are provided in an amount equal to at least
190-25 100 percent of the hospital's or hospital system's tax-exempt
190-26 benefits, excluding federal income tax;
190-27 (D) for tax periods beginning before January 1,
191-1 1996, charity care and community benefits are provided in a
191-2 combined amount equal to at least five percent of the hospital's
191-3 net patient revenue, provided that charity care and
191-4 government-sponsored indigent health care are provided in an amount
191-5 equal to at least three percent of net patient revenue;
191-6 (E) for tax periods beginning after December 31,
191-7 1995, charity care and community benefits are provided in a
191-8 combined amount equal to at least five percent of the hospital's or
191-9 hospital system's net patient revenue, provided that charity care
191-10 and government-sponsored indigent health care are provided in an
191-11 amount equal to at least four percent of net patient revenue;
191-12 (F) a nonprofit hospital that has been
191-13 designated as a disproportionate share hospital under the state
191-14 Medicaid program in the current year or in either of the previous
191-15 two fiscal years is considered to have provided a reasonable amount
191-16 of charity care and government-sponsored indigent health care and
191-17 is considered in compliance with the standards provided by this
191-18 subsection; or
191-19 (G) a hospital operated on a nonprofit basis
191-20 that is located in a county with a population of less than 50,000
191-21 and in which the entire county or the population of the entire
191-22 county has been designated as a health professionals shortage area
191-23 is considered in compliance with the standards provided by this
191-24 subsection;
191-25 (2) a corporation exempted under Section 501(c)(2) or
191-26 (25), Internal Revenue Code, if the corporation or corporations for
191-27 which it holds title to property is either exempt from or not
192-1 subject to the franchise tax;
192-2 (3) a corporation exempted from federal income tax
192-3 under Section 501(c)(16), Internal Revenue Code; and
192-4 (4) a nonprofit corporation exempted from the federal
192-5 income tax under Section 501(c)(3), Internal Revenue Code, that
192-6 does not receive any payment for providing health care services to
192-7 inpatients or outpatients from any source including but not limited
192-8 to the patient or person legally obligated to support the patient,
192-9 third-party payors, Medicare, Medicaid, or any other state or local
192-10 indigent care program. Payment for providing health care services
192-11 does not include charitable donations, legacies, bequests, or
192-12 grants or payments for research.
192-13 For purposes of satisfying Paragraph (E) of Subdivision (1),
192-14 a hospital or hospital system may not change its existing fiscal
192-15 year unless the hospital or hospital system changes its ownership
192-16 or corporate structure as a result of a sale or merger.
192-17 For purposes of this subsection, a hospital that satisfies
192-18 Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in
192-19 determining a hospital system's compliance with the standards
192-20 provided by Paragraph (B), (C), (D), or (E) of Subdivision (1).
192-21 For purposes of this subsection, the terms "charity care,"
192-22 "government-sponsored indigent health care," "health care
192-23 organization," "hospital system," "net patient revenue," "nonprofit
192-24 hospital," and "tax-exempt benefits" have the meanings set forth in
192-25 Sections 311.031 and 311.042, Health and Safety Code. A
192-26 determination of the amount of community benefits and charity care
192-27 and government-sponsored indigent health care provided by a
193-1 hospital or hospital system and the hospital's or hospital system's
193-2 compliance with the requirements of Section 311.045, Health and
193-3 Safety Code, shall be based on the most recently completed and
193-4 audited prior fiscal year of the hospital or hospital system.
193-5 The providing of charity care and government-sponsored
193-6 indigent health care in accordance with Paragraph (A) of
193-7 Subdivision (1) shall be guided by the prudent business judgment of
193-8 the hospital which will ultimately determine the appropriate level
193-9 of charity care and government-sponsored indigent health care based
193-10 on the community needs, the available resources of the hospital,
193-11 the tax-exempt benefits received by the hospital, and other factors
193-12 that may be unique to the hospital, such as the hospital's volume
193-13 of Medicare and Medicaid patients. These criteria shall not be
193-14 determinative factors, but shall be guidelines contributing to the
193-15 hospital's decision along with other factors which may be unique to
193-16 the hospital. The formulas contained in Paragraphs (B), (C), (D),
193-17 and (E) of Subdivision (1) shall also not be considered
193-18 determinative of a reasonable amount of charity care and
193-19 government-sponsored indigent health care.
193-20 The requirements of this subsection shall not apply to the
193-21 extent a hospital or hospital system demonstrates that reductions
193-22 in the amount of community benefits, charity care, and
193-23 government-sponsored indigent health care are necessary to maintain
193-24 financial reserves at a level required by a bond covenant, are
193-25 necessary to prevent the hospital or hospital system from
193-26 endangering its ability to continue operations, or if the hospital,
193-27 as a result of a natural or other disaster, is required
194-1 substantially to curtail its operations.
194-2 In any fiscal year that a hospital or hospital system,
194-3 through unintended miscalculation, fails to meet any of the
194-4 standards in Subdivision (1), the hospital or hospital system shall
194-5 not lose its tax-exempt status without the opportunity to cure the
194-6 miscalculation in the fiscal year following the fiscal year the
194-7 failure is discovered by both meeting one of the standards and
194-8 providing an additional amount of charity care and
194-9 government-sponsored indigent health care that is equal to the
194-10 shortfall from the previous fiscal year. A hospital or hospital
194-11 system may apply this provision only once every five years.
194-12 SECTION 3.08. Section 171.101, Tax Code, is amended by
194-13 adding Subsections (d) and (e) to read as follows:
194-14 (d) The net taxable capital of a taxable entity other than a
194-15 corporation, a limited liability company, and a savings and loan
194-16 association is computed by:
194-17 (1) adding the taxable entity's capital accounts,
194-18 undistributed profits, and surplus to determine the taxable
194-19 entity's taxable capital;
194-20 (2) for a taxable entity to which Section 171.1102
194-21 applies, subtracting from the amount computed under Subdivision (1)
194-22 the amount of any passive income capital;
194-23 (3) apportioning the taxable entity's taxable capital
194-24 to this state as provided by Section 171.106(a) to determine the
194-25 entity's apportioned taxable capital; and
194-26 (4) subtracting from the amount computed under
194-27 Subdivision (3) any other allowable deductions to determine the
195-1 taxable entity's net taxable capital.
195-2 (e) For purposes of Subsection (d)(1), an amount that
195-3 belongs to the taxable entity's capital accounts, undistributed
195-4 profits, or surplus is excluded if the amount has been added once
195-5 under that subsection in determining the entity's taxable capital.
195-6 SECTION 3.09. Sections 171.1015(a), (b), and (e), Tax Code,
195-7 are amended to read as follows:
195-8 (a) A taxable entity [corporation] that has been designated
195-9 as an enterprise project as provided by Chapter 2303, Government
195-10 Code, may deduct either:
195-11 (1) from its apportioned taxable capital, 50 percent
195-12 of its capital investment in the enterprise zone in which the
195-13 enterprise project is located; or
195-14 (2) from its apportioned taxable earned surplus, five
195-15 percent of its capital investment in the enterprise zone in which
195-16 the enterprise project is located. The deduction may be taken on
195-17 each franchise tax report that is based on a taxable entity's
195-18 [corporation's] fiscal year during all or part of which the taxable
195-19 entity [corporation] is an enterprise project.
195-20 (b) The deduction authorized by this section is limited to
195-21 the depreciated value of capital equipment or other investment that
195-22 qualifies for depreciation for federal income tax purposes and that
195-23 is placed in service in the zone after designation as an enterprise
195-24 project. The depreciated value must be computed by a method which
195-25 is otherwise acceptable for that taxable entity's [corporation's]
195-26 franchise tax report and must be computed for each report on which
195-27 it is taken by the same method of depreciation.
196-1 (e) A taxable entity [corporation] may elect to make the
196-2 deduction authorized by this section either from apportioned
196-3 taxable capital or apportioned taxable earned surplus for each
196-4 separate regular annual period. An election for an initial period
196-5 applies to the second tax period and to the first regular annual
196-6 period.
196-7 SECTION 3.10. Section 171.103, Tax Code, is amended to read
196-8 as follows:
196-9 Sec. 171.103. DETERMINATION OF GROSS RECEIPTS FROM BUSINESS
196-10 DONE IN THIS STATE FOR TAXABLE CAPITAL. (a) In apportioning
196-11 taxable capital, the gross receipts of a taxable entity
196-12 [corporation] from its business done in this state is the sum of
196-13 the taxable entity's [corporation's] receipts from:
196-14 (1) each sale of tangible personal property if the
196-15 property is delivered or shipped to a buyer in this state
196-16 regardless of the FOB point or another condition of the sale, and
196-17 each sale of tangible personal property shipped from this state to
196-18 a purchaser in another state in which the seller is not subject to
196-19 taxation;
196-20 (2) each service performed in this state;
196-21 (3) each rental of property situated in this state;
196-22 (4) each [royalty for the] use of a patent, [or]
196-23 copyright, trademark, franchise, or license in this state; [and]
196-24 (5) each sale of real property located in this state,
196-25 including royalties for oil, gas, or other mineral interests; and
196-26 (6) other business done in this state.
196-27 (b) If a taxable entity sells an investment or capital
197-1 asset, the taxable entity's gross receipts from business done in
197-2 this state include only the gain from the sale.
197-3 (c) In apportioning taxable capital of a telephone company
197-4 or a transportation company, the comptroller shall adopt rules to
197-5 apportion to this state receipts from this state's portion of a
197-6 transaction within and without this state.
197-7 SECTION 3.11. Section 171.1032, Tax Code, is amended to read
197-8 as follows:
197-9 Sec. 171.1032. DETERMINATION OF GROSS RECEIPTS FROM BUSINESS
197-10 DONE IN THIS STATE FOR TAXABLE EARNED SURPLUS. (a) Except for the
197-11 gross receipts of a taxable entity [corporation] that are subject
197-12 to the provisions of Section 171.1061, in apportioning taxable
197-13 earned surplus, the gross receipts of a taxable entity
197-14 [corporation] from its business done in this state is the sum of
197-15 the taxable entity's [corporation's] receipts from:
197-16 (1) each sale of tangible personal property if the
197-17 property is delivered or shipped to a buyer in this state
197-18 regardless of the FOB point or another condition of the sale, and
197-19 each sale of tangible personal property shipped from this state to
197-20 a purchaser in another state in which the seller is not subject to
197-21 any tax on, or measured by, net income, without regard to whether
197-22 the tax is imposed;
197-23 (2) each service performed in this state;
197-24 (3) each rental of property situated in this state;
197-25 (4) each [royalty for the] use of a patent, [or]
197-26 copyright, trademark, franchise, or license in this state; [and]
197-27 (5) each sale of real property located in this state,
198-1 including royalties for oil, gas, or other mineral interests; and
198-2 (6) other business done in this state.
198-3 (b) If a taxable entity sells an investment or capital
198-4 asset, the taxable entity's gross receipts from business done in
198-5 this state include only the gain from the sale [A corporation shall
198-6 deduct from its gross receipts computed under Subsection (a) any
198-7 amount to the extent included under Subsection (a) because of the
198-8 application of Section 78 or Sections 951-964, Internal Revenue
198-9 Code, and dividends received from a subsidiary, associate, or
198-10 affiliated corporation that does not transact a substantial portion
198-11 of its business or regularly maintain a substantial portion of its
198-12 assets in the United States].
198-13 (c) In apportioning taxable earned surplus of a telephone
198-14 company or a transportation company, the comptroller shall adopt
198-15 rules to apportion to this state receipts from this state's portion
198-16 of a transaction within and without this state.
198-17 SECTION 3.12. Section 171.105, Tax Code, is amended to read
198-18 as follows:
198-19 Sec. 171.105. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
198-20 BUSINESS FOR TAXABLE CAPITAL. (a) In apportioning taxable
198-21 capital, the gross receipts of a taxable entity [corporation] from
198-22 its entire business is the sum of the taxable entity's
198-23 [corporation's] receipts from:
198-24 (1) each sale of the taxable entity's [corporation's]
198-25 tangible personal property;
198-26 (2) each service, rental, or royalty; and
198-27 (3) other business.
199-1 (b) If a taxable entity [corporation] sells an investment or
199-2 capital asset, the taxable entity's [corporation's] gross receipts
199-3 from its entire business for taxable capital include only the net
199-4 gain from the sale.
199-5 SECTION 3.13. Section 171.1051, Tax Code, is amended to read
199-6 as follows:
199-7 Sec. 171.1051. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
199-8 BUSINESS FOR TAXABLE EARNED SURPLUS. (a) Except for the gross
199-9 receipts of a taxable entity [corporation] that are subject to the
199-10 provisions of Section 171.1061, in apportioning taxable earned
199-11 surplus, the gross receipts of a taxable entity [corporation] from
199-12 its entire business is the sum of the taxable entity's
199-13 [corporation's] receipts from:
199-14 (1) each sale of the taxable entity's [corporation's]
199-15 tangible personal property;
199-16 (2) each service, rental, or royalty; and
199-17 (3) other business.
199-18 (b) If a taxable entity [corporation] sells an investment or
199-19 capital asset, the taxable entity's [corporation's] gross receipts
199-20 from its entire business for taxable earned surplus includes only
199-21 the net gain from the sale.
199-22 [(c) A corporation shall deduct from its gross receipts
199-23 computed under Subsection (a) any amount to the extent included in
199-24 Subsection (a) because of the application of Section 78 or Sections
199-25 951-964, Internal Revenue Code, and dividends received from a
199-26 subsidiary, associate, or affiliated corporation that does not
199-27 transact a substantial portion of its business or regularly
200-1 maintain a substantial portion of its assets in the United States.]
200-2 SECTION 3.14. Section 171.106, Tax Code, is amended to read
200-3 as follows:
200-4 Sec. 171.106. APPORTIONMENT OF TAXABLE CAPITAL AND TAXABLE
200-5 EARNED SURPLUS TO THIS STATE. (a) A taxable entity's [Except as
200-6 provided by Subsection (c), a corporation's] taxable capital is
200-7 apportioned to this state to determine the amount of the tax
200-8 imposed under Section 171.002(b)(1) by multiplying the taxable
200-9 entity's [corporation's] taxable capital by a fraction, the
200-10 numerator of which is the taxable entity's [corporation's] gross
200-11 receipts from business done in this state, as determined under
200-12 Section 171.103 or 171.1031, as applicable, and the denominator of
200-13 which is the taxable entity's [corporation's] gross receipts from
200-14 its entire business, as determined under Section 171.105.
200-15 (b) A taxable entity's [Except as provided by Subsection
200-16 (c), a corporation's] taxable earned surplus is apportioned to this
200-17 state to determine the amount of tax imposed under Section
200-18 171.002(b)(2) by multiplying the taxable earned surplus by a
200-19 fraction, the numerator of which is the taxable entity's
200-20 [corporation's] gross receipts from business done in this state, as
200-21 determined under Section 171.1031 or 171.1032, as applicable, and
200-22 the denominator of which is the taxable entity's [corporation's]
200-23 gross receipts from its entire business, as determined under
200-24 Section 171.1051.
200-25 [(c) A corporation's taxable capital or earned surplus that
200-26 is derived, directly or indirectly, from the sale of management,
200-27 distribution, or administration services to or on behalf of a
201-1 regulated investment company, including a corporation that includes
201-2 trustees or sponsors of employee benefit plans that have accounts
201-3 in a regulated investment company, is apportioned to this state to
201-4 determine the amount of the tax imposed under Section 171.002 by
201-5 multiplying the corporation's total taxable capital or earned
201-6 surplus from the sale of services to or on behalf of a regulated
201-7 investment company by a fraction, the numerator of which is the
201-8 average of the sum of shares owned at the beginning of the year and
201-9 the sum of shares owned at the end of the year by the investment
201-10 company shareholders who are commercially domiciled in this state,
201-11 and the denominator of which is the average of the sum of shares
201-12 owned at the beginning of the year and the sum of shares owned at
201-13 the end of the year by all investment company shareholders. The
201-14 corporation shall make a separate computation to allocate taxable
201-15 capital and earned surplus. In this subsection, "regulated
201-16 investment company" has the meaning assigned by Section 851(a),
201-17 Internal Revenue Code.]
201-18 SECTION 3.15. Section 171.1061, Tax Code, is amended to read
201-19 as follows:
201-20 Sec. 171.1061. ALLOCATION OF CERTAIN TAXABLE EARNED SURPLUS
201-21 TO THIS STATE. An item of income included in a taxable entity's
201-22 [corporation's] taxable earned surplus, except that portion derived
201-23 from dividends and interest, that a state, other than this state,
201-24 or a country, other than the United States, cannot tax because the
201-25 activities generating that item of income do not have sufficient
201-26 unitary connection with the taxable entity's [corporation's] other
201-27 activities conducted within that state or country under the United
202-1 States Constitution, is allocated to this state if the taxable
202-2 entity's [corporation's] commercial domicile is in this state.
202-3 Income that can only be allocated to the state of commercial
202-4 domicile because the income has insufficient unitary connection
202-5 with any other state or country shall be allocated to this state or
202-6 another state or country net of expenses related to that income. A
202-7 portion of a taxable entity's [corporation's] taxable earned
202-8 surplus allocated to this state under this section may not be
202-9 apportioned under Section 171.110(a)(2).
202-10 SECTION 3.16. Section 171.109, Tax Code, as amended by
202-11 Chapters 801 and 1198, Acts of the 71st Legislature, Regular
202-12 Session, 1989, is amended to read as follows:
202-13 Sec. 171.109. SURPLUS. (a) In this chapter:
202-14 (1) "Surplus" means the net assets of a taxable entity
202-15 [corporation] minus its stated capital. For a limited liability
202-16 company, "surplus" means the net assets of the company minus its
202-17 members' contributions. Surplus includes unrealized, estimated, or
202-18 contingent losses or obligations or any writedown of assets other
202-19 than those listed in Subsection (i) of this section net of
202-20 appropriate income tax provisions. The definition under this
202-21 subdivision does not apply to earned surplus.
202-22 (2) "Net assets" means the total assets of a taxable
202-23 entity [corporation] minus its total debts.
202-24 (3) "Debt" means any legally enforceable obligation
202-25 measured in a certain amount of money which must be performed or
202-26 paid within an ascertainable period of time or on demand.
202-27 (b) Except as otherwise provided in this section, a taxable
203-1 entity [corporation] must compute its surplus, assets, and debts
203-2 according to generally accepted accounting principles. If
203-3 generally accepted accounting principles are unsettled or do not
203-4 specify an accounting practice for a particular purpose related to
203-5 the computation of surplus, assets, or debts, the comptroller by
203-6 rule may establish rules to specify the applicable accounting
203-7 practice for that purpose.
203-8 (c) A taxable entity [corporation] whose taxable capital is
203-9 less than $1 million may report its surplus according to the
203-10 method used in the taxable entity's [corporation's] most recent
203-11 federal income tax return originally due on or before the date on
203-12 which the taxable entity's [corporation's] franchise tax report is
203-13 originally due. In determining if taxable capital is less than $1
203-14 million, the taxable entity [corporation] shall apply the methods
203-15 the taxable entity [corporation] used in computing that federal
203-16 income tax return unless another method is required under this
203-17 chapter.
203-18 (d) A taxable entity [corporation] shall report its surplus
203-19 based solely on its own financial condition. Consolidated
203-20 reporting of the surplus of related taxable entities [corporations]
203-21 is prohibited.
203-22 (e) A taxable entity [Unless the provisions of Section
203-23 171.111 apply due to an election under that section, a corporation]
203-24 may not change the accounting methods used to compute its surplus
203-25 more often than once every four years without the written consent
203-26 of the comptroller. A change in accounting methods is not
203-27 justified solely because it results in a reduction of tax
204-1 liability.
204-2 (f) A taxable entity making a distribution [corporation
204-3 declaring dividends] shall exclude the distribution [those
204-4 dividends] from its taxable capital, and a taxable entity
204-5 [corporation] receiving a distribution [dividends] shall include
204-6 the distribution [those dividends] in its gross receipts and
204-7 taxable capital as of the earlier of:
204-8 (1) the date the distribution is [dividends are]
204-9 declared, if the distribution is [dividends are] actually paid
204-10 within one year after the declaration date; or
204-11 (2) the date the distribution is [dividends are]
204-12 actually paid.
204-13 (g) All oil and gas exploration and production activities
204-14 conducted by a taxable entity [corporation] that reports its
204-15 surplus according to generally accepted accounting principles as
204-16 required or permitted by this chapter must be reported according to
204-17 the successful efforts or the full cost method of accounting.
204-18 (h) A parent or investor taxable entity [corporation] must
204-19 use the cost method of accounting in reporting and calculating the
204-20 franchise tax on its investments in subsidiary taxable entities
204-21 [corporations] or other investees. The retained earnings of a
204-22 subsidiary corporation or other investee before acquisition by the
204-23 parent or investor taxable entity [corporation] may not be excluded
204-24 from the cost of the subsidiary corporation or investee to the
204-25 parent or investor taxable entity [corporation] and must be
204-26 included by the parent or investor taxable entity [corporation] in
204-27 calculating its surplus.
205-1 (i) The following accounts may also be excluded from
205-2 surplus, to the extent they are in conformance with generally
205-3 accepted accounting principles or the appropriate federal income
205-4 tax method, whichever is applicable:
205-5 (1) a reserve or allowance for uncollectable accounts;
205-6 and
205-7 (2) a contra-asset account for depletion,
205-8 depreciation, or amortization.
205-9 (j) A taxable entity [corporation] may not exclude from
205-10 surplus:
205-11 (1) liabilities for compensation and other benefits
205-12 provided to employees, other than wages, that are not debt as of
205-13 the end of the accounting period on which the taxable capital
205-14 component is based, including retirement, medical, insurance,
205-15 postretirement, and other similar benefits; and
205-16 (2) deferred investment tax credits.
205-17 (k) Notwithstanding any other provision in this chapter, a
205-18 taxable entity [corporation] subject to the tax imposed by this
205-19 chapter shall use double entry bookkeeping to account for all
205-20 transactions that affect the computation of that tax.
205-21 (l) The "first in-first out" and "last in-first out" methods
205-22 of accounting are acceptable methods for computing surplus.
205-23 (m) A taxable entity [corporation] may not use the push-down
205-24 method of accounting in computing or reporting its surplus.
205-25 SECTION 3.17. Section 171.110, Tax Code, is amended to read
205-26 as follows:
205-27 Sec. 171.110. DETERMINATION OF NET TAXABLE EARNED SURPLUS.
206-1 (a) Except as provided by Section 171.1101, the [The] net taxable
206-2 earned surplus of a taxable entity [corporation] is computed by:
206-3 (1) determining the taxable entity's [corporation's]
206-4 reportable federal taxable income and making the following
206-5 adjustments:[,]
206-6 (A) subtracting [from that amount] any amount
206-7 included in reportable federal taxable income under Section 78 or
206-8 Sections 951-964, Internal Revenue Code;[, and]
206-9 (B) subtracting any taxable income or deductions
206-10 included under the provisions of Section 702(a) or 1366(a),
206-11 Internal Revenue Code, to the extent included in computing federal
206-12 taxable income from an S corporation or a partnership that is
206-13 subject to the earned surplus component of the tax imposed under
206-14 this chapter;
206-15 (C) adding, for each other taxable entity owned
206-16 in whole or part by the taxable entity, in proportion to the amount
206-17 of that ownership, any amount of passive income subtracted from
206-18 reportable federal taxable income under Section 171.1102 by the
206-19 other taxable entity;
206-20 (D) subtracting dividends received from a
206-21 subsidiary, associate, or affiliated corporation that does not
206-22 transact a substantial portion of its business or regularly
206-23 maintain a substantial portion of its assets in the United
206-24 States;[, and]
206-25 (E) adding 100 percent of compensation, to the
206-26 extent excluded in determining reportable federal taxable income,
206-27 of:
207-1 (i) each officer, except if a bank, only
207-2 each executive officer;
207-3 (ii) each director; and
207-4 (iii) each owner who owns 0.1 percent or
207-5 more of the taxable entity [to that amount any compensation of
207-6 officers or directors, or if a bank, any compensation of directors
207-7 and executive officers, to the extent excluded in determining
207-8 federal taxable income to determine the corporation's taxable
207-9 earned surplus]; and
207-10 (F) for a taxable entity with 35 or fewer
207-11 owners, directly or indirectly, subtracting an amount up to
207-12 $100,000 in compensation paid to each owner who owns 0.1 percent or
207-13 more of the taxable entity;
207-14 (2) apportioning the taxable entity's [corporation's]
207-15 taxable earned surplus to this state as provided by Section
207-16 171.106(b) [or (c), as applicable,] to determine the taxable
207-17 entity's [corporation's] apportioned taxable earned surplus;
207-18 (3) adding the taxable entity's [corporation's]
207-19 taxable earned surplus allocated to this state as provided by
207-20 Section 171.1061; and
207-21 (4) subtracting from that amount any allowable
207-22 deductions and any business loss that is carried forward to the tax
207-23 reporting period and deductible under Subsection (e).
207-24 (b) For purposes of Subsection (a)(1):
207-25 (1) an amount may not be subtracted from reportable
207-26 federal taxable income more than once;
207-27 (2) an amount may not be added to reportable federal
208-1 taxable income more than once; and
208-2 (3) husband and wife are treated as one owner if the
208-3 ownership interest is:
208-4 (A) stock issued to them jointly; or
208-5 (B) represented by a certificate, statement in a
208-6 trust, or other evidence of ownership and the evidence identifies
208-7 the spouses as joint owners of the same interest. [A corporation
208-8 is not required to add the compensation of officers or directors as
208-9 required by Subsection (a)(1) if the corporation is:]
208-10 [(1) a corporation that has not more than 35
208-11 shareholders; or]
208-12 [(2) an S corporation, as that term is defined by
208-13 Section 1361, Internal Revenue Code.]
208-14 (c) [Subsection (b) does not apply to a subsidiary
208-15 corporation unless it applies to the subsidiary's parent
208-16 corporation.]
208-17 [(d)] A corporation's reportable federal taxable income is
208-18 the corporation's federal taxable income after Schedule C special
208-19 deductions and before net operating loss deductions as computed
208-20 under the Internal Revenue Code, except that an S corporation's
208-21 reportable federal taxable income is the amount of the income
208-22 reportable to the Internal Revenue Service as taxable to the
208-23 corporation's shareholders.
208-24 (d) Reportable federal taxable income shall be determined
208-25 before adjustment for distributions to owners and includes all
208-26 income taxable to the entity or the owners for federal income tax
208-27 purposes.
209-1 (e) For purposes of this section, a business loss is any
209-2 negative amount after apportionment and allocation. The business
209-3 loss shall be carried forward to the year succeeding the loss year
209-4 as a deduction to net taxable earned surplus, then successively to
209-5 the succeeding four taxable years after the loss year or until the
209-6 loss is exhausted, whichever occurs first, but for not more than
209-7 five taxable years after the loss year. Notwithstanding the
209-8 preceding sentence, a business loss from a tax year that ends
209-9 before January 1, 1991, may not be used to reduce net taxable
209-10 earned surplus. A business loss incurred before January 1, 1997,
209-11 may not be used to reduce the net taxable earned surplus of a
209-12 taxable entity not subject to this chapter before January 1, 1998.
209-13 (f) A taxable entity [corporation] may use either the "first
209-14 in-first out" or "last in-first out" method of accounting to
209-15 compute its net taxable earned surplus, but only to the extent that
209-16 the taxable entity [corporation] used that method on its most
209-17 recent federal income tax report originally due on or before the
209-18 date on which the taxable entity's [corporation's] franchise tax
209-19 report is originally due.
209-20 (g) For purposes of this section, an approved Employee Stock
209-21 Ownership Plan controlling a minority interest and voted through a
209-22 single trustee shall be considered one owner [shareholder].
209-23 SECTION 3.18. Subchapter C, Chapter 171, Tax Code, is
209-24 amended by adding Section 171.1101 to read as follows:
209-25 Sec. 171.1101. DETERMINATION OF NET TAXABLE EARNED SURPLUS
209-26 OF PARTNERSHIPS. (a) The net taxable earned surplus of a
209-27 partnership is computed by:
210-1 (1) determining the partnership's reportable federal
210-2 taxable income and making the following adjustments:
210-3 (A) subtracting any taxable income or deductions
210-4 included under the provisions of Section 702(a) or 1366(a),
210-5 Internal Revenue Code, to the extent included in computing
210-6 reportable federal taxable income from a partnership that is
210-7 subject to the earned surplus component of the tax imposed under
210-8 this chapter;
210-9 (B) adding 100 percent of guaranteed payments,
210-10 to the extent excluded in determining reportable federal taxable
210-11 income, made to each partner; and
210-12 (C) for a partnership with 35 or fewer partners,
210-13 all of whom are natural persons, subtracting an amount up to
210-14 $100,000 in guaranteed payments made to and ordinary income from
210-15 trade or business activities allocated to each partner;
210-16 (2) apportioning the partnership's taxable earned
210-17 surplus to this state as provided by Section 171.106(b) to
210-18 determine the partnership's apportioned taxable earned surplus;
210-19 (3) adding the partnership's taxable earned surplus
210-20 allocated to this state as provided by Section 171.1061; and
210-21 (4) subtracting from that amount any allowable
210-22 deductions and any business loss that is carried forward to the tax
210-23 reporting period and deductible under Subsection (d).
210-24 (b) For purposes of Subsection (a)(1):
210-25 (1) an amount may not be subtracted from reportable
210-26 federal taxable income more than once;
210-27 (2) an amount may not be added to reportable federal
211-1 taxable income more than once; and
211-2 (3) in determining whether a partnership has 35 or
211-3 fewer partners, husband and wife are treated as one partner.
211-4 (c) A partnership's reportable federal taxable income is the
211-5 amount of the income reportable to the Internal Revenue Service as
211-6 taxable to the partners, except for guaranteed payments, if taxed
211-7 as a partnership for federal income tax purposes.
211-8 (d) For purposes of this section, a business loss is
211-9 any negative amount after apportionment and allocation. The
211-10 business loss shall be carried forward to the year succeeding the
211-11 loss year as a deduction to net taxable earned surplus, then
211-12 successively to the succeeding four taxable years after the loss
211-13 year or until the loss is exhausted, whichever occurs first, but
211-14 for not more than five taxable years after the loss year.
211-15 Notwithstanding the preceding sentence, a business loss incurred
211-16 before January 1, 1997, may not be used to reduce net taxable
211-17 earned surplus.
211-18 SECTION 3.181. Subchapter C, Chapter 171, Tax Code, is
211-19 amended by adding Section 171.1102 to read as follows:
211-20 Sec. 171.1102. ADDITIONAL ADJUSTMENT OF NET TAXABLE EARNED
211-21 SURPLUS FOR PASSIVE INCOME OF CERTAIN TAXABLE ENTITIES. (a) In
211-22 addition to the applicable adjustments to a taxable entity's
211-23 reportable federal taxable income provided by Section 171.110(a)(1)
211-24 or 171.1101(a)(1), the net taxable earned surplus of a taxable
211-25 entity to which this section applies is computed by subtracting any
211-26 amount of passive income included in reportable federal taxable
211-27 income.
212-1 (b) This section applies to a taxable entity other than:
212-2 (1) a corporation, including a banking corporation;
212-3 (2) a limited liability company;
212-4 (3) a state or federal savings and loan association;
212-5 or
212-6 (4) a lending institution.
212-7 (c) In this section, "lending institution" means an entity:
212-8 (1) that is regularly engaged in the business of
212-9 extending credit, making loans, or providing other forms of
212-10 financing; and
212-11 (2) that, as a result of engaging in the activity
212-12 described by Subdivision (1), is required to register or become
212-13 licensed under state law, including registration with the Office of
212-14 Consumer Credit Commissioner under Title 79, Revised Statutes, by
212-15 another state under similar law, or by the federal government.
212-16 SECTION 3.19. Sections 171.112(b), (c), (d), (e), (f), and
212-17 (h), Tax Code, are amended to read as follows:
212-18 (b) Except as otherwise provided in this section, a taxable
212-19 entity [corporation] must compute gross receipts in accordance with
212-20 generally accepted accounting principles. If generally accepted
212-21 accounting principles are unsettled or do not specify an accounting
212-22 practice for a particular purpose related to the computation of
212-23 gross receipts, the comptroller by rule may establish rules to
212-24 specify the applicable accounting practice.
212-25 (c) A taxable entity [corporation] whose taxable capital is
212-26 less than $1 million may report its gross receipts according to the
212-27 method used in the taxable entity's [corporation's] most recent
213-1 federal income tax return originally due on or before the date on
213-2 which the taxable entity's [corporation's] franchise tax report is
213-3 originally due. In determining if taxable capital is less than $1
213-4 million, the taxable entity [corporation] shall apply the methods
213-5 the taxable entity [corporation] used in computing that federal
213-6 income tax return unless another method is required under this
213-7 chapter.
213-8 (d) A taxable entity [corporation] shall report its gross
213-9 receipts based solely on its own financial condition. Consolidated
213-10 reporting of related taxable entities [corporations] is prohibited.
213-11 (e) A taxable entity [Unless the provisions of Section
213-12 171.111 apply due to an election under that section, a corporation]
213-13 may not change its accounting methods used to calculate gross
213-14 receipts more often than once every four years without the express
213-15 written consent of the comptroller. A change in accounting methods
213-16 is not justified solely because it results in a reduction of tax
213-17 liability.
213-18 (f) Notwithstanding any other provision in this chapter, a
213-19 taxable entity [corporation] subject to the tax imposed by this
213-20 chapter shall use double entry bookkeeping to account for all
213-21 transactions that affect the computation of that tax.
213-22 (h) Except as otherwise provided by this section, a taxable
213-23 entity [corporation] shall use the same accounting methods to
213-24 apportion its taxable capital as it used to compute its taxable
213-25 capital.
213-26 SECTION 3.20. Section 171.1121, Tax Code, is amended to read
213-27 as follows:
214-1 Sec. 171.1121. GROSS RECEIPTS FOR TAXABLE EARNED SURPLUS.
214-2 (a) For purposes of this section, "gross receipts" means all
214-3 revenues reportable by a taxable entity [corporation] on its
214-4 federal tax return, without deduction for the cost of property
214-5 sold, materials used, labor performed, or other costs incurred,
214-6 unless otherwise specifically provided in this chapter. "Gross
214-7 receipts" does not include revenues that are not included in
214-8 taxable earned surplus. For example, Schedule C special deductions
214-9 and any amounts subtracted from reportable federal taxable income
214-10 under Section 171.110(a)(1) are not included in taxable earned
214-11 surplus and therefore are not considered gross receipts.
214-12 (b) Except as otherwise provided by this section, a taxable
214-13 entity [corporation] shall use the same accounting methods to
214-14 apportion taxable earned surplus as used in computing reportable
214-15 federal taxable income.
214-16 (c) A taxable entity [corporation] shall report its gross
214-17 receipts based solely on its own financial condition. Consolidated
214-18 reporting of related taxable entities [corporations] is prohibited.
214-19 (d) A taxable entity [Unless the provisions of Section
214-20 171.111 apply due to an election under that section, a corporation]
214-21 may not change its accounting methods used to calculate gross
214-22 receipts more often than once every four years without the express
214-23 written consent of the comptroller. A change in accounting methods
214-24 is not justified solely because it results in a reduction of tax
214-25 liability.
214-26 SECTION 3.21. Section 171.113, Tax Code, is amended to read
214-27 as follows:
215-1 Sec. 171.113. ALTERNATE METHOD OF DETERMINING TAXABLE
215-2 CAPITAL AND GROSS RECEIPTS FOR SMALL BUSINESS ENTITIES [CERTAIN
215-3 CORPORATIONS]. (a) This section applies only to a small business
215-4 entity[:]
215-5 [(1) a corporation organized as a close corporation
215-6 under Part 12, Texas Business Corporation Act, that has not more
215-7 than 35 shareholders;]
215-8 [(2) a foreign corporation organized under the close
215-9 corporation law of another state that has not more than 35
215-10 shareholders; and]
215-11 [(3) an S corporation as that term is defined by
215-12 Section 1361, Internal Revenue Code of 1986 (26 U.S.C. Section
215-13 1361)].
215-14 (b) A small business entity [corporation to which this
215-15 section applies] may elect to compute its surplus, assets, debts,
215-16 and gross receipts according to the method the business entity
215-17 [corporation] uses to report its federal income tax instead of as
215-18 provided by Sections 171.109(b) and (g) and Section 171.112(b).
215-19 This section does not affect the application of the other
215-20 subsections of Sections 171.109 and 171.112 and other provisions of
215-21 this chapter to a small business entity [corporation] making the
215-22 election.
215-23 (c) The comptroller may adopt rules as necessary to specify
215-24 the reporting requirements for a small business entity
215-25 [corporations to which this section applies].
215-26 (d) This section does not apply to a subsidiary corporation
215-27 unless it applies to the parent corporation of the subsidiary.
216-1 (e) The election under Subsection (b) becomes effective when
216-2 written notice of the election is received by the comptroller from
216-3 the small business entity [corporation]. An election under
216-4 Subsection (b) must be postmarked not later than the due date for
216-5 the electing small business entity's [corporation's] franchise tax
216-6 report to which the election applies.
216-7 SECTION 3.22. Section 171.151, Tax Code, is amended to read
216-8 as follows:
216-9 Sec. 171.151. PRIVILEGE PERIOD COVERED BY TAX. The
216-10 franchise tax shall be paid for each of the following:
216-11 (1) an initial period beginning on the taxable
216-12 entity's [corporation's] beginning date and ending on the day
216-13 before the first anniversary of the beginning date;
216-14 (2) a second period beginning on the first anniversary
216-15 of the beginning date and ending on December 31 following that
216-16 date; and
216-17 (3) after the initial and second periods have expired,
216-18 a regular annual period beginning each year on January 1 and ending
216-19 the following December 31.
216-20 SECTION 3.23. Section 171.152(c), Tax Code, is amended to
216-21 read as follows:
216-22 (c) Payment of the tax covering the regular annual period is
216-23 due May 15, of each year after the beginning of the regular annual
216-24 period. However, if the first anniversary of the taxable entity's
216-25 [corporation's] beginning date is after October 3 and before
216-26 January 1, the payment of the tax covering the first regular annual
216-27 period is due on the same date as the tax covering the initial
217-1 period.
217-2 SECTION 3.24. Sections 171.153(a) and (c), Tax Code, are
217-3 amended to read as follows:
217-4 (a) The tax covering the initial period is reported on the
217-5 initial report and is based on the business done by the taxable
217-6 entity [corporation] during the period beginning on the taxable
217-7 entity's [corporation's] beginning date and:
217-8 (1) ending on the last accounting period ending date
217-9 that is at least six months after the beginning date and at least
217-10 60 days before the original due date of the initial report; or
217-11 (2) if there is no such period ending date in
217-12 Subdivision (1) of this subsection, then ending on the day that is
217-13 the last day of a calendar month and that is nearest to the end of
217-14 the taxable entity's [corporation's] first year of business; or
217-15 (3) ending on the day after the merger occurs, for the
217-16 survivor of a merger which occurs after the day on which the tax is
217-17 based in Subdivision (1) or Subdivision (2), whichever is
217-18 applicable, of Subsection (a) and before January 1, of the year an
217-19 initial report is due by the survivor.
217-20 (c) The tax covering the regular annual period is based on
217-21 the business done by the taxable entity [corporation] during its
217-22 last accounting period that ends in the year before the year in
217-23 which the tax is due; unless a taxable entity [corporation] is the
217-24 survivor of a merger which occurs between the end of its last
217-25 accounting period in the year before the report year and January 1
217-26 of the report year, in which case the tax will be based on the
217-27 financial condition of the surviving taxable entity [corporation]
218-1 for the 12-month period ending on the day after the merger.
218-2 However, if the first anniversary of the taxable entity's
218-3 [corporation's] beginning date is after October 3 and before
218-4 January 1, the tax covering the first regular annual period is
218-5 based on the same business on which the tax covering the initial
218-6 period is based and is reported on the initial report.
218-7 SECTION 3.25. Section 171.1532, Tax Code, is amended to read
218-8 as follows:
218-9 Sec. 171.1532. BUSINESS ON WHICH TAX ON NET TAXABLE EARNED
218-10 SURPLUS IS BASED. (a) The tax covering the privilege periods
218-11 included on the initial report, as required by Section 171.153, is
218-12 based on the business done by the taxable entity [corporation]
218-13 during the period beginning on the taxable entity's [corporation's]
218-14 beginning date and:
218-15 (1) ending on the last accounting period ending date
218-16 for federal income tax purposes that is at least 60 days before the
218-17 original due date of the initial report; or
218-18 (2) if there is no such period ending date in
218-19 Subdivision (1) of this subsection, then ending on the day that is
218-20 the last day of a calendar month and that is nearest to the end of
218-21 the taxable entity's [corporation's] first year of business.
218-22 (b) The tax covering the regular annual period, other than a
218-23 regular annual period included on the initial report, is based on
218-24 the business done by the taxable entity [corporation] during the
218-25 period beginning with the day after the last date upon which net
218-26 taxable earned surplus on a previous report was based and ending
218-27 with its last accounting period ending date for federal income tax
219-1 purposes in the year before the year in which the report is
219-2 originally due.
219-3 SECTION 3.26. Section 171.154, Tax Code, is amended to read
219-4 as follows:
219-5 Sec. 171.154. PAYMENT TO COMPTROLLER. A taxable entity
219-6 [corporation] on which a tax is imposed by this chapter shall pay
219-7 the tax to the comptroller.
219-8 SECTION 3.27. Section 171.201, Tax Code, is amended to read
219-9 as follows:
219-10 Sec. 171.201. INITIAL REPORT. (a) Except as provided by
219-11 Section 171.2022, a taxable entity [corporation] on which the
219-12 franchise tax is imposed shall file an initial report with the
219-13 comptroller containing:
219-14 (1) information showing the financial condition of the
219-15 taxable entity [corporation] on the day that is the last day of a
219-16 calendar month and that is nearest to the end of the taxable
219-17 entity's [corporation's] first year of business;
219-18 (2) the name and address of each officer and director
219-19 of the taxable entity [corporation];
219-20 (3) the name and address of the agent of the taxable
219-21 entity [corporation] designated under Section 171.354; and
219-22 (4) other information required by the comptroller.
219-23 (b) The taxable entity [corporation] shall file the report
219-24 on or before the date the payment is due under Subsection (a) of
219-25 Section 171.152.
219-26 SECTION 3.28. Sections 171.202(a), (b), (c), (e), and (f),
219-27 Tax Code, are amended to read as follows:
220-1 (a) Except as provided by Section 171.2022, a taxable entity
220-2 [corporation] on which the franchise tax is imposed shall file an
220-3 annual report with the comptroller containing:
220-4 (1) financial information of the taxable entity
220-5 [corporation] necessary to compute the tax under this chapter;
220-6 (2) the name and address of each officer and director
220-7 of the taxable entity [corporation];
220-8 (3) the name and address of the agent of the taxable
220-9 entity [corporation] designated under Section 171.354; and
220-10 (4) other information required by the comptroller.
220-11 (b) The taxable entity [corporation] shall file the report
220-12 before May 16 of each year after the beginning of the regular
220-13 annual period. The report shall be filed on forms supplied by the
220-14 comptroller.
220-15 (c) The comptroller shall grant an extension of time to a
220-16 taxable entity [corporation] that is not required by rule to make
220-17 its tax payments by electronic funds transfer for the filing of a
220-18 report required by this section to any date on or before the next
220-19 November 15, if a taxable entity [corporation]:
220-20 (1) requests the extension, on or before May 15, on a
220-21 form provided by the comptroller; and
220-22 (2) remits with the request:
220-23 (A) not less than 90 percent of the amount of
220-24 tax reported as due on the report filed on or before November 15;
220-25 or
220-26 (B) 100 percent of the tax paid in the previous
220-27 year.
221-1 (e) The comptroller shall grant an extension of time for the
221-2 filing of a report required by this section by a taxable entity
221-3 [corporation] required by rule to make its tax payments by
221-4 electronic funds transfer to any date on or before the next August
221-5 15, if the taxable entity [corporation]:
221-6 (1) requests the extension, on or before May 15, on a
221-7 form provided by the comptroller; and
221-8 (2) remits with the request:
221-9 (A) not less than 90 percent of the amount of
221-10 tax reported as due on the report filed on or before August 15; or
221-11 (B) 100 percent of the tax paid in the previous
221-12 year.
221-13 (f) The comptroller shall grant an extension of time to a
221-14 taxable entity [corporation] required by rule to make its tax
221-15 payments by electronic funds transfer for the filing of a report
221-16 due on or before August 15 to any date on or before the next
221-17 November 15, if the taxable entity [corporation]:
221-18 (1) requests the extension, on or before August 15, on
221-19 a form provided by the comptroller; and
221-20 (2) remits with the request the difference between the
221-21 amount remitted under Subsection (e) and 100 percent of the amount
221-22 of tax reported as due on the report filed on or before November
221-23 15.
221-24 SECTION 3.29. Section 171.2022, Tax Code, is amended to read
221-25 as follows:
221-26 Sec. 171.2022. EXEMPTION FROM REPORTING REQUIREMENTS. A
221-27 taxable entity [corporation] that does not owe any tax under this
222-1 chapter for any period is not required to file a report under
222-2 Section 171.201, 171.202, or 171.2021. The exemption applies only
222-3 to a period for which no tax is due.
222-4 SECTION 3.30. Section 171.204, Tax Code, is amended to read
222-5 as follows:
222-6 Sec. 171.204. INFORMATION REPORT. To determine eligibility
222-7 for the exemption provided by Section 171.2022, or to determine the
222-8 amount of the franchise tax or the correctness of a franchise tax
222-9 report, the comptroller may require [an officer of] a taxable
222-10 entity [corporation] that may be subject to the tax imposed under
222-11 this chapter to file an information report with the comptroller
222-12 stating the amount of the taxable entity's [corporation's] taxable
222-13 capital and earned surplus, or any other information the
222-14 comptroller may request.
222-15 SECTION 3.31. Section 171.205, Tax Code, is amended to read
222-16 as follows:
222-17 Sec. 171.205. ADDITIONAL INFORMATION REQUIRED BY
222-18 COMPTROLLER. The comptroller may require a taxable entity
222-19 [corporation] on which the franchise tax is imposed to furnish to
222-20 the comptroller information from the taxable entity's
222-21 [corporation's] books and records that has not been filed
222-22 previously and that is necessary for the comptroller to determine
222-23 the amount of the tax.
222-24 SECTION 3.32. Section 171.206, Tax Code, is amended to read
222-25 as follows:
222-26 Sec. 171.206. CONFIDENTIAL INFORMATION. Except as provided
222-27 by Section 171.207 of this code, the following information is
223-1 confidential and may not be made open to public inspection:
223-2 (1) information that is obtained from a record or
223-3 other instrument that is required by this chapter to be filed with
223-4 the comptroller; or
223-5 (2) information, including information about the
223-6 business affairs, operations, profits, losses, or expenditures of a
223-7 taxable entity [corporation], obtained by an examination of the
223-8 books and records, officers, or employees of a taxable entity
223-9 [corporation] on which a tax is imposed by this chapter.
223-10 SECTION 3.33. Section 171.208, Tax Code, is amended to read
223-11 as follows:
223-12 Sec. 171.208. PROHIBITION OF DISCLOSURE OF INFORMATION. A
223-13 person, including a state officer or employee or a shareholder of a
223-14 taxable entity [corporation], who has access to a report filed
223-15 under this chapter may not make known in a manner not permitted by
223-16 law the amount or source of the taxable entity's [corporation's]
223-17 income, profits, losses, expenditures, or other information in the
223-18 report relating to the financial condition of the taxable entity
223-19 [corporation].
223-20 SECTION 3.34. Section 171.209, Tax Code, is amended to read
223-21 as follows:
223-22 Sec. 171.209. RIGHT OF OWNER [SHAREHOLDER] TO EXAMINE OR
223-23 RECEIVE REPORTS. If an owner in [a person owning at least one
223-24 share of outstanding stock of] a taxable entity [corporation] on
223-25 whom the franchise tax is imposed presents evidence of the
223-26 ownership to the comptroller, the person is entitled to examine or
223-27 receive a copy of an initial or annual report that is filed under
224-1 Section 171.201 or 171.202 of this code and that relates to the
224-2 taxable entity [corporation].
224-3 SECTION 3.35. Section 171.211, Tax Code, is amended to read
224-4 as follows:
224-5 Sec. 171.211. EXAMINATION OF [CORPORATE] RECORDS. To
224-6 determine the franchise tax liability of a taxable entity
224-7 [corporation], the comptroller may investigate or examine the
224-8 records of the taxable entity [corporation].
224-9 SECTION 3.36. The heading to Subchapter F, Chapter 171, Tax
224-10 Code, is amended to read as follows:
224-11 SUBCHAPTER F. FORFEITURE OF CORPORATE AND BUSINESS PRIVILEGES
224-12 SECTION 3.37. Subchapter F, Chapter 171, Tax Code, is
224-13 amended by adding Sections 171.260-171.275 to read as follows:
224-14 Sec. 171.260. FORFEITURE OF RIGHT TO TRANSACT BUSINESS:
224-15 LIMITED PARTNERSHIPS. The comptroller shall forfeit the right of a
224-16 domestic or foreign limited partnership subject to the tax imposed
224-17 by this chapter to transact business in this state if the limited
224-18 partnership:
224-19 (1) does not file, in accordance with this chapter and
224-20 before the 45th day after the date notice of forfeiture is mailed,
224-21 a report required by this chapter;
224-22 (2) does not pay, before the 45th day after the date
224-23 notice of forfeiture is mailed, a tax imposed by this chapter or
224-24 does not pay, before that date, a penalty imposed by this chapter
224-25 relating to that tax; or
224-26 (3) does not permit the comptroller to investigate or
224-27 examine the records of the limited partnership to determine the
225-1 limited partnership's liability under this chapter.
225-2 Sec. 171.261. EFFECTS OF FORFEITURE: LIMITED PARTNERSHIPS.
225-3 If the limited partnership's right to transact business is
225-4 forfeited under this subchapter:
225-5 (1) the limited partnership is denied the right to sue
225-6 in a court of this state; and
225-7 (2) each partner, whether a limited or general
225-8 partner, of the limited partnership is liable for a debt of the
225-9 limited partnership as provided by Section 171.264.
225-10 Sec. 171.262. SUIT ON CAUSE OF ACTION ARISING BEFORE
225-11 FORFEITURE: LIMITED PARTNERSHIPS. In a suit against a limited
225-12 partnership on a cause of action arising before the forfeiture of
225-13 the limited partnership's right to transact business, a court may
225-14 not grant affirmative relief to the limited partnership unless its
225-15 right to transact business is revived under this chapter.
225-16 Sec. 171.263. EXCEPTION TO FORFEITURE: LIMITED
225-17 PARTNERSHIPS. The forfeiture of a limited partnership's right to
225-18 transact business does not apply to the privilege to defend in a
225-19 suit to forfeit the limited partnership's certificate of limited
225-20 partnership or registration of foreign limited partnership.
225-21 Sec. 171.264. LIABILITY OF PARTNERS: LIMITED PARTNERSHIPS.
225-22 (a) If the right to transact business of a limited partnership is
225-23 forfeited for the failure to file a report or pay a tax or penalty,
225-24 each partner of the limited partnership, whether a limited or
225-25 general partner, is liable for each debt of the limited partnership
225-26 that is created or incurred in this state after the date on which
225-27 the report, tax, or penalty is due and before the right to transact
226-1 business is revived. The liability includes liability for any tax
226-2 or penalty imposed by this chapter on the limited partnership that
226-3 becomes due and payable after the date of the forfeiture.
226-4 (b) All partners are liable jointly and severally for the
226-5 liability imposed under this subchapter.
226-6 (c) If a limited partnership's certificate of limited
226-7 partnership or registration of foreign limited partnership and its
226-8 right to transact business are forfeited and revived under this
226-9 chapter, the liability under this section of a partner of the
226-10 limited partnership is not affected by the revival of the
226-11 certificate or registration and the right to transact business.
226-12 Sec. 171.265. NOTICE OF FORFEITURE: LIMITED PARTNERSHIPS.
226-13 (a) To forfeit the right to transact business of a limited
226-14 partnership, the comptroller must notify the limited partnership
226-15 that the forfeiture will occur without a judicial proceeding unless
226-16 the limited partnership:
226-17 (1) files, within the time established by Section
226-18 171.260, the report to which that section refers; or
226-19 (2) pays, within the time established by Section
226-20 171.260, the delinquent tax and penalty to which that section
226-21 refers.
226-22 (b) The notice must be written or printed and be verified by
226-23 the seal of the comptroller's office.
226-24 (c) The comptroller shall mail the notice to the limited
226-25 partnership at least 45 days before the forfeiture of the right to
226-26 transact business. The comptroller shall address the notice to the
226-27 limited partnership and mail it to the registered office of the
227-1 limited partnership, the last known address of the limited
227-2 partnership, or to any other place of business of the limited
227-3 partnership.
227-4 (d) The comptroller shall keep at the comptroller's office a
227-5 record of the date on which the notice is mailed. For the purposes
227-6 of this chapter, the notice and the record of the mailing date
227-7 constitute legal and sufficient notice of the forfeiture.
227-8 Sec. 171.266. JUDICIAL PROCEEDING NOT REQUIRED FOR
227-9 FORFEITURE: LIMITED PARTNERSHIPS. The forfeiture of the right to
227-10 transact business of a limited partnership is effected by the
227-11 comptroller without a judicial proceeding.
227-12 Sec. 171.267. REVIVAL OF RIGHT TO TRANSACT BUSINESS:
227-13 LIMITED PARTNERSHIPS. The comptroller shall revive the right to
227-14 transact business of a limited partnership if the limited
227-15 partnership, before the forfeiture of its certificate of limited
227-16 partnership or registration of foreign limited partnership, pays
227-17 any tax, penalty, or interest due under this chapter.
227-18 Sec. 171.268. REVOCATION OF REGISTRATION: LIMITED LIABILITY
227-19 PARTNERSHIPS. The comptroller shall certify to the secretary of
227-20 state for revocation and the secretary of state shall revoke the
227-21 registration of a limited liability partnership on which the tax
227-22 imposed by this chapter is imposed if the limited liability
227-23 partnership:
227-24 (1) does not file, in accordance with this chapter and
227-25 before the 45th day after the date notice of revocation is mailed,
227-26 a report required by this chapter;
227-27 (2) does not pay, before the 45th day after the date
228-1 notice of revocation is mailed, a tax imposed by this chapter or
228-2 does not pay, before that date, a penalty imposed by this chapter
228-3 relating to that tax; or
228-4 (3) does not permit the comptroller to investigate or
228-5 examine the records of the limited liability partnership to
228-6 determine the limited liability partnership's liability under this
228-7 chapter.
228-8 Sec. 171.269. EFFECTS OF REVOCATION: LIMITED LIABILITY
228-9 PARTNERSHIPS. If the limited liability partnership's registration
228-10 is revoked under this subchapter:
228-11 (1) the limited liability partnership is denied the
228-12 right to sue in a court of this state; and
228-13 (2) each partner of the limited liability partnership
228-14 is liable for a debt of the limited liability partnership as
228-15 provided by Section 171.272.
228-16 Sec. 171.270. SUIT ON CAUSE OF ACTION ARISING BEFORE
228-17 REVOCATION: LIMITED LIABILITY PARTNERSHIP. In a suit against a
228-18 limited liability partnership on a cause of action arising before
228-19 the revocation of the limited liability partnership's registration,
228-20 a court may not grant affirmative relief to the limited liability
228-21 partnership unless its registration is revived under this chapter.
228-22 Sec. 171.271. EXCEPTION TO REVOCATION: LIMITED LIABILITY
228-23 PARTNERSHIP. The revocation of a limited liability partnership's
228-24 registration does not apply to the privilege to defend in a suit to
228-25 revoke the limited liability partnership's registration.
228-26 Sec. 171.272. LIABILITY OF PARTNERS: LIMITED LIABILITY
228-27 PARTNERSHIP. (a) If the registration of a limited liability
229-1 partnership is revoked for the failure to file a report or pay a
229-2 tax or penalty, each partner of the limited liability partnership
229-3 is liable for each debt of the limited liability partnership that
229-4 is created or incurred in this state after the date on which the
229-5 report, tax, or penalty is due and before the registration is
229-6 revived. The liability includes liability for any tax or penalty
229-7 imposed by this chapter on the limited liability partnership that
229-8 becomes due and payable after the date of the revocation.
229-9 (b) All partners are liable jointly and severally for the
229-10 liability imposed under this subchapter.
229-11 (c) If a limited liability partnership's registration is
229-12 revoked and revived under this chapter, the liability under this
229-13 section of a partner of the limited liability partnership is not
229-14 affected by the revival of the certificate or registration and the
229-15 registration.
229-16 Sec. 171.273. NOTICE OF REVOCATION: LIMITED LIABILITY
229-17 PARTNERSHIPS. (a) To forfeit the registration of a limited
229-18 liability partnership, the comptroller must notify the limited
229-19 liability partnership that the revocation will occur without a
229-20 judicial proceeding unless the limited liability partnership:
229-21 (1) files, within the time established by Section
229-22 171.268, the report to which that section refers; or
229-23 (2) pays, within the time established by Section
229-24 171.268, the delinquent tax and penalty to which that section
229-25 refers.
229-26 (b) The notice must be written or printed and be verified by
229-27 the seal of the comptroller's office.
230-1 (c) The comptroller shall mail the notice to the limited
230-2 liability partnership at least 45 days before the revocation of the
230-3 registration. The comptroller shall address the notice to the
230-4 limited liability partnership and mail it to the last known address
230-5 of the limited liability partnership, or to any other place of
230-6 business of the limited liability partnership.
230-7 (d) The comptroller shall keep at the comptroller's office a
230-8 record of the date on which the notice is mailed. For the purposes
230-9 of this chapter, the notice and the record of the mailing date
230-10 constitute legal and sufficient notice of the revocation.
230-11 Sec. 171.274. JUDICIAL PROCEEDING NOT REQUIRED FOR
230-12 REVOCATION: LIMITED LIABILITY PARTNERSHIPS. The revocation of the
230-13 registration of a limited liability partnership is effected by the
230-14 comptroller without a judicial proceeding.
230-15 Sec. 171.275. REVIVAL OF REGISTRATION: LIMITED LIABILITY
230-16 PARTNERSHIPS. The comptroller shall revive the registration of a
230-17 limited liability partnership if the limited liability partnership
230-18 pays any tax, penalty, or interest due under this chapter.
230-19 SECTION 3.38. Subchapter G, Chapter 171, Tax Code, is
230-20 amended by adding Sections 171.318-171.326 to read as follows:
230-21 Sec. 171.318. GROUNDS FOR FORFEITURE OF CERTIFICATE OF
230-22 LIMITED PARTNERSHIPS OR REGISTRATION OF FOREIGN LIMITED
230-23 PARTNERSHIPS. It is a ground for the forfeiture of a limited
230-24 partnership's certificate or registration if:
230-25 (1) the right to transact business of the limited
230-26 partnership is forfeited under this chapter and the limited
230-27 partnership does not pay, before the 120th day after the date the
231-1 right to transact business is forfeited, the amount necessary for
231-2 the limited partnership to revive under this chapter its right to
231-3 transact business; or
231-4 (2) the limited partnership does not permit the
231-5 comptroller to investigate or examine the records of the limited
231-6 partnership to determine the limited partnership's liability under
231-7 this chapter.
231-8 Sec. 171.319. CERTIFICATION BY COMPTROLLER: LIMITED
231-9 PARTNERSHIPS. After the 120th day after the date that the right to
231-10 transact business of a limited partnership is forfeited under this
231-11 chapter, the comptroller shall certify the name of the limited
231-12 partnership to the secretary of state.
231-13 Sec. 171.320. FORFEITURE BY SECRETARY OF STATE: LIMITED
231-14 PARTNERSHIPS. The secretary of state shall forfeit the certificate
231-15 or registration of a limited partnership if:
231-16 (1) the secretary receives the comptroller's
231-17 certification under Section 171.319;
231-18 (2) the limited partnership does not revive its
231-19 forfeited right to transact business before the 120th day after the
231-20 date that the right to transact business was forfeited; and
231-21 (3) the limited partnership does not have assets from
231-22 which a judgment for any tax, penalty, or court costs imposed by
231-23 this chapter may be satisfied.
231-24 Sec. 171.321. JUDICIAL PROCEEDING NOT REQUIRED FOR
231-25 FORFEITURE BY SECRETARY OF STATE: LIMITED PARTNERSHIPS. The
231-26 forfeiture by the secretary of state of a limited partnership's
231-27 certificate or registration under this chapter is effected without
232-1 a judicial proceeding.
232-2 Sec. 171.322. RECORD OF FORFEITURE BY SECRETARY OF STATE:
232-3 LIMITED PARTNERSHIPS. The secretary of state shall effect a
232-4 forfeiture of a limited partnership's certificate or registration
232-5 under this chapter by inscribing on the limited partnership's
232-6 record in the secretary's office the words "Certificate Forfeited"
232-7 or "Registration Forfeited," the date on which this inscription is
232-8 made, and a citation to this chapter as authority for the
232-9 forfeiture.
232-10 Sec. 171.323. REVIVAL OF CERTIFICATE OF LIMITED PARTNERSHIPS
232-11 OR REGISTRATION OF FOREIGN LIMITED PARTNERSHIPS AFTER FORFEITURE BY
232-12 SECRETARY OF STATE. A limited partnership whose certificate or
232-13 registration is forfeited under this chapter by the secretary of
232-14 state is entitled to have its certificate or registration revived
232-15 and to have its right to transact business revived if:
232-16 (1) the limited partnership files each report that is
232-17 required by this chapter and that is delinquent;
232-18 (2) the limited partnership pays the tax, penalty, and
232-19 interest that is imposed by this chapter and that is due at the
232-20 time the request under Section 171.324 to set aside forfeiture is
232-21 made; and
232-22 (3) the forfeiture of the limited partnership's
232-23 certificate or registration is set aside in a proceeding under
232-24 Section 171.324.
232-25 Sec. 171.324. PROCEEDING TO SET ASIDE FORFEITURE BY
232-26 SECRETARY OF STATE: LIMITED PARTNERSHIPS. (a) If a limited
232-27 partnership's certificate or registration is forfeited under this
233-1 chapter by the secretary of state, a partner of the limited
233-2 partnership at the time of the forfeiture of the certificate or
233-3 registration or of the right to transact business of the limited
233-4 partnership may request in the name of the limited partnership that
233-5 the secretary of state set aside the forfeiture of the certificate
233-6 or registration.
233-7 (b) If a request is made, the secretary of state shall
233-8 determine if each delinquent report has been filed and any
233-9 delinquent tax, penalty, or interest has been paid. If each report
233-10 has been filed and the tax, penalty, or interest has been paid, the
233-11 secretary shall set aside the forfeiture of the limited
233-12 partnership's certificate or registration.
233-13 Sec. 171.325. RIGHT TO TRANSACT BUSINESS AFTER FORFEITURE BY
233-14 SECRETARY OF STATE IS SET ASIDE: LIMITED PARTNERSHIPS. If the
233-15 secretary of state sets aside under this chapter the forfeiture of
233-16 a limited partnership's certificate or registration, the
233-17 comptroller shall revive the right to transact business of the
233-18 limited partnership.
233-19 Sec. 171.326. USE OF LIMITED PARTNERSHIP NAME AFTER REVIVAL
233-20 OF CERTIFICATE OR REGISTRATION. If a limited partnership's
233-21 certificate or registration is forfeited under this chapter by the
233-22 secretary of state and if the limited partnership requests the
233-23 secretary to set aside the forfeiture under Section 171.324, the
233-24 limited partnership shall determine from the secretary whether the
233-25 limited partnership's name is available for use. If the name is
233-26 not available, the limited partnership shall file an amendment to
233-27 its certificate or application or adopt a new name for use in this
234-1 state as a precondition to reinstatement.
234-2 SECTION 3.39. Section 171.351, Tax Code, is amended to read
234-3 as follows:
234-4 Sec. 171.351. VENUE OF SUIT TO ENFORCE CHAPTER. Venue of a
234-5 civil suit against a taxable entity [corporation] to enforce this
234-6 chapter is either in a county where the taxable entity's
234-7 [corporation's] principal office is located according to its
234-8 charter or certificate of authority or in Travis County.
234-9 SECTION 3.40. Section 171.353, Tax Code, is amended to read
234-10 as follows:
234-11 Sec. 171.353. APPOINTMENT OF RECEIVER. If a court forfeits
234-12 a taxable entity's [corporation's] charter or certificate of
234-13 authority, the court may appoint a receiver for the taxable entity
234-14 [corporation] and may administer the receivership under the laws
234-15 relating to receiverships.
234-16 SECTION 3.41. Section 171.354, Tax Code, is amended to read
234-17 as follows:
234-18 Sec. 171.354. AGENT FOR SERVICE OF PROCESS. Each taxable
234-19 entity [corporation] on which a tax is imposed by this chapter
234-20 shall designate a resident of this state as the taxable entity's
234-21 [corporation's] agent for the service of process.
234-22 SECTION 3.42. Sections 171.362(a), (d), and (e), Tax Code,
234-23 are amended to read as follows:
234-24 (a) If a taxable entity [corporation] on which a tax is
234-25 imposed by this chapter fails to pay the tax when it is due and
234-26 payable or fails to file a report required by this chapter when it
234-27 is due, the taxable entity [corporation] is liable for a penalty of
235-1 five percent of the amount of the tax due.
235-2 (d) If a taxable entity [corporation] electing to remit
235-3 under Paragraph (A) of Subdivision (2) of Subsection (c) of Section
235-4 171.202 of this code remits less than the amount required, the
235-5 penalties imposed by this section and the interest imposed under
235-6 Section 111.060 of this code are assessed against the difference
235-7 between the amount required to be remitted under Paragraph (A) of
235-8 Subdivision (2) of Subsection (c) of Section 171.202 and the amount
235-9 actually remitted on or before May 15.
235-10 (e) If a taxable entity [corporation] remits the entire
235-11 amount required by Subsection (c) of Section 171.202 of this code,
235-12 no penalties will be imposed against the amount remitted on or
235-13 before November 15.
235-14 SECTION 3.43. Sections 171.363(a) and (b), Tax Code, are
235-15 amended to read as follows:
235-16 (a) A taxable entity [corporation] commits an offense if the
235-17 taxable entity [corporation] is subject to the provisions of this
235-18 chapter and the taxable entity [corporation] wilfully:
235-19 (1) fails to file a report;
235-20 (2) fails to keep books and records as required by
235-21 this chapter;
235-22 (3) files a fraudulent report;
235-23 (4) violates any rule of the comptroller for the
235-24 administration and enforcement of the provisions of this chapter;
235-25 or
235-26 (5) attempts in any other manner to evade or defeat
235-27 any tax imposed by this chapter or the payment of the tax.
236-1 (b) A person commits an offense if the person is an
236-2 accountant or an agent for or an officer or employee of a taxable
236-3 entity [corporation] and the person knowingly enters or provides
236-4 false information on any report, return, or other document filed by
236-5 the taxable entity [corporation] under this chapter.
236-6 SECTION 3.44. Section 171.401, Tax Code, is amended to read
236-7 as follows:
236-8 Sec. 171.401. REVENUE DEPOSITED IN GENERAL REVENUE FUND.
236-9 The revenue from the tax imposed by this chapter [on corporations]
236-10 shall be deposited to the credit of the general revenue fund.
236-11 SECTION 3.45. Section 171.501(a), Tax Code, is amended to
236-12 read as follows:
236-13 (a) A taxable entity [corporation] that has been certified a
236-14 qualified business as provided by Chapter 2303, Government Code,
236-15 may apply for and be granted a refund of franchise tax paid with an
236-16 initial or annual report if the governing body or bodies certify to
236-17 the Texas Department of Commerce that the business has created 10
236-18 or more new jobs in its enterprise zone held by qualified employees
236-19 during the calendar year that contains the end of the accounting
236-20 period on which the report is based. The Texas Department of
236-21 Commerce shall certify eligibility for any refund to the
236-22 comptroller.
236-23 SECTION 3.46. Section 171.652, Tax Code, is amended to read
236-24 as follows:
236-25 Sec. 171.652. CREDIT. A taxable entity [corporation] that
236-26 meets the eligibility requirements under this subchapter is
236-27 entitled to a credit in the amount allowed by this subchapter
237-1 against the tax imposed under this chapter.
237-2 SECTION 3.47. Section 171.653, Tax Code, is amended to read
237-3 as follows:
237-4 Sec. 171.653. CREDIT FOR WAGES PAID TO INMATE. (a) The
237-5 amount of the credit for wages paid by a taxable entity
237-6 [corporation] to an inmate is equal to 10 percent of that portion
237-7 of the wages paid that the department apportions to the state under
237-8 Section 497.004(b)(3), Government Code, as reimbursement for the
237-9 cost of the inmate's confinement.
237-10 (b) A taxable entity [corporation] is eligible for the
237-11 credit under this section only if it receives before the due date
237-12 of its franchise tax report for the privilege period for which the
237-13 credit is claimed a written certification from the department
237-14 stating the amount of the wages that the taxable entity
237-15 [corporation] paid to an inmate during the privilege period and the
237-16 amount of those wages that the department apportioned to the state
237-17 as reimbursement for the cost of the inmate's confinement.
237-18 (c) A taxable entity [corporation] is eligible for the
237-19 credit under this section only if the inmate for whom it is paid
237-20 has been continuously employed for not less than six months.
237-21 SECTION 3.48. Section 171.654, Tax Code, is amended to read
237-22 as follows:
237-23 Sec. 171.654. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
237-24 INMATE. (a) The amount of the credit for wages paid by a taxable
237-25 entity [corporation] to an employee who was employed by the taxable
237-26 entity [corporation] when the employee was an inmate is equal to 10
237-27 percent of that portion of the wages paid that, were the employee
238-1 still an inmate, the department would apportion to the state under
238-2 Section 497.004(b)(3), Government Code, as reimbursement for the
238-3 cost of the inmate's confinement.
238-4 (b) A taxable entity [corporation] is eligible for the
238-5 credit under this section only if:
238-6 (1) the employee who was formerly an inmate was
238-7 continuously employed for not less than six months while an inmate
238-8 and has been continuously employed by the taxable entity
238-9 [corporation] for at least one year after the date that the
238-10 employee was released from prison;
238-11 (2) the nature of the employment is substantially
238-12 similar to the employment the employee had with the taxable entity
238-13 [corporation] when the employee was an inmate or the employment
238-14 requires more skills or provides greater opportunities for the
238-15 employee;
238-16 (3) the taxable entity [corporation] has provided the
238-17 department a statement of the amount of wages paid the employee
238-18 during the accounting period on which the credit is computed; and
238-19 (4) the taxable entity [corporation] receives before
238-20 the due date of its franchise tax report for the privilege period
238-21 for which the credit is claimed a written certification from the
238-22 department stating the amount of the wages that, were the employee
238-23 still an inmate, the department would have apportioned to the state
238-24 as reimbursement for the cost of the inmate's confinement.
238-25 (c) A taxable entity [corporation] may claim a credit under
238-26 this section only for:
238-27 (1) wages paid an employee after the employee has been
239-1 employed by the taxable entity [corporation] for more than one year
239-2 after the date of the employee's release from prison; and
239-3 (2) wages paid the employee for not longer than one
239-4 year.
239-5 SECTION 3.49. Section 171.656, Tax Code, is amended to read
239-6 as follows:
239-7 Sec. 171.656. APPLICATION FOR CREDIT. (a) A taxable entity
239-8 [corporation] must apply for a credit under this subchapter on or
239-9 with the tax report for the period for which the credit is claimed.
239-10 (b) The comptroller shall promulgate a form for the
239-11 application for the credit. A taxable entity [corporation] must
239-12 use this form in applying for the credit.
239-13 SECTION 3.50. Section 171.657, Tax Code, is amended to read
239-14 as follows:
239-15 Sec. 171.657. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
239-16 taxable entity [corporation] may claim a credit under this
239-17 subchapter for wages paid during an accounting period only against
239-18 the tax owed for the corresponding privilege period.
239-19 SECTION 3.51. Section 171.682, Tax Code, is amended to read
239-20 as follows:
239-21 Sec. 171.682. CREDIT. A taxable entity [corporation] that
239-22 meets the eligibility requirements under this subchapter is
239-23 entitled to a credit in the amount allowed by this subchapter
239-24 against the tax imposed under this chapter.
239-25 SECTION 3.52. Section 171.683, Tax Code, is amended to read
239-26 as follows:
239-27 Sec. 171.683. CREDIT FOR WAGES PAID TO ELIGIBLE CHILD.
240-1 (a) The amount of the credit for wages paid by a taxable entity
240-2 [corporation] to an eligible child is equal to 10 percent of that
240-3 portion of the wages the taxable entity [corporation] paid to the
240-4 eligible child or the commission for the benefit of the child.
240-5 (b) A taxable entity [corporation] is eligible for the
240-6 credit under this section only if it files, on or before the due
240-7 date of its franchise tax report for the privilege period for
240-8 which the credit is claimed, a written certification issued by the
240-9 commission stating the amount of the wages that the taxable entity
240-10 [corporation] paid to an eligible child or to the commission for
240-11 the benefit of the child during:
240-12 (1) the privilege period; and
240-13 (2) not more than six months of the preceding
240-14 privilege period for wages for which a credit has not previously
240-15 been claimed.
240-16 (c) A taxable entity [corporation] is eligible for the
240-17 credit under this section only if the eligible child to whom or for
240-18 whose benefit it pays wages has been continuously employed by the
240-19 taxable entity [corporation] for not less than six months.
240-20 SECTION 3.53. Section 171.684, Tax Code, is amended to read
240-21 as follows:
240-22 Sec. 171.684. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
240-23 ELIGIBLE CHILD. (a) The amount of the credit for wages paid by a
240-24 taxable entity [corporation] to an employee who was first employed
240-25 by the taxable entity [corporation] when the employee was an
240-26 eligible child is equal to 10 percent of the wages paid the
240-27 employee.
241-1 (b) A taxable entity [corporation] is eligible for the
241-2 credit under this section only if:
241-3 (1) the employee who was formerly an eligible child
241-4 was continuously employed for not less than six months while an
241-5 eligible child and has been continuously employed by the taxable
241-6 entity [corporation] for at least one year after the date that the
241-7 employee was released from commitment to the commission or released
241-8 under supervision by the commission; and
241-9 (2) the nature of the employment is substantially
241-10 similar to the employment the employee had with the taxable entity
241-11 [corporation] when the employee was an eligible child or the
241-12 employment requires more skills or provides greater opportunities
241-13 for the employee.
241-14 (c) A taxable entity [corporation] may claim a credit under
241-15 this section only for:
241-16 (1) wages paid an employee after the employee has been
241-17 employed by the taxable entity [corporation] for more than one year
241-18 after the earlier of the date of the employee's release from
241-19 commitment to the commission or release under supervision by the
241-20 commission; and
241-21 (2) wages paid the employee for not longer than one
241-22 year.
241-23 SECTION 3.54. Section 171.686, Tax Code, is amended to read
241-24 as follows:
241-25 Sec. 171.686. APPLICATION FOR CREDIT. (a) A taxable entity
241-26 [corporation] must apply for a credit under this subchapter on or
241-27 with the tax report for the period for which the credit is claimed.
242-1 (b) The comptroller shall promulgate a form for the
242-2 application for the credit. A taxable entity [corporation] must
242-3 use this form in applying for the credit.
242-4 SECTION 3.55. Section 171.687, Tax Code, is amended to read
242-5 as follows:
242-6 Sec. 171.687. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
242-7 taxable entity [corporation] may claim a credit under this
242-8 subchapter for wages paid during an accounting period only against
242-9 the tax owed for the corresponding privilege period.
242-10 SECTION 3.56. Section 3.03(a), Texas Revised Limited
242-11 Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes),
242-12 is amended to read as follows:
242-13 (a) Except as provided by Subsection (d) of this section and
242-14 Subtitle F, Title 2, Tax Code, a limited partner is not liable for
242-15 the obligations of a limited partnership unless the limited
242-16 partner is also a general partner or, in addition to the exercise
242-17 of the limited partner's rights and powers as a limited partner,
242-18 the limited partner participates in the control of the business.
242-19 However, if the limited partner does participate in the control of
242-20 the business, the limited partner is liable only to persons who
242-21 transact business with the limited partnership reasonably
242-22 believing, based on the limited partner's conduct, that the limited
242-23 partner is a general partner.
242-24 SECTION 3.57. Section 9.01(a), Texas Revised Limited
242-25 Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes),
242-26 is amended to read as follows:
242-27 (a) Except as provided by Subtitles F and G, Title 2, Tax
243-1 Code, the [The] laws of the state under which a foreign limited
243-2 partnership is formed govern its organization and internal affairs
243-3 and the liability of its partners.
243-4 SECTION 3.58. Chapter 13, Texas Revised Limited Partnership
243-5 Act (Article 6132a-1, Vernon's Texas Civil Statutes), is amended by
243-6 adding Section 13.10 to read as follows:
243-7 Sec. 13.10. FORFEITURE OF RIGHT TO TRANSACT BUSINESS OR
243-8 CANCELLATION OF CERTIFICATE OR REGISTRATION. (a) A limited
243-9 partnership that does not comply with Subtitle F, Title 2, Tax
243-10 Code, forfeits the right to transact business and is subject to
243-11 cancellation of its certificate or registration.
243-12 (b) Subject to Subtitles F and G, Title 2, Tax Code, the
243-13 comptroller may specify procedures for effecting the forfeiture or
243-14 cancellation and providing for relief from the forfeiture and
243-15 cancellation.
243-16 SECTION 3.59. Section 15(2), Texas Uniform Partnership Act
243-17 (Article 6132b, Vernon's Texas Civil Statutes), is amended to read
243-18 as follows:
243-19 (2) Except as provided by Subtitle F, Title 2, Tax
243-20 Code, a [A] partner in a registered limited liability partnership
243-21 is not individually liable for debts and obligations of the
243-22 partnership arising from errors, omissions, negligence,
243-23 incompetence, or malfeasance committed in the course of the
243-24 partnership business by another partner or a representative of the
243-25 partnership not working under the supervision or direction of the
243-26 first partner at the time the errors, omissions, negligence,
243-27 incompetence, or malfeasance occurred, unless the first partner:
244-1 (a) was directly involved in the specific
244-2 activity in which the errors, omissions, negligence, incompetence,
244-3 or malfeasance were committed by the other partner or
244-4 representative; or
244-5 (b) had notice or knowledge of the errors,
244-6 omissions, negligence, incompetence, or malfeasance by the other
244-7 partner or representative at the time of occurrence.
244-8 SECTION 3.60. Section 45-A, Texas Uniform Partnership Act
244-9 (Article 6132b, Vernon's Texas Civil Statutes), is amended by
244-10 adding Subsection (7) to read as follows:
244-11 (7) The secretary of state shall revoke registration on
244-12 notice from the comptroller that a registered limited liability
244-13 partnership has not complied with Subtitle F, Title 2, Tax Code.
244-14 SECTION 3.61. Section 3.08(a)(1), Texas Revised Partnership
244-15 Act (Article 6132b-3.08, Vernon's Texas Civil Statutes), is amended
244-16 to read as follows:
244-17 (1) Except as provided by Subtitle F, Title 2, Tax
244-18 Code, a [A] partner in a registered limited liability partnership
244-19 is not individually liable for debts and obligations of the
244-20 partnership arising from errors, omissions, negligence,
244-21 incompetence, or malfeasance committed while the partnership is a
244-22 registered limited liability partnership and in the course of the
244-23 partnership business by another partner or a representative of the
244-24 partnership not working under the supervision or direction of the
244-25 first partner unless the first partner:
244-26 (A) was directly involved in the specific
244-27 activity in which the errors, omissions, negligence, incompetence,
245-1 or malfeasance were committed by the other partner or
245-2 representative; or
245-3 (B) had notice or knowledge of the errors,
245-4 omissions, negligence, incompetence, or malfeasance by the other
245-5 partner or representative at the time of occurrence and then failed
245-6 to take reasonable steps to prevent or cure the errors, omissions,
245-7 negligence, incompetence, or malfeasance.
245-8 SECTION 3.62. Section 3.08(b), Texas Revised Partnership Act
245-9 (Article 6132b-3.08, Vernon's Texas Civil Statutes), is amended by
245-10 adding Subdivision (16) to read as follows:
245-11 (16) The secretary of state shall revoke registration
245-12 on notice from the comptroller that a registered limited liability
245-13 partnership has not complied with Subtitle F, Title 2, Tax Code.
245-14 SECTION 3.63. The following provisions of the Tax Code are
245-15 repealed:
245-16 (1) Section 171.056;
245-17 (2) Section 171.074;
245-18 (3) Section 171.079;
245-19 (4) Section 171.080;
245-20 (5) Section 171.085;
245-21 (6) Section 171.104;
245-22 (7) Section 171.107; and
245-23 (8) Section 171.111.
245-24 SECTION 3.64. (a) Subject to other provisions of this
245-25 section, this article takes effect for initial or annual reports
245-26 originally due January 1, 1998, or later, and for final reports
245-27 originally due on the effective date of this Act or later.
246-1 (b) For an entity becoming subject to the franchise tax
246-2 under this article:
246-3 (1) no income or losses occurring before January 1,
246-4 1997, which would have been included in federal taxable income on a
246-5 federal period ending December 31, 1996, or earlier had the entity
246-6 been required to file a return for federal income tax purposes
246-7 through December 31, 1996, shall be considered for purposes of the
246-8 earned surplus component;
246-9 (2) for entities in existence on January 1, 1997,
246-10 which would have been subject to the franchise tax had this article
246-11 been in effect on January 1, 1997, the first report due under this
246-12 article will be either a final report, if applicable, or an annual
246-13 report due May 15, 1998; and
246-14 (3) for entities which would have become subject to
246-15 the franchise tax after January 1, 1997, even if this article had
246-16 been effective on January 1, 1997, the first report due under this
246-17 article will be an initial report or a final report, if applicable.
246-18 (c) For purposes of this article, an existing partnership
246-19 shall be considered as continuing if it is not terminated.
246-20 (d) A partnership shall be considered as terminated only if:
246-21 (1) no part of any business, financial operation, or
246-22 venture of the partnership continues to be carried on by any of its
246-23 partners in a partnership; or
246-24 (2) within a 12-month period there is a sale or
246-25 exchange of 50 percent or more of the total interest in partnership
246-26 capital and profits.
246-27 (e) In the case of a merger or consolidation of two or more
247-1 partnerships, the resulting partnership shall, for purposes of this
247-2 article, be considered the continuation of any merging or
247-3 consolidating partnership whose members own an interest of more
247-4 than 50 percent in the capital and profits of the resulting
247-5 partnership.
247-6 (f) In the case of a division of a partnership into two or
247-7 more partnerships, the resulting partnerships (other than any
247-8 resulting partnership the members of which had an interest of 50
247-9 percent or less in the capital and profits of the prior
247-10 partnership) shall, for purposes of this article, be considered a
247-11 continuation of the prior partnership.
247-12 ARTICLE 4. SALES TAX
247-13 SECTION 4.01. Section 151.0028, Tax Code, is amended by
247-14 adding Subsection (c) to read as follows:
247-15 (c) "Amusement services" includes the provision of a sports
247-16 or athletic event.
247-17 SECTION 4.02. Subchapter A, Chapter 151, Tax Code, is
247-18 amended by adding Section 151.0029 to read as follows:
247-19 Sec. 151.0029. "APPRAISAL SERVICES." "Appraisal services"
247-20 means services to establish or evaluate the value of real or
247-21 tangible personal property.
247-22 SECTION 4.03. Subchapter A, Chapter 151, Tax Code, is
247-23 amended by adding Section 151.00295 to read as follows:
247-24 Sec. 151.00295. "BOAT DOCK SERVICES." "Boat dock services"
247-25 means the providing of dry stack storage, boat-on-trailer storage,
247-26 slips, or docks at a marina or other facility, including a
247-27 boathouse, for the mooring or dry storage of a vessel, as defined
248-1 by Section 31.003, Parks and Wildlife Code, manufactured or used
248-2 for recreational purposes.
248-3 SECTION 4.04. Section 151.0031, Tax Code, is amended to read
248-4 as follows:
248-5 Sec. 151.0031. "COMPUTER PROGRAM." "Computer program" means
248-6 a series of instructions that are coded for acceptance or use by a
248-7 computer system and that are designed to permit the computer system
248-8 to process data and provide results and information. The series of
248-9 instructions may be contained in or on magnetic tapes, punched
248-10 cards, printed instructions, or other tangible or electronic media.
248-11 For purposes of this chapter, the term includes a computer program
248-12 created or developed exclusively for a client who retains all
248-13 rights to the program.
248-14 SECTION 4.05. Subchapter A, Chapter 151, Tax Code, is
248-15 amended by adding Sections 151.00335 and 151.00336 to read as
248-16 follows:
248-17 Sec. 151.00335. "COMMERCIAL RESEARCH, DEVELOPMENT, OR
248-18 TESTING SERVICES." (a) "Commercial research, development, or
248-19 testing services" includes:
248-20 (1) commercial physical and biological research and
248-21 development;
248-22 (2) analyzing, developing, creating, or testing items,
248-23 products, or processes using methods of scientific experimentation
248-24 and observation; and
248-25 (3) commercial research involving business, marketing,
248-26 opinion, and other economic, sociological, and education research.
248-27 (b) "Commercial research, development, or testing services"
249-1 does not include:
249-2 (1) research and development directly engaged in by
249-3 aircraft and spacecraft manufacturers;
249-4 (2) research by a nonprofit establishment funded by an
249-5 endowment, grant, or contribution; or
249-6 (3) medical tests performed:
249-7 (A) on a human or animal; or
249-8 (B) on tissue, fluids, or other substances
249-9 removed from a human or animal in connection with diagnosis,
249-10 treatment, or another medical service provided by a licensed
249-11 practitioner of the healing arts.
249-12 Sec. 151.00336. "CUSTOMIZING OF VEHICLE." "Customizing of
249-13 vehicle" includes any customizing services, including window
249-14 tinting, performed on a motor vehicle, truck, airplane, boat,
249-15 ship, or other type of vehicle.
249-16 SECTION 4.06. Subchapter A, Chapter 151, Tax Code, is
249-17 amended by adding Section 151.00365 to read as follows:
249-18 Sec. 151.00365. "DIVING SERVICES." (a) "Diving services"
249-19 means providing personnel for underwater services, including:
249-20 (1) exploration or salvage;
249-21 (2) the location of property or persons;
249-22 (3) construction, remodeling, maintenance, or repair
249-23 services to the extent not otherwise taxed; and
249-24 (4) accompanying recreational divers.
249-25 (b) "Diving services" does not include scuba-diving training
249-26 and instruction.
249-27 SECTION 4.07. Subchapter A, Chapter 151, Tax Code, is
250-1 amended by adding Section 151.0037 to read as follows:
250-2 Sec. 151.0037. "EMPLOYMENT AGENCY SERVICES." "Employment
250-3 agency services" means services performed in an effort to locate or
250-4 find employment for an employer or a person seeking employment,
250-5 including executive, professional, administrative, secretarial,
250-6 clerical, service, manufacturing, and health care personnel. The
250-7 term includes employment services by an employment registry
250-8 service, or a casting bureau or agency for the theater or motion
250-9 pictures.
250-10 SECTION 4.08. Subchapter A, Chapter 151, Tax Code, is
250-11 amended by adding Sections 151.0041, 151.0042, 151.0043, 151.0044,
250-12 151.00442, and 151.00443 to read as follows:
250-13 Sec. 151.0041. "LOW-LEVEL RADIOACTIVE WASTE DISPOSAL
250-14 SERVICES." "Low-level radioactive waste disposal services" means
250-15 the disposal of low-level radioactive waste by a private entity
250-16 under Chapter 402, Health and Safety Code.
250-17 Sec. 151.0042. "MANAGEMENT, CONSULTING, OR PUBLIC RELATIONS
250-18 SERVICES." (a) "Management, consulting, or public relations
250-19 services" includes:
250-20 (1) directing, analyzing, evaluating, or giving advice
250-21 about the management of a business, including:
250-22 (A) business operations;
250-23 (B) organizational structure;
250-24 (C) financial planning and budgeting;
250-25 (D) business strategies and marketing objectives
250-26 and policies;
250-27 (E) information systems, including hardware or
251-1 software needs, options, or solutions;
251-2 (F) human resources and employee management
251-3 policies, practices, and planning; or
251-4 (G) production scheduling or control processes;
251-5 (2) facilities support management services;
251-6 (3) services to determine or influence the opinion or
251-7 sentiments of the public or specific individuals, governmental
251-8 officials, or groups, including services the performance of which
251-9 would require a person to be registered under Chapter 305,
251-10 Government Code; and
251-11 (4) services relating to gathering or compiling
251-12 economic, sociological, consumer, or other information.
251-13 (b) "Management, consulting, or public relations services"
251-14 does not include, except for services provided to a client for
251-15 which registration is required under Chapter 305, Government Code:
251-16 (1) legal services provided by an attorney;
251-17 (2) accounting services provided by a certified public
251-18 accountant, enrolled agent, or bookkeeping firm to produce
251-19 financial reports or prepare tax returns;
251-20 (3) customs brokerage consulting, entry processing,
251-21 and record-keeping services licensed by the United States Customs
251-22 Service;
251-23 (4) air, land, or ocean freight forwarding services;
251-24 (5) services provided by an attorney-in-fact for a
251-25 reciprocal exchange authorized by Chapter 19, Insurance Code; or
251-26 (6) actuarial services provided by an actuary who is:
251-27 (A) a member of the American Academy of
252-1 Actuaries, a fellow of the Society of Actuaries, or a member of a
252-2 similar nationally recognized organization that accredits or
252-3 certifies actuaries; or
252-4 (B) an enrolled actuary under the Employee
252-5 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
252-6 seq.).
252-7 Sec. 151.0043. "MOTOR VEHICLE REPAIR SERVICES." (a) "Motor
252-8 vehicle repair services" means the repair, remodeling, maintenance,
252-9 or restoration of a motor vehicle, including testing or diagnostic
252-10 services, body repair and painting, engine repair, transmission
252-11 repair, exhaust system repair, brake repair, and air conditioning
252-12 repair.
252-13 (b) "Motor vehicle repair services" does not include any
252-14 vehicle emissions tests required by law, safety inspections tests
252-15 required by law, and other similar tests required by law.
252-16 Sec. 151.0044. "MOTOR VEHICLE WASH OR DETAIL SERVICES."
252-17 (a) "Motor vehicle wash or detail services" includes:
252-18 (1) cleaning of the exterior or interior of a motor
252-19 vehicle, including washing, waxing, polishing, buffing, detailing,
252-20 shampooing, vacuuming, finishing, or steam cleaning; or
252-21 (2) providing an automated facility that provides the
252-22 services described in Subdivision (1).
252-23 (b) "Motor vehicle wash or detail services" does not include
252-24 the services described in Subsection (a)(1) if the services are
252-25 provided through the use or operation of a token- or coin-operated
252-26 self-service or automated facility.
252-27 Sec. 151.00442. "OIL WELL SERVICE." (a) "Oil well service"
253-1 means, if provided by a person described by Subsection (b),
253-2 cementing the casing seat of an oil or gas well, shooting,
253-3 fracturing, or acidizing the sands or other formations of the earth
253-4 in an oil or gas well, or surveying or testing the sands or other
253-5 formations or their contents in an oil or gas well by using
253-6 instruments or equipment at least a part of which is located in the
253-7 well bore when the survey or test is made.
253-8 (b) The provider of a taxable oil well service is a person
253-9 who:
253-10 (1) owns, controls, or furnishes the tools,
253-11 instruments, and equipment used in providing the oil well service;
253-12 or
253-13 (2) uses any chemical, electrical, or mechanical
253-14 process in providing the service at any oil or gas well during and
253-15 in connection with the drilling and completion, or reworking or
253-16 reconditioning, of the well.
253-17 (c) "Oil well service" does not mean the business of
253-18 drilling an oil or gas well or a service incidental to that
253-19 business performed by persons engaged in the business of drilling.
253-20 Sec. 151.00443. "PATENT BROKERAGE." "Patent brokerage"
253-21 means the negotiation as an agent of a patent holder or a
253-22 prospective purchaser of a patent right of the sale, purchase, or
253-23 other transfer of patent rights or licenses under a patent right.
253-24 The term includes services provided to a patent holder for locating
253-25 investment in the manufacture or production of the item or process
253-26 subject to the patent. The term does not include the services of:
253-27 (1) a patent attorney in establishing a patent right
254-1 for the inventor or creator or the successor of an inventor or
254-2 creator who acquires an interest in the creation or process before
254-3 receiving a patent; or
254-4 (2) an attorney at law in defending a patent right,
254-5 representing an estate that has an interest in a patent right, or
254-6 negotiating the sale of a business having assets that may include a
254-7 patent right.
254-8 SECTION 4.09. Section 151.0045, Tax Code, is amended to read
254-9 as follows:
254-10 Sec. 151.0045. "PERSONAL SERVICES." (a) "Personal
254-11 services" means those personal services listed as personal services
254-12 under Group 721, Major Group 72 of the Standard Industrial
254-13 Classification Manual, 1987 [1972], and includes massage parlors,
254-14 escort services, dating services, shopping services for
254-15 individuals, privately operated wedding chapels, and Turkish baths
254-16 under Group 729 of said manual but does not include any other
254-17 services listed under Group 729 unless otherwise covered under this
254-18 chapter [Act], prepared by the statistical policy division of the
254-19 office on management and budget, office of the president of the
254-20 United States.
254-21 (b) "Personal services" includes:
254-22 (1) services provided by tanning salons or tattoo
254-23 parlors; or
254-24 (2) diet or weight-reducing services.
254-25 SECTION 4.09A. Section 151.0048(a), Tax Code, is amended to
254-26 read as follows:
254-27 (a) Except as provided by Subsection (b), "real property
255-1 service" means:
255-2 (1) landscaping;
255-3 (2) the care and maintenance of lawns, yards, or
255-4 ornamental trees or other plants;
255-5 (3) the removal or collection of garbage, rubbish, or
255-6 other solid waste other than:
255-7 (A) hazardous waste;
255-8 (B) industrial solid waste;
255-9 (C) waste material that results from an activity
255-10 associated with the exploration, development, or production of oil,
255-11 gas, geothermal resources, or any other substance or material
255-12 regulated by the Railroad Commission of Texas under Section 91.101,
255-13 Natural Resources Code;
255-14 (D) domestic sewage or an irrigation return
255-15 flow, to the extent the sewage or return flow does not constitute
255-16 garbage or rubbish; and
255-17 (E) industrial discharges subject to regulation
255-18 by permit issued pursuant to Chapter 26, Water Code;
255-19 (4) building or grounds cleaning, janitorial, or
255-20 custodial services;
255-21 (5) a structural pest control service covered by
255-22 Section 2, Texas Structural Pest Control Act (Article 135b-6,
255-23 Vernon's Texas Civil Statutes); [or]
255-24 (6) the surveying of real property; or
255-25 (7) custom map making, which includes the provision of
255-26 a topological representation of an area of land, submerged land, or
255-27 water specifically prepared under special order or for limited
256-1 distribution without regard to the medium in which the
256-2 representation is presented.
256-3 SECTION 4.10. Sections 151.005 and 151.006, Tax Code, are
256-4 amended to read as follows:
256-5 Sec. 151.005. "SALE" OR "PURCHASE." "Sale" or "purchase"
256-6 means any of the following when done or performed for
256-7 consideration:
256-8 (1) a transfer of title or possession of tangible
256-9 personal property;
256-10 (2) the exchange, barter, lease, or rental of tangible
256-11 personal property, including the license or distribution of films,
256-12 videotapes, or disks for theatrical or other public exhibition or
256-13 broadcast;
256-14 (3) the performance of a taxable service, contracting
256-15 to perform a taxable service or to make a taxable service
256-16 available, or, in the case of an amusement service, a transfer of
256-17 title to or possession of a ticket or other admission document, the
256-18 collection of an admission fee, whether by individual performance,
256-19 subscription series, or membership privilege, the collection of
256-20 dues or a fee, charge, or assessment, including an initiation fee,
256-21 by a club or organization for membership or a special privilege,
256-22 status, or membership classification in the club or organization,
256-23 or the use of a coin-operated machine;
256-24 (4) the production, fabrication, processing, printing,
256-25 or imprinting of tangible personal property for consumers who
256-26 directly or indirectly furnish the materials used in the
256-27 production, fabrication, processing, printing, or imprinting;
257-1 (5) the furnishing and distribution of tangible
257-2 personal property by a social club or fraternal organization to
257-3 anyone;
257-4 (6) the furnishing, preparation, or service of food,
257-5 meals, or drinks;
257-6 (7) a transfer of the possession of tangible personal
257-7 property if the title to the property is retained by the seller as
257-8 security for the payment of the price; or
257-9 (8) a transfer of the title or possession of tangible
257-10 personal property that has been produced, fabricated, or printed to
257-11 the special order of the customer.
257-12 Sec. 151.006. "SALE FOR RESALE." "Sale for resale" means a
257-13 sale of:
257-14 (1) tangible personal property or a taxable service to
257-15 a purchaser who acquires the property or service for the purpose of
257-16 reselling it in the United States of America or a possession or
257-17 territory of the United States of America or in the United Mexican
257-18 States in the normal course of business in the form or condition in
257-19 which it is acquired or as an attachment to or integral part of
257-20 other tangible personal property or taxable service;
257-21 (2) tangible personal property to a purchaser for the
257-22 sole purpose of the purchaser's leasing or renting it in the United
257-23 States of America or a possession or territory of the United States
257-24 of America or in the United Mexican States to another person, but
257-25 not if incidental to the leasing or renting of real estate;
257-26 (3) tangible personal property to a purchaser who
257-27 acquires the property for the purpose of transferring it in the
258-1 United States of America or a possession or territory of the United
258-2 States of America or in the United Mexican States as an integral
258-3 part of a taxable service; or
258-4 (4) a taxable service, other than a transportation,
258-5 warehouse or storage, or appraisal service, performed on tangible
258-6 personal property that is held for sale by the purchaser of the
258-7 taxable service.
258-8 SECTION 4.11. Subchapter A, Chapter 151, Tax Code, is
258-9 amended by adding Sections 151.0073 and 151.0074 to read as
258-10 follows:
258-11 Sec. 151.0073. "SANITIZING, STERILIZING, OR DISINFECTION
258-12 SERVICES." "Sanitizing, sterilizing, or disinfection services"
258-13 means the cleaning of real or tangible personal property through
258-14 the use of agents and processes designed to remove bacteriological,
258-15 viral, or other pathogenic materials.
258-16 Sec. 151.0074. "SECRETARIAL OR MAILING SERVICES."
258-17 "Secretarial or mailing services" includes:
258-18 (1) letter or resume writing services;
258-19 (2) editing or proofreading services; or
258-20 (3) addressing, packaging, sorting, collating,
258-21 folding, labeling, or any other service to prepare an item for
258-22 shipping or mailing.
258-23 SECTION 4.12. Subchapter A, Chapter 151, Tax Code, is
258-24 amended by adding Section 151.0082 to read as follows:
258-25 Sec. 151.0082. "SLUDGE DISPOSAL SERVICES." "Sludge disposal
258-26 services" means the recycling of sludge, as that term is defined by
258-27 Section 361.003, Health and Safety Code.
259-1 SECTION 4.13. Section 151.009, Tax Code, is amended to read
259-2 as follows:
259-3 Sec. 151.009. "TANGIBLE PERSONAL PROPERTY". "Tangible
259-4 personal property" means personal property that can be seen,
259-5 weighed, measured, felt, or touched or that is perceptible to the
259-6 senses in any other manner, and, for the purposes of this chapter,
259-7 the term includes a computer program and a telephone prepaid
259-8 calling card.
259-9 SECTION 4.14. Section 151.0101(a), Tax Code, is amended to
259-10 read as follows:
259-11 (a) "Taxable services" means:
259-12 (1) amusement services;
259-13 (2) cable television services;
259-14 (3) personal services;
259-15 (4) motor vehicle parking and storage services;
259-16 (5) the repair, remodeling, maintenance, and
259-17 restoration of tangible personal property, except:
259-18 (A) aircraft; and
259-19 (B) a ship, boat, or other vessel, other than:
259-20 (i) a taxable boat or motor as defined by
259-21 Section 160.001;
259-22 (ii) a sports fishing boat; or
259-23 (iii) any other vessel used for pleasure;
259-24 [(C) the repair, maintenance, and restoration of
259-25 a motor vehicle; and]
259-26 [(D) the repair, maintenance, creation, and
259-27 restoration of a computer program, including its development and
260-1 modification, not sold by the person performing the repair,
260-2 maintenance, creation, or restoration service;]
260-3 (6) telecommunications services;
260-4 (7) credit reporting services;
260-5 (8) debt collection services;
260-6 (9) insurance services;
260-7 (10) information services;
260-8 (11) real property services;
260-9 (12) data processing services;
260-10 (13) real property repair and remodeling;
260-11 (14) security services; [and]
260-12 (15) telephone answering services;
260-13 (16) fees in excess of $100 for motor vehicle repair
260-14 services;
260-15 (17) motor vehicle wash or detail services;
260-16 (18) employment agency services;
260-17 (19) management, consulting, or public relations
260-18 services;
260-19 (20) commercial research, development, or testing
260-20 services;
260-21 (21) transportation services;
260-22 (22) appraisal services;
260-23 (23) traffic or crowd control services;
260-24 (24) warehouse or storage services;
260-25 (25) boat dock services;
260-26 (26) secretarial or mailing services;
260-27 (27) diving services;
261-1 (28) sanitizing, sterilizing, or disinfection
261-2 services;
261-3 (29) patent brokerage;
261-4 (30) sludge disposal services;
261-5 (31) low-level radioactive waste disposal services;
261-6 (32) oil well service; and
261-7 (33) customizing of vehicle.
261-8 SECTION 4.15. Section 151.0103, Tax Code, is amended to read
261-9 as follows:
261-10 Sec. 151.0103. TELECOMMUNICATIONS SERVICES. (a) For the
261-11 purposes of this title only, "telecommunications services" means
261-12 the electronic or electrical transmission, conveyance, routing, or
261-13 reception of sounds, signals, data, or information utilizing wires,
261-14 cable, radio waves, microwaves, satellites, fiber optics, or any
261-15 other method now in existence or that may be devised, including but
261-16 not limited to long-distance telephone service. The term does not
261-17 include:
261-18 (1) the [The] storage of data or information for
261-19 subsequent retrieval or the processing, or reception and
261-20 processing, of data or information intended to change its form or
261-21 content; or
261-22 (2) the sale or use of a telephone prepaid calling
261-23 card.
261-24 (b) The sale or use of a telephone prepaid calling card is
261-25 considered to be a sale or use of tangible personal property. [are
261-26 not included in "telecommunications services."]
261-27 SECTION 4.16. Subchapter A, Chapter 151, Tax Code, is
262-1 amended by adding Section 151.01032 to read as follows:
262-2 Sec. 151.01032. "TELEPHONE PREPAID CALLING CARD".
262-3 "Telephone prepaid calling card" means a card or other item,
262-4 including an access code, that represents the right to make one or
262-5 more telephone calls for which payment is made in incremental
262-6 amounts and before the call is initiated.
262-7 SECTION 4.17. Subchapter A, Chapter 151, Tax Code, is
262-8 amended by adding Section 151.01034 to read as follows:
262-9 Sec. 151.01034. "TRAFFIC OR CROWD CONTROL SERVICES." (a)
262-10 "Traffic or crowd control services" means:
262-11 (1) marking, painting, or designating traffic flow
262-12 lanes, parking lanes, or walkways;
262-13 (2) rerouting traffic flow for repairs; or
262-14 (3) crowd control consultation or planning.
262-15 (b) "Traffic or crowd control services" does not include
262-16 crowd control security personnel or road-race management or race
262-17 director services.
262-18 SECTION 4.18. Subchapter A, Chapter 151, Tax Code, is
262-19 amended by adding Section 151.0106 to read as follows:
262-20 Sec. 151.0106. "TRANSPORTATION SERVICES." (a)
262-21 "Transportation services" means transportation of passengers or
262-22 property that originates and terminates in this state, other than
262-23 the regularly scheduled transport of passengers by airline, train,
262-24 or boat, including any combination of the following:
262-25 (1) freight hauled by rail or by motor vehicle;
262-26 (2) private mail or package delivery or courier
262-27 service;
263-1 (3) towing of a motor vehicle;
263-2 (4) bus or van service, including airport or bus
263-3 terminal shuttle service; and
263-4 (5) limousine service.
263-5 (b) "Transportation services" does not include:
263-6 (1) transportation of passengers or of passengers and
263-7 tangible personal property by means of a private passenger motor
263-8 vehicle, other than a limousine, that is taxed under Chapter 192;
263-9 (2) transportation of goods considered to be in or
263-10 offered into the stream of foreign commerce, either imported or
263-11 intended for export, including United States Customs bonded or
263-12 cleared cargoes;
263-13 (3) the transportation of hydrocarbons by means of a
263-14 pipe;
263-15 (4) transportation of tangible personal property by
263-16 means of a barge; or
263-17 (5) marine towing and tugboat services.
263-18 SECTION 4.19. Subchapter A, Chapter 151, Tax Code, is
263-19 amended by adding Section 151.014 to read as follows:
263-20 Sec. 151.014. "WAREHOUSE OR STORAGE SERVICES." (a)
263-21 "Warehouse or storage services" means the provision of space and
263-22 facilities for the keeping and storage of tangible personal
263-23 property and includes the rental of space and equipment used for
263-24 safekeeping of the stored items and security at the place of
263-25 storage without regard to whether the retailer or purchaser has or
263-26 limits access to the storage area. The term includes cold storage
263-27 and refrigerated lockers for food and perishables.
264-1 (b) "Warehouse or storage services" does not include:
264-2 (1) the use of a safety deposit box or other storage
264-3 facility provided in a bank or other financial institution;
264-4 (2) grain or other agricultural product warehousing
264-5 described by Chapter 14, Agriculture Code, or other cooperative
264-6 storage by members who are agricultural producers;
264-7 (3) the storage of natural gas, hazardous liquids,
264-8 petroleum products, or any chemical product; or
264-9 (4) storage or warehousing of import or export
264-10 products without regard to whether the storage facility or
264-11 warehouse is located in a foreign trade zone, but only while the
264-12 warehoused product remains in the stream of international commerce.
264-13 SECTION 4.20. Section 151.051(b), Tax Code, is amended to
264-14 read as follows:
264-15 (b) Except as provided by Section 151.0511, the [The] sales
264-16 tax rate is 6-1/4 percent of the sales price of the taxable item
264-17 sold.
264-18 SECTION 4.21. Subchapter C, Chapter 151, Tax Code, is
264-19 amended by adding Section 151.0511 to read as follows:
264-20 Sec. 151.0511. RATE FOR GAS AND ELECTRICITY. (a) The sales
264-21 tax rate is 3.25 percent of the sales price of gas and electricity
264-22 sold for use by a person exploring for, producing, or transporting
264-23 a material extracted from the earth.
264-24 (b) Gas and electricity sold for a use other than a use
264-25 listed in Subsection (a) or exempted under this chapter is taxed at
264-26 the rate provided under Section 151.051.
264-27 SECTION 4.22. Section 151.101(b), Tax Code, is amended to
265-1 read as follows:
265-2 (b) The tax is at the same percentage rate as is provided by
265-3 Section 151.051 or 151.0511 of this code on the sales price of the
265-4 taxable item.
265-5 SECTION 4.23. Section 151.301, Tax Code, is amended to read
265-6 as follows:
265-7 Sec. 151.301. "Exempted From the Taxes Imposed by This
265-8 Chapter." If a taxable item is exempted from the taxes imposed by
265-9 this chapter, the sale, storage, use or other consumption of the
265-10 item is not subject to the sales tax imposed by Sections [Section]
265-11 151.051 and 151.0511 [of this code] or the use tax imposed by
265-12 Section 151.101 [of this code] if the item meets the qualifications
265-13 for exemption as provided in this subchapter; and when an item is
265-14 exempted from the taxes imposed by this chapter the receipts from
265-15 its sale are excluded from the computation of the taxes.
265-16 SECTION 4.24. Section 151.302, Tax Code, is amended by
265-17 adding Subsections (e) and (f) to read as follows:
265-18 (e) An appraisal service may be purchased for resale only if
265-19 the service is resold in the form or condition in which it is
265-20 purchased.
265-21 (f) A transportation service or warehouse or storage service
265-22 may be purchased for resale only if the service is resold in the
265-23 form or condition in which it is purchased and not resold incident
265-24 to a sale of another taxable item.
265-25 SECTION 4.25. Section 151.304, Tax Code, is amended by
265-26 adding Subsection (h) to read as follows:
265-27 (h) This section does not apply to the sale or the storage,
266-1 use, or consumption of an aircraft, as that term is defined by
266-2 Section 151.328.
266-3 SECTION 4.26. Section 151.307, Tax Code, is amended by
266-4 amending Subsections (b), (c), and (d) and adding Subsections (e)
266-5 and (f) to read as follows:
266-6 (b) When an exemption is claimed because tangible personal
266-7 property is irrevocably committed to the stream of export or
266-8 exported by the seller, or exported by a United States Customs
266-9 Broker licensed by the comptroller under Section 151.157, beyond
266-10 the territorial limits of the United States, proof of export may be
266-11 shown only by:
266-12 (1) a bill of lading issued by a licensed and
266-13 certificated carrier of persons or property showing the seller as
266-14 consignor, the buyer as consignee, and a delivery point outside the
266-15 territorial limits of the United States;
266-16 (2) documentation[:]
266-17 [(A)] provided to a seller by a United States
266-18 Customs Broker licensed by the comptroller under Section 151.157
266-19 that:
266-20 (A) shows the name and address of the seller and
266-21 the buyer;
266-22 (B) shows a delivery point outside the
266-23 territorial limits of the United States; and
266-24 (C) is accompanied by a copy of the invoice,
266-25 receipt, or other document issued by the seller evidencing the
266-26 sales price of the tangible personal property[;]
266-27 [(B) certifying that delivery was made to a
267-1 point outside the territorial limits of the United States; and]
267-2 [(C) to which a stamp issued under Section
267-3 151.158 is affixed in the manner required by that section or
267-4 Section 151.157];
267-5 (3) import documents from the country of destination
267-6 showing that the property was imported into a country other than
267-7 the United States;
267-8 (4) export documents showing a delivery point outside
267-9 the United States certified by an employee of a local government
267-10 that maintains toll booths on an international bridge and
267-11 confirming that the property has been exported into a country other
267-12 than the United States;
267-13 (5) an original airway, ocean, or railroad bill of
267-14 lading and a forwarder's receipt if an air, ocean, or rail freight
267-15 forwarder takes possession of the property; or
267-16 (6) [(5)] any other manner provided by the comptroller
267-17 for an enterprise authorized to make tax-free purchases under
267-18 Section 151.156.
267-19 (c) A United States Customs Broker may not rely on the type
267-20 of evidence described by Subsection (b)(2) to establish that the
267-21 tangible personal property was delivered to a point outside the
267-22 territorial limits of the United States but instead must maintain
267-23 evidence of the type described by Subsection (b)(1), (b)(3),
267-24 (b)(4), or (b)(5).
267-25 (d) If a United States Customs Broker does not maintain the
267-26 documentation as required by Subsection (c) or if the comptroller
267-27 establishes that the tangible personal property was not delivered
268-1 to a point outside the territorial limits of the United States, the
268-2 customs broker is:
268-3 (1) liable for the tax on the original purchase price
268-4 of the tangible personal property, plus applicable penalties and
268-5 interest computed from the date the retailer delivered the property
268-6 to the customs broker; and
268-7 (2) not eligible for the exemption authorized by this
268-8 section.
268-9 (e) Except for tangible personal property for which proof of
268-10 export is shown under Subsection (b)(6), a purchaser who takes
268-11 possession in this state of tangible personal property to which
268-12 this section otherwise applies is liable for sales tax on the
268-13 original purchase price of the tangible personal property and is
268-14 not eligible for the exemption provided by this section
268-15 [Documentation, including the stamp affixed to the documentation,
268-16 that is provided by a customs broker licensed by the comptroller
268-17 under Section 151.157 is presumed valid in the absence of clear and
268-18 convincing evidence that the tangible personal property covered by
268-19 the documentation was not exported outside the territorial limits
268-20 of the United States].
268-21 (f) [(d)] In this section:
268-22 (1) "Air forwarder" means a licensed International Air
268-23 Transportation Association freight forwarder.
268-24 (2) "Ocean forwarder" means a licensed Federal
268-25 Maritime Commission freight forwarder.
268-26 SECTION 4.27. Section 151.308(a), Tax Code, is amended to
268-27 read as follows:
269-1 (a) The following are exempted from the taxes imposed by
269-2 this chapter:
269-3 (1) oil as taxed by Chapter 202;
269-4 (2) sulphur as taxed by Chapter 203;
269-5 (3) motor fuels and special fuels as defined, taxed,
269-6 or exempted by Chapter 153;
269-7 (4) cement as taxed by Chapter 181;
269-8 (5) motor vehicles, trailers, and semitrailers as
269-9 defined, taxed, or exempted by Chapter 152 or 157, other than a
269-10 mobile office as defined by Section 152.001(16);
269-11 (6) mixed beverages, ice, or nonalcoholic beverages
269-12 and the preparation or service of these items if the receipts are
269-13 taxable by Chapter 183 [202, Alcoholic Beverage Code];
269-14 (7) alcoholic beverages when sold to the holder of a
269-15 private club registration permit or to the agent or employee of the
269-16 holder of a private club registration permit if the holder or agent
269-17 or employee is acting as the agent of the members of the club and
269-18 if the beverages are to be served on the premises of the club;
269-19 (8) [oil well service as taxed by Subchapter E,
269-20 Chapter 191; and]
269-21 [(9)] insurance premiums subject to gross premiums
269-22 taxes;
269-23 (9) aviation fuel as defined, taxed, or exempted by
269-24 Chapter 161; and
269-25 (10) coal as taxed by Chapter 162.
269-26 SECTION 4.28. Section 151.3101, Tax Code, is amended by
269-27 adding Subsection (c) to read as follows:
270-1 (c) This section does not exempt:
270-2 (1) a sports or athletic event provided by an
270-3 institution of higher education or a private or independent
270-4 institution of higher education, as those terms are defined by
270-5 Section 61.003, Education Code; or
270-6 (2) a musical concert performance or other amusement
270-7 that is not solely for educational purposes if an institution of
270-8 higher education or a private or independent institution of higher
270-9 education, as those terms are defined by Section 61.003, Education
270-10 Code, contracts with an entity other than another institution of
270-11 higher education or a private or independent institution of higher
270-12 education for the provision of the amusement.
270-13 SECTION 4.29. Section 151.3111, Tax Code, is amended by
270-14 adding Subsection (d) to read as follows:
270-15 (d) This section does not apply to:
270-16 (1) transportation services;
270-17 (2) appraisal services; or
270-18 (3) sanitizing, sterilizing, or disinfection services.
270-19 SECTION 4.30. Section 151.316, Tax Code, is amended by
270-20 amending Subsection (a) and adding Subsection (e) to read as
270-21 follows:
270-22 (a) The following items are exempted from the taxes imposed
270-23 by this chapter:
270-24 (1) horses, mules, and work animals;
270-25 (2) animal life the products of which ordinarily
270-26 constitute food for human consumption;
270-27 (3) feed for farm and ranch animals;
271-1 (4) feed for animals that are held for sale in the
271-2 regular course of business;
271-3 (5) seeds and annual plants the products of which:
271-4 (A) ordinarily constitute food for human
271-5 consumption;
271-6 (B) are to be sold in the regular course of
271-7 business; or
271-8 (C) are used to produce feed for animals
271-9 exempted by this section;
271-10 (6) fertilizers, fungicides, insecticides, herbicides,
271-11 defoliants, and desiccants exclusively used or employed on a farm
271-12 or ranch in the production of:
271-13 (A) food for human consumption;
271-14 (B) feed for animal life; or
271-15 (C) other agricultural products to be sold in
271-16 the regular course of business;
271-17 (7) machinery and equipment exclusively used or
271-18 employed on a farm or ranch in the building or maintaining of roads
271-19 or water facilities or in the production of:
271-20 (A) food for human consumption;
271-21 (B) grass;
271-22 (C) feed for animal life; or
271-23 (D) other agricultural products to be sold in
271-24 the regular course of business; and
271-25 (8) machinery and equipment exclusively used in, and
271-26 pollution control equipment required as a result of, the
271-27 processing, packing, or marketing of agricultural products by an
272-1 original producer at a location operated by the original producer
272-2 for processing, packing, or marketing the producer's own products
272-3 if:
272-4 (A) 50 percent or more of the products
272-5 processed, packed, or marketed at or from the location are produced
272-6 by the original producer and not purchased or acquired from others;
272-7 and
272-8 (B) the producer does not process, pack, or
272-9 market for consideration any agricultural products that belong to
272-10 other persons in an amount greater than five percent of the total
272-11 agricultural products processed, packed, or marketed by the
272-12 producer[; and]
272-13 [(9) ice exclusively used by commercial fishing boats
272-14 in the storing of aquatic species including but not limited to
272-15 shrimp, other crustaceans, finfish, mollusks, and other similar
272-16 creatures].
272-17 (e) A transportation service is exempt from the taxes
272-18 imposed by this chapter if the service is for the transportation of
272-19 agricultural products.
272-20 SECTION 4.31. Section 151.317, Tax Code, is amended to read
272-21 as follows:
272-22 Sec. 151.317. GAS AND ELECTRICITY. (a) Gas and electricity
272-23 are exempted from the taxes imposed by this chapter except when
272-24 sold for commercial use.
272-25 (b) The sale, production, distribution, lease, or rental of,
272-26 and the use, storage, or other consumption in this state of, gas
272-27 and electricity, except when sold for residential or commercial
273-1 use, are exempted from the taxes imposed by a city under Chapter
273-2 321 [the Local Sales and Use Tax Act], unless sales for residential
273-3 use are further exempted by the city as provided by Chapter 321
273-4 [the Local Sales and Use Tax Act]. The sale, production,
273-5 distribution, lease, or rental of, and the use, storage, or other
273-6 consumption in this state of, gas and electricity, except when sold
273-7 for commercial use, are exempted from the taxes imposed by any
273-8 other entity under Title 3 or another law that authorizes the
273-9 imposition of a local sales and use tax. For purposes of this
273-10 subsection, "commercial use" has the meaning assigned that term by
273-11 Subsection (c) but does not include exploring for, producing, or
273-12 transporting a material extracted from the earth.
273-13 (c) In this section:
273-14 (1) "Residential use" means use:
273-15 (A) in a family dwelling or in a multifamily
273-16 apartment or housing complex or building or in a part of a building
273-17 occupied as a home or residence when the use is by the owner of the
273-18 dwelling, apartment, complex, or building or part of the building
273-19 occupied; or
273-20 (B) in a dwelling, apartment, house, or building
273-21 or part of a building occupied as a home or residence when the use
273-22 is by a tenant who occupies the dwelling, apartment, house, or
273-23 building or part of a building under a contract for an express
273-24 initial term for longer than 29 consecutive days.
273-25 (2) "Commercial use" means use by a person engaged in
273-26 selling, warehousing, or distributing a commodity or a professional
273-27 or personal service, or in exploring for, producing, or
274-1 transporting a material extracted from the earth, but does not
274-2 include:
274-3 (A) use by a person engaged in:
274-4 (i) processing tangible personal property
274-5 for sale as tangible personal property, other than preparation or
274-6 storage of food for immediate consumption;
274-7 (ii) [exploring for, producing, or
274-8 transporting, a material extracted from the earth;]
274-9 [(iii)] agriculture, including dairy or
274-10 poultry operations and pumping for farm or ranch irrigation;
274-11 (iii) [(iv)] electrical processes such as
274-12 electroplating, electrolysis, and cathodic protection; or
274-13 (iv) [(v)] the off-wing processing,
274-14 overhaul, or repair of a jet turbine engine or its parts for a
274-15 certificated or licensed carrier of persons or property; or
274-16 (B) a direct or indirect use, consumption, or
274-17 loss of electricity by an electric utility engaged in the purchase
274-18 of electricity for resale.
274-19 SECTION 4.32. Section 151.318, Tax Code, is amended by
274-20 amending Subsections (a) and (c) and adding Subsections (r), (s),
274-21 and (t) to read as follows:
274-22 (a) The following items are exempted from the taxes imposed
274-23 by this chapter:
274-24 (1) tangible personal property that will become an
274-25 ingredient or component part of tangible personal property
274-26 manufactured, processed, or fabricated for ultimate sale;
274-27 (2) tangible personal property directly used or
275-1 consumed in or during the actual manufacturing, processing, or
275-2 fabrication of tangible personal property for ultimate sale if the
275-3 use or consumption of the property is necessary or essential to the
275-4 manufacturing, processing, or fabrication operation and directly
275-5 makes or causes a chemical or physical change to:
275-6 (A) the product being manufactured, processed,
275-7 or fabricated for ultimate sale; or
275-8 (B) any intermediate or preliminary product that
275-9 will become an ingredient or component part of the product being
275-10 manufactured, processed, or fabricated for ultimate sale; [and]
275-11 (3) services performed directly on the product being
275-12 manufactured prior to its distribution for sale and for the purpose
275-13 of making the product more marketable; and
275-14 (4) actuators, steam production equipment and its
275-15 fuel, in-process flow through tanks, cooling towers, generators,
275-16 heat exchangers, electronic control room equipment, and
275-17 computerized control units that are used to power, supply, support,
275-18 or control equipment that qualifies for exemption under Subdivision
275-19 (2) or to generate electricity, chilled water, or steam for
275-20 ultimate sale.
275-21 (c) The exemption does not include:
275-22 (1) machinery, equipment, or replacement parts or
275-23 their accessories having a useful life when new in excess of six
275-24 months;
275-25 (2) intraplant transportation equipment, including
275-26 intraplant transportation equipment used to move a product or raw
275-27 material in connection with the manufacturing process and
276-1 specifically including all piping and conveyor systems;
276-2 (3) maintenance or janitorial supplies or equipment
276-3 [,] or other machinery, equipment, materials, or supplies that are
276-4 used incidentally in a manufacturing, processing, or fabrication
276-5 operation;
276-6 (4) [(3)] hand tools; [or]
276-7 (5) [(4)] office equipment or supplies, equipment or
276-8 supplies used in sales or distribution activities, research or
276-9 development of new products, or transportation activities, or other
276-10 tangible personal property not used in an actual manufacturing,
276-11 processing, or fabrication operation;
276-12 (6) ice exclusively used by commercial fishing boats
276-13 in the storing of aquatic species including shrimp, other
276-14 crustaceans, finfish, mollusks, and other similar creatures; or
276-15 (7) machinery and equipment or supplies used to
276-16 maintain or store tangible personal property.
276-17 (r) A taxpayer claiming an exemption under this section has
276-18 the burden of proof that the exemption is applicable and that no
276-19 exclusion under Subsection (c) applies.
276-20 (s) Transportation services are exempted from the taxes
276-21 imposed by this chapter if the services are purchased by a
276-22 manufacturer for the transportation of:
276-23 (1) items exempt under Subsection (a)(1); or
276-24 (2) fuel, including coal or natural gas, used or
276-25 consumed in or during the manufacturing, processing, or fabrication
276-26 of tangible property for ultimate sale.
276-27 (t) The following do not apply to the semiconductor
277-1 fabrication cleanrooms and equipment in Subsection (q):
277-2 (1) limitations in Subsection (a)(2) that refer to
277-3 tangible personal property directly causing chemical and physical
277-4 changes to the product being manufactured, processed, or fabricated
277-5 for ultimate sale;
277-6 (2) Subsection (c)(2); and
277-7 (3) Subsection (c)(7).
277-8 SECTION 4.33. Sections 151.319(c), (d), and (f), Tax Code,
277-9 are amended to read as follows:
277-10 (c) A transaction involving the sale of a handbill,
277-11 circular, flyer, advertising supplement, or similar item that is
277-12 printed to the special order of a customer is exempted from the
277-13 taxes imposed by this chapter only if the item is printed or
277-14 purchased by a newspaper for the exclusive purpose of distributing
277-15 it as part of the newspaper [being distributed as a part of a
277-16 newspaper, is actually distributed as a part of the newspaper, and
277-17 is delivered to the person who is responsible for the distribution
277-18 of the newspaper in which the item is distributed and not to the
277-19 customer].
277-20 (d) The following items are exempted from the taxes imposed
277-21 by this chapter:
277-22 (1) except as provided by Subsection (c), tangible
277-23 personal property that enters into and becomes an ingredient or
277-24 component part of a newspaper, whether or not the newspaper is
277-25 printed for ultimate sale in this state;
277-26 (2) tangible personal property used or consumed in or
277-27 during a phase of actual printing or processing of a newspaper if
278-1 the use of the property is necessary or essential to the processing
278-2 or printing operation; and
278-3 (3) chemicals, catalysts, and other materials that are
278-4 used for the purpose of producing a chemical or physical change or
278-5 removing impurities during the printing or processing of a
278-6 newspaper or are used for placing a newspaper in its final
278-7 distributable form.
278-8 (f) In this section, "newspaper" means a publication that is
278-9 printed on newsprint, the average sales price of which for each
278-10 copy over a 30-day period does not exceed 75 cents, and that is
278-11 printed and distributed at a daily, weekly, or other short interval
278-12 for the dissemination of news of a general character and of a
278-13 general interest. Except as provided by Subsection (c),
278-14 "newspaper" ["Newspaper"] does not include a magazine, handbill,
278-15 circular, flyer, sales catalog, or similar printed item [unless the
278-16 printed item is printed for distribution as a part of a newspaper
278-17 and is actually distributed as a part of a newspaper]. For the
278-18 purposes of this section, an advertisement is news of a general
278-19 character and of a general interest. Notwithstanding any other
278-20 provision of this subsection, "newspaper" includes:
278-21 (1) a publication containing articles and essays of
278-22 general interest by various writers and advertisements that is
278-23 produced for the operator of a licensed and certified carrier of
278-24 persons and distributed by the operator to its customers during
278-25 their travel on the carrier; and
278-26 (2) a publication for the dissemination of news of a
278-27 general character and of a general interest that is printed on
279-1 newsprint and distributed to the general public free of charge at a
279-2 daily, weekly, or other short interval.
279-3 SECTION 4.34. Section 151.328(a), Tax Code, is amended to
279-4 read as follows:
279-5 (a) Aircraft are exempted from the taxes imposed by this
279-6 chapter if:
279-7 (1) sold to a person using the aircraft as a
279-8 certificated or licensed carrier of persons or property;
279-9 (2) sold to a person who:
279-10 (A) has a sales tax permit issued under this
279-11 chapter; and
279-12 (B) uses the aircraft for the purpose of
279-13 providing flight instruction that is:
279-14 (i) recognized by the Federal Aviation
279-15 Administration;
279-16 (ii) under the direct or general
279-17 supervision of a flight instructor certified by the Federal
279-18 Aviation Administration; and
279-19 (iii) designed to lead to a pilot
279-20 certificate or rating issued by the Federal Aviation Administration
279-21 or otherwise required by a rule or regulation of the Federal
279-22 Aviation Administration; or
279-23 (3) sold to a foreign government[; or]
279-24 [(4) sold to a person for use and registration in
279-25 another state or nation before any use in this state other than
279-26 flight training in the aircraft and the transportation of the
279-27 aircraft out of this state].
280-1 SECTION 4.35. Section 151.330, Tax Code, is amended by
280-2 adding Subsections (j)-(m) to read as follows:
280-3 (j) The benefit of the following services is derived solely
280-4 at the location at which the services are provided:
280-5 (1) amusement services;
280-6 (2) personal services;
280-7 (3) motor vehicle parking and storage services;
280-8 (4) real property services;
280-9 (5) real property repair and remodeling;
280-10 (6) motor vehicle repair services;
280-11 (7) motor vehicle wash or detail services;
280-12 (8) oil well services;
280-13 (9) warehouse or storage services;
280-14 (10) boat dock services;
280-15 (11) diving services; and
280-16 (12) customizing of vehicle.
280-17 (k) The benefit of employment agency services is derived
280-18 solely at the physical location where the employment position is
280-19 filled.
280-20 (l) The benefit of the following services is derived at the
280-21 location of the property that is the subject of the services:
280-22 (1) appraisal services; and
280-23 (2) traffic or crowd control services.
280-24 (m) The benefit of secretarial or mailing services is
280-25 derived at the location of the individual receiving the property or
280-26 other outcome of the service.
280-27 SECTION 4.36. Section 151.338, Tax Code, is amended to read
281-1 as follows:
281-2 Sec. 151.338. ENVIRONMENT AND CONSERVATION SERVICES. (a)
281-3 The services involved in the repair, remodeling, maintenance, or
281-4 restoration of tangible personal property are not taxable under
281-5 this chapter if the repair, remodeling, maintenance, or restoration
281-6 is required by statute, ordinance, order, rule, or regulation of
281-7 any commission, agency, court, or political, governmental, or
281-8 quasi-governmental entity in order to protect the environment or to
281-9 conserve energy.
281-10 (b) This section does not apply to a service that was not
281-11 taxable under this chapter on September 30, 1997.
281-12 SECTION 4.37. Section 151.346(c), Tax Code, is amended to
281-13 read as follows:
281-14 (c) An exemption authorized by this section does not apply
281-15 to a service that would have been taxable under this chapter as it
281-16 existed on September 1, 1987.
281-17 SECTION 4.38. Section 151.410, Tax Code, is amended to read
281-18 as follows:
281-19 Sec. 151.410. Method of Reporting Sales Tax: General Rule.
281-20 A seller shall compute the sales tax imposed by Subchapter C of
281-21 this chapter to be paid to the comptroller by multiplying the
281-22 applicable percentage rate of the sales tax times the total
281-23 receipts of the seller from all sales of taxable tangible personal
281-24 property and of taxable services.
281-25 SECTION 4.39. Section 151.416, Tax Code, is amended to read
281-26 as follows:
281-27 Sec. 151.416. Commingled Receipts and Tax. A seller who has
282-1 an accounting system under which the taxes collected under this
282-2 chapter are commingled with the receipts from the sales of taxable
282-3 items may compute his taxable receipts by:
282-4 (1) subtracting from the total receipts of the seller
282-5 the receipts from the sales of items that are exempted or are
282-6 specifically excluded from the taxes imposed by this chapter to
282-7 obtain a remainder consisting of the commingled receipts from
282-8 taxable sales and the taxes collected; and
282-9 (2) dividing this remainder by one plus the applicable
282-10 sales tax rate expressed as a decimal fraction to obtain a quotient
282-11 that is the taxable receipts that may be reported under Section
282-12 151.410 of this code.
282-13 SECTION 4.40. Sections 151.712(a) and (b), Tax Code, are
282-14 amended to read as follows:
282-15 (a) A person may not sign or certify [proof of export]
282-16 documentation for the purpose of showing an exemption under Section
282-17 151.307(b)(2) unless:
282-18 (1) the person is:
282-19 (A) a customs broker licensed by the comptroller
282-20 under Section 151.157; or
282-21 (B) an authorized employee of a customs broker
282-22 licensed by the comptroller under Section 151.157; and
282-23 (2) the tangible personal property was delivered by
282-24 the seller to the customs broker for export as described by Section
282-25 151.307(b)(2) [the export of which the person certifies is exported
282-26 on the date and to the place shown on the export documentation
282-27 signed by the person].
283-1 (b) A person who provides [proof of] documentation for the
283-2 purpose of claiming the exemption under Section 151.307(b)(2) [that
283-3 tangible personal property has been exported outside of the United
283-4 States] or a person who may benefit from the provision of the
283-5 [proof of] documentation, including a customs broker, authorized
283-6 employee, [authorized independent contractor,] seller of the
283-7 property or agent or employee of the seller, or a consumer of the
283-8 property or agent or employee of the consumer, may not sell or buy
283-9 the [proof of documentation, including stamps required for the]
283-10 documentation. This subsection does not apply to a customs broker
283-11 who accepts a fee for providing documentation under Section
283-12 151.307(b).
283-13 SECTION 4.41. Section 321.002(a), Tax Code, is amended by
283-14 adding Subdivision (4) to read as follows:
283-15 (4) "Expanded tax base" means the sale, use, storage,
283-16 rental, or other consumption of a taxable item that was not subject
283-17 to the tax imposed by Chapter 151 on September 30, 1997. The term
283-18 does not include the sale, use, or other consumption of gas and
283-19 electricity for residential use if the municipality is authorized
283-20 to impose a tax on the residential use of gas and electricity.
283-21 SECTION 4.42. Subchapter C, Chapter 321, Tax Code, is
283-22 amended by adding Sections 321.211 and 321.2111 to read as follows:
283-23 Sec. 321.211. USE OF EXPANDED TAX BASE REVENUE: GENERAL
283-24 PURPOSE TAX. (a) Except as otherwise provided by this section, a
283-25 municipality that has adopted the tax authorized by Section
283-26 321.101(a) shall use revenue from the expanded tax base to reduce
283-27 municipal property taxes.
284-1 (b) The governing body of a municipality that has adopted
284-2 the tax authorized by Section 321.101(a) may call and hold an
284-3 election on November 4, 1997, on the question of using revenue from
284-4 the expanded tax base collected under that provision for a purpose
284-5 other than or in addition to reducing municipal property taxes.
284-6 (c) The order calling the election under this section must
284-7 allow the voters of the municipality to vote on whether the
284-8 expanded tax base revenue is required to be used to:
284-9 (1) reduce municipal property taxes;
284-10 (2) provide additional revenue for the municipality
284-11 that can be used for any general purpose of the municipality in
284-12 accordance with Section 321.506;
284-13 (3) provide funding for one or more specific projects
284-14 or types of projects; or
284-15 (4) provide funding for a combination of the purposes
284-16 described by this subsection.
284-17 (d) The ballot at the election held under this section shall
284-18 be printed to permit voting in separate propositions on the
284-19 purposes described by Subsection (c). If the governing body
284-20 authorizes a vote on using the revenue for a combination of
284-21 purposes, the ballot at the election must specify an amount or
284-22 percentage of the amount of revenue that shall be used for each
284-23 purpose. Regardless of the number of propositions on the ballot, a
284-24 voter may be allowed to vote in favor of only one proposition. A
284-25 voter may not be allowed to vote against any proposition.
284-26 (e) If the municipality holds an election under this
284-27 section, the municipality may use the revenue from the expanded tax
285-1 base only for the purpose or combination of purposes expressed in
285-2 the proposition that receives a majority of the votes cast in the
285-3 election. If no proposition receives a majority of the votes cast
285-4 in the election, the governing body shall call another election to
285-5 vote on the two propositions that received the highest and
285-6 second-highest number of votes in the election or that tie for the
285-7 highest number of votes. If more than two propositions tie for the
285-8 highest number of votes in the election or two or more
285-9 propositions tie for the second-highest number of votes, the
285-10 governing body by majority vote shall determine which two
285-11 propositions are to be voted on in the subsequent election.
285-12 (f) Not later than the fifth day after the date the final
285-13 canvass of the original election is completed, the governing body
285-14 shall order the subsequent election under Subsection (e). The
285-15 subsequent election shall be held not earlier than the 20th or
285-16 later than the 30th day after the date the final canvass of the
285-17 original election is completed. A subsequent election, however,
285-18 may be held after the 30th but not later than the 45th day after
285-19 the date the final canvass of the original election is completed if
285-20 the later date is necessary to:
285-21 (1) permit a joint election to be held with another
285-22 political subdivision in accordance with Chapter 271, Election
285-23 Code; or
285-24 (2) avoid holding the election on:
285-25 (A) a legal state or national holiday; or
285-26 (B) a weekend day within three days of a legal
285-27 state or national holiday.
286-1 (g) If the municipality holds a subsequent election, the
286-2 municipality may use the revenue from the expanded tax base only
286-3 for the purpose or combination of purposes expressed in the
286-4 proposition that receives a majority of the votes cast in the
286-5 subsequent election.
286-6 (h) If a municipality holds an election under this section
286-7 and, before the date the use of the revenue from the expanded tax
286-8 base is finally determined by the election, a municipality receives
286-9 a distribution of the municipality's share of taxes under this
286-10 chapter that includes revenue from the expanded tax base, the
286-11 municipality shall deposit the expanded tax base revenue in a
286-12 special account and may not use that money for any purpose until
286-13 the approved use is finally determined.
286-14 (i) A municipality is not required to call and hold an
286-15 election under this section if the annual revenue from the expanded
286-16 tax base does not exceed $50,000. If the governing body elects not
286-17 to hold the election, the revenue from the expanded tax base shall
286-18 be used to provide for the reduction of municipal property taxes,
286-19 additional revenue for the municipality that can be used for any
286-20 general purpose of the municipality, funding for one or more
286-21 specific projects or types of projects, or a combination of these
286-22 purposes as determined by the governing body. If the governing
286-23 body elects to hold the election, the election shall be conducted
286-24 in the manner required by this section.
286-25 Sec. 321.2111. USE OF EXPANDED TAX BASE REVENUE: TAX LEVIED
286-26 FOR BENEFIT OF ANOTHER ENTITY. (a) This section applies to a
286-27 municipality in which a sales and use tax has been adopted at an
287-1 election held before September 1, 1997, and the municipality levies
287-2 the tax for the benefit of another entity such as an industrial
287-3 development corporation.
287-4 (b) Except as otherwise provided by this section, a
287-5 municipality to which this section applies shall use revenue from
287-6 the expanded tax base to reduce municipal property taxes.
287-7 (c) The governing body of a municipality to which this
287-8 section applies may call and hold an election on November 4, 1997,
287-9 on the question of using revenue from the expanded tax base
287-10 collected under the law authorizing the imposition of the tax for a
287-11 purpose other than or in addition to reducing municipal property
287-12 taxes.
287-13 (d) The order calling the election under this section must
287-14 allow the voters of the municipality to vote on whether the
287-15 expanded tax base revenue is required to be used to:
287-16 (1) reduce municipal property taxes;
287-17 (2) provide additional revenue that can be used for
287-18 any general purpose of the entity;
287-19 (3) provide funding for one or more specific projects
287-20 or types of projects that the entity is otherwise authorized to
287-21 undertake;
287-22 (4) rebate revenue to the municipality to provide
287-23 additional revenue for the municipality that can be used for one or
287-24 more specific projects or types of projects;
287-25 (5) rebate revenue to the municipality to provide
287-26 additional revenue for the municipality that can be used for any
287-27 general purpose of the municipality in accordance with Section
288-1 321.506; or
288-2 (6) provide funding for a combination of the purposes
288-3 described by this subsection.
288-4 (e) The ballot at the election held under this section shall
288-5 be printed to permit voting in separate propositions on the
288-6 purposes described by Subsection (d). If the governing body
288-7 authorizes a vote on using the revenue for a combination of
288-8 purposes, the ballot at the election must specify an amount or
288-9 percentage of an amount of revenue that shall be used for each
288-10 purpose. Regardless of the number of propositions on the ballot, a
288-11 voter may be allowed to vote in favor of only one proposition. A
288-12 voter may not be allowed to vote against any proposition.
288-13 (f) If the municipality holds an election under this
288-14 section, the entity or municipality, as appropriate, may use the
288-15 revenue from the expanded tax base only for the purpose or
288-16 combination of purposes expressed in the proposition that receives
288-17 a majority of the votes cast in the election. If no proposition
288-18 receives a majority of the votes cast in the election, the
288-19 governing body of the municipality shall call another election to
288-20 vote on the two propositions that received the highest and
288-21 second-highest number of votes in the election or that tie for the
288-22 highest number of votes. If more than two propositions tie for the
288-23 highest number of votes in the main election or two or more
288-24 propositions tie for the second-highest number of votes, the
288-25 governing body by majority vote shall determine which propositions
288-26 are to be voted on in the subsequent election.
288-27 (g) Not later than the fifth day after the date the final
289-1 canvass of the original election is completed, the governing body
289-2 shall order the subsequent election under Subsection (f). The
289-3 subsequent election shall be held not earlier than the 20th or
289-4 later than the 30th day after the date the final canvass of the
289-5 original election is completed. A subsequent election, however,
289-6 may be held after the 30th but not later than the 45th day after
289-7 the date the final canvass of the original election is completed if
289-8 the later date is necessary to:
289-9 (1) permit a joint election to be held with another
289-10 political subdivision in accordance with Chapter 271, Election
289-11 Code; or
289-12 (2) avoid holding the election on:
289-13 (A) a legal state or national holiday; or
289-14 (B) a weekend day within three days of a legal
289-15 state or national holiday.
289-16 (h) If the municipality holds a subsequent election, the
289-17 entity or municipality, as appropriate, may use the revenue from
289-18 the expanded tax base only for the purpose or combination of
289-19 purposes expressed in the proposition that receives a favorable
289-20 vote of a majority of the votes cast in the subsequent election.
289-21 (i) If a municipality holds an election under this section
289-22 and, before the date the use of the revenue from the expanded tax
289-23 base is finally determined by the election, a municipality receives
289-24 a distribution of the entity's share of taxes under this chapter
289-25 that includes revenue from the expanded tax base, the municipality
289-26 shall deposit the expanded tax base revenue in a special account
289-27 and the entity or municipality may not use that money for any
290-1 purpose until the approved use is finally determined.
290-2 (j) A municipality is not required to call and hold an
290-3 election under this section if the annual revenue from the expanded
290-4 tax base does not exceed $50,000. If the governing body elects not
290-5 to hold the election, the revenue from the expanded tax base shall
290-6 be used to provide for the reduction of municipal property taxes,
290-7 additional revenue for the municipality that can be used for any
290-8 general purpose of the municipality, funding for one or more
290-9 specific projects or types of projects, or a combination of these
290-10 purposes as determined by the governing body. If the governing
290-11 body elects to hold the election, the election shall be conducted
290-12 in the manner required by this section.
290-13 SECTION 4.43. Subchapter C, Chapter 321, Tax Code, is
290-14 amended by adding Section 321.2112 to read as follows:
290-15 Sec. 321.2112. ELECTION FOR USE OF EXPANDED TAX BASE
290-16 REVENUE: GENERAL PURPOSE TAX IN CERTAIN MUNICIPALITIES. (a) This
290-17 section applies only to a municipality with a population of more
290-18 than 1,000,000.
290-19 (b) The governing body of each municipality to which this
290-20 section applies that has adopted the tax authorized by Section
290-21 321.101(a) shall call and hold an election on November 4, 1997, on
290-22 the question of the use of revenue from the expanded tax base
290-23 collected under that provision.
290-24 (c) The order calling the election under this section must
290-25 allow the voters of the municipality to vote on whether the
290-26 expanded tax base revenue is required to be used to:
290-27 (1) provide funding for the construction or renovation
291-1 of one or more sports facilities described by Subsection (e); or
291-2 (2) provide additional revenue for the municipality
291-3 that can be used for any general purpose of the municipality in
291-4 accordance with Section 321.506.
291-5 (d) In addition to the purposes described by Subsection (b),
291-6 the governing body may authorize a vote on the additional options
291-7 of using the revenue to:
291-8 (1) reduce municipal property taxes;
291-9 (2) provide funding for one or more other specific
291-10 projects or types of projects; or
291-11 (3) provide funding for a combination of the purposes
291-12 described by this subsection and Subsection (c).
291-13 (e) A municipality may use revenue from the expanded sales
291-14 tax base to provide funding for the construction or renovation of
291-15 one or more sports facilities only if:
291-16 (1) the facility on which the revenue is to be spent
291-17 is owned and operated or managed by the municipality;
291-18 (2) the municipality does not lease or sell any
291-19 interest in the facility; and
291-20 (3) the municipality will receive at least 50 percent
291-21 of the gross revenue from the facility, including revenues from
291-22 parking and concessions.
291-23 (f) The ballot at the election held under this section shall
291-24 be printed to permit voting in separate propositions on the
291-25 purposes described by Subsection (c) or in three or more separate
291-26 propositions if necessary to vote on the purposes described by
291-27 Subsections (c) and (d). If the governing body authorizes a vote
292-1 on using the revenue for a combination of purposes, the ballot at
292-2 the election must specify an amount or percentage of the amount of
292-3 revenue that shall be used for each purpose. Regardless of the
292-4 number of propositions on the ballot, a voter may be allowed to
292-5 vote in favor of only one proposition. A voter may not be allowed
292-6 to vote against any proposition.
292-7 (g) Any advertisement or other information relating to the
292-8 election under this section that is prepared or approved by the
292-9 municipality must include information describing who will receive
292-10 revenue from each sports facility included on the ballot and the
292-11 estimated rental fees the municipality will receive from the use of
292-12 the facility by professional sports teams or other regular users.
292-13 (h) The municipality may use the revenue from the expanded
292-14 tax base only for the purpose or combination of purposes expressed
292-15 in the proposition that receives a majority of the votes cast in
292-16 the election. If no proposition receives a majority of the votes
292-17 cast in the election, the governing body shall call another
292-18 election to vote on the two propositions that received the highest
292-19 and second-highest number of votes in the election or that tie for
292-20 the highest number of votes. If more than two propositions tie for
292-21 the highest number of votes in the election or two or more
292-22 propositions tie for the second-highest number of votes, the
292-23 governing body shall draw lots to determine which two propositions
292-24 are to be voted on in the subsequent election.
292-25 (i) Not later than the fifth day after the date the final
292-26 canvass of the original election is completed, the governing body
292-27 shall order the subsequent election under Subsection (e). The
293-1 subsequent election shall be held not earlier than the 20th or
293-2 later than the 30th day after the date the final canvass of the
293-3 original election is completed. A subsequent election, however,
293-4 may be held after the 30th but not later than the 45th day after
293-5 the date the final canvass of the original election is completed if
293-6 the later date is necessary to:
293-7 (1) permit a joint election to be held with another
293-8 political subdivision in accordance with Chapter 271, Election
293-9 Code; or
293-10 (2) avoid holding the election on:
293-11 (A) a legal state or national holiday; or
293-12 (B) a weekend day within three days of a legal
293-13 state or national holiday.
293-14 (j) The municipality may use the revenue from the expanded
293-15 tax base only for the purpose or combination of purposes expressed
293-16 in the proposition that receives a majority of the votes cast in
293-17 the subsequent election.
293-18 (k) If, before the date the use of the revenue from the
293-19 expanded tax base is finally determined under this section, a
293-20 municipality receives a distribution of the municipality's share of
293-21 taxes under this chapter that includes revenue from the expanded
293-22 tax base, the municipality shall deposit the expanded tax base
293-23 revenue in a special account and may not use that money for any
293-24 purpose until the approved use is finally determined.
293-25 (l) In this section, "sports facility" means an arena,
293-26 coliseum, stadium, or other type of area or facility that is used
293-27 or is planned for use for one or more professional or amateur
294-1 sports events, community events, or other sports events, including
294-2 rodeos, livestock shows, agricultural expositions, promotional
294-3 events, and other civic or charitable events. The term includes
294-4 any store, restaurant, on-site hotel, concession, automobile
294-5 parking facility, area transportation facility, road, street, water
294-6 or sewer facility, or other on-site or off-site improvement that
294-7 relates to and enhances the use, value, or appeal of a sports
294-8 facility.
294-9 SECTION 4.44. Subchapter F, Chapter 321, Tax Code, is
294-10 amended by adding Section 321.508 to read as follows:
294-11 Sec. 321.508. USE OF TAX REVENUE FROM EXPANDED TAX BASE.
294-12 (a) Except as otherwise provided by this section, a municipality
294-13 that imposes a tax under this chapter or an entity for whom the
294-14 municipality levies a sales and use tax may use revenue from the
294-15 expanded tax base only to reduce municipal property taxes.
294-16 (b) If the municipality holds an election under this chapter
294-17 on the question of how to use the expanded tax base revenue, the
294-18 municipality may use the revenue only for the purpose or purposes
294-19 authorized by the voters under the applicable provisions of this
294-20 chapter.
294-21 (c) If all or part of the expanded tax base revenue is to be
294-22 used to reduce municipal property taxes, and the municipality also
294-23 imposes the additional sales and use tax under Section 321.101(b),
294-24 the expanded tax base revenue is treated as revenue from the
294-25 additional sales and use tax and Section 321.507 and the applicable
294-26 provisions of Title 1 apply.
294-27 (d) If all or part of the expanded tax base revenue is to be
295-1 used to reduce municipal property taxes, and the municipality does
295-2 not impose the additional sales and use tax under Section
295-3 321.101(b), the municipality is considered to have voted to adopt
295-4 the additional sales and use tax and Section 321.507 and the
295-5 applicable provisions of Title 1 apply to the expanded tax base
295-6 revenue.
295-7 SECTION 4.45. (a) Chapter 322, Tax Code, is amended by
295-8 adding Subchapter E to read as follows:
295-9 SUBCHAPTER E. EXPANDED TAX BASE
295-10 Sec. 322.401. COMPUTATION OF EXPANDED TAX BASE INDEX. (a)
295-11 Not later than September 1, 1997, the comptroller shall compute an
295-12 expanded tax base index for each taxing entity that imposes a
295-13 sales and use tax on January 1, 1997.
295-14 (b) The expanded tax base index for a taxing entity is
295-15 computed by subtracting from 1 a fraction, expressed as a
295-16 percentage and rounded to the nearest one-eighth of one percent:
295-17 (1) the numerator of which is the total amount of
295-18 sales and use tax collected in the entity area on the sale, use,
295-19 storage, and other consumption of all taxable items under this
295-20 chapter for the period beginning on July 1, 1996, and extending
295-21 through June 30, 1997; and
295-22 (2) the denominator of which is the total amount of
295-23 sales and use taxes that the comptroller estimates would have been
295-24 collected in the entity area on the sale, use, storage, and other
295-25 consumption of all taxable items that will be subject to the tax
295-26 imposed by Chapter 151 on October 1, 1997, including taxable items
295-27 subject to the tax on September 30, 1997, had those items been
296-1 taxed for the entire period beginning on July 1, 1996, and
296-2 extending through June 30, 1997.
296-3 (c) The comptroller shall establish each expanded tax base
296-4 index using generally accepted statistical techniques and any
296-5 relevant information available to the comptroller.
296-6 (d) The comptroller shall notify each taxing entity of the
296-7 entity's expanded tax base index.
296-8 Sec. 322.402. TAX RATE ADJUSTMENT. (a) Effective on
296-9 October 1, 1997, the taxing entity shall reduce the rate at which
296-10 the taxing entity is imposing the sales and use tax rate by the
296-11 percentage equal to the entity's expanded tax base index.
296-12 (b) In addition to the reduction required by Subsection (a),
296-13 if the taxing entity is imposing the sales and use tax at the
296-14 maximum level allowed by law, the maximum tax rate is also reduced
296-15 accordingly.
296-16 (c) If the taxing entity is not imposing the sales and use
296-17 tax at the maximum level allowed by law, the maximum tax rate at
296-18 which the taxing entity may impose the sales and use tax is
296-19 automatically reduced by a percentage equal to the entity's
296-20 expanded tax base index. The comptroller shall compute the amount
296-21 of the reduction required by this subsection and notify the taxing
296-22 entity of the new maximum rate.
296-23 (d) The comptroller shall deliver to each taxing entity
296-24 required to reduce a tax rate under this section the expanded tax
296-25 base index on or before September 15, 1997.
296-26 (e) Except for mandamus to compute or recompute the expanded
296-27 tax base, a determination under this section is not subject to
297-1 appeal.
297-2 Sec. 322.403. RECOMPUTATION. (a) Not later than August 1,
297-3 1999, the comptroller shall recompute each taxing entity's expanded
297-4 tax base index, taking into account at least one year's actual
297-5 economic experience and any other factor the comptroller determines
297-6 is appropriate. The comptroller shall notify each taxing entity
297-7 of the entity's recomputed expanded tax base index.
297-8 (b) Effective on the earlier of October 1, 1999, or the
297-9 first day of the next calendar quarter that begins at least 30 days
297-10 after the date the comptroller notifies the taxing entity of the
297-11 entity's recomputed expanded tax base index under Subsection (a),
297-12 the taxing entity shall adjust the rate at which the entity is
297-13 imposing the sales and use tax rate and the entity's maximum tax
297-14 rate as necessary to reflect the recomputed expanded tax base
297-15 index.
297-16 Sec. 322.404. EXEMPTION ELECTION. (a) A taxing entity is
297-17 exempt from the application of this subchapter if the voters of the
297-18 entity, voting at an election called and held for that purpose,
297-19 authorize the exemption.
297-20 (b) If the election is held after the taxing entity's tax
297-21 rate is reduced under this subchapter, the ballot at an election
297-22 held under this section must be printed to permit voting for or
297-23 against the proposition: "The increase of the local sales and use
297-24 tax rate of ________ (insert name of taxing entity) to _____
297-25 (insert rate not to exceed the rate at which the taxing entity was
297-26 imposing the tax on September 1, 1997), and the corresponding
297-27 increase of the maximum tax rate to _____ (insert rate not to
298-1 exceed the maximum tax rate allowed by law on September 1, 1997)."
298-2 (c) If the election is held before the taxing entity's tax
298-3 rate is reduced under this subchapter, the ballot at an election
298-4 held under this section must be printed to permit voting for or
298-5 against the proposition: "Exempting _________ (insert name of
298-6 taxing entity) from the state-mandated automatic tax rate
298-7 reduction."
298-8 (d) A notice of the election and a certified copy of the
298-9 order canvassing the election results shall be:
298-10 (1) sent to the Texas Department of Transportation and
298-11 comptroller; and
298-12 (2) filed in the deed records of each county in which
298-13 the taxing entity is located.
298-14 (e) Section 41.001(a), Election Code, does not apply to an
298-15 election held under this section.
298-16 Sec. 322.405. EFFECTIVE DATE OF RATE INCREASE. A rate
298-17 increase authorized by Section 322.404(b) takes effect on the first
298-18 day of the first calendar quarter occurring after the expiration of
298-19 the first complete calendar quarter occurring after the date the
298-20 comptroller receives the notice under Section 322.404(d).
298-21 (b) This section takes effect on the earliest date on which
298-22 it may take effect under Section 39, Article III, Texas
298-23 Constitution.
298-24 (c) An election under Section 322.404, Tax Code, as added by
298-25 this section, may not be held before September 1, 1997, but the
298-26 ordering of an election before that date is not invalid.
298-27 SECTION 4.46. Section 323.002, Tax Code, is amended to read
299-1 as follows:
299-2 Sec. 323.002. DEFINITIONS. (a) The words used in this
299-3 chapter and defined by Chapters 151 and 321 have the meanings
299-4 assigned by Chapters 151 and 321.
299-5 (b) In this chapter, "expanded tax base" means the sale,
299-6 use, storage, rental, or other consumption of a taxable item that
299-7 was not subject to the tax imposed by Chapter 151 on September 30,
299-8 1997.
299-9 SECTION 4.47. Subchapter C, Chapter 323, Tax Code, is
299-10 amended by adding Sections 323.210 and 323.2101 to read as follows:
299-11 Sec. 323.210. USE OF EXPANDED TAX BASE REVENUE; GENERAL
299-12 COUNTY TAX. (a) This section applies to a county that has adopted
299-13 the county sales and use tax authorized by this chapter at an
299-14 election held before September 1, 1997.
299-15 (b) The commissioners court of a county to which this
299-16 section applies may call and hold an election on November 4, 1997,
299-17 on the question of using revenue from the expanded tax base
299-18 collected under this chapter for a purpose in addition to or other
299-19 than reducing county property taxes.
299-20 (c) The order calling the election under this section shall
299-21 allow the voters of the county to vote on whether the expanded tax
299-22 base revenue is required to be used to:
299-23 (1) provide further reduction of county property
299-24 taxes;
299-25 (2) provide additional revenue for the county that can
299-26 be used for any general purpose of the county;
299-27 (3) provide funding for one or more specific projects
300-1 or types of projects; or
300-2 (4) provide funding for a combination of the purposes
300-3 described by this subsection.
300-4 (d) The ballot at the election held under this section shall
300-5 be printed to permit voting in separate propositions on the
300-6 purposes described by Subsection (c). If the commissioners court
300-7 authorizes a vote on using the revenue for a combination of
300-8 purposes, the ballot at the election must specify an amount or
300-9 percentage of the amount of revenue that shall be used for each
300-10 purpose. Regardless of the number of propositions on the ballot, a
300-11 voter may be allowed to vote in favor of only one proposition. A
300-12 voter may not be allowed to vote against any proposition.
300-13 (e) If the county holds an election under this section, the
300-14 county may use the revenue from the expanded tax base only for the
300-15 purpose or combination of purposes expressed in the proposition
300-16 that receives a majority of the votes cast in the election. If no
300-17 proposition receives a majority of the votes cast in the election,
300-18 the commissioners court shall call another election to vote on the
300-19 two propositions that received the highest and second-highest
300-20 number of votes in the election or that tie for the highest number
300-21 of votes. If more than two propositions tie for the highest number
300-22 of votes in the main election or two or more propositions tie for
300-23 the second-highest number of votes, the commissioners court by
300-24 majority vote shall determine which two propositions are to be
300-25 voted on in the subsequent election.
300-26 (f) Not later than the fifth day after the date the final
300-27 canvass of the original election is completed, the commissioners
301-1 court shall order the subsequent election under Subsection (e).
301-2 The subsequent election shall be held not earlier than the 20th or
301-3 later than the 30th day after the date the final canvass of the
301-4 original election is completed. A subsequent election, however,
301-5 may be held after the 30th but not later than the 45th day after
301-6 the date the final canvass of the original election is completed if
301-7 the later date is necessary to:
301-8 (1) permit a joint election to be held with another
301-9 political subdivision in accordance with Chapter 271, Election
301-10 Code; or
301-11 (2) avoid holding the election on:
301-12 (A) a legal state or national holiday; or
301-13 (B) a weekend day within three days of a legal
301-14 state or national holiday.
301-15 (g) If the county holds a subsequent election, the county
301-16 may use the revenue from the expanded tax base only for the purpose
301-17 or combination of purposes expressed in the proposition that
301-18 receives a majority of the votes cast in the subsequent election.
301-19 (h) If the county holds an election under this section and,
301-20 before the date the use of the revenue from the expanded tax base
301-21 is finally determined by the election, a county receives a
301-22 distribution of the county's share of taxes under this chapter that
301-23 includes revenue from the expanded tax base, the county shall
301-24 deposit the expanded tax base revenue in a special account and may
301-25 not use that money for any purpose until the approved use is
301-26 finally determined.
301-27 (i) A county is not required to call and hold an election
302-1 under this section if the annual revenue from the expanded tax base
302-2 does not exceed $50,000. If the commissioners court elects not to
302-3 hold the election, the revenue from the expanded tax base shall be
302-4 used to provide for the reduction of county property taxes,
302-5 additional revenue for the county that can be used for any general
302-6 purpose of the county, funding for one or more specific projects or
302-7 types of projects, or a combination of these purposes as determined
302-8 by the commissioners court. If the commissioners court elects to
302-9 hold the election, the election shall be conducted in the manner
302-10 required by this section.
302-11 Sec. 323.2101. USE OF EXPANDED TAX BASE: TAX LEVIED FOR
302-12 SPECIAL PURPOSE. (a) This section applies to a county in which a
302-13 sales and use tax has been adopted at an election held before
302-14 September 1, 1997, and the county may use the revenue from that
302-15 tax only for a special purpose such as to provide funding for
302-16 health services or for the operation of a county landfill and a
302-17 criminal detention center.
302-18 (b) Except as otherwise provided by this section, a county
302-19 to which this section applies shall use revenue from the expanded
302-20 tax base to reduce county property taxes.
302-21 (c) The commissioners court of a county to which this
302-22 section applies may call and hold an election on November 4, 1997,
302-23 on the question of using revenue from the expanded tax base
302-24 collected under the law authorizing the imposition of the tax for a
302-25 purpose other than or in addition to reducing county property
302-26 taxes.
302-27 (d) The order calling the election under this section shall
303-1 allow the voters of the county to vote on whether the expanded tax
303-2 base revenue is required to be used to:
303-3 (1) reduce county property taxes;
303-4 (2) provide additional revenue that can be used for
303-5 any special purpose for which the tax is imposed;
303-6 (3) provide funding for one or more specific projects
303-7 or types of projects that the county is otherwise authorized to
303-8 undertake under the law authorizing the imposition of the tax;
303-9 (4) provide funding that can be used for one or more
303-10 specific projects or types of projects that the county is generally
303-11 authorized to undertake;
303-12 (5) provide additional revenue for the county that can
303-13 be used for any general purpose of the county; or
303-14 (6) provide funding for a combination of the purposes
303-15 described by this subsection.
303-16 (e) The ballot at the election held under this section shall
303-17 be printed to permit voting in separate propositions on the
303-18 purposes described by Subsection (d). If the commissioners court
303-19 authorizes a vote on using the revenue for a combination of
303-20 purposes, the ballot at the election must specify an amount or
303-21 percentage of an amount of revenue that shall be used for each
303-22 purpose. Regardless of the number of propositions on the ballot,
303-23 a voter may be allowed to vote in favor of only one proposition. A
303-24 voter may not be allowed to vote against any proposition.
303-25 (f) If the county holds an election under this section, the
303-26 county may use the revenue from the expanded tax base only for the
303-27 purpose or combination of purposes expressed in the proposition
304-1 that receives a majority of the votes cast in the election. If no
304-2 proposition receives a majority of the votes cast in the election,
304-3 the commissioners court shall call another election to vote on the
304-4 two propositions that received the highest and second-highest
304-5 number of votes in the election or that tie for the highest number
304-6 of votes. If more than two propositions tie for the highest number
304-7 of votes in the election or two or more propositions tie for the
304-8 second-highest number of votes, the commissioners court by majority
304-9 vote shall determine which two propositions are to be voted on in
304-10 the subsequent election.
304-11 (g) Not later than the fifth day after the date the final
304-12 canvass of the original election is completed, the commissioners
304-13 court shall order the subsequent election under Subsection (f).
304-14 The subsequent election shall be held not earlier than the 20th or
304-15 later than the 30th day after the date the final canvass of the
304-16 original election is completed. A subsequent election, however,
304-17 may be held after the 30th but not later than the 45th day after
304-18 the date the final canvass of the original election is completed if
304-19 the later date is necessary to:
304-20 (1) permit a joint election to be held with another
304-21 political subdivision in accordance with Chapter 271, Election
304-22 Code; or
304-23 (2) avoid holding the election on:
304-24 (A) a legal state or national holiday; or
304-25 (B) a weekend day within three days of a legal
304-26 state or national holiday.
304-27 (h) If the county holds a subsequent election under this
305-1 section, the county may use the revenue from the expanded tax base
305-2 only for the purpose or combination of purposes expressed in the
305-3 proposition that receives a majority of the votes cast in the
305-4 subsequent election.
305-5 (i) If a county holds an election under this section and,
305-6 before the date the use of the revenue from the expanded tax base
305-7 is finally determined under this section, a county receives a
305-8 distribution of the county's share of taxes under this chapter that
305-9 includes revenue from the expanded tax base, the county shall
305-10 deposit the expanded tax base revenue in a special account and may
305-11 not use that money for any purpose until the approved use is
305-12 finally determined.
305-13 (j) A county is not required to call and hold an election
305-14 under this section if the annual revenue from the expanded tax base
305-15 does not exceed $50,000. If the commissioners court elects not to
305-16 hold the election, the revenue from the expanded tax base shall be
305-17 used to provide for the reduction of county property taxes,
305-18 additional revenue for the county that can be used for any general
305-19 purpose of the county, funding for one or more specific projects or
305-20 types of projects, or a combination of these purposes as determined
305-21 by the commissioners court. If the commissioners court elects to
305-22 hold the election, the election shall be conducted in the manner
305-23 required by this section.
305-24 SECTION 4.48. Subchapter F, Chapter 323, Tax Code, is
305-25 amended by adding Section 323.506 to read as follows:
305-26 Sec. 323.506. USE OF TAX REVENUE FROM EXPANDED TAX BASE.
305-27 (a) If a county holds an election under this chapter on the
306-1 question of how to use the expanded tax base revenue, the county
306-2 may use the revenue only for the purpose or purposes authorized by
306-3 the voters under the applicable provisions of this chapter.
306-4 (b) If all or part of the additional revenue is to be used
306-5 to reduce county property taxes, the county shall use the money as
306-6 required by Section 323.505 and the applicable provisions of Title
306-7 1.
306-8 (c) If all or part of the additional revenue is to be used
306-9 for a purpose other than to reduce county property taxes, that
306-10 revenue is not considered to be sales and use tax revenue for the
306-11 purposes of Title 1.
306-12 SECTION 4.49. (a) Subtitle C, Title 3, Tax Code, is amended
306-13 by adding Chapter 326 to read as follows:
306-14 CHAPTER 326. EXPANDED TAX BASE FOR CERTAIN POLITICAL SUBDIVISIONS
306-15 SUBCHAPTER A. GENERAL PROVISIONS
306-16 Sec. 326.001. DEFINITIONS. In this chapter:
306-17 (1) "Expanded tax base" means the sale, use, storage,
306-18 rental, or other consumption of a taxable item that was not subject
306-19 to the tax imposed by Chapter 151 on September 30, 1997.
306-20 (2) "Political subdivision" includes a crime control
306-21 and prevention district, hospital district, and municipal
306-22 management or improvement district. The term does not include a
306-23 municipality, a county, a transportation authority created under
306-24 Subtitle K, Title 6, Transportation Code, or another entity for
306-25 whose benefit a municipality levies a sales and use tax.
306-26 (Sections 326.002-326.020 reserved for expansion
307-1 SUBCHAPTER B. POLITICAL SUBDIVISION THAT IMPOSES AN
307-2 AD VALOREM TAX
307-3 Sec. 326.021. APPLICATION OF SUBCHAPTER. This subchapter
307-4 applies to a political subdivision that imposes an ad valorem tax
307-5 and voted to impose a sales and use tax governed by Chapter 321 or
307-6 323 before September 1, 1997.
307-7 Sec. 326.022. USE OF EXPANDED TAX BASE. Except as otherwise
307-8 provided by this subchapter, a political subdivision to which this
307-9 subchapter applies shall use revenue from the expanded tax base to
307-10 reduce the political subdivision's property taxes.
307-11 Sec. 326.023. ELECTION FOR USE OF EXPANDED TAX BASE. (a)
307-12 The governing body of a political subdivision to which this
307-13 subchapter applies may call and hold an election on November 4,
307-14 1997, on the question of using revenue from the expanded tax base
307-15 collected under the law authorizing the imposition of the tax for a
307-16 purpose other than or in addition to reducing property taxes.
307-17 (b) The order calling the election under this section must
307-18 allow the voters of the political subdivision to vote on whether
307-19 the expanded tax base revenue is required to be used to:
307-20 (1) reduce property taxes of the political
307-21 subdivision;
307-22 (2) provide additional revenue for the political
307-23 subdivision that can be used for any general purpose of the
307-24 political subdivision;
307-25 (3) provide funding for one or more specific projects
307-26 or types of projects otherwise authorized for the political
307-27 subdivision; or
308-1 (4) provide funding for a combination of the purposes
308-2 described by this subsection.
308-3 (c) The ballot at the election held under this section shall
308-4 be printed to permit voting in separate propositions on the
308-5 purposes described by this section. If the governing body
308-6 authorizes a vote on using the revenue for a combination of
308-7 purposes, the ballot at the election must specify an amount or
308-8 percentage of the amount of revenue that shall be used for each
308-9 purpose. Regardless of the number of propositions on the ballot, a
308-10 voter may be allowed to vote in favor of only one proposition. A
308-11 voter may not be allowed to vote against any proposition.
308-12 (d) If the political subdivision holds an election under
308-13 this section, the political subdivision may use the revenue from
308-14 the expanded tax base only for the purpose or combination of
308-15 purposes expressed in the proposition that receives a majority of
308-16 the votes cast in the election. If no proposition receives a
308-17 majority of the votes cast in the election, the governing body
308-18 shall call another election to vote on the two propositions that
308-19 received the highest and second-highest number of votes in the
308-20 election or that tie for the highest number of votes. If more than
308-21 two propositions tie for the highest number of votes in the
308-22 election or two or more propositions tie for the second-highest
308-23 number of votes, the governing body by majority vote shall
308-24 determine which two propositions are to be voted on in the
308-25 subsequent election.
308-26 (e) Not later than the fifth day after the date the final
308-27 canvass of the original election is completed, the governing body
309-1 shall order the subsequent election under Subsection (d). The
309-2 subsequent election shall be held not earlier than the 20th or
309-3 later than the 30th day after the date the final canvass of the
309-4 original election is completed. A subsequent election, however,
309-5 may be held after the 30th but not later than the 45th day after
309-6 the date the final canvass of the original election is completed if
309-7 the later date is necessary to:
309-8 (1) permit a joint election to be held with another
309-9 political subdivision in accordance with Chapter 271, Election
309-10 Code; or
309-11 (2) avoid holding the election on:
309-12 (A) a legal state or national holiday; or
309-13 (B) a weekend day within three days of a legal
309-14 state or national holiday.
309-15 (f) If the political subdivision holds a subsequent
309-16 election, the political subdivision may use the revenue from the
309-17 expanded tax base only for the purpose or combination of purposes
309-18 expressed in the proposition that receives a majority of the votes
309-19 cast in the subsequent election.
309-20 (g) If a political subdivision holds an election under this
309-21 section and, before the date the use of the revenue from the
309-22 expanded tax base is finally determined under this section, a
309-23 political subdivision receives a distribution of the political
309-24 subdivision's share of taxes under this chapter that includes
309-25 revenue from the expanded tax base, the political subdivision shall
309-26 deposit the expanded tax base revenue in a special account and may
309-27 not use that money for any purpose until the approved use is
310-1 finally determined.
310-2 Sec. 326.024. USE OF TAX REVENUE. (a) Except as otherwise
310-3 provided by this section, a political subdivision to which this
310-4 subchapter applies may use the revenue from the expanded tax base
310-5 only to reduce the political subdivision's property taxes.
310-6 (b) If the political subdivision holds an election under
310-7 this subchapter on the question of how to use the expanded tax base
310-8 revenue, the political subdivision may use the revenue only for the
310-9 purpose or purposes authorized by the voters.
310-10 (c) If all or part of the additional revenue is to be used
310-11 to reduce property taxes, the political subdivision is considered
310-12 to have voted to impose the municipal additional sales and use tax
310-13 or the county sales and use tax and Section 321.507 or 323.505, as
310-14 appropriate, applies. Regardless, the applicable provisions of
310-15 Title 1 apply.
310-16 (Sections 326.025-326.050 reserved for expansion
310-17 SUBCHAPTER C. POLITICAL SUBDIVISION THAT DOES NOT
310-18 IMPOSE AN AD VALOREM TAX
310-19 Sec. 326.051. APPLICATION OF SUBCHAPTER. This subchapter
310-20 applies to a political subdivision that does not impose an ad
310-21 valorem tax and voted to impose a sales and use tax governed by
310-22 Chapter 321 or 323 before September 1, 1997.
310-23 Sec. 326.052. COMPUTATION OF EXPANDED TAX BASE INDEX. (a)
310-24 Not later than September 1, 1997, the comptroller shall compute an
310-25 expanded tax base index for each political subdivision to which
310-26 this subchapter applies.
310-27 (b) Not later than August 1, 1999, the comptroller shall
311-1 recompute the expanded tax base index for each political
311-2 subdivision in accordance with Section 322.403.
311-3 (c) In computing and recomputing the expanded tax base
311-4 index, the comptroller shall use the procedures prescribed by
311-5 Subchapter E, Chapter 322. For purposes of that computation:
311-6 (1) "entity area," as that term is used in Subchapter
311-7 E, Chapter 322, means the area included in the political
311-8 subdivision; and
311-9 (2) "taxing entity," as that term is used in
311-10 Subchapter E, Chapter 322, means the political subdivision.
311-11 Sec. 326.053. REDUCTION OF TAX BASE. After the comptroller
311-12 computes or recomputes the expanded tax base index, the political
311-13 subdivision shall reduce the actual and maximum tax rate in
311-14 accordance with the requirements of Subchapter E, Chapter 322.
311-15 Sec. 326.054. EXEMPTION ELECTION. The voters of a political
311-16 subdivision may exempt the political subdivision from the
311-17 application of this subchapter in accordance with the procedures
311-18 prescribed by Subchapter E, Chapter 322, and any resulting tax
311-19 increase takes effect as provided by that subchapter, except that
311-20 the political subdivision is not required to send notice or a
311-21 certified copy of the order canvassing the election results to the
311-22 Texas Department of Transportation.
311-23 (b) This section takes effect on the earliest date on which
311-24 it may take effect under Section 39, Article III, Texas
311-25 Constitution.
311-26 (c) An election under Section 326.054, Tax Code, as added by
311-27 this section, may not be held before September 1, 1997, but the
312-1 ordering of an election before that date is not invalid.
312-2 SECTION 4.50. The following provisions of the Tax Code are
312-3 repealed:
312-4 (1) Section 151.007(d);
312-5 (2) Section 151.157(g);
312-6 (3) Sections 151.158 and 151.159;
312-7 (4) Section 151.3071;
312-8 (5) Section 151.320;
312-9 (6) Sections 151.328(f) and (g); and
312-10 (7) Subchapter E, Chapter 191.
312-11 SECTION 4.51. (a) There are exempted from the taxes imposed
312-12 by Chapter 151, Tax Code, the receipts from the sale, use, storage,
312-13 rental, or other consumption in this state of items or services
312-14 that became subject to the taxes because of the terms of this
312-15 article and that are the subject of a written contract or bid
312-16 entered into on or before March 1, 1997.
312-17 (b) The exemption provided by this section expires January
312-18 1, 2000.
312-19 SECTION 4.52. Except as provided by this article, this
312-20 article takes effect October 1, 1997.
312-21 ARTICLE 5. INSURANCE PREMIUM TAXES
312-22 SECTION 5.01. Section 11(a), Article 1.14-1, Insurance Code,
312-23 is amended to read as follows:
312-24 (a) Except as to premiums on insurance procured by a
312-25 licensed surplus lines agent from an eligible surplus lines insurer
312-26 as defined in Article 1.14-2 and premiums on independently procured
312-27 insurance on which a tax has been paid pursuant to this Article or
313-1 Article 1.14-2, every unauthorized insurer shall pay to the
313-2 comptroller, on a form prescribed by the comptroller, before March
313-3 1 next succeeding the calendar year in which the insurance was so
313-4 effectuated, continued or renewed or another date as prescribed by
313-5 the comptroller a premium receipts tax of 5.85 [4.85] percent of
313-6 gross premiums charged for such insurance on subjects resident,
313-7 located or to be performed in this state. Such insurance on
313-8 subjects resident, located or to be performed in this state
313-9 procured through negotiations or an application, in whole or in
313-10 part occurring or made within or from within or outside of this
313-11 state, or for which premiums in whole or in part are remitted
313-12 directly or indirectly from within or outside of this state, shall
313-13 be deemed to be insurance procured, or continued or renewed in this
313-14 state. The term "premium" includes all premiums, membership fees,
313-15 assessments, dues and any other consideration for insurance. Such
313-16 tax shall be in lieu of all other insurance taxes. On default of
313-17 any such unauthorized insurer in the payment of such tax the
313-18 insured shall pay the tax. If the tax prescribed by this
313-19 subsection is not paid within the time stated, Subtitles A and B,
313-20 Title 2, Tax Code, and their subsequent amendments, apply.
313-21 SECTION 5.02. Section 12(a), Article 1.14-1, Insurance Code,
313-22 is amended to read as follows:
313-23 (a) Every insured who procures insurance in accordance with
313-24 Section 2(b)(4) [2(b)4] of this Article must file a report with the
313-25 comptroller and pay an independently procured insurance tax of 5.85
313-26 [4.85] percent.
313-27 SECTION 5.03. Section 12(a), Article 1.14-2, Insurance Code,
314-1 is amended to read as follows:
314-2 (a) The premiums charged for surplus lines insurance are
314-3 subject to a premium receipts tax of 5.85 [4.85] percent of gross
314-4 premiums charged for such insurance. The term premium includes all
314-5 premiums, membership fees, assessments, dues or any other
314-6 consideration for insurance. Such tax shall be in lieu of all
314-7 other insurance taxes. The surplus lines agent shall collect from
314-8 the insured the amount of the tax at the time of delivery of the
314-9 cover note, certificate of insurance, policy or other initial
314-10 confirmation of insurance, in addition to the full amount of the
314-11 gross premium charged by the insurer for the insurance. No agent
314-12 shall absorb such tax nor shall any agent, as an inducement for
314-13 insurance or for any other reason, rebate all or any part of such
314-14 tax or his commission. The surplus lines agent shall report to the
314-15 comptroller on or before March 1 of each year the amount of gross
314-16 premiums received for such insurance placed through an eligible
314-17 surplus lines insurer during the calendar year ending on the
314-18 preceding December 31 and shall pay to the comptroller the tax as
314-19 provided for by this Article. If a surplus lines policy covers
314-20 risks or exposures only partially in this state, the tax payable
314-21 shall be computed on the portions of the premium which are properly
314-22 allocated to the risks or exposures located in this state. In
314-23 determining the amount of premiums taxable in this state, all
314-24 premiums written, procured, or received in this state and all
314-25 premiums on policies negotiated in this state shall be deemed
314-26 written on property or risks located or resident in this state,
314-27 except such premiums as are properly allocated or apportioned and
315-1 reported as premiums which may be subject to taxation by any other
315-2 state or states. Premiums that are properly allocated to any other
315-3 state or states that are specifically exempt from taxation under
315-4 the regulations of that state or states are not taxable in this
315-5 state. Premiums on risks or exposures which are properly allocated
315-6 to federal waters, international waters or under the jurisdiction
315-7 of a foreign government shall not be taxable by this state. In
315-8 event of cancellation and rewriting of any surplus lines insurance
315-9 contract the additional premium for premium receipts tax purposes
315-10 shall be the premium in excess of the unearned premium of the
315-11 canceled insurance contract.
315-12 SECTION 5.04. Subsection (b), Article 1.16, Insurance Code,
315-13 is amended to read as follows:
315-14 (b) Assessments for the expenses of such domestic
315-15 examination which shall be sufficient to meet all the expenses and
315-16 disbursements necessary to comply with the provisions of the laws
315-17 of Texas relating to the examination of insurance companies and to
315-18 comply with the provisions of this Article and Articles 1.17 and
315-19 1.18 of this Code, shall be made by the Texas Department [State
315-20 Board] of Insurance upon the corporations or associations to be
315-21 examined taking into consideration annual premium receipts, and/or
315-22 admitted assets that are not attributable to 90 percent of pension
315-23 plan contracts as defined in Section 818(a) of the Internal Revenue
315-24 Code of 1986 (26 U.S.C. Section 818(a)), and/or insurance in force;
315-25 provided such assessments shall be made and collected as follows:
315-26 (1) expenses attributable directly to a specific examination
315-27 including employees' salaries and expenses and expenses provided by
316-1 Article 1.28 of this Code shall be collected at the time of
316-2 examination; (2) assessments calculated annually for each
316-3 corporation or association which take into consideration annual
316-4 premium receipts, and/or admitted assets that are not attributable
316-5 to 90 percent of pension plan contracts as defined in Section
316-6 818(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section
316-7 818(a)), and/or insurance in force shall be assessed annually for
316-8 each such corporation or association. In computing the
316-9 assessments, the department [board] may not consider insurance
316-10 premiums for insurance contracted for by a state or federal
316-11 governmental entity to provide welfare benefits to designated
316-12 welfare recipients or contracted for in accordance with or in
316-13 furtherance of Title 2, Human Resources Code, or the federal Social
316-14 Security Act (42 U.S.C. Section 301 et seq.). The amount of the
316-15 assessments paid in each taxable year to or for the use of the
316-16 State of Texas by any insurance corporation or association hereby
316-17 affected may not [shall] be allowed as a credit on the amount of
316-18 premium taxes to be paid by any such insurance corporation or
316-19 association [for such taxable year except as provided by Article
316-20 1.28 of this Code].
316-21 SECTION 5.05. Section 2, Article 1.28, Insurance Code, is
316-22 amended to read as follows:
316-23 Sec. 2. The amount of the examination expenses paid to this
316-24 state [incurred by representatives of the State Board of Insurance
316-25 that is directly attributable to an examination of the books,
316-26 records, accounts, and principal offices of a domestic insurance
316-27 company located outside this state as provided by this article] is
317-1 not allowed as a credit on or offset to the amount of premium taxes
317-2 to be paid by the domestic insurance company to the state, and this
317-3 article prevails over any conflicting provisions in [Articles 1.16,
317-4 4.10, and 4.11 of this code or] any other law of this state.
317-5 SECTION 5.06. Section 1, Article 4.10, Insurance Code, is
317-6 amended to read as follows:
317-7 Sec. 1. PAYMENT OF TAX. Every insurance carrier, including
317-8 Lloyd's and reciprocal or interinsurance exchanges and any other
317-9 organization or concern receiving gross premiums from the business
317-10 of fire, marine, marine inland, accident, credit, livestock,
317-11 fidelity, guaranty, surety, casualty, workers' compensation,
317-12 employers' liability, or any other kind or character of insurance,
317-13 except title insurance and except as provided in Sections 2, 3, and
317-14 4 of this article, shall pay to the comptroller [for transmittal to
317-15 the state treasurer] a tax upon such gross premium receipts as
317-16 provided in this article. Any such insurance carrier doing other
317-17 kinds of insurance business shall pay the tax levied upon its gross
317-18 premiums received from such other kinds of business as provided in
317-19 Articles 4.03 and 4.11 of this code.
317-20 SECTION 5.07. Section 6(b), Article 4.10, Insurance Code,
317-21 is amended to read as follows:
317-22 (b) A semiannual prepayment of premium tax must be made on
317-23 March 1st and August 1st by all insurers with net tax liability for
317-24 the previous calendar year in excess of $1,000. The tax paid on
317-25 each date must equal one-half of the total premium tax paid for the
317-26 previous calendar year. Should no premium tax have been paid
317-27 during the previous calendar year, the semiannual payment shall
318-1 equal the tax which would be owed on the aggregate of the gross
318-2 premium receipts for the two previous calendar quarters at the
318-3 [minimum] tax rate specified by law. The comptroller is authorized
318-4 to [certify for] refund [to the State Treasurer] any overpayment of
318-5 premium taxes that results from the semiannual prepayment system
318-6 herein established.
318-7 SECTION 5.08. Article 4.10, Insurance Code, is amended by
318-8 adding Section 6A and amending Section 10 to read as follows:
318-9 Sec. 6A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
318-10 Notwithstanding Section 6 of this article, for the 1998 tax year, a
318-11 semiannual prepayment of premium tax must be made on March 1, 1998,
318-12 and August 1, 1998, by all insurers with net tax liability for the
318-13 previous calendar year in excess of $1,000. The tax paid on each
318-14 date must equal 66.5 percent of the total premium tax paid during
318-15 the previous calendar year. If an insurer did not pay premium
318-16 taxes during the previous calendar year, the semiannual payment
318-17 shall equal the tax that would be owed on the aggregate of the
318-18 gross premium receipts for the two previous calendar quarters at
318-19 the tax rate specified by law for the 1998 tax year. The
318-20 comptroller is authorized to refund any overpayment of premium
318-21 taxes that results from the semiannual prepayment system
318-22 established by this section.
318-23 (b) This section expires September 1, 1999.
318-24 Sec. 10. Rate of tax. There is imposed on each such
318-25 insurance carrier an annual tax equal to 2.25 percent [3.5%] of its
318-26 premium receipts. [Any insurance carrier may qualify for a tax
318-27 rate lower than the 3.5% imposed by this article. Such
319-1 qualification for a lower rate can be accomplished in the following
319-2 two ways:]
319-3 [(a) If such insurance carrier for the year ending
319-4 December 31 preceding owns Texas investments in an amount in total
319-5 value which is not less than 85% nor more than 90% of the amount
319-6 such insurance carrier owned in the comparison state in similar
319-7 investments as herein defined, the tax imposed shall be equal to
319-8 2.4% of its gross premium receipts.]
319-9 [(b) If such insurance carrier for the year ending
319-10 December 31 preceding owns Texas investments in an amount in total
319-11 value which is in excess of 90% of the amount such insurance
319-12 carrier owned in the comparison state in similar investments as
319-13 herein defined, the tax imposed shall be equal to 1.6% of its gross
319-14 premium receipts.]
319-15 SECTION 5.09. Section 2(c), Article 4.11, Insurance Code, is
319-16 amended to read as follows:
319-17 (c) "Gross premiums" are the total gross amount of all
319-18 premiums, membership fees, assessments, dues, and any other
319-19 considerations for such insurance received during the taxable year
319-20 on each and every kind of such insurance policy or contract
319-21 covering persons located in the State of Texas and arising from the
319-22 types of insurance specified in Section 1 of this article, but
319-23 deducting returned premiums, any dividends applied to purchase
319-24 paid-up additions to insurance or to shorten the endowment or
319-25 premium payment period, and excluding those premiums received from
319-26 insurance carriers for reinsurance and there shall be no deduction
319-27 for premiums paid for reinsurance. For purposes of this article, a
320-1 stop-loss or excess loss insurance policy issued to a health
320-2 maintenance organization, as defined under the Texas Health
320-3 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
320-4 Code), shall be considered reinsurance. [Such gross premiums shall
320-5 not include premiums received from the Treasury of the State of
320-6 Texas or from the Treasury of the United States for insurance
320-7 contracted for by the state or federal government for the purpose
320-8 of providing welfare benefits to designated welfare recipients or
320-9 for insurance contracted for by the state or federal government in
320-10 accordance with or in furtherance of the provisions of Title 2,
320-11 Human Resources Code, or the Federal Social Security Act.] The
320-12 gross premiums receipts so reported shall not include the amount of
320-13 premiums paid on group health, accident, and life policies in which
320-14 the group covered by the policy consists of a single nonprofit
320-15 trust established to provide coverage primarily for municipal or
320-16 county employees of this state. To the extent allowed by federal
320-17 law, "gross premiums" includes any contributions made by the
320-18 carrier to an employee benefit plan.
320-19 SECTION 5.10. Article 4.11, Insurance Code, is amended by
320-20 amending Section 5F and adding Section 5I to read as follows:
320-21 Sec. 5F. TAX RATE--1995 THROUGH 1997 [AND AFTERWARDS].
320-22 (a) Except for gross premiums on life insurance taxed under
320-23 Section 5G of this article and gross revenues of health maintenance
320-24 organizations taxed under Subsection (b) of this section and
320-25 Section 5H of this article, beginning with tax year 1995, through
320-26 tax year 1997, there is imposed on each insurance carrier an annual
320-27 tax equal to 1.75 percent of its gross premiums.
321-1 (b) Beginning with tax year 1995, through tax year 1997,
321-2 there is imposed on each health maintenance organization operating
321-3 under the Texas Health Maintenance Organization Act (Chapter 20A,
321-4 Vernon's Texas Insurance Code) an annual tax equal to 1.75 percent
321-5 of its gross amount of its revenues collected for issuance of
321-6 health maintenance certificates or contracts.
321-7 Sec. 5I. TAX RATE--1998 AND AFTERWARDS. Beginning with tax
321-8 year 1998, there is imposed on each insurance carrier and health
321-9 maintenance organization covered under this article a tax equal to
321-10 2.25 percent of its gross premiums or revenues collected for
321-11 issuance of certificates or contracts.
321-12 SECTION 5.11. Section 13(a), Article 4.11, Insurance Code,
321-13 is amended to read as follows:
321-14 (a) A semiannual prepayment of premium tax must be made on
321-15 March 1 and August 1 by all insurers with net tax liability for the
321-16 previous calendar year in excess of $1,000. The tax paid on each
321-17 date must equal one-half of the total premium tax paid for the
321-18 previous calendar year. Should no premium tax have been paid
321-19 during the previous calendar year, the semiannual payment shall
321-20 equal the tax which would be owed on the aggregate of the gross
321-21 premium receipts for the two previous calendar quarters at the
321-22 [minimum] tax rate specified by law. The comptroller is authorized
321-23 to [certify for] refund [to the state treasurer] any overpayment of
321-24 premium taxes that results from the semiannual prepayment system
321-25 herein established.
321-26 SECTION 5.12. Article 4.11, Insurance Code, is amended by
321-27 adding Section 13A to read as follows:
322-1 Sec. 13A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
322-2 Notwithstanding Section 13 of this article, for the 1998 tax year,
322-3 a semiannual prepayment of premium tax must be made on March 1,
322-4 1998, and August 1, 1998, by all insurers with net tax liability
322-5 for the previous calendar year in excess of $1,000. The tax paid
322-6 on each date must equal 66.5 percent of the total premium tax paid
322-7 during the previous calendar year. If an insurer did not pay
322-8 premium taxes during the previous calendar year, the semiannual
322-9 payment shall equal the tax that would be owed on the aggregate of
322-10 the gross premium receipts for the two previous calendar quarters
322-11 at the tax rate specified by law for the 1998 tax year. The
322-12 comptroller is authorized to refund any overpayment of premium
322-13 taxes that results from the semiannual prepayment system
322-14 established by this section.
322-15 (b) This section expires September 1, 1999.
322-16 SECTION 5.13. Section 3(b), Article 9.59, Insurance Code, is
322-17 amended to read as follows:
322-18 (b) A semiannual prepayment of premium tax must be made on
322-19 March 1 and August 1 by all insurers with net tax liability for the
322-20 previous calendar year of more than $1,000. The tax paid on each
322-21 date must equal one-half of the total premium tax paid for the
322-22 previous calendar year. If no premium tax has been paid during the
322-23 previous calendar year, the semiannual payment shall equal the tax
322-24 that would be owed on the aggregate of the gross premium receipts
322-25 for the two previous calendar quarters at the [minimum] tax rate
322-26 specified by law. The comptroller may [certify for] refund [to the
322-27 state treasurer] any overpayment of premium taxes that results from
323-1 the semiannual prepayment system established by this subsection.
323-2 SECTION 5.14. Article 9.59, Insurance Code, is amended by
323-3 adding Section 3A and amending Section 4 to read as follows:
323-4 Sec. 3A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
323-5 Notwithstanding Section 3 of this article, for the 1998 tax year, a
323-6 semiannual prepayment of premium tax must be made on March 1, 1998,
323-7 and August 1, 1998, by all insurers with net tax liability for the
323-8 previous calendar year in excess of $1,000. The tax paid on each
323-9 date must equal 66.5 percent of the total premium tax paid during
323-10 the previous calendar year. If an insurer did not pay premium
323-11 taxes during the previous calendar year, the semiannual payment
323-12 shall equal the tax that would be owed on the aggregate of the
323-13 gross premium receipts for the two previous calendar quarters at
323-14 the tax rate specified by law for the 1998 tax year. The
323-15 comptroller is authorized to refund any overpayment of premium
323-16 taxes that results from the semiannual prepayment system
323-17 established by this section.
323-18 (b) This section expires September 1, 1999.
323-19 Sec. 4. RATE OF TAX. There is imposed on all premium on
323-20 title insurance an annual tax equal to 1.8 percent (1.8%) [two
323-21 percent (2.0%)].
323-22 [Any title insurance company may remit on a tax rate lower
323-23 than the two percent (2.0%) imposed by this article. If such title
323-24 insurance company as of the preceding December 31 owns Texas
323-25 investments in an amount in total value which is in excess of
323-26 ninety percent (90%) of the amount such title insurance company
323-27 owned in the comparison state in similar investments as herein
324-1 defined, the tax imposed shall be equal to 1.3 percent (1.3%) of
324-2 premium.]
324-3 SECTION 5.15. Sections 32(b)(3)-(5), Texas Health
324-4 Maintenance Organization Act (Article 20A.32, Vernon's Texas
324-5 Insurance Code), are amended to read as follows:
324-6 (3) The [Except as provided by Subdivision (4) of this
324-7 subsection, the] amount paid by a health maintenance organization
324-8 in each taxable year under Subdivision (1)(B) of this subsection
324-9 may not [shall] be allowed as a credit on the amount of premium
324-10 taxes to be paid by the health maintenance organization [for that
324-11 taxable year].
324-12 (4) [The amount directly attributable to an
324-13 examination of the books, records, accounts, or principal offices
324-14 of a health maintenance organization located outside this state may
324-15 not be allowed as a credit against the amount of premium taxes to
324-16 be paid by the health maintenance organization.]
324-17 [(5)] The funds received by the board shall be
324-18 deposited in the state treasury to the credit of the Texas
324-19 Department of Health health maintenance organization fund, and
324-20 those funds shall be appropriated to the Texas Department of Health
324-21 to carry out the statutory duties of the board under this chapter.
324-22 SECTION 5.16. The following provisions of the Insurance Code
324-23 are repealed:
324-24 (1) Sections 7, 8, 9, and 13, Article 4.10;
324-25 (2) Section 8, Article 4.11;
324-26 (3) Article 4.11B;
324-27 (4) Article 4.11C; and
325-1 (5) Sections 7, 13, and 14, Article 9.59.
325-2 SECTION 5.17. This article takes effect January 1, 1998.
325-3 ARTICLE 6. LOTTERY REVENUE
325-4 SECTION 6.01. Section 466.015, Government Code, is amended
325-5 by amending Subsection (c) and adding Subsection (d) to read as
325-6 follows:
325-7 (c) The commission may adopt rules governing the
325-8 establishment and operation of the lottery, including rules
325-9 governing:
325-10 (1) the type of lottery games to be conducted;
325-11 (2) the price of each ticket;
325-12 (3) the number of winning tickets and amount of the
325-13 prize paid on each winning ticket, except that the total amount of
325-14 prizes awarded under this chapter may not exceed the amount
325-15 described in Subsection (d);
325-16 (4) the frequency of the drawing or selection of a
325-17 winning ticket;
325-18 (5) the number and types of locations at which a
325-19 ticket may be sold;
325-20 (6) the method to be used in selling a ticket;
325-21 (7) the use of vending machines or electronic or
325-22 mechanical devices of any kind, other than machines or devices that
325-23 dispense currency or coins as prizes;
325-24 (8) the manner of paying a prize to the holder of a
325-25 winning ticket;
325-26 (9) the investigation of possible violations of this
325-27 chapter or any rule adopted under this chapter;
326-1 (10) the means of advertising to be used for the
326-2 lottery;
326-3 (11) the qualifications of vendors of lottery services
326-4 or equipment;
326-5 (12) the confidentiality of information relating to
326-6 the operation of the lottery, including:
326-7 (A) trade secrets;
326-8 (B) security measures, systems, or procedures;
326-9 (C) security reports;
326-10 (D) bids or other information regarding the
326-11 commission's contracts, if disclosure of the information would
326-12 impair the commission's ability to contract for facilities, goods,
326-13 or services on terms favorable to the commission;
326-14 (E) personnel information unrelated to
326-15 compensation, duties, qualifications, or responsibilities; and
326-16 (F) information obtained by commission security
326-17 officers or investigators;
326-18 (13) the development and availability of a model
326-19 agreement governing the division of a prize among multiple
326-20 purchasers of a winning ticket purchased through a group purchase
326-21 or pooling arrangement;
326-22 (14) the criteria to be used in evaluating bids for
326-23 contracts for lottery facilities, goods, and services; or
326-24 (15) any other matter necessary or desirable as
326-25 determined by the commission, to promote and ensure:
326-26 (A) the integrity, security, honesty, and
326-27 fairness of the operation and administration of the lottery; and
327-1 (B) the convenience of players and holders of
327-2 winning tickets.
327-3 (d) The total amount of lottery prizes that the commission
327-4 may award for all lottery games in any fiscal year may not exceed
327-5 an amount equal to the gross revenue from the sale of tickets in
327-6 that fiscal year multiplied by the percentage amount of lottery
327-7 prizes awarded for all lottery games in fiscal year 1997 as
327-8 determined by the comptroller minus an amount equal to five percent
327-9 of gross lottery revenue for the fiscal year in which the prizes
327-10 are being awarded.
327-11 SECTION 6.02. Section 466.355(b), Government Code, is
327-12 amended to read as follows:
327-13 (b) Money in the state lottery account may be used only for
327-14 the following purposes and shall be distributed as follows:
327-15 (1) the payment of prizes to the holders of winning
327-16 tickets;
327-17 (2) the payment of costs incurred in the operation and
327-18 administration of the lottery, including any fees received by a
327-19 lottery operator, provided that the costs incurred in a fiscal
327-20 biennium may not exceed an amount equal to 15 percent of the gross
327-21 revenue accruing from the sale of tickets in that biennium;
327-22 (3) the establishment of a pooled bond fund, lottery
327-23 prize reserve fund, unclaimed prize fund, and prize payment
327-24 account; and
327-25 (4) the balance, after creation of a reserve
327-26 sufficient to pay the amounts needed or estimated to be needed
327-27 under Subdivisions (1) through (3), to be transferred to the
328-1 foundation school [unobligated portion of the general revenue]
328-2 fund, on or before the 15th day of each month.
328-3 SECTION 6.03. This article takes effect September 1, 1997.
328-4 SECTION 6.04. (a) Except as provided by Subsection (b) of
328-5 this section, the change in law made to Section 466.015, Government
328-6 Code, by this article, applies to a ticket sold on or after the
328-7 effective date of this article. A ticket sold before that date is
328-8 governed by the law in effect when the ticket was sold, and that
328-9 law is continued in effect for that purpose.
328-10 (b) In fiscal year 1998, the total amount of lottery prizes
328-11 that the Texas Lottery Commission may award under Section
328-12 466.015(d), Government Code, as added by this article, may not
328-13 exceed an amount equal to the gross revenue from the sale of
328-14 lottery tickets multiplied by the percentage amount of lottery
328-15 prizes awarded for all lottery games in fiscal year 1997 as
328-16 determined by the comptroller minus an amount equal to four and
328-17 one-half percent of gross lottery revenue for the 1998 fiscal year.
328-18 SECTION 6.05. The change in law made to Section 466.355,
328-19 Government Code, by this article applies only to a transfer from
328-20 the state lottery account made on or after the effective date of
328-21 this article.
328-22 ARTICLE 7. ALCOHOLIC BEVERAGE TAXES
328-23 SECTION 7.01. Sections 201.03, 201.04, and 201.09, Alcoholic
328-24 Beverage Code, are amended to read as follows:
328-25 Sec. 201.03. Tax on Distilled Spirits. (a) A tax is
328-26 imposed on the first sale of distilled spirits at the rate of $2.64
328-27 [$2.40] per gallon.
329-1 (b) The minimum tax imposed on packages of distilled spirits
329-2 containing two ounces or less is 5.5 [five] cents per package.
329-3 (c) Should packages containing less than one-half pint but
329-4 more than two ounces ever be legalized in this state, the minimum
329-5 tax imposed on each of these packages is $0.134 [$0.122].
329-6 Sec. 201.04. Tax on Vinous Liquor. (a) A tax is imposed on
329-7 the first sale of vinous liquor that does not contain over 14
329-8 percent of alcohol by volume at the rate of 22.44 [20.4] cents per
329-9 gallon.
329-10 (b) A tax is imposed on vinous liquor that contains more
329-11 than 14 percent of alcohol by volume at the rate of 44.88 [40.8]
329-12 cents per gallon.
329-13 (c) A tax is imposed on artificially carbonated and natural
329-14 sparkling vinous liquor at the rate of 56.76 [51.6] cents per
329-15 gallon.
329-16 Sec. 201.09. REFUND DUE ON DISPOSITION OUTSIDE OF STATE.
329-17 The holder of any permit authorizing the transportation of liquor
329-18 out of this state may apply to the commission for a refund of the
329-19 excise tax on liquor on which the state tax has been paid on proper
329-20 proof that the liquor was sold or disposed of outside of this
329-21 state. This section does not apply to the holder of an airline
329-22 beverage permit or passenger train permit.
329-23 SECTION 7.02. Section 201.42, Alcoholic Beverage Code, is
329-24 amended to read as follows:
329-25 Sec. 201.42. Tax on Ale and Malt Liquor. A tax is imposed
329-26 on the first sale of ale and malt liquor at the rate of $0.2178
329-27 [$0.198] per gallon.
330-1 SECTION 7.03. Section 203.01, Alcoholic Beverage Code, is
330-2 amended to read as follows:
330-3 Sec. 203.01. Tax on Beer. A tax is imposed on the first
330-4 sale of beer manufactured in this state or imported into this state
330-5 at the rate of $6.60 [six dollars] per barrel.
330-6 SECTION 7.04. (a) This article takes effect September 1,
330-7 1997.
330-8 (b) In addition to the holders of any alcoholic beverage
330-9 license or permit, the provisions of this article also apply to the
330-10 holder of a food and beverage certificate issued by the Texas
330-11 Alcoholic Beverage Commission.
330-12 ARTICLE 8. MOTOR FUEL AND AVIATION FUEL TAXES
330-13 SECTION 8.01. Section 153.001, Tax Code, is amended by
330-14 amending Subdivisions (1), (4), (8), (16), (18), (19), (25), and
330-15 (27) and adding Subdivisions (28), (29), and (30) to read as
330-16 follows:
330-17 (1) "Aviation fuel [dealer]" has the meaning assigned
330-18 to that term by Section 161.001 [means a person who:]
330-19 [(A) is the operator of an aircraft servicing
330-20 facility;]
330-21 [(B) delivers gasoline or diesel fuel
330-22 exclusively into the fuel supply tanks of aircraft or into
330-23 equipment used solely for servicing aircraft and used exclusively
330-24 off-highway; and]
330-25 [(C) does not use, sell, or distribute gasoline
330-26 or diesel fuel on which a fuel tax is required to be collected or
330-27 paid to this state].
331-1 (4) "Dealer" means a person who is the operator of a
331-2 service station or other retail outlet and who delivers motor fuel
331-3 into the fuel supply tanks of motor vehicles, commercial vessels,
331-4 or motorboats.
331-5 (8) "Diesel tax prepaid user" means a person:
331-6 (A) whose purchases of diesel fuel are not for
331-7 commercial vessel or agricultural use and are predominantly for
331-8 nonhighway use;
331-9 (B) who acquires diesel fuel on which the tax
331-10 imposed under Section 153.202(c) has been paid;
331-11 (C) whose only diesel-powered motor vehicles are
331-12 passenger cars or light trucks; and
331-13 (D) [(C)] who elects to prepay an annual diesel
331-14 fuel tax to the comptroller on each diesel-powered motor vehicle.
331-15 (16) "Liquefied gas" means all combustible gases that
331-16 exist in the gaseous state at 60 degrees Fahrenheit and at a
331-17 pressure of 14.7 pounds per square inch absolute, but does not
331-18 include gasoline, [or] diesel fuel, or aviation fuel.
331-19 (18) "Motorboat" means a vessel propelled by
331-20 machinery, whether or not the machinery is the principal source of
331-21 propulsion. The term does not include a commercial vessel.
331-22 (19) "Motor fuel" includes gasoline, diesel fuel,
331-23 liquefied gas, and other products that are usable as propellants of
331-24 a motor vehicle, but does not include aviation fuel.
331-25 (25) "Supplier" means a person who:
331-26 (A) refines, distills, manufactures, produces,
331-27 or blends for sale or distribution diesel fuel in this state;
332-1 (B) imports or exports diesel fuel other than in
332-2 the fuel supply tanks of motor vehicles;
332-3 (C) sells or delivers diesel fuel in bulk
332-4 quantities to dealers, users, [aviation fuel dealers,] or other
332-5 suppliers; or
332-6 (D) is engaged in the business of selling or
332-7 delivering diesel fuel in bulk quantities to consumers for
332-8 nonhighway uses.
332-9 (27) "User" means a person who owns or operates a
332-10 motor vehicle, a motorboat, or a motor-fuel-powered motor or
332-11 engine, other than a commercial vessel or a motor or engine for
332-12 agricultural use, having fuel supply tanks into which gasoline or
332-13 diesel fuel is delivered.
332-14 (28) "Agricultural use" means propelling farm
332-15 machinery and operating pumping equipment in the production of an
332-16 agricultural product or processing farm and ranch products in the
332-17 hands of the producer only.
332-18 (29) "Bonded limited tax-paid user" means a user who
332-19 does not possess or use tax-free diesel fuel.
332-20 (30) "Commercial vessel" means a vessel propelled by
332-21 machinery, whether or not the machinery is the principal source of
332-22 propulsion, that is used exclusively for commercial purposes, other
332-23 than the provision of entertainment or gambling services.
332-24 SECTION 8.02. Section 153.013, Tax Code, is amended by
332-25 adding Subsection (c) to read as follows:
332-26 (c) In the absence of evidence to the contrary, any
332-27 gasoline, diesel fuel, or other product capable of being used as
333-1 the propellant of a gasoline-powered engine or diesel engine is
333-2 presumed to be motor fuel subject to the provisions of this chapter
333-3 unless the product is in the possession of an aviation fuel
333-4 distributor or aviation fuel dealer or in the fuel supply tanks of
333-5 an aircraft, in which case the fuel or product is presumed to be
333-6 aviation gasoline or aviation diesel fuel subject to the provisions
333-7 of Chapter 161. A cargo manifest identifying fuel as aviation fuel
333-8 is sufficient evidence to establish the fuel as aviation fuel and
333-9 subject the fuel to the provisions of Chapter 161. If an
333-10 enforcement act or procedure is authorized by this chapter and by
333-11 Chapter 161, the enforcement officer is not required to state or
333-12 determine whether the action is taken under this chapter or Chapter
333-13 161.
333-14 SECTION 8.03. Section 153.102, Tax Code, is amended by
333-15 adding Subsection (c) to read as follows:
333-16 (c) The tax rate for gasoline used in this state for a
333-17 nonhighway use other than commercial vessel or agricultural use and
333-18 other than an excepted use is four cents for each gross or
333-19 volumetric gallon or fractional part of a gallon.
333-20 SECTION 8.04. Section 153.104, Tax Code, is amended to read
333-21 as follows:
333-22 Sec. 153.104. EXCEPTIONS. The tax imposed by this
333-23 subchapter does not apply to gasoline:
333-24 (1) brought into this state in the fuel supply tank of
333-25 a motor vehicle operated by a person not required to be permitted
333-26 as an interstate trucker or in the fuel supply tank having a
333-27 capacity of 60 gallons or less of a motor or engine not used for
334-1 highway purposes and not removed from the tank;
334-2 (2) delivered by a permitted distributor to a common
334-3 or contract carrier, oceangoing vessel (including ship, tanker, or
334-4 boat), or a barge for export from this state if the gasoline is
334-5 moved forthwith outside the state;
334-6 (3) sold by a permitted distributor to another
334-7 permitted distributor;
334-8 (4) sold to the federal government for its exclusive
334-9 use;
334-10 (5) that is aviation fuel and is taxed under Chapter
334-11 161 [delivered by a permitted distributor into a storage facility
334-12 of a permitted aviation fuel dealer from which gasoline will be
334-13 delivered solely into the fuel supply tanks of aircraft or aircraft
334-14 servicing equipment;]
334-15 [(6) sold by one aviation fuel dealer to another
334-16 aviation fuel dealer who will deliver the aviation fuel exclusively
334-17 into the fuel supply tanks of aircraft or aircraft servicing
334-18 equipment];
334-19 (6) [(7)] sold to a public school district in this
334-20 state for its exclusive use; or
334-21 (7) [(8)] sold to a commercial transportation company
334-22 that provides public school transportation services to a school
334-23 district under Section 34.008 [21.181], Education Code, and used by
334-24 the company exclusively to provide those services.
334-25 SECTION 8.05. Section 153.114, Tax Code, is amended to read
334-26 as follows:
334-27 Sec. 153.114. LIST OF DISTRIBUTORS[, AVIATION FUEL DEALERS,]
335-1 AND GASOLINE JOBBERS. The comptroller, on or before December 20 of
335-2 each year, shall mail or distribute to all permitted distributors a
335-3 printed alphabetical list of permitted distributors[, aviation fuel
335-4 dealers,] and gasoline jobbers. A distributor [and an aviation fuel
335-5 dealer] on the list is [are] qualified to purchase gasoline tax
335-6 free during the following calendar year. A gasoline jobber on the
335-7 list is qualified to purchase gasoline tax-paid during the
335-8 following calendar year. A supplemental list of additions and
335-9 deletions shall be delivered to the distributors each month. A
335-10 current and effective permit or the list furnished by the
335-11 comptroller is evidence of the validity of the permit until the
335-12 comptroller notifies distributors of a change in the status of a
335-13 permit holder.
335-14 SECTION 8.06. Section 153.117(f), Tax Code, is amended to
335-15 read as follows:
335-16 (f) The comptroller may require selective schedules from a
335-17 distributor, dealer, [aviation fuel dealer,] interstate trucker,
335-18 gasoline jobber, or common or contract carrier for any purchases,
335-19 sales, or deliveries of gasoline when the schedules are not
335-20 inconsistent with the requirements of this chapter.
335-21 SECTION 8.07. Sections 153.119(a), (b), and (d), Tax Code,
335-22 are amended to read as follows:
335-23 (a) A person who exports, sells to the federal government,
335-24 to a public school district in this state, or to a commercial
335-25 transportation company for exclusive use in providing public school
335-26 transportation services to a school district under Section 34.008
335-27 [21.181], Education Code, without having added the amount of the
336-1 tax imposed by this chapter to his selling price, loses by fire or
336-2 other accident, or uses gasoline for the purpose of operating or
336-3 propelling a commercial vessel or for agricultural use [motorboat,
336-4 tractor used for agricultural purposes, or stationary engine, or
336-5 for another purpose except in a vehicle operated or intended to be
336-6 operated on the public highways of this state,] and who has paid
336-7 the tax imposed on gasoline by this chapter either directly or
336-8 indirectly is, when the person has complied with the invoice and
336-9 filing provisions of this section and the rules of the comptroller,
336-10 entitled to reimbursement of the tax paid by him, less a filing fee
336-11 and any amount allowed distributors, wholesalers or jobbers,
336-12 dealers, or others under Section 153.105(e) [153.105(c) of this
336-13 code]. A public school district that has paid the tax imposed
336-14 under this chapter on gasoline used by the district or a commercial
336-15 transportation company that has paid the tax imposed under this
336-16 chapter on gasoline used by the company exclusively to provide
336-17 public school transportation services to a school district under
336-18 Section 34.008 [21.181], Education Code, is entitled to
336-19 reimbursement of the amount of the tax paid in the same manner and
336-20 subject to the same procedures as other exempted users.
336-21 (b) A person who uses gasoline for the purpose of operating
336-22 a stationary engine, for the purpose of operating a motorboat, for
336-23 the purpose of operating a railway engine, or for another purpose
336-24 except in a vehicle operated or intended to be operated on the
336-25 public highways of this state and who has paid the tax imposed on
336-26 gasoline by this chapter either directly or indirectly and is not
336-27 otherwise entitled to a full refund is, when the person has
337-1 complied with the invoice and filing provisions of this section and
337-2 the rules of the comptroller, entitled to reimbursement of the tax
337-3 paid by the person, less a filing fee, any amount allowed
337-4 distributors, wholesalers or jobbers, dealers, or others under
337-5 Section 153.105(e), and four cents for each gallon or fractional
337-6 part of a gallon used. A person may file a refund claim under this
337-7 subsection for a portion of the tax paid on the gasoline used in
337-8 motor vehicles that are operated exclusively off the public
337-9 highways except for incidental travel on the public highways as
337-10 determined by the comptroller, but not for that portion used in
337-11 incidental travel.
337-12 (d) If the quantity of gasoline used in Texas by auxiliary
337-13 power units or power take-off equipment on any motor vehicle can be
337-14 accurately measured while the motor vehicle is stationary by any
337-15 metering or other measuring device or method designed to measure
337-16 the fuel separately from fuel used to propel the motor vehicle, the
337-17 comptroller may approve and adopt the use of any device as a basis
337-18 for determining the quantity of gasoline consumed in those
337-19 operations for tax credit or tax refund under Subsection (b).
337-20 SECTION 8.08. Section 153.1195(d), Tax Code, is amended to
337-21 read as follows:
337-22 (d) This section does not apply to a sale of gasoline that
337-23 is delivered into the fuel supply tank of a motor vehicle, a
337-24 commercial vessel, or a motorboat and for which payment is made
337-25 through the use and acceptance of a credit card.
337-26 SECTION 8.09. Section 153.120(a), Tax Code, is amended to
337-27 read as follows:
338-1 (a) A refund claim must be filed on a form provided by the
338-2 comptroller, be supported by the original invoice issued by the
338-3 seller, and contain:
338-4 (1) the stamped or preprinted name and address of the
338-5 seller;
338-6 (2) the name of the purchaser;
338-7 (3) the date of delivery of the gasoline;
338-8 (4) the date of the issuance of the invoice (if
338-9 different from the date of fuel delivery);
338-10 (5) the number of gallons of gasoline delivered;
338-11 (6) the amount of tax, either separately stated from
338-12 the selling price or a notation that the selling price includes the
338-13 tax; and
338-14 (7) the type of vehicle or equipment, such as a
338-15 motorboat, commercial vessel, railway engine, farm machine, highway
338-16 vehicle, off-highway vehicle, or refrigeration unit or stationary
338-17 engine, distinguishing agricultural and other user, into which the
338-18 fuel is delivered.
338-19 SECTION 8.10. Section 153.202, Tax Code, is amended by
338-20 adding Subsections (c), (d), (e), and (f) to read as follows:
338-21 (c) The tax rate for diesel fuel sold or used in this state
338-22 for a nonhighway use other than commercial vessel or agricultural
338-23 use and other than an excepted use is four cents for each gross or
338-24 volumetric gallon or fractional part of a gallon.
338-25 (d) A tax is imposed on diesel fuel purchased tax-free
338-26 before January 1, 1998, that would have been subject to payment of
338-27 the tax imposed by Subsection (c) if the diesel fuel had been
339-1 purchased on or after January 1, 1998. The rate of tax is four
339-2 cents for each volumetric gallon or fractional part of a gallon of
339-3 diesel fuel held on that date. The tax imposed by this subsection
339-4 does not apply to a person who on January 1, 1998, holds less than
339-5 2,000 gallons of diesel fuel.
339-6 (e) Each person shall gauge or meter each storage tank
339-7 containing tax-free diesel fuel at the end of December 31, 1997.
339-8 Each person shall report the volume of tax-free diesel fuel so
339-9 measured and remit the taxes imposed by this section not later than
339-10 January 21, 1998, on forms and according to procedures adopted by
339-11 the comptroller for that purpose.
339-12 (f) This subsection and Subsections (d) and (e) expire
339-13 January 1, 1999.
339-14 SECTION 8.11. Section 153.203, Tax Code, is amended to read
339-15 as follows:
339-16 Sec. 153.203. EXCEPTIONS. The tax imposed by this
339-17 subchapter does not apply to:
339-18 (1) diesel fuel delivered by a permitted supplier to a
339-19 common or contract carrier, oceangoing vessel (including ship,
339-20 tanker, or boat), or barge for export from this state, if the
339-21 diesel fuel is moved forthwith outside this state;
339-22 (2) diesel fuel sold by a permitted supplier to the
339-23 federal government for its exclusive use;
339-24 (3) diesel fuel sold or delivered by a permitted
339-25 supplier to another permitted supplier or bonded tax-free user[, to
339-26 the bulk storage facility of a diesel tax prepaid user,] or to a
339-27 purchaser who provides a signed statement as provided by Section
340-1 153.205 [of this code], but not including a delivery of tax-free
340-2 diesel fuel into the fuel supply tanks of a motor vehicle, except
340-3 for a motor vehicle owned by the federal government;
340-4 (4) diesel fuel that is aviation fuel and that is
340-5 taxed under Chapter 161 [sold or delivered by a permitted supplier
340-6 into the storage facility of a permitted aviation fuel dealer,
340-7 from which diesel fuel will be sold or delivered solely into the
340-8 fuel supply tanks of aircraft or aircraft servicing equipment];
340-9 (5) diesel fuel sold or delivered by a permitted
340-10 supplier into fuel supply tanks of commercial vessels [railway
340-11 engines, motorboats,] or refrigeration units for agricultural use
340-12 or other stationary equipment for agricultural use powered by a
340-13 separate motor from a separate fuel supply tank;
340-14 (6) kerosene when delivered by a permitted supplier
340-15 into a storage facility at a retail business from which all
340-16 deliveries are exclusively for heating, cooking, lighting, or
340-17 similar non-motor or non-engine [nonhighway] use;
340-18 (7) [diesel fuel sold or delivered by one aviation
340-19 fuel dealer to another aviation fuel dealer who will deliver the
340-20 diesel fuel exclusively into the supply tanks of aircraft or
340-21 aircraft servicing equipment;]
340-22 [(8)] diesel fuel sold by a permitted supplier to a
340-23 public school district in this state for its exclusive use; [or]
340-24 (8) [(9)] diesel fuel sold by a permitted supplier to
340-25 a commercial transportation company that provides public school
340-26 transportation services to a school district under Section 34.008
340-27 [21.181], Education Code, and used by the company exclusively to
341-1 provide those services; or
341-2 (9) diesel fuel brought into this state in the fuel
341-3 supply tank having a capacity of 60 gallons or less of a motor or
341-4 engine not used for highway purposes and not removed from the tank.
341-5 SECTION 8.12. Section 153.205(a), Tax Code, is amended to
341-6 read as follows:
341-7 (a) The first sale or use of diesel fuel in this state is
341-8 taxable, except that the sale of diesel fuel may be made without
341-9 collecting the tax if the purchaser furnishes to a permitted
341-10 supplier a signed statement that stipulates that:
341-11 (1) the purchaser does not operate any diesel-powered
341-12 motors or engines, other than a commercial vessel or other than for
341-13 agricultural use [motor vehicles on the public highway];
341-14 (2) all of the diesel fuel will be consumed by the
341-15 purchaser and no diesel fuel purchased on a signed statement will
341-16 be resold; and
341-17 (3) none of the diesel fuel purchased in this state
341-18 will be delivered or permitted by the purchaser to be delivered
341-19 into fuel supply tanks of motor vehicles or used to power any motor
341-20 or engine other than a commercial vessel or other than for an
341-21 agricultural use.
341-22 SECTION 8.13. Subchapter C, Chapter 153, Tax Code, is
341-23 amended by adding Section 153.2055 to read as follows:
341-24 Sec. 153.2055. STATEMENT FOR PURCHASE OF CERTAIN DIESEL
341-25 FUEL. (a) The first sale or use of diesel fuel in this state is
341-26 taxable, except that the sale of diesel fuel may be made without
341-27 the collection of the tax imposed under Section 153.202(a) but with
342-1 the collection of the tax imposed under Section 153.202(c) if the
342-2 purchaser furnishes to a permitted supplier a signed statement that
342-3 stipulates that:
342-4 (1) the purchaser does not operate any diesel-powered
342-5 motor vehicles on the public highways;
342-6 (2) all of the diesel fuel will be consumed by the
342-7 purchaser and no diesel fuel purchased on a signed statement will
342-8 be resold; and
342-9 (3) none of the diesel fuel purchased in this state
342-10 will be delivered or permitted by the purchaser to be delivered
342-11 into fuel supply tanks of motor vehicles.
342-12 (b) A person may not make a purchase of diesel fuel under
342-13 this section using a signed statement:
342-14 (1) for the purchase of more than 3,000 gallons of
342-15 diesel fuel in a single transaction; or
342-16 (2) in a calendar month in which the person has
342-17 previously purchased more than 10,000 gallons of diesel fuel from
342-18 all sources.
342-19 (c) The signed statement from the purchaser relieves the
342-20 permitted supplier from the burden of proof that the sale of diesel
342-21 fuel was taxable only under Section 153.202(c) to the purchaser
342-22 and remains in effect unless:
342-23 (1) the statement is revoked in writing by the
342-24 purchaser or supplier;
342-25 (2) the comptroller notifies the supplier in writing
342-26 that the purchaser may no longer make purchases under this section;
342-27 or
343-1 (3) the supplier is put on notice by making sales of
343-2 diesel fuel taxable under Section 153.202(a) to a purchaser who
343-3 has previously submitted a signed statement to the supplier.
343-4 (d) A sale taxable under Section 153.202(a) to a person who
343-5 has previously submitted a signed statement creates a rebuttable
343-6 presumption that the supplier had reasonable notice that all
343-7 subsequent sales should have been taxable.
343-8 (e) A person who makes a use that is taxable under Section
343-9 153.202(a) of any part of the diesel fuel purchased under a signed
343-10 statement shall, in addition to any criminal penalty, forfeit the
343-11 person's right to purchase diesel fuel tax free or under this
343-12 section for a period of one year from the date of the offense, and
343-13 any tax, interest, and penalty found to be due through false or
343-14 erroneous execution or continuance of a promissory statement by the
343-15 purchaser, if assessed to the supplier, is a debt of the purchaser
343-16 to the supplier until paid and is recoverable at law in the same
343-17 manner as the purchase price of the fuel. The person may, however,
343-18 claim a refund of the tax paid on any diesel fuel as permitted
343-19 under Section 153.222.
343-20 (f) The statement must be signed by the purchaser or the
343-21 purchaser's representative.
343-22 (g) The comptroller's regulations may allow separate
343-23 operating divisions of corporations to give separate signed
343-24 statements as if they were different legal entities.
343-25 (h) The comptroller may promulgate necessary forms and rules
343-26 to administer and enforce this section.
343-27 (i) A permitted supplier may not make a sale of diesel fuel
344-1 on which only the tax imposed by Section 153.202(c) is collected
344-2 to a purchaser using a signed statement:
344-3 (1) for the sale of more than 3,000 gallons of diesel
344-4 fuel in a single transaction; or
344-5 (2) in a calendar month in which the supplier has
344-6 previously sold more than 10,000 gallons of diesel fuel to the
344-7 purchaser.
344-8 (j) A sale of diesel fuel may be made with the collection of
344-9 only the tax imposed by Section 153.202(c) to a purchaser who
344-10 operates one or more motor vehicles on the public highways and who
344-11 furnishes to a permitted supplier a signed statement only as
344-12 provided in this subsection. The statement must stipulate that all
344-13 the diesel fuel will be consumed by the purchaser for purposes
344-14 other than operating a motor vehicle on the public highways and
344-15 that no diesel fuel purchased on a signed statement will be resold
344-16 or delivered into the fuel supply tanks of a motor vehicle. Diesel
344-17 fuel that may be sold under this subsection with the collection of
344-18 only the taxes imposed under Section 153.202(c) may only be of a
344-19 type that may not be legally used by the purchaser for the
344-20 operation of a motor vehicle on the public highways under state or
344-21 federal law. Subsections (a), (c)(3), and (d) do not apply to sales
344-22 of fuel under this subsection.
344-23 SECTION 8.14. Sections 153.206(a), (c), and (i), Tax Code,
344-24 are amended to read as follows:
344-25 (a) A supplier who makes a sale or use of diesel fuel in
344-26 this state for a purpose other than those exceptions listed in
344-27 Section 153.203 [of this code] shall at the time of sale or use be
345-1 liable to the state for the tax imposed in this subchapter and
345-2 shall report and pay the tax in the manner provided in the
345-3 subchapter. A supplier who makes a sale of diesel fuel to the
345-4 holder of a diesel tax prepaid user permit or a bonded limited
345-5 tax-paid user or who makes a sale under a statement under Section
345-6 153.2055 shall collect the tax at the rate provided by Section
345-7 153.202(c).
345-8 (c) A user, except a diesel tax prepaid user, shall report
345-9 and pay to the state the tax at the rate imposed on each gallon of
345-10 diesel fuel delivered by him into the fuel supply tanks of a motor
345-11 vehicle, unless the tax has been paid to a permitted supplier or a
345-12 dealer, or, as a diesel tax prepaid user, the tax has been prepaid
345-13 directly to the comptroller. If the diesel fuel delivered under
345-14 this section into the fuel supply tanks of a motor vehicle is fuel
345-15 on which the tax imposed under Section 153.202(c) has been paid,
345-16 the user shall pay the difference between the tax imposed under
345-17 Section 153.202(a) and the tax imposed under Section 153.202(c);
345-18 otherwise, the amount paid shall be the amount of tax imposed under
345-19 Section 153.202(a).
345-20 (i) A bonded limited tax-paid user or permitted interstate
345-21 trucker is entitled to deduct one-half of one percent of the
345-22 taxable gallons of diesel fuel on payment of the taxes to this
345-23 state for the expense of recordkeeping, reporting, and remitting
345-24 the tax.
345-25 SECTION 8.15. Section 153.207(a), Tax Code, is amended to
345-26 read as follows:
345-27 (a) A supplier, bonded limited tax-paid user, bonded
346-1 tax-free user, interstate trucker, diesel tax prepaid user,
346-2 [aviation fuel dealer,] or diesel fuel jobber shall file an
346-3 application with the comptroller for one of the nonassignable
346-4 permits provided for in this subchapter.
346-5 SECTION 8.16. Section 153.208, Tax Code, is amended by
346-6 amending Subsections (b), (c), and (d) and adding Subsection (e) to
346-7 read as follows:
346-8 (b) A supplier's permit authorizes a person to sell tax-free
346-9 diesel fuel to:
346-10 (1) another supplier;
346-11 (2) a bonded tax-free user;
346-12 (3) if applicable, an agricultural operator [an
346-13 aviation fuel dealer]; and
346-14 (4) [a diesel prepaid user if delivered into his bulk
346-15 storage facilities only; and]
346-16 [(5)] a person issuing a signed statement under
346-17 Section 153.205.
346-18 (c) A supplier's permit authorizes a person to supply diesel
346-19 fuel on which the tax under Section 153.202(c) has been paid to:
346-20 (1) a bonded limited tax-paid user;
346-21 (2) a diesel prepaid user;
346-22 (3) a permitted supplier; and
346-23 (4) a person issuing a signed statement under Section
346-24 153.2055.
346-25 (d) A supplier's permit authorizes a person to supply fully
346-26 tax-paid diesel fuel to suppliers and other purchasers.
346-27 (e) [(d)] A supplier may not make a tax-free sale or
347-1 delivery of diesel fuel into the fuel supply tanks of a diesel
347-2 motor or engine, other than a commercial vessel or other than for
347-3 an agricultural use, or of a motor vehicle other than a motor
347-4 vehicle owned by the United States.
347-5 SECTION 8.17. Section 153.209, Tax Code, is amended to read
347-6 as follows:
347-7 Sec. 153.209. BONDED TAX-FREE USER PERMIT. A bonded
347-8 tax-free user permit authorizes a user whose purchases of diesel
347-9 fuel are exclusively for commercial vessel or agricultural
347-10 [predominantly for nonhighway] use to purchase diesel fuel tax free
347-11 from permitted suppliers [and to report and pay taxes to this
347-12 state on that part of the diesel fuel that is delivered into the
347-13 fuel supply tanks of motor vehicles owned or operated by him].
347-14 SECTION 8.18. Subchapter C, Chapter 153, Tax Code, is amended
347-15 by adding Sections 153.2095 and 153.2096 to read as follows:
347-16 Sec. 153.2095. BONDED LIMITED TAX-PAID USER PERMIT. A
347-17 bonded limited tax-paid user permit authorizes a user whose
347-18 purchases of diesel fuel are predominantly for nonhighway use,
347-19 other than for commercial vessel or agricultural use, to purchase
347-20 diesel fuel on which the tax has been paid under Section
347-21 153.202(c) from permitted suppliers and to report and pay taxes to
347-22 this state in accordance with Section 153.206(c) on that part of
347-23 the diesel fuel that is delivered into the fuel supply tanks of
347-24 motor vehicles owned or operated by him.
347-25 Sec. 153.2096. AGRICULTURAL OPERATOR'S PERMIT. An
347-26 agricultural operator's permit authorizes a user whose purchases of
347-27 diesel fuel are predominantly for nonhighway agricultural use to
348-1 purchase diesel fuel tax-free from permitted suppliers and to
348-2 report and pay taxes as imposed by Section 153.202(a) to this state
348-3 on that part of the diesel fuel that is delivered into the fuel
348-4 supply tanks of motor vehicles owned or operated by the
348-5 agricultural user.
348-6 SECTION 8.19. Sections 153.210(a) and (b), Tax Code, are
348-7 amended to read as follows:
348-8 (a) A diesel tax prepaid user permit authorizes a person
348-9 whose use of diesel fuel is, other than commercial vessel or
348-10 agricultural use, predominantly for nonhighway use, but who owns or
348-11 operates one or more passenger cars or light trucks only in the
348-12 weight class shown in this section to elect to prepay an annual tax
348-13 on the fuel delivered from his own [tax-free] storage rather than
348-14 obtain a bonded limited tax-paid user permit. If he elects to
348-15 obtain a diesel tax prepaid user permit, he must prepay the tax at
348-16 the rate prescribed for each motor vehicle based on the class of
348-17 registered gross weight. A person whose purchases of diesel fuel
348-18 are predominantly for highway use does not qualify for a diesel tax
348-19 prepaid user permit.
348-20 (b) The vehicle classes and amounts of tax are:
348-21 Class A Less than 2,500 pounds ....... $ 37.20 [46.50]
348-22 Class B 2,500 to 3,500 pounds ....... 66.00 [82.50]
348-23 Class C 3,501 to 4,500 pounds ...... 82.80 [103.50]
348-24 Class D 4,501 to 7,000 pounds ...... 99.60 [124.50]
348-25 Class E 7,001 to 10,000 pounds ....... 116.40 [145.50]
348-26 SECTION 8.20. Section 153.214, Tax Code, is amended to read
348-27 as follows:
349-1 Sec. 153.214. SUPPLIER MAY PERFORM OTHER FUNCTIONS. A
349-2 supplier may operate under the supplier's permit as a user or[,]
349-3 dealer[, or aviation fuel dealer] without securing a separate
349-4 permit, but is subject to all other conditions, requirements, and
349-5 liabilities imposed on those permittees.
349-6 SECTION 8.21. Section 153.215(a), Tax Code, is amended to
349-7 read as follows:
349-8 (a) A supplier's, agricultural operator's, bonded tax-free
349-9 user's, and bonded limited tax-paid user's [user] permit is
349-10 permanent and valid as long as the permittee has in force and
349-11 effect the required bond or security and furnishes timely reports
349-12 as required, or until the permit is surrendered by the holder or
349-13 canceled by the comptroller. The comptroller may cancel a
349-14 supplier's, agricultural operator's, bonded tax-free user's, or
349-15 bonded limited tax-paid user's permit if no purchase, sale, or use
349-16 of diesel fuel has been reported by the supplier, agricultural
349-17 operator, bonded tax-free user, or bonded limited tax-paid user for
349-18 the prior 12 months.
349-19 SECTION 8.22. Section 153.217, Tax Code, is amended to read
349-20 as follows:
349-21 Sec. 153.217. LIST OF SUPPLIERS, BONDED TAX-FREE USERS,
349-22 BONDED LIMITED TAX-PAID USERS, AGRICULTURAL OPERATORS, [AVIATION
349-23 FUEL DEALERS,] AND DIESEL FUEL JOBBERS. (a) The comptroller, on
349-24 or before December 20 of each calendar year, shall mail or
349-25 distribute to each supplier a printed alphabetical list of
349-26 permitted suppliers, bonded tax-free users, bonded limited tax-paid
349-27 users, agricultural operators, [aviation fuel dealers,] and diesel
350-1 fuel jobbers. A permitted supplier, a bonded tax-free user, and an
350-2 agricultural operator [aviation fuel dealer] on the list are
350-3 qualified to purchase diesel fuel tax free during the following
350-4 calendar year. A bonded limited tax-paid user on the list is
350-5 entitled to purchase diesel fuel on which the tax imposed under
350-6 Section 153.202(c) has been paid. A diesel fuel jobber on the
350-7 list is qualified to purchase diesel fuel tax-paid during the
350-8 following calendar year. A supplemental list of additions and
350-9 deletions shall be delivered to each supplier each month.
350-10 (b) The comptroller, on or before January 31 of each
350-11 calendar year, shall mail or distribute to each supplier a printed
350-12 alphabetical list of diesel tax prepaid user permittees who are
350-13 qualified to purchase diesel fuel on which the tax imposed by
350-14 Section 153.202(c) has been paid [tax free] during the ensuing
350-15 calendar year. A supplemental list of additions and deletions
350-16 shall be delivered to each supplier each month.
350-17 SECTION 8.23. Sections 153.218(a), (b), (c), and (j), Tax
350-18 Code, are amended to read as follows:
350-19 (a) The comptroller shall determine the amount of security
350-20 required of a supplier, agricultural operator, bonded tax-free
350-21 user, bonded limited tax-paid user, or diesel fuel jobber taking
350-22 into consideration the amount of tax that has or is expected to
350-23 become due from the person, any past history of the person as a
350-24 supplier, bonded tax-free user, bonded limited tax-paid user, or
350-25 diesel fuel jobber and the necessity to protect the state against
350-26 the failure to pay the tax as it becomes due.
350-27 (b) If it is determined that the posting of security is
351-1 necessary to protect the state, the comptroller may require a
351-2 supplier or bonded tax-free user to post a surety bond equal to two
351-3 times the most amount of tax that could accrue on tax-free diesel
351-4 fuel purchased or acquired during a reporting period. A diesel
351-5 fuel jobber or bonded limited tax-paid user shall post a bond in an
351-6 amount determined by the comptroller according to the past payment
351-7 history of the jobber or bonded limited tax-paid user. The minimum
351-8 bond for a supplier or diesel fuel jobber is $30,000, and the
351-9 maximum bond is $600,000. The minimum bond for a bonded tax-free
351-10 user, agricultural operator, or bonded limited tax-paid user is
351-11 $10,000, and the maximum bond is $600,000. However, if the
351-12 comptroller determines there is undue risk of loss of tax revenues,
351-13 the comptroller may require one or more bonds or securities in a
351-14 total amount exceeding $600,000.
351-15 (c) A supplier, agricultural operator, bonded tax-free user,
351-16 bonded limited tax-paid user, or diesel fuel jobber who has filed a
351-17 bond or other security under this subchapter is exempted from the
351-18 bond or other security requirements of this subchapter and is
351-19 entitled, on request, to have the comptroller return, refund, or
351-20 release the bond or security if in the judgment of the comptroller
351-21 the person has for four consecutive years continuously complied
351-22 with the conditions of the bond or other security filed under this
351-23 subchapter. However, if the comptroller determines that the
351-24 revenues of the state would be jeopardized by the return, refund,
351-25 or release of the bond or security, the comptroller may elect not
351-26 to return, refund, or release the bond or security, and may
351-27 reimpose a requirement of a bond or other security as the
352-1 comptroller determines is necessary to protect the revenues of the
352-2 state.
352-3 (j) The comptroller shall notify immediately the issuer of a
352-4 letter of credit of a final determination of the supplier's,
352-5 agricultural operator's, bonded tax-free user's, or bonded limited
352-6 tax-paid user's delinquent liability or a judgment secured in any
352-7 action by this state to recover diesel taxes, costs, penalties, and
352-8 interest found to be due this state by a supplier, agricultural
352-9 operator, bonded tax-free user, or bonded limited tax-paid user in
352-10 whose behalf the letter of credit was issued. The letter of credit
352-11 allowed as security for the remittance of taxes under this
352-12 subchapter shall contain a statement that the issuer agrees to
352-13 respond to the comptroller's notice of liability with amounts to
352-14 satisfy the comptroller's delinquency claim against the supplier,
352-15 agricultural operator, bonded tax-free user, or bonded limited
352-16 tax-paid user.
352-17 SECTION 8.24. Sections 153.219(c)-(i), Tax Code, are amended
352-18 to read as follows:
352-19 (c) An agricultural operator or a [A] bonded limited
352-20 tax-paid user, bonded tax-free user, or other user with nonhighway
352-21 equipment uses who files a claim for a refund shall keep a record
352-22 showing the number of gallons of:
352-23 (1) inventories of all diesel fuel on hand at the
352-24 first of each month;
352-25 (2) all diesel fuel purchased or received, showing the
352-26 name of the seller and the date of each purchase;
352-27 (3) all diesel fuel deliveries into the fuel supply
353-1 tanks of motor vehicles;
353-2 (4) diesel fuel used for other purposes, showing the
353-3 purpose for which used; and
353-4 (5) all diesel fuel lost by fire or other accident.
353-5 (d) [An aviation fuel dealer shall keep a record showing the
353-6 number of gallons of:]
353-7 [(1) all diesel fuel inventories on hand at the first
353-8 of each month;]
353-9 [(2) all diesel fuel purchased or received, showing
353-10 the name of the seller and the date of each purchase or receipt;]
353-11 [(3) all diesel fuel sold, distributed, or used in
353-12 aircraft or aircraft servicing equipment; and]
353-13 [(4) diesel fuel lost by fire or other accident.]
353-14 [(e) The records of an aviation fuel dealer made under
353-15 Subsection (d)(3) of this section must show:]
353-16 [(1) the name of the purchaser or user of diesel fuel;]
353-17 [(2) the date of the sale, distribution, or use of the
353-18 diesel fuel; and]
353-19 [(3) the registration or "N" number of the airplane or
353-20 a description or number of the aircraft servicing equipment in
353-21 which diesel fuel is used.]
353-22 [(f)] A permitted interstate trucker shall keep a record of:
353-23 (1) the total miles traveled in all states by all
353-24 vehicles traveling into or from Texas and the total quantity of
353-25 diesel fuel consumed in those vehicles; and
353-26 (2) the total miles traveled in Texas and the total
353-27 quantity of diesel fuel delivered into the fuel supply tanks of
354-1 motor vehicles in Texas.
354-2 (e) [(g)] The comptroller may require selective schedules
354-3 from a supplier, dealer, [aviation fuel dealer,] interstate
354-4 trucker, diesel fuel jobber, or common or contract carrier for a
354-5 purchase, sale, or delivery of diesel fuel if the schedules are not
354-6 inconsistent with the requirements of this chapter.
354-7 (f) [(h)] The records required must be kept for four years
354-8 and are open to inspection at all times by the comptroller or the
354-9 attorney general.
354-10 (g) [(i)] A diesel fuel jobber shall keep a record showing
354-11 the number of gallons of:
354-12 (1) all diesel fuel inventories on hand at the first
354-13 of each month;
354-14 (2) all diesel fuel purchased or received, showing the
354-15 name of the seller and date of each purchase or receipt;
354-16 (3) all diesel fuel sold, distributed, or used,
354-17 showing the name of the purchaser and the date of the sale or use;
354-18 and
354-19 (4) all diesel fuel lost by fire or other accident.
354-20 (h) Each person required to keep a record under this section
354-21 shall for each record relating to the possession, sale, purchase,
354-22 or use of diesel fuel identify whether the diesel fuel was tax-free
354-23 fuel, diesel fuel on which the tax imposed under Section
354-24 153.202(c) has been paid, or diesel fuel on which the tax imposed
354-25 by Section 153.202(a) or (b) has been paid.
354-26 SECTION 8.25. Sections 153.220(a), (d), and (e), Tax Code,
354-27 are amended to read as follows:
355-1 (a) A delivery of diesel fuel into the fuel supply tanks of
355-2 a motor vehicle operated for commercial purposes and described by
355-3 Section 153.001(12) shall be evidenced by an invoice issued in
355-4 duplicate by a dealer or an invoice or a distribution log issued by
355-5 an agricultural operator or a bonded limited tax-paid user or other
355-6 user.
355-7 (d) The invoice or distribution log must contain:
355-8 (1) the name and address of the person making the
355-9 delivery stamped or preprinted on it;
355-10 (2) a statement:
355-11 (A) of the amount of the diesel fuel tax
355-12 separate from the selling price; or
355-13 (B) [a statement] that the diesel fuel tax is
355-14 included in the selling price and the rate of the tax;
355-15 (3) a statement that no diesel fuel tax was collected
355-16 by the seller if the invoice is to be used by the seller to support
355-17 a refund claim; and
355-18 (4) spaces for providing the following:
355-19 (A) the name of the purchaser;
355-20 (B) the date of delivery of the fuel;
355-21 (C) the number of gallons delivered;
355-22 (D) the odometer or hubmeter reading;
355-23 (E) the state highway license or unit number;
355-24 (F) the type of vehicle or equipment, such as a
355-25 commercial vessel, motorboat, railway engine, farm machine, highway
355-26 vehicle, off-highway vehicle, or refrigeration unit or stationary
355-27 engine, distinguishing agricultural and other user, into which the
356-1 fuel is delivered; and
356-2 (G) the signature of the recipient.
356-3 (e) If the delivery of [tax-paid] diesel fuel on which the
356-4 tax imposed by Section 153.202(a) or (b) has been paid is made
356-5 through an automated method whereby the purchase is automatically
356-6 applied to the purchaser's account, one invoice may be issued at
356-7 the time of billing covering multiple purchases made during a
356-8 30-day billing cycle.
356-9 SECTION 8.26. Sections 153.221(b) and (c), Tax Code, are
356-10 amended to read as follows:
356-11 (b) On or before the 25th day of the month following the end
356-12 of each calendar quarter, an agricultural operator, a bonded
356-13 tax-free user, a bonded limited tax-paid user, or an interstate
356-14 trucker shall file a report and, if applicable, remit the amount of
356-15 tax due [except as provided by Subsection (d) of this section]. A
356-16 report must be executed and filed with the comptroller and contain
356-17 complete and detailed information on diesel fuel transactions
356-18 during the preceding calendar quarter and other information
356-19 required by the comptroller on forms provided for that purpose. A
356-20 person [bonded user or interstate trucker] required to file a
356-21 report under this section who has not sold, used, or distributed
356-22 any diesel fuel during the reporting period shall file with the
356-23 comptroller the report setting forth the facts or information. The
356-24 failure of an agricultural operator, a bonded tax-free user, a
356-25 bonded limited tax-paid user, or an interstate trucker to obtain
356-26 forms from the comptroller is no excuse for the failure to file a
356-27 report containing all the information required to be reported.
357-1 (c) No report is required to be filed by:
357-2 (1) [an aviation fuel dealer;]
357-3 [(2)] a trip permit user;
357-4 (2) [(3)] a diesel tax prepaid user;
357-5 (3) [(4)] a person issuing signed statements;
357-6 (4) [(5)] a common or contract carrier; or
357-7 (5) [(6)] a diesel fuel jobber.
357-8 SECTION 8.27. Sections 153.222(a), (b), and (d), Tax Code,
357-9 are amended to read as follows:
357-10 (a) A dealer or diesel fuel jobber who has paid tax on
357-11 diesel fuel that has been used or sold for use by the dealer or
357-12 diesel fuel jobber for powering a commercial vessel or for an
357-13 agricultural use [any purpose other than propelling a motor vehicle
357-14 on the public highways of this state] or that has been sold to the
357-15 United States or a public school district in this state for the
357-16 exclusive use of the purchaser, or to a commercial transportation
357-17 company for exclusive use in providing public school transportation
357-18 services to a school district under Section 34.008 [21.181],
357-19 Education Code, without adding the amount of the tax to his selling
357-20 price, and a user who has paid tax on any diesel fuel that has been
357-21 used by him for powering a commercial vessel or for an agricultural
357-22 use [a purpose other than propelling a motor vehicle on the public
357-23 highways], is a public school district and has paid the tax on
357-24 diesel fuel purchased for its exclusive use, or is a commercial
357-25 transportation company and has paid the tax on diesel fuel used by
357-26 the company exclusively to provide public school transportation
357-27 services to a school district under Section 34.008 [21.181],
358-1 Education Code, may file a claim for a refund of taxes paid, less
358-2 the deduction allowed vendors and a filing fee.
358-3 (b) A dealer or diesel fuel jobber who has paid the tax
358-4 imposed under Section 153.202(a) on diesel fuel that has been used
358-5 or sold for use by the dealer or diesel fuel jobber for any
358-6 purpose, other than propelling a motor vehicle on the public
358-7 highways of this state or other than powering a commercial vessel
358-8 or other than for an agricultural use, and a user who has paid the
358-9 tax imposed by Section 153.202(a) on any diesel fuel that has been
358-10 used by him for a purpose, other than propelling a motor vehicle on
358-11 the public highways and other than powering a commercial vessel or
358-12 other than for an agricultural use, may file a claim for a refund
358-13 of taxes paid, less the deduction allowed vendors, a filing fee,
358-14 and four cents for each gallon or fraction of a gallon sold or
358-15 used. A person may file a refund claim under this subsection for a
358-16 portion of the tax paid on the diesel fuel used in motor vehicles
358-17 that are operated exclusively off the public highways except for
358-18 incidental travel on the public highways as determined by the
358-19 comptroller, but not for that portion used in the incidental
358-20 travel.
358-21 (d) If the quantity of diesel fuel used in Texas by
358-22 auxiliary power units or power take-off equipment on any motor
358-23 vehicle can be accurately measured while the motor vehicle is
358-24 stationary by any metering or other measuring device or method
358-25 designed to measure the fuel separately from fuel used to propel
358-26 the motor vehicle, the comptroller may approve and adopt the use of
358-27 any device as a basis for determining the quantity of diesel fuel
359-1 consumed in those operations for tax credit or tax refund under
359-2 Subsection (b). If no separate metering device or other approved
359-3 measuring method is provided, the following credit or refund
359-4 procedures are authorized. A permitted supplier or bonded limited
359-5 tax-paid user who operates diesel-powered motor vehicles equipped
359-6 with a power take-off or a diesel-powered auxiliary power unit
359-7 mounted on the motor vehicle and using the fuel supply tank of the
359-8 motor vehicle may be allowed a deduction from the taxable gallons
359-9 used in this state in each motor vehicle so equipped, subject to
359-10 the payment of the tax imposed under Section 153.202(c). The
359-11 comptroller shall determine the percentage of the deduction. A
359-12 user who is required to pay the tax on diesel fuel used in motor
359-13 vehicles so equipped may file a claim for a refund not to exceed
359-14 the percentage allowed by the comptroller of the total taxable fuel
359-15 used in this state in each motor vehicle so equipped.
359-16 SECTION 8.28. Section 153.403, Tax Code, is amended to read
359-17 as follows:
359-18 Sec. 153.403. CRIMINAL OFFENSES. Except as provided by
359-19 Section 153.404 [of this code], a person commits an offense if the
359-20 person:
359-21 (1) refuses to stop and permit the inspection and
359-22 examination of a motor vehicle transporting or using motor fuel on
359-23 the demand of a peace officer or the comptroller;
359-24 (2) is required to hold a valid trip permit or
359-25 interstate trucker's permit, but operates a motor vehicle in this
359-26 state without a valid trip permit or interstate trucker's permit;
359-27 (3) operates a liquefied gas-propelled motor vehicle
360-1 that is required to be licensed in Texas, including a motor vehicle
360-2 equipped with dual carburetion, and does not display a current
360-3 liquefied gas tax decal or multistate fuels tax agreement decal;
360-4 (4) transports gasoline or diesel fuel that is not
360-5 aviation fuel in any cargo tank that has a connection by pipe,
360-6 tube, valve, or otherwise with the fuel injector or carburetor or
360-7 with the fuel supply tank feeding the fuel injector or carburetor
360-8 of the motor vehicle transporting the product;
360-9 (5) sells or delivers gasoline or diesel fuel that is
360-10 not aviation fuel from a fuel supply tank that is connected with
360-11 the fuel injector or carburetor of a motor vehicle;
360-12 (6) owns or operates a motor vehicle for which reports
360-13 or mileage records are required by this chapter without an
360-14 operating odometer or other device in good working condition to
360-15 record accurately the miles traveled;
360-16 (7) as a diesel tax prepaid user fails to prepay the
360-17 tax on every diesel-powered motor vehicle owned or operated by him;
360-18 (8) makes a tax-free sale or delivery of liquefied gas
360-19 into the fuel supply tank of a motor vehicle that does not display
360-20 a current Texas liquefied gas tax decal;
360-21 (9) makes a sale or delivery of liquefied gas on which
360-22 the person knows the tax is required to be collected, if at the
360-23 time the sale is made the person does not hold a valid dealer's
360-24 permit;
360-25 (10) makes a tax-free sale or delivery of liquefied
360-26 gas into the fuel supply tank of a motor vehicle bearing
360-27 out-of-state license plates;
361-1 (11) makes a delivery of liquefied gas into the fuel
361-2 supply tank of a motor vehicle bearing Texas license plates and no
361-3 Texas liquefied gas tax decal, unless licensed under a multistate
361-4 fuels tax agreement;
361-5 (12) refuses to permit the comptroller or the attorney
361-6 general to inspect, examine, or audit a book or record required to
361-7 be kept by a distributor, supplier, user, dealer, interstate
361-8 trucker, [aviation fuel dealer,] jobber, common or contract
361-9 carrier, or any person required to hold a permit under this
361-10 chapter;
361-11 (13) refuses to permit the comptroller or the attorney
361-12 general to inspect or examine any plant, equipment, materials, or
361-13 premises where motor fuel is produced, processed, stored, sold,
361-14 delivered, or used;
361-15 (14) refuses to permit the comptroller or the attorney
361-16 general to measure or gauge the contents of or take samples from a
361-17 storage tank or container on premises where motor fuel is produced,
361-18 processed, stored, sold, delivered, or used;
361-19 (15) is a distributor, bonded tax-free user,
361-20 agricultural operator, bonded limited tax-paid user, interstate
361-21 trucker, or supplier and fails or refuses to make or deliver to the
361-22 comptroller a report required by this chapter to be made and
361-23 delivered to the comptroller;
361-24 (16) conceals motor fuel with the intent of engaging
361-25 in any conduct proscribed by this chapter or refuses to make sales
361-26 of motor fuel on the volume-corrected basis prescribed by this
361-27 chapter;
362-1 (17) refuses, while transporting motor fuel, to stop
362-2 the motor vehicle he is operating when called on to do so by a
362-3 person authorized to stop the motor vehicle;
362-4 (18) refuses to surrender a motor vehicle and cargo
362-5 for impoundment after being ordered to do so by a person authorized
362-6 to impound the motor vehicle and cargo;
362-7 (19) transports motor fuel for which a cargo manifest
362-8 is required to be carried without possessing or exhibiting on
362-9 demand by an officer authorized to make the demand a cargo manifest
362-10 containing the information required to be shown on the manifest;
362-11 (20) mutilates, destroys, or secretes a book or record
362-12 required by this chapter to be kept by a distributor, supplier,
362-13 user, dealer, interstate trucker, [aviation fuel dealer,] jobber,
362-14 or person required to hold a permit under this chapter;
362-15 (21) is a distributor, supplier, user, dealer,
362-16 interstate trucker, [aviation fuel dealer,] jobber, or other person
362-17 required to hold a permit under this chapter, or the agent or
362-18 employee of one of those persons and makes a false entry or fails
362-19 to make an entry in the books and records required under this
362-20 chapter to be made by the person;
362-21 (22) transports in any manner motor fuel under a false
362-22 cargo manifest;
362-23 (23) engages in a motor fuel transaction that requires
362-24 that the person have a permit under this chapter without then and
362-25 there holding the required permit;
362-26 (24) makes and delivers to the comptroller a report
362-27 required under this chapter to be made and delivered to the
363-1 comptroller, if the report contains false information;
363-2 (25) forges, falsifies, or alters an invoice
363-3 prescribed by law;
363-4 (26) makes any statement, knowing said statement to be
363-5 false, in a claim for a tax refund filed with the comptroller;
363-6 (27) furnishes to a supplier a signed statement for
363-7 purchasing diesel fuel of a type that may be legally used by the
363-8 purchaser for the operation of a motor vehicle on the public
363-9 highway under state or federal law tax free when he owns, operates,
363-10 or acquires a diesel-powered motor vehicle;
363-11 (28) holds a supplier's permit and:
363-12 (A) sells to a dealer diesel fuel on which the
363-13 tax imposed under Section 153.202(a) has not been paid; or
363-14 (B) sells diesel fuel on which only the tax
363-15 imposed by Section 153.202(c) has been paid to a person other than
363-16 a bonded limited tax-paid user, a diesel tax prepaid user, or a
363-17 person who has issued a statement under Section 153.2055 [an
363-18 aviation fuel dealer's permit and makes a taxable sale or use of
363-19 any gasoline or diesel fuel];
363-20 (29) fails to remit any tax funds collected by a
363-21 distributor, supplier, user, dealer, interstate trucker, jobber, or
363-22 any other person required to hold a permit under this chapter;
363-23 (30) makes a sale of diesel fuel that is not aviation
363-24 fuel tax free into a storage facility of a person who:
363-25 (A) is not permitted as a supplier[, as an
363-26 aviation fuel dealer], as a bonded tax-free user, or as an
363-27 agricultural operator [a diesel tax prepaid user of diesel fuel];
364-1 or
364-2 (B) does not furnish to the permitted supplier a
364-3 signed statement prescribed in Section 153.205 [of this code];
364-4 (31) makes a sale of gasoline that is not aviation
364-5 fuel tax free to any person who is not permitted as [either] a
364-6 distributor [or an aviation fuel dealer];
364-7 (32) is a dealer who purchases any motor fuel tax free
364-8 when not authorized to make a tax-free purchase under this chapter;
364-9 or
364-10 (33) is a dealer who purchases motor fuel with the
364-11 intent to evade any tax imposed by this chapter.
364-12 SECTION 8.29. Section 153.5025, Tax Code, is amended to read
364-13 as follows:
364-14 Sec. 153.5025. ALLOCATION OF OTHER [UNCLAIMED REFUNDABLE]
364-15 NONDEDICATED TAXES. (a) The comptroller by rule shall devise a
364-16 method of determining as accurately as possible the:
364-17 (1) number of gallons of fuel that is not used to
364-18 propel a motor vehicle on the public highways; and
364-19 (2) amount of taxes collected under this chapter from
364-20 fuel:
364-21 (A) that is not used to propel a motor vehicle
364-22 on the public highways;
364-23 (B) that would have been refunded under this
364-24 chapter if refund claims had been filed in accordance with this
364-25 chapter or on which the tax imposed by Section 153.102(c) or
364-26 153.202(c) is applicable; and
364-27 (C) that is not subject to allocation under
365-1 Section 153.502.
365-2 (b) The comptroller shall allocate to the general revenue
365-3 fund the amount determined under Subsection (a)(2).
365-4 (c) The determination and allocation shall be made
365-5 periodically as prescribed by rule.
365-6 SECTION 8.30. Subtitle E, Title 2, Tax Code, is amended by
365-7 adding Chapter 161 to read as follows:
365-8 CHAPTER 161. AVIATION FUELS TAX
365-9 SUBCHAPTER A. GENERAL PROVISIONS
365-10 Sec. 161.001. DEFINITIONS. In this chapter:
365-11 (1) "Aircraft" means any vehicle or contrivance that
365-12 is used or intended for use for flight in the air.
365-13 (2) "Aviation fuel" means a product offered for sale,
365-14 sold, or used as the propellant fuel in an aircraft engine. The
365-15 term includes aviation gasoline (AVGAS) or aviation diesel (JET)
365-16 fuel.
365-17 (3) "Aviation fuel dealer" means a person who:
365-18 (A) operates an aircraft servicing facility;
365-19 (B) delivers aviation fuel exclusively into the
365-20 fuel supply tanks of aircraft; and
365-21 (C) does not use, sell, or distribute aviation
365-22 fuel on which a motor fuel tax under Chapter 153 is imposed.
365-23 (4) "Aviation fuel distributor" means a person who:
365-24 (A) refines, manufactures, produces, or blends
365-25 aviation fuel for sale or distribution in this state;
365-26 (B) imports or exports aviation fuel other than
365-27 in the fuel supply tank of an aircraft;
366-1 (C) sells or delivers aviation fuel to other
366-2 aviation fuel distributors; or
366-3 (D) sells or delivers aviation fuel in bulk
366-4 quantities to aviation fuel dealers in this state.
366-5 (5) "Cargo tank" means an assembly that is used for
366-6 transporting, hauling, or delivering liquids and that consists of a
366-7 tank having one or more compartments, mounted on a wagon,
366-8 automobile, truck, trailer, or wheels, and includes accessory
366-9 piping, valves, and meters, but does not include a fuel supply tank
366-10 connected to the carburetor or fuel injector of a motor vehicle.
366-11 (6) "Motor vehicle" means a self-propelled vehicle
366-12 licensed or required to be licensed for use on a public highway or
366-13 used on a public highway.
366-14 (7) "Public highway" means a way or place of whatever
366-15 nature open to the use of the public as a matter of right for the
366-16 purpose of vehicular travel, even if the way or place is
366-17 temporarily closed for the purpose of construction, maintenance, or
366-18 repair.
366-19 (8) "Sale" means a transfer of title, exchange, or
366-20 barter of aviation fuel, but does not include transfer of
366-21 possession of aviation fuel on consignment.
366-22 Sec. 161.002. CARGO CARRIER RECORDS. (a) All common and
366-23 contract carriers operating in this state shall keep for four
366-24 years, open to inspection by the comptroller, a complete record of
366-25 each intrastate and interstate transportation of aviation fuel.
366-26 (b) The record must show:
366-27 (1) the date of transportation;
367-1 (2) the name of the consignor and consignee;
367-2 (3) the means of transportation; and
367-3 (4) the quantity and the kind of aviation fuel
367-4 transported.
367-5 (c) The records must also include:
367-6 (1) full data concerning the diversion of shipments
367-7 and the number of gallons diverted from interstate to intrastate
367-8 commerce and from intrastate to interstate commerce; and
367-9 (2) the points of origin and destination, the number
367-10 of gallons shipped or transported, the date, the consignee and the
367-11 consignor, and the kind of aviation fuel that has been diverted.
367-12 Sec. 161.003. AVIATION FUEL TRANSPORTING DOCUMENT. (a)
367-13 Except as provided by Subsection (c), a person who transports
367-14 aviation fuel on the public highways, regardless of whether a tax
367-15 is due on the fuel under this chapter, shall record the shipment of
367-16 the cargo on a cargo manifest containing any information required
367-17 by the comptroller.
367-18 (b) The cargo manifest shall be carried with the aviation
367-19 fuel until the fuel is resold or removed from the cargo tank.
367-20 (c) This section does not apply to a pipeline operating as a
367-21 common carrier or to aviation fuel carried in the fuel supply tanks
367-22 of an aircraft.
367-23 (d) Each person, other than a common carrier, transporting
367-24 aviation fuel under this chapter shall also carry a copy of the
367-25 aviation fuel distributor permit or proof of tax payment on the
367-26 fuel being transported.
367-27 Sec. 161.004. CANCELLATION OF PERMITS. (a) The comptroller
368-1 may cancel or refuse to issue or reissue an aviation fuel
368-2 distributor permit to any person who violates or fails to comply
368-3 with this chapter or a rule of the comptroller for the
368-4 administration of this chapter.
368-5 (b) Before a permit may be canceled or the issuance or
368-6 reissuance of a permit refused, the comptroller shall give the
368-7 permittee or permit applicant a hearing, at the office of the
368-8 comptroller in Austin or at another specified comptroller's office,
368-9 granting the permit holder or applicant an opportunity to show
368-10 cause why the proposed action should not be taken. If a permit is
368-11 in effect, the permit remains in force pending the determination of
368-12 the hearing. The comptroller shall deliver to the permit holder or
368-13 applicant a written notice of the hearing not later than the 10th
368-14 day before the date of the hearing. The notice may be delivered
368-15 directly by the comptroller or by registered or certified mail
368-16 addressed to the last known address of the permit holder or
368-17 applicant. Notice by mail is considered delivered when the notice
368-18 is deposited in the United States mail.
368-19 (c) The comptroller may prescribe rules of procedure and
368-20 evidence for hearings in accordance with Chapter 2001, Government
368-21 Code.
368-22 Sec. 161.005. SUMMARY SUSPENSION OF PERMIT. (a) The
368-23 comptroller may suspend a person's permit without notice or a
368-24 hearing for the person's failure to comply with this chapter or a
368-25 rule adopted under this chapter if the person's continued operation
368-26 constitutes an immediate and substantial threat to the collection
368-27 of taxes imposed by this chapter and attributable to the person's
369-1 operation.
369-2 (b) If the comptroller summarily suspends a person's permit,
369-3 proceedings for a preliminary hearing before the comptroller or the
369-4 comptroller's representative must be initiated simultaneously with
369-5 the summary suspension. The preliminary hearing shall be set for a
369-6 date not later than 10 days after the date of the summary
369-7 suspension, unless the parties agree to a later date.
369-8 (c) At the preliminary hearing, the permit holder must show
369-9 cause why the permit should not remain suspended pending a final
369-10 hearing on suspension or revocation.
369-11 (d) Chapter 2001, Government Code, does not apply to a
369-12 summary suspension under this section.
369-13 (e) To initiate a proceeding to suspend summarily a person's
369-14 permit, the comptroller shall serve notice on the permit holder
369-15 informing the permit holder of the right to a preliminary hearing
369-16 before the comptroller or the comptroller's representative and of
369-17 the time and place of the preliminary hearing. The notice must be
369-18 personally served on the permit holder or an officer, employee, or
369-19 agent of the permit holder, or sent by certified or registered
369-20 mail, return receipt requested, to the permit holder's mailing
369-21 address as it appears on the comptroller's records. The notice
369-22 must state the alleged violations that constitute the grounds for
369-23 summary suspension. The suspension is effective at the time the
369-24 notice is served. If the notice is served in person, the permit
369-25 holder shall immediately surrender the permit to the comptroller or
369-26 to the comptroller's representative. If notice is served by mail,
369-27 the permit holder shall immediately return the permit to the
370-1 comptroller.
370-2 (f) Section 161.004, governing hearings for permit
370-3 cancellation or refusal to issue a permit under this chapter,
370-4 governs a final administrative hearing under this section.
370-5 Sec. 161.006. ENFORCEMENT OF PERMIT CANCELLATION,
370-6 SUSPENSION, OR REFUSAL. (a) The comptroller may examine any books
370-7 and records incident to the conduct of the business of a person
370-8 whose permit has been canceled or suspended on the person's failure
370-9 to file the reports required by this chapter or to remit all taxes
370-10 due. The comptroller shall issue an audit deficiency determination
370-11 of the amount of delinquent taxes, penalties, and interest,
370-12 containing a demand for payment. The deficiency determination
370-13 shall provide that if neither a payment is made nor a request for a
370-14 redetermination is filed within 30 days after the date of the
370-15 notice of the deficiency, the amount of the determination becomes
370-16 due and payable. If the amount is not paid on or before the 44th
370-17 day after service of the notice of the deficiency determination,
370-18 the bond or other security required under this chapter shall be
370-19 forfeited. The demand for payment shall be addressed to both the
370-20 surety or sureties and the person who owes the delinquency.
370-21 (b) If the forfeiture of the bond or other security does not
370-22 satisfy the delinquency, the comptroller shall certify the taxes,
370-23 penalty, and interest delinquent to the attorney general, who may
370-24 file suit against the person or the person's surety or both to
370-25 collect the amount due. After a person has been given notice of an
370-26 order of cancellation or summary suspension, it shall be unlawful
370-27 for the person to continue to operate the person's business under a
371-1 canceled or suspended permit. The attorney general may file suit
371-2 to enjoin the person from continuing to operate under the person's
371-3 permit until the permit is reissued by the comptroller.
371-4 (c) An appeal from an order of the comptroller canceling or
371-5 suspending or refusing the issuance or reissuance of a permit may
371-6 be taken to a district court of Travis County by the aggrieved
371-7 permittee or applicant. The trial shall be de novo under the same
371-8 rules as ordinary civil suits, except that:
371-9 (1) an appeal must be perfected and filed within 30
371-10 days after the effective date of the order, decision, or ruling of
371-11 the comptroller;
371-12 (2) the trial of the case shall begin within 10 days
371-13 after its filing; and
371-14 (3) the order, decision, or ruling of the comptroller
371-15 may be suspended or modified by the court pending a trial on the
371-16 merits.
371-17 Sec. 161.007. Inspection of Premises and Records. For the
371-18 purpose of determining the amount of tax collected and payable to
371-19 the state, the amount of tax accruing and due, and whether a tax
371-20 liability has been incurred under this chapter, the comptroller
371-21 may:
371-22 (1) inspect any premises where motor vehicle fuel,
371-23 aviation fuel, crude petroleum, natural gas, or any derivatives or
371-24 condensates of crude petroleum, natural gas, or their products,
371-25 methyl alcohol, ethyl alcohol, or other blending agents are
371-26 produced, made, prepared, stored, transported, sold, or offered for
371-27 sale or exchange;
372-1 (2) examine all the books and records required to be
372-2 kept by, and any and all records incident to the business of, any
372-3 aviation fuel distributor, any aviation fuel dealer, or any person
372-4 receiving or possessing, delivering, or selling motor vehicle fuel,
372-5 aviation fuel, crude oil, or derivatives or condensates of crude
372-6 petroleum, natural gas, or their products, or any blending agents;
372-7 (3) examine and either gauge or measure the contents
372-8 of all storage tanks, containers, and other property or equipment;
372-9 and
372-10 (4) take samples of any of these products stored on
372-11 the premises.
372-12 Sec. 161.008. Authority to Stop and Examine. To enforce
372-13 this chapter, the comptroller, a law enforcement officer of the
372-14 Department of Public Safety, or any other peace officer may stop a
372-15 motor vehicle that appears to be transporting aviation fuel in
372-16 order to examine the cargo manifest required to be carried, examine
372-17 a permit or copy of a permit that may be required to be carried,
372-18 take samples from the fuel supply or cargo tanks, or make any other
372-19 investigation that could reasonably be made to determine whether
372-20 the required taxes have been paid or accounted for by a dealer or
372-21 any person required to be permitted under this chapter.
372-22 Sec. 161.009. IMPOUNDMENT AND SEIZURE. (a) If after
372-23 examination or other investigation the comptroller or a peace
372-24 officer has reasonable cause to believe that the owner or operator
372-25 of any motor vehicle or cargo tanks, or any person receiving or
372-26 possessing, delivering, or selling aviation fuel, has not paid all
372-27 aviation fuel taxes due or does not have a valid permit entitling
373-1 that person to possess or transport tax-free aviation fuel, the
373-2 comptroller or peace officer may impound the fuel, vehicle, cargo
373-3 tanks, storage tanks, equipment, paraphernalia, or other tangible
373-4 personal property used for or incident to the storage, sale, or
373-5 transportation of that aviation fuel. The comptroller may demand
373-6 payment of all taxes, penalties, interest due to this state, and
373-7 costs of impoundment unless proof is produced within three working
373-8 days after the beginning of impoundment that:
373-9 (1) the owner, operator, or other person has paid the
373-10 taxes established by the comptroller to be due on the aviation fuel
373-11 stored, sold, used, or transported and any other taxes due to this
373-12 state; or
373-13 (2) the owner, operator, or other person holds a valid
373-14 permit to possess or transport tax-free aviation fuel.
373-15 (b) If the owner or operator does not produce the required
373-16 documentation or required permit or does not pay the taxes,
373-17 penalties, interest, and costs due within three working days after
373-18 the beginning of the impoundment, the comptroller may seize the
373-19 impounded property to satisfy the tax liability.
373-20 (c) The comptroller may seize:
373-21 (1) all aviation fuel on which taxes are imposed by
373-22 this chapter that is found in the possession, custody, or control
373-23 of any person for the purpose of being sold, transported, removed,
373-24 or used by the person in violation of this chapter;
373-25 (2) all aviation fuel that is removed or is deposited,
373-26 stored, or concealed in any place with the intent to avoid payment
373-27 of taxes;
374-1 (3) any automobile, truck, tank truck, boat, trailer
374-2 conveyance, or other vehicle used in the removal or transportation
374-3 of the aviation fuel to avoid payment of taxes; and
374-4 (4) all equipment, paraphernalia, storage tanks, or
374-5 tangible personal property incident to and used for avoiding the
374-6 payment of taxes and found in the place, building, or vehicle where
374-7 the aviation fuel is found.
374-8 Sec. 161.010. SALE OF SEIZED PROPERTY. (a) The comptroller
374-9 may sell property seized under Section 161.009.
374-10 (b) Notice of the time and place of a sale shall be given to
374-11 the delinquent person in writing by certified mail at least 20 days
374-12 before the date set for the sale. The notice shall be enclosed in
374-13 an envelope addressed to the person at the person's last known
374-14 address or place of business and be deposited in the United States
374-15 mail, postage prepaid. The notice shall also be published once a
374-16 week for two consecutive weeks before the date set for the sale in
374-17 a newspaper of general circulation published in the county in which
374-18 the property seized is to be sold. If there is no newspaper of
374-19 general circulation in the county, notice shall be posted in three
374-20 public places in the county 14 days before the date set for the
374-21 sale. The notice must contain a description of the property to be
374-22 sold, a statement of the amount due, including interest, penalties,
374-23 and costs, the name of the delinquent, and the further statement
374-24 that unless the amount due, interest, penalties, and costs are paid
374-25 on or before the time fixed in the notice for the sale, the
374-26 property, or as much of it as may be necessary, will be sold at
374-27 public auction in accordance with the law and the notice.
375-1 (c) At the sale, the comptroller shall sell the property and
375-2 shall deliver to the purchaser a bill of sale for personal property
375-3 and a deed for real property sold. The bill of sale or deed vests
375-4 the interest or title of the person liable for the amount in the
375-5 purchaser. The unsold portion of any property seized may be left
375-6 at the place of sale at the risk of the person liable for the
375-7 amount.
375-8 (d) The proceeds of a sale shall be allocated according to
375-9 the following priorities:
375-10 (1) the payment of expenses of seizure, appraisal,
375-11 custody, advertising, and auction and any other expenses incident
375-12 to the seizure and sale;
375-13 (2) the payment of the tax, penalty, and interest; and
375-14 (3) the repayment of the remaining balance to the
375-15 person liable for the amount unless a claim is presented before the
375-16 sale by any other person who has an ownership interest evidenced by
375-17 a financing statement or lien, in which case the comptroller shall
375-18 withhold the remaining balance pending a determination of the
375-19 rights of the respective parties.
375-20 Sec. 161.011. PRESUMPTIONS. An aviation fuel distributor
375-21 who fails to keep the records, issue the invoices, or file the
375-22 reports required by this chapter is presumed to have sold or used
375-23 for taxable purposes all aviation fuel shown by an audit by the
375-24 comptroller to have been sold to the distributor. Any aviation
375-25 fuel unaccounted for is presumed to have been sold or used for
375-26 taxable purposes. The comptroller may establish the amount of
375-27 taxes, penalties, and interest due from the records of deliveries
376-1 or from any records or information available to the comptroller.
376-2 If a tax claim developed through this procedure is not paid, after
376-3 the opportunity to request a redetermination the claim and any
376-4 audit made by the comptroller or any report filed by the
376-5 distributor are admissible in any suit or judicial proceedings
376-6 filed by the attorney general and are prima facie evidence of the
376-7 correctness of the claim or audit.
376-8 Sec. 161.012. ADDITIONAL TAX APPLIES TO AVIATION FUEL DEALER
376-9 INVENTORIES. (a) On the effective date of an increase in the
376-10 rates of the taxes imposed by this chapter, a dealer that possesses
376-11 for the purpose of sale 2,000 or more gallons of aviation fuel at
376-12 each business location on which the taxes imposed by this chapter
376-13 at a previous rate have been paid shall report to the comptroller
376-14 the volume of that aviation fuel and, at the time of the report,
376-15 shall pay a tax on that aviation fuel at a rate equal to the rate
376-16 of the tax increase.
376-17 (b) On the effective date of a reduction of the rates of
376-18 taxes imposed by this chapter, an aviation fuel dealer that
376-19 possesses for the purpose of sale 2,000 or more gallons of aviation
376-20 fuel at each business location on which the taxes imposed by this
376-21 chapter at the previous rate have been paid becomes entitled to a
376-22 refund in an amount equal to the difference in the amount of taxes
376-23 paid on that aviation fuel at the previous rate and at the rate in
376-24 effect on the effective date of the reduction in the tax rates.
376-25 The rules of the comptroller shall provide for the method of
376-26 claiming a refund under this chapter and may require that the
376-27 refund be paid through the aviation fuel distributor from whom the
377-1 dealer received the aviation fuel.
377-2 (Sections 161.013-161.050 reserved for expansion
377-3 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX
377-4 Sec. 161.051. TAX IMPOSED; RATE. (a) A tax is imposed on
377-5 the sale or delivery of aviation fuel in this state.
377-6 (b) The aviation fuel tax rate is four cents for each gallon
377-7 or fractional part delivered to an aviation fuel dealer or other
377-8 person.
377-9 Sec. 161.052. COMPUTATION OF TAX. (a) The amount of the
377-10 tax shall be computed and paid to the state on the
377-11 temperature-adjusted volume of gallons of taxable aviation fuel
377-12 sold to an aviation fuel dealer or other person purchasing aviation
377-13 fuel for the person's own use or for resale if the sale is made in
377-14 a single delivery of 5,000 gallons or more or in a lesser quantity
377-15 if required by municipal ordinance. The comptroller may publish
377-16 and distribute a table to be used for converting the measurement of
377-17 gross gallons of aviation fuel to temperature-adjusted gallons.
377-18 (b) The amount of the tax shall be computed and paid to the
377-19 state on the gross or volumetric gallons of taxable aviation fuel
377-20 sold if the sale is made in a single delivery of less than 5,000
377-21 gallons or in a quantity less than the maximum prescribed by an
377-22 applicable municipal ordinance if the maximum is less than 5,000
377-23 gallons.
377-24 (c) For a permitted aviation fuel distributor whose aviation
377-25 fuel deliveries are made to retail outlets operated by the
377-26 distributor or made by the distributor on consignment, the tax on
377-27 sales to users and consumers shall be computed on the basis of
378-1 actual sales.
378-2 (d) If the comptroller is not satisfied with a tax return or
378-3 the amount of tax required to be paid to the state by any aviation
378-4 fuel distributor who elects to report on the basis of actual sales,
378-5 the comptroller may compute and determine the amount to be paid on
378-6 the basis of the beginning inventory, showing the total gallons of
378-7 aviation fuel in storage at the location on the first day of the
378-8 calendar month, plus the total gallons of aviation fuel delivered
378-9 into the storage facility during the month, less the total gallons
378-10 of aviation fuel in the storage facility at the end of the calendar
378-11 month.
378-12 Sec. 161.053. EXCEPTIONS. The tax imposed by Section
378-13 161.051 does not apply to aviation fuel:
378-14 (1) delivered as cargo by a permitted aviation fuel
378-15 distributor to a common or contract carrier, an oceangoing vessel,
378-16 including a ship, tanker, or boat, or a barge for export from this
378-17 state if the aviation fuel is moved immediately outside this state;
378-18 (2) sold by a permitted aviation fuel distributor to
378-19 the federal government for its exclusive use;
378-20 (3) sold or delivered by a permitted aviation fuel
378-21 distributor to another permitted aviation fuel distributor; or
378-22 (4) sold or delivered by a permitted aviation fuel
378-23 distributor into the fuel supply tanks of aircraft used for aerial
378-24 application of agricultural chemicals to crops or land used for
378-25 growing crops.
378-26 Sec. 161.054. COLLECTION OF TAX. (a) A permitted aviation
378-27 fuel distributor who uses or makes a sale of aviation fuel in this
379-1 state for any purpose other than those exceptions listed in Section
379-2 161.053 at the time of use or sale is liable to the state for the
379-3 tax imposed by this chapter and shall report and pay the tax in the
379-4 manner provided by this chapter.
379-5 (b) Aviation fuels are considered to be used when withdrawn
379-6 from storage for delivery into a fuel supply tank.
379-7 (c) An aviation fuel distributor shall pay the tax at the
379-8 rate imposed on each gallon of aviation fuel delivered to an
379-9 aviation fuel dealer or used in an aircraft by the distributor.
379-10 (d) The tax on one percent of the taxable gallons of
379-11 aviation fuel sold or distributed in this state shall be allocated
379-12 to the permitted aviation fuel distributor making the first taxable
379-13 sale or use of aviation fuel in this state. That allocation may be
379-14 deducted by the aviation fuel distributor in the payment to the
379-15 state of the taxes imposed for the expense of collecting,
379-16 accounting for, reporting, and remitting the tax collected and for
379-17 keeping records.
379-18 Sec. 161.055. PERMITS. A person acting as an aviation fuel
379-19 distributor must obtain from the comptroller an aviation fuel
379-20 distributor permit.
379-21 Sec. 161.056. PERMIT APPLICATION FORMS. The comptroller
379-22 shall promulgate the application form for a permit, which must
379-23 contain the following information:
379-24 (1) the name under which the applicant transacts or
379-25 intends to transact business;
379-26 (2) the principal office, residence, or place of
379-27 business in this state of the applicant;
380-1 (3) if the applicant is not an individual, the names
380-2 of the principal officers of an applicant corporation or the names
380-3 of each partner in an applicant partnership and the office, street,
380-4 or post office address of each officer or partner; and
380-5 (4) other information required by the comptroller.
380-6 Sec. 161.057. PERMITS: PERIOD OF VALIDITY. A permit is
380-7 valid so long as the permit holder has in force and effect the
380-8 required bond or security and furnishes timely reports as required
380-9 or until the permit is surrendered by the holder or canceled by the
380-10 comptroller.
380-11 Sec. 161.058. DISPLAY OF PERMIT. A permit must be posted
380-12 in a conspicuous place or kept available for inspection at the
380-13 principal place of business of the permit holder. A copy of the
380-14 permit must be kept at each place of business or other place of
380-15 storage from which aviation fuel is sold, distributed, or used by
380-16 the permit holder and in each motor vehicle used by the permit
380-17 holder to transport on the public highways aviation fuel purchased
380-18 by the permit holder for resale, distribution, or use.
380-19 Sec. 161.059. LIST OF PERMIT HOLDERS. The comptroller, on
380-20 or before December 20 of each year, shall prepare and deliver to
380-21 each aviation fuel distributor a printed alphabetical list of
380-22 permitted aviation fuel distributors who are qualified to purchase
380-23 aviation fuel tax free during the following calendar year. A
380-24 supplemental list of additions and deletions shall be delivered to
380-25 each aviation fuel distributor each succeeding month.
380-26 Sec. 161.060. BONDS AND OTHER SECURITY FOR TAXES. (a) The
380-27 comptroller shall determine the amount of security required of an
381-1 aviation fuel distributor taking into consideration the amount of
381-2 tax that has or is expected to become due from the person, any
381-3 history of the person as a permit holder under Chapter 153, and the
381-4 necessity to protect the state against the failure to pay the tax
381-5 as it becomes due.
381-6 (b) If it is determined that the posting of security is
381-7 necessary to protect the state, the comptroller may require an
381-8 aviation fuel distributor to post a bond. An aviation fuel
381-9 distributor shall post a bond equal to twice the maximum amount of
381-10 tax that could accrue on tax-free aviation fuel purchased or
381-11 acquired during a reporting period. The minimum bond is $30,000.
381-12 The maximum bond is $600,000 unless the comptroller believes there
381-13 is undue risk of loss of tax revenues, in which event the
381-14 comptroller may require one or more bonds or securities in a total
381-15 amount exceeding $600,000.
381-16 (c) An aviation fuel distributor who has filed a bond or
381-17 other security under this subchapter is exempted from the bond or
381-18 other security requirements of this subchapter and is entitled, on
381-19 request, to have the comptroller return, refund, or release the
381-20 bond or security if in the judgment of the comptroller the person
381-21 has for four consecutive years continuously complied with the
381-22 conditions of the bond or other security filed under this
381-23 subchapter. However, if the comptroller determines that the
381-24 revenues of the state would be jeopardized by the return, refund,
381-25 or release of the bond or security, the comptroller may elect not
381-26 to return, refund, or release the bond or security and may reimpose
381-27 a requirement of a bond or other security the comptroller
382-1 determines necessary to protect the revenues of the state.
382-2 (d) A bond must be a continuing instrument, must constitute
382-3 a new and separate obligation in the penal sum named in the bond
382-4 for each calendar year or portion of a year while the bond is in
382-5 force, and must remain in effect until the surety on the bond is
382-6 released and discharged.
382-7 (e) In lieu of filing a surety bond, an applicant for a
382-8 permit may substitute the following security:
382-9 (1) cash in the form of United States currency in an
382-10 amount equal to the required bond to be deposited in the suspense
382-11 account of the state treasury;
382-12 (2) an assignment to the comptroller of a certificate
382-13 of deposit in any bank or savings and loan association in this
382-14 state that is a member of the Federal Deposit Insurance Corporation
382-15 in an amount at least equal to the bond amount required; or
382-16 (3) an irrevocable letter of credit to the comptroller
382-17 from any bank or savings and loan association in this state that is
382-18 a member of the Federal Deposit Insurance Corporation in an amount
382-19 of credit at least equal to the bond amount required.
382-20 (f) If the amount of an existing bond becomes insufficient
382-21 or a security becomes unsatisfactory or unacceptable, the
382-22 comptroller may require the filing of a new or additional bond or
382-23 security.
382-24 (g) A surety bond or other form of security may not be
382-25 released until it is determined by examination or audit that no
382-26 tax, penalty, or interest liability exists. The cash or securities
382-27 shall be released within 60 days after the comptroller determines
383-1 that no liability exists.
383-2 (h) The comptroller may use the cash or certificate of
383-3 deposit security to satisfy a final determination of delinquent
383-4 liability or a judgment secured in any action by this state to
383-5 recover aviation fuel taxes, costs, penalties, and interest found
383-6 to be due this state by a person in whose behalf the cash or
383-7 certificate security was deposited.
383-8 (i) A surety on a bond furnished by a permittee shall be
383-9 released and discharged from liability to the state accruing on the
383-10 bond after the expiration of 30 days after the date on which the
383-11 surety files with the comptroller a written request to be released
383-12 and discharged. The request does not relieve, release, or
383-13 discharge the surety from a liability already accrued or that
383-14 accrues before the expiration of the 30-day period. The
383-15 comptroller, promptly on receipt of the request, shall notify the
383-16 permittee who furnished the bond, and unless the permittee, before
383-17 the expiration date of the existing security, files with the
383-18 comptroller a new bond with a surety company duly authorized to do
383-19 business under the laws of the state, or other authorized security,
383-20 in the amount required in this section, the comptroller shall
383-21 cancel the permit in the manner provided by this chapter.
383-22 (j) The comptroller shall notify immediately the issuer of a
383-23 letter of credit of a final determination of the distributor's
383-24 delinquent liability or a judgment secured in any action by this
383-25 state to recover aviation fuel taxes, costs, penalties, and
383-26 interest found to be due this state by a distributor in whose
383-27 behalf the letter of credit was issued. The letter of credit
384-1 allowed as security for the remittance of taxes under this
384-2 subchapter shall contain a statement that the issuer agrees to
384-3 respond to the comptroller's notice of liability with amounts to
384-4 satisfy the comptroller's delinquency claim against the
384-5 distributor.
384-6 (k) A permit holder may request an examination or audit to
384-7 obtain release of the security when the permit holder relinquishes
384-8 the permit or when the permit holder desires to substitute one form
384-9 of security for an existing one.
384-10 Sec. 161.061. RECORDS. (a) A permitted aviation fuel
384-11 distributor shall keep a complete and separate record of the number
384-12 of gallons of aviation gasoline and the number of gallons of
384-13 aviation diesel fuel:
384-14 (1) on hand as inventory at the first of each month;
384-15 (2) refined, compounded, or blended during the month;
384-16 (3) purchased or received during the month, showing
384-17 the name of the seller and the date of each purchase or receipt,
384-18 with the amount of tax separately stated;
384-19 (4) sold, distributed, or used during the month,
384-20 showing the name of the purchaser and the date of sale,
384-21 distribution, or use and the registration or "N" number or a
384-22 description of the aircraft in which the aviation fuel is
384-23 delivered; and
384-24 (5) lost during the month by fire or other accident.
384-25 (b) An aviation fuel dealer shall keep a complete and
384-26 separate record of the number of gallons of aviation gasoline and
384-27 the number of gallons of aviation diesel fuel:
385-1 (1) on hand as inventory at the first of each month;
385-2 (2) purchased or received during the month, showing
385-3 the name of the seller and the date of each purchase or receipt;
385-4 (3) sold, distributed, or used during the month,
385-5 showing the name of the purchaser and the date of sale,
385-6 distribution, or use and the registration or "N" number or a
385-7 description of the aircraft in which the aviation fuel is
385-8 delivered; and
385-9 (4) lost during the month by fire or other accident.
385-10 Sec. 161.062. REPORTS AND PAYMENTS. (a) On or before the
385-11 25th day of each month, an aviation fuel distributor shall file a
385-12 report of aviation fuel transactions and remit the amount of tax
385-13 required to be collected during the preceding month. The report
385-14 must be filed on a form provided by the comptroller and contain the
385-15 information required by the comptroller, including complete and
385-16 detailed information of aviation fuel transactions during the
385-17 preceding month. A permitted aviation fuel distributor who has not
385-18 sold, used, or distributed any aviation fuel during a reporting
385-19 period shall nevertheless file a report for that period with the
385-20 comptroller. The failure of an aviation fuel distributor to obtain
385-21 forms from the comptroller is not an acceptable excuse for the
385-22 failure to file a report. The report must be executed by the
385-23 aviation fuel distributor or the aviation fuel distributor's
385-24 representative.
385-25 (b) The comptroller may require selective schedules from an
385-26 aviation fuel distributor or common or contract cargo carrier for a
385-27 purchase, sale, delivery, or transportation of aviation fuel if the
386-1 schedules are not inconsistent with the requirements of this
386-2 chapter. The records required must be kept for four years and are
386-3 open to inspection at all times by the comptroller, the attorney
386-4 general, or their authorized representatives.
386-5 Sec. 161.063. TAX ON INITIAL INVENTORY. (a) A tax is
386-6 imposed on aviation fuel held by an aviation fuel dealer on January
386-7 1, 1998, other than for the excepted uses under Section 161.053.
386-8 The rate of the tax is four cents for each volumetric gallon or
386-9 fractional part of a gallon of aviation fuel held on that date.
386-10 (b) Each aviation fuel dealer shall gauge or meter each
386-11 storage tank containing aviation fuel at the end of December 31,
386-12 1997. Each aviation fuel dealer shall report the volume of
386-13 aviation fuel so measured and remit the taxes imposed by this
386-14 section not later than February 21, 1998, on forms and according to
386-15 procedures adopted by the comptroller for that purpose.
386-16 (c) This section expires January 1, 1999.
386-17 (Sections 161.064-161.100 reserved for expansion
386-18 SUBCHAPTER C. REFUNDS
386-19 Sec. 161.101. REFUNDS ON TAXES PAID. (a) A person who
386-20 qualifies for a tax refund under Subsection (b) or (c) and who
386-21 fully complies with the invoice and filing provisions of this
386-22 chapter and the rules of the comptroller is entitled to
386-23 reimbursement of the tax paid by the person, less a filing fee and
386-24 any amount allowed permitted aviation fuel distributors.
386-25 (b) A person who exports as cargo or loses by fire or other
386-26 accident 100 gallons or more of aviation fuel on which the tax has
386-27 been paid, sells aviation fuel on which the tax has been paid in
387-1 any quantity to the United States government for the exclusive use
387-2 of the government, or uses aviation fuel for the purpose of
387-3 operating an aircraft for aerial application of agricultural
387-4 chemicals to crops or land used for growing crops may file a claim
387-5 for a refund on the net tax paid to the state in the manner
387-6 provided by this subchapter or as the comptroller may direct.
387-7 (c) The right to receive a refund under this section is not
387-8 assignable, except that a person residing or maintaining a place of
387-9 business outside the state who purchases 100 gallons or more of
387-10 aviation fuel and immediately exports as cargo the entire quantity
387-11 may assign the person's right to claim a refund to the permitted
387-12 distributor from whom the aviation fuel was purchased or to any
387-13 permitted aviation fuel distributor who has paid the tax on the
387-14 aviation fuel either directly or through another permitted dealer
387-15 in this state. If a distributor has secured an assignment and the
387-16 proof of export as cargo required by the comptroller, the
387-17 distributor may credit the tax paid on any monthly report filed
387-18 with the comptroller before the expiration of one year after the
387-19 first day of the month following the date of delivery to the
387-20 exporter of the aviation fuel.
387-21 (d) An aviation fuel dealer or user who establishes proof
387-22 satisfactory to the comptroller of delivery into aircraft of motor
387-23 vehicle fuel on which the state motor fuel tax has been paid may
387-24 request a refund of the amount by which the motor fuel tax paid
387-25 exceeds the amount of the tax imposed by this chapter on the fuel.
387-26 Sec. 161.102. CREDITS FOR BAD DEBTS. (a) A permitted
387-27 aviation fuel distributor may take a credit on the monthly report
388-1 to be filed with the comptroller if:
388-2 (1) the distributor has paid the taxes imposed by this
388-3 chapter on aviation fuel sold on account;
388-4 (2) the distributor determines that the account is
388-5 uncollectible and worthless; and
388-6 (3) the account is written off as a bad debt on the
388-7 accounting books of the distributor.
388-8 (b) The amount of the credit that may be taken under
388-9 Subsection (a) may equal but may not exceed the amount of taxes
388-10 paid on the aviation fuel to which the written-off account applies.
388-11 (c) If, after a credit is taken under Subsection (a), the
388-12 account on which the credit was based is paid, or if the
388-13 comptroller otherwise determines that the credit was not authorized
388-14 by Subsection (a), the unpaid taxes shall be paid by the
388-15 distributor taking the credit, plus a penalty of 10 percent of the
388-16 amount of the unpaid taxes and interest at the rate provided by
388-17 Section 111.060 beginning on the day that the credit was taken.
388-18 (d) This section does not apply to a sale of aviation fuel
388-19 that is delivered into the fuel supply tank of an aircraft for
388-20 which payment is made through the use and acceptance of a credit
388-21 card.
388-22 Sec. 161.103. REFUND PROCEDURE. A refund claim must be
388-23 filed with the comptroller on a form provided by the comptroller
388-24 and must show the date of filing, the period covered in the claim,
388-25 the number of gallons of aviation fuel subject to refund, and other
388-26 information required by the comptroller. A claim must be supported
388-27 by one or more original invoices issued to the claimant or such
389-1 other information as the comptroller considers necessary.
389-2 Sec. 161.104. LIMITATIONS ON REFUNDS. (a) A refund claim
389-3 must be filed with the comptroller within one year after the first
389-4 day of the calendar month following the purchase, export, or loss
389-5 by fire, theft, or other accident of the aviation fuel on which the
389-6 claim is based.
389-7 (b) If on the audit of an aviation fuel distributor the
389-8 comptroller determines that a tax-free sale was made to an
389-9 unauthorized purchaser and the unauthorized purchaser could have
389-10 filed for a refund if tax had been paid at the time of sale, the
389-11 unauthorized purchaser may file a refund claim within one year
389-12 after the date of final assessment.
389-13 (c) A person who files a refund claim on any aviation fuel
389-14 used for a purpose for which a tax refund is not authorized, or who
389-15 files an invoice supporting a refund claim on which the date,
389-16 amounts, or any material information has been falsified or altered,
389-17 forfeits the right to the entire amount of the refund claim filed.
389-18 This forfeiture provision does not apply if a claimant provides
389-19 proof satisfactory to the comptroller that the incorrect refund
389-20 claim filed was due to a clerical or mathematical calculation
389-21 error.
389-22 Sec. 161.105. REFUND PAYMENTS AND FILING FEE. (a) After
389-23 examination and approval of a refund claim, the comptroller before
389-24 issuance of a refund warrant shall deduct from the amount of the
389-25 refund payment:
389-26 (1) the one percent deducted originally by the
389-27 aviation fuel distributor on the sale or delivery of the aviation
390-1 fuel; and
390-2 (2) $10 as a filing fee.
390-3 (b) The filing fees shall be set aside for use by the
390-4 comptroller in the administration and enforcement of this chapter
390-5 and for payment of expenses in furnishing the claim forms and other
390-6 forms. All filing fees shall be paid into the state treasury and
390-7 shall be paid out on vouchers and warrants in the manner prescribed
390-8 by law.
390-9 (Sections 161.106-161.150 reserved for expansion
390-10 SUBCHAPTER D. PENALTIES AND OFFENSES
390-11 Sec. 161.151. CIVIL PENALTY AND INTEREST; FAILURE TO PAY OR
390-12 REPORT. (a) If a person having a permit as an aviation fuel
390-13 distributor fails to file a report as required by this chapter or
390-14 fails to pay a tax imposed by this chapter when due, the person
390-15 forfeits five percent of the amount due as a penalty, and if the
390-16 person fails to file the report or pay the tax within 30 days after
390-17 the day on which the tax or report is due, the person forfeits an
390-18 additional five percent.
390-19 (b) The minimum penalty imposed by this section is $10.
390-20 (c) The comptroller may add a penalty of 75 percent of the
390-21 amount of taxes, penalties, and interest due if failure to file the
390-22 report or pay the tax when it becomes due is attributable to fraud
390-23 or an intent to evade the application of this chapter or a rule
390-24 adopted under this chapter or Chapter 111.
390-25 Sec. 161.152. VENUE OF COLLECTION SUITS. A suit,
390-26 injunction, or other proceeding at law available for the
390-27 establishment or collection of any claim for delinquent taxes,
391-1 penalties, or interest due under this chapter and the enforcement
391-2 of this chapter may be brought in Travis County or any other county
391-3 in which venue lies under other law.
391-4 Sec. 161.153. PROHIBITED ACTS; CIVIL PENALTIES. A person
391-5 forfeits to the state a civil penalty of not less than $25 or more
391-6 than $200 if the person:
391-7 (1) refuses to stop and permit the inspection and
391-8 examination of a motor vehicle transporting aviation fuel on demand
391-9 of a peace officer or the comptroller;
391-10 (2) transports aviation fuel on the public highways in
391-11 a cargo tank that has a connection by pipe, tube, valve, or
391-12 otherwise with the fuel injector or carburetor or with the fuel
391-13 supply tank feeding the fuel injector or carburetor of the motor
391-14 vehicle transporting the product;
391-15 (3) fails or refuses to comply with or violates a
391-16 provision of this chapter; or
391-17 (4) fails or refuses to comply with or violates a rule
391-18 adopted for the administration of this chapter by the comptroller.
391-19 Sec. 161.154. CRIMINAL OFFENSES. Except as provided by
391-20 Section 161.155, a person commits an offense if the person
391-21 intentionally or knowingly:
391-22 (1) refuses to stop and permit the inspection and
391-23 examination of a motor vehicle transporting or using aviation fuel
391-24 on the demand of a peace officer or the comptroller;
391-25 (2) transports aviation fuel on the public highways in
391-26 any tank that has a connection by pipe, tube, valve, or otherwise
391-27 with the fuel injector or carburetor or with the fuel supply tank
392-1 feeding the fuel injector or carburetor of the motor vehicle;
392-2 (3) refuses to permit the comptroller or the attorney
392-3 general to inspect, examine, or audit any books and records
392-4 required to be kept by an aviation fuel distributor, aviation fuel
392-5 dealer, common or contract carrier, or any person required to hold
392-6 a permit under this chapter;
392-7 (4) refuses to permit the comptroller or the attorney
392-8 general to inspect or examine any plant, equipment, materials, or
392-9 premises where aviation fuel is produced, processed, stored, sold,
392-10 delivered, or used;
392-11 (5) refuses to permit the comptroller or the attorney
392-12 general to measure or gauge the contents of or take samples from
392-13 any storage tank or container on premises where aviation fuel is
392-14 produced, processed, stored, sold, delivered, or used;
392-15 (6) is an aviation fuel distributor or dealer and
392-16 fails or refuses to make or deliver to the comptroller a report
392-17 required by this chapter to be made and delivered to the
392-18 comptroller;
392-19 (7) conceals aviation fuel with the intent of engaging
392-20 in any conduct prohibited by this chapter;
392-21 (8) refuses, while transporting aviation fuel, to stop
392-22 the motor vehicle the person is operating when called on to do so
392-23 by a person authorized to stop the motor vehicle;
392-24 (9) refuses to surrender a motor vehicle and cargo for
392-25 impoundment after being ordered to do so by a person authorized to
392-26 impound the motor vehicle and cargo;
392-27 (10) transports aviation fuel in any quantity for
393-1 which a cargo manifest is required to be carried without possessing
393-2 or exhibiting on demand by an officer authorized to make the demand
393-3 a cargo manifest containing the information required to be shown on
393-4 the manifest;
393-5 (11) mutilates, destroys, or secretes a record
393-6 required by this chapter to be kept by any person required to hold
393-7 a permit required by this chapter;
393-8 (12) is an aviation fuel distributor or other person
393-9 required to hold a permit under this chapter, or is the agent or
393-10 employee of such a person, and makes a false entry or fails to make
393-11 an entry in the books and records required under this chapter to be
393-12 made by the person;
393-13 (13) transports in any manner aviation fuel under a
393-14 false cargo manifest;
393-15 (14) engages in an aviation fuel transaction that
393-16 requires that the person have a permit under this chapter without
393-17 then and there holding the required permit;
393-18 (15) makes and delivers to the comptroller a report
393-19 required under this chapter to be made and delivered to the
393-20 comptroller if the report contains false information;
393-21 (16) forges, falsifies, or alters an invoice for any
393-22 fuel if the invoice is prescribed by law;
393-23 (17) makes any statement, knowing the statement to be
393-24 false, in a claim for a tax refund filed with the comptroller;
393-25 (18) fails to remit any tax funds collected by an
393-26 aviation fuel distributor or any other person;
393-27 (19) holds an aviation fuel dealer's permit and makes
394-1 a sale or use of any gasoline or diesel fuel required to be taxed
394-2 under Chapter 153;
394-3 (20) makes a sale of aviation fuel tax free to any
394-4 person who is not permitted as an aviation fuel distributor or
394-5 except as otherwise authorized by this chapter; or
394-6 (21) is an aviation fuel distributor or aviation fuel
394-7 dealer who purchases aviation fuel with the intent to evade any tax
394-8 imposed by this chapter.
394-9 Sec. 161.155. CRIMINAL OFFENSES; CONTINUING VIOLATION.
394-10 Each day that a refusal prohibited by Section 161.154(3), (4), or
394-11 (5) continues is a separate offense.
394-12 Sec. 161.156. CRIMINAL PENALTIES. (a) An offense under
394-13 Section 161.154(1) or (2) is a Class C misdemeanor.
394-14 (b) An offense under Section 161.154(3), (4), (5), or (6) is
394-15 a Class B misdemeanor.
394-16 (c) An offense under Section 161.154(7), (8), (9), or (10)
394-17 is a Class A misdemeanor.
394-18 (d) An offense under Section 161.154(11), (12), (13), (14),
394-19 (15), (16), or (17) is a felony of the third degree.
394-20 (e) An offense under Section 161.154(18), (19), (20), or
394-21 (21) is a felony of the second degree.
394-22 (f) Violations of three or more separate offenses under
394-23 Sections 161.154(11) through (17) committed pursuant to one scheme
394-24 or continuous course of conduct may be considered as one offense
394-25 and punished as a felony of the second degree.
394-26 Sec. 161.157. CRIMINAL PENALTIES: CORPORATIONS AND
394-27 ASSOCIATIONS. (a) Except as provided by Subsection (b),
395-1 Subchapter E, Chapter 12, Penal Code, applies to offenses under
395-2 this chapter committed by a corporation or association.
395-3 (b) The court may not fine a corporation or association
395-4 under Section 12.51(c), Penal Code, unless the amount of the fine
395-5 under that subsection is greater than the amount that could be
395-6 fixed by the court under Section 12.51(b), Penal Code.
395-7 (c) In addition to a sentence imposed on a corporation, the
395-8 court shall give notice of the conviction to the attorney general
395-9 as required by Article 17A.09, Code of Criminal Procedure.
395-10 Sec. 161.158. CRIMINAL PROSECUTIONS: VENUE. An offense
395-11 under this chapter must be prosecuted in Travis County or in the
395-12 county in which the offense occurred.
395-13 Sec. 161.159. REMEDIES CUMULATIVE. The remedies provided
395-14 by this chapter for the state are cumulative. An action taken by
395-15 the comptroller or the attorney general does not constitute an
395-16 election to pursue a remedy to the exclusion of any other remedy
395-17 provided by this chapter or other law.
395-18 (Sections 161.160-161.200 reserved for expansion
395-19 SUBCHAPTER E. ALLOCATION OF REVENUE; OTHER TAXES
395-20 Sec. 161.201. TAX ADMINISTRATION ACCOUNT. (a) Before any
395-21 other allocation of the taxes collected under this chapter is made,
395-22 one percent of the gross amount of taxes shall be deposited in a
395-23 special account, subject to the use of the comptroller in the
395-24 administration and enforcement of this chapter.
395-25 (b) The unexpended portion of the special account shall
395-26 revert, at the end of the fiscal year, to the unobligated portion
395-27 of the general revenue fund.
396-1 Sec. 161.202. ALLOCATION OF REVENUE. Each month the
396-2 comptroller, after making deductions for refund purposes and
396-3 setting aside other amounts as provided by this chapter, shall
396-4 allocate the taxes collected under this chapter to the general
396-5 revenue fund.
396-6 Sec. 161.203. OTHER TAXES. A political subdivision may not
396-7 impose a tax, other than property taxes, on aviation fuel.
396-8 SECTION 8.31. The following sections or subsections of Title
396-9 2, Tax Code, are repealed:
396-10 (1) Section 153.110;
396-11 (2) Section 153.111;
396-12 (3) Section 153.112(b);
396-13 (4) Sections 153.117(d) and (e);
396-14 (5) Section 153.118(d);
396-15 (6) Section 153.213; and
396-16 (7) Section 153.215(b).
396-17 SECTION 8.32. (a) This article does not affect rights,
396-18 privileges, duties, obligations, or powers that matured, penalties
396-19 that were incurred, or proceedings that were begun before its
396-20 effective date.
396-21 (b) The provisions of Chapter 153, Tax Code, amended by this
396-22 article, as they existed immediately before the effective date of
396-23 this article, remain in effect only for the purposes of collecting,
396-24 administering, and allocating the taxes imposed under that chapter
396-25 before the effective date of this article.
396-26 (c) There is exempted from the taxes imposed by Chapter 153,
396-27 Tax Code, the sale or use in this state of gasoline or diesel fuel
397-1 that became under Section 153.102(c) or 153.202(c) or (d), as added
397-2 by this article, subject to the taxes because of the terms of this
397-3 article and that is consumed in the performance of a fixed price
397-4 contract with a governmental entity entered into on or before March
397-5 1, 1997. The exemption provided by this subsection expires January
397-6 1, 2000.
397-7 SECTION 8.33. (a) This article takes effect January 1,
397-8 1998.
397-9 (b) Effective September 1, 1997, the comptroller may adopt
397-10 rules in anticipation of the effective date of Chapter 161, Tax
397-11 Code, as added by this article, and may prescribe, print, and
397-12 distribute forms and other information that will be needed on the
397-13 effective date of that chapter.
397-14 ARTICLE 9. HOTEL OCCUPANCY TAX
397-15 SECTION 9.01. Sections 156.052 and 156.101, Tax Code, are
397-16 amended to read as follows:
397-17 Sec. 156.052. Rate of Tax. The rate of the tax imposed by
397-18 this chapter is 6.25 [six] percent of the price paid for a room in
397-19 a hotel.
397-20 Sec. 156.101. Exception--Permanent Resident. This chapter
397-21 does not impose a tax on the occupancy or right to occupancy by the
397-22 same individual of [a person who has the right to use or possess] a
397-23 room in a hotel for at least 30 consecutive days, so long as there
397-24 is no interruption of payment for the period.
397-25 SECTION 9.02. This article takes effect September 1, 1997.
397-26 ARTICLE 10. CIGARETTE AND TOBACCO PRODUCTS TAX
397-27 SECTION 10.01. Section 154.021(b), Tax Code, is amended to
398-1 read as follows:
398-2 (b) The tax rates are:
398-3 (1) $33.00 [$20.50] per thousand on cigarettes
398-4 weighing three pounds or less per thousand; and
398-5 (2) the rate provided by Subdivision (1) plus $2.10
398-6 per thousand on cigarettes weighing more than three pounds per
398-7 thousand.
398-8 SECTION 10.02. Section 155.021(b), Tax Code, is amended to
398-9 read as follows:
398-10 (b) The tax rates are:
398-11 (1) 1.5 cents [one cent] per 10 or fraction of 10 on
398-12 cigars weighing three pounds or less per thousand;
398-13 (2) $11.25 [$7.50] per thousand on cigars that:
398-14 (A) weigh more than three pounds per thousand;
398-15 and
398-16 (B) sell at factory list price, exclusive of any
398-17 trade discount, special discount, or deal, for 3.3 cents or less
398-18 each;
398-19 (3) $16.50 [$11] per thousand on cigars that:
398-20 (A) weigh more than three pounds per thousand;
398-21 (B) sell at factory list price, exclusive of any
398-22 trade discount, special discount, or deal, for more than 3.3 cents
398-23 each; and
398-24 (C) contain no substantial amount of nontobacco
398-25 ingredients; and
398-26 (4) $22.50 [$15] per thousand on cigars that:
398-27 (A) weigh more than three pounds per thousand;
399-1 (B) sell at factory list price, exclusive of any
399-2 trade discount, special discount, or deal, for more than 3.3 cents
399-3 each; and
399-4 (C) contain a substantial amount of nontobacco
399-5 ingredients.
399-6 SECTION 10.03. Section 155.0211(b), Tax Code, is amended to
399-7 read as follows:
399-8 (b) The tax rate for tobacco products other than cigars is
399-9 52.820 [35.213] percent of the manufacturer's list price, exclusive
399-10 of any trade discount, special discount, or deal.
399-11 SECTION 10.04. This article takes effect September 1, 1997.
399-12 ARTICLE 11. MANUFACTURED HOUSING SALES AND USE TAX
399-13 SECTION 11.01. (a) Section 158.051, Tax Code, is amended to
399-14 read as follows:
399-15 Sec. 158.051. Tax Imposed. A tax is imposed on the initial
399-16 sale in this state of every new manufactured home at the rate of
399-17 6.25 [five] percent of the amount of the sales price determined as
399-18 provided by Section 158.052 of this code.
399-19 (b) This section takes effect October 1, 1997.
399-20 ARTICLE 12. GAS, ELECTRIC, AND WATER SERVICE TAX
399-21 SECTION 12.01. The heading to Subchapter B, Chapter 182, Tax
399-22 Code, is amended to read as follows:
399-23 SUBCHAPTER B. GAS AND ELECTRIC SERVICE
399-24 [UTILITY] COMPANIES
399-25 SECTION 12.02. Section 182.021, Tax Code, is amended to read
399-26 as follows:
399-27 Sec. 182.021. Definitions. In this subchapter:
400-1 (1) "Service ["Utility] company" means a person,
400-2 including a cooperative or nonprofit corporation or a political
400-3 subdivision of this state, who conducts business in this state [who
400-4 owns or operates a gas, electric light, electric power, or water
400-5 works, or water and light plant used for local sale and
400-6 distribution located within an incorporated city or town in this
400-7 state].
400-8 (2) "Business" means:
400-9 (A) selling [the providing of] gas, electric
400-10 light, or electric power to any person for any use, other than for
400-11 resale to another person; or
400-12 (B) transporting or providing transportation of
400-13 gas, electric light, or electric power to any person for any use,
400-14 other than for resale to another person.
400-15 (3) "Resale" does not include the sale of gas to a
400-16 person for use, consumption, or resale outside this state[, or
400-17 water].
400-18 SECTION 12.03. Section 182.022, Tax Code, is amended to read
400-19 as follows:
400-20 Sec. 182.022. Imposition and Rate of Tax. (a) A tax is
400-21 imposed on each service [utility] company doing business in this
400-22 state [located in an incorporated city or town having a population
400-23 of more than 1,000, according to the last federal census next
400-24 preceding the filing of the report].
400-25 (b) The tax rate is 2.75 [rates are:]
400-26 [(1) .581] percent of the gross receipts from business
400-27 done in this state [an incorporated city or town having a
401-1 population of more than 1,000 but less than 2,500, according to the
401-2 last federal census next preceding the filing of the report;]
401-3 [(2) 1.07 percent of the gross receipts from business
401-4 done in an incorporated city or town having a population of 2,500
401-5 or more but less than 10,000, according to the last federal census
401-6 next preceding the filing of the report; and]
401-7 [(3) 1.997 percent of the gross receipts from business
401-8 done in an incorporated city or town having a population of 10,000
401-9 or more, according to the last federal census next preceding the
401-10 filing of the report].
401-11 SECTION 12.04. Sections 182.023 and 182.024, Tax Code, are
401-12 amended to read as follows:
401-13 Sec. 182.023. PAYMENT OF TAX. Only one service [utility]
401-14 company pays the tax on a commodity. If the commodity is produced
401-15 by one service [utility] company and distributed by another, the
401-16 distributor pays the tax.
401-17 Sec. 182.024. Political Subdivisions. No city or other
401-18 political subdivision of this state may impose an occupation tax or
401-19 charge of any sort on a service [utility] company taxed under this
401-20 subchapter.
401-21 SECTION 12.05. Section 182.026, Tax Code, is amended to read
401-22 as follows:
401-23 Sec. 182.026. EFFECT AND APPLICABILITY OF SUBCHAPTER [NOT
401-24 APPLICABLE]. (a) This subchapter does not apply to the retail
401-25 sale of natural gas to an electric utility company [a utility
401-26 company owned and operated by a city, town, county, water
401-27 improvement district, or conservation district].
402-1 (b) This subchapter does not:
402-2 (1) affect collection of ad valorem taxes; or
402-3 (2) impair or alter a provision of a contract,
402-4 agreement, or franchise made between a city and a public utility
402-5 company relating to a payment made to the city.
402-6 SECTION 12.06. Article 6060, Revised Statutes, is repealed.
402-7 SECTION 12.07. This article takes effect January 1, 1998,
402-8 and applies to gross receipts received from business done in this
402-9 state on or after that date. Gross receipts from business done in
402-10 this state before that date are governed by the law in effect when
402-11 the business was done, and that law is continued in effect for that
402-12 purpose.
402-13 ARTICLE 13. INTERSTATE MOTOR CARRIER SALES AND USE TAX
402-14 SECTION 13.01. Subtitle E, Title 2, Tax Code, is amended by
402-15 adding Chapter 157 to read as follows:
402-16 CHAPTER 157. INTERSTATE MOTOR CARRIER SALES AND USE TAX
402-17 SUBCHAPTER A. GENERAL PROVISIONS
402-18 Sec. 157.001. DEFINITIONS. In this chapter:
402-19 (1) "Person" includes an individual, firm,
402-20 partnership, joint venture, corporation, association, organization,
402-21 or group or combination acting as a unit.
402-22 (2) "Motor carrier" means:
402-23 (A) a person who transports persons or property
402-24 for hire or who holds himself out to the public as willing to
402-25 transport persons or property for hire by motor vehicle;
402-26 (B) a person who leases, rents, or otherwise
402-27 provides a motor vehicle for the use of others and who in
403-1 connection therewith in the regular course of business provides,
403-2 procures, or arranges for, directly, indirectly, or by course of
403-3 dealing, a driver or operator therefor;
403-4 (C) a person who operates a motor vehicle over
403-5 the public highways of this state for the purpose of transporting
403-6 persons or property when the transportation is incidental to a
403-7 primary business enterprise, other than transportation, in which
403-8 such person is engaged; or
403-9 (D) a person who engages in transportation by
403-10 motor vehicle of persons or property for compensation, other than
403-11 transportation referred to in Paragraph (A) of this subdivision,
403-12 under continuing contracts with one person or a limited number of
403-13 persons either:
403-14 (i) for the furnishing of transportation
403-15 services through the assignment of motor vehicles for a continuing
403-16 period of time to the exclusive use of each person served; or
403-17 (ii) for the furnishing of transportation
403-18 services designed to meet the distinct and peculiar needs of each
403-19 individual customer which are not normally provided by a common
403-20 carrier.
403-21 (3) "Interstate motor vehicle" means a motor vehicle
403-22 whose registration fees could be apportioned if the motor vehicle
403-23 were registered in a state or province of a country which was a
403-24 member of the International Registration Plan. For the purposes of
403-25 this chapter, a bus used in transportation of chartered parties
403-26 shall be considered an interstate motor vehicle if it meets all the
403-27 standards required of other motor vehicles for apportioned
404-1 registration fees.
404-2 (4) "Truck-tractor" means every motor vehicle designed
404-3 or used primarily for drawing other vehicles, and not so
404-4 constructed as to carry a load other than a part of the weight of
404-5 the vehicle and load so drawn.
404-6 (5) "Commercial motor vehicle" means any motor vehicle
404-7 (other than a motorcycle or passenger car) designed or used
404-8 primarily for the transportation of property or persons.
404-9 (6) "Trailer" means every vehicle designed or used to
404-10 carry its load wholly on its own structure and to be drawn by a
404-11 motor vehicle.
404-12 (7) "Semitrailer" means a vehicle of the trailer type
404-13 so designed or used in conjunction with a motor vehicle that some
404-14 part of its own weight and that of its load rests upon or is
404-15 carried by another vehicle, including a van, flatbed, tank,
404-16 dumpster, dolly, jeep, stinger, auxiliary axle, or converter gear.
404-17 (8) "Trip-lease equipment" means a motor vehicle
404-18 leased between any person and a motor carrier on a single trip
404-19 basis and driven by the lessor or an employee of the lessor.
404-20 (9) "Purchase" means a lease of or a transfer of title
404-21 to a motor vehicle, trailer, or semitrailer for consideration.
404-22 (10) "Preceding year" means the period of 12
404-23 consecutive calendar months immediately prior to January 1 or any
404-24 other day that the comptroller may designate.
404-25 (11) "Lease" means an agreement by an owner of a motor
404-26 vehicle, trailer, or semitrailer to give to another for longer than
404-27 180 days under a single agreement exclusive use of the vehicle
405-1 without a driver for consideration.
405-2 (Sections 157.002-157.100 reserved for expansion
405-3 SUBCHAPTER B. IMPOSITION OF TAX
405-4 Sec. 157.101. TAXES IMPOSED. Sales and use taxes are
405-5 imposed on interstate motor vehicles, trailers, and semitrailers:
405-6 (1) purchased in this state or purchased outside this
405-7 state and brought into this state by a motor carrier that is a
405-8 resident of this state or is domiciled or doing business in this
405-9 state;
405-10 (2) hired with a driver by a motor carrier that is a
405-11 resident of this state or is domiciled or doing business in this
405-12 state to transport persons or property over the carrier's routes
405-13 and under the authority of the carrier's permits; or
405-14 (3) contracted by a motor carrier that is a resident
405-15 of this state or is domiciled or doing business in this state for
405-16 use as trip-leased equipment.
405-17 Sec. 157.102. TAX RATE. (a) Except as provided in
405-18 Subsections (c), (d), and (e) of this section, the payment of the
405-19 tax is the responsibility of the motor carrier operating the motor
405-20 vehicle and the tax rate on an interstate motor vehicle shall be
405-21 calculated as follows:
405-22 (1) The carrier's total miles operated in Texas by
405-23 interstate truck-tractors and interstate commercial motor vehicles
405-24 during the preceding year is divided by the total miles operated by
405-25 the same interstate truck-tractors and interstate commercial motor
405-26 vehicles operated in Texas during the preceding year;
405-27 (2) The percentage calculated in Subdivision (1) of
406-1 this subsection is multiplied by 6-1/4 percent of the purchase
406-2 price of each interstate motor vehicle purchased in Texas or first
406-3 brought into the State of Texas during the reporting period. If a
406-4 lease price is used in this formula, charges for gasoline,
406-5 maintenance, insurance, and pass-through charges, such as federal
406-6 highway use tax and fees for licensing and registration, may be
406-7 excluded from the lease price;
406-8 (3)(A) From the amount computed in Subdivision (2) of
406-9 this subsection may be deducted the amount of sales and use tax
406-10 paid on the interstate motor vehicle multiplied by the formula in
406-11 Subdivision (1) of this subsection;
406-12 (B) If an operator is paying sales or use tax on
406-13 lease payments, he may take the credit allowed by Paragraph (A) of
406-14 this subdivision on a quarterly basis.
406-15 (b) If a motor carrier has not operated in Texas during the
406-16 preceding year, it shall estimate the miles it will drive during
406-17 the year and use the estimate in the calculations set forth in
406-18 Subsection (a) of this section. The carrier shall adjust any
406-19 overpayments or underpayments of tax based on actual mileage in the
406-20 first reporting period after a year of operation.
406-21 (c)(1) The payment of the tax is the responsibility of the
406-22 motor carriers operating the motor vehicle, and the tax rate on an
406-23 interstate trailer or semitrailer being purchased or first brought
406-24 into Texas during a reporting period shall be calculated as
406-25 follows:
406-26 (A) The number of truck-tractors operated in
406-27 Texas by the motor carrier during the reporting period is divided
407-1 by the total number of truck-tractors operated by a motor carrier
407-2 in the reporting period;
407-3 (B) The percentage calculated in Paragraph (A)
407-4 of this subdivision is multiplied by 6-1/4 percent of the purchase
407-5 price of all trailers and semitrailers purchased during the
407-6 reporting period;
407-7 (C) The amount calculated in Paragraph (B) of
407-8 this subdivision is multiplied by the formula in Subsection (a)(1)
407-9 of this section;
407-10 (D) From the amount calculated in Paragraph (C)
407-11 of this subdivision shall be deducted the amount of sales and use
407-12 taxes paid on all trailers and semitrailers purchased in the
407-13 reporting period multiplied by the percentages calculated in
407-14 Paragraph (A) of this subdivision and in Subsection (a)(1) of this
407-15 section;
407-16 (2) However, if the motor carrier can prove that the
407-17 actual number of trailers or semitrailers being purchased in Texas
407-18 or first brought into Texas during a reporting period is less than
407-19 the number under the formula in Subsection (c)(1) of this section,
407-20 the motor carrier may pay tax on the lesser number using the
407-21 formula in Subsection (a) of this section. If a motor carrier
407-22 chooses to use the actual number of trailers or semitrailers
407-23 purchased in Texas or first brought into Texas during a reporting
407-24 period and then uses the formula for other reporting periods, the
407-25 motor carrier must remit tax on trailers and semitrailers purchased
407-26 during the period it used the actual count when the trailers or
407-27 semitrailers are first brought into the state.
408-1 (d) If a motor carrier contracts to hire an interstate motor
408-2 vehicle with a driver to transport persons or property over the
408-3 carrier's routes and under the authority of the carrier's permits,
408-4 the tax rate is $25 per truck-tractor per contract and $25 per
408-5 trailer or semitrailer per contract and is the responsibility of
408-6 the motor carrier operating the motor vehicle. However, if a sales
408-7 and use tax of at least 6-1/4 percent of the purchase price of the
408-8 motor vehicle has been paid or if tax under Subsection (a), (b), or
408-9 (c) of this section has been paid, no tax is due on the vehicle
408-10 under this subsection. This subsection may not be utilized by a
408-11 motor carrier contracting with a person being controlled or having
408-12 controlling interest in the motor carrier. Controlling interest is
408-13 defined as 50 percent of ownership.
408-14 (e) If a motor carrier contracts to use trip-leased
408-15 equipment, the tax rate is $5 per motor vehicle per contract and is
408-16 the responsibility of the motor carrier operating the motor
408-17 vehicle. However, if a sales and use tax of at least 6-1/4 percent
408-18 of the purchase price of the motor vehicle has been paid or if tax
408-19 under Subsection (a) of this section has been paid, no tax is due
408-20 on the vehicle under this subsection. This subsection may not be
408-21 utilized by a motor carrier contracting with a person being
408-22 controlled or having controlling interest in the motor carrier.
408-23 Controlling interest is defined as 50 percent of ownership.
408-24 (Sections 157.103-157.200 reserved for expansion)
408-25 SUBCHAPTER C. ENFORCEMENT AND COLLECTION
408-26 Sec. 157.201. PERMITS. (a) Motor carriers required to pay
408-27 tax under this chapter shall be permitted by the comptroller.
409-1 (b) The permit may be used by the motor carrier to register
409-2 motor vehicles, trailers, and semitrailers with the county tax
409-3 assessor-collector without paying the motor vehicle sales and use
409-4 tax under Chapter 152 of this code if the motor vehicle is being
409-5 registered as an apportioned motor vehicle or if the motor vehicle
409-6 is a bus used in the interstate transportation of chartered
409-7 parties.
409-8 (c) Lessors may title an interstate motor vehicle, trailer,
409-9 and semitrailer leased for periods in excess of 180 days under the
409-10 permit authority of the motor carrier operating the vehicle without
409-11 payment of taxes imposed by Chapter 152 of this code, if the motor
409-12 vehicle is being registered as an apportioned motor vehicle or if
409-13 the motor vehicle is a bus used in the interstate transportation of
409-14 chartered parties.
409-15 Sec. 157.202. REPORTS. (a) The motor carriers subject to
409-16 the provisions of this chapter shall report and pay the tax to the
409-17 comptroller quarterly on or before the last day of the month
409-18 succeeding each calendar quarter.
409-19 (b) Notwithstanding the provisions of Subsection (a) of this
409-20 section, the comptroller may prescribe the date and period for
409-21 filing reports and payments in order to facilitate the collection
409-22 of the tax including a longer reporting period for motor carriers
409-23 owing a minimal amount of tax.
409-24 Sec. 157.203. RECORDS. Motor carriers are required to keep
409-25 records and supporting documents including mileage records
409-26 regarding the payment of motor carrier sales and use tax in such
409-27 form as the comptroller may reasonably require. The motor carriers
410-1 must keep the records for at least three years.
410-2 Sec. 157.204. PENALTY AND INTEREST. Any person who fails to
410-3 timely pay the tax required by this chapter forfeits five percent
410-4 of the amount due as a penalty, and after the first 30 days,
410-5 forfeits an additional five percent. The penalty may never be less
410-6 than $1. Delinquent taxes shall draw interest at the rate provided
410-7 by Section 111.060, beginning 60 days from the date due.
410-8 Sec. 157.205. ENFORCEMENT BY COMPTROLLER; RULES AND
410-9 REGULATIONS. (a) The comptroller shall enforce the provisions of
410-10 this chapter and may prescribe, adopt, and enforce rules relating
410-11 to the administration and enforcement of this chapter.
410-12 (b) The comptroller may promulgate such forms as are
410-13 necessary for the administration and enforcement of this chapter.
410-14 SECTION 13.02. It is the intent of the legislature that
410-15 Chapter 157, Tax Code, be reenacted to continue that chapter in
410-16 effect without interruption as it exists on August 31, 1997,
410-17 notwithstanding the repeal of that chapter by Section 31(b),
410-18 Chapter 705, Acts of the 74th Legislature, Regular Session, 1995.
410-19 SECTION 13.03. This article takes effect September 1, 1997.
410-20 ARTICLE 14. CEMENT PRODUCTION TAX
410-21 SECTION 14.01. Section 181.002, Tax Code, is amended to read
410-22 as follows:
410-23 Sec. 181.002. RATE OF TAX. The rate of the tax imposed by
410-24 this chapter is $0.05 [$0.0275] for each 100 pounds or fraction of
410-25 100 pounds of taxable cement.
410-26 SECTION 14.02. This article takes effect September 1, 1997,
410-27 and applies to cement distributed, sold, or used on or after that
411-1 date. Cement distributed, sold, or used before that date is
411-2 governed by the law in effect when the distribution, sale, or use
411-3 was made and that law is continued in effect for that purpose.
411-4 ARTICLE 15. COAL USE TAX
411-5 SECTION 15.01. Subtitle E, Title 2, Tax Code, is amended by
411-6 adding Chapter 162 to read as follows:
411-7 CHAPTER 162. COAL TAX
411-8 SUBCHAPTER A. GENERAL PROVISIONS
411-9 Sec. 162.001. DEFINITIONS. In this chapter:
411-10 (1) "Coal" does not include lignite, commonly referred
411-11 to as brown coal, of intermediate grade between peat and bituminous
411-12 coal.
411-13 (2) "Use" includes storage for use in this state, but
411-14 does not include:
411-15 (A) the use by a producer of coal who owns the
411-16 coal in place and who produces the coal for the producer's own use;
411-17 or
411-18 (B) the storage for use or shipment out of this
411-19 state.
411-20 (Sections 162.002-162.020 reserved for expansion
411-21 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX
411-22 Sec. 162.021. TAX IMPOSED. (a) A tax is imposed on the
411-23 purchase in this state of coal for use in this state.
411-24 (b) A tax is imposed on the use of coal in this state.
411-25 Sec. 162.022. RATE OF TAX. The rate of the taxes imposed by
411-26 this chapter is 7.5 percent of the total price paid for the coal,
411-27 without regard to where the purchase occurs, delivered at the site
412-1 at which the coal will be used, including transportation costs to
412-2 that site.
412-3 Sec. 162.023. USE TAX DEDUCTION. A person may deduct from
412-4 the amount of tax otherwise imposed by Section 162.021(b) the
412-5 amount of tax reported and paid under Section 162.021(a).
412-6 Sec. 162.024. PAYMENT OF TAX. On or before the 25th day of
412-7 each month, each person on whom a tax is imposed by this chapter
412-8 shall send to the comptroller the amount of tax due under this
412-9 chapter for the preceding month.
412-10 Sec. 162.025. REPORTS. On or before the 25th day of each
412-11 month, each person on whom a tax is imposed by this chapter shall
412-12 file with the comptroller a report stating:
412-13 (1) the amount of coal purchased by the person for
412-14 use in this state and used in this state during the preceding
412-15 month;
412-16 (2) the total price of that coal; and
412-17 (3) any other information required by the comptroller.
412-18 Sec. 162.026. RECORDS. A person on whom a tax is imposed by
412-19 this chapter shall keep a complete record of:
412-20 (1) the amount of coal purchased by the person for use
412-21 in this state;
412-22 (2) the use of coal in this state by the person; and
412-23 (3) any other information required by the comptroller.
412-24 (Sections 162.027-162.050 reserved for expansion
412-25 SUBCHAPTER C. PENALTIES AND OFFENSES
412-26 Sec. 162.051. INTEREST ON DELINQUENT TAX. A tax imposed by
412-27 this chapter that is delinquent draws interest as provided by
413-1 Section 111.060.
413-2 Sec. 162.052. PENALTY. (a) A person on whom a tax is
413-3 imposed by this chapter and who fails to file a report as required
413-4 by this chapter or does not pay the tax when it is due forfeits to
413-5 the state a penalty of 12 percent of the amount of tax delinquent.
413-6 (b) If a report required by this chapter is not filed or a
413-7 tax imposed by this chapter is not paid within 30 days after it is
413-8 due, the person on whom the tax is imposed forfeits to the state a
413-9 penalty of an additional 12 percent of the amount of tax
413-10 delinquent.
413-11 (c) The minimum penalty under this section is $1.
413-12 Sec. 162.053. CRIMINAL PENALTY. (a) A person who violates
413-13 this chapter commits an offense.
413-14 (b) An offense under this section is a Class C misdemeanor.
413-15 (Sections 162.054-162.070 reserved for expansion
413-16 SUBCHAPTER D. ALLOCATION AND USE
413-17 Sec. 162.071. ALLOCATION OF TAX REVENUE. All of the revenue
413-18 from the tax imposed by this chapter shall be deposited to the
413-19 credit of the general revenue fund.
413-20 SECTION 15.02. This article takes effect December 1, 1997,
413-21 and applies to coal purchased on or after that date.
413-22 ARTICLE 16. PARI-MUTUEL WAGERING
413-23 SECTION 16.01. Section 6.091(a), Texas Racing Act (Article
413-24 179e, Vernon's Texas Civil Statutes), is amended to read as
413-25 follows:
413-26 (a) An association shall distribute from the total amount
413-27 deducted as provided by Sections 6.08(a) and 6.09(a) of this Act
414-1 from each simulcast pari-mutuel pool the following shares:
414-2 (1) an amount equal to 2.2 [one] percent of each pool
414-3 as the amount set aside for the state;
414-4 (2) an amount equal to 0.25 percent of each pool set
414-5 aside to the Texas Commission on Alcohol and Drug Abuse to be
414-6 expended for the prevention of problem gambling;
414-7 (3) if the association is a horse racing association,
414-8 an amount equal to one percent of a multiple two wagering pool or
414-9 multiple three wagering pool as the amount set aside for the
414-10 Texas-bred program to be used as provided by Section 6.08(f) of
414-11 this Act;
414-12 (4) if the association is a greyhound association, an
414-13 amount equal to one percent of a multiple two wagering pool or a
414-14 multiple three wagering pool as the amount set aside for the
414-15 Texas-bred program for greyhound races, to be distributed and used
414-16 in accordance with rules of the commission adopted to promote
414-17 greyhound breeding in this state; and
414-18 (5) the remainder as the amount set aside for purses,
414-19 expenses, the sending association, and the receiving location
414-20 pursuant to a contract approved by the commission between the
414-21 sending association and the receiving location.
414-22 SECTION 16.02. This article takes effect September 1, 1997.
414-23 ARTICLE 17. GAS TARIFFS
414-24 SECTION 17.01. Article IV, Gas Utility Regulatory Act
414-25 (Article 1446e, Vernon's Texas Civil Statutes), is amended by
414-26 adding Section 4.065 to read as follows:
414-27 Sec. 4.065. TAX ADJUSTMENT. (a) Each gas utility shall add
415-1 a tax adjustment provision to the utility's rates and file a tariff
415-2 or tariffs reflecting that provision with each regulatory
415-3 authority having original jurisdiction over the utility's rates
415-4 under Section 2.01 of this Act.
415-5 (b) The tax adjustment provision takes effect and becomes
415-6 part of the gas utility's rates on the date the related tariff or
415-7 tariffs are filed under Subsection (a) of this section.
415-8 (c) The tax adjustment provision shall require the gas
415-9 utility to track changes that occur since 1996 in costs incurred
415-10 for ad valorem taxes and for gross receipts payments made under
415-11 Subchapter B, Chapter 182, Tax Code, by the utility within the
415-12 regulatory authority's jurisdiction. If the tariffs of a gas
415-13 utility in effect on September 1, 1997, allow the utility to
415-14 recover some or all of those costs, the tax adjustment provision
415-15 for that utility must take that into account.
415-16 (d) The initial tariffs filed under this section must have
415-17 attached data, methodology, and computations supporting the tax
415-18 adjustment provisions and the related tariff or tariffs. Each
415-19 regulatory authority with whom a tariff is filed under this section
415-20 may review the tax adjustment provision and any supporting data,
415-21 methodology, and computation to ensure that the gas utility is
415-22 accurately recovering through its rates the changes in costs
415-23 described by Subsection (c) of this section. The regulatory
415-24 authority may order changes in the tax adjustment provision and
415-25 related tariffs to be thereafter observed and in effect if the
415-26 regulatory authority determines that the gas utility is not
415-27 accurately recovering those changes in costs.
416-1 SECTION 17.02. This article takes effect January 1, 1998.
416-2 ARTICLE 18. INTERIOR DESIGN PROFESSIONAL FEE
416-3 SECTION 18.01. Article 249e, Revised Statutes, is amended by
416-4 adding Section 6A to read as follows:
416-5 Sec. 6A. INCREASE IN FEES. (a) Each of the following fees
416-6 imposed by Section 6 of this article is increased by $200:
416-7 (1) registration application fee;
416-8 (2) annual registration renewal fee; and
416-9 (3) reciprocal registration fee.
416-10 (b) Of the fee increase collected, $50 shall be deposited to
416-11 the credit of the foundation school fund and $150 shall be
416-12 deposited to the credit of the general revenue fund. This
416-13 subsection applies to the disposition of each fee increase
416-14 regardless of any other provision of law providing for a different
416-15 disposition of funds.
416-16 SECTION 18.02. This article takes effect September 1, 1997,
416-17 and applies to a fee imposed on or after that date. A fee imposed
416-18 before the effective date of this article is governed by the law in
416-19 effect on that date, and that law is continued in effect for that
416-20 purpose.
416-21 ARTICLE 19. TAXICAB PERMITS
416-22 SECTION 19.01. Subtitle H, Title 2, Tax Code, is amended by
416-23 adding Chapter 192 to read as follows:
416-24 CHAPTER 192. TAXICABS
416-25 SUBCHAPTER A. GENERAL PROVISIONS
416-26 Sec. 192.001. DEFINITIONS. In this chapter:
416-27 (1) "Tax" means the tax imposed under this chapter.
417-1 (2) "Tax year" means the calendar year.
417-2 (3) "Taxicab" means a private passenger motor vehicle
417-3 that:
417-4 (A) is licensed or otherwise regulated by a
417-5 municipality under Section 215.004, Local Government Code; or
417-6 (B) provides passenger or tangible personal
417-7 property and passenger transportation services for compensation and
417-8 is designed for carrying no more than eight passengers.
417-9 (4) "Taxpayer" means a person who owes a tax under
417-10 this chapter.
417-11 Sec. 192.002. LIMOUSINES EXCLUDED. This chapter does not
417-12 apply to a limousine that provides transportation services subject
417-13 to the tax imposed by Chapter 151.
417-14 (Sections 192.003-192.050 reserved for expansion)
417-15 SUBCHAPTER B. IMPOSITION AND PAYMENT OF TAX
417-16 Sec. 192.051. TAX IMPOSED. (a) A tax is imposed on the
417-17 operation of a taxicab in this state.
417-18 (b) The amount of the tax is $100 for each tax year that the
417-19 taxicab is operated.
417-20 Sec. 192.052. PAYMENT OF TAX. The owner of the taxicab
417-21 shall pay the tax before January 1 of the tax year.
417-22 Sec. 192.053. OPERATIONS BEGINNING AFTER TAX YEAR STARTS.
417-23 (a) A taxpayer shall pay the full amount of the tax for a taxicab
417-24 that begins operating in this state after the beginning of the tax
417-25 year but before July 1.
417-26 (b) A taxpayer shall pay $50 for a taxicab that begins
417-27 operating in this state on or after July 1 for that tax year.
418-1 Sec. 192.054. CESSATION OF OPERATIONS. A taxpayer that
418-2 begins operating a taxicab in this state during a tax year that is
418-3 taken out of service or ceases operating for any reason during the
418-4 tax year, including termination of the use of the vehicle as a
418-5 taxicab or destruction of the vehicle, owes the full tax for the
418-6 tax year.
418-7 Sec. 192.055. NO CREDIT OR REBATE. A taxpayer is not
418-8 entitled to any credit or rebate of the tax paid.
418-9 Sec. 192.056. DUE DATE OF PAYMENT. The tax is due before
418-10 the beginning of the tax year or before a taxicab may begin
418-11 operating in this state.
418-12 (Sections 192.057-192.100 reserved for expansion
418-13 SUBCHAPTER C. PERMIT AND INSIGNIA
418-14 Sec. 192.101. APPLICATION FOR TAXICAB OPERATION PERMIT.
418-15 (a) A taxpayer shall submit with the payment of the tax an
418-16 application for a taxicab operation permit.
418-17 (b) The comptroller shall provide a form to apply for the
418-18 taxicab operation permit and the taxpayer must use that form in
418-19 applying for the permit.
418-20 (c) The comptroller may require that the taxpayer include on
418-21 the application form any information that the comptroller considers
418-22 necessary to collect, administer, and enforce the tax.
418-23 (d) The comptroller may provide for an application form in
418-24 which a taxpayer who owns more than one taxicab may apply for an
418-25 operation permit for each of the taxicabs at the same time.
418-26 Sec. 192.102. ISSUANCE OF TAXICAB OPERATION PERMIT AND
418-27 INSIGNIA. (a) Except as provided by Subsection (b), on receipt of
419-1 an application form that is properly completed and the payment of
419-2 the tax, the comptroller shall issue to the taxpayer:
419-3 (1) a taxicab operation permit stating that the tax
419-4 has been paid for the taxicab; and
419-5 (2) a taxicab operation permit insignia to be affixed
419-6 to the taxicab as provided by Section 192.103.
419-7 (b) The comptroller may refuse to issue a taxicab operation
419-8 permit and taxicab operation permit insignia if the comptroller
419-9 determines that the taxpayer is delinquent in the payment of any
419-10 tax owed to the state.
419-11 (c) The comptroller shall provide for the issuance of the
419-12 taxicab operation permit and taxicab operation permit insignia in a
419-13 manner that ensures that the permit and insignia are issued to a
419-14 taxpayer for a specific taxicab and are not transferrable.
419-15 Sec. 192.103. DESIGN AND PLACEMENT OF TAXICAB OPERATION
419-16 PERMIT INSIGNIA. (a) The comptroller shall prepare the design of
419-17 the taxicab operation permit insignia.
419-18 (b) The comptroller shall require the attachment of a
419-19 taxicab operating permit insignia to the windshield of the taxicab
419-20 in a manner that best promotes the enforcement of this chapter by
419-21 the law enforcement personnel of this state.
419-22 (c) The taxpayer shall place the taxicab operation permit
419-23 insignia on the taxicab windshield in the manner required by the
419-24 comptroller.
419-25 (Sections 192.104-192.150 reserved for expansion
419-26 SUBCHAPTER D. ENFORCEMENT
419-27 Sec. 192.151. PENALTY AND INTEREST. The penalty and
420-1 interest provisions of Subchapter B, Chapter 111, apply to the tax.
420-2 Sec. 192.152. OFFENSE: FAILURE TO DISPLAY INSIGNIA. (a) A
420-3 person commits an offense if the person operates a taxicab without
420-4 displaying a taxicab operating permit insignia.
420-5 (b) An offense under this section is a Class C misdemeanor.
420-6 (c) Any peace officer of the state may enforce this section.
420-7 (d) A peace officer who exhibits a badge or other sign of
420-8 authority may stop a taxicab not displaying a taxicab operating
420-9 permit insignia on the windshield and require the owner or operator
420-10 to produce a taxicab operating permit.
420-11 (e) It is a defense to prosecution under this section that a
420-12 taxicab operating permit for the taxicab is in effect at the time
420-13 of the arrest.
420-14 Sec. 192.153. OFFENSE: DISPLAY OF FICTITIOUS INSIGNIA.
420-15 (a) A person commits an offense if the person:
420-16 (1) displays or causes or permits to be displayed a
420-17 taxicab operating permit insignia knowing it to be fictitious or
420-18 issued for another taxicab; or
420-19 (2) transfers a taxicab operating permit insignia from
420-20 a windshield or location to another windshield or location.
420-21 (b) An offense under this section is a Class C misdemeanor.
420-22 (c) A taxicab on which is displayed a taxicab operating
420-23 permit insignia in violation of this section and that is operated
420-24 or parked on a public roadway may be impounded by a peace officer
420-25 or other authorized employee of this state or a political
420-26 subdivision of this state in which the taxicab is operated or
420-27 parked.
421-1 (Sections 192.154-192.200 reserved for expansion
421-2 SUBCHAPTER E. REVENUE
421-3 Sec. 192.201. DISTRIBUTION OF REVENUE FROM TAX. The revenue
421-4 from the tax shall be deposited as follows:
421-5 (1) 25 percent to the credit of the foundation school
421-6 fund; and
421-7 (2) 75 percent to the credit of the general revenue
421-8 fund.
421-9 SECTION 19.02. Subchapter C, Chapter 548, Transportation
421-10 Code, is amended by adding Section 548.1055 to read as follows:
421-11 Sec. 548.1055. DISPLAY OF TAXICAB OPERATING PERMIT INSIGNIA
421-12 AS PREREQUISITE TO ISSUANCE OF INSPECTION CERTIFICATE. (a) An
421-13 inspection station or inspector may not issue an inspection
421-14 certificate for a taxicab, as that term is defined by Section
421-15 192.001, Tax Code, unless a current taxicab operating permit
421-16 insignia required under Chapter 192, Tax Code, is displayed on the
421-17 taxicab.
421-18 (b) An inspection station is not liable to a person,
421-19 including the state, for issuing an inspection certificate in
421-20 reliance on the presence of a current taxicab operating permit
421-21 insignia displayed on the taxicab.
421-22 SECTION 19.03. (a) Except as provided by Subsections (b)
421-23 and (c) of this section, this article takes effect September 1,
421-24 1997.
421-25 (b) Notwithstanding any provisions of Chapter 192, Tax Code,
421-26 as added by this article, no taxicab permit is required before
421-27 January 1, 1998.
422-1 (c) Section 19.02 of this article takes effect January 1,
422-2 1998.
422-3 ARTICLE 20. COIN-OPERATED MACHINES
422-4 SECTION 20.01. Article 8801, Revised Statutes, is amended by
422-5 amending Subdivisions (3) and (6) and adding Subdivision (8) to
422-6 read as follows:
422-7 (3) The term "coin-operated machine" means every
422-8 machine or device of any kind or character that [which] is operated
422-9 by or with coins, or metal slugs, tokens or checks, "music
422-10 coin-operated machines," "service coin-operated machines,"
422-11 "cash-dispensing machines," and "skill or pleasure coin-operated
422-12 machines" as those terms are hereinafter defined, shall be included
422-13 in such terms.
422-14 (6) The term "service coin-operated machines" means
422-15 [every pay toilet, pay telephone and all other] machines or devices
422-16 which dispense service only and not merchandise, music, skill or
422-17 pleasure and includes coin-operated lockers.
422-18 (8) The term "cash-dispensing machine" means an
422-19 automated or electronic machine that, on insertion of a properly
422-20 coded card, the entry of data through a keyboard, or both,
422-21 dispenses currency or cash. The term does not include a machine
422-22 used in the retail purchase of tangible personal property without
422-23 regard to whether the purchase includes an amount, received in
422-24 cash, over and above the sales price of the items purchased.
422-25 SECTION 20.02. Article 8802(1), Revised Statutes, is amended
422-26 to read as follows:
422-27 (1) Every "owner", save an owner holding an import
423-1 license and holding coin-operated machines solely for re-sale, who
423-2 exhibits, displays, or who permits to be exhibited or displayed in
423-3 this State any "coin-operated machine" shall pay, and there is
423-4 hereby levied on each "coin-operated machine", as defined herein in
423-5 Article 8801, except as are exempt herein, an annual occupation tax
423-6 of $60.00. In lieu of the $60.00 occupation tax, an annual
423-7 occupation tax of $30.00 is imposed on each coin-operated locker.
423-8 An annual occupation tax of $100 is imposed on "cash-dispensing
423-9 machines." The tax shall be paid to the comptroller by cashier's
423-10 check or money order. The annual tax levied by this chapter may be
423-11 collected by the comptroller on a quarterly basis. The comptroller
423-12 may establish procedures for quarterly collection and set due dates
423-13 for the tax payments. The tax due from the owner of a
423-14 coin-operated machine first exhibited or displayed in this State
423-15 later than March 31 shall be prorated on a quarterly basis, with
423-16 one-fourth of the annual tax due for each quarter or portion of a
423-17 quarter remaining in the calendar year. No refund or credit of the
423-18 annual tax levied by this chapter may be allowed to any owner who
423-19 ceases the exhibition or display of any coin-operated machine prior
423-20 to the end of any calendar year. Subtitle B, Title 2, Tax Code,
423-21 applies to the administration, collection, and enforcement of the
423-22 taxes, penalties, and interest imposed by this chapter.
423-23 SECTION 20.03. Article 8803, Revised Statutes, is amended to
423-24 read as follows:
423-25 Art. 8803. EXEMPTIONS FROM TAX. The following machines are
423-26 exempt from the tax under this chapter:
423-27 (1) machines selling newspapers;
424-1 (2) pay toilets;
424-2 (3) a machine the sales of which are exempted by
424-3 Section 151.305, Tax Code;
424-4 (4) machines that provide change only if no charge is
424-5 made for the service;
424-6 (5) machines dispensing pressurized air;
424-7 (6) laundromat machines used to wash or dry clothes;
424-8 and
424-9 (7) any machine dispensing an item or providing a
424-10 service that is subject to:
424-11 (A) the sales and use tax under Chapter 151, Tax
424-12 Code;
424-13 (B) the cigarette tax under Chapter 154, Tax
424-14 Code;
424-15 (C) the cigars and tobacco products tax under
424-16 Chapter 155, Tax Code; or
424-17 (D) any other state tax excluding ad valorem
424-18 taxes and franchise taxes [Gas meters, pay telephones, pay toilets,
424-19 food vending machines, confection vending machines, beverage
424-20 vending machines, merchandise vending machines, and cigarette
424-21 vending machines which are now subject to an occupation or gross
424-22 receipts tax, stamp vending machines, and "service coin-operated
424-23 machines," as that term is defined, are expressly exempt from the
424-24 tax levied herein, and the other provisions of this Chapter].
424-25 SECTION 20.04. This article takes effect October 1, 1997.
424-26 ARTICLE 21. RESIDENTIAL TENANT'S TAX RELIEF
424-27 SECTION 21.01. Title 1, Tax Code, is amended by adding
425-1 Chapter 51 to read as follows:
425-2 CHAPTER 51. PROPERTY TAX RELIEF FOR RESIDENTIAL TENANTS
425-3 Sec. 51.001. TAX SAVINGS FOR RESIDENTIAL TENANTS. To ensure
425-4 that residential rental tenants receive direct and immediate
425-5 benefit from the reduction in local ad valorem school taxes until
425-6 the benefit of such tax relief is fully reflected in rental rates
425-7 through free market competition, every residential landlord shall
425-8 have the option of giving either a monthly rent credit or rebate to
425-9 tenants who are renting a residential dwelling unit in this state
425-10 during the years 1998, 1999, and 2000.
425-11 Sec. 51.002. DEFINITIONS. In this chapter:
425-12 (1) "Landlord" means the owner, lessor, or sublessor
425-13 of a dwelling, but does not include a manager or agent of the
425-14 landlord unless the manager or agent purports to be the owner,
425-15 lessor, or sublessor in a written or oral lease.
425-16 (2) "Lease" means a written or oral agreement between
425-17 a landlord and tenant that establishes or modifies the terms,
425-18 condition, rules, or other provisions regarding the use and
425-19 occupancy of a dwelling.
425-20 (3) "Multifamily rental dwelling project" means any
425-21 multiunit rental project with two or more rental dwelling units,
425-22 including duplexes, apartments, dormitories, manufactured housing
425-23 communities, retirement centers and communities, assisted living
425-24 centers, and all other multiunit rental housing subject to local
425-25 school ad valorem taxes.
425-26 (4) "Rent" includes the total amount charged by a
425-27 landlord, or by another person on the landlord's behalf, for the
426-1 use and occupancy of a dwelling unit, not including refundable
426-2 security deposits.
426-3 (5) "Rental dwelling unit" means one or more rooms
426-4 rented for use as a permanent residence under a single lease to one
426-5 or more tenants.
426-6 (6) "Tenant" means an individual who is authorized by
426-7 a lease to occupy a dwelling to the exclusion of others and is
426-8 obligated under the lease to pay rent.
426-9 Sec. 51.003. CREDIT OR REBATE TO TENANT OF LANDLORD'S
426-10 PROPERTY TAX SAVINGS. A landlord is obligated to provide a tenant
426-11 with a monthly credit or rebate on rents to reflect a portion of
426-12 the landlord's local ad valorem school tax savings for 1997, 1998,
426-13 and 1999, as provided by this chapter.
426-14 Sec. 51.004. APPLICATION. (a) This chapter applies only to
426-15 a dwelling unit or multifamily rental dwelling project that is
426-16 subject to the local ad valorem school tax.
426-17 (b) This chapter does not apply to a temporary residential
426-18 tenancy created by a contract of sale in which the buyer occupies
426-19 the property before closing or the seller occupies the property
426-20 after closing for a term not to exceed 90 days.
426-21 Sec. 51.005. NOTICE BY CENTRAL APPRAISAL DISTRICTS. (a) On
426-22 or before October 1, 1997, or as soon thereafter as practicable,
426-23 each central appraisal district shall send all residential property
426-24 owners a notice describing the requirements of this chapter. The
426-25 notice shall contain language substantially similar to the
426-26 following:
426-27 "Due to the property tax relief law passed by the 1997 Texas
427-1 Legislature, residential landlords are required to pass local ad
427-2 valorem school tax savings along to residential tenants for all
427-3 leases in effect as of January 1, 1998, and for all leases entered
427-4 into in 1998, 1999, and 2000. These savings must be provided to
427-5 tenants by giving a monthly rent credit or rebate that reflects a
427-6 portion of the property tax savings on school property taxes.
427-7 Failure to comply with this law could result in severe penalties,
427-8 including a civil penalty of $100, treble damages, and attorney's
427-9 fees. Information on complying with this law is available by
427-10 contacting the (insert name, address, and phone number of local
427-11 central appraisal district) or by contacting the Texas Comptroller
427-12 of Public Accounts by calling 1-800/252-5555."
427-13 (b) The notice required under Subsection (a) may be sent to
427-14 property owners as part of another communication sent by the
427-15 appraisal district in accordance with Section 31.01, Tax Code, and
427-16 does not have to be sent to property owners in the form of a
427-17 separate communication.
427-18 (c) The central appraisal district shall place at least one
427-19 advertisement monthly in a newspaper of general circulation in the
427-20 county in which the central appraisal district is located during
427-21 the months of November and December 1997. The advertisement shall
427-22 be in 14-point type or larger and contain language substantially
427-23 similar to the language in Subsection (a).
427-24 Sec. 51.006. TECHNICAL ASSISTANCE BY COMPTROLLER OF PUBLIC
427-25 ACCOUNTS. (a) Not later than September 1, 1997, the comptroller
427-26 shall develop materials in plain language to assist landlords in
427-27 complying with this chapter. Such information shall also be made
428-1 available in Spanish. Copies of this information shall be sent to
428-2 all central appraisal districts on or before September 15, 1997,
428-3 and shall also be provided without cost to property owners who
428-4 contact the comptroller.
428-5 (b) The comptroller shall also provide any technical
428-6 assistance necessary to assist central appraisal districts and
428-7 landlords in complying with this chapter.
428-8 Sec. 51.007. TAX SAVINGS CALCULATIONS BY LANDLORDS. (a) A
428-9 landlord shall determine the monthly local ad valorem school tax
428-10 savings due to a tenant through a rent credit or rebate as follows:
428-11 (1) The monthly rent credit or rebate for a single
428-12 family rental dwelling unit shall be equal to one-twelfth of the
428-13 total difference between the local ad valorem school taxes for the
428-14 dwelling unit for the previous year as compared to the taxes that
428-15 would have been charged on the unit for the previous year if the
428-16 unit had been taxed under the state ad valorem tax.
428-17 (2) The monthly rent credit or rebate for a rental
428-18 dwelling unit in a multifamily rental dwelling project shall be
428-19 equal to one-twelfth of the total difference between the local ad
428-20 valorem school taxes for the multifamily dwelling project for the
428-21 previous year as compared to the taxes that would have been charged
428-22 on the unit for the previous year if the unit had been taxed under
428-23 the state ad valorem tax, times the square footage in the tenant's
428-24 dwelling unit, and divided by the total net rentable square footage
428-25 of all rental dwelling units in the multifamily rental dwelling
428-26 project.
428-27 (b) The rent credit or rebate calculated under Subsection
429-1 (a) shall be on a per-dwelling-unit basis and not on a per-tenant
429-2 basis.
429-3 Sec. 51.008. DATE OF REQUIRED CREDIT OR REBATE. (a) If a
429-4 landlord gives a monthly credit to a tenant under this chapter, the
429-5 landlord shall give the credit on the due date for each month's
429-6 rent.
429-7 (b) If a landlord pays a monthly rent rebate to the tenant,
429-8 the landlord shall pay the rebate no later than 10 days after the
429-9 tenant pays the entire rent due for the month. A landlord is
429-10 presumed to have timely paid a rebate if the rebate is placed in
429-11 the United States mail and postmarked on or before that date.
429-12 (c) If the rent is paid weekly, the credit or rebate shall
429-13 equal 1/52 of the credit or rebate for the entire year.
429-14 Sec. 51.009. NOTICE TO TENANTS. (a) If a landlord and
429-15 tenant entered into a lease prior to January 1, 1998, the landlord
429-16 shall provide a notice to the tenant on or before January 5, 1998.
429-17 The notice shall be in bold-faced, 14-point type or larger, and
429-18 state substantially the following:
429-19 "NOTICE OF TAX SAVINGS ON RENT
429-20 "Your current monthly rent on (insert unit number or street
429-21 address) is $ (insert amount of rent).
429-22 "Due to the property tax relief law passed by the 1997 Texas
429-23 Legislature, the school property taxes for your dwelling unit have
429-24 been reduced by (insert percentage savings) % for 1998 (or 1999 or
429-25 2000). The property tax relief law provides that the property
429-26 owner must pass along tax savings to you and other tenants until
429-27 sufficient time has elapsed for the tax relief to be fully
430-1 reflected in rental rates through free market competition.
430-2 "Accordingly, you will receive a rent credit (or rebate
430-3 check) of $ (insert monthly prorated amount) for the current month
430-4 of January and for each month thereafter, until the expiration of
430-5 your current lease or December 31, 2000, whichever date is first.
430-6 The cumulative amount of property tax savings that will be passed
430-7 on to you during the term of your lease as a result of the 1997
430-8 property tax relief legislation is $ (insert cumulative savings for
430-9 the unit for the term of the lease).
430-10 "This means the net rent you will be paying for this month
430-11 and each subsequent month under your current lease will be $
430-12 (insert net rent rate). You will also be entitled to a rent credit
430-13 or rebate if you enter into a new lease for any rental dwelling
430-14 unit in Texas anytime in 1998, 1999, or 2000, through the
430-15 expiration of your lease term or December 31, 2000, whichever date
430-16 is first.
430-17 "If you have any questions about this new law, please contact
430-18 the local appraisal district at (insert address and phone number of
430-19 local appraisal district)."
430-20 (b) If a landlord and tenant enter into a lease anytime in
430-21 1998, 1999, or 2000, the landlord shall provide a notice to the
430-22 tenant at the time of signing the lease. The notice shall be in
430-23 bold-faced, 14-point type or larger, and shall state substantially
430-24 the following:
430-25 "NOTICE OF TAX SAVINGS ON RENT
430-26 "The monthly rent on (insert unit number or street address of
430-27 dwelling unit) is $ (insert amount of rent).
431-1 "Due to the property tax relief law passed by the 1997 Texas
431-2 Legislature, the school property taxes for your dwelling unit have
431-3 been reduced by (insert percentage savings) % for 1998 (or 1999 or
431-4 2000). The property tax relief law provides that the property
431-5 owner must pass along tax savings to you and other tenants until
431-6 sufficient time has elapsed for the tax relief to be fully
431-7 reflected in rental rates through free market competition.
431-8 "Accordingly, you will receive a rent credit (or rebate
431-9 check) of $ (insert monthly prorated amount) for the first month of
431-10 your lease and for each month thereafter, until the expiration of
431-11 your current lease or December 31, 2000, whichever date is first.
431-12 The cumulative amount of property tax savings that will be passed
431-13 on to you during the term of your lease as a result of the 1997
431-14 property tax relief legislation is $ (insert cumulative savings for
431-15 the unit for the term of the lease).
431-16 "This means the net rent you will be paying for this month
431-17 and each subsequent month under your current lease will be $
431-18 (insert net rent rate). You will also be entitled to a rent credit
431-19 or rebate if you enter into a new lease for any rental dwelling
431-20 unit in Texas anytime in 1998, 1999, or 2000 through the expiration
431-21 of your lease term or December 31, 2000, whichever date is first.
431-22 "If you have any questions about this new law, please contact
431-23 the local appraisal district at (insert address and phone number of
431-24 local appraisal district)."
431-25 (c) The notices required in Subsections (a) and (b) shall be
431-26 required to be translated and printed in Spanish in any county
431-27 whose Hispanic population exceeds 25 percent of the total
432-1 population as demonstrated in the most recent census figures
432-2 available.
432-3 Sec. 51.010. CREDIT OR REBATE FOR MULTIPLE TENANTS. If
432-4 there are two or more tenants liable under a lease for the same
432-5 rental dwelling unit, the credit or rebate shall be provided
432-6 jointly to all tenants renting the dwelling.
432-7 Sec. 51.011. PENALTIES. If a landlord fails to comply with
432-8 this chapter, the landlord shall be liable to the tenant for a
432-9 civil penalty of $100 and treble the amount of any rent credit or
432-10 rebate not provided to the tenant. In any litigation involving a
432-11 rent credit or rebate, the prevailing party shall recover
432-12 reasonable attorney's fees from the nonprevailing party.
432-13 Sec. 51.012. TAX APPRAISALS. For the calendar years 1997,
432-14 1998, 1999, and 2000, no state or local taxing authority may
432-15 consider the reduction of local ad valorem school taxes resulting
432-16 from this chapter in any valuation leading to an increase in the
432-17 appraised value of a residential rental dwelling unit or a
432-18 multifamily rental dwelling project.
432-19 Sec. 51.013. COMPTROLLER STUDY. (a) The comptroller shall
432-20 issue a preliminary report no later than March 1, 1999, if
432-21 sufficient data is available, and shall issue a final report no
432-22 later than December 1, 2000, to the governor, the lieutenant
432-23 governor, and the speaker of the house of representatives on the
432-24 implementation, administration, and effect of this chapter,
432-25 including findings as to the following:
432-26 (1) the impact of property tax relief on rental rates
432-27 throughout the state considering competitive market conditions, new
433-1 construction, operating expenses, and other relevant factors
433-2 impacting rental rates;
433-3 (2) the number of civil actions filed against
433-4 landlords, and the type of properties owned by those landlords, by
433-5 tenants to enforce the provisions of this chapter;
433-6 (3) the number of civil penalties levied against
433-7 landlords, and the type of properties owned by those landlords, for
433-8 noncompliance with this chapter;
433-9 (4) the administrative costs associated with this
433-10 chapter incurred by the comptroller, the central appraisal
433-11 districts, and landlords; and
433-12 (5) any effect of lower local ad valorem school tax
433-13 rates on increasing the supply of affordable housing for either
433-14 purchase or rent by a person for use as a dwelling.
433-15 (b) In filing the report, the comptroller shall consider the
433-16 need to recommend alternative methods for providing ad valorem
433-17 school tax relief to persons who rent their dwelling.
433-18 Sec. 51.014. EXPIRATION DATE. This chapter expires January
433-19 1, 2001.
433-20 ARTICLE 22. ALTERNATIVE TAXATION OF OIL OR
433-21 GAS PROPERTY INTERESTS
433-22 SECTION 22.01. Subtitle I, Title 2, Tax Code, is amended by
433-23 adding Chapter 205 to read as follows:
433-24 CHAPTER 205. ALTERNATIVE TAXATION OF OIL OR
433-25 GAS PROPERTY INTERESTS
433-26 SUBCHAPTER A. GENERAL PROVISIONS
433-27 Sec. 205.001. CHAPTERS 201 AND 202 APPLICABLE. Except to
434-1 the extent that a provision of this chapter applies, Chapters 201
434-2 and 202 apply to the taxes imposed by this chapter in the same
434-3 manner as those chapters apply to the taxes imposed by those
434-4 chapters.
434-5 Sec. 205.002. APPLICATION OF CHAPTER. This chapter applies
434-6 to oil and gas produced from property for which the owner of the
434-7 oil or gas interest has elected under Section 1.16 to pay the tax
434-8 imposed by this chapter on the oil and gas produced in lieu of ad
434-9 valorem taxes imposed on the oil or gas interest under Title 1.
434-10 (Sections 205.003-205.020 reserved for expansion
434-11 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAXES
434-12 Sec. 205.021. GAS TAX IMPOSED. (a) There is imposed a tax
434-13 on each producer of gas, including condensate and liquid
434-14 hydrocarbons, subject to this chapter.
434-15 (b) The rate of the tax imposed by this section is 2.5
434-16 percent of the market value of:
434-17 (1) gas produced and saved in this state by the
434-18 producer; or
434-19 (2) liquid hydrocarbons, other than condensate,
434-20 recovered from gas produced in this state by the producer.
434-21 (c) The tax on condensate is imposed at the same rate as the
434-22 rate of the tax imposed on oil by Section 205.022.
434-23 (d) Section 201.053 applies to the tax imposed by this
434-24 section.
434-25 Sec. 205.022. OIL TAX IMPOSED. (a) There is imposed a tax
434-26 on the production of oil subject to this chapter.
434-27 (b) The rate of the tax imposed by this section is 2.4
435-1 percent of the gross wellhead receipts derived from oil produced in
435-2 this state.
435-3 Sec. 205.023. TAX IN ADDITION TO OTHER TAX. (a) The taxes
435-4 imposed by this chapter are in addition to any applicable tax
435-5 imposed by Chapter 201 or 202.
435-6 (b) Except as provided by Section 205.021, an exemption or
435-7 rate reduction provided by Chapter 201, 202, or 204 or other law
435-8 does not apply to the taxes imposed by this chapter.
435-9 Sec. 205.024. REPORTS. In addition to the applicable
435-10 records and reports required by Chapters 201 and 202, the
435-11 comptroller may require a person subject to a tax imposed by this
435-12 chapter to keep a record of and report any additional information
435-13 necessary to administer this chapter.
435-14 (Sections 205.025-205.050 reserved for expansion
435-15 SUBCHAPTER C. ALLOCATION AND USE OF TAX
435-16 Sec. 205.051. DEPOSIT AND ALLOCATION. (a) The comptroller
435-17 shall apportion among the state and each taxing unit in which the
435-18 oil or gas is produced an amount of the revenue collected under
435-19 this chapter in proportion to the ad valorem tax rates of the state
435-20 and the taxing unit.
435-21 (b) The collector for a taxing unit or the comptroller shall
435-22 deposit and allocate all revenue from the taxes imposed by this
435-23 chapter in the same manner the collector or the comptroller
435-24 deposits and allocates revenue from ad valorem taxes imposed by the
435-25 taxing unit or the state.
435-26 ARTICLE 23. GROSS RECEIPTS TAX ON SEXUALLY ORIENTED BUSINESSES
435-27 SECTION 23.01. Chapter 182, Tax Code, is amended by adding
436-1 Subchapter A to read as follows:
436-2 Sec. 182.001. DEFINITION. In this subchapter, "sexually
436-3 oriented business" has the meaning assigned that term by Section
436-4 243.002, Local Government Code.
436-5 Sec. 182.002. EXEMPTION. A business that is exempt under
436-6 Chapter 243, Local Government Code, from regulation under that
436-7 chapter is exempt from the tax imposed under this subchapter.
436-8 Sec. 182.003. IMPOSITION AND RATE OF TAX. (a) An
436-9 occupation tax is imposed on every sexually oriented business that
436-10 does business in this state.
436-11 (b) The tax rate is 10 percent of the gross receipts of the
436-12 sexually oriented business from business done in this state.
436-13 SECTION 23.02. This article takes effect on the effective
436-14 date of this Act.
436-15 ARTICLE 24. COMMITTEE ON COST CONTROL
436-16 SECTION 24.01. Subtitle B, Title 10, Government Code, is
436-17 amended by adding Chapter 2059 to read as follows:
436-18 CHAPTER 2059. COMMITTEE ON COST CONTROL
436-19 Sec. 2059.001. DEFINITION. In this chapter, "state agency":
436-20 (1) means an office, department, commission, or other
436-21 agency in the executive branch of state government that is created
436-22 by the constitution or a state statute and that has statewide
436-23 jurisdiction; and
436-24 (2) does not include the office of the lieutenant
436-25 governor.
436-26 Sec. 2059.002. COMMITTEE COMPOSITION. (a) The Private
436-27 Sector Committee on Cost Control in State Government is composed of
437-1 nine members. Five members are appointed by the governor, two
437-2 members are appointed by the lieutenant governor, and two members
437-3 are appointed by the speaker of the house of representatives. A
437-4 member of the committee must have the qualifications determined by
437-5 the appointing officer to be of benefit to the committee in
437-6 administering its duties. As soon as possible after September 1,
437-7 1997, the appointing officers shall appoint a number of members to
437-8 the committee that is sufficient to allow the committee to begin
437-9 its work.
437-10 (b) A member of the committee serves at the will of the
437-11 appointing officer.
437-12 (c) A person may not serve as a member of the committee if
437-13 the person is required to register as a lobbyist under Chapter 305
437-14 because of the person's activities for compensation on behalf of a
437-15 profession related to the operation of the committee.
437-16 Sec. 2059.003. OFFICERS; COMPENSATION; MEETINGS. (a) The
437-17 governor shall designate a presiding officer from among the members
437-18 of the committee. The committee may elect other officers from its
437-19 members as the committee considers appropriate.
437-20 (b) A member of the committee may not receive compensation
437-21 for service on the committee.
437-22 (c) The committee shall meet at the call of the governor or
437-23 of the presiding officer. The committee shall hold its first
437-24 meeting not later than October 1, 1997.
437-25 Sec. 2059.004. DUTIES. (a) The committee shall study how
437-26 to control costs in state agencies and consider cost-control
437-27 methods used in the private sector. The committee shall then
438-1 advise the governor, the legislature, and the governing bodies of
438-2 state agencies about improving management and reducing costs.
438-3 (b) The committee shall conduct in-depth reviews of the
438-4 operations of state agencies as a basis for evaluating potential
438-5 improvements in state agency operations.
438-6 (c) In performing its duties, the committee shall consider
438-7 providing recommendations about:
438-8 (1) opportunities for increased efficiency and reduced
438-9 costs in state agencies that can be accomplished through
438-10 legislation or through executive branch action;
438-11 (2) situations in which managerial accountability can
438-12 be enhanced and administrative control can be improved;
438-13 (3) opportunities for short-term and long-term
438-14 managerial improvements;
438-15 (4) governmental expenditures, indebtedness, and
438-16 personnel management; and
438-17 (5) specific situations in which further study would
438-18 be justified by the potential savings.
438-19 (d) The committee shall hold at least five public meetings
438-20 in various locations around the state.
438-21 Sec. 2059.005. AGENCY COOPERATION. The administrative head
438-22 of a state agency shall provide to the committee information that
438-23 is not excepted from required public disclosure under Chapter 552
438-24 that the committee requests in performing its duties, including
438-25 information relating to the structure, organization, personnel, and
438-26 operations of the agency.
438-27 Sec. 2059.006. GIFTS AND GRANTS; STAFF; RESOURCES. (a) The
439-1 governor's office may accept gifts and grants, including the
439-2 donation of labor or in-kind resources, on behalf of the committee
439-3 to accomplish the objectives of this chapter.
439-4 (b) The governor's office and, at the request of the
439-5 governor, a state agency may provide staff support and other
439-6 resources to support the work of the committee.
439-7 Sec. 2059.007. APPLICABILITY OF ADVISORY COMMITTEE LAW.
439-8 Article 6252-33, Revised Statutes, does not apply to the committee
439-9 except for the provisions of Section 4 of that law.
439-10 Sec. 2059.008. FINAL REPORT; ABOLITION OF COMMITTEE. (a)
439-11 Not later than November 1, 1998, the committee shall submit its
439-12 final report to the governor and to the presiding officer of each
439-13 house of the legislature.
439-14 (b) The committee is abolished upon the submission of its
439-15 final report.
439-16 ARTICLE 25. EFFECTIVE DATE; CONTINGENCY; EMERGENCY
439-17 SECTION 25.01. (a) Except as otherwise provided by this
439-18 Act, this Act takes effect September 1, 1997, but only if the
439-19 constitutional amendment proposed by H.J.R. No. 4, 75th
439-20 Legislature, Regular Session, 1997, is approved by the voters. If
439-21 that amendment is not approved by the voters, this Act has no
439-22 effect.
439-23 (b) The change in law made by this Act to a tax or fee does
439-24 not affect the liability for a tax or fee. The liability for a tax
439-25 or fee is governed by the law in effect when the tax or fee became
439-26 due, and that law is continued in effect for the collection of the
439-27 tax or fee and for civil and criminal enforcement of the liability
440-1 for that tax or fee.
440-2 SECTION 25.02. The comptroller shall adopt, amend, or repeal
440-3 rules on an emergency basis under Section 2001.034, Government
440-4 Code, as necessary or appropriate to implement each provision of
440-5 this Act relating to taxation on its effective date. This section
440-6 does not authorize the comptroller to adopt rules relating to
440-7 education or the Texas Education Agency. This section is a
440-8 requirement of state law for the purposes of Section
440-9 2001.034(a)(1), Government Code. In this section, "rule" has the
440-10 meaning assigned by Section 2001.003(6), Government Code.
440-11 SECTION 25.03. The importance of this legislation and the
440-12 crowded condition of the calendars in both houses create an
440-13 emergency and an imperative public necessity that the
440-14 constitutional rule requiring bills to be read on three several
440-15 days in each house be suspended, and this rule is hereby suspended.