75R9864 DAK/CBH-D
By Craddick, Junell, et al. H.B. No. 4
Substitute the following for H.B. No. 4:
By Sadler, Hilbert, Brimer, Chisum, C.S.H.B. No. 4
Craddick, Hernandez, Hochberg, Junell,
Stiles, Williamson, Wilson
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
1-6 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1-10 are repealed: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.
3-7 (b) A student to whom Subsection (a) does not apply is
3-8 entitled to the benefits of the Foundation School Program if the
3-9 student is enrolled in a prekindergarten class under Section
3-10 29.153.
3-11 (c) A child may be enrolled in the first grade if the child
3-12 is at least six years of age at the beginning of the school year of
3-13 the district or has been enrolled in the first grade or has
3-14 completed kindergarten in the public schools in another state
3-15 before transferring to a public school in this state.
3-16 (d) Notwithstanding Subsection (a), a student younger than
3-17 five years of age is entitled to the benefits of the Foundation
3-18 School Program if:
3-19 (1) the student performs satisfactorily on the
3-20 assessment instrument administered under Section 39.023(a) to
3-21 students in the third grade; and
3-22 (2) the district has adopted a policy for admitting
3-23 students younger than five years of age.
3-24 Sec. 42.004. ADMINISTRATION OF THE PROGRAM. The
3-25 commissioner, in accordance with [the] rules adopted by the
3-26 commissioner [of the State Board of Education], shall take such
3-27 action and require such reports consistent with this chapter as may
4-1 be necessary to implement and administer the Foundation School
4-2 Program.
4-3 Sec. 42.005. AVERAGE DAILY ATTENDANCE. (a) In this
4-4 chapter, average daily attendance is the quotient of the sum of
4-5 attendance for each day of the minimum number of days of
4-6 instruction as described under Section 25.081(a) [and for each day
4-7 approved by the commissioner for an extended year program under
4-8 Section 29.082] divided by the minimum number of days of
4-9 instruction.
4-10 [(a-1) Subsection (a) applies beginning with the 1997-1998
4-11 school year. For the 1995-1996 and 1996-1997 school years, average
4-12 daily attendance is the quotient of the sum of attendance for each
4-13 day of the minimum number of days of instruction as described under
4-14 Section 25.081(a) divided by the minimum number of days of
4-15 instruction. This subsection expires September 1, 1997.]
4-16 (b) A school district that experiences a decline of two
4-17 percent or more in average daily attendance as a result of the
4-18 closing or reduction in personnel of a military base shall be
4-19 funded on the basis of the actual average daily attendance of the
4-20 preceding school year.
4-21 (c) The commissioner shall adjust the average daily
4-22 attendance of a school district that has a significant percentage
4-23 of students who are migratory children as defined by 20 U.S.C.
4-24 Section 6399.
4-25 (d) The commissioner may adjust the average daily attendance
4-26 of a school district in which a disaster, flood, extreme weather
4-27 condition, fuel curtailment, or other calamity has a significant
5-1 effect on the district's attendance.
5-2 Sec. 42.006. PUBLIC EDUCATION INFORMATION MANAGEMENT SYSTEM
5-3 (PEIMS). (a) Each school district shall participate in the Public
5-4 Education Information Management System (PEIMS) and shall provide
5-5 through that system information required for the administration of
5-6 this chapter and of other appropriate provisions of this code.
5-7 (b) Each school district shall use a uniform accounting
5-8 system adopted by the commissioner for the data required to be
5-9 reported for the Public Education Information Management System.
5-10 (c) Annually, the commissioner shall review the Public
5-11 Education Information Management System and shall repeal or amend
5-12 rules that require school districts to provide information through
5-13 the Public Education Information Management System that is not
5-14 necessary. In reviewing and revising the Public Education
5-15 Information Management System, the commissioner shall develop rules
5-16 to ensure that the system:
5-17 (1) provides useful, accurate, and timely information
5-18 on student demographics and academic performance, personnel, and
5-19 school district finances;
5-20 (2) contains only the data necessary for the
5-21 legislature and the agency to perform their legally authorized
5-22 functions in overseeing the public education system; and
5-23 (3) does not contain any information related to
5-24 instructional methods, except as required by federal law.
5-25 Sec. 42.007. EQUALIZED FUNDING ELEMENTS. (a) The
5-26 Legislative Budget Board shall compute [adopt rules, subject to
5-27 appropriate notice and opportunity for public comment, for the
6-1 calculation] for each year of a biennium [of] the qualified funding
6-2 elements, in accordance with Subsection (c), [under Section
6-3 42.256(e)] necessary to achieve the state policy under Section
6-4 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 may conduct a study on the funding elements
7-24 each biennium, as appropriate.
7-25 [(f) Not later than December 1 preceding each regular
7-26 session of the legislature, the foundation school fund budget
7-27 committee shall publish and report the equalized funding elements
8-1 calculated under this section to the commissioner and the
8-2 legislature. Before the committee adopts the elements, the
8-3 committee or the committee's designees shall hold a public hearing
8-4 on the recommendations of the Legislative Budget Board.]
8-5 (Sections 42.008-42.100 reserved for expansion)
8-6 SUBCHAPTER B. BASIC PROGRAM [ENTITLEMENT]
8-7 [SUBCHAPTER F. GUARANTEED YIELD PROGRAM]
8-8 [Sec. 42.301. PURPOSE. The purpose of the guaranteed yield
8-9 component of the Foundation School Program is to provide each
8-10 school district with the opportunity to provide the basic program
8-11 and to supplement that program at a level of its own choice and
8-12 with access to additional funds for facilities. An allotment under
8-13 this subchapter may be used for any legal purpose, including
8-14 capital outlay and debt service.]
8-15 Sec. 42.101. BASIC PROGRAM [42.302. ALLOTMENT]. (a) Each
8-16 school district is guaranteed a specified amount per [weighted]
8-17 student in state and local funds for each cent of tax effort [over
8-18 that required for the district's local fund assignment] up to the
8-19 maximum level specified in this subchapter. Except as provided by
8-20 Subchapter C, funds allocated under this section may be used for
8-21 any legal purpose. The amount of state and local funds for each
8-22 educational program for which a student multiplier is provided
8-23 under Subsection (b) [support, subject only to the maximum amount
8-24 under Section 42.303,] is determined by the formula:
8-25 GYA = [(]GL X S X SM [WADA] X DTR X 100[) - LR]
8-26 where:
8-27 "GYA" is the guaranteed yield amount of state and local funds
9-1 [to be] allocated to the district for the educational program;
9-2 "GL" is the dollar amount guaranteed level of state and local
9-3 funds per [weighted] student per cent of tax effort, which is
9-4 $53.15 [$20.55] or a greater amount for any year provided by
9-5 appropriation[, or a greater amount adopted by the foundation
9-6 school fund budget committee under Section 42.256(d)];
9-7 "S" ["WADA"] is the number of students in [weighted] average
9-8 daily attendance, number of full-time equivalent students, or
9-9 number of students enrolled, as appropriate, in the educational
9-10 program for which the computation is made[, which is calculated by
9-11 dividing the sum of the school district's allotments under
9-12 Subchapters B and C, less any allotment to the district for
9-13 transportation and 50 percent of the adjustment under Section
9-14 42.102, by the basic allotment for the applicable year];
9-15 "SM" is the student multiplier for the educational program,
9-16 as provided by Subsection (b); and
9-17 "DTR" is the district maintenance and operations [enrichment
9-18 and facilities] tax rate of the school district[, which is
9-19 determined by subtracting the amounts specified by Subsection (b)
9-20 from the total amount of taxes collected by the school district for
9-21 the applicable school year and dividing the difference by the
9-22 quotient of the district's taxable value of property as determined
9-23 under Subchapter M, Chapter 403, Government Code, divided by 100;
9-24 and]
9-25 ["LR" is the local revenue, which is determined by
9-26 multiplying "DTR" by the quotient of the district's taxable value
9-27 of property as determined under Subchapter M, Chapter 403,
10-1 Government Code, divided by 100].
10-2 (b) The student multipliers are:
10-3 (1) 1.0 for a student in average daily attendance, not
10-4 including time the student spends each day in a special education
10-5 program in an instructional arrangement other than mainstream or in
10-6 career and technology education programs;
10-7 (2) 1.1 for a student in a special education program
10-8 in a mainstream instructional arrangement;
10-9 (3) 5.0 for a full-time equivalent student in a
10-10 special education program in a homebound instructional arrangement;
10-11 (4) 3.0 for a full-time equivalent student in a
10-12 special education program in a hospital class instructional
10-13 arrangement;
10-14 (5) 5.0 for a full-time equivalent student in a
10-15 special education program in a speech therapy instructional
10-16 arrangement;
10-17 (6) 3.0 for a full-time equivalent student in a
10-18 special education program in a resource room instructional
10-19 arrangement;
10-20 (7) 3.0 for a full-time equivalent student in a
10-21 special education program in a self-contained, mild and moderate,
10-22 regular campus instructional arrangement;
10-23 (8) 3.0 for a full-time equivalent student in a
10-24 special education program in a self-contained, severe, regular
10-25 campus instructional arrangement;
10-26 (9) 2.7 for a full-time equivalent student in a
10-27 special education program in an off-home campus instructional
11-1 arrangement;
11-2 (10) 1.7 for a full-time equivalent student in a
11-3 special education program in a nonpublic day school;
11-4 (11) 2.3 for a full-time equivalent student in a
11-5 special education program vocational adjustment class;
11-6 (12) 4.0 for a student in a special education program
11-7 who resides in a residential care and treatment facility, other
11-8 than a state school, whose parent or guardian does not reside in
11-9 the district and who receives educational services from a local
11-10 school district;
11-11 (13) 2.8 for a student in a special education program
11-12 who resides in a state school;
11-13 (14) 0.2 for a student who is educationally
11-14 disadvantaged or who is a student who does not have a disability
11-15 and resides in a residential placement facility in a district in
11-16 which the student's parent or guardian does not reside;
11-17 (15) 2.41 for a student who is in a remedial and
11-18 support program under Section 29.081 because the student is
11-19 pregnant;
11-20 (16) 0.1 for a student who is in a bilingual education
11-21 or special language program under Subchapter B, Chapter 29;
11-22 (17) 1.37 for a full-time equivalent student in an
11-23 approved career and technology education program in grades nine
11-24 through 12 or in a career and technology program for students with
11-25 disabilities in grades seven through 12; and
11-26 (18) 0.12 for a student in a program for gifted and
11-27 talented students that the district certifies to the commissioner
12-1 as complying with Subchapter D, Chapter 29.
12-2 (c) The sum of the guaranteed yield amounts for each
12-3 educational program allocated to the district constitute the
12-4 district's basic program.
12-5 (d) In this section:
12-6 (1) "Career and technology education program" means a
12-7 program under Subchapter F, Chapter 29.
12-8 (2) "Full-time equivalent student" means 30 hours of
12-9 contact a week between a student and program personnel.
12-10 (3) "Special education program" means a program under
12-11 Subchapter A, Chapter 29 [In computing the district enrichment and
12-12 facilities tax rate of a school district, the total amount of
12-13 taxes collected by the school district does not include the amount
12-14 of:]
12-15 [(1) the district's local fund assignment under
12-16 Section 42.252; or]
12-17 [(2) taxes collected to pay the local share of the
12-18 cost of an instructional facility for which the district receives
12-19 state assistance under Subchapter H].
12-20 Sec. 42.102 [42.303]. LIMITATION ON MAINTENANCE AND
12-21 OPERATIONS [ENRICHMENT AND FACILITIES] TAX RATE. The district
12-22 maintenance and operations [enrichment and facilities] tax rate
12-23 ("DTR") under Section 42.101 [42.302] may not exceed 70 cents
12-24 [$0.64] per $100 of valuation[, or a greater amount adopted by the
12-25 foundation school fund budget committee under Section 42.256(d)].
12-26 [Sec. 42.101. BASIC ALLOTMENT. For each student in average
12-27 daily attendance, not including the time students spend each day in
13-1 special education programs in an instructional arrangement other
13-2 than mainstream or career and technology education programs, for
13-3 which an additional allotment is made under Subchapter C, a
13-4 district is entitled to an allotment of $2,387 or a greater amount
13-5 adopted by the foundation school fund budget committee under
13-6 Section 42.256. A greater amount for any school year may be
13-7 provided by appropriation.]
13-8 Sec. 42.103 [42.102]. COST OF EDUCATION ADJUSTMENT.
13-9 (a) The basic program [allotment] for each district is adjusted to
13-10 reflect the geographic variation in known resource costs and costs
13-11 of education due to factors beyond the control of the school
13-12 district.
13-13 (b) The [foundation school fund budget committee shall
13-14 determine the] cost of education adjustment is determined by the
13-15 following formula:
13-16 CEA = ((CEI - 1) X .58) + 1
13-17 where:
13-18 "CEA" is the cost of education adjustment; and
13-19 "CEI" is the cost of education index adjustment adopted by
13-20 the foundation school fund budget committee and contained in
13-21 Chapter 203, Title 19, Texas Administrative Code, as that chapter
13-22 existed on January 1, 1997 [under Section 42.256].
13-23 [(c) Beginning with the 1996-1997 school year, the
13-24 commissioner shall recompute the cost of education index, excluding
13-25 from the computation the calculation for the diseconomies of scale
13-26 component and substituting a value of 1.00.]
13-27 Sec. 42.104 [42.103]. SMALL AND MID-SIZED DISTRICT
14-1 ADJUSTMENT. (a) The basic program [allotment] for certain small
14-2 and mid-sized districts is adjusted in accordance with this
14-3 section. In this section:
14-4 (1) "AP" ["AA"] is the district's adjusted program
14-5 [allotment per student];
14-6 (2) "ADA" is the number of students in average daily
14-7 attendance for which the district is entitled to state funds [an
14-8 allotment] under Section 42.101; and
14-9 (3) "ABP" ["ABA"] is the adjusted basic program
14-10 [allotment] determined under Section 42.103 [42.102].
14-11 (b) The basic program [allotment] of a school district that
14-12 contains at least 300 square miles and has not more than 1,600
14-13 students in average daily attendance is adjusted by applying the
14-14 formula:
14-15 AP [AA] = (1 + ((1,600 - ADA) X .0004)) X ABP [ABA]
14-16 (c) The basic program [allotment] of a school district that
14-17 contains less than 300 square miles and has not more than 1,600
14-18 students in average daily attendance is adjusted by applying the
14-19 formula:
14-20 AP [AA] = (1 + ((1,600 - ADA) X .00025)) X ABP [ABA]
14-21 (d) The basic program [allotment] of a school district that
14-22 offers a kindergarten through grade 12 program and has less than
14-23 5,000 students in average daily attendance is adjusted by applying
14-24 the formula, of the following formulas, that results in the
14-25 greatest adjusted allotment:
14-26 (1) the formula in Subsection (b) or (c) for which the
14-27 district is eligible;
15-1 (2) AP [AA] = 1 X ABP [ABA]; or
15-2 (3) depending on the school year:
15-3 (A) [for the 1996-1997 school year,]
15-4 [AA = (1 + ((5,000 - ADA) X .0000045)) X ABA;]
15-5 [(B)] for the 1997-1998 school year,
15-6 AP [AA] = (1 + ((5,000 - ADA) X .0000090)) X ABP [ABA];
15-7 (B) [(C)] for the 1998-1999 school year,
15-8 AP [AA] = (1 + ((5,000 - ADA) X .000015)) X ABP [ABA];
15-9 (C) [(D)] for the 1999-2000 school year,
15-10 AP [AA] = (1 + ((5,000 - ADA) X .000020)) X ABP [ABA];
15-11 (D) [(E)] for the 2000-2001 school year,
15-12 AP [AA] = (1 + ((5,000 - ADA) X .000025)) X ABP [ABA].
15-13 [(e) The commissioner may make the adjustment authorized by
15-14 Subsection (d)(3) only if the district's wealth per student does
15-15 not exceed the equalized wealth level under Section 41.002. For
15-16 purposes of this subsection, a district's wealth per student is
15-17 determined in the manner provided by Section 41.001, except that
15-18 the adjustment provided by Subsection (d)(3) is not used in
15-19 computing the number of students in weighted average daily
15-20 attendance.]
15-21 [Sec. 42.104. USE OF SMALL OR MID-SIZED DISTRICT ADJUSTMENT
15-22 IN CALCULATING SPECIAL ALLOTMENTS. In determining the amount of a
15-23 special allotment under Subchapter C for a district to which
15-24 Section 42.103 applies, a district's adjusted basic allotment is
15-25 considered to be the district's adjusted allotment determined under
15-26 Section 42.103.]
15-27 Sec. 42.105. SPARSITY ADJUSTMENT. Notwithstanding Sections
16-1 42.101, [42.102, and] 42.103, and 42.104, a school district that
16-2 has fewer than 130 students in average daily attendance shall be
16-3 provided an adjusted basic program [allotment] on the basis of 130
16-4 students in average daily attendance if it offers a kindergarten
16-5 through grade 12 program and has preceding or current year's
16-6 average daily attendance of at least 90 students or is 30 miles or
16-7 more by bus route from the nearest high school district. A
16-8 district offering a kindergarten through grade 8 program whose
16-9 preceding or current year's average daily attendance was at least
16-10 50 students or which is 30 miles or more by bus route from the
16-11 nearest high school district shall be provided an adjusted basic
16-12 program [allotment] on the basis of 75 students in average daily
16-13 attendance. An average daily attendance of 60 students shall be
16-14 the basis of providing the adjusted basic program [allotment] if a
16-15 district offers a kindergarten through grade 6 program and has
16-16 preceding or current year's average daily attendance of at least 40
16-17 students or is 30 miles or more by bus route from the nearest high
16-18 school district.
16-19 Sec. 42.106 [42.304]. COMPUTATION OF AID FOR CERTAIN
16-20 DISTRICTS [DISTRICT ON MILITARY RESERVATION] OR AT STATE SCHOOL.
16-21 State assistance under this chapter [subchapter] for a school
16-22 district located on a federal military installation or at Moody
16-23 State School or for the South Texas Independent School District or
16-24 the Boys Ranch Independent School District is computed using the
16-25 average maintenance and operations tax rate [and property value per
16-26 student] of school districts in the county, as determined by the
16-27 commissioner.
17-1 (Sections 42.107 [42.106]-42.150 reserved for expansion)
17-2 SUBCHAPTER C. CONDITIONS APPLICABLE TO FUNDING BASED ON
17-3 SPECIAL STUDENT MULTIPLIERS [SPECIAL ALLOTMENTS]
17-4 Sec. 42.151. SPECIAL EDUCATION PROGRAMS. (a) [For each
17-5 student in average daily attendance in a special education program
17-6 under Subchapter A, Chapter 29, in a mainstream instructional
17-7 arrangement, a school district is entitled to an annual allotment
17-8 equal to the adjusted basic allotment multiplied by 1.1. For each
17-9 full-time equivalent student in average daily attendance in a
17-10 special education program under Subchapter A, Chapter 29, in an
17-11 instructional arrangement other than a mainstream instructional
17-12 arrangement, a district is entitled to an annual allotment equal to
17-13 the adjusted basic allotment multiplied by a weight determined
17-14 according to instructional arrangement as follows:]
17-15 [Homebound ........................................ 5.0]
17-16 [Hospital class ................................... 3.0]
17-17 [Speech therapy ................................... 5.0]
17-18 [Resource room .................................... 3.0]
17-19 [Self-contained, mild and moderate, regular
17-20 campus ............................................ 3.0]
17-21 [Self-contained, severe, regular campus ........... 3.0]
17-22 [Off home campus .................................. 2.7]
17-23 [Nonpublic day school ............................. 1.7]
17-24 [Vocational adjustment class ...................... 2.3]
17-25 [(b) A special instructional arrangement for students with
17-26 disabilities residing in care and treatment facilities, other than
17-27 state schools, whose parents or guardians do not reside in the
18-1 district providing education services shall be established under
18-2 the rules of the State Board of Education. The funding weight for
18-3 this arrangement shall be 4.0 for those students who receive their
18-4 education service on a local school district campus. A special
18-5 instructional arrangement for students with disabilities residing
18-6 in state schools shall be established under the rules of the State
18-7 Board of Education with a funding weight of 2.8.]
18-8 [(c)] For funding purposes, the number of contact hours
18-9 credited per day for each student in the off home campus
18-10 instructional arrangement may not exceed the contact hours credited
18-11 per day for the multidistrict class instructional arrangement in
18-12 the 1992-1993 school year.
18-13 (b) [(d)] For funding purposes, the number of contact hours
18-14 credited per day for each student in the resource room;
18-15 self-contained, mild and moderate; and self-contained, severe,
18-16 instructional arrangements may not exceed the average of the
18-17 statewide total contact hours credited per day for those three
18-18 instructional arrangements in the 1992-1993 school year.
18-19 (c) [(e)] The commissioner [State Board of Education] by
18-20 rule shall prescribe the qualifications an instructional
18-21 arrangement must meet in order to be funded as a particular
18-22 instructional arrangement under this chapter [section]. In
18-23 prescribing the qualifications that a mainstream instructional
18-24 arrangement must meet, the commissioner [board] shall establish
18-25 requirements that students with disabilities and their teachers
18-26 receive the direct, indirect, and support services that are
18-27 necessary to enrich the regular classroom and enable student
19-1 success.
19-2 (d) [(f) In this section, "full-time equivalent student"
19-3 means 30 hours of contact a week between a special education
19-4 student and special education program personnel.]
19-5 [(g)] The commissioner [State Board of Education] shall
19-6 adopt rules and procedures governing contracts for residential
19-7 placement of special education students. The legislature shall
19-8 provide by appropriation for the state's share of the costs of
19-9 those placements.
19-10 (e) [(h)] Funds allocated under this chapter for special
19-11 education programs [section], other than an indirect cost allotment
19-12 established under rules adopted by the commissioner [State Board of
19-13 Education rule], must be used in the special education program
19-14 under Subchapter A, Chapter 29.
19-15 (f) [(i)] The agency shall encourage the placement of
19-16 students in special education programs, including students in
19-17 residential instructional arrangements, in the least restrictive
19-18 environment appropriate for their educational needs.
19-19 (g) [(j)] A school district that maintains for two
19-20 successive years a ratio of full-time equivalent students placed in
19-21 partially or totally self-contained classrooms to the number of
19-22 full-time equivalent students placed in resource room or mainstream
19-23 instructional arrangements that is 25 percent higher than the
19-24 statewide average ratio shall be reviewed by the agency to
19-25 determine the appropriateness of student placement. The
19-26 commissioner may reduce the guaranteed yield amounts for special
19-27 education [allotment the district receives] to the level to which
20-1 the district would be entitled if the district's ratio was not more
20-2 than 25 percent higher than the statewide average ratio.
20-3 (h) [(k)] A school district that provides an extended year
20-4 program required by federal law for special education students who
20-5 may regress is entitled to receive funds in an amount equal to 75
20-6 percent, or a lesser percentage determined by the commissioner, of
20-7 the dollar amount guaranteed level of state and local funds per
20-8 student per cent of tax effort [adjusted basic allotment or
20-9 adjusted allotment, as applicable], for each full-time equivalent
20-10 student in average daily attendance, multiplied by the amount
20-11 designated for the student's instructional arrangement under
20-12 Section 42.101(b) [this section], for each day the program is
20-13 provided divided by the number of days in the minimum school year.
20-14 For purposes of this subsection, the dollar amount guaranteed level
20-15 of state and local funds per student per cent of tax effort is
20-16 adjusted in the same manner as a district's basic program under
20-17 Sections 42.103 and 42.104. The total amount of state funding for
20-18 extended year services under this section may not exceed $10
20-19 million per year. A school district may use funds received under
20-20 this section only in providing an extended year program.
20-21 [(l) From the total amount of funds appropriated for special
20-22 education under this section, the commissioner shall withhold an
20-23 amount specified in the General Appropriations Act, and distribute
20-24 that amount to school districts for programs under Section 29.014.
20-25 The program established under that section is required only in
20-26 school districts in which the program is financed by funds
20-27 distributed under this subsection and any other funds available for
21-1 the program. After deducting the amount withheld under this
21-2 subsection from the total amount appropriated for special
21-3 education, the commissioner shall reduce each district's allotment
21-4 proportionately and shall allocate funds to each district
21-5 accordingly.]
21-6 Sec. 42.152. COMPENSATORY EDUCATION PROGRAMS [ALLOTMENT].
21-7 (a) [For each student who is educationally disadvantaged or who
21-8 is a student who does not have a disability and resides in a
21-9 residential placement facility in a district in which the student's
21-10 parent or legal guardian does not reside, a district is entitled to
21-11 an annual allotment equal to the adjusted basic allotment
21-12 multiplied by 0.2, and by 2.41 for each full-time equivalent
21-13 student who is in a remedial and support program under Section
21-14 29.081 because the student is pregnant.]
21-15 [(b)] For purposes of Section 42.101 [this section], the
21-16 number of educationally disadvantaged students is determined by
21-17 averaging the best six months' enrollment in the national school
21-18 lunch program of free or reduced-price lunches for the preceding
21-19 school year.
21-20 (b) [(c)] Funds allocated under this chapter for
21-21 compensatory education programs [section], other than an indirect
21-22 cost allotment established under rules adopted by the commissioner
21-23 [State Board of Education rule, which may not exceed 15 percent],
21-24 must be used in providing compensatory education and accelerated
21-25 instruction programs under Section 29.081 and may only be spent to
21-26 improve and enhance programs and services funded under the regular
21-27 education program. A[, and the] district must account for the
22-1 expenditure of [state] funds allocated under this chapter for
22-2 compensatory education programs by program and by campus under
22-3 existing agency reporting and auditing procedures. [Funds
22-4 allocated under this section, other than the indirect cost
22-5 allotment, shall only be expended to improve and enhance programs
22-6 and services funded under the regular education program.] A
22-7 home-rule school district or an open-enrollment charter school must
22-8 use funds allocated under this chapter for compensatory education
22-9 programs [Subsection (a)] to provide compensatory services but is
22-10 not otherwise subject to Subchapter C, Chapter 29.
22-11 (c) [(d)] The agency shall evaluate the effectiveness of
22-12 accelerated instruction and support programs provided under Section
22-13 29.081 for students at risk of dropping out of school.
22-14 [(e) The commissioner may:]
22-15 [(1) retain a portion of the total amount allotted
22-16 under Subsection (a) that the commissioner considers appropriate
22-17 to finance intensive accelerated instruction programs and study
22-18 guides provided under Sections 39.024(b) and (c); and]
22-19 [(2) reduce each district's tier one allotments in the
22-20 same manner described for a reduction in allotments under Section
22-21 42.253.]
22-22 [(f) From the total amount of funds appropriated for
22-23 allotments under this section, the commissioner shall, each fiscal
22-24 year, withhold an amount to be determined by the commissioner, but
22-25 not less than $10,000,000, and distribute that amount for programs
22-26 under Section 29.085. In distributing those funds, preference
22-27 shall be given to a school district that received funds for a
23-1 program under Section 29.085 for the preceding school year. The
23-2 program established under that section is required only in school
23-3 districts in which the program is financed by funds distributed
23-4 under this section and any other funds available for the program.]
23-5 [(g) The commissioner shall coordinate the funds withheld
23-6 under Subsection (f) and any other funds available for the program
23-7 and shall distribute those funds. To receive funds for the
23-8 program, a school district must apply to the commissioner. The
23-9 commissioner shall give a preference to the districts that apply
23-10 that have the highest concentration of students who are pregnant or
23-11 who are parents.]
23-12 [(h) After deducting the amount withheld under Subsection
23-13 (f) from the total amount appropriated for the allotment under
23-14 Subsection (a), the commissioner shall reduce each district's tier
23-15 one allotments in the same manner described for a reduction in
23-16 allotments under Section 42.253 and shall allocate funds to each
23-17 district accordingly.]
23-18 [(i) From the total amount of funds appropriated for
23-19 allotments under this section, the commissioner shall, each fiscal
23-20 year, withhold $7,500,000 or a greater amount as determined in the
23-21 General Appropriations Act and distribute that amount for programs
23-22 under Subchapter A, Chapter 33. A program established under that
23-23 subchapter is required only in school districts in which the
23-24 program is financed by funds distributed under this section or
23-25 other funds distributed by the commissioner for a program under
23-26 that subchapter. In distributing those funds, preference shall be
23-27 given to a school district that received funds for a program under
24-1 this subsection for the preceding school year.]
24-2 [(j) The commissioner shall coordinate the funds withheld
24-3 under Subsection (i) and any other funds available for the program
24-4 and shall distribute those funds. To receive funds for the
24-5 program, a school district must apply to the commissioner. The
24-6 commissioner shall give a preference to the districts that apply
24-7 that have the highest concentration of at-risk students. For each
24-8 school year that a school district receives funds under this
24-9 section, the district shall allocate an amount of local funds for
24-10 school guidance and counseling programs that is equal to or greater
24-11 than the amount of local funds that the school district allocated
24-12 for that purpose during the preceding school year.]
24-13 [(k) After deducting the amount withheld under Subsection
24-14 (i) from the total amount appropriated for the allotment under
24-15 Subsection (a), the commissioner shall reduce each district's tier
24-16 one allotments in the same manner described for a reduction in
24-17 allotments under Section 42.253.]
24-18 [(l) From the total amount of funds appropriated for
24-19 allotments under this section, the commissioner shall, each fiscal
24-20 year, withhold the amount of $2.5 million for transfer to the
24-21 investment capital fund under Section 7.024.]
24-22 [(m) From the total amount of funds appropriated for
24-23 allotments under this section, the commissioner may withhold an
24-24 amount not exceeding $1 million each fiscal year and distribute the
24-25 funds to school districts that incur unanticipated expenditures
24-26 resulting from a significant increase in the enrollment of students
24-27 who do not have disabilities and who reside in residential
25-1 placement facilities.]
25-2 [(n) After deducting the amount withheld under Subsection
25-3 (l) from the total amount appropriated for the allotment under
25-4 Subsection (a), the commissioner shall reduce each district's
25-5 allotment under Subsection (a) proportionately and shall allocate
25-6 funds to each district accordingly.]
25-7 [(o) After deducting the amount withheld under Subsection
25-8 (m) from the total amount appropriated for the allotment under
25-9 Subsection (a), the commissioner shall reduce each district's
25-10 allotment under Subsection (a) proportionately.]
25-11 [(p) The commissioner shall:]
25-12 [(1) withhold, from the total amount of funds
25-13 appropriated for allotments under this section, an amount
25-14 sufficient to finance extended year programs under Section 29.082
25-15 not to exceed five percent of the amounts allocated under this
25-16 section; and]
25-17 [(2) give priority to applications for extended year
25-18 programs to districts with high concentrations of educationally
25-19 disadvantaged students.]
25-20 Sec. 42.153. BILINGUAL EDUCATION PROGRAMS [ALLOTMENT].
25-21 (a) [For each student in average daily attendance in a bilingual
25-22 education or special language program under Subchapter B, Chapter
25-23 29, a district is entitled to an annual allotment equal to the
25-24 adjusted basic allotment multiplied by 0.1.]
25-25 [(b)] Funds allocated under this chapter for bilingual
25-26 education programs [section], other than an indirect cost allotment
25-27 established under rules adopted by the commissioner [State Board of
26-1 Education rule], must be used in providing bilingual education or
26-2 special language programs under Subchapter B, Chapter 29, and must
26-3 be accounted for under existing agency reporting and auditing
26-4 procedures.
26-5 (b) [(c)] A district's bilingual education or special
26-6 language allocation may be used only for program and student
26-7 evaluation, instructional materials and equipment, staff
26-8 development, supplemental staff expenses, salary supplements for
26-9 teachers, and other supplies required for quality instruction and
26-10 smaller class size.
26-11 Sec. 42.154. CAREER AND TECHNOLOGY EDUCATION [ALLOTMENT].
26-12 [(a) For each full-time equivalent student in average daily
26-13 attendance in an approved career and technology education program
26-14 in grades nine through 12 or in career and technology education
26-15 programs for students with disabilities in grades seven through 12,
26-16 a district is entitled to an annual allotment equal to the adjusted
26-17 basic allotment multiplied by a weight of 1.37.]
26-18 [(b) In this section, "full-time equivalent student" means
26-19 30 hours of contact a week between a student and career and
26-20 technology education program personnel.]
26-21 [(c)] Funds allocated under this chapter for career and
26-22 technology education [section], other than an indirect cost
26-23 allotment established under rules adopted by the commissioner
26-24 [State Board of Education rule], must be used in providing career
26-25 and technology education programs in grades nine through 12 or
26-26 career and technology education programs for students with
26-27 disabilities in grades seven through 12 under Sections 29.182,
27-1 29.183, and 29.184.
27-2 [(d) The commissioner shall conduct a cost-benefit
27-3 comparison between career and technology education programs and
27-4 mathematics and science programs.]
27-5 [(e) Out of the total statewide allotment for career and
27-6 technology education under this section, the commissioner shall set
27-7 aside an amount specified in the General Appropriations Act, which
27-8 may not exceed an amount equal to one percent of the total amount
27-9 appropriated, to support regional career and technology education
27-10 planning. After deducting the amount set aside under this
27-11 subsection from the total amount appropriated for career and
27-12 technology education under this section, the commissioner shall
27-13 reduce each district's tier one allotments in the same manner
27-14 described for a reduction in allotments under Section 42.253.]
27-15 Sec. 42.155 [42.156]. GIFTED AND TALENTED STUDENT PROGRAMS
27-16 [ALLOTMENT]. (a) [For each identified student a school district
27-17 serves in a program for gifted and talented students that the
27-18 district certifies to the commissioner as complying with Subchapter
27-19 D, Chapter 29, a district is entitled to an annual allotment equal
27-20 to the district's adjusted basic allotment as determined under
27-21 Section 42.102 or Section 42.103, as applicable, multiplied by .12
27-22 for each school year or a greater amount provided by appropriation.]
27-23 [(b)] Funds allocated under this chapter for gifted and
27-24 talented student programs [section], other than the amount that
27-25 represents the program's share of general administrative costs,
27-26 must be used in providing programs for gifted and talented students
27-27 under Subchapter D, Chapter 29, including programs sanctioned by
28-1 International Baccalaureate and Advanced Placement, or in
28-2 developing programs for gifted and talented students. Each
28-3 district must account for the expenditure of state funds as
28-4 provided by rules adopted by the commissioner [rule of the State
28-5 Board of Education]. If by the end of the 12th month after
28-6 receiving an allotment for developing a program a district has
28-7 failed to implement a program, the district must refund the amount
28-8 of the allotment to the agency within 30 days.
28-9 (b) [(c)] Not more than five percent of a district's
28-10 students in average daily attendance are eligible for funding under
28-11 this chapter for attendance in a gifted and talented program
28-12 [section].
28-13 [(d) If the amount of state funds for which school districts
28-14 are eligible under this section exceeds the amount of state funds
28-15 appropriated in any year for the programs, the commissioner shall
28-16 reduce each district's tier one allotments in the same manner
28-17 described for a reduction in allotments under Section 42.253.]
28-18 [(e) If the total amount of funds allotted under this
28-19 section before a date set by rule of the State Board of Education
28-20 is less than the total amount appropriated for a school year, the
28-21 commissioner shall transfer the remainder to any program for which
28-22 an allotment under Section 42.152 may be used.]
28-23 [(f) After each district has received allotted funds for
28-24 this program, the State Board of Education may use up to $500,000
28-25 of the funds allocated under this section for programs such as
28-26 MATHCOUNTS, Future Problem Solving, Odyssey of the Mind, and
28-27 Academic Decathlon, as long as these funds are used to train
29-1 personnel and provide program services. To be eligible for funding
29-2 under this subsection, a program must be determined by the State
29-3 Board of Education to provide services that are effective and
29-4 consistent with the state plan for gifted and talented education.]
29-5 (Sections 42.156 [42.157]-42.200 reserved for expansion)
29-6 SUBCHAPTER D. TRANSPORTATION ALLOTMENT
29-7 Sec. 42.201 [42.155]. TRANSPORTATION ALLOTMENT. [(a)] Each
29-8 district or county operating a transportation system is entitled to
29-9 allotments for transportation costs as provided by this subchapter
29-10 [section].
29-11 Sec. 42.202. DEFINITIONS. In [(b) As used in] this
29-12 subchapter [section]:
29-13 (1) "Regular eligible student" means a student who
29-14 resides two or more miles from the student's campus of regular
29-15 attendance, measured along the shortest route that may be traveled
29-16 on public roads, and who is not classified as a student eligible
29-17 for special education services.
29-18 (2) "Eligible special education student" means a
29-19 student who is eligible for special education services under
29-20 Section 29.003 and who would be unable to attend classes without
29-21 special transportation services.
29-22 (3) "Linear density" means the average number of
29-23 regular eligible students transported daily, divided by the
29-24 approved daily route miles traveled by the respective
29-25 transportation system.
29-26 Sec. 42.203. REGULAR TRANSPORTATION ALLOTMENT.
29-27 (a) [(c)] Each district or county operating a regular
30-1 transportation system is entitled to an allotment based on the
30-2 daily cost per regular eligible student of operating and
30-3 maintaining the regular transportation system and the linear
30-4 density of that system.
30-5 (b) In determining the cost, the commissioner shall give
30-6 consideration to factors affecting the actual cost of providing
30-7 these transportation services in each district or county. The
30-8 average actual cost is to be computed by the commissioner and
30-9 included for consideration by [the foundation school fund budget
30-10 committee and] the legislature in the General Appropriations Act.
30-11 (c) The allotment per mile of approved route may not exceed
30-12 the amount set by appropriation.
30-13 Sec. 42.204. HAZARDOUS CONDITIONS TRANSPORTATION ALLOTMENT.
30-14 (a) [(d)] A district or county may apply for and on approval of
30-15 the commissioner receive an additional amount of up to 10 percent
30-16 of its regular transportation allotment to be used for the
30-17 transportation of children living within two miles of the school
30-18 they attend who would be subject to hazardous traffic conditions if
30-19 they walked to school.
30-20 (b) Each board of trustees shall provide to the commissioner
30-21 the definition of hazardous conditions applicable to that district
30-22 and shall identify the specific hazardous areas for which the
30-23 allocation is requested. A hazardous condition exists where no
30-24 walkway is provided and children must walk along or cross a freeway
30-25 or expressway, an underpass, an overpass or a bridge, an
30-26 uncontrolled major traffic artery, an industrial or commercial
30-27 area, or another comparable condition.
31-1 Sec. 42.205. COMMERCIAL TRANSPORTATION ALLOTMENT.
31-2 (a) [(e)] The commissioner may grant an amount set by
31-3 appropriation for private or commercial transportation for eligible
31-4 students from isolated areas. The need for this type of
31-5 transportation grant shall be determined on an individual basis and
31-6 the amount granted shall not exceed the actual cost.
31-7 (b) The grants may be made only in extreme hardship cases.
31-8 A grant may not be made if the students live within two miles of an
31-9 approved school bus route.
31-10 Sec. 42.206. TRANSPORTATION OF CAREER AND TECHNOLOGY
31-11 EDUCATION STUDENTS. [(f)] The cost of transporting career and
31-12 technology education students from one campus to another inside a
31-13 district or from a sending district to another secondary public
31-14 school for a career and technology program or an area career and
31-15 technology school or to an approved post-secondary institution
31-16 under a contract for instruction approved by the agency shall be
31-17 reimbursed based on the number of actual miles traveled times the
31-18 district's official extracurricular travel per mile rate as set by
31-19 the board of trustees and approved by the agency.
31-20 Sec. 42.207. TRANSPORTATION OF SPECIAL EDUCATION STUDENTS.
31-21 (a) [(g)] A school district or county that provides special
31-22 transportation services for eligible special education students is
31-23 entitled to a state allocation paid on a previous year's
31-24 cost-per-mile basis. The maximum rate per mile allowable shall be
31-25 set by appropriation based on data gathered from the first year of
31-26 each preceding biennium.
31-27 (b) Districts may use a portion of their support allocation
32-1 to pay transportation costs, if necessary. The commissioner may
32-2 grant an amount set by appropriation for private transportation to
32-3 reimburse parents or their agents for transporting eligible special
32-4 education students. The mileage allowed shall be computed along
32-5 the shortest public road from the student's home to school and
32-6 back, morning and afternoon. The need for this type transportation
32-7 shall be determined on an individual basis and shall be approved
32-8 only in extreme hardship cases.
32-9 Sec. 42.208. USE OF TRANSPORTATION ALLOTMENTS. [(h)] Funds
32-10 allotted under this subchapter [section] must be used in providing
32-11 transportation services.
32-12 Sec. 42.209. DETERMINATION OF TRANSPORTATION ALLOTMENTS OF
32-13 DISTRICT BELONGING TO COUNTY TRANSPORTATION SYSTEM. [(i)] In the
32-14 case of a district belonging to a county transportation system, the
32-15 district's transportation allotment for purposes of determining a
32-16 district's foundation school program allocations is determined on
32-17 the basis of the number of approved daily route miles in the
32-18 district multiplied by the allotment per mile to which the county
32-19 transportation system is entitled.
32-20 Sec. 42.210. TRANSPORTATION ALLOTMENT FOR TEXAS SCHOOL FOR
32-21 THE DEAF. [(j)] The Texas School for the Deaf is entitled to an
32-22 allotment under this subchapter [section]. The commissioner shall
32-23 determine the appropriate allotment.
32-24 (Sections 42.211 [42.202]-42.250 reserved for expansion)
32-25 SUBCHAPTER E. FINANCING THE PROGRAM
32-26 Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the
32-27 adjusted basic program [allotment] under Subchapter B and the
33-1 transportation allotment [special allotments] under Subchapter D
33-2 [C], computed in accordance with this chapter, [constitute the tier
33-3 one allotments. The sum of the tier one allotments, the guaranteed
33-4 yield allotments under Subchapter F, and assistance provided under
33-5 the school facilities assistance program under Subchapter H,
33-6 computed in accordance with this chapter,] constitute the total
33-7 cost of the Foundation School Program.
33-8 (b) The program shall be financed by:
33-9 (1) ad valorem tax revenue generated by an equalized
33-10 [uniform] school district effort;
33-11 (2) [ad valorem tax revenue generated by local school
33-12 district effort in excess of the equalized uniform school district
33-13 effort;]
33-14 [(3)] state available school funds distributed in
33-15 accordance with law; and
33-16 (3) [(4)] state funds appropriated for the purposes of
33-17 public school education and allocated to each district in an amount
33-18 sufficient to finance the cost of each district's Foundation School
33-19 Program not covered by other funds specified in this subsection.
33-20 [(c) The commissioner shall compute for each school district
33-21 the total amount, if any, by which the district's total revenue is
33-22 reduced from one school year to the next because of a change in the
33-23 method of finance under this chapter. The commissioner shall
33-24 certify the amount of the reduction to the school district for use
33-25 in determining the school district's rollback rate under Section
33-26 26.08, Tax Code.]
33-27 Sec. 42.252. LOCAL SHARE OF PROGRAM COST [(TIER ONE)].
34-1 (a) Each school district's share of the Foundation School Program
34-2 is determined by the following formula:
34-3 LS [LFA] = DTR [TR] X DPV
34-4 where:
34-5 "LS" ["LFA"] is the school district's local share;
34-6 "DTR" ["TR"] is the district's [a] tax rate for maintenance
34-7 and operations used in computing the district's basic program under
34-8 Section 42.101 [which for each hundred dollars of valuation is an
34-9 effective tax rate of $0.86]; and
34-10 "DPV" is the taxable value of property in the school district
34-11 for the current [preceding] tax year for purposes of maintenance
34-12 and operations taxes determined under Section 403.302(d)
34-13 [Subchapter M, Chapter 403], Government Code.
34-14 (b) The commissioner shall adjust the values reported in the
34-15 official report of the comptroller as required by Section 5.09(a),
34-16 Tax Code, to reflect reductions in taxable value of property
34-17 resulting from natural or economic disaster after January 1 in the
34-18 year in which the valuations are determined. The decision of the
34-19 commissioner is final. An adjustment does not affect the local
34-20 share [fund assignment] of any other school district.
34-21 (c) Appeals of district values shall be held pursuant to
34-22 Section 403.303, Government Code.
34-23 [(d) A school district must raise its total local share of
34-24 the Foundation School Program to be eligible to receive foundation
34-25 school fund payments.]
34-26 [(e) The commissioner shall hear appeals from school
34-27 districts that have experienced a rapid decline in tax base used in
35-1 calculating the local fund assignment, exceeding four percent of
35-2 the preceding year, that is beyond the control of the board of
35-3 trustees of the district. The commissioner may adjust the
35-4 district's taxable values for local fund assignment purposes for
35-5 such losses in value exceeding four percent and thereby adjust the
35-6 local fund assignment to reflect the local current year taxable
35-7 value. The decision of the commissioner is final. An adjustment
35-8 does not affect the local fund assignment of any other school
35-9 district. This subsection applies to determinations by the
35-10 commissioner in identifying districts with wealth per student
35-11 exceeding the equalized wealth level pursuant to Section 41.004.]
35-12 Sec. 42.253. DISTRIBUTION OF FOUNDATION SCHOOL FUND.
35-13 (a) For each school year the commissioner shall determine:
35-14 (1) the amount of money to which a school district is
35-15 entitled under Subchapters B and D [C];
35-16 (2) [the amount of money to which a school district is
35-17 entitled under Subchapter F;]
35-18 [(3)] the amount of money allocated to the district
35-19 from the available school fund; and
35-20 (3) [(4)] the amount of each district's [tier one]
35-21 local share under Section 42.252[; and]
35-22 [(5) the amount of each district's tier two local
35-23 share under Section 42.302].
35-24 (b) Except as provided by this subsection, the commissioner
35-25 shall base the determinations under Subsection (a) on the estimates
35-26 provided to the legislature under Section 42.254, or if the General
35-27 Appropriations Act provides estimates for that purpose, on the
36-1 estimates provided under that Act, for each school district for
36-2 each school year. The commissioner shall reduce the entitlement of
36-3 each district that has a final taxable value of property for the
36-4 second year of a state fiscal biennium that is higher than the
36-5 estimate under Section 42.254 or the General Appropriations Act, as
36-6 applicable. A reduction under this subsection may not reduce the
36-7 district's entitlement below the amount to which it is entitled at
36-8 its actual taxable value of property. The sum of the reductions
36-9 under this subsection may not be greater than the amount necessary
36-10 to fully fund the entitlement of each district.
36-11 (c) Each school district is entitled to an amount equal to
36-12 the difference for that district between the amount of Subsection
36-13 [sum of Subsections] (a)(1) [and (a)(2)] and the sum of Subsections
36-14 (a)(2) and (a)(3)[, (a)(4), and (a)(5)].
36-15 (d) The commissioner shall approve warrants to each school
36-16 district equaling the amount of its entitlement except as provided
36-17 by this section. Warrants for all money expended according to this
36-18 chapter shall be approved and transmitted to treasurers or
36-19 depositories of school districts in the same manner that warrants
36-20 for state payments are transmitted. The total amount of the
36-21 warrants issued under this section may not exceed the total amount
36-22 appropriated for Foundation School Program purposes for that fiscal
36-23 year.
36-24 (e) The commissioner shall recompute the amount to which the
36-25 district is entitled under Subsection (c) if a school district's
36-26 tax rate is less than the limit authorized under this subsection.
36-27 The amount to which a district is entitled under this section may
37-1 not exceed the amount to which the district would be entitled at
37-2 the district's tax rate for the final year of the preceding
37-3 biennium, or a different tax rate provided by appropriation. The
37-4 commissioner shall recompute the amount to which a district is
37-5 entitled to the extent necessary under this section. The
37-6 commissioner shall approve warrants to the school in the amount
37-7 that results from the new computation. An amount equal to the
37-8 difference between the initial allocation and the amount of the
37-9 warrants shall be transferred to a special account in the
37-10 foundation school fund known as the reserve account.
37-11 (e-1) Notwithstanding Subsection (e), the amount to which a
37-12 district is entitled under this section for the 1997-1998 and
37-13 1998-1999 school years may not exceed the amount to which the
37-14 district would be entitled at the maximum tax rate permitted under
37-15 Section 26.08(g)(1) or (2)(A), Tax Code, for the district for the
37-16 1997 tax year. This subsection expires September 1, 1999.
37-17 (f) Amounts transferred to the reserve account under
37-18 Subsection (e) shall be used in the succeeding fiscal year to
37-19 finance increases in allocations to school districts under
37-20 Subsection (i). If the amount in the reserve account is less than
37-21 the amount of the increases under Subsection (i) for the second
37-22 year of a state fiscal biennium, the commissioner shall certify the
37-23 amount of the difference to the Legislative Budget Board
37-24 [foundation school fund budget committee] not later than January 1
37-25 of the second year of the state fiscal biennium. The Legislative
37-26 Budget Board [committee] shall propose to the legislature that the
37-27 certified amount be transferred to the foundation school fund from
38-1 the economic stabilization fund and appropriated for the purpose of
38-2 increases in allocations under Subsection (h).
38-3 (g) If a school district demonstrates to the satisfaction of
38-4 the commissioner that the estimate of the district's tax rate,
38-5 student enrollment, or taxable value of property used in
38-6 determining the amount of state funds to which the district is
38-7 entitled are so inaccurate as to result in undue financial hardship
38-8 to the district, the commissioner may adjust funding to that
38-9 district in that school year to the extent that funds are available
38-10 for that year, including funds in the reserve account. Funds in
38-11 the reserve account may not be used under this subsection until any
38-12 reserve funds have been used for purposes of Subsection (f).
38-13 (h) If the legislature fails during the regular session to
38-14 enact the transfer and appropriation proposed under Subsection (f)
38-15 and there are not funds available under Subsection (j), the
38-16 commissioner shall reduce the total amount of state funds allocated
38-17 to each district by an amount determined by a method under which
38-18 the application of the same number of cents of increase in tax rate
38-19 in all districts applied to the taxable value of property of each
38-20 district for purposes of maintenance and operations taxes, as
38-21 determined under Section 403.302(d) [Subchapter M, Chapter 403],
38-22 Government Code, results in a total levy equal to the total
38-23 reduction. The following fiscal year, a district's entitlement
38-24 under this section is increased by an amount equal to the reduction
38-25 made under this subsection.
38-26 (i) Not later than March 1 each year, the commissioner shall
38-27 determine the actual amount of state funds to which each school
39-1 district is entitled under the allocation formulas in this chapter
39-2 for the current school year and shall compare that amount with the
39-3 amount of the warrants issued to each district for that year. If
39-4 the amount of the warrants differs from the amount to which a
39-5 district is entitled because of variations in the district's tax
39-6 rate, student enrollment, or taxable value of property, the
39-7 commissioner shall adjust the district's entitlement for the next
39-8 fiscal year accordingly.
39-9 (j) The legislature may appropriate funds necessary for
39-10 increases under Subsection (i) from funds that the comptroller, at
39-11 any time during the fiscal year, finds are available.
39-12 (k) The commissioner shall compute for each school district
39-13 the total amount by which the district's allocation of state funds
39-14 is increased or reduced under Subsection (i) and shall certify that
39-15 amount to the district.
39-16 Sec. 42.2531. ADDITIONAL STATE AID FOR CERTAIN SCHOOL
39-17 DISTRICTS. (a) Notwithstanding any other provision of this
39-18 chapter, a school district that imposes a tax for purposes of
39-19 maintenance and operations at a tax rate of at least 70 cents on
39-20 the $100 valuation of property is entitled, for the 1997-1998 and
39-21 1998-1999 school years, to an amount of state and local funding per
39-22 student, using the student multipliers under Section 42.101(b),
39-23 that is equal to the state and local funding per weighted student
39-24 for maintenance and operations to which the district would have
39-25 been entitled for each of those years at the district's tax rate
39-26 for the 1996 tax year under:
39-27 (1) this code as it would have been in effect for the
40-1 appropriate school year before amendment by H.B. No. 4, Acts of the
40-2 75th Legislature, Regular Session, 1997, except as provided by
40-3 Subsection (b) or (c); and
40-4 (2) the General Appropriations Act.
40-5 (b) For purposes of Subsection (a), for the 1998-1999 school
40-6 year, the amount of state and local funding to which a school
40-7 district would have been entitled includes any amount to which the
40-8 district would have been entitled for that year if former Section
40-9 41.002(e) had been in effect for that year.
40-10 (c) Notwithstanding Subsection (a), a school district is not
40-11 entitled to additional state aid based on the computation of
40-12 average daily attendance under Section 42.005(a) as that subsection
40-13 would have been in effect on September 1, 1997, before amendment of
40-14 this chapter by H.B. No. 4, Acts of the 75th Legislature, Regular
40-15 Session, 1997.
40-16 (d) The commissioner shall determine the amount of
40-17 additional state aid to which a district is entitled by subtracting
40-18 the amount to which the district is entitled under Section
40-19 42.253(a)(1) from the amount to which the district is entitled
40-20 under Subsection (a) and shall award that amount to the district.
40-21 (e) A determination by the commissioner under this section
40-22 is final and not appealable.
40-23 (f) This section expires September 1, 1999.
40-24 Sec. 42.2532. EXPERIENCED TEACHER ALLOTMENT. (a) A
40-25 district in which the average of the minimum salaries of classroom
40-26 teachers and full-time librarians required under the minimum salary
40-27 schedule provided by Section 21.4011 or 21.402 exceeds the average
41-1 minimum salary for classroom teachers and full-time librarians in
41-2 the state multiplied by 1.03 is entitled to an additional allotment
41-3 computed as provided by Subsection (b).
41-4 (b) The amount of the allotment under this section is the
41-5 difference between the total amount of all minimum salaries of
41-6 classroom teachers and full-time librarians in the district less an
41-7 amount equal to the amount those salaries would be if each
41-8 classroom teacher and full-time librarian in the district were paid
41-9 a salary equal to the state average minimum salary multiplied by
41-10 1.03.
41-11 (c) An allotment under this section is payable in the manner
41-12 provided by this chapter for payment of a school district's
41-13 entitlement under the basic program.
41-14 [(l) In this section, the number of students in weighted
41-15 average daily attendance is calculated in the manner provided by
41-16 Section 42.302.]
41-17 Sec. 42.254. ESTIMATES REQUIRED. (a) Not later than
41-18 October 1 of each even-numbered year:
41-19 (1) the agency shall submit to [the foundation school
41-20 fund budget committee and] the legislature an estimate of:
41-21 (A) the tax rate and student enrollment of each
41-22 school district for the following biennium; and
41-23 (B) the expected cost of teacher salaries for
41-24 the following biennium, based on the minimum salary schedule
41-25 provided by Section 21.402 and excluding any projected increase in
41-26 the number of teachers due to growth in student enrollment; and
41-27 (2) the comptroller shall submit to [the foundation
42-1 school fund budget committee and] the legislature an estimate of
42-2 the total taxable value of all property in the state as determined
42-3 under Subchapter M, Chapter 403, Government Code, for the following
42-4 biennium.
42-5 (b) The agency and the comptroller shall update the
42-6 information provided to the legislature under Subsection (a) not
42-7 later than March 1 of each odd-numbered year.
42-8 (c) Not later than September 1 of each year, each school
42-9 district shall submit to the Legislative Budget Board an estimate
42-10 of:
42-11 (1) the district's tax rate that will be in effect for
42-12 that fiscal year;
42-13 (2) the district's student enrollment for that school
42-14 year; and
42-15 (3) the number of teachers in the district for that
42-16 school year at each step of the minimum salary schedule provided by
42-17 Section 21.402.
42-18 Sec. 42.255. FALSIFICATION OF RECORDS; REPORT. When, in the
42-19 opinion of the agency's director of school audits, audits or
42-20 reviews of accounting, enrollment, or other records of a school
42-21 district reveal deliberate falsification of the records, or
42-22 violation of the provisions of this chapter, through which the
42-23 district's share of state funds allocated under the authority of
42-24 this chapter would be, or has been, illegally increased, the
42-25 director shall promptly and fully report the fact to the State
42-26 Board of Education, the state auditor, and the appropriate county
42-27 attorney, district attorney, or criminal district attorney.
43-1 Sec. 42.256 [42.257]. EFFECT OF APPRAISAL APPEAL. (a) If
43-2 the final determination of an appeal under Chapter 42, Tax Code,
43-3 results in a reduction in the taxable value of property for
43-4 purposes of maintenance and operations taxes that exceeds five
43-5 percent of the total taxable value of property for purposes of
43-6 maintenance and operations taxes in the school district for the
43-7 same tax year determined under Section 403.302(d) [Subchapter M,
43-8 Chapter 403], Government Code, the commissioner shall request the
43-9 comptroller to adjust the comptroller's [its] taxable property
43-10 value findings for that year consistent with the final
43-11 determination of the appraisal appeal.
43-12 (b) If the district would have received a greater amount
43-13 from the foundation school fund for the applicable school year
43-14 using the adjusted value, the commissioner shall add the difference
43-15 to subsequent distributions to the district from the foundation
43-16 school fund. An adjustment does not affect the local share [fund
43-17 assignment] of any other district.
43-18 Sec. 42.257 [42.258]. RECOVERY OF OVERALLOCATED FUNDS.
43-19 (a) If a school district has received an overallocation of state
43-20 funds, the agency shall, by withholding from subsequent allocations
43-21 of state funds or by requesting and obtaining a refund, recover
43-22 from the district an amount equal to the overallocation.
43-23 (b) If a district fails to comply with a request for a
43-24 refund under Subsection (a), the agency shall certify to the
43-25 comptroller that the amount constitutes a debt for purposes of
43-26 Section 403.055, Government Code. The agency shall provide to the
43-27 comptroller the amount of the overallocation and any other
44-1 information required by the comptroller. The comptroller may
44-2 certify the amount of the debt to the attorney general for
44-3 collection.
44-4 (c) Any amounts recovered under this section shall be
44-5 deposited in the foundation school fund.
44-6 Sec. 42.258. PENALTY FOR FAILURE TO FULLY COLLECT TAXES.
44-7 (a) As provided by comptroller's rule, the comptroller shall
44-8 determine for each school district the amount of taxes for purposes
44-9 of maintenance and operations that the district would have
44-10 collected during the preceding tax year if:
44-11 (1) the values of the district's appraisals were the
44-12 same as the values determined under Section 403.302(d), Government
44-13 Code; and
44-14 (2) the district had collected all the taxes the
44-15 district levied.
44-16 (b) The comptroller shall certify to the commissioner any
44-17 difference between the amount determined under Subsection (a) and
44-18 the amount of taxes for purposes of maintenance and operations the
44-19 district actually collected for the preceding tax year.
44-20 (c) The commissioner shall reduce a district's state aid
44-21 under this chapter for the current year by any amount certified
44-22 under Subsection (b).
44-23 (d) A school district may appeal to the comptroller the
44-24 comptroller's determination under Subsection (a) if the district's
44-25 failure to collect all the taxes the district levied was due to a
44-26 factor beyond the district's control.
44-27 Sec. 42.259. FOUNDATION SCHOOL FUND TRANSFERS. (a) [In
45-1 this section:]
45-2 [(1) "Category 1 school district" means a school
45-3 district having a wealth per student of less than one-half of the
45-4 statewide average wealth per student.]
45-5 [(2) "Category 2 school district" means a school
45-6 district having a wealth per student of at least one-half of the
45-7 statewide average wealth per student but not more than the
45-8 statewide average wealth per student.]
45-9 [(3) "Category 3 school district" means a school
45-10 district having a wealth per student of more than the statewide
45-11 average wealth per student.]
45-12 [(4) "Wealth per student" means the taxable property
45-13 values reported by the comptroller to the commissioner under
45-14 Section 42.252 divided by the number of students in average daily
45-15 attendance.]
45-16 [(b)] Payments from the foundation school fund to each
45-17 [category 1] school district shall be made as follows:
45-18 (1) 30 [15] percent of the yearly entitlement of the
45-19 district shall be paid in two equal installments [an installment]
45-20 to be made on or before the 25th day of August and September [of a
45-21 fiscal year]; and
45-22 (2) 70 [80] percent of the yearly entitlement of the
45-23 district shall be paid in 10 [eight] equal installments to be made
45-24 on or before the 25th day of October, November, December, January,
45-25 February, March, April, May, June, and July[; and]
45-26 [(3) five percent of the yearly entitlement of the
45-27 district shall be paid in an installment to be made on or before
46-1 the 25th day of February].
46-2 (b) [(c) Payments from the foundation school fund to each
46-3 category 2 school district shall be made as follows:]
46-4 [(1) 22 percent of the yearly entitlement of the
46-5 district shall be paid in an installment to be made on or before
46-6 the 25th day of September of a fiscal year;]
46-7 [(2) 18 percent of the yearly entitlement of the
46-8 district shall be paid in an installment to be made on or before
46-9 the 25th day of October;]
46-10 [(3) 9.5 percent of the yearly entitlement of the
46-11 district shall be paid in an installment to be made on or before
46-12 the 25th day of November;]
46-13 [(4) 7.5 percent of the yearly entitlement of the
46-14 district shall be paid in an installment to be made on or before
46-15 the 25th day of April;]
46-16 [(5) five percent of the yearly entitlement of the
46-17 district shall be paid in an installment to be made on or before
46-18 the 25th day of May;]
46-19 [(6) 10 percent of the yearly entitlement of the
46-20 district shall be paid in an installment to be made on or before
46-21 the 25th day of June;]
46-22 [(7) 13 percent of the yearly entitlement of the
46-23 district shall be paid in an installment to be made on or before
46-24 the 25th day of July; and]
46-25 [(8) 15 percent of the yearly entitlement of the
46-26 district shall be paid in an installment to be made on or before
46-27 the 25th day of August.]
47-1 [(d) Payments from the foundation school fund to each
47-2 category 3 school district shall be made as follows:]
47-3 [(1) 45 percent of the yearly entitlement of the
47-4 district shall be paid in an installment to be made on or before
47-5 the 25th day of September of a fiscal year;]
47-6 [(2) 35 percent of the yearly entitlement of the
47-7 district shall be paid in an installment to be made on or before
47-8 the 25th day of October; and]
47-9 [(3) 20 percent of the yearly entitlement of the
47-10 district shall be paid in an installment to be made on or before
47-11 the 25th day of August.]
47-12 [(e)] The amount of any installment required by this section
47-13 may be modified to provide a school district with the proper amount
47-14 to which the district may be entitled by law and to correct errors
47-15 in the allocation or distribution of funds. If an installment
47-16 under this section is required to be equal to other installments,
47-17 the amount of other installments may be adjusted to provide for
47-18 that equality. A payment under this section is not invalid because
47-19 it is not equal to other installments.
47-20 (c) [(f)] Any previously unpaid additional funds from prior
47-21 years owed to a district shall be paid to the district together
47-22 with the September payment of the current year entitlement.
47-23 (Sections 42.260-42.300 reserved for expansion)
47-24 SUBCHAPTER F [D]. ADMINISTRATIVE COSTS
47-25 Sec. 42.301 [42.201]. LIMIT ON ADMINISTRATIVE COSTS.
47-26 (a) The commissioner by rule shall determine annually:
47-27 (1) an administrative cost ratio for school districts
48-1 with fewer than 500 students in average daily attendance;
48-2 (2) an administrative cost ratio for school districts
48-3 with 500 to 999 students in average daily attendance;
48-4 (3) an administrative cost ratio for school districts
48-5 with 1,000 to 4,999 students in average daily attendance;
48-6 (4) an administrative cost ratio for school districts
48-7 with 5,000 to 9,999 students in average daily attendance; and
48-8 (5) an administrative cost ratio for school districts
48-9 with more than 10,000 students in average daily attendance.
48-10 (b) The commissioner may adjust the administrative cost
48-11 ratio of a district to allow for additional administrative costs
48-12 required by:
48-13 (1) the sparsity of the district; or
48-14 (2) students with special needs.
48-15 (c) Not later than February 1 of each year, the commissioner
48-16 shall notify all districts of the requirements and standards for
48-17 determining administrative cost ratios for the following year. Not
48-18 later than May 1 of each year, agency staff shall conduct a desk
48-19 audit of prior-year expenditure data available through the Public
48-20 Education Information Management System (PEIMS) to identify those
48-21 districts whose administrative cost ratio in the preceding year
48-22 exceeded their adjusted group standard. Districts with an
48-23 administrative cost ratio in excess of their adjusted group
48-24 standard shall be notified not later than May 15 that they have
48-25 excessive administrative costs and that they are required to reduce
48-26 these costs to the level of the adjusted group standard for the
48-27 following school year. Not later than the 60th day after receiving
49-1 notification, a district shall respond to the commissioner by
49-2 submitting a description of the district's plan to comply with the
49-3 standard for the following year or request a waiver from the
49-4 commissioner explaining why the district cannot comply with the
49-5 standard. Not later than August 15, the commissioner shall notify
49-6 responding districts if further action is needed.
49-7 (d) If a school district fails to reduce administrative
49-8 costs to the level required by this section, the commissioner shall
49-9 deduct from a school district's foundation school program
49-10 allocations [tier one allotments] an amount equal to the amount by
49-11 which the district's administrative costs exceed the amount
49-12 permitted by its administrative cost ratio, unless the commissioner
49-13 has granted a waiver in response to the district's request. The
49-14 commissioner shall make a deduction under this subsection from the
49-15 foundation school fund payments to the district in the school year
49-16 following the school year in which the plan to reduce costs was to
49-17 be implemented. If a school district does not receive a foundation
49-18 school program allocation [tier one allotment], the district shall
49-19 remit an amount equal to the excess to the comptroller for deposit
49-20 to the credit of the foundation school fund.
49-21 (e) The commissioner may grant a waiver to a school district
49-22 that exceeds its administrative cost ratio if the excess is
49-23 justified by unusual circumstances.
49-24 (f) A school district shall include a statement of any
49-25 amount withheld or remitted under Subsection (d) in the district
49-26 report required by Section 39.053.
49-27 (g) In this section:
50-1 (1) "Administrative cost ratio" means a school
50-2 district's administrative costs divided by its instructional costs,
50-3 expressed as a percentage.
50-4 (2) "Administrative costs" are defined as operating
50-5 expenses made from funds other than federal funds associated with
50-6 managing, planning, directing, coordinating, and evaluating a
50-7 school district in accordance with Accounting functions 21 --
50-8 Instructional Leadership, and 41 -- General Administration, as
50-9 described in the Financial Accountability Resource guide, Bulletin
50-10 679, Module 1: Financial Accounting and Reporting, First Edition,
50-11 published by the Texas Education Agency.
50-12 (3) "Instructional costs" are defined as operating
50-13 expenses made from funds other than federal funds associated with
50-14 teacher-student instruction in accordance with Accounting functions
50-15 11 -- Instruction, 12 -- Instructional Resources and Media
50-16 Services, 13 -- Curriculum Development and Instructional Staff
50-17 Development, and 31 -- Guidance and Counseling Services, as
50-18 described in the Financial Accountability Resource guide, Bulletin
50-19 679, Module 1: Financial Accounting and Reporting, First Edition,
50-20 published by the Texas Education Agency.
50-21 (4) "Adjusted group standard" is the acceptable
50-22 administrative cost ratio for each district as determined in
50-23 accordance with Subsections (a) and (b).
50-24 (Sections 42.302 [42.305]-42.350 reserved for expansion)
50-25 SUBCHAPTER G. ENRICHMENT GUARANTEED YIELD
50-26 Sec. 42.351. PURPOSE. The purpose of the enrichment
50-27 guaranteed yield component of the Foundation School Program is to
51-1 provide each school district with the opportunity to supplement the
51-2 basic program at a level of its own choice. Except as provided by
51-3 Section 42.354, an allotment under this subchapter may be used for
51-4 any legal purpose, including capital outlay and debt service.
51-5 Sec. 42.352. ALLOTMENT. Each school district is guaranteed
51-6 a specified amount per student in state and local funds for each
51-7 cent of tax effort up to the maximum level specified in this
51-8 subchapter. The amount of state support is determined by the
51-9 formula:
51-10 GYA = (GL X AADA X DTR X 100) - LR
51-11 where:
51-12 "GYA" is the guaranteed yield amount of state funds to be
51-13 allocated to the district;
51-14 "GL" is the dollar amount guaranteed level of state and local
51-15 funds per student per cent of tax effort, which is $9 or a greater
51-16 amount for any year provided by appropriation;
51-17 "AADA" is the number of students in adjusted average daily
51-18 attendance, which is computed by dividing the amount of the
51-19 district's adjusted basic program under Subchapter B by the
51-20 guaranteed level of state and local funds per student per cent of
51-21 tax effort provided by Section 42.101;
51-22 "DTR" is the rate of the district educational enrichment tax
51-23 levied in accordance with Section 45.0031(b); and
51-24 "LR" is the local revenue, which is determined by multiplying
51-25 "DTR" by the quotient of the district's taxable value of property
51-26 for the current year for purposes of maintenance and operations
51-27 taxes determined under Section 403.302(d), Government Code, as
52-1 applicable, divided by 100.
52-2 Sec. 42.353. DISTRIBUTION OF SUPPLEMENTAL GUARANTEED YIELD.
52-3 (a) For each school year the commissioner shall determine the
52-4 guaranteed yield amount of state funds to which a school district
52-5 is entitled under Section 42.352.
52-6 (b) Except as otherwise provided by this subsection, the
52-7 commissioner shall base the determination under Subsection (a) on
52-8 the estimates provided to the legislature under Section 42.254 for
52-9 each school district for each school year. The commissioner shall
52-10 reduce the entitlement of each district that has a final taxable
52-11 value of property for the second year of a state fiscal biennium
52-12 that is higher than the estimate under Section 42.254. A reduction
52-13 under this subsection may not reduce the district's entitlement
52-14 below the amount to which it is entitled at its actual taxable
52-15 value of property. The sum of the reductions under this subsection
52-16 may not be greater than the amount necessary to fully fund the
52-17 entitlement of each district.
52-18 (c) The amount to which a district is entitled under this
52-19 section may not exceed the amount to which the district would be
52-20 entitled at the district's tax rate for the final year of the
52-21 preceding biennium, or a different tax rate provided by
52-22 appropriation.
52-23 (c-1) Notwithstanding Subsection (c), the amount to which a
52-24 district is entitled under this section for the 1997-1998 and
52-25 1998-1999 school years may not exceed the amount to which the
52-26 district would be entitled at the maximum tax rate permitted under
52-27 Section 26.08(g)(1) or (2)(A), Tax Code, for the district for the
53-1 1997 tax year. This subsection expires September 1, 1999.
53-2 (d) The commissioner shall approve warrants to each school
53-3 district equaling the amount of the district's entitlement as
53-4 determined under Subsection (a) except as otherwise provided by
53-5 this section. Warrants for all money spent according to this
53-6 chapter shall be approved and transmitted as provided by Subchapter
53-7 E. The total amount of the warrants issued under this section may
53-8 not exceed the total amount appropriated for purposes of the
53-9 supplemental guaranteed yield for that fiscal year.
53-10 (e) If the total amount of state funds allocated to
53-11 districts under this subchapter for a fiscal year exceeds the
53-12 amount appropriated for that year and there are not funds available
53-13 under Subsection (g), the commissioner shall reduce the total
53-14 amount of state funds allocated to each district by an amount
53-15 determined by a method under which the application of the same
53-16 number of cents of increase in tax rate in all districts applied to
53-17 the taxable value of property of each district for purposes of
53-18 maintenance and operations, as determined under Section 403.302(d),
53-19 Government Code, results in a total levy equal to the total
53-20 reduction. The following fiscal year, a district's entitlement
53-21 under this section is increased by an amount equal to the reduction
53-22 made under this subsection.
53-23 (f) Not later than March 1 each year, the commissioner shall
53-24 determine the actual amount of state funds to which each school
53-25 district is entitled under this subchapter for the current school
53-26 year and shall compare that amount with the amount of the warrants
53-27 issued to the district under this section for that year. If the
54-1 amount of the warrants differs from the amount to which a district
54-2 is entitled because of variations in the district's tax rate,
54-3 student enrollment, or taxable value of property, the commissioner
54-4 shall adjust the district's entitlement for the next fiscal year
54-5 accordingly.
54-6 (g) The legislature may appropriate funds necessary for
54-7 increases under Subsection (f) from funds that the comptroller, at
54-8 any time during the fiscal year, finds are available.
54-9 (h) Section 42.258 applies to district educational
54-10 enrichment taxes in the same manner as it applies to maintenance
54-11 and operations taxes.
54-12 Sec. 42.354. ALLOTMENT FOR EXISTING DEBT. (a) Each school
54-13 district is guaranteed a specified amount in state and local funds
54-14 for each cent of tax effort levied for purposes of debt service on
54-15 bonds authorized before September 1, 1997, up to the maximum level
54-16 specified by this section. The amount of state support is
54-17 determined by the formula:
54-18 GYA = (GL X ADA X DTR X 100) - LR
54-19 where:
54-20 "GYA" is the guaranteed yield amount of state funds to be
54-21 allocated to the district;
54-22 "GL" is $21.35 or a greater amount for any year provided by
54-23 appropriation;
54-24 "ADA" is the number of students in average daily attendance
54-25 as determined under Section 42.005;
54-26 "DTR" is the district existing debt tax rate; and
54-27 "LR" is determined by multiplying "DTR" by the quotient of
55-1 the district's taxable value of property for the current year for
55-2 purposes of debt service taxes determined under Section 403.302(e),
55-3 Government Code, divided by 100.
55-4 (b) Sections 46.003(b) and (c) apply to taxes for which a
55-5 district receives state assistance under this section.
55-6 (c) If the amount appropriated for purposes of this section
55-7 for a year is less than the total amount to which each school
55-8 district is entitled under Subsection (a) for that year, the
55-9 commissioner shall:
55-10 (1) transfer from the basic program to the enrichment
55-11 program the amount by which the total amount to which districts are
55-12 entitled under Subsection (a) exceeds the amount appropriated; and
55-13 (2) reduce each district's basic program allocations
55-14 in the manner provided by Section 42.253.
55-15 (d) A district may use state funds received under this
55-16 section only to pay the principal of and interest on the bonds for
55-17 which the district receives the funds.
55-18 (e) As soon as practicable after September 1 of each year,
55-19 the commissioner shall distribute to each school district the
55-20 amount of state assistance under this section to which the
55-21 commissioner has determined the district is entitled for the school
55-22 year. The district shall deposit the money in the interest and
55-23 sinking fund for the bonds for which the assistance is received and
55-24 shall adopt a tax rate for purposes of debt service that takes into
55-25 account the balance of the interest and sinking fund.
55-26 Sec. 42.355. LIMITATION ON TAX RATE. The sum of the
55-27 district enrichment tax rate under Section 42.352 and the existing
56-1 debt tax rate under Section 42.354 may not exceed $0.10 per $100 of
56-2 valuation.
56-3 [SUBCHAPTER G. SCHOOL FACILITIES INVENTORY AND STANDARDS]
56-4 [Sec. 42.351. INVENTORY OF SCHOOL FACILITIES. (a) The
56-5 State Board of Education shall establish a statewide inventory of
56-6 school facilities and shall update the inventory on a periodic
56-7 basis.]
56-8 [(b) The inventory shall include information on the
56-9 condition, use, type, and replacement cost of public school
56-10 facilities in this state.]
56-11 [Sec. 42.352. STANDARDS. The State Board of Education shall
56-12 establish standards for adequacy of school facilities. The
56-13 standards shall include requirements related to space, educational
56-14 adequacy, and construction quality. All facilities constructed
56-15 after September 1, 1992, must meet the standards in order to be
56-16 financed with state or local tax funds.]
56-17 [SUBCHAPTER H. SCHOOL FACILITIES ASSISTANCE PROGRAM]
56-18 [Sec. 42.401. DEFINITIONS. In this subchapter:]
56-19 [(1) "Effective tax rate" means a tax rate that is
56-20 determined by dividing the amount of taxes collected by a school
56-21 district by the quotient of the district's taxable value of
56-22 property, as determined under Subchapter M, Chapter 403, Government
56-23 Code, divided by 100.]
56-24 [(2) "Guaranteed wealth level" means a wealth per
56-25 student determined by the following formula:]
56-26 [GWL = (GL X 10,000) X (SWADA/SADA)]
56-27 [where:]
57-1 ["GWL" is the guaranteed wealth level;]
57-2 ["GL" is the dollar amount guaranteed level of state and
57-3 local funds per weighted student per cent of tax effort, as
57-4 provided by Section 42.302;]
57-5 ["SWADA" is the total weighted average daily attendance,
57-6 determined in the manner provided by Section 42.302, for all school
57-7 districts in the state; and]
57-8 ["SADA" is the total average daily attendance for all school
57-9 districts in the state.]
57-10 [(3) "Instructional facility" means real property, an
57-11 improvement to real property, or a necessary fixture of an
57-12 improvement to real property that is used predominantly for
57-13 teaching the curriculum required under Section 28.002.]
57-14 [(4) "Wealth per student" means a school district's
57-15 taxable value of property, as determined under Subchapter M,
57-16 Chapter 403, Government Code, divided by the district's average
57-17 daily attendance.]
57-18 [Sec. 42.402. DISTRICT ELIGIBILITY. A school district is
57-19 eligible for state assistance under this subchapter if the district
57-20 has:]
57-21 [(1) a wealth per student less than the guaranteed
57-22 wealth level; and]
57-23 [(2) a total effective tax rate that is at least $1.30
57-24 per $100 of valuation of taxable property or an effective tax rate
57-25 for the payment of principal of and interest on bonds that is at
57-26 least $0.20 per $100 of valuation of taxable property.]
57-27 [Sec. 42.403. AMOUNT OF STATE ASSISTANCE. Except as
58-1 provided by Section 42.404, the amount of state assistance to which
58-2 a school district is entitled for an eligible project is determined
58-3 by the following formula:]
58-4 [SA = (1 - (WPS/GWL)) X PC]
58-5 [where:]
58-6 ["SA" is the amount of state assistance;]
58-7 ["WPS" is the district's wealth per student;]
58-8 ["GWL" is the guaranteed wealth level; and]
58-9 ["PC" is the total cost of the project, excluding financing
58-10 costs.]
58-11 [Sec. 42.404. SUPPLEMENTAL STATE ASSISTANCE FOR SMALL SCHOOL
58-12 DISTRICTS. (a) In addition to the amount determined under Section
58-13 42.403, a district is entitled to supplemental state assistance if
58-14 the district's average daily attendance is less than the product of
58-15 the quotient of the average daily attendance for all school
58-16 districts in the state, as determined under Section 42.401, divided
58-17 by the weighted average daily attendance for all school districts
58-18 in the state, as determined under Section 42.401, multiplied by
58-19 2,500. The amount of supplemental state assistance to which a
58-20 school district is entitled is the lesser of the amounts determined
58-21 by the following formulas:]
58-22 [SSA = PC - SA - (.002 X DPV X PC/500,000)]
58-23 [where:]
58-24 ["SSA" is the amount of supplemental state assistance;]
58-25 ["SA" is the amount of state assistance determined under
58-26 Section 42.403;]
58-27 ["DPV" is the district's taxable value of property, as
59-1 determined under Subchapter M, Chapter 403, Government Code; and]
59-2 ["PC" is the total cost of the project; or]
59-3 [SSA = PC - SA - (0.15 X PC)]
59-4 [where:]
59-5 ["SSA" is the amount of supplemental state assistance;]
59-6 ["SA" is the amount of state assistance determined under
59-7 Section 42.403; and]
59-8 ["PC" is the total cost of the project.]
59-9 [(b) If the lesser of the amounts determined by the formulas
59-10 in Subsection (a) is less than zero, the district is not entitled
59-11 to supplemental state assistance.]
59-12 [Sec. 42.405. PROJECT ELIGIBILITY AND APPROVAL. (a) A
59-13 project must be an instructional facility to be eligible for state
59-14 assistance under this subchapter.]
59-15 [(b) A district is entitled to state assistance under this
59-16 subchapter for only one project in a state fiscal biennium.]
59-17 [(c) To receive state assistance under this subchapter, a
59-18 school district must submit to the commissioner a proposal that
59-19 contains the information required by rule of the commissioner.]
59-20 [(d) A school district must submit a proposal by the date
59-21 established by rule of the commissioner.]
59-22 [(e) The commissioner shall review each proposal and approve
59-23 those proposals that meet the requirements of this subchapter and
59-24 the commissioner's rules.]
59-25 [(f) If the amount of state assistance for an approved
59-26 project is insufficient to enable the school district to finance
59-27 the remainder from other funds, the district may modify the project
60-1 to reduce its cost and may resubmit the proposal.]
60-2 [Sec. 42.406. LIMITATION ON ASSISTANCE. (a) The cost of a
60-3 project for which a district may receive assistance under this
60-4 subchapter may not exceed the greater of:]
60-5 [(1) $500,000; or]
60-6 [(2) the product of the number of students in average
60-7 daily attendance in the district multiplied by $266.]
60-8 [(b) For purposes of Sections 42.403, 42.404, and 42.407, a
60-9 project that has a cost that exceeds the limit prescribed by
60-10 Subsection (a) is treated as if the cost equals the applicable
60-11 limit.]
60-12 [Sec. 42.407. SHORTAGE OF APPROPRIATED FUNDS. If the total
60-13 state assistance for approved projects in a state fiscal biennium
60-14 exceeds the amount appropriated for that biennium, the commissioner
60-15 shall remove from the list of approved projects one or more
60-16 projects in ascending order of the proportion of state assistance
60-17 to project cost, beginning with the project that has the lowest
60-18 proportion of state assistance to project cost, until the total
60-19 state assistance for approved projects is less than or equal to the
60-20 amount appropriated. If, after removing approved projects from the
60-21 list, the total state assistance is less than the amount
60-22 appropriated, the commissioner shall grant the difference to the
60-23 district that proposed the last project removed from the list.]
60-24 [Sec. 42.408. USE OF EXCESS APPROPRIATED FUNDS. If the
60-25 total state assistance for approved projects in a state fiscal
60-26 biennium is less than the amount appropriated for that biennium,
60-27 the commissioner may use the excess amount for any purpose under
61-1 the Foundation School Program.]
61-2 [Sec. 42.409. PAYMENT OF STATE ASSISTANCE. (a) The
61-3 commissioner shall approve warrants to a school district that
61-4 receives state assistance under this subchapter as necessary to
61-5 permit the district to meet contractual obligations as construction
61-6 or renovation progresses.]
61-7 [(b) The commissioner may not approve a warrant for
61-8 assistance under this subchapter until the district provides the
61-9 commissioner with information concerning the manner in which the
61-10 district will pay the local share of the project cost. The
61-11 information must include the number of years:]
61-12 [(1) for which the district will have bonds
61-13 outstanding in connection with the project; or]
61-14 [(2) in which the district will be making payments
61-15 under a lease-purchase agreement in connection with the project.]
61-16 [(c) If the commissioner determines that a district has
61-17 altered a project in a manner that reduces the cost of the project
61-18 below the cost stated in the proposal, the commissioner shall
61-19 recompute the amount of state assistance to which the district is
61-20 entitled based on the reduced project cost and approve warrants to
61-21 the district accordingly.]
61-22 [Sec. 42.410. ADDITIONAL STATE ASSISTANCE. (a) If the
61-23 guaranteed wealth level is increased over the level for the year in
61-24 which a school district received assistance under this subchapter,
61-25 for each year to which the increased level applies and in which the
61-26 district levies a tax to pay for the local share of the cost of the
61-27 project for which the district received state assistance under this
62-1 subchapter, the district is entitled to additional state assistance
62-2 determined by the formula:]
62-3 [ASA = (GL X (SWADA/SADA) X ADA X PTR X 100) - LPR - ((SA +
62-4 SSA)/PY)]
62-5 [where:]
62-6 ["ASA" is the amount of additional state assistance;]
62-7 ["GL" is the dollar amount guaranteed level of state and
62-8 local funds per weighted student per cent of tax effort, as
62-9 provided by Section 42.302;]
62-10 ["SWADA" is the total number of students in weighted average
62-11 daily attendance in the district, determined in the manner provided
62-12 by Section 42.302, for all school districts in the state;]
62-13 ["SADA" is the total average daily attendance for all school
62-14 districts in the state;]
62-15 ["ADA" is the district's average daily attendance;]
62-16 ["PTR" is the project tax rate of the district, which is
62-17 calculated by dividing the amount necessary for annual payments:]
62-18 [(1) on the principal and interest of bonds issued to
62-19 finance the local share of the project; or]
62-20 [(2) under a lease-purchase agreement for the local
62-21 share of the project;]
62-22 [by the DPV as defined in Section 42.404;]
62-23 ["LPR" is the local project revenue, which is determined by
62-24 multiplying "PTR" by the quotient of the district's taxable value
62-25 of property, as determined under Subchapter M, Chapter 403,
62-26 Government Code, divided by 100;]
62-27 ["SA" is the state assistance allocated to the district under
63-1 Section 42.403;]
63-2 ["SSA" is the supplemental state assistance allocated to the
63-3 district under Section 42.404; and]
63-4 ["PY" is the number of years for which the district must levy
63-5 a tax to pay for the local share of the project cost, as reported
63-6 to the commissioner under Section 42.409(b).]
63-7 [(b) A district may use assistance received under this
63-8 section for any legal purpose.]
63-9 [(c) Assistance under this subsection shall be paid in the
63-10 manner prescribed by Section 42.253.]
63-11 [Sec. 42.411. PROJECTS BY MORE THAN ONE DISTRICT. (a) Two
63-12 or more eligible districts may submit a proposal for a joint
63-13 project at a single location.]
63-14 [(b) The state assistance for a joint project is the amount
63-15 specified by Section 42.403, except that wealth per student is the
63-16 quotient of the sum of the taxable values of property of the
63-17 districts divided by the sum of the districts' average daily
63-18 attendances.]
63-19 [(c) The supplemental state assistance for a joint project
63-20 is the sum of the assistance under Section 42.404 for each district
63-21 participating in the joint project that is eligible under Section
63-22 42.404, except that:]
63-23 [(1) the result of the applicable formula in that
63-24 section for each district is multiplied by the ratio of the
63-25 district's average daily attendance to the total average daily
63-26 attendance for all the districts in the project; and]
63-27 [(2) "500,000" is replaced by (600,000 x N), where "N"
64-1 is the number of districts in the project.]
64-2 [(d) The limitation on assistance for a joint project is 20
64-3 percent greater than the sum of the limitations for each district
64-4 prescribed by Section 42.406.]
64-5 SECTION 1.03. Title 2, Education Code, is amended by adding
64-6 Chapter 46 to read as follows:
64-7 CHAPTER 46. INSTRUCTIONAL FACILITIES ALLOTMENT
64-8 Sec. 46.001. DEFINITION. In this chapter, "instructional
64-9 facility" means real property, an improvement to real property, or
64-10 a necessary fixture of an improvement to real property that is used
64-11 predominantly for teaching the curriculum required under Section
64-12 28.002.
64-13 Sec. 46.002. RULES. (a) The commissioner may adopt rules
64-14 for the administration of this chapter.
64-15 (b) The commissioner's rules may limit the amount of an
64-16 allotment under this chapter that is to be used to construct,
64-17 acquire, renovate, or improve an instructional facility that may
64-18 also be used for noninstructional or extracurricular activities.
64-19 Sec. 46.003. SCHOOL FACILITIES ALLOTMENT. (a) For each
64-20 year, except as provided by Sections 46.005 and 46.006, a school
64-21 district is guaranteed a specified amount per student in state and
64-22 local funds for each cent of tax effort, up to the maximum rate
64-23 under Subsection (b), to pay the principal of and interest on
64-24 eligible bonds issued to construct, acquire, renovate, or improve
64-25 an instructional facility. The amount of state support is
64-26 determined by the formula:
64-27 FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
65-1 where:
65-2 "FYA" is the guaranteed facilities yield amount of state
65-3 funds allocated to the district for the year;
65-4 "FYL" is the dollar amount guaranteed level of state and
65-5 local funds per student per cent of tax effort, which is $36.40 or
65-6 a greater amount for any year provided by appropriation;
65-7 "ADA" is the number of students in average daily attendance,
65-8 as determined under Section 42.005, in the district;
65-9 "BTR" is the district's bond tax rate for the current year,
65-10 determined as provided by Subsection (b); and
65-11 "DPV" is the district's taxable value of property for the
65-12 current year for purposes of debt service taxes as determined under
65-13 Section 403.302(e), Government Code.
65-14 (b) The bond tax rate under Subsection (a) may not exceed
65-15 the rate that would be necessary for the current year, using state
65-16 funds under Subsection (a), to make payments of principal and
65-17 interest on the bonds for which the tax is pledged if:
65-18 (1) the values of the district's appraisals were the
65-19 same as the values determined under Section 403.302(e), Government
65-20 Code; and
65-21 (2) the district had collected all the bond taxes the
65-22 district levied.
65-23 (c) To enable the district to collect local funds sufficient
65-24 to pay the district's share of the debt service, a district may
65-25 levy a bond tax at a rate higher than the maximum rate for which it
65-26 may receive state assistance.
65-27 (d) Bonds are eligible to be paid with state and local funds
66-1 under this section if the bonds:
66-2 (1) are authorized on or after September 1, 1997; and
66-3 (2) do not have a weighted average maturity of less
66-4 than eight years and may not be called for redemption earlier than
66-5 10 years after the date of issuance.
66-6 (e) A district may use state funds received under this
66-7 section only to pay the principal of and interest on the bonds for
66-8 which the district received the funds.
66-9 (f) The board of trustees and voters of a school district
66-10 shall determine district needs concerning construction,
66-11 acquisition, renovation, or improvement of instructional
66-12 facilities.
66-13 (g) To receive state assistance under this chapter, a school
66-14 district must apply to the commissioner in accordance with rules
66-15 adopted by the commissioner before issuing bonds that will be paid
66-16 with state assistance. Until the bonds are fully paid or the
66-17 instructional facility is sold:
66-18 (1) a school district is entitled to continue
66-19 receiving state assistance without reapplying to the commissioner;
66-20 and
66-21 (2) the guaranteed level of state and local funds per
66-22 student per cent of tax effort applicable to the bonds may not be
66-23 reduced below the level provided for the year in which the bonds
66-24 were issued.
66-25 Sec. 46.004. LEASE-PURCHASE AGREEMENTS. (a) A district may
66-26 receive state assistance in connection with a lease-purchase
66-27 agreement concerning an instructional facility. For purposes of
67-1 this chapter:
67-2 (1) taxes levied for purposes of maintenance and
67-3 operations that are necessary to pay a district's share of the
67-4 payments under a lease-purchase agreement for which the district
67-5 receives state assistance under this chapter are considered to be
67-6 bond taxes; and
67-7 (2) payments under a lease-purchase agreement are
67-8 considered to be payments of principal of and interest on bonds.
67-9 (b) Section 46.003(b) applies to taxes levied to pay a
67-10 district's share of the payments under a lease-purchase agreement
67-11 for which the district receives state assistance under this
67-12 chapter.
67-13 (c) A lease-purchase agreement must be for a term of at
67-14 least eight years to be eligible to be paid with state and local
67-15 funds under this chapter.
67-16 Sec. 46.005. LIMITATION ON GUARANTEED AMOUNT. In any state
67-17 fiscal biennium, the guaranteed amount of state and local funds
67-18 under Section 46.003 for a school district may not exceed the
67-19 lesser of:
67-20 (1) the amount the actual debt service payments the
67-21 district makes in the biennium in which the bonds are issued; or
67-22 (2) the greater of:
67-23 (A) $100,000; or
67-24 (B) the product of the number of students in
67-25 average daily attendance in the district multiplied by $250.
67-26 Sec. 46.006. SHORTAGE OR EXCESS OF FUNDS APPROPRIATED FOR
67-27 NEW PROJECTS. (a) If the total amount appropriated for a year for
68-1 new projects is less than the amount of money to which school
68-2 districts applying for state assistance are entitled for that year,
68-3 the commissioner shall rank each school district applying by wealth
68-4 per student. For purposes of this section, a district's wealth per
68-5 student is reduced by 10 percent for each state fiscal biennium in
68-6 which the district did not receive assistance under this chapter.
68-7 The commissioner shall adjust the rankings after making the
68-8 reductions in wealth per student required by this subsection.
68-9 (b) Beginning with the district with the lowest adjusted
68-10 wealth per student that has applied for state assistance for the
68-11 year, the commissioner shall award state assistance to districts
68-12 that have applied for state assistance in ascending order of
68-13 adjusted wealth per student. The commissioner shall award the full
68-14 amount of state assistance to which a district is entitled under
68-15 this chapter, except that the commissioner may award less than the
68-16 full amount to the last district for which any funds are available.
68-17 (c) Any amount appropriated for the first year of a fiscal
68-18 biennium that is not awarded to a school district may be used to
68-19 provide assistance in the following fiscal year.
68-20 (d) In this section, "wealth per student" means a school
68-21 district's taxable value of property for purposes of debt service
68-22 taxes, as determined under Section 403.302(e), Government Code,
68-23 divided by the district's average daily attendance as determined
68-24 under Section 42.005.
68-25 Sec. 46.007. REFUNDING BONDS. A school district may use
68-26 state funds received under this chapter to pay the principal of and
68-27 interest on refunding bonds that:
69-1 (1) are issued to refund bonds eligible under Section
69-2 46.003;
69-3 (2) do not have a final maturity date later than the
69-4 final maturity date of the bonds being refunded;
69-5 (3) may not be called for redemption earlier than the
69-6 earliest call date of the bonds being refunded; and
69-7 (4) result in a present value savings, which is
69-8 determined by computing the net present value of the difference
69-9 between each scheduled payment on the original bonds and each
69-10 scheduled payment on the refunding bonds. The present value
69-11 savings shall be computed at the true interest cost of the
69-12 refunding bonds.
69-13 Sec. 46.008. STANDARDS. The commissioner shall establish
69-14 standards for adequacy of school facilities. The standards must
69-15 include requirements related to space, educational adequacy, and
69-16 construction quality. All facilities constructed after September
69-17 1, 1998, must meet the standards to be eligible to be financed with
69-18 state or local tax funds.
69-19 Sec. 46.009. PAYMENT OF SCHOOL FACILITIES ALLOTMENTS. (a)
69-20 For each school year, the commissioner shall determine the amount
69-21 of money to which each school district is entitled under this
69-22 chapter.
69-23 (b) If the amount appropriated for purposes of Section
69-24 46.003 for a year is less than the total amount determined under
69-25 Subsection (a) for that year, the commissioner shall:
69-26 (1) transfer from the Foundation School Program to the
69-27 instructional facilities program the amount by which the total
70-1 amount determined under Subsection (a) exceeds the amount
70-2 appropriated; and
70-3 (2) reduce each district's foundation school fund
70-4 allocations in the manner provided by Section 42.253.
70-5 (c) Warrants for payments under this chapter shall be
70-6 approved and transmitted to school district treasurers or
70-7 depositories in the same manner as warrants for payments under
70-8 Chapter 42.
70-9 (d) As soon as practicable after September 1 of each year,
70-10 the commissioner shall distribute to each school district the
70-11 amount of state assistance under this chapter to which the
70-12 commissioner has determined the district is entitled for the school
70-13 year. The district shall deposit the money in the interest and
70-14 sinking fund for the bonds for which the assistance is received and
70-15 shall adopt a tax rate for purposes of debt service that takes into
70-16 account the balance of the interest and sinking fund.
70-17 (e) Section 42.257 applies to payments under this chapter.
70-18 Sec. 46.010. PENALTY FOR FAILURE TO FULLY COLLECT TAXES.
70-19 (a) As provided by comptroller's rule, the comptroller shall
70-20 determine for each school district the amount of taxes for purposes
70-21 of eligible debt service that the district would have collected
70-22 during the preceding tax year if:
70-23 (1) the values of the district's appraisals were the
70-24 same as the values determined under Section 403.302(e), Government
70-25 Code; and
70-26 (2) the district had collected all the taxes the
70-27 district levied.
71-1 (b) The comptroller shall certify to the commissioner any
71-2 difference between the amount determined under Subsection (a) and
71-3 the amount of taxes for purposes of debt service the district
71-4 actually collected for the preceding tax year.
71-5 (c) The commissioner shall reduce a district's state aid
71-6 under Chapter 42 for the current year by any amount certified under
71-7 Subsection (b).
71-8 (d) A school district may appeal to the comptroller the
71-9 comptroller's determination under Subsection (a) if the district's
71-10 failure to collect all the taxes the district levied was due to a
71-11 factor beyond the district's control.
71-12 Sec. 46.011. PROJECTS BY MORE THAN ONE DISTRICT. If two or
71-13 more districts apply for state assistance in connection with a
71-14 joint project at a single location, each district is entitled to a
71-15 guaranteed facilities yield amount of state and local funds that is
71-16 20 percent higher than the amount to which the district would
71-17 otherwise be entitled under Section 46.005.
71-18 Sec. 46.012. SALE OF INSTRUCTIONAL FACILITY FINANCED WITH
71-19 INSTRUCTIONAL FACILITIES ALLOTMENT. (a) If an instructional
71-20 facility financed by bonds paid with state and local funds under
71-21 this chapter is sold before the bonds are fully paid, the school
71-22 district shall send to the comptroller an amount equal to the
71-23 district's net proceeds from the sale multiplied by a percentage
71-24 determined by dividing the amount of state funds under this
71-25 subchapter used to pay the principal of and interest on the bonds
71-26 by the total amount of principal and interest paid on the bonds
71-27 with funds other than the proceeds of the sale.
72-1 (b) In this section, "net proceeds" means the difference
72-2 between the total amount received from the sale less:
72-3 (1) the amount necessary to fully pay the outstanding
72-4 principal of and interest on the bonds; and
72-5 (2) the school district's costs of the sale, as
72-6 approved by the commissioner.
72-7 SECTION 1.04. Section 7.024(a), Education Code, is amended
72-8 to read as follows:
72-9 (a) The investment capital fund consists of money
72-10 appropriated [transferred] to the fund [as provided by Section
72-11 42.152(l)]. The agency shall administer the fund. The purposes
72-12 of this fund are to assist eligible public schools to implement
72-13 practices and procedures consistent with deregulation and school
72-14 restructuring in order to improve student achievement and to help
72-15 schools identify and train parents and community leaders who will
72-16 hold the school and the school district accountable for achieving
72-17 high academic standards.
72-18 SECTION 1.05. Section 12.013(b), Education Code, is amended
72-19 to read as follows:
72-20 (b) A home-rule school district is subject to:
72-21 (1) a provision of this title establishing a criminal
72-22 offense;
72-23 (2) a provision of this title relating to limitations
72-24 on liability; and
72-25 (3) a prohibition, restriction, or requirement, as
72-26 applicable, imposed by this title or a rule adopted under this
72-27 title, relating to:
73-1 (A) the Public Education Information Management
73-2 System (PEIMS) to the extent necessary to monitor compliance with
73-3 this subchapter as determined by the commissioner;
73-4 (B) educator certification under Chapter 21 and
73-5 educator rights under Sections 21.407, 21.408, and 22.001;
73-6 (C) criminal history records under Subchapter C,
73-7 Chapter 22;
73-8 (D) student admissions under Section 25.001;
73-9 (E) school attendance under Sections 25.085,
73-10 25.086, and 25.087;
73-11 (F) inter-district or inter-county transfers of
73-12 students under Subchapter B, Chapter 25;
73-13 (G) elementary class size limits under Section
73-14 25.112, in the case of any campus in the district that is
73-15 considered low-performing under Section 39.131(b);
73-16 (H) high school graduation under Section 28.025;
73-17 (I) special education programs under Subchapter
73-18 A, Chapter 29;
73-19 (J) bilingual education under Subchapter B,
73-20 Chapter 29;
73-21 (K) prekindergarten programs under Subchapter E,
73-22 Chapter 29;
73-23 (L) safety provisions relating to the
73-24 transportation of students under Sections 34.002, 34.003, 34.004,
73-25 and 34.008;
73-26 (M) computation and distribution of state aid
73-27 under Chapters 31, 42, and 43;
74-1 (N) extracurricular activities under Section
74-2 33.081;
74-3 (O) health and safety under Chapter 38;
74-4 (P) public school accountability under
74-5 Subchapters B, C, D, and G, Chapter 39;
74-6 (Q) [equalized wealth under Chapter 41;]
74-7 [(R)] a bond or other obligation or tax rate
74-8 under Chapters 42, 43, and 45; and
74-9 (R) [(S)] purchasing under Chapter 44.
74-10 SECTION 1.06. Section 12.016, Education Code, is amended to
74-11 read as follows:
74-12 Sec. 12.016. CONTENT. Each home-rule school district
74-13 charter must:
74-14 (1) describe the educational program to be offered;
74-15 (2) provide that continuation of the home-rule school
74-16 district charter is contingent on:
74-17 (A) acceptable student performance on assessment
74-18 instruments adopted under Subchapter B, Chapter 39; and
74-19 (B) compliance with other applicable
74-20 accountability provisions under Chapter 39;
74-21 (3) specify any basis, in addition to a basis
74-22 specified by this subchapter, on which the charter may be placed on
74-23 probation or revoked;
74-24 (4) describe the governing structure of the district
74-25 and campuses;
74-26 (5) specify any procedure or requirement, in addition
74-27 to those under Chapter 38, that the district will follow to ensure
75-1 the health and safety of students and employees;
75-2 (6) describe the process by which the district will
75-3 adopt an annual budget, including a description of the use of
75-4 [program-weight] funds for programs under Subchapters A-D and F,
75-5 Chapter 29;
75-6 (7) describe the manner in which an annual audit of
75-7 financial and programmatic operations of the district is to be
75-8 conducted, including the manner in which the district will provide
75-9 information necessary for the district to participate in the Public
75-10 Education Information Management System (PEIMS) to the extent
75-11 required by this subchapter; and
75-12 (8) include any other provision the charter commission
75-13 considers necessary.
75-14 SECTION 1.07. Section 12.029(b), Education Code, is amended
75-15 to read as follows:
75-16 (b) If [Except as provided by Subchapter H, Chapter 41, if]
75-17 two or more school districts having different status, one of which
75-18 is home-rule school district status, consolidate into a single
75-19 district, the petition under Section 13.003 initiating the
75-20 consolidation must state the status for the consolidated district.
75-21 The ballot shall be printed to permit voting for or against the
75-22 proposition: "Consolidation of (names of school districts) into a
75-23 single school district governed as (status of school district
75-24 specified in the petition)."
75-25 SECTION 1.08. Section 12.106, Education Code, is amended to
75-26 read as follows:
75-27 Sec. 12.106. [STATE] FUNDING. [(a)] An open-enrollment
76-1 charter school is entitled to funding under Chapter 42 as if the
76-2 open-enrollment charter school were a school district to which
76-3 Section 42.106 applies. In determining funding for an
76-4 open-enrollment charter school, adjustments under Sections 42.103,
76-5 42.104, and 42.105 are based on the average adjustment for the
76-6 county in which the open-enrollment charter school is located [the
76-7 distribution from the available school fund for a student attending
76-8 the open-enrollment charter school to which the district in which
76-9 the student resides would be entitled].
76-10 [(b) A student attending an open-enrollment charter school
76-11 who is eligible under Section 42.003 is entitled to the benefits of
76-12 the Foundation School Program under Chapter 42. The commissioner
76-13 shall distribute from the foundation school fund to each school an
76-14 amount equal to the cost of a Foundation School Program provided by
76-15 the program for which the charter is granted as determined under
76-16 Section 42.251, including the transportation allotment under
76-17 Section 42.155, for the student that the district in which the
76-18 student resides would be entitled to, less an amount equal to the
76-19 sum of the school's tuition receipts under Section 12.107 plus the
76-20 school's distribution from the available school fund.]
76-21 SECTION 1.09. Section 12.108, Education Code, is amended to
76-22 read as follows:
76-23 Sec. 12.108. TUITION RESTRICTED. An [Except as provided by
76-24 Section 12.106, an] open-enrollment charter school may not charge
76-25 tuition to an eligible student who applies under Section 12.117.
76-26 SECTION 1.10. Section 13.054(f), Education Code, is amended
76-27 to read as follows:
77-1 (f) For five years beginning with the school year in which
77-2 the annexation occurs, the commissioner shall annually adjust the
77-3 local share [fund assignment] of a district to which territory is
77-4 annexed under this section by multiplying the enlarged district's
77-5 local share [fund assignment] computed under Section 42.252 by a
77-6 fraction, the numerator of which is the number of students residing
77-7 in the district preceding the date of the annexation and the
77-8 denominator of which is the number of students residing in the
77-9 district as enlarged on the date of the annexation.
77-10 SECTION 1.11. Section 13.285, Education Code, is amended to
77-11 read as follows:
77-12 Sec. 13.285. COST. The cost of incentive aid payments
77-13 authorized by this subchapter shall be paid from the foundation
77-14 school fund. [The costs shall be considered and included by the
77-15 foundation school fund budget committee in estimating the funds
77-16 needed for purposes of the Foundation School Program.]
77-17 SECTION 1.12. Section 19.007(b), Education Code, is amended
77-18 to read as follows:
77-19 (b) The costs for persons eligible under Section 19.005
77-20 shall be paid from the foundation school fund. [Those costs shall
77-21 be considered annually by the foundation school fund budget
77-22 committee and included in estimating the funds needed for purposes
77-23 of the Foundation School Program.]
77-24 SECTION 1.13. Section 21.401, Education Code, is amended to
77-25 read as follows:
77-26 Sec. 21.401. MINIMUM SERVICE REQUIRED. (a) A contract
77-27 between a school district and an educator must be for a minimum of
78-1 10 months' service.
78-2 (a-1) For the 1997-1998 and 1998-1999 school years
78-3 [1995-1996 school year], an educator employed under a 10-month
78-4 contract must provide a minimum of 185 [183] days of service. This
78-5 subsection expires September 1, 1999 [1997].
78-6 [(a-2) For the 1996-1997 school year, an educator employed
78-7 under a 10-month contract must provide a minimum of 185 days of
78-8 service. This subsection expires September 1, 1997.]
78-9 (b) An educator employed under a 10-month contract must
78-10 provide a minimum number of days of service as determined by the
78-11 following formula:
78-12 MDS = 185 + (0.33 X (GL1 - GL2)(GL2/185)
78-13 [(R1 - R2)/(R2/183)])
78-14 where:
78-15 "MDS" is the minimum number of days of service;
78-16 "GL1" ["R1"] is equal to the guaranteed level of state and
78-17 local funds per student per cent of tax effort as provided by
78-18 Section 42.101 [FSP/ADA as determined under Section 21.402] for the
78-19 fiscal year; and
78-20 "GL2" ["R2"] is equal to the guaranteed level of state and
78-21 local funds per student per cent of tax effort as provided by
78-22 Section 42.101 [FSP/ADA as determined under Section 21.402] for the
78-23 1998-1999 [1994-1995] school year.
78-24 (b-1) Subsection (b) applies beginning with the 1999-2000
78-25 [1997-1998] school year. This subsection expires January 1, 2000
78-26 [1998].
78-27 (c) The result of the formula prescribed by Subsection (b)
79-1 shall be rounded to the nearest whole number.
79-2 (d) The commissioner, as provided by Section 25.081(b), may
79-3 reduce the number of days of service required by this section. A
79-4 reduction by the commissioner does not reduce an educator's salary.
79-5 SECTION 1.14. Subchapter I, Chapter 21, Education Code, is
79-6 amended by adding Section 21.4011 to read as follows:
79-7 Sec. 21.4011. MINIMUM SALARY SCHEDULE FOR CLASSROOM TEACHERS
79-8 AND FULL-TIME LIBRARIANS FOR 1997-1998 AND 1998-1999 SCHOOL YEARS.
79-9 (a) This section applies only to the 1997-1998 and 1998-1999
79-10 school years.
79-11 (b) Except as provided by Subsection (d), a school district
79-12 must pay each classroom teacher or full-time librarian not less
79-13 than the minimum monthly salary, based on the employee's level of
79-14 experience, as follows:
79-15 Years Experience 0 1 2 3 4
79-16 Minimum Salary 1,995 2,049 2,103 2,157 2,271
79-17 Years Experience 5 6 7 8 9
79-18 Minimum Salary 2,384 2,498 2,604 2,704 2,798
79-19 Years Experience 10 11 12 13 14
79-20 Minimum Salary 2,887 2,972 3,052 3,127 3,198
79-21 Years Experience 15 16 17 18 19
79-22 Minimum Salary 3,265 3,329 3,389 3,446 3,500
79-23 Years Experience 20 and over
79-24 Minimum Salary 3,551
79-25 (c) Placement of a classroom teacher or full-time librarian
79-26 on the minimum salary schedule provided by this section is
79-27 determined in accordance with Section 21.403.
80-1 (d) Notwithstanding Subsection (b), a teacher or librarian
80-2 who received a career ladder supplement on August 31, 1993, is
80-3 entitled to at least the same gross monthly salary the teacher or
80-4 librarian received for the 1994-1995 school year as long as the
80-5 teacher or librarian is employed by the same district.
80-6 (e) In this section, "gross monthly salary" must include the
80-7 amount a teacher or librarian received that represented a career
80-8 ladder salary supplement under Section 16.057, as that section
80-9 existed January 1, 1993.
80-10 (f) This section expires September 1, 1999.
80-11 SECTION 1.15. Section 21.402, Education Code, is amended to
80-12 read as follows:
80-13 Sec. 21.402. MINIMUM SALARY SCHEDULE FOR CLASSROOM TEACHERS
80-14 AND FULL-TIME LIBRARIANS. (a) Except as provided by Subsection
80-15 (c) or (d) [or (e)], a school district must pay each classroom
80-16 teacher or full-time librarian not less than the minimum monthly
80-17 salary, based on the employee's level of experience, determined by
80-18 the following formula:
80-19 MS = SF X GL [(FSP/ADA)]
80-20 where:
80-21 "MS" is the minimum monthly salary;
80-22 "SF" is the applicable salary factor specified by Subsection
80-23 (c); and
80-24 "GL" is the guaranteed level of state and local funds per
80-25 student per cent of tax effort provided by Section 42.101 ["FSP" is
80-26 the amount appropriated in the General Appropriations Act for the
80-27 fiscal year for the Foundation School Program, as determined by the
81-1 commissioner as provided by Subsection (b); and]
81-2 ["ADA" is the total estimated average daily attendance, as
81-3 defined by Section 42.005, used for purposes of the General
81-4 Appropriations Act for the fiscal year].
81-5 (b) [Not later than June 1 of each year, the commissioner
81-6 shall determine the amount appropriated for purposes of Chapter 42
81-7 for the state fiscal year beginning September 1. The commissioner
81-8 shall exclude from the determination:]
81-9 [(1) amounts designated solely for use in connection
81-10 with school facilities or for payment of principal of and interest
81-11 on bonds; and]
81-12 [(2) local funds received under Subchapter D, Chapter
81-13 41.]
81-14 [(c)] The salary factors per step are as follows:
81-15 Years Experience 0 1 2
81-16 Salary Factor 37.5353 [.8470] 38.5513 [.8699] 39.5673 [.8928]
81-17 Years Experience 3 4 5
81-18 Salary Factor 40.5833 [.9156] 42.7281 [.9639] 44.8542 [1.0122]
81-19 Years Experience 6 7 8
81-20 Salary Factor 46.9991 [1.0605] 46.9934 [1.1054] 50.8749 [1.1477]
81-21 Years Experience 9 10 11
81-22 Salary Factor 52.6435 [1.1879] 54.3180 [1.2256] 55.9172 [1.2616]
81-23 Years Experience 12 13 14
81-24 Salary Factor 57.4224 [1.2955] 58.8335 [1.3273] 60.1693 [1.3578]
81-25 Years Experience 15 16 17
81-26 Salary Factor 61.4299 [1.3862] 62.6341 [1.4133] 63.7629 [1.4387]
81-27 Years Experience 18 19 20 and over
82-1 Salary Factor 64.8354 [1.4628] 65.8514 [1.4857] 66.8109 [1.5073]
82-2 (c) [(d)] If the minimum monthly salary determined under
82-3 Subsection (a) for a particular level of experience is less than
82-4 the minimum monthly salary for that level of experience in the
82-5 preceding year, the minimum monthly salary is the minimum monthly
82-6 salary for the preceding year.
82-7 (d) [(e)] Notwithstanding Subsection (a), a teacher or
82-8 librarian who received a career ladder supplement on August 31,
82-9 1993, is entitled to at least the same gross monthly salary the
82-10 teacher or librarian received for the 1994-1995 school year as long
82-11 as the teacher or librarian is employed by the same district.
82-12 (e) [(f)] In this section, "gross monthly salary" must
82-13 include the amount a teacher or librarian received that represented
82-14 a career ladder salary supplement under Section 16.057, as that
82-15 section existed January 1, 1993.
82-16 (f) This section applies beginning with the 1999-2000 school
82-17 year. This subsection expires January 1, 2000.
82-18 SECTION 1.16. Section 29.002, Education Code, is amended to
82-19 read as follows:
82-20 Sec. 29.002. DEFINITION. In this subchapter, "special
82-21 services" means:
82-22 (1) special instruction, which may be provided by
82-23 professional and paraprofessional personnel in the regular
82-24 classroom or in an instructional arrangement described by Sections
82-25 42.101(b)(2)-(13) [Section 42.151]; or
82-26 (2) related services, which are developmental,
82-27 corrective, supportive, or evaluative services, not instructional
83-1 in nature, that may be required for the proper development and
83-2 implementation of a student's individualized education program.
83-3 SECTION 1.17. Section 29.008(b), Education Code, is amended
83-4 to read as follows:
83-5 (b) Except as provided by Subsection (c), costs of an
83-6 approved contract for residential placement may be paid from a
83-7 combination of federal, state, and local funds. The local share
83-8 under this section of the total contract cost for each student is
83-9 that portion of the local tax effort that exceeds the district's
83-10 local share [fund assignment] under Section 42.252, divided by the
83-11 average daily attendance in the district. If the contract involves
83-12 a private facility, the state share of the total contract cost is
83-13 that amount remaining after subtracting the local share under this
83-14 section. If the contract involves a public facility, the state
83-15 share is that amount remaining after subtracting the local share
83-16 from the portion of the contract that involves the costs of
83-17 instructional and related services. For purposes of this
83-18 subsection, "local tax effort" means the total amount of money
83-19 generated by taxes imposed for debt service and maintenance and
83-20 operation.
83-21 SECTION 1.18. Section 29.014, Education Code, is amended by
83-22 amending Subsection (d) and adding Subsection (e) to read as
83-23 follows:
83-24 (d) The guaranteed level of state and local funds per
83-25 student [basic allotment] for a student enrolled in a district to
83-26 which this section applies is adjusted by:
83-27 (1) the cost of education adjustment under Section
84-1 42.103 [42.102] for the school district in which the district is
84-2 geographically located; and
84-3 (2) the student multiplier [weight] for a homebound
84-4 student under Section 42.101(b)(3) [42.151(a)].
84-5 (e) The commissioner shall distribute to school districts
84-6 funds appropriated for programs under this section. The program
84-7 established under this section is required only in school districts
84-8 in which the program is financed by funds distributed under this
84-9 subsection and any other funds available for the program.
84-10 SECTION 1.19. Section 29.081, Education Code, is amended by
84-11 adding Subsection (g) to read as follows:
84-12 (g) The commissioner shall distribute funds appropriated for
84-13 purposes of this subsection to school districts that incur
84-14 unanticipated expenditures resulting from a significant increase in
84-15 the enrollment of students who do not have disabilities and who
84-16 reside in residential placement facilities.
84-17 SECTION 1.20. Section 29.082(a), Education Code, is amended
84-18 to read as follows:
84-19 (a) A school district may set aside an amount from the
84-20 district's allotment for compensatory education under Chapter 42
84-21 [Section 42.152] or may apply to the commissioner [agency] for
84-22 funding of an extended year program for a period not to exceed 30
84-23 instructional days for students in kindergarten through grade 8 who
84-24 are identified as likely not to be promoted to the next grade level
84-25 for the succeeding school year. Funding distributed by the
84-26 commissioner under this subsection shall be from amounts
84-27 appropriated for extended year programs. In distributing funds
85-1 under this subsection, the commissioner shall give priority to
85-2 applications submitted by districts that have high concentrations
85-3 of educationally disadvantaged students.
85-4 SECTION 1.21. Section 29.085, Education Code, is amended by
85-5 adding Subsections (e) and (f) to read as follows:
85-6 (e) The commissioner shall, each fiscal year, distribute to
85-7 school districts funds appropriated for programs under this
85-8 section. In distributing those funds, preference shall be given
85-9 to a school district that received funds for a program under this
85-10 section for the preceding school year. The program established
85-11 under this section is required only in school districts in which
85-12 the program is financed by funds distributed under this subsection
85-13 and any other funds available for the program.
85-14 (f) The commissioner shall coordinate the funds distributed
85-15 under Subsection (e) with any other funds available for the
85-16 program. To receive funds for the program, a school district must
85-17 apply to the commissioner. The commissioner shall give a
85-18 preference to the districts that apply that have the highest
85-19 concentration of students who are pregnant or who are parents.
85-20 SECTION 1.22. Subchapter D, Chapter 29, Education Code, is
85-21 amended by adding Section 29.124 to read as follows:
85-22 Sec. 29.124. FUNDING OF ADDITIONAL PROGRAMS. The
85-23 commissioner shall distribute to school districts funds
85-24 appropriated for programs such as MATHCOUNTS, Future Problem
85-25 Solving, Odyssey of the Mind, and Academic Decathlon, as long as
85-26 these funds are used to train personnel and provide program
85-27 services. To be eligible for funding under this section, a program
86-1 must be determined by the State Board of Education to provide
86-2 services that are effective and consistent with the state plan for
86-3 gifted and talented education.
86-4 SECTION 1.23. Section 29.203(b), Education Code, is amended
86-5 to read as follows:
86-6 (b) A student's public education grant is the total state
86-7 and local funding per student for the school district in which the
86-8 student resides. Total funding from state and local sources
86-9 includes funding based on student multipliers under Section
86-10 42.101(b) [special allotments under Subchapter C, Chapter 42], but
86-11 does not include small district, sparsity, and cost of education
86-12 adjustments and allotments for technology and transportation. A
86-13 student's public education grant is the entitlement of the student,
86-14 under the supervision of the student's parent, guardian, or
86-15 custodian, is not an entitlement of any school district, and is
86-16 paid to a school district solely as a means of administrative
86-17 convenience.
86-18 SECTION 1.24. Section 29.256(c), Education Code, is amended
86-19 to read as follows:
86-20 (c) The cost to the state shall be paid from the foundation
86-21 school fund. [The foundation school fund budget committee shall
86-22 consider that cost in estimating the funds needed for Foundation
86-23 School Program purposes.]
86-24 SECTION 1.25. Section 29.257(a), Education Code, is amended
86-25 to read as follows:
86-26 (a) The legislature may appropriate money from the
86-27 foundation school fund to the agency for developing and
87-1 implementing community education projects. [The foundation school
87-2 fund budget committee shall consider the cost of community
87-3 education development projects in estimating the money needed for
87-4 foundation school fund purposes.] The agency shall actively seek
87-5 gifts, grants, or other donations for purposes related to community
87-6 education development projects, unless the acceptance is prohibited
87-7 by other law. Money received under this subsection shall be
87-8 deposited in the account established under Subsection (b) and may
87-9 be appropriated only for the purpose for which the money was given.
87-10 SECTION 1.26. Section 30.087(b), Education Code, is amended
87-11 to read as follows:
87-12 (b) From the amount appropriated for regional day school
87-13 programs, the commissioner shall allocate funds to each program
87-14 based on the number of [weighted] full-time equivalent students,
87-15 adjusted by the appropriate student multiplier under Section
87-16 42.101(b), served. The commissioner may consider local resources
87-17 available in allocating funds under this subsection.
87-18 SECTION 1.27. Section 31.021(b), Education Code, is amended
87-19 to read as follows:
87-20 (b) The State Board of Education shall annually set aside
87-21 out of the available school fund of the state an amount sufficient
87-22 for the board, school districts, and open-enrollment charter
87-23 schools to purchase and distribute the necessary textbooks for the
87-24 use of the students of this state for the following school year.
87-25 The board shall determine the amount of the available school fund
87-26 to set aside for the state textbook fund based on:
87-27 (1) a report by the commissioner issued on July 1 or,
88-1 if that date is a Saturday or Sunday, on the following Monday,
88-2 stating the amount of unobligated money in the fund;
88-3 (2) a requirement to provide an allotment to be
88-4 distributed to each district equal to $30 per student in average
88-5 daily attendance, or a greater amount for any year provided by
88-6 appropriation [as determined under Subsection (c)], to be used only
88-7 to:
88-8 (A) provide for the purchase by school districts
88-9 of electronic textbooks or technological equipment that contributes
88-10 to student learning; and
88-11 (B) pay for training educational personnel
88-12 directly involved in student learning in the appropriate use of
88-13 electronic textbooks and for providing for access to technological
88-14 equipment for instructional use;
88-15 (3) the commissioner's estimate, based on textbooks
88-16 selected under Section 31.101 and on attendance reports submitted
88-17 under Section 31.103 by school districts and open-enrollment
88-18 charter schools, of the amount of funds, in addition to funds
88-19 reported under Subdivision (1), that will be necessary for purchase
88-20 and distribution of textbooks for the following school year; and
88-21 (4) any amount the board determines should be set
88-22 aside for emergency purposes caused by unexpected increases in
88-23 attendance.
88-24 SECTION 1.28. Section 33.001, Education Code, is amended to
88-25 read as follows:
88-26 Sec. 33.001. APPLICABILITY OF SUBCHAPTER; FUNDING. (a)
88-27 This subchapter applies only to a school district that receives
89-1 funds under this section [as provided by Section 42.152(i)].
89-2 (b) The commissioner shall, each fiscal year, distribute
89-3 funds appropriated for the purpose of programs under this
89-4 subchapter. In distributing those funds, preference shall be given
89-5 to a school district that received funds for a program under this
89-6 subsection for the preceding school year.
89-7 (c) The commissioner shall coordinate the funds distributed
89-8 under Subsection (b) with any other funds available for the
89-9 program. To receive funds for the program, a school district must
89-10 apply to the commissioner. The commissioner shall give a
89-11 preference to the districts that have the highest concentration of
89-12 at-risk students. For each school year that a school district
89-13 receives funds under this section, the district shall allocate an
89-14 amount of local funds for school guidance and counseling programs
89-15 that is equal to or greater than the amount of local funds that the
89-16 school district allocated for that purpose during the preceding
89-17 school year.
89-18 SECTION 1.29. Section 34.002(c), Education Code, is amended
89-19 to read as follows:
89-20 (c) A school district that fails or refuses to comply with
89-21 the safety standards established under this section is ineligible
89-22 to share in the transportation allotment under Subchapter D,
89-23 Chapter 42, [Section 42.155] until the first anniversary of the
89-24 date the district begins complying with the safety standards.
89-25 SECTION 1.30. Section 39.024(c), Education Code, is amended
89-26 to read as follows:
89-27 (c) The agency shall develop and distribute study guides to
90-1 assist parents in providing assistance during the period that
90-2 school is recessed for summer to students who do not perform
90-3 satisfactorily on one or more parts of an assessment instrument
90-4 administered under this subchapter. The commissioner shall use
90-5 funds appropriated for that purpose [retain a portion of the total
90-6 amount of funds allotted under Section 42.152(a) that the
90-7 commissioner considers appropriate] to finance the development and
90-8 distribution of the study guides [and shall reduce each district's
90-9 allotment proportionately].
90-10 SECTION 1.31. Section 39.031, Education Code, is amended to
90-11 read as follows:
90-12 Sec. 39.031. COST. [(a)] The cost of preparing,
90-13 administering, or grading the assessment instruments and the [shall
90-14 be paid from the funds allotted under Section 42.152, and each
90-15 district shall bear the cost in the same manner described for a
90-16 reduction in allotments under Section 42.253. If a district does
90-17 not receive an allotment under Section 42.152, the commissioner
90-18 shall subtract the cost from the district's other foundation school
90-19 fund allotments.]
90-20 [(b) The] cost of releasing the question and answer keys
90-21 under Section 39.023(d) shall be paid from amounts appropriated to
90-22 the agency for those purposes.
90-23 SECTION 1.32. Section 39.182(a), Education Code, is amended
90-24 to read as follows:
90-25 (a) The agency shall prepare and deliver to the governor,
90-26 the lieutenant governor, the speaker of the house of
90-27 representatives, each member of the legislature, the Legislative
91-1 Budget Board, and the clerks of the standing committees of the
91-2 senate and house of representatives with primary jurisdiction over
91-3 the public school system a comprehensive report covering the
91-4 preceding two school years and containing:
91-5 (1) an evaluation of the achievements of the state
91-6 educational program in relation to the statutory goals for the
91-7 public education system under Section 4.002;
91-8 (2) an evaluation of the status of education in the
91-9 state as reflected by the academic excellence indicators adopted
91-10 under Section 39.051;
91-11 (3) a summary compilation of overall student
91-12 performance on academic skills assessment instruments required by
91-13 Section 39.023, aggregated by grade level, subject area, campus,
91-14 and district, with appropriate interpretations and analysis and
91-15 disaggregated by race, ethnicity, sex, and socioeconomic status;
91-16 (4) an evaluation of the correlation between student
91-17 grades and student performance on academic skills assessment
91-18 instruments required by Section 39.023;
91-19 (5) a statement of the dropout rate of students in
91-20 grade levels 7 through 12, expressed in the aggregate and by grade
91-21 level;
91-22 (6) a statement of the projected cross-sectional and
91-23 longitudinal dropout rates for grade levels 7 through 12 for the
91-24 next five years, assuming no state action is taken to reduce the
91-25 dropout rate;
91-26 (7) a description of a systematic plan for reducing
91-27 the projected cross-sectional and longitudinal dropout rates to
92-1 five percent or less for the 1997-1998 school year;
92-2 (8) a summary of the information required by Section
92-3 29.083 regarding grade level retention of students;
92-4 (9) a list of each school district or campus that does
92-5 not satisfy performance standards, with an explanation of the
92-6 actions taken by the commissioner to improve student performance in
92-7 the district or campus and an evaluation of the results of those
92-8 actions;
92-9 (10) an evaluation of the status of the curriculum
92-10 taught in public schools, with recommendations for legislative
92-11 changes necessary to improve or modify the curriculum required by
92-12 Section 28.002;
92-13 (11) a description of all funds received by and each
92-14 activity and expenditure of the agency;
92-15 (12) a summary and analysis of the compliance of
92-16 school districts with administrative cost ratios set by the
92-17 commissioner under Section 42.301 [42.201], including any
92-18 improvements and cost savings achieved by school districts;
92-19 (13) a summary of the effect of deregulation,
92-20 including exemptions and waivers granted under Section 7.056 or
92-21 39.112;
92-22 (14) a statement of the total number and length of
92-23 reports that school districts and school district employees must
92-24 submit to the agency, identifying which reports are required by
92-25 federal statute or rule, state statute, or agency rule, and a
92-26 summary of the agency's efforts to reduce overall reporting
92-27 requirements; and
93-1 (15) any additional information considered important
93-2 by the commissioner or the State Board of Education.
93-3 SECTION 1.33. Section 43.002, Education Code, is amended to
93-4 read as follows:
93-5 Sec. 43.002. TRANSFERS FROM GENERAL REVENUE FUND TO
93-6 AVAILABLE FUND. Of the amounts available for transfer from the
93-7 general revenue fund to the available school fund for the months of
93-8 January and February of each fiscal year, no more than the amount
93-9 necessary to enable the comptroller to distribute from the
93-10 available school fund an amount equal to 9-1/2 percent of the
93-11 estimated annual available school fund apportionment to [category
93-12 1] school districts[, as defined by Section 42.259, and 3-1/2
93-13 percent of the estimated annual available school fund apportionment
93-14 to category 2 school districts, as defined by Section 42.259,] may
93-15 be transferred from the general revenue fund to the available
93-16 school fund. Any remaining amount that would otherwise be
93-17 available for transfer for the months of January and February shall
93-18 be transferred from the general revenue fund to the available
93-19 school fund in equal amounts in June and in August of the same
93-20 fiscal year.
93-21 SECTION 1.34. Section 45.002, Education Code, is amended to
93-22 read as follows:
93-23 Sec. 45.002. MAINTENANCE AND OPERATIONS TAXES. (a) The
93-24 governing board of an independent school district, including the
93-25 city council or commission that has jurisdiction over a municipally
93-26 controlled independent school district, the governing board of a
93-27 rural high school district, and the commissioners court of a
94-1 county, on behalf of each common school district under its
94-2 jurisdiction, may levy, assess, and collect annual ad valorem taxes
94-3 on all residential property in the district for the further
94-4 maintenance and operations of public schools in the district,
94-5 subject to Sections [Section] 45.003 and 45.0031.
94-6 (b) In this section, "residential property" means that
94-7 portion of real property used primarily for residential purposes
94-8 and on which a structure used for a residential purpose is located.
94-9 The term includes a single-family residence, a multifamily
94-10 residence, a mobile home, and the residential portion, not
94-11 exceeding 20 acres, of farm and ranch property. The term does not
94-12 include:
94-13 (1) a hotel or motel; or
94-14 (2) land qualified for appraisal under Subchapter C,
94-15 D, or E, Chapter 23, Tax Code.
94-16 SECTION 1.35. Sections 45.003(d) and (e), Education Code,
94-17 are amended to read as follows:
94-18 (d) A proposition submitted to authorize the levy of
94-19 maintenance taxes must include the question of whether the
94-20 governing board or commissioners court may levy, assess, and
94-21 collect annual ad valorem taxes for the further maintenance of
94-22 public schools, at a rate not to exceed the rate[, which may be not
94-23 more than $1.50 on the $100 valuation of taxable property in the
94-24 district,] stated in the proposition.
94-25 (e) Before issuing bonds, a district must demonstrate to the
94-26 attorney general with respect to the proposed issuance that the
94-27 district has a projected ability to pay the principal of and
95-1 interest on the proposed bonds and all previously issued bonds
95-2 other than bonds authorized to be issued at an election held on or
95-3 before April 1, 1991, and issued before September 1, 1992, from a
95-4 tax at a rate not to exceed $0.50 per $100 of valuation. A
95-5 district that demonstrates to the attorney general that the
95-6 district's ability to comply with this subsection is contingent on
95-7 receiving state assistance may not adopt a tax rate for a year for
95-8 purposes of paying the principal of and interest on the bonds
95-9 unless the district credits to the account of the interest and
95-10 sinking fund of the bonds the amount of state assistance received
95-11 or to be received in that year.
95-12 SECTION 1.36. Subchapter A, Chapter 45, Education Code, is
95-13 amended by adding Section 45.0031 to read as follows:
95-14 Sec. 45.0031. RATE LIMIT. (a) Except as provided by
95-15 Subsection (b), a school district may not levy a tax for purposes
95-16 of maintenance and operations at a rate that exceeds 70 cents on
95-17 the $100 valuation of taxable property.
95-18 (b) A school district may levy a tax for purposes of
95-19 maintenance and operations at a rate that exceeds 70 cents but does
95-20 not exceed 80 cents on the $100 valuation of taxable property if
95-21 the rate is approved by the voters of the district at an election
95-22 conducted after September 1, 1997, as provided by Section 45.003
95-23 and this section.
95-24 (c) Revenue received from a tax levied under Subsection (b)
95-25 may only be used to provide educational enrichment beyond the basic
95-26 program under Chapter 42.
95-27 (d) At an election under Subsection (b), the ballot shall be
96-1 printed to permit voting for or against the proposition:
96-2 "Authorizing the board of trustees of _____ School District to levy
96-3 a tax on residential property at a rate not to exceed _____ (rate
96-4 stated in proposition) for purposes of educational enrichment."
96-5 (e) A school district is not subject to Section 26.08, Tax
96-6 Code, in connection with an increase in the district's tax rate for
96-7 which the district conducts an election under Subsection (b).
96-8 SECTION 1.37. Section 45.105(c), Education Code, is amended
96-9 to read as follows:
96-10 (c) Local school funds from district taxes, tuition fees of
96-11 students not entitled to a free education, and other local sources
96-12 may be used for the purposes listed for state and county funds and
96-13 for purchasing appliances and supplies, paying insurance premiums,
96-14 paying janitors and other employees, buying school sites, buying,
96-15 building, repairing, and renting school buildings, including
96-16 acquiring school buildings and sites by leasing through annual
96-17 payments with an ultimate option to purchase, and [paying] for
96-18 other purposes [goods and services] necessary in the conduct of the
96-19 public schools determined by the board of trustees. The accounts
96-20 and vouchers for county districts must be approved by the county
96-21 superintendent. If the state available school fund in any
96-22 municipality or district is sufficient to maintain the schools in
96-23 any year for at least eight months and leave a surplus, the surplus
96-24 may be spent for the purposes listed in this subsection.
96-25 SECTION 1.38. Sections 74.066(a) and (b), Education Code,
96-26 are amended to read as follows:
96-27 (a) To provide for the continuance of educational programs
97-1 for persons who are inpatients and outpatients at The University of
97-2 Texas Medical Branch at Galveston and for students in the Moody
97-3 State School for Cerebral Palsied Children, the commissioner of
97-4 education shall develop and the State Board of Education shall
97-5 adopt a formula for the allocation of state special education funds
97-6 on a basis similar to that provided for independent school
97-7 districts, except that no local share [fund assignment] shall be
97-8 charged to the schools.
97-9 (b) State funds for the support of the special school and
97-10 the Moody State School shall be paid from the foundation school
97-11 fund [and shall be considered by the Foundation School Fund Budget
97-12 Committee in estimating the funds needed for Foundation School
97-13 Program purposes].
97-14 SECTION 1.39. Section 96.707, Education Code, is amended by
97-15 adding Subsection (k) to read as follows:
97-16 (k) For each student enrolled in the academy, the academy is
97-17 entitled to allotments from the Foundation School Program under
97-18 Chapter 42 as if the academy were a school district, except that
97-19 the academy has a local share applied that is equivalent to the
97-20 local share of the Beaumont Independent School District.
97-21 SECTION 1.40. Section 105.95(e), Education Code, is amended
97-22 to read as follows:
97-23 (e) The academy is not subject to the provisions of this
97-24 code, or to the rules of the Texas Education Agency, regulating
97-25 public schools, except that:
97-26 (1) professional employees of the academy are entitled
97-27 to the limited liability of an employee under Section 22.051 or
98-1 22.052;
98-2 (2) a student's attendance at the academy satisfies
98-3 compulsory school attendance requirements; and
98-4 (3) for each student enrolled, the academy is entitled
98-5 to allotments from the foundation school program under Chapter 42
98-6 as if the academy were a school district, except that the academy
98-7 has a local share applied that is equivalent to the local share
98-8 [fund assignment] of the Denton Independent School District.
98-9 SECTION 1.41. Section 316.002(a), Government Code, is
98-10 amended to read as follows:
98-11 (a) Before the Legislative Budget Board submits the budget
98-12 as prescribed by Section 322.008(c) [322.008(b)], the board shall
98-13 establish:
98-14 (1) the estimated rate of growth of the state's
98-15 economy from the current biennium to the next biennium;
98-16 (2) the level of appropriations for the current
98-17 biennium from state tax revenues not dedicated by the constitution;
98-18 and
98-19 (3) the amount of state tax revenues not dedicated by
98-20 the constitution that could be appropriated for the next biennium
98-21 within the limit established by the estimated rate of growth of the
98-22 state's economy.
98-23 SECTION 1.42. Section 317.005(f), Government Code, is
98-24 amended to read as follows:
98-25 (f) The governor or board may adopt an order under this
98-26 section withholding or transferring any portion of the total amount
98-27 appropriated to finance the foundation school program for a fiscal
99-1 year. The governor or board may not adopt such an order if it
99-2 would result in an allocation of money between particular programs
99-3 or statutory allotments under the foundation school program
99-4 contrary to the statutory proration formula provided by Section
99-5 42.253(h) [16.254(h)], Education Code. The governor or board may
99-6 transfer an amount to the total amount appropriated to finance the
99-7 foundation school program for a fiscal year and may increase the
99-8 guaranteed level of state and local funds per student [basic
99-9 allotment]. The governor or board may adjust allocations of
99-10 amounts between particular programs or statutory allotments under
99-11 the foundation school program only for the purpose of conforming
99-12 the allocations to actual student [pupil] enrollments or
99-13 attendance.
99-14 SECTION 1.43. Section 322.008(b), Government Code, is
99-15 amended to read as follows:
99-16 (b) The [Not later than the 1994-1995 school year, the]
99-17 general appropriations bill may [shall] include for purposes of
99-18 information the funding elements computed [adopted] by the
99-19 Legislative Budget Board [foundation school fund budget committee]
99-20 under Section 42.007 [16.256(e)], Education Code, excluding the
99-21 values for each school district calculated under Section
99-22 42.007(c)(2), Education Code [Subdivision (2) of that subsection].
99-23 If the funding elements are included, the [The] funding elements
99-24 under Section 42.007(c)(3) [16.256(e)(3)], Education Code, shall be
99-25 reported in dollar amounts per student [pupil].
99-26 SECTION 1.44. Section 403.302, Government Code, is amended
99-27 to read as follows:
100-1 Sec. 403.302. DETERMINATION OF SCHOOL DISTRICT PROPERTY
100-2 VALUES. (a) The comptroller shall conduct an annual study using
100-3 comparable sales and generally accepted auditing and sampling
100-4 techniques to determine the total value of all taxable property in
100-5 each school district for purposes of maintenance and operations
100-6 taxes and the total value of all taxable property in each school
100-7 district for purposes of debt service taxes. The study shall
100-8 determine the taxable value of all property and of each category of
100-9 property in the district and the productivity value of all land
100-10 that qualifies for appraisal on the basis of its productive
100-11 capacity and for which the owner has applied for and received a
100-12 productivity appraisal. [The comptroller shall make appropriate
100-13 adjustments in the study to account for actions taken under Chapter
100-14 41, Education Code.]
100-15 (b) In conducting the study, the comptroller shall review
100-16 the appraisal standards, procedures, and methodology used by each
100-17 appraisal district to determine the taxable value of property in
100-18 each school district. The review must test the validity of the
100-19 taxable values assigned to each category of property by the
100-20 appraisal district:
100-21 (1) using, if appropriate, samples selected through
100-22 generally accepted sampling techniques; and
100-23 (2) according to generally accepted standard
100-24 valuation, statistical compilation, and analysis techniques.
100-25 (c) If the comptroller finds in the annual study that
100-26 generally accepted appraisal standards and practices were used by
100-27 the appraisal district in valuing a particular category of
101-1 property, and that the taxable values assigned to each category of
101-2 property by the appraisal district are valid, the appraisal roll
101-3 value of that category of property is presumed to represent taxable
101-4 value. In the absence of such a presumption, the comptroller shall
101-5 estimate the taxable value of that category of property using
101-6 generally accepted standard valuation, statistical compilation, and
101-7 analysis techniques.
101-8 (d) In this section, "taxable value" for purposes of
101-9 maintenance and operations taxes means the market value of
101-10 residential property less:
101-11 (1) the total dollar amount of any exemptions of part
101-12 but not all of the value of taxable property required by the
101-13 constitution in the year that is the subject of the study; and
101-14 (2) the portion of the appraised value of residence
101-15 homesteads of the elderly on which school district taxes are not
101-16 imposed in the year that is the subject of the study, calculated as
101-17 if the residence homesteads were appraised at the full value
101-18 required by law.
101-19 (e) In [For the purposes of] this section, "taxable value"
101-20 for purposes of debt service taxes means market value less:
101-21 (1) the total dollar amount of any exemptions of part
101-22 but not all of the value of taxable property required by the
101-23 constitution or a statute that a district lawfully granted in the
101-24 year that is the subject of the study;
101-25 (2) the total dollar amount of any exemptions granted
101-26 before May 31, 1993, within a reinvestment zone under agreements
101-27 authorized by Chapter 312, Tax Code;
102-1 (3) the total dollar amount of any captured appraised
102-2 value of property that is located in a reinvestment zone and that
102-3 is eligible for tax increment financing under Chapter 311, Tax
102-4 Code;
102-5 (4) the total dollar amount of any exemptions granted
102-6 under Section 11.251, Tax Code;
102-7 (5) the difference between the market value and the
102-8 productivity value of land that qualifies for appraisal on the
102-9 basis of its productive capacity, except that the productivity
102-10 value may not exceed the fair market value of the land;
102-11 (6) the portion of the appraised value of residence
102-12 homesteads of the elderly on which school district taxes are not
102-13 imposed in the year that is the subject of the study, calculated as
102-14 if the residence homesteads were appraised at the full value
102-15 required by law;
102-16 (7) a portion of the market value of property not
102-17 otherwise fully taxable by the district at market value because of
102-18 action required by statute or the constitution of this state that,
102-19 if the tax rate adopted by the district is applied to it, produces
102-20 an amount equal to the difference between the tax that the district
102-21 would have imposed on the property if the property were fully
102-22 taxable at market value and the tax that the district is actually
102-23 authorized to impose on the property; and
102-24 (8) the market value of all tangible personal
102-25 property, other than manufactured homes, owned by a family or
102-26 individual and not held or used for the production of income.
102-27 (f) [(e)] The study shall determine the values as of January
103-1 1 of each year.
103-2 (g) [(f)] The comptroller shall publish preliminary
103-3 findings, listing values by district, before February 1 of the year
103-4 following the year of the study. Preliminary findings shall be
103-5 delivered to each school district and shall be certified to the
103-6 commissioner of education.
103-7 (h) [(g)] On request of the commissioner of education or a
103-8 school district, the comptroller may audit a school district to
103-9 determine the total taxable value of property in the school
103-10 district, including the productivity values of land only if the
103-11 land qualifies for appraisal on that basis and the owner of the
103-12 land has applied for and received a productivity appraisal. The
103-13 comptroller shall certify the comptroller's findings to the
103-14 commissioner.
103-15 (i) In this section, "residential property" has the meaning
103-16 assigned by Section 45.002, Education Code.
103-17 SECTION 1.45. Sections 825.405(b), (h), and (i), Government
103-18 Code, are amended to read as follows:
103-19 (b) For purposes of this section, the statutory minimum
103-20 salary is the salary provided by Section 21.402 or the former
103-21 Sections 16.056 and 16.058, Education Code, multiplied by the cost
103-22 of education adjustment applicable under Section 42.103 [42.102],
103-23 Education Code, to the district in which the member is employed.
103-24 (h) This section does not apply to state contributions for
103-25 members employed by a school district in a school year if the
103-26 district's [effective] tax rate for maintenance and operation
103-27 revenues for the tax year that ended in the preceding school year
104-1 equals or exceeds 125 percent of the statewide average [effective]
104-2 tax rate for school district maintenance and operation revenues for
104-3 that tax year. For a tax year, the statewide average [effective]
104-4 tax rate for school district maintenance and operation revenues is
104-5 the tax rate that, if applied to the statewide total appraised
104-6 value of taxable property for purposes of maintenance and
104-7 operations taxes for every school district in the state determined
104-8 under Section 403.302(d), would produce an amount equal to the
104-9 statewide total amount of maintenance and operation taxes imposed
104-10 in the tax year for every school district in the state.
104-11 (i) Not later than the seventh day after the final date the
104-12 comptroller certifies to the commissioner of education changes to
104-13 the property value study conducted under Subchapter M, Chapter 403
104-14 [Section 11.86, Education Code], the comptroller shall certify to
104-15 the retirement system [Teacher Retirement System of Texas]:
104-16 (1) the [effective] tax rate for school district
104-17 maintenance and operation revenues for each school district in the
104-18 state for the [immediately] preceding tax year; and
104-19 (2) the statewide average [effective] tax rate for
104-20 school district maintenance and operation revenues for the
104-21 [immediately] preceding tax year.
104-22 SECTION 1.46. The foundation school fund budget committee is
104-23 abolished.
104-24 SECTION 1.47. This article applies beginning with the
104-25 1997-1998 school year.
104-26 SECTION 1.48. An obligation or entitlement of a school
104-27 district in connection with state funding for the 1996-1997 or an
105-1 earlier school year under Chapters 41 and 42, Education Code, as
105-2 those chapters existed before amendment or repeal by this article,
105-3 is not affected by this Act, and the prior law is continued in
105-4 effect for that purpose.
105-5 SECTION 1.49. (a) For the 1997 tax year, a school district
105-6 may not:
105-7 (1) adopt a tax rate for purposes of maintenance and
105-8 operations before September 1, 1997; or
105-9 (2) levy or collect a tax for purposes of maintenance
105-10 and operations at a rate adopted before September 1, 1997.
105-11 (b) This Act does not affect the validity of a tax imposed
105-12 by a school district for the 1996 tax year or an earlier tax year.
105-13 ARTICLE 2. STATE PROPERTY TAX
105-14 SECTION 2.01. The Tax Code is amended by adding Title 4 to
105-15 read as follows:
105-16 TITLE 4. STATE AD VALOREM TAX
105-17 CHAPTER 501. STATE AD VALOREM TAX
105-18 Sec. 501.001. STATE AD VALOREM TAX. (a) A state ad valorem
105-19 tax for elementary and secondary public school purposes is levied
105-20 on all taxable real and tangible personal property in each county
105-21 of this state that is not taxable for maintenance and operations
105-22 purposes by a school district under Section 45.002, Education Code.
105-23 (b) The state ad valorem tax rate is $1.05 on the $100
105-24 valuation of taxable property.
105-25 (c) Except as otherwise provided by law, the state shall be
105-26 treated, for purposes of the state ad valorem tax, as a taxing unit
105-27 under Title 1.
106-1 Sec. 501.002. APPRAISAL OF PROPERTY. (a) Property subject
106-2 to the state ad valorem tax shall be appraised by the appraisal
106-3 district for the county in which the property is located.
106-4 (b) Property subject to the state ad valorem tax shall be
106-5 appraised in the manner provided by Title 1 for the appraisal of
106-6 property that is subject to ad valorem taxation by a county.
106-7 Sec. 501.003. TAX COLLECTION. (a) In each county, the
106-8 assessor-collector for the county shall assess and collect state ad
106-9 valorem taxes imposed on property in that county.
106-10 (b) If the commissioners court of a county contracts with an
106-11 official, taxing unit, or political subdivision of this state for
106-12 the assessment or collection of the ad valorem taxes of the county,
106-13 the official, taxing unit, or political subdivision shall collect
106-14 the state ad valorem taxes imposed on property in that county.
106-15 (c) Each assessor or collector of state ad valorem taxes is
106-16 entitled to be reimbursed by the comptroller for the actual costs
106-17 incurred by the assessor or collector in assessing or collecting
106-18 state ad valorem taxes. However, an assessor or collector is not
106-19 entitled to be reimbursed for any amount that is greater than the
106-20 additional incremental costs incurred in assessing or collecting
106-21 the state ad valorem taxes.
106-22 (d) The comptroller shall:
106-23 (1) prescribe methods of accounting for and remitting
106-24 state ad valorem taxes;
106-25 (2) prescribe methods for establishing an assessor's
106-26 or collector's additional incremental costs incurred in assessing
106-27 or collecting state ad valorem taxes;
107-1 (3) prescribe and furnish forms for periodic reports
107-2 relating to state ad valorem taxes; and
107-3 (4) periodically examine the records of each assessor
107-4 or collector of state ad valorem taxes to verify the accuracy of
107-5 any reports required under this subsection.
107-6 Sec. 501.004. DUTIES AND POWERS OF COMPTROLLER. Except as
107-7 otherwise provided by this chapter, a duty or power imposed on or
107-8 granted to the governing body of a taxing unit by Title 1 may, for
107-9 purposes of the state ad valorem tax, be exercised by the
107-10 comptroller, and a reference to the presiding officer of a
107-11 governing body in Title 1 is a reference to the comptroller for the
107-12 purposes of the state tax.
107-13 Sec. 501.005. IDENTIFICATION OF PROPERTY SUBJECT TO TAX.
107-14 (a) The chief appraiser of each appraisal district shall identify
107-15 the property in the county for which the appraisal district is
107-16 established that is subject to the state ad valorem tax.
107-17 (b) The comptroller by rule shall establish guidelines to
107-18 assist in making those identifications and to provide uniformity in
107-19 the application of this chapter throughout the state.
107-20 Sec. 501.006. ADMINISTRATION AND REFUND ACCOUNTS. The
107-21 comptroller shall deposit to the credit of the general revenue fund
107-22 in appropriately designated accounts an amount of revenue collected
107-23 from the state ad valorem tax to pay for the comptroller's expenses
107-24 in administering this chapter and for the payment of tax refunds
107-25 that may become payable.
107-26 Sec. 501.007. NONAPPLICABILITY OF CERTAIN OTHER TAX LAWS.
107-27 Title 2 does not apply to the state ad valorem tax imposed under
108-1 this chapter.
108-2 SECTION 2.02. (a) Section 5.05(a), Tax Code, is amended to
108-3 read as follows:
108-4 (a) The comptroller shall prepare and issue:
108-5 (1) [a general appraisal manual;]
108-6 [(2) special appraisal manuals;]
108-7 [(3)] cost, price, and depreciation schedules, with
108-8 provision for inserting local market index factors and with a
108-9 standard procedure for determining local market index factors;
108-10 (2) [(4)] news and reference bulletins;
108-11 (3) [(5)] annotated digests of all laws relating to
108-12 property taxation; and
108-13 (4) [(6)] a handbook of all rules promulgated by the
108-14 comptroller relating to the property tax and its administration.
108-15 (b) Section 5.05(d), Tax Code, is repealed.
108-16 SECTION 2.03. Section 6.03, Tax Code, is amended by adding
108-17 Subsection (n) to read as follows:
108-18 (n) For purposes of this section, the voting entitlement of
108-19 a school district is calculated as if the state ad valorem taxes
108-20 imposed for the preceding year on property appraised by the
108-21 appraisal district for taxation by the school district were taxes
108-22 imposed in the appraisal district by the school district.
108-23 SECTION 2.04. Subchapter A, Chapter 6, Tax Code, is amended
108-24 by adding Section 6.038 to read as follows:
108-25 Sec. 6.038. STATE PARTICIPATION. (a) The comptroller and
108-26 the state do not participate in the election of the board of
108-27 directors of an appraisal district, the governance or management of
109-1 the district, or the determination of the district's finances and
109-2 budget.
109-3 (b) The comptroller by rule shall establish guidelines and
109-4 criteria under which, if the comptroller finds that generally
109-5 accepted appraisal standards and practices were not used by the
109-6 appraisal district appraising property subject to the state ad
109-7 valorem tax or that the appraised values assigned to property
109-8 subject to that tax are invalid, the comptroller may:
109-9 (1) withhold payment of all or part of the portion of
109-10 the amount of the budget of the appraisal district that is
109-11 allocated to the state until the district takes appropriate actions
109-12 to remedy the deficiencies in appraisals found by the comptroller;
109-13 or
109-14 (2) direct that all or any part of the portion of the
109-15 amount of the budget of the district allocated to the state be
109-16 applied to remedying those deficiencies.
109-17 SECTION 2.05. Section 6.06, Tax Code, is amended by amending
109-18 Subsection (d) and adding Subsection (l) to read as follows:
109-19 (d) The state and each [Each] taxing unit participating in
109-20 the district is allocated a portion of the amount of the budget
109-21 equal to the proportion that the total dollar amount of property
109-22 taxes imposed in the district by the state or taxing unit for the
109-23 tax year in which the budget proposal is prepared bears to the sum
109-24 of the total dollar amount of property taxes imposed in the
109-25 district by the state and each participating unit for that year.
109-26 For purposes of this subsection, only state ad valorem taxes
109-27 imposed in the county for which the district is established are
110-1 considered as state ad valorem taxes imposed in the district. If a
110-2 taxing unit participates in two or more districts, only the taxes
110-3 imposed in a district are used to calculate the unit's cost
110-4 allocations in that district. If the number of real property
110-5 parcels in a taxing unit is less than 5 percent of the total number
110-6 of real property parcels in the district and the taxing unit
110-7 imposes in excess of 25 percent of the total amount of the property
110-8 taxes imposed in the district by all of the participating taxing
110-9 units for a year, the unit's allocation may not exceed a percentage
110-10 of the appraisal district's budget equal to three times the unit's
110-11 percentage of the total number of real property parcels appraised
110-12 by the district.
110-13 (l) For the 1997 budget of an appraisal district, the state
110-14 is not required to contribute to the budget of the district. The
110-15 allocation of the 1997 budget shall be made as provided by
110-16 Subsection (d) as that subsection existed on January 1, 1997. This
110-17 subsection expires January 1, 1998.
110-18 SECTION 2.06. Section 11.13, Tax Code, is amended by
110-19 amending Subsections (d), (f), and (n) and adding Subsection (n-1)
110-20 to read as follows:
110-21 (d) In addition to the exemptions provided by Subsections
110-22 (b) and (c) [of this section], an individual who is disabled or is
110-23 65 or older is entitled to an exemption from taxation by a taxing
110-24 unit other than a school district, or to an exemption from taxation
110-25 by a school district for debt service purposes, of a portion (the
110-26 amount of which is fixed as provided by Subsection (e) [of this
110-27 section]) of the appraised value of the individual's [his]
111-1 residence homestead if the exemption is adopted either:
111-2 (1) by the governing body of the taxing unit; or
111-3 (2) by a favorable vote of a majority of the qualified
111-4 voters of the taxing unit at an election called by the governing
111-5 body of a taxing unit, and the governing body shall call the
111-6 election on the petition of at least 20 percent of the number of
111-7 qualified voters who voted in the preceding election of the taxing
111-8 unit.
111-9 (f) Once authorized, an exemption adopted as provided by
111-10 Subsection (d) [of this section] may be repealed or decreased or
111-11 increased in amount by the governing body of the taxing unit or by
111-12 the procedure authorized by Subdivision (2) of Subsection (d) [of
111-13 this section]. In the case of a decrease, the amount of the
111-14 exemption may not be reduced to less than $3,000 of the market
111-15 value. For purposes of the exemption provided by Subsection (d)
111-16 for school district debt service taxes, the adoption of an
111-17 exemption under Subsection (d) when the exemption also applied to
111-18 school district taxes imposed for maintenance and operations
111-19 continues to apply to the district's debt service taxes until the
111-20 exemption is repealed, decreased, or increased as provided by this
111-21 section.
111-22 (n) In addition to any other exemptions provided by this
111-23 section, an individual is entitled to an exemption from taxation by
111-24 a taxing unit other than a school district, or to an exemption from
111-25 taxation by a school district for debt service purposes, of a
111-26 percentage of the appraised value of the individual's [his]
111-27 residence homestead if the exemption is adopted by the governing
112-1 body of the taxing unit before May 1 in the manner provided by law
112-2 for official action by the body. If the percentage set by the
112-3 taxing unit produces an exemption in a tax year of less than $5,000
112-4 when applied to a particular residence homestead, the individual is
112-5 entitled to an exemption of $5,000 of the appraised value. The
112-6 percentage adopted by the taxing unit may not exceed 20 percent.
112-7 (n-1) This subsection expires January 1, 1999. For purposes
112-8 of taxes imposed for 1997 by a school district for debt service
112-9 purposes:
112-10 (1) the governing body of the school district may
112-11 adopt the exemption provided by Subsection (n) at any time before
112-12 the governing board adopts the 1997 debt service tax rate, and the
112-13 May 1 deadline provided by Subsection (n) does not apply; and
112-14 (2) the adoption of an exemption provided by
112-15 Subsection (n) before this subsection took effect applicable to the
112-16 school district's 1997 taxes applies to the district's 1997 taxes
112-17 for debt service purposes unless the governing body revokes the
112-18 adoption for 1997 taxes at any time before the governing board
112-19 adopts the 1997 debt service tax rate.
112-20 SECTION 2.07. Section 11.14, Tax Code, is amended by adding
112-21 Subsection (f) to read as follows:
112-22 (f) Subsection (c) does not apply to the comptroller or to
112-23 the state ad valorem tax.
112-24 SECTION 2.08. Section 11.251(i), Tax Code, is amended to
112-25 read as follows:
112-26 (i) The exemption provided by Subsection (b) does not apply
112-27 to:
113-1 (1) taxation by a taxing unit that took [takes]
113-2 action to tax the property under Article VIII, Section 1-j,
113-3 Subsection (b), [of the] Texas Constitution; or
113-4 (2) the state ad valorem tax.
113-5 SECTION 2.09. Section 11.26, Tax Code, is amended by
113-6 amending Subsection (b) and adding Subsections (g), (h), and (i) to
113-7 read as follows:
113-8 (b) If an individual makes improvements to the individual's
113-9 [his] residence homestead, other than improvements required to
113-10 comply with governmental requirements or repairs, the school
113-11 district may increase the tax on the homestead in the first year
113-12 the value of the homestead is increased on the appraisal roll
113-13 because of the enhancement of value by the improvements. The
113-14 amount of the tax increase is determined by applying the current
113-15 applicable tax rates [rate] to the difference in the assessed value
113-16 of the homestead with the improvements and the assessed value it
113-17 would have had without the improvements. The limitations imposed
113-18 by Subsection (a), (g), or (h), as applicable, [of this section]
113-19 then apply to the increased amount of tax until more improvements,
113-20 if any, are made.
113-21 (g) This subsection applies only to an individual 65 years
113-22 of age or older who qualified the individual's residence homestead
113-23 for the limitation provided by Section 1-b(d), Article VIII, Texas
113-24 Constitution, before January 1, 1998, or to a surviving spouse who
113-25 qualified for the limitation provided by Section 1-b(d) for a
113-26 surviving spouse before that date. Except as provided by
113-27 Subsection (b), the maximum amount of tax that a school district
114-1 may impose on the residence homestead of the individual or the
114-2 surviving spouse is the lesser of:
114-3 (1) the total amount of taxes the district imposed on
114-4 the residence homestead in the first year the individual or
114-5 surviving spouse qualified the residence homestead for the
114-6 applicable limitation; or
114-7 (2) the amount computed by multiplying the district's
114-8 1997 tax rate for maintenance and operations purposes by the 1997
114-9 taxable value of the residence homestead for maintenance and
114-10 operations purposes, multiplying the district's 1997 tax rate for
114-11 debt service purposes by the 1997 taxable value of the residence
114-12 homestead for debt services purposes, and adding the products.
114-13 (h) Except as provided by Subsection (b), if an individual
114-14 who receives a limitation on tax increases imposed by this section
114-15 subsequently qualifies a different residence homestead for an
114-16 exemption under Section 11.13, a school district may not impose ad
114-17 valorem taxes on the subsequently qualified homestead in a year in
114-18 an amount that exceeds the amount of taxes the school district
114-19 would have imposed on the subsequently qualified homestead in the
114-20 first year in which the individual receives that exemption for the
114-21 subsequently qualified homestead had the limitation on tax
114-22 increases imposed by this section not been in effect, multiplied by
114-23 a fraction the numerator of which is the total amount of school
114-24 district taxes imposed on the former homestead in the last year in
114-25 which the individual received that exemption for the former
114-26 homestead and the denominator of which is the total amount of
114-27 school district taxes that would have been imposed on the former
115-1 homestead in the last year in which the individual received that
115-2 exemption for the former homestead had the limitation on tax
115-3 increases imposed by this section not been in effect.
115-4 (i) An individual who receives a limitation on tax increases
115-5 under this section and who subsequently qualifies a different
115-6 residence homestead for an exemption under Section 11.13, or an
115-7 agent of the individual, is entitled to receive from the chief
115-8 appraiser of the appraisal district in which the former homestead
115-9 was located a written certificate providing the information
115-10 necessary to determine whether the individual may qualify for a
115-11 limitation on the subsequently qualified homestead under Subsection
115-12 (h) and to calculate the amount of taxes the school district may
115-13 impose on the subsequently qualified homestead.
115-14 SECTION 2.10. Section 11.28, Tax Code, is amended to read as
115-15 follows:
115-16 Sec. 11.28. PROPERTY EXEMPTED FROM [CITY] TAXATION BY TAX
115-17 ABATEMENT AGREEMENT. (a) The owner of property to which an
115-18 agreement made under the Property Redevelopment and Tax Abatement
115-19 Act (Chapter 312 [of this code]) applies is entitled to exemption
115-20 from taxation by an incorporated city or town or other taxing unit
115-21 of all or part of the value of the property as provided by the
115-22 agreement.
115-23 (b) In each tax year after 1996 in which school district
115-24 taxes are abated on property covered by this subsection, the owner
115-25 of the property is entitled to an exemption from the state ad
115-26 valorem tax imposed by Chapter 501 of the portion of the value of
115-27 the property that is exempt from school district taxes according to
116-1 the agreement. This subsection applies only to property subject to
116-2 the state ad valorem tax for which the agreement under Chapter 312
116-3 to abate school district taxes on the property was executed:
116-4 (1) before January 1, 1997; or
116-5 (2) on or after January 1, 1997, if:
116-6 (A) the property is located in a reinvestment
116-7 zone created by a municipality that by ordinance or resolution
116-8 adopted on or before April 1, 1997, expressed an intent to enter
116-9 into an agreement to abate municipal taxes on the property;
116-10 (B) the municipality executed the agreement to
116-11 abate municipal taxes on the property on or before July 1, 1997;
116-12 and
116-13 (C) the agreement by the school district to
116-14 abate school district taxes on the property is executed in the time
116-15 permitted by Section 312.206(a) after the date the municipal
116-16 agreement described by Paragraph (B) is executed.
116-17 SECTION 2.11. Section 21.03(a), Tax Code, is amended to read
116-18 as follows:
116-19 (a) If personal property that is taxable by this state or a
116-20 taxing unit of this state is used continually outside this state,
116-21 whether regularly or irregularly, the appraisal office shall
116-22 allocate to this state the portion of the total market value of the
116-23 property that fairly reflects its use in this state.
116-24 SECTION 2.12. Section 21.031(a), Tax Code, is amended to
116-25 read as follows:
116-26 (a) If a vessel or other watercraft that is taxable by this
116-27 state or a taxing unit of this state is used continually outside
117-1 this state, whether regularly or irregularly, the appraisal office
117-2 shall allocate to this state the portion of the total market value
117-3 of the vessel or watercraft that fairly reflects its use in this
117-4 state. The appraisal office shall not allocate to this state the
117-5 portion of the total market value of the vessel or watercraft that
117-6 fairly reflects its use in another state or country, in
117-7 international waters, or beyond the Gulfward boundary of this
117-8 state.
117-9 SECTION 2.13. Section 23.02, Tax Code, is amended by adding
117-10 Subsection (e) to read as follows:
117-11 (e) This section does not apply to the state ad valorem tax
117-12 imposed under Chapter 501.
117-13 SECTION 2.14. Section 23.46(d), Tax Code, is amended to read
117-14 as follows:
117-15 (d) A tax lien attaches to the land on the date the sale or
117-16 change of use occurs to secure payment of the additional tax and
117-17 interest imposed by Subsection (c) [of this section] and any
117-18 penalties incurred. The lien exists in favor of the state and all
117-19 taxing units for which the additional tax is imposed.
117-20 SECTION 2.15. Section 23.55(b), Tax Code, is amended to read
117-21 as follows:
117-22 (b) A tax lien attaches to the land on the date the change
117-23 of use occurs to secure payment of the additional tax and interest
117-24 imposed by this section and any penalties incurred. The lien
117-25 exists in favor of the state and all taxing units for which the
117-26 additional tax is imposed.
117-27 SECTION 2.16. Section 23.76(b), Tax Code, is amended to read
118-1 as follows:
118-2 (b) A tax lien attaches to the land on the date the change
118-3 of use occurs to secure payment of the additional tax and interest
118-4 imposed by this section and any penalties incurred. The lien
118-5 exists in favor of the state and all taxing units for which the
118-6 additional tax is imposed.
118-7 SECTION 2.17. Section 23.86(b), Tax Code, is amended to read
118-8 as follows:
118-9 (b) A tax lien attaches to the land on the date the change
118-10 of use occurs or the deed restriction expires to secure payment of
118-11 the additional tax and interest imposed by this section and any
118-12 penalties incurred. The lien exists in favor of the state and all
118-13 taxing units for which the additional tax is imposed.
118-14 SECTION 2.18. Section 23.96(b), Tax Code, is amended to read
118-15 as follows:
118-16 (b) A tax lien attaches to the property on the date the deed
118-17 restriction expires to secure payment of the additional tax and
118-18 interest imposed by this section and any penalties incurred. The
118-19 lien exists in favor of the state and all taxing units for which
118-20 the additional tax is imposed.
118-21 SECTION 2.19. Section 24.39, Tax Code, is amended to read as
118-22 follows:
118-23 Sec. 24.39. Imposition of Tax. (a) The county
118-24 assessor-collector and commissioners court may not change the
118-25 apportioned values certified as provided by this subchapter.
118-26 (b) The county assessor-collector shall add each owner's
118-27 rolling stock and the value apportioned to the county as certified
119-1 to that official [him] to the appraisal roll certified to that
119-2 official [him] by the chief appraiser as provided by Section 26.01
119-3 [of this code] for county tax purposes and to the appraisal roll
119-4 for state ad valorem taxes. The county assessor-collector [He]
119-5 shall calculate the county and state taxes [tax] due on the rolling
119-6 stock as provided by Section 26.09 [of this code].
119-7 SECTION 2.20. Section 25.19, Tax Code, is amended by
119-8 amending Subsection (b) and adding Subsection (k) to read as
119-9 follows:
119-10 (b) The chief appraiser shall separate real from personal
119-11 property and include in the notice for each:
119-12 (1) a list of the taxing units in which the property
119-13 is taxable and, for property subject to the state ad valorem tax, a
119-14 statement that the property is subject to the state tax;
119-15 (2) the appraised value of the property in the
119-16 preceding year;
119-17 (3) the [assessed and] taxable value of the property
119-18 in the preceding year for each taxing unit taxing the property and
119-19 for state taxation, if applicable;
119-20 (4) the appraised value of the property for the
119-21 current year and the kind and amount of each partial exemption, if
119-22 any, approved for the current year;
119-23 (5) if the appraised value is greater than it was in
119-24 the preceding year:
119-25 (A) the effective tax rate or rates for local
119-26 taxes that would be announced pursuant to Chapter 26 [Section 26.04
119-27 of this code] if the total values being submitted to the appraisal
120-1 review board were to be approved by the board with an explanation
120-2 that that rate would raise the same amount of revenue from property
120-3 taxed in the preceding year as the unit raised for those purposes
120-4 in the preceding year;
120-5 (B) the amount of local tax that would be
120-6 imposed on the property on the basis of the rate or rates described
120-7 by Paragraph (A) [of this subdivision]; and
120-8 (C) a statement that the governing body of a
120-9 local taxing [the] unit may not adopt a rate that will increase tax
120-10 revenues for operating purposes from properties taxed in the
120-11 preceding year without publishing notice in a newspaper that it is
120-12 considering a tax increase and holding a hearing for taxpayers to
120-13 discuss the tax increase;
120-14 (6) in italic typeface, the following statement: "The
120-15 Texas Legislature does not set the amount of your local taxes.
120-16 Your local property tax burden is decided by your locally elected
120-17 officials, and all inquiries concerning your local taxes should be
120-18 directed to those officials";
120-19 (7) a brief explanation of the time and procedure for
120-20 protesting the value;
120-21 (8) the date and place the appraisal review board will
120-22 begin hearing protests; and
120-23 (9) a brief explanation that:
120-24 (A) the governing body of each taxing unit
120-25 decides whether or not local taxes on the property will increase
120-26 and the appraisal district only determines the value of the
120-27 property; and
121-1 (B) a taxpayer who objects to increasing local
121-2 taxes and government expenditures should complain to the governing
121-3 bodies of the taxing units and only complaints about value should
121-4 be presented to the appraisal office and the appraisal review
121-5 board.
121-6 (k) In a notice for a tax year that begins before January 1,
121-7 1998, the chief appraiser is not required to include information
121-8 relating to taxation of property by the state. This subsection
121-9 expires January 1, 1999.
121-10 SECTION 2.21. Section 25.24, Tax Code, is amended to read
121-11 as follows:
121-12 Sec. 25.24. APPRAISAL ROLL. The appraisal records, as
121-13 changed by order of the appraisal review board and approved by that
121-14 board, constitute the appraisal roll for the district. The
121-15 appraisal roll for the district for the purpose of a school
121-16 district includes for each property two values: a value for the
121-17 levy of district maintenance and operations taxes and a value for
121-18 the levy of debt service taxes.
121-19 SECTION 2.22. Section 26.01(b), Tax Code, is amended to read
121-20 as follows:
121-21 (b) When a chief appraiser submits an appraisal roll for
121-22 county taxes to a county assessor-collector, the chief appraiser
121-23 [he] also shall certify that appraisal [the] roll to the
121-24 comptroller in the form and manner prescribed by the comptroller
121-25 and shall identify the property on that appraisal roll that is
121-26 subject to the state ad valorem tax. Property identified on a
121-27 county appraisal roll by the chief appraiser as subject to the
122-1 state ad valorem tax constitutes the state appraisal roll for
122-2 purposes of the assessment of the state ad valorem tax on property
122-3 in that county. [However, the comptroller by rule may provide for
122-4 submission of only a summary of the appraisal roll. In that event,
122-5 the chief appraiser shall certify the summary in the form and
122-6 manner prescribed by the comptroller's rule.]
122-7 SECTION 2.23. Chapter 26, Tax Code, is amended by adding
122-8 Section 26.011 to read as follows:
122-9 Sec. 26.011. PROVISIONS EXCLUDED FOR STATE TAX. Sections
122-10 26.04, 26.041, 26.05, 26.051, 26.06, 26.07, and 26.08 do not apply
122-11 to the state ad valorem tax or to the comptroller.
122-12 SECTION 2.24. Sections 26.04(a) and (b), Tax Code, are
122-13 amended to read as follows:
122-14 (a) On receipt of the appraisal roll, the assessor for a
122-15 taxing unit shall determine the total appraised value[, the total
122-16 assessed value,] and the total taxable value of property taxable by
122-17 the unit and for a school district the total taxable value for each
122-18 tax rate imposed by the district. The assessor [He] shall also
122-19 determine, using information provided by the appraisal office, the
122-20 appraised, assessed, and taxable values [value] of new property.
122-21 (b) The assessor shall submit the appraisal roll for the
122-22 unit showing the total appraised, assessed, and taxable values of
122-23 all property and the total taxable values [value] of new property
122-24 to the governing body of the unit by August 1 or as soon thereafter
122-25 as practicable. By August 1 or as soon thereafter as practicable,
122-26 the taxing unit's collector shall certify an estimate of the
122-27 collection rate for the current year to the governing body. If the
123-1 collector certified an anticipated collection rate in the preceding
123-2 year and the actual collection rate in that year exceeded the
123-3 anticipated rate, the collector shall also certify the amount of
123-4 debt taxes collected in excess of the anticipated amount in the
123-5 preceding year.
123-6 SECTION 2.25. Chapter 26, Tax Code, is amended by adding
123-7 Section 26.046 to read as follows:
123-8 Sec. 26.046. EFFECTIVE TAX RATES: SCHOOL DISTRICTS.
123-9 Notwithstanding Section 26.04, the officer or employee designated
123-10 under that section to make the calculations for a school district
123-11 shall determine an effective tax rate for the school district for
123-12 maintenance and operations and an effective tax rate for the school
123-13 district for debt service according to formulas prescribed by the
123-14 comptroller. The formulas shall require the effective tax rates to
123-15 be calculated in the manner provided by Section 26.04, except as
123-16 provided by this section. The effective tax rate for maintenance
123-17 and operations shall be calculated on the value of property on the
123-18 appraisal roll for maintenance and operations taxation, and the
123-19 effective tax rate for debt service taxation shall be calculated on
123-20 the value of property on the appraisal roll for debt service
123-21 taxation.
123-22 SECTION 2.26. Section 26.05(a), Tax Code, is amended to read
123-23 as follows:
123-24 (a) Except as provided by Subsection (c), the governing body
123-25 of each taxing unit before September 1 or as soon thereafter as
123-26 practicable shall adopt a tax rate for the current tax year and
123-27 shall notify the assessor for the unit of the rate adopted. The
124-1 tax rate consists of two components, each of which must be approved
124-2 separately. The components are:
124-3 (1) the rate that, if applied to the total taxable
124-4 value or for a school district the total taxable value for debt
124-5 taxation, will impose the total amount published under Section
124-6 26.04(e)(3)(C) [of this code], less any amount of additional sales
124-7 and use tax revenue that will be used to pay debt service; and
124-8 (2) the rate that, if applied to the total taxable
124-9 value or for a school district the total taxable value for
124-10 maintenance and operations taxation, will impose the amount of
124-11 taxes needed to fund maintenance and operation expenditures of the
124-12 unit for the next year.
124-13 SECTION 2.27. Section 26.08, Tax Code, is amended to read as
124-14 follows:
124-15 Sec. 26.08. ELECTION TO LIMIT SCHOOL TAXES. (a) If the
124-16 governing body of a school district adopts a maintenance and
124-17 operations tax rate that exceeds the sum of the district's
124-18 effective maintenance and operations rate and[,] the rate of $0.025
124-19 per $100 of taxable value [$0.08, and the district's current debt
124-20 rate], the registered voters of the district at an election held
124-21 for that purpose must determine whether to limit the maintenance
124-22 and operations tax rate the governing body may adopt for the
124-23 current year to the [school district rollback] tax rate calculated
124-24 by adding the district's effective maintenance and operations tax
124-25 rate and the rate of $0.025 per $100 of taxable value. When
124-26 increased expenditure of money by a school district is necessary to
124-27 respond to a disaster, including a tornado, hurricane, flood, or
125-1 other calamity, but not including a drought, that has impacted a
125-2 school district and the governor has requested federal disaster
125-3 assistance for the area in which the school district is located, an
125-4 election is not required under this section to limit the
125-5 maintenance and operations tax rate the governing body may adopt
125-6 for the year following the year in which the disaster occurs.
125-7 (b) If an election is required under Subsection (a), the
125-8 [The] governing body shall order that an election be held in the
125-9 school district on a date not less than 30 or more than 90 days
125-10 after the day on which it adopted the maintenance and operations
125-11 tax rate. Section 41.001, Election Code, does not apply to the
125-12 election unless a date specified by that section falls within the
125-13 time permitted by this section. At the election, the ballots shall
125-14 be prepared to permit voting for or against the proposition:
125-15 "Limiting the ad valorem tax rate for maintenance and operations
125-16 revenue in (name of school district) for the current year from (the
125-17 rate adopted) to (the [school district rollback] tax rate
125-18 calculated under Subsection (a))."
125-19 (c) If a majority of the votes cast in the election
125-20 favor the proposition, the governing body may not adopt a
125-21 maintenance and operations tax rate for the school district
125-22 for the current year that exceeds the sum of the district's
125-23 effective maintenance and operations rate and the rate of
125-24 $0.025 per $100 of taxable value [school district rollback
125-25 tax rate calculated for that year using the following
125-26 formula:]
125-27 [ROLLBACK TAX RATE = (ENROLLMENT ADJUSTMENT) (EFFECTIVE MAINTENANCE
126-1 AND OPERATIONS RATE FOR TAX YEAR) + $0.08 + CURRENT DEBT RATE]
126-2 [where:]
126-3 [(1) "tax year" denotes amounts used in calculating
126-4 the rollback tax rate in the year immediately preceding the year in
126-5 which the tax increase that initiated the referendum occurred
126-6 rather than the year in which the calculation occurs; and]
126-7 [(2) "enrollment adjustment" is computed by dividing
126-8 the current year's projected fall enrollment, as defined by the
126-9 Texas Education Agency, by last year's enrollment but may not be
126-10 less than 1.0].
126-11 (d) For purposes of this section, local tax funds dedicated
126-12 to a junior college district under Section 45.105(e), Education
126-13 Code, shall be eliminated from the calculation of the maintenance
126-14 and operations tax rate adopted by the governing body of the school
126-15 district. However, the funds dedicated to the junior college
126-16 district are subject to Section 26.085.
126-17 (e) [If a school district is certified by the commissioner
126-18 of education under Section 42.251(c), Education Code, to have been
126-19 subject to a reduction in total revenue for the school year ending
126-20 on August 31 of the tax year:]
126-21 [(1) the district's effective maintenance and
126-22 operations rate for the tax year is calculated as provided by
126-23 Section 26.012, except that last year's levy is reduced by the
126-24 amount of taxes imposed in the preceding year, if any, to offset
126-25 the amount of the reduction certified by the commissioner; and]
126-26 [(2) the district's rollback tax rate for the tax year
126-27 calculated as provided by Section 26.04 or by Subsection (c), as
127-1 applicable, is increased by the tax rate that, if applied to the
127-2 current total value for the school district, would impose taxes in
127-3 an amount equal to the amount of the reduction certified by the
127-4 commissioner.]
127-5 [(f)] In a school district that received distributions from
127-6 an equalization tax imposed under former Chapter 18, Education
127-7 Code, the effective maintenance and operations rate of that tax as
127-8 of the date of the county unit system's abolition is added to the
127-9 district's effective maintenance and operations rate under
127-10 Subsections (a) and (c) [of this section in the calculation of the
127-11 district's rollback tax rate].
127-12 (f) [(i)] For purposes of this section, increases in taxable
127-13 values and tax levies occurring within a reinvestment zone under
127-14 the provisions of Chapter 311 (Tax Increment Financing Act), in
127-15 which the district is a participant, shall be eliminated from the
127-16 calculation of the maintenance and operations tax rate adopted by
127-17 the governing body of the school district.
127-18 (g) Subsection (a) does not apply to the 1997 tax year. For
127-19 the 1997 tax year, a school district may not adopt a tax rate for
127-20 maintenance and operations purposes that exceeds the lesser of:
127-21 (1) 70 cents on the $100 valuation of property; or
127-22 (2) a rate equal to the sum of:
127-23 (A) the rate necessary for the district to
127-24 receive an amount of state and local funding per student, using the
127-25 student multipliers under Section 42.101(b), Education Code, that
127-26 is equal to the state and local funding per weighted student for
127-27 maintenance and operations to which the district would have been
128-1 entitled for each of those years at the district's tax rate for the
128-2 1996 tax year under:
128-3 (i) the Education Code as it would have
128-4 been in effect for the appropriate school year before amendment by
128-5 H.B. No. 4, Acts of the 75th Legislature, Regular Session, 1997,
128-6 except as provided by Subsection (h) or (i); and
128-7 (ii) the General Appropriations Act; plus
128-8 (B) 2.5 cents.
128-9 (h) For purposes of Subsection (g), for the 1998-1999 school
128-10 year, the amount of state and local funding to which a school
128-11 district would have been entitled includes any amount to which the
128-12 district would have been entitled for that year if former Section
128-13 41.002(e), Education Code, had been in effect for that year.
128-14 (i) Notwithstanding Subsection (g), the amount of state and
128-15 local funding to which a district would have been entitled does not
128-16 include funding based on the computation of average daily
128-17 attendance under Section 42.005(a), Education Code, as that
128-18 subsection would have been in effect on September 1, 1997, before
128-19 amendment of Chapter 42, Education Code, by H.B. No. 4, Acts of the
128-20 75th Legislature, Regular Session, 1997.
128-21 (j) Subsections (g)-(i) and this subsection expire January
128-22 1, 1999.
128-23 SECTION 2.28. Sections 26.09(b) and (c), Tax Code, are
128-24 amended to read as follows:
128-25 (b) The county assessor-collector shall add the properties
128-26 and their values certified to that official [him] as provided by
128-27 Chapter 24 [of this code] to the appraisal roll for county tax
129-1 purposes and to the appraisal roll for state ad valorem taxes. The
129-2 county assessor-collector shall use the appropriate appraisal roll
129-3 certified to that official [him] as provided by Section 26.01 with
129-4 the added properties and values to calculate county and state
129-5 taxes.
129-6 (c) The tax is calculated by:
129-7 (1) subtracting from the appraised value of a property
129-8 as shown on the appraisal roll for a taxing [the] unit or the state
129-9 the amount of any partial exemption allowed the property owner that
129-10 applies to appraised value to determine taxable [net appraised]
129-11 value; and
129-12 (2) [multiplying the net appraised value by the
129-13 assessment ratio to determine assessed value;]
129-14 [(3) subtracting from the assessed value the amount of
129-15 any partial exemption allowed the property owner to determine
129-16 taxable value; and]
129-17 [(4)] multiplying the taxable value by the applicable
129-18 tax rate, or for a school district as defined by Section
129-19 11.13(m)(2), multiplying the taxable value for maintenance and
129-20 operations taxation by the maintenance and operations tax rate,
129-21 multiplying the taxable value for debt service taxation by the debt
129-22 service tax rate, and adding the products.
129-23 SECTION 2.29. Section 26.12, Tax Code, is amended by adding
129-24 Subsection (e) to read as follows:
129-25 (e) For purposes of this section, the state is not a taxing
129-26 unit.
129-27 SECTION 2.30. Section 26.15(c), Tax Code, is amended to read
130-1 as follows:
130-2 (c) At any time, the governing body of a taxing unit, on
130-3 motion of the assessor for the unit or of a property owner, shall
130-4 direct by written order changes in the tax roll to correct errors
130-5 in the mathematical computation of a tax. The assessor shall enter
130-6 the corrections ordered by the governing body. The comptroller may
130-7 order changes on the state tax roll to correct errors in the
130-8 mathematical computation of the state tax.
130-9 SECTION 2.31. Section 31.01(c), Tax Code, is amended to read
130-10 as follows:
130-11 (c) The tax bill or a separate statement accompanying the
130-12 tax bill shall:
130-13 (1) identify the property subject to the tax;
130-14 (2) state the appraised value[, assessed value,] and
130-15 taxable value of the property for each type of tax levy the taxing
130-16 unit imposes on a different value;
130-17 (3) if the property is land appraised as provided by
130-18 Subchapter C, D, or E, Chapter 23 [of this code], state the market
130-19 value and the taxable value for purposes of deferred or additional
130-20 taxation as provided by Section 23.46, 23.55, or 23.76, as
130-21 applicable[, of this code];
130-22 (4) [state the assessment ratio for the unit;]
130-23 [(5)] state the type and amount of any partial
130-24 exemption applicable to the property[, indicating whether it
130-25 applies to appraised or assessed value];
130-26 (5) [(6)] state the total tax rate or rates for the
130-27 unit;
131-1 (6) [(7)] state the amount of tax due, the due date,
131-2 and the delinquency date;
131-3 (7) [(8)] explain the payment option and discounts
131-4 provided by Sections 31.03 and 31.05 [of this code], if available
131-5 to the unit's taxpayers, and state the date on which each of the
131-6 discount periods provided by Section 31.05 concludes, if the
131-7 discounts are available;
131-8 (8) [(9)] state the rates of penalty and interest
131-9 imposed for delinquent payment of the tax; and
131-10 (9) [(10)] include any other information required by
131-11 the comptroller.
131-12 SECTION 2.32. Section 31.11(a), Tax Code, is amended to read
131-13 as follows:
131-14 (a) If a taxpayer applies to the tax collector of a taxing
131-15 unit for a refund of an overpayment or erroneous payment of taxes
131-16 and the auditor for the unit or the comptroller in the case of the
131-17 state ad valorem tax determines that the payment was erroneous or
131-18 excessive, the tax collector shall refund the amount of the
131-19 excessive or erroneous payment from available current tax
131-20 collections or from funds appropriated by the unit for making
131-21 refunds. For taxes other than state ad valorem taxes [However], if
131-22 the amount of the refund exceeds $500, the collector may not make
131-23 the refund unless the governing body of the taxing unit also
131-24 determines that the payment was erroneous or excessive and approves
131-25 the refund.
131-26 SECTION 2.33. Sections 32.01(a) and (c), Tax Code, are
131-27 amended to read as follows:
132-1 (a) On January 1 of each year, a tax lien attaches to
132-2 property to secure the payment of all taxes, penalties, and
132-3 interest ultimately imposed for the year by the state or a taxing
132-4 unit on the property, whether or not the taxes are imposed in the
132-5 year the lien attaches. The lien to secure the payment of state ad
132-6 valorem taxes and applicable penalties and interest exists in favor
132-7 of the state. The lien to secure the payment of taxes imposed by a
132-8 taxing unit and applicable penalties and interest exists in favor
132-9 of the [each] taxing unit having power to tax the property.
132-10 (c) The lien under this section is perfected on attachment
132-11 and, except as provided by Section 32.03(b), perfection requires no
132-12 further action by the state or taxing unit.
132-13 SECTION 2.34. Section 33.01(a), Tax Code, is amended to read
132-14 as follows:
132-15 (a) A delinquent tax, including a delinquent state ad
132-16 valorem tax, incurs a penalty of six percent of the amount of the
132-17 tax for the first calendar month it is delinquent plus one percent
132-18 for each additional month or portion of a month the tax remains
132-19 unpaid prior to July 1 of the year in which it becomes delinquent.
132-20 However, a tax delinquent on July 1 incurs a total penalty of
132-21 twelve percent of the amount of the delinquent tax without regard
132-22 to the number of months the tax has been delinquent.
132-23 SECTION 2.35. Subchapter A, Chapter 33, Tax Code, is amended
132-24 by adding Section 33.08 to read as follows:
132-25 Sec. 33.08. COLLECTION OF DELINQUENT STATE AD VALOREM TAXES;
132-26 PENALTY. (a) Except as provided by Subsection (b), the attorney
132-27 general shall represent the state to enforce the collection of
133-1 delinquent state ad valorem taxes. The attorney general may
133-2 delegate the attorney general's duties under this subsection to a
133-3 county or district attorney or may contract with a private attorney
133-4 for the performance of those duties.
133-5 (b) If the commissioners court of a county contracts with a
133-6 private attorney for the collection of delinquent county ad valorem
133-7 taxes, the contract applies to the collection of delinquent state
133-8 ad valorem taxes on property taxable in that county without further
133-9 action. The compensation of the private attorney for collecting
133-10 delinquent state ad valorem taxes is equal to a percentage of the
133-11 amount collected that represents the portion of that amount
133-12 attributable to the additional penalty provided by Subsection (c).
133-13 (c) State ad valorem taxes that remain delinquent on July 1
133-14 of the year in which they become delinquent incur an additional
133-15 penalty to defray costs of collection if the collection of the
133-16 delinquent taxes is covered by a contract with a private attorney
133-17 under Subsection (a) or (b). The amount of the penalty is 15
133-18 percent of the amount of the taxes, penalty, and interest due.
133-19 (d) A tax lien attaches in favor of the state to the
133-20 property on which the tax is imposed to secure payment of the
133-21 penalty.
133-22 (e) The attorney general or the person responsible for
133-23 collecting the delinquent tax shall deliver a notice of delinquency
133-24 and of the penalty to the property owner at least 30 and not more
133-25 than 60 days before July 1.
133-26 (f) Sections 6.30 and 33.07 do not apply to the state ad
133-27 valorem tax.
134-1 SECTION 2.36. Sections 33.21(a) and (b), Tax Code, are
134-2 amended to read as follows:
134-3 (a) A person's personal property is subject to seizure for
134-4 the payment of a delinquent tax, penalty, and interest the person
134-5 [he] owes the state or a taxing unit on property.
134-6 (b) A person's personal property is subject to seizure for
134-7 the payment of a tax imposed by the state or a taxing unit on the
134-8 person's [his] property before the tax becomes delinquent if:
134-9 (1) the collector discovers that property on which the
134-10 tax has been or will be imposed is about to be removed from the
134-11 county; and
134-12 (2) the collector knows of no other personal property
134-13 in the county from which the tax may be satisfied.
134-14 SECTION 2.37. Section 33.23(b), Tax Code, is amended to read
134-15 as follows:
134-16 (b) A bond may not be required of the state or a taxing unit
134-17 for issuance or delivery of a tax warrant, and a fee or court cost
134-18 may not be charged for issuance or delivery of a warrant.
134-19 SECTION 2.38. Section 33.44(b), Tax Code, is amended to read
134-20 as follows:
134-21 (b) For purposes of joining a county, citation may be served
134-22 on the county tax assessor-collector. For purposes of joining any
134-23 other taxing unit, citation may be served on the officer charged
134-24 with collecting taxes for the unit or on the presiding officer or
134-25 secretary of the governing body of the unit. For purposes of
134-26 joining the state, citation shall be served on the comptroller.
134-27 Citation may be served by certified mail, return receipt requested.
135-1 A person on whom service is authorized by this subsection may waive
135-2 the issuance and service of citation in behalf of the person's
135-3 [his] taxing unit.
135-4 SECTION 2.39. Section 34.04(b), Tax Code, is amended to read
135-5 as follows:
135-6 (b) A copy of the petition shall be served on the county
135-7 attorney or, if there is no county attorney, the district attorney
135-8 and on all parties to the suit that ordered the sale, if any, not
135-9 later than the 20th day before the date set for a hearing on the
135-10 petition. The attorney general represents the state at the hearing
135-11 unless the attorney general delegates that duty to the county or
135-12 district attorney.
135-13 SECTION 2.40. Section 41.03, Tax Code, is amended to read as
135-14 follows:
135-15 Sec. 41.03. Challenge by State or Taxing Unit. The state or
135-16 a [A] taxing unit is entitled to challenge before the appraisal
135-17 review board:
135-18 (1) the level of appraisals of any category of
135-19 property in the district or in any territory in the district, but
135-20 not the appraised value of a single taxpayer's property;
135-21 (2) an exclusion of property from the appraisal
135-22 records;
135-23 (3) a grant in whole or in part of a partial
135-24 exemption;
135-25 (4) a determination that land qualifies for appraisal
135-26 as provided by Subchapter C, D, or E, Chapter 23 [of this code]; or
135-27 (5) failure to identify the taxing unit as one in
136-1 which a particular property is taxable.
136-2 SECTION 2.41. Subchapter A, Chapter 41, Tax Code, is amended
136-3 by adding Sections 41.031 and 41.032 to read as follows:
136-4 Sec. 41.031. CHALLENGE BY SCHOOL DISTRICT. A school
136-5 district is entitled to challenge before the appraisal review board
136-6 the exclusion of property from the appraisal roll for the
136-7 maintenance and operations taxes or debt service taxes of the
136-8 district.
136-9 Sec. 41.032. CHALLENGE BY COMPTROLLER. The comptroller is
136-10 entitled to challenge before the appraisal review board the
136-11 exclusion of property from the appraisal roll for state ad valorem
136-12 taxes.
136-13 SECTION 2.42. Section 41.06(a), Tax Code, is amended to read
136-14 as follows:
136-15 (a) The secretary of the appraisal review board shall
136-16 deliver to the comptroller and the presiding officer of the
136-17 governing body of each taxing unit entitled to appear at a
136-18 challenge hearing written notice of the date, time, and place fixed
136-19 for the hearing. The secretary shall deliver the notice not later
136-20 than the 10th day before the date of the hearing.
136-21 SECTION 2.43. Section 41.07(d), Tax Code, is amended to read
136-22 as follows:
136-23 (d) The board shall deliver by certified mail a notice of
136-24 the issuance of the order and a copy of the order to the taxing
136-25 unit. If the order of the board excludes property from the
136-26 appraisal roll for state ad valorem taxes, the board shall also
136-27 deliver a notice of issuance and a copy of the order to the
137-1 comptroller in the manner prescribed by the comptroller.
137-2 SECTION 2.44. Section 41.47(d), Tax Code, is amended to read
137-3 as follows:
137-4 (d) The board shall deliver by certified mail a notice of
137-5 issuance of the order and a copy of the order to the property owner
137-6 and the chief appraiser. If the order of the board excludes
137-7 property from the appraisal roll for state ad valorem taxes, the
137-8 board shall also deliver a notice of issuance and a copy of the
137-9 order to the comptroller in the manner prescribed by the
137-10 comptroller.
137-11 SECTION 2.45. Section 41.41, Tax Code, is amended to read as
137-12 follows:
137-13 Sec. 41.41. Right of Protest. A property owner is entitled
137-14 to protest before the appraisal review board the following actions:
137-15 (1) determination of the appraised value of the
137-16 owner's property or, in the case of land appraised as provided by
137-17 Subchapter C, D, or E, Chapter 23, determination of its appraised
137-18 or market value;
137-19 (2) unequal appraisal of the owner's property;
137-20 (3) inclusion of the owner's property on the appraisal
137-21 records;
137-22 (4) denial to the property owner in whole or in part
137-23 of a partial exemption;
137-24 (5) determination that the owner's land does not
137-25 qualify for appraisal as provided by Subchapter C, D, or E, Chapter
137-26 23;
137-27 (6) identification of the taxing units in which the
138-1 owner's property is taxable in the case of the appraisal district's
138-2 appraisal roll;
138-3 (7) determination that the property owner is the owner
138-4 of property;
138-5 (8) a determination that a change in use of land
138-6 appraised under Subchapter C, D, or E, Chapter 23, has occurred;
138-7 [or]
138-8 (9) the inclusion of the property on or the exclusion
138-9 of the property from the appraisal roll for the maintenance and
138-10 operations or debt service taxes of a school district;
138-11 (10) the inclusion of the property on or the exclusion
138-12 of the property from the appraisal roll for state ad valorem taxes;
138-13 or
138-14 (11) any other action of the chief appraiser,
138-15 appraisal district, or appraisal review board that applies to and
138-16 adversely affects the property owner.
138-17 SECTION 2.46. Subchapter A, Chapter 42, Tax Code, is amended
138-18 by adding Section 42.032 to read as follows:
138-19 Sec. 42.032. RIGHT OF APPEAL BY COMPTROLLER. (a) The
138-20 comptroller is entitled to appeal an order of the appraisal review
138-21 board excluding property from the appraisal roll for state ad
138-22 valorem taxes.
138-23 (b) The attorney general shall represent the comptroller in
138-24 an appeal under this section. The attorney general may delegate
138-25 its duties under this section to a county or district attorney or
138-26 may contract with a private attorney for the performance of those
138-27 duties.
139-1 SECTION 2.47. Sections 42.06(a) and (d), Tax Code, are
139-2 amended to read as follows:
139-3 (a) To exercise the party's right to appeal an order of an
139-4 appraisal review board, a party other than a property owner must
139-5 file written notice of appeal within 15 days after the date the
139-6 party receives the notice required by Section 41.47 or, in the case
139-7 of a taxing unit or the comptroller, by Section 41.07 that the
139-8 order appealed has been issued. To exercise the right to appeal an
139-9 order of the comptroller, a party other than a property owner must
139-10 file written notice of appeal within 15 days after the date the
139-11 party receives the comptroller's order.
139-12 (d) If the chief appraiser, a taxing unit, [or] a county, or
139-13 the comptroller appeals, the chief appraiser, if the appeal is of
139-14 an order of the appraisal review board, or the comptroller, if the
139-15 appeal is of an order of the comptroller, shall deliver a copy of
139-16 the notice to the property owner whose property is involved in the
139-17 appeal within 10 days after the date the notice is filed.
139-18 SECTION 2.48. Sections 42.08(b) and (c), Tax Code, are
139-19 amended to read as follows:
139-20 (b) Except as provided in Subsection (d), a property owner
139-21 who appeals as provided by this chapter must pay taxes on the
139-22 property subject to the appeal in the amount required by this
139-23 subsection before the delinquency date or the property owner
139-24 forfeits the right to proceed to a final determination of the
139-25 appeal. The amount of taxes the property owner must pay on the
139-26 property before the delinquency date to comply with this subsection
139-27 is the lesser of:
140-1 (1) the amount of taxes due on the portion of the
140-2 taxable value of the property that is not in dispute [or the amount
140-3 of taxes imposed on the property in the preceding year, whichever
140-4 is greater]; or
140-5 (2) the amount of taxes due on the property under the
140-6 order from which the appeal is taken.
140-7 (c) A property owner that pays an [the] amount of taxes
140-8 greater than that required by Subsection (b) does not forfeit the
140-9 property owner's right to a final determination of the appeal by
140-10 making the payment. If the property owner files a timely appeal
140-11 under this chapter, taxes paid on the property are considered paid
140-12 under protest, even if paid before the appeal is filed.
140-13 SECTION 2.49. Section 42.29, Tax Code, is amended to read as
140-14 follows:
140-15 Sec. 42.29. ATTORNEY'S FEES. (a) A property owner who
140-16 prevails in an appeal to the court under Section 42.25 or [Section]
140-17 42.26 [of this code] may be awarded reasonable attorney's fees not
140-18 to exceed $100,000 [the greater of $15,000 or 20 percent of the
140-19 total amount by which the property owner's tax liability is reduced
140-20 as a result of the appeal. The award of attorney's fees, however,
140-21 may not exceed the total amount by which the property owner's tax
140-22 liability is reduced as a result of the appeal].
140-23 (b) An appraisal district that prevails in an appeal to the
140-24 court under this chapter may be awarded reasonable attorney's fees
140-25 not to exceed $100,000 if the amount of taxes due on the property
140-26 as determined by the court exceeds by at least $5,000 the amount of
140-27 taxes due on the property as claimed by the property owner.
141-1 SECTION 2.50. Section 42.42, Tax Code, is amended by
141-2 amending Subsection (c) and adding Subsection (d) to read as
141-3 follows:
141-4 (c) If the final determination of an appeal occurs after the
141-5 property owner has paid a portion of the tax finally determined to
141-6 be due as required by Section 42.08 [of this code], the assessor
141-7 for each affected taxing unit shall prepare and mail a supplemental
141-8 tax bill in the form and manner prescribed by Subsection (b) [of
141-9 this section]. The additional tax is due and becomes delinquent as
141-10 provided by Subsection (b), but the property owner is liable for
141-11 penalties and interest on the tax included in the supplemental bill
141-12 calculated as provided by Section 33.01 as if the tax included in
141-13 the supplemental bill became delinquent on the original
141-14 delinquency date prescribed by Chapter 31 [at the rate prescribed
141-15 by this code for delinquent taxes].
141-16 (d) If the property owner did not pay any portion of the
141-17 taxes imposed on the property because the court found that payment
141-18 would constitute an unreasonable restraint on the owner's right of
141-19 access to the courts as provided by Section 42.08(d), after the
141-20 final determination of the appeal the assessor for each affected
141-21 taxing unit shall prepare and mail a supplemental tax bill in the
141-22 form and manner prescribed by Subsection (b). The additional tax
141-23 is due and becomes delinquent as provided by Subsection (b), but
141-24 the property owner is liable for interest on the tax included in
141-25 the supplemental bill calculated as provided by Section 33.01 as if
141-26 the tax included in the supplemental bill became delinquent on the
141-27 delinquency date prescribed by Chapter 31.
142-1 SECTION 2.51. Section 42.43, Tax Code, is amended to read as
142-2 follows:
142-3 Sec. 42.43. Refund. (a) If the final determination of an
142-4 appeal that decreases a property owner's tax liability occurs after
142-5 the property owner has paid his taxes, the taxing unit and the
142-6 comptroller, if the property is subject to a state tax, shall
142-7 refund to the property owner the difference between the amount of
142-8 taxes paid and amount of taxes for which the property owner is
142-9 liable.
142-10 (b) For a refund made under this section because an
142-11 exemption under Section 11.20 that was denied by the chief
142-12 appraiser or appraisal review board is granted, the state or taxing
142-13 unit shall include with the refund interest on the amount refunded
142-14 calculated at an annual rate that is equal to the auction average
142-15 rate quoted on a bank discount basis for three-month treasury bills
142-16 issued by the United States government, as published by the Federal
142-17 Reserve Board, for the week in which the taxes became delinquent,
142-18 but not more than 10 percent, calculated from the delinquency date
142-19 for the taxes until the date the refund is made. For any other
142-20 refund made under this section, the state or taxing unit shall
142-21 include with the refund interest on the amount refunded at an
142-22 annual rate that is equal to the auction average rate quoted on a
142-23 bank discount basis for three-month treasury bills issued by the
142-24 United States government, as published by the Federal Reserve
142-25 Board, for the week in which the taxes became delinquent, but not
142-26 more than eight percent, calculated from the delinquency date for
142-27 the taxes until the date the refund is made.
143-1 SECTION 2.52. Sections 43.01 and 43.04, Tax Code, are
143-2 amended to read as follows:
143-3 Sec. 43.01. Authority to Bring Suit. The comptroller or a
143-4 [A] taxing unit may sue the appraisal district that appraises
143-5 property for the unit to compel the appraisal district to comply
143-6 with the provisions of this title, rules of the comptroller, or
143-7 other applicable law.
143-8 Sec. 43.04. Suit to Compel Compliance With Deadlines. The
143-9 comptroller or the governing body of a taxing unit may sue the
143-10 chief appraiser or members of the appraisal review board, as
143-11 applicable, for failure to comply with the deadlines imposed by
143-12 Section 25.22(a), 26.01(a), or 41.12. If the court finds that the
143-13 chief appraiser or appraisal review board failed to comply for good
143-14 cause shown, the court shall enter an order fixing a reasonable
143-15 deadline for compliance. If the court finds that the chief
143-16 appraiser or appraisal review board failed to comply without good
143-17 cause, the court shall enter an order requiring the chief appraiser
143-18 or appraisal review board to comply with the deadline not later
143-19 than the 10th day after the date the judgment is signed. In a suit
143-20 brought under this section, the court may enter any other order the
143-21 court considers necessary to ensure compliance with the court's
143-22 deadline or the applicable statutory requirements. Failure to obey
143-23 an order of the court is punishable as contempt.
143-24 SECTION 2.53. Section 23.56, Tax Code, is amended to read as
143-25 follows:
143-26 Sec. 23.56. LAND INELIGIBLE FOR APPRAISAL AS OPEN-SPACE
143-27 LAND. (a) Land is not eligible for appraisal as provided by this
144-1 subchapter if:
144-2 (1) the land is located inside the corporate limits of
144-3 an incorporated city or town, unless:
144-4 (A) the city or town is not providing the land
144-5 with governmental and proprietary services substantially equivalent
144-6 in standard and scope to those services it provides in other parts
144-7 of the city or town with similar topography, land utilization, and
144-8 population density; or
144-9 (B) the land has been devoted principally to
144-10 agricultural use continuously for the preceding five years;
144-11 (2) the land is owned by an individual who is a
144-12 nonresident alien or by a foreign government if that individual or
144-13 government is required by federal law or by rule adopted pursuant
144-14 to federal law to register his ownership or acquisition of that
144-15 property; [or]
144-16 (3) the land is owned by a corporation, partnership,
144-17 trust, or other legal entity if the entity is required by federal
144-18 law or by rule adopted pursuant to federal law to register its
144-19 ownership or acquisition of that land and a nonresident alien or a
144-20 foreign government or any combination of nonresident aliens and
144-21 foreign governments own a majority interest in the entity; or
144-22 (4) the land consists of a parcel of real property
144-23 that is contiguous to one or more parcels of real property owned by
144-24 the same person and all parcels taken together would not be
144-25 eligible for appraisal under this subchapter.
144-26 (b) A parcel is not ineligible for appraisal under this
144-27 subchapter under Subsection (a)(4) because one of the contiguous
145-1 parcels is the residence homestead of the person.
145-2 (c) In this section, "same person" includes:
145-3 (1) an individual's spouse or an individual related
145-4 within the first degree of consanguinity; or
145-5 (2) affiliated legal entities.
145-6 SECTION 2.54. The comptroller shall:
145-7 (1) conduct a study for the 1997 and 1998 tax years of
145-8 the appraisal by local appraisal officials of property that is
145-9 subject to the state ad valorem tax imposed under Chapter 501, Tax
145-10 Code, as added by this article; and
145-11 (2) not later than January 15, 1999, submit a report
145-12 to the 76th Legislature that includes recommendations for the equal
145-13 and uniform appraisal of property that is subject to the state ad
145-14 valorem tax.
145-15 SECTION 2.55. (a) This article takes effect September 1,
145-16 1997.
145-17 (b) Except as provided by Subsections (c)-(f) of this
145-18 section, this article applies to each tax year that begins on or
145-19 after January 1, 1997, the changes in law made by this article do
145-20 not apply to ad valorem taxes imposed before January 1, 1997, and
145-21 the law as it existed before January 1, 1997, is continued in
145-22 effect for those purposes.
145-23 (c) The changes in law made by this article to Sections
145-24 42.08 and 42.09, Tax Code, apply only to an appeal filed under
145-25 Chapter 42, Tax Code, as amended by this article, on or after
145-26 September 1, 1997. An appeal filed under Chapter 42, Tax Code, as
145-27 amended by this article, before September 1, 1997, is governed by
146-1 the law in effect when the appeal was filed, and that law is
146-2 continued in effect for that purpose.
146-3 (d) Except as provided by Subsection (e) of this section,
146-4 the change in law made by this article to Section 42.42(c), Tax
146-5 Code, applies only to the accrual of penalties and interest on
146-6 taxes on property subject to an appeal that are paid on or after
146-7 September 1, 1997, or for which the supplemental tax bill is mailed
146-8 under Section 42.42(c), Tax Code, on or after that date. For taxes
146-9 on property subject to an appeal for which the original delinquency
146-10 date prescribed by Chapter 31, Tax Code, occurred before September
146-11 1, 1997, and that are paid on or after that date or for which the
146-12 supplemental tax bill is sent under Section 42.42(c), Tax Code, on
146-13 or after that date, penalties imposed as provided by Section
146-14 42.42(c), Tax Code, as amended by this article, on the additional
146-15 tax paid on or after September 1, 1997, or included in the
146-16 supplemental tax bill sent on or after that date are calculated as
146-17 provided by Section 33.01, Tax Code, as if the delinquency date for
146-18 those taxes is October 1, 1997.
146-19 (e) The accrual of penalties and interest on taxes for which
146-20 a supplemental tax bill is sent as provided by Section 42.42(c),
146-21 Tax Code, before September 1, 1997, are governed by Section
146-22 42.42(c), Tax Code, as that section existed when the supplemental
146-23 tax bill was mailed, and that law is continued in effect for that
146-24 purpose.
146-25 (f) Section 42.42(d), Tax Code, as added by this article,
146-26 applies only to the accrual of interest on unpaid taxes covered by
146-27 that subsection on or after September 1, 1997. The accrual of
147-1 penalties and interest on those taxes before September 1, 1997, is
147-2 governed by the applicable law in effect before that date.
147-3 ARTICLE 3. FRANCHISE TAX
147-4 SECTION 3.01. Sections 171.001(a) and (b), Tax Code, are
147-5 amended to read as follows:
147-6 (a) A franchise tax is imposed on[:]
147-7 [(1)] each taxable entity [corporation] that does
147-8 business in this state or that is chartered, organized, or
147-9 authorized to do business in this state[, and]
147-10 [(2) each limited liability company that does business
147-11 in this state or that is organized under the laws of this state or
147-12 is authorized to do business in this state].
147-13 (b) In this chapter:
147-14 (1) "Banking corporation" means each state, national,
147-15 domestic, or foreign bank, including a limited banking association,
147-16 as defined by Section 1.002(a), Texas Banking Act (Article
147-17 342-1.002, Vernon's Texas Civil Statutes), and each bank organized
147-18 under Section 25A [25(a)], Federal Reserve Act (12 U.S.C. Secs.
147-19 611-631) (edge corporations), but does not include a bank holding
147-20 company as that term is defined by Section 2, Bank Holding Company
147-21 Act of 1956 (12 U.S.C. Sec. 1841).
147-22 (2) "Beginning date" means:
147-23 (A) for a taxable entity [corporation] chartered
147-24 or organized in this state, the date on which the taxable entity's
147-25 [corporation's] charter or organization takes effect; and
147-26 (B) for any other taxable entity without regard
147-27 to whether the entity is foreign or domestic or whether it is
148-1 formally organized or chartered [a foreign corporation], the
148-2 earlier of the date on which:
148-3 (i) the corporation's certificate of
148-4 authority takes effect; or
148-5 (ii) the taxable entity [corporation]
148-6 begins doing business in this state.
148-7 (3) "Business trust" means a trust for carrying on a
148-8 business operation. ["Corporation" includes:]
148-9 [(A) a limited liability company, as defined
148-10 under the Texas Limited Liability Company Act; and]
148-11 [(B) a state or federal savings and loan
148-12 association.]
148-13 (4) "Charter" includes a limited liability company's
148-14 certificate of organization, a limited partnership's certificate of
148-15 limited partnership, and the registration of a limited liability
148-16 partnership.
148-17 (5) "Commercial domicile" means the principal location
148-18 of a taxable entity's day-to-day commercial operations. If the
148-19 taxable entity conducts its day-to-day commercial operations
148-20 equally or substantially equally in more than one state or foreign
148-21 country, "commercial domicile" means the state or foreign country
148-22 in which:
148-23 (A) is located the principal location from which
148-24 the day-to-day operations of the taxable entity are directed; and
148-25 (B) the taxable entity conducts significant
148-26 commercial operations.
148-27 (6) "Compensation" means amounts paid to or for the
149-1 benefit of an officer, director, or owner and that:
149-2 (A) are subject to withholding under the
149-3 Internal Revenue Code; or
149-4 (B) would be subject to withholding if the
149-5 person were considered an employee and the amounts paid were
149-6 considered salaries.
149-7 (7) "Does business in this state" means the taxable
149-8 entity is subject to taxation by this state without the state
149-9 violating the United States Constitution and the federal law
149-10 adopted under the United States Constitution.
149-11 (8) "Income or equity partner" includes a partner who
149-12 is entitled to a distributive share of the partnership's income or
149-13 loss or who becomes entitled to a share of the partnership's assets
149-14 or liabilities on termination of the partnership.
149-15 (9) "Internal Revenue Code" means the Internal Revenue
149-16 Code of 1986 in effect for the federal tax year beginning on or
149-17 after January 1, 1996 [1994], and before January 1, 1997 [1995],
149-18 and any regulations adopted under that code applicable to that
149-19 period.
149-20 (10) [(6)] "Officer" and "director" include a limited
149-21 liability company's directors and managers, [and] a limited banking
149-22 association's directors and managers and participants if there are
149-23 no directors or managers, and persons holding comparable positions
149-24 of authority in a noncorporate taxable entity.
149-25 (11) "Owner" includes a shareholder, an income or
149-26 equity partner of a partnership, and an owner of equity in any
149-27 other taxable entity.
150-1 (12) "Passive income" means:
150-2 (A) interest;
150-3 (B) dividends;
150-4 (C) rents;
150-5 (D) royalties, including overriding royalties;
150-6 (E) income from the disposition of a capital
150-7 asset or property held for investment;
150-8 (F) income from any of the following entities or
150-9 any entity controlled, directly or indirectly, by any of the
150-10 following entities:
150-11 (i) a real estate investment trust;
150-12 (ii) a regulated investment company;
150-13 (iii) a real estate mortgage investment
150-14 conduit; or
150-15 (iv) a common trust fund; or
150-16 (G) income from oil and gas working interests
150-17 held by the taxable entity if the taxable entity is not an operator
150-18 of oil and gas properties.
150-19 (13) "Passive income asset" means an asset owned by a
150-20 taxable entity if any income generated by the asset, including on
150-21 disposition of the asset, is passive income.
150-22 (14) "Passive income capital" for a taxable entity
150-23 means an amount that is the product of the passive income ratio for
150-24 the taxable entity and the entity's apportioned taxable capital
150-25 under Section 171.101(d)(3).
150-26 (15) "Passive income ratio" means the ratio, expressed
150-27 as a percentage, in which:
151-1 (A) the numerator is the aggregate cost of all
151-2 of the taxable entity's passive income assets; and
151-3 (B) the denominator is the aggregate cost of the
151-4 taxable entity's total assets.
151-5 (16) [(7)] "Savings and loan association" includes a
151-6 state or federal savings bank.
151-7 (17) [(8)] "Shareholder" includes a limited liability
151-8 company's member and a limited banking association's participant.
151-9 (18) "Small business entity" means a taxable entity
151-10 the gross receipts of which are $500,000 or less for the period on
151-11 which the net taxable earned surplus is based. For the purposes of
151-12 this definition, "gross receipts" has the meaning given that term
151-13 by Sections 171.1051 and 171.1121.
151-14 (19) "Taxable entity" does not include a sole
151-15 proprietorship. "Taxable entity" means:
151-16 (A) a banking corporation;
151-17 (B) a business trust that is required to file a
151-18 federal tax return as a corporation or a partnership;
151-19 (C) a corporation;
151-20 (D) a limited liability company;
151-21 (E) a limited liability partnership;
151-22 (F) a limited partnership;
151-23 (G) a partnership that is required to file a
151-24 federal tax return as a corporation or a partnership;
151-25 (H) a registered limited liability partnership;
151-26 (I) a state or federal savings and loan
151-27 association;
152-1 (J) a professional association;
152-2 (K) a professional corporation; and
152-3 (L) any other kind of business association,
152-4 joint venture, or other combination of entities or persons engaged
152-5 in business, other than an oil and gas joint operating agreement.
152-6 SECTION 3.02. Sections 171.0011(a), (b), and (c), Tax Code,
152-7 are amended to read as follows:
152-8 (a) An additional tax is imposed on a taxable entity
152-9 [corporation] that for any reason becomes no longer subject to the
152-10 earned surplus component of the tax, without regard to whether the
152-11 taxable entity [corporation] remains subject to the taxable
152-12 capital component of the tax.
152-13 (b) The additional tax is equal to 4.5 percent of the
152-14 taxable entity's [corporation's] net taxable earned surplus
152-15 computed on the period beginning on the day after the last day for
152-16 which the tax imposed on net taxable earned surplus was computed
152-17 under Section 171.1532 and ending on the date the taxable entity
152-18 [corporation] is no longer subject to the earned surplus component
152-19 of the tax.
152-20 (c) The additional tax imposed and any report required by
152-21 the comptroller are due on the 60th day after the date the taxable
152-22 entity [corporation] becomes no longer subject to the earned
152-23 surplus component of the tax.
152-24 SECTION 3.03. Sections 171.002(b) and (d), Tax Code, are
152-25 amended to read as follows:
152-26 (b) The amount of franchise tax on each taxable entity
152-27 [corporation], except as provided in Subsection (d), is computed by
153-1 adding the following:
153-2 (1) the amount calculated by applying the tax rate
153-3 prescribed by Subsection (a)(1) to the taxable entity's
153-4 [corporation's] net taxable capital; and
153-5 (2) the difference between:
153-6 (A) the amount calculated by applying the tax
153-7 rate prescribed by Subsection (a)(2) to the taxable entity's
153-8 [corporation's] net taxable earned surplus; and
153-9 (B) the amount determined under Subdivision (1).
153-10 (d) If the amount of tax computed under Subsection (b) for a
153-11 taxable entity [corporation] is less than $500 [$100], the taxable
153-12 entity [corporation] is not required to pay that amount and is not
153-13 considered to owe any tax for that period.
153-14 SECTION 3.04. Subchapter A, Chapter 171, Tax Code, is
153-15 amended by adding Section 171.003 to read as follows:
153-16 Sec. 171.003. TERMINATION, MERGER, AND DIVISION OF
153-17 PARTNERSHIP. (a) For purposes of this chapter, an existing
153-18 partnership shall be considered as continuing if it is not
153-19 terminated.
153-20 (b) A partnership shall be considered as terminated only if:
153-21 (1) no part of any business, financial operation, or
153-22 venture of the partnership continues to be carried on by any of its
153-23 partners in a partnership; or
153-24 (2) within a 12-month period there is a sale or
153-25 exchange of 50 percent or more of the total interest in partnership
153-26 capital and profits.
153-27 (c) In the case of a merger or consolidation of two or more
154-1 partnerships, the resulting partnership shall, for purposes of this
154-2 chapter, be considered the continuation of any merging or
154-3 consolidating partnership whose members own an interest of more
154-4 than 50 percent in the capital and profits of the resulting
154-5 partnership.
154-6 (d) In the case of a division of a partnership into two or
154-7 more partnerships, the resulting partnerships (other than any
154-8 resulting partnership the members of which had an interest of 50
154-9 percent or less in the capital and profits of the prior
154-10 partnership) shall, for purposes of this chapter, be considered a
154-11 continuation of the prior partnership.
154-12 SECTION 3.05. Subchapter B, Chapter 171, Tax Code, is
154-13 amended by adding Section 171.0515 to read as follows:
154-14 Sec. 171.0515. UNRELATED BUSINESS TAXABLE INCOME OF AN
154-15 EXEMPT TAXABLE ENTITY. A taxable entity, otherwise exempt from the
154-16 tax imposed by this chapter, is subject to the net taxable earned
154-17 surplus component of the franchise tax to the extent of its
154-18 unrelated business taxable income, as defined by the Internal
154-19 Revenue Code.
154-20 SECTION 3.06. Subchapter B, Chapter 171, Tax Code, is
154-21 amended by adding Section 171.054 to read as follows:
154-22 Sec. 171.054. EXEMPTION--NONCORPORATE TAXABLE ENTITY
154-23 ELIGIBLE FOR CERTAIN EXEMPTIONS. A taxable entity that is not a
154-24 corporation but that, because of its activities, would qualify for
154-25 a specific exemption under this subchapter if it were a
154-26 corporation, qualifies for the exemption and is exempt from the tax
154-27 in the same manner and under the same conditions as a corporation.
155-1 SECTION 3.07. Section 171.063(a), Tax Code, is amended to
155-2 read as follows:
155-3 (a) The following corporations are exempt from the franchise
155-4 tax:
155-5 (1) a nonprofit corporation exempted from the federal
155-6 income tax under Section 501(c)(3), (4), [(5), (6), (7),] (8),
155-7 (10), or (19), Internal Revenue Code, which in the case of a
155-8 nonprofit hospital means a hospital providing charity care and
155-9 community benefits as set forth in Paragraph (A), (B), (C), (D),
155-10 (E), (F), or (G):
155-11 (A) charity care and government-sponsored
155-12 indigent health care are provided at a level which is reasonable in
155-13 relation to the community needs, as determined through the
155-14 community needs assessment, the available resources of the hospital
155-15 or hospital system, and the tax-exempt benefits received by the
155-16 hospital or hospital system;
155-17 (B) charity care and government-sponsored
155-18 indigent health care are provided in an amount equal to at least
155-19 four percent of the hospital's or hospital system's net patient
155-20 revenue;
155-21 (C) charity care and government-sponsored
155-22 indigent health care are provided in an amount equal to at least
155-23 100 percent of the hospital's or hospital system's tax-exempt
155-24 benefits, excluding federal income tax;
155-25 (D) for tax periods beginning before January 1,
155-26 1996, charity care and community benefits are provided in a
155-27 combined amount equal to at least five percent of the hospital's
156-1 net patient revenue, provided that charity care and
156-2 government-sponsored indigent health care are provided in an amount
156-3 equal to at least three percent of net patient revenue;
156-4 (E) for tax periods beginning after December 31,
156-5 1995, charity care and community benefits are provided in a
156-6 combined amount equal to at least five percent of the hospital's or
156-7 hospital system's net patient revenue, provided that charity care
156-8 and government-sponsored indigent health care are provided in an
156-9 amount equal to at least four percent of net patient revenue;
156-10 (F) a nonprofit hospital that has been
156-11 designated as a disproportionate share hospital under the state
156-12 Medicaid program in the current year or in either of the previous
156-13 two fiscal years is considered to have provided a reasonable amount
156-14 of charity care and government-sponsored indigent health care and
156-15 is considered in compliance with the standards provided by this
156-16 subsection; or
156-17 (G) a hospital operated on a nonprofit basis
156-18 that is located in a county with a population of less than 50,000
156-19 and in which the entire county or the population of the entire
156-20 county has been designated as a health professionals shortage area
156-21 is considered in compliance with the standards provided by this
156-22 subsection;
156-23 (2) a corporation exempted under Section 501(c)(2) or
156-24 (25), Internal Revenue Code, if the corporation or corporations for
156-25 which it holds title to property is either exempt from or not
156-26 subject to the franchise tax;
156-27 (3) a corporation exempted from federal income tax
157-1 under Section 501(c)(16), Internal Revenue Code; and
157-2 (4) a nonprofit corporation exempted from the federal
157-3 income tax under Section 501(c)(3), Internal Revenue Code, that
157-4 does not receive any payment for providing health care services to
157-5 inpatients or outpatients from any source including but not limited
157-6 to the patient or person legally obligated to support the patient,
157-7 third-party payors, Medicare, Medicaid, or any other state or local
157-8 indigent care program. Payment for providing health care services
157-9 does not include charitable donations, legacies, bequests, or
157-10 grants or payments for research.
157-11 For purposes of satisfying Paragraph (E) of Subdivision (1),
157-12 a hospital or hospital system may not change its existing fiscal
157-13 year unless the hospital or hospital system changes its ownership
157-14 or corporate structure as a result of a sale or merger.
157-15 For purposes of this subsection, a hospital that satisfies
157-16 Paragraph (A), (F), or (G) of Subdivision (1) shall be excluded in
157-17 determining a hospital system's compliance with the standards
157-18 provided by Paragraph (B), (C), (D), or (E) of Subdivision (1).
157-19 For purposes of this subsection, the terms "charity care,"
157-20 "government-sponsored indigent health care," "health care
157-21 organization," "hospital system," "net patient revenue," "nonprofit
157-22 hospital," and "tax-exempt benefits" have the meanings set forth in
157-23 Sections 311.031 and 311.042, Health and Safety Code. A
157-24 determination of the amount of community benefits and charity care
157-25 and government-sponsored indigent health care provided by a
157-26 hospital or hospital system and the hospital's or hospital system's
157-27 compliance with the requirements of Section 311.045, Health and
158-1 Safety Code, shall be based on the most recently completed and
158-2 audited prior fiscal year of the hospital or hospital system.
158-3 The providing of charity care and government-sponsored
158-4 indigent health care in accordance with Paragraph (A) of
158-5 Subdivision (1) shall be guided by the prudent business judgment of
158-6 the hospital which will ultimately determine the appropriate level
158-7 of charity care and government-sponsored indigent health care based
158-8 on the community needs, the available resources of the hospital,
158-9 the tax-exempt benefits received by the hospital, and other factors
158-10 that may be unique to the hospital, such as the hospital's volume
158-11 of Medicare and Medicaid patients. These criteria shall not be
158-12 determinative factors, but shall be guidelines contributing to the
158-13 hospital's decision along with other factors which may be unique to
158-14 the hospital. The formulas contained in Paragraphs (B), (C), (D),
158-15 and (E) of Subdivision (1) shall also not be considered
158-16 determinative of a reasonable amount of charity care and
158-17 government-sponsored indigent health care.
158-18 The requirements of this subsection shall not apply to the
158-19 extent a hospital or hospital system demonstrates that reductions
158-20 in the amount of community benefits, charity care, and
158-21 government-sponsored indigent health care are necessary to maintain
158-22 financial reserves at a level required by a bond covenant, are
158-23 necessary to prevent the hospital or hospital system from
158-24 endangering its ability to continue operations, or if the hospital,
158-25 as a result of a natural or other disaster, is required
158-26 substantially to curtail its operations.
158-27 In any fiscal year that a hospital or hospital system,
159-1 through unintended miscalculation, fails to meet any of the
159-2 standards in Subdivision (1), the hospital or hospital system shall
159-3 not lose its tax-exempt status without the opportunity to cure the
159-4 miscalculation in the fiscal year following the fiscal year the
159-5 failure is discovered by both meeting one of the standards and
159-6 providing an additional amount of charity care and
159-7 government-sponsored indigent health care that is equal to the
159-8 shortfall from the previous fiscal year. A hospital or hospital
159-9 system may apply this provision only once every five years.
159-10 SECTION 3.08. Section 171.101, Tax Code, is amended by
159-11 adding Subsections (d) and (e) to read as follows:
159-12 (d) The net taxable capital of a taxable entity other than a
159-13 corporation, a limited liability company, and a savings and loan
159-14 association is computed by:
159-15 (1) adding the taxable entity's capital accounts,
159-16 undistributed profits, and surplus to determine the taxable
159-17 entity's taxable capital;
159-18 (2) for a taxable entity to which Section 171.1102
159-19 applies, subtracting from the amount computed under Subdivision (1)
159-20 the amount of any passive income capital;
159-21 (3) apportioning the taxable entity's taxable capital
159-22 to this state as provided by Section 171.106(a) to determine the
159-23 entity's apportioned taxable capital; and
159-24 (4) subtracting from the amount computed under
159-25 Subdivision (3) any other allowable deductions to determine the
159-26 taxable entity's net taxable capital.
159-27 (e) For purposes of Subsection (d)(1), an amount that
160-1 belongs to the taxable entity's capital accounts, undistributed
160-2 profits, or surplus is excluded if the amount has been added once
160-3 under that subsection in determining the entity's taxable capital.
160-4 SECTION 3.09. Sections 171.1015(a), (b), and (e), Tax Code,
160-5 are amended to read as follows:
160-6 (a) A taxable entity [corporation] that has been designated
160-7 as an enterprise project as provided by Chapter 2303, Government
160-8 Code, may deduct either:
160-9 (1) from its apportioned taxable capital, 50 percent
160-10 of its capital investment in the enterprise zone in which the
160-11 enterprise project is located; or
160-12 (2) from its apportioned taxable earned surplus, five
160-13 percent of its capital investment in the enterprise zone in which
160-14 the enterprise project is located. The deduction may be taken on
160-15 each franchise tax report that is based on a taxable entity's
160-16 [corporation's] fiscal year during all or part of which the taxable
160-17 entity [corporation] is an enterprise project.
160-18 (b) The deduction authorized by this section is limited to
160-19 the depreciated value of capital equipment or other investment that
160-20 qualifies for depreciation for federal income tax purposes and that
160-21 is placed in service in the zone after designation as an enterprise
160-22 project. The depreciated value must be computed by a method which
160-23 is otherwise acceptable for that taxable entity's [corporation's]
160-24 franchise tax report and must be computed for each report on which
160-25 it is taken by the same method of depreciation.
160-26 (e) A taxable entity [corporation] may elect to make the
160-27 deduction authorized by this section either from apportioned
161-1 taxable capital or apportioned taxable earned surplus for each
161-2 separate regular annual period. An election for an initial period
161-3 applies to the second tax period and to the first regular annual
161-4 period.
161-5 SECTION 3.10. Section 171.103, Tax Code, is amended to read
161-6 as follows:
161-7 Sec. 171.103. DETERMINATION OF GROSS RECEIPTS FROM BUSINESS
161-8 DONE IN THIS STATE FOR TAXABLE CAPITAL. (a) In apportioning
161-9 taxable capital, the gross receipts of a taxable entity
161-10 [corporation] from its business done in this state is the sum of
161-11 the taxable entity's [corporation's] receipts from:
161-12 (1) each sale of tangible personal property if the
161-13 property is delivered or shipped to a buyer in this state
161-14 regardless of the FOB point or another condition of the sale, and
161-15 each sale of tangible personal property shipped from this state to
161-16 a purchaser in another state in which the seller is not subject to
161-17 taxation;
161-18 (2) each service performed in this state;
161-19 (3) each rental of property situated in this state;
161-20 (4) each [royalty for the] use of a patent, [or]
161-21 copyright, trademark, franchise, or license in this state; [and]
161-22 (5) each sale of real property located in this state,
161-23 including royalties for oil, gas, or other mineral interests; and
161-24 (6) other business done in this state.
161-25 (b) If a taxable entity sells an investment or capital
161-26 asset, the taxable entity's gross receipts from business done in
161-27 this state include only the gain from the sale.
162-1 (c) Gross receipts from interest, dividends, sales of
162-2 intangibles, and other business done in this state shall be
162-3 apportioned to this state if:
162-4 (1) the commercial domicile of the recipient is in
162-5 this state; and
162-6 (2) the gross receipt is not interest from, a dividend
162-7 from, or the sale of stock of a subsidiary, associate, or
162-8 affiliated corporation:
162-9 (A) whose income is received predominantly from
162-10 sources outside of the United States or from a subsidiary,
162-11 associate, or affiliated corporation whose income is predominantly
162-12 from sources outside of the United States; and
162-13 (B) that does not transact and does not have a
162-14 subsidiary that transacts a substantial portion of its business, or
162-15 regularly maintains a substantial portion of its assets, in the
162-16 United States.
162-17 (d) For purposes of Subsection(c)(2)(B), a holding company
162-18 incorporated in the United States that owns stock only of a
162-19 subsidiary, associate, or affiliated corporation that transacts
162-20 substantially all of its business outside of the United States or
162-21 of another holding company that owns stock only of a subsidiary,
162-22 associate, or affiliated corporation that transacts substantially
162-23 all of its business outside of the United States does not transact
162-24 a substantial portion of its business or regularly maintain a
162-25 substantial portion of its assets in the United States.
162-26 (e) In apportioning taxable capital of a telephone company
162-27 or a transportation company, the comptroller shall adopt rules to
163-1 apportion to this state receipts from this state's portion of a
163-2 transaction within and without this state.
163-3 SECTION 3.11. Section 171.1032, Tax Code, is amended to read
163-4 as follows:
163-5 Sec. 171.1032. DETERMINATION OF GROSS RECEIPTS FROM BUSINESS
163-6 DONE IN THIS STATE FOR TAXABLE EARNED SURPLUS. (a) Except for the
163-7 gross receipts of a taxable entity [corporation] that are subject
163-8 to the provisions of Section 171.1061, in apportioning taxable
163-9 earned surplus, the gross receipts of a taxable entity
163-10 [corporation] from its business done in this state is the sum of
163-11 the taxable entity's [corporation's] receipts from:
163-12 (1) each sale of tangible personal property if the
163-13 property is delivered or shipped to a buyer in this state
163-14 regardless of the FOB point or another condition of the sale, and
163-15 each sale of tangible personal property shipped from this state to
163-16 a purchaser in another state in which the seller is not subject to
163-17 any tax on, or measured by, net income, without regard to whether
163-18 the tax is imposed;
163-19 (2) each service performed in this state;
163-20 (3) each rental of property situated in this state;
163-21 (4) each [royalty for the] use of a patent, [or]
163-22 copyright, trademark, franchise, or license in this state; [and]
163-23 (5) each sale of real property located in this state,
163-24 including royalties for oil, gas, or other mineral interests; and
163-25 (6) other business done in this state.
163-26 (b) If a taxable entity sells an investment or capital
163-27 asset, the taxable entity's gross receipts from business done in
164-1 this state include only the gain from the sale [A corporation shall
164-2 deduct from its gross receipts computed under Subsection (a) any
164-3 amount to the extent included under Subsection (a) because of the
164-4 application of Section 78 or Sections 951-964, Internal Revenue
164-5 Code, and dividends received from a subsidiary, associate, or
164-6 affiliated corporation that does not transact a substantial portion
164-7 of its business or regularly maintain a substantial portion of its
164-8 assets in the United States].
164-9 (c) Gross receipts from interest, dividends, sales of
164-10 intangibles, and other business done in this state shall be
164-11 apportioned to this state if:
164-12 (1) the commercial domicile of the recipient is in
164-13 this state; and
164-14 (2) the gross receipt is not interest from, a dividend
164-15 from, or the sale of stock of, a subsidiary, associate, or
164-16 affiliated corporation:
164-17 (A) whose income is received predominantly from
164-18 sources outside of the United States or from a subsidiary,
164-19 associate, or affiliated corporation whose income is predominantly
164-20 from sources outside of the United States; and
164-21 (B) that does not transact and does not have a
164-22 subsidiary that transacts a substantial portion of its business, or
164-23 regularly maintains a substantial portion of its assets, in the
164-24 United States.
164-25 (d) For purposes of Subsection (c)(2)(B), a holding company
164-26 incorporated in the United States that owns stock only of a
164-27 subsidiary, associate, or affiliated corporation that transacts
165-1 substantially all of its business outside of the United States or
165-2 of another holding company that owns stock only of a subsidiary,
165-3 associate, or affiliated corporation that transacts substantially
165-4 all of its business outside of the United States does not transact
165-5 a substantial portion of its business or regularly maintain a
165-6 substantial portion of its assets in the United States.
165-7 (e) In apportioning taxable earned surplus of a telephone
165-8 company or a transportation company, the comptroller shall adopt
165-9 rules to apportion to this state receipts from this state's portion
165-10 of a transaction within and without this state.
165-11 SECTION 3.12. Section 171.105, Tax Code, is amended to read
165-12 as follows:
165-13 Sec. 171.105. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
165-14 BUSINESS FOR TAXABLE CAPITAL. (a) In apportioning taxable
165-15 capital, the gross receipts of a taxable entity [corporation] from
165-16 its entire business is the sum of the taxable entity's
165-17 [corporation's] receipts from:
165-18 (1) each sale of the taxable entity's [corporation's]
165-19 tangible personal property;
165-20 (2) each service, rental, or royalty; and
165-21 (3) other business.
165-22 (b) If a taxable entity [corporation] sells an investment or
165-23 capital asset, the taxable entity's [corporation's] gross receipts
165-24 from its entire business for taxable capital include only the net
165-25 gain from the sale.
165-26 SECTION 3.13. Section 171.1051, Tax Code, is amended to read
165-27 as follows:
166-1 Sec. 171.1051. DETERMINATION OF GROSS RECEIPTS FROM ENTIRE
166-2 BUSINESS FOR TAXABLE EARNED SURPLUS. (a) Except for the gross
166-3 receipts of a taxable entity [corporation] that are subject to the
166-4 provisions of Section 171.1061, in apportioning taxable earned
166-5 surplus, the gross receipts of a taxable entity [corporation] from
166-6 its entire business is the sum of the taxable entity's
166-7 [corporation's] receipts from:
166-8 (1) each sale of the taxable entity's [corporation's]
166-9 tangible personal property;
166-10 (2) each service, rental, or royalty; and
166-11 (3) other business.
166-12 (b) If a taxable entity [corporation] sells an investment or
166-13 capital asset, the taxable entity's [corporation's] gross receipts
166-14 from its entire business for taxable earned surplus includes only
166-15 the net gain from the sale.
166-16 [(c) A corporation shall deduct from its gross receipts
166-17 computed under Subsection (a) any amount to the extent included in
166-18 Subsection (a) because of the application of Section 78 or Sections
166-19 951-964, Internal Revenue Code, and dividends received from a
166-20 subsidiary, associate, or affiliated corporation that does not
166-21 transact a substantial portion of its business or regularly
166-22 maintain a substantial portion of its assets in the United States.]
166-23 SECTION 3.14. Section 171.106, Tax Code, is amended to read
166-24 as follows:
166-25 Sec. 171.106. APPORTIONMENT OF TAXABLE CAPITAL AND TAXABLE
166-26 EARNED SURPLUS TO THIS STATE. (a) A taxable entity's [Except as
166-27 provided by Subsection (c), a corporation's] taxable capital is
167-1 apportioned to this state to determine the amount of the tax
167-2 imposed under Section 171.002(b)(1) by multiplying the taxable
167-3 entity's [corporation's] taxable capital by a fraction, the
167-4 numerator of which is the taxable entity's [corporation's] gross
167-5 receipts from business done in this state, as determined under
167-6 Section 171.103 or 171.1031, as applicable, and the denominator of
167-7 which is the taxable entity's [corporation's] gross receipts from
167-8 its entire business, as determined under Section 171.105.
167-9 (b) A taxable entity's [Except as provided by Subsection
167-10 (c), a corporation's] taxable earned surplus is apportioned to this
167-11 state to determine the amount of tax imposed under Section
167-12 171.002(b)(2) by multiplying the taxable earned surplus by a
167-13 fraction, the numerator of which is the taxable entity's
167-14 [corporation's] gross receipts from business done in this state, as
167-15 determined under Section 171.1031 or 171.1032, as applicable, and
167-16 the denominator of which is the taxable entity's [corporation's]
167-17 gross receipts from its entire business, as determined under
167-18 Section 171.1051.
167-19 [(c) A corporation's taxable capital or earned surplus that
167-20 is derived, directly or indirectly, from the sale of management,
167-21 distribution, or administration services to or on behalf of a
167-22 regulated investment company, including a corporation that includes
167-23 trustees or sponsors of employee benefit plans that have accounts
167-24 in a regulated investment company, is apportioned to this state to
167-25 determine the amount of the tax imposed under Section 171.002 by
167-26 multiplying the corporation's total taxable capital or earned
167-27 surplus from the sale of services to or on behalf of a regulated
168-1 investment company by a fraction, the numerator of which is the
168-2 average of the sum of shares owned at the beginning of the year and
168-3 the sum of shares owned at the end of the year by the investment
168-4 company shareholders who are commercially domiciled in this state,
168-5 and the denominator of which is the average of the sum of shares
168-6 owned at the beginning of the year and the sum of shares owned at
168-7 the end of the year by all investment company shareholders. The
168-8 corporation shall make a separate computation to allocate taxable
168-9 capital and earned surplus. In this subsection, "regulated
168-10 investment company" has the meaning assigned by Section 851(a),
168-11 Internal Revenue Code.]
168-12 SECTION 3.15. Section 171.1061, Tax Code, is amended to read
168-13 as follows:
168-14 Sec. 171.1061. ALLOCATION OF CERTAIN TAXABLE EARNED SURPLUS
168-15 TO THIS STATE. An item of income included in a taxable entity's
168-16 [corporation's] taxable earned surplus, except that portion derived
168-17 from dividends and interest, that a state, other than this state,
168-18 or a country, other than the United States, cannot tax because the
168-19 activities generating that item of income do not have sufficient
168-20 unitary connection with the taxable entity's [corporation's] other
168-21 activities conducted within that state or country under the United
168-22 States Constitution, is allocated to this state if the taxable
168-23 entity's [corporation's] commercial domicile is in this state.
168-24 Income that can only be allocated to the state of commercial
168-25 domicile because the income has insufficient unitary connection
168-26 with any other state or country shall be allocated to this state or
168-27 another state or country net of expenses related to that income. A
169-1 portion of a taxable entity's [corporation's] taxable earned
169-2 surplus allocated to this state under this section may not be
169-3 apportioned under Section 171.110(a)(2).
169-4 SECTION 3.16. Section 171.109, Tax Code, as amended by
169-5 Chapters 801 and 1198, Acts of the 71st Legislature, Regular
169-6 Session, 1989, is amended to read as follows:
169-7 Sec. 171.109. SURPLUS. (a) In this chapter:
169-8 (1) "Surplus" means the net assets of a taxable entity
169-9 [corporation] minus its stated capital. For a limited liability
169-10 company, "surplus" means the net assets of the company minus its
169-11 members' contributions. Surplus includes unrealized, estimated, or
169-12 contingent losses or obligations or any writedown of assets other
169-13 than those listed in Subsection (i) of this section net of
169-14 appropriate income tax provisions. The definition under this
169-15 subdivision does not apply to earned surplus.
169-16 (2) "Net assets" means the total assets of a taxable
169-17 entity [corporation] minus its total debts.
169-18 (3) "Debt" means any legally enforceable obligation
169-19 measured in a certain amount of money which must be performed or
169-20 paid within an ascertainable period of time or on demand.
169-21 (b) Except as otherwise provided in this section, a taxable
169-22 entity [corporation] must compute its surplus, assets, and debts
169-23 according to generally accepted accounting principles. If
169-24 generally accepted accounting principles are unsettled or do not
169-25 specify an accounting practice for a particular purpose related to
169-26 the computation of surplus, assets, or debts, the comptroller by
169-27 rule may establish rules to specify the applicable accounting
170-1 practice for that purpose.
170-2 (c) A taxable entity [corporation] whose taxable capital is
170-3 less than $1 million may report its surplus according to the
170-4 method used in the taxable entity's [corporation's] most recent
170-5 federal income tax return originally due on or before the date on
170-6 which the taxable entity's [corporation's] franchise tax report is
170-7 originally due. In determining if taxable capital is less than $1
170-8 million, the taxable entity [corporation] shall apply the methods
170-9 the taxable entity [corporation] used in computing that federal
170-10 income tax return unless another method is required under this
170-11 chapter.
170-12 (d) A taxable entity [corporation] shall report its surplus
170-13 based solely on its own financial condition. Consolidated
170-14 reporting of the surplus of related taxable entities [corporations]
170-15 is prohibited.
170-16 (e) A taxable entity [Unless the provisions of Section
170-17 171.111 apply due to an election under that section, a corporation]
170-18 may not change the accounting methods used to compute its surplus
170-19 more often than once every four years without the written consent
170-20 of the comptroller. A change in accounting methods is not
170-21 justified solely because it results in a reduction of tax
170-22 liability.
170-23 (f) A taxable entity making a distribution [corporation
170-24 declaring dividends] shall exclude the distribution [those
170-25 dividends] from its taxable capital, and a taxable entity
170-26 [corporation] receiving a distribution [dividends] shall include
170-27 the distribution [those dividends] in its gross receipts and
171-1 taxable capital as of the earlier of:
171-2 (1) the date the distribution is [dividends are]
171-3 declared, if the distribution is [dividends are] actually paid
171-4 within one year after the declaration date; or
171-5 (2) the date the distribution is [dividends are]
171-6 actually paid.
171-7 (g) All oil and gas exploration and production activities
171-8 conducted by a taxable entity [corporation] that reports its
171-9 surplus according to generally accepted accounting principles as
171-10 required or permitted by this chapter must be reported according to
171-11 the successful efforts or the full cost method of accounting.
171-12 (h) A parent or investor taxable entity [corporation] must
171-13 use the cost method of accounting in reporting and calculating the
171-14 franchise tax on its investments in subsidiary taxable entities
171-15 [corporations] or other investees. The retained earnings of a
171-16 subsidiary corporation or other investee before acquisition by the
171-17 parent or investor taxable entity [corporation] may not be excluded
171-18 from the cost of the subsidiary corporation or investee to the
171-19 parent or investor taxable entity [corporation] and must be
171-20 included by the parent or investor taxable entity [corporation] in
171-21 calculating its surplus.
171-22 (i) The following accounts may also be excluded from
171-23 surplus, to the extent they are in conformance with generally
171-24 accepted accounting principles or the appropriate federal income
171-25 tax method, whichever is applicable:
171-26 (1) a reserve or allowance for uncollectable accounts;
171-27 and
172-1 (2) a contra-asset account for depletion,
172-2 depreciation, or amortization.
172-3 (j) A taxable entity [corporation] may not exclude from
172-4 surplus:
172-5 (1) liabilities for compensation and other benefits
172-6 provided to employees, other than wages, that are not debt as of
172-7 the end of the accounting period on which the taxable capital
172-8 component is based, including retirement, medical, insurance,
172-9 postretirement, and other similar benefits; and
172-10 (2) deferred investment tax credits.
172-11 (k) Notwithstanding any other provision in this chapter, a
172-12 taxable entity [corporation] subject to the tax imposed by this
172-13 chapter shall use double entry bookkeeping to account for all
172-14 transactions that affect the computation of that tax.
172-15 (l) The "first in-first out" and "last in-first out" methods
172-16 of accounting are acceptable methods for computing surplus.
172-17 (m) A taxable entity [corporation] may not use the push-down
172-18 method of accounting in computing or reporting its surplus.
172-19 SECTION 3.17. Section 171.110, Tax Code, is amended to read
172-20 as follows:
172-21 Sec. 171.110. DETERMINATION OF NET TAXABLE EARNED SURPLUS.
172-22 (a) Except as provided by Section 171.1101, the [The] net taxable
172-23 earned surplus of a taxable entity [corporation] is computed by:
172-24 (1) determining the taxable entity's [corporation's]
172-25 reportable federal taxable income and making the following
172-26 adjustments:[,]
172-27 (A) subtracting [from that amount] any amount
173-1 included in reportable federal taxable income under Section 78 or
173-2 Sections 951-964, Internal Revenue Code;[, and]
173-3 (B) subtracting any taxable income or deductions
173-4 included under the provisions of Section 702(a) or 1366(a),
173-5 Internal Revenue Code, to the extent included in computing federal
173-6 taxable income from an S corporation or a partnership that is
173-7 subject to the earned surplus component of the tax imposed under
173-8 this chapter;
173-9 (C) adding, for each other taxable entity owned
173-10 in whole or part by the taxable entity, in proportion to the amount
173-11 of that ownership, any amount of passive income subtracted from
173-12 reportable federal taxable income under Section 171.1102 by the
173-13 other taxable entity;
173-14 (D) subtracting dividends received from a
173-15 subsidiary, associate, or affiliated corporation that does not
173-16 transact a substantial portion of its business or regularly
173-17 maintain a substantial portion of its assets in the United
173-18 States;[, and]
173-19 (E) adding 100 percent of compensation, to the
173-20 extent excluded in determining reportable federal taxable income,
173-21 of:
173-22 (i) each officer, except if a bank, only
173-23 each executive officer;
173-24 (ii) each director; and
173-25 (iii) each owner who owns 0.1 percent or
173-26 more of the taxable entity [to that amount any compensation of
173-27 officers or directors, or if a bank, any compensation of directors
174-1 and executive officers, to the extent excluded in determining
174-2 federal taxable income to determine the corporation's taxable
174-3 earned surplus]; and
174-4 (F) for a taxable entity with 35 or fewer
174-5 owners, directly or indirectly, subtracting an amount up to
174-6 $100,000 in compensation paid to each owner who owns 0.1 percent or
174-7 more of the taxable entity;
174-8 (2) apportioning the taxable entity's [corporation's]
174-9 taxable earned surplus to this state as provided by Section
174-10 171.106(b) [or (c), as applicable,] to determine the taxable
174-11 entity's [corporation's] apportioned taxable earned surplus;
174-12 (3) adding the taxable entity's [corporation's]
174-13 taxable earned surplus allocated to this state as provided by
174-14 Section 171.1061; and
174-15 (4) subtracting from that amount any allowable
174-16 deductions and any business loss that is carried forward to the tax
174-17 reporting period and deductible under Subsection (e).
174-18 (b) For purposes of Subsection (a)(1):
174-19 (1) an amount may not be subtracted from reportable
174-20 federal taxable income more than once;
174-21 (2) an amount may not be added to reportable federal
174-22 taxable income more than once; and
174-23 (3) husband and wife are treated as one owner if the
174-24 ownership interest is:
174-25 (A) stock issued to them jointly; or
174-26 (B) represented by a certificate, statement in a
174-27 trust, or other evidence of ownership and the evidence identifies
175-1 the spouses as joint owners of the same interest. [A corporation
175-2 is not required to add the compensation of officers or directors as
175-3 required by Subsection (a)(1) if the corporation is:]
175-4 [(1) a corporation that has not more than 35
175-5 shareholders; or]
175-6 [(2) an S corporation, as that term is defined by
175-7 Section 1361, Internal Revenue Code.]
175-8 (c) [Subsection (b) does not apply to a subsidiary
175-9 corporation unless it applies to the subsidiary's parent
175-10 corporation.]
175-11 [(d)] A corporation's reportable federal taxable income is
175-12 the corporation's federal taxable income after Schedule C special
175-13 deductions and before net operating loss deductions as computed
175-14 under the Internal Revenue Code, except that an S corporation's
175-15 reportable federal taxable income is the amount of the income
175-16 reportable to the Internal Revenue Service as taxable to the
175-17 corporation's shareholders.
175-18 (d) Reportable federal taxable income shall be determined
175-19 before adjustment for distributions to owners and includes all
175-20 income taxable to the entity or the owners for federal income tax
175-21 purposes.
175-22 (e) For purposes of this section, a business loss is any
175-23 negative amount after apportionment and allocation. The business
175-24 loss shall be carried forward to the year succeeding the loss year
175-25 as a deduction to net taxable earned surplus, then successively to
175-26 the succeeding four taxable years after the loss year or until the
175-27 loss is exhausted, whichever occurs first, but for not more than
176-1 five taxable years after the loss year. Notwithstanding the
176-2 preceding sentence, a business loss from a tax year that ends
176-3 before January 1, 1991, may not be used to reduce net taxable
176-4 earned surplus. A business loss incurred before January 1, 1997,
176-5 may not be used to reduce the net taxable earned surplus of a
176-6 taxable entity not subject to this chapter before January 1, 1998.
176-7 (f) A taxable entity [corporation] may use either the "first
176-8 in-first out" or "last in-first out" method of accounting to
176-9 compute its net taxable earned surplus, but only to the extent that
176-10 the taxable entity [corporation] used that method on its most
176-11 recent federal income tax report originally due on or before the
176-12 date on which the taxable entity's [corporation's] franchise tax
176-13 report is originally due.
176-14 (g) For purposes of this section, an approved Employee Stock
176-15 Ownership Plan controlling a minority interest and voted through a
176-16 single trustee shall be considered one owner [shareholder].
176-17 SECTION 3.18. Subchapter C, Chapter 171, Tax Code, is
176-18 amended by adding Section 171.1101 to read as follows:
176-19 Sec. 171.1101. DETERMINATION OF NET TAXABLE EARNED SURPLUS
176-20 OF PARTNERSHIPS. (a) The net taxable earned surplus of a
176-21 partnership is computed by:
176-22 (1) determining the partnership's reportable federal
176-23 taxable income and making the following adjustments:
176-24 (A) subtracting any taxable income or deductions
176-25 included under the provisions of Section 702(a) or 1366(a),
176-26 Internal Revenue Code, to the extent included in computing
176-27 reportable federal taxable income from a partnership that is
177-1 subject to the earned surplus component of the tax imposed under
177-2 this chapter;
177-3 (B) adding 100 percent of guaranteed payments,
177-4 to the extent excluded in determining reportable federal taxable
177-5 income, made to each partner; and
177-6 (C) for a partnership with 35 or fewer partners,
177-7 all of whom are natural persons, subtracting an amount up to
177-8 $100,000 in guaranteed payments made to each partner;
177-9 (2) apportioning the partnership's taxable earned
177-10 surplus to this state as provided by Section 171.106(b) to
177-11 determine the partnership's apportioned taxable earned surplus;
177-12 (3) adding the partnership's taxable earned surplus
177-13 allocated to this state as provided by Section 171.1061; and
177-14 (4) subtracting from that amount any allowable
177-15 deductions and any business loss that is carried forward to the tax
177-16 reporting period and deductible under Subsection (d).
177-17 (b) For purposes of Subsection (a)(1):
177-18 (1) an amount may not be subtracted from reportable
177-19 federal taxable income more than once;
177-20 (2) an amount may not be added to reportable federal
177-21 taxable income more than once; and
177-22 (3) in determining whether a partnership has 35 or
177-23 fewer partners, husband and wife are treated as one partner.
177-24 (c) A partnership's reportable federal taxable income is the
177-25 amount of the income reportable to the Internal Revenue Service as
177-26 taxable to the partners, except for guaranteed payments, if taxed
177-27 as a partnership for federal income tax purposes.
178-1 (d) For purposes of this section, a business loss is
178-2 any negative amount after apportionment and allocation. The
178-3 business loss shall be carried forward to the year succeeding the
178-4 loss year as a deduction to net taxable earned surplus, then
178-5 successively to the succeeding four taxable years after the loss
178-6 year or until the loss is exhausted, whichever occurs first, but
178-7 for not more than five taxable years after the loss year.
178-8 Notwithstanding the preceding sentence, a business loss incurred
178-9 before January 1, 1997, may not be used to reduce net taxable
178-10 earned surplus.
178-11 SECTION 3.181. Subchapter C, Chapter 171, Tax Code, is
178-12 amended by adding Section 171.1102 to read as follows:
178-13 Sec. 171.1102. ADDITIONAL ADJUSTMENT OF NET TAXABLE EARNED
178-14 SURPLUS FOR PASSIVE INCOME OF CERTAIN TAXABLE ENTITIES. (a) In
178-15 addition to the applicable adjustments to a taxable entity's
178-16 reportable federal taxable income provided by Section 171.110(a)(1)
178-17 or 171.1101(a)(1), the net taxable earned surplus of a taxable
178-18 entity to which this section applies is computed by subtracting any
178-19 amount of passive income included in reportable federal taxable
178-20 income.
178-21 (b) This section applies to a taxable entity other than:
178-22 (1) a corporation, including a banking corporation;
178-23 (2) a limited liability company;
178-24 (3) a state or federal savings and loan association;
178-25 or
178-26 (4) a lending institution.
178-27 (c) In this section, "lending institution" means an entity:
179-1 (1) that is regularly engaged in the business of
179-2 extending credit, making loans, or providing other forms of
179-3 financing; and
179-4 (2) that, as a result of engaging in the activity
179-5 described by Subdivision (1), is required to register or become
179-6 licensed under state law, including registration with the Office of
179-7 Consumer Credit Commissioner under Title 79, Revised Statutes, by
179-8 another state under similar law, or by the federal government.
179-9 SECTION 3.19. Sections 171.112(b), (c), (d), (e), (f), and
179-10 (h), Tax Code, are amended to read as follows:
179-11 (b) Except as otherwise provided in this section, a taxable
179-12 entity [corporation] must compute gross receipts in accordance with
179-13 generally accepted accounting principles. If generally accepted
179-14 accounting principles are unsettled or do not specify an accounting
179-15 practice for a particular purpose related to the computation of
179-16 gross receipts, the comptroller by rule may establish rules to
179-17 specify the applicable accounting practice.
179-18 (c) A taxable entity [corporation] whose taxable capital is
179-19 less than $1 million may report its gross receipts according to the
179-20 method used in the taxable entity's [corporation's] most recent
179-21 federal income tax return originally due on or before the date on
179-22 which the taxable entity's [corporation's] franchise tax report is
179-23 originally due. In determining if taxable capital is less than $1
179-24 million, the taxable entity [corporation] shall apply the methods
179-25 the taxable entity [corporation] used in computing that federal
179-26 income tax return unless another method is required under this
179-27 chapter.
180-1 (d) A taxable entity [corporation] shall report its gross
180-2 receipts based solely on its own financial condition. Consolidated
180-3 reporting of related taxable entities [corporations] is prohibited.
180-4 (e) A taxable entity [Unless the provisions of Section
180-5 171.111 apply due to an election under that section, a corporation]
180-6 may not change its accounting methods used to calculate gross
180-7 receipts more often than once every four years without the express
180-8 written consent of the comptroller. A change in accounting methods
180-9 is not justified solely because it results in a reduction of tax
180-10 liability.
180-11 (f) Notwithstanding any other provision in this chapter, a
180-12 taxable entity [corporation] subject to the tax imposed by this
180-13 chapter shall use double entry bookkeeping to account for all
180-14 transactions that affect the computation of that tax.
180-15 (h) Except as otherwise provided by this section, a taxable
180-16 entity [corporation] shall use the same accounting methods to
180-17 apportion its taxable capital as it used to compute its taxable
180-18 capital.
180-19 SECTION 3.20. Section 171.1121, Tax Code, is amended to read
180-20 as follows:
180-21 Sec. 171.1121. GROSS RECEIPTS FOR TAXABLE EARNED SURPLUS.
180-22 (a) For purposes of this section, "gross receipts" means all
180-23 revenues reportable by a taxable entity [corporation] on its
180-24 federal tax return, without deduction for the cost of property
180-25 sold, materials used, labor performed, or other costs incurred,
180-26 unless otherwise specifically provided in this chapter. "Gross
180-27 receipts" does not include revenues that are not included in
181-1 taxable earned surplus. For example, Schedule C special deductions
181-2 and any amounts subtracted from reportable federal taxable income
181-3 under Section 171.110(a)(1) are not included in taxable earned
181-4 surplus and therefore are not considered gross receipts.
181-5 (b) Except as otherwise provided by this section, a taxable
181-6 entity [corporation] shall use the same accounting methods to
181-7 apportion taxable earned surplus as used in computing reportable
181-8 federal taxable income.
181-9 (c) A taxable entity [corporation] shall report its gross
181-10 receipts based solely on its own financial condition. Consolidated
181-11 reporting of related taxable entities [corporations] is prohibited.
181-12 (d) A taxable entity [Unless the provisions of Section
181-13 171.111 apply due to an election under that section, a corporation]
181-14 may not change its accounting methods used to calculate gross
181-15 receipts more often than once every four years without the express
181-16 written consent of the comptroller. A change in accounting methods
181-17 is not justified solely because it results in a reduction of tax
181-18 liability.
181-19 SECTION 3.21. Section 171.113, Tax Code, is amended to read
181-20 as follows:
181-21 Sec. 171.113. ALTERNATE METHOD OF DETERMINING TAXABLE
181-22 CAPITAL AND GROSS RECEIPTS FOR SMALL BUSINESS ENTITIES [CERTAIN
181-23 CORPORATIONS]. (a) This section applies only to a small business
181-24 entity[:]
181-25 [(1) a corporation organized as a close corporation
181-26 under Part 12, Texas Business Corporation Act, that has not more
181-27 than 35 shareholders;]
182-1 [(2) a foreign corporation organized under the close
182-2 corporation law of another state that has not more than 35
182-3 shareholders; and]
182-4 [(3) an S corporation as that term is defined by
182-5 Section 1361, Internal Revenue Code of 1986 (26 U.S.C. Section
182-6 1361)].
182-7 (b) A small business entity [corporation to which this
182-8 section applies] may elect to compute its surplus, assets, debts,
182-9 and gross receipts according to the method the business entity
182-10 [corporation] uses to report its federal income tax instead of as
182-11 provided by Sections 171.109(b) and (g) and Section 171.112(b).
182-12 This section does not affect the application of the other
182-13 subsections of Sections 171.109 and 171.112 and other provisions of
182-14 this chapter to a small business entity [corporation] making the
182-15 election.
182-16 (c) The comptroller may adopt rules as necessary to specify
182-17 the reporting requirements for a small business entity
182-18 [corporations to which this section applies].
182-19 (d) This section does not apply to a subsidiary corporation
182-20 unless it applies to the parent corporation of the subsidiary.
182-21 (e) The election under Subsection (b) becomes effective when
182-22 written notice of the election is received by the comptroller from
182-23 the small business entity [corporation]. An election under
182-24 Subsection (b) must be postmarked not later than the due date for
182-25 the electing small business entity's [corporation's] franchise tax
182-26 report to which the election applies.
182-27 SECTION 3.22. Section 171.151, Tax Code, is amended to read
183-1 as follows:
183-2 Sec. 171.151. PRIVILEGE PERIOD COVERED BY TAX. The
183-3 franchise tax shall be paid for each of the following:
183-4 (1) an initial period beginning on the taxable
183-5 entity's [corporation's] beginning date and ending on the day
183-6 before the first anniversary of the beginning date;
183-7 (2) a second period beginning on the first anniversary
183-8 of the beginning date and ending on December 31 following that
183-9 date; and
183-10 (3) after the initial and second periods have expired,
183-11 a regular annual period beginning each year on January 1 and ending
183-12 the following December 31.
183-13 SECTION 3.23. Section 171.152(c), Tax Code, is amended to
183-14 read as follows:
183-15 (c) Payment of the tax covering the regular annual period is
183-16 due May 15, of each year after the beginning of the regular annual
183-17 period. However, if the first anniversary of the taxable entity's
183-18 [corporation's] beginning date is after October 3 and before
183-19 January 1, the payment of the tax covering the first regular annual
183-20 period is due on the same date as the tax covering the initial
183-21 period.
183-22 SECTION 3.24. Sections 171.153(a) and (c), Tax Code, are
183-23 amended to read as follows:
183-24 (a) The tax covering the initial period is reported on the
183-25 initial report and is based on the business done by the taxable
183-26 entity [corporation] during the period beginning on the taxable
183-27 entity's [corporation's] beginning date and:
184-1 (1) ending on the last accounting period ending date
184-2 that is at least six months after the beginning date and at least
184-3 60 days before the original due date of the initial report; or
184-4 (2) if there is no such period ending date in
184-5 Subdivision (1) of this subsection, then ending on the day that is
184-6 the last day of a calendar month and that is nearest to the end of
184-7 the taxable entity's [corporation's] first year of business; or
184-8 (3) ending on the day after the merger occurs, for the
184-9 survivor of a merger which occurs after the day on which the tax is
184-10 based in Subdivision (1) or Subdivision (2), whichever is
184-11 applicable, of Subsection (a) and before January 1, of the year an
184-12 initial report is due by the survivor.
184-13 (c) The tax covering the regular annual period is based on
184-14 the business done by the taxable entity [corporation] during its
184-15 last accounting period that ends in the year before the year in
184-16 which the tax is due; unless a taxable entity [corporation] is the
184-17 survivor of a merger which occurs between the end of its last
184-18 accounting period in the year before the report year and January 1
184-19 of the report year, in which case the tax will be based on the
184-20 financial condition of the surviving taxable entity [corporation]
184-21 for the 12-month period ending on the day after the merger.
184-22 However, if the first anniversary of the taxable entity's
184-23 [corporation's] beginning date is after October 3 and before
184-24 January 1, the tax covering the first regular annual period is
184-25 based on the same business on which the tax covering the initial
184-26 period is based and is reported on the initial report.
184-27 SECTION 3.25. Section 171.1532, Tax Code, is amended to read
185-1 as follows:
185-2 Sec. 171.1532. BUSINESS ON WHICH TAX ON NET TAXABLE EARNED
185-3 SURPLUS IS BASED. (a) The tax covering the privilege periods
185-4 included on the initial report, as required by Section 171.153, is
185-5 based on the business done by the taxable entity [corporation]
185-6 during the period beginning on the taxable entity's [corporation's]
185-7 beginning date and:
185-8 (1) ending on the last accounting period ending date
185-9 for federal income tax purposes that is at least 60 days before the
185-10 original due date of the initial report; or
185-11 (2) if there is no such period ending date in
185-12 Subdivision (1) of this subsection, then ending on the day that is
185-13 the last day of a calendar month and that is nearest to the end of
185-14 the taxable entity's [corporation's] first year of business.
185-15 (b) The tax covering the regular annual period, other than a
185-16 regular annual period included on the initial report, is based on
185-17 the business done by the taxable entity [corporation] during the
185-18 period beginning with the day after the last date upon which net
185-19 taxable earned surplus on a previous report was based and ending
185-20 with its last accounting period ending date for federal income tax
185-21 purposes in the year before the year in which the report is
185-22 originally due.
185-23 SECTION 3.26. Section 171.154, Tax Code, is amended to read
185-24 as follows:
185-25 Sec. 171.154. PAYMENT TO COMPTROLLER. A taxable entity
185-26 [corporation] on which a tax is imposed by this chapter shall pay
185-27 the tax to the comptroller.
186-1 SECTION 3.27. Section 171.201, Tax Code, is amended to read
186-2 as follows:
186-3 Sec. 171.201. INITIAL REPORT. (a) Except as provided by
186-4 Section 171.2022, a taxable entity [corporation] on which the
186-5 franchise tax is imposed shall file an initial report with the
186-6 comptroller containing:
186-7 (1) information showing the financial condition of the
186-8 taxable entity [corporation] on the day that is the last day of a
186-9 calendar month and that is nearest to the end of the taxable
186-10 entity's [corporation's] first year of business;
186-11 (2) the name and address of each officer and director
186-12 of the taxable entity [corporation];
186-13 (3) the name and address of the agent of the taxable
186-14 entity [corporation] designated under Section 171.354; and
186-15 (4) other information required by the comptroller.
186-16 (b) The taxable entity [corporation] shall file the report
186-17 on or before the date the payment is due under Subsection (a) of
186-18 Section 171.152.
186-19 SECTION 3.28. Sections 171.202(a), (b), (c), (e), and (f),
186-20 Tax Code, are amended to read as follows:
186-21 (a) Except as provided by Section 171.2022, a taxable entity
186-22 [corporation] on which the franchise tax is imposed shall file an
186-23 annual report with the comptroller containing:
186-24 (1) financial information of the taxable entity
186-25 [corporation] necessary to compute the tax under this chapter;
186-26 (2) the name and address of each officer and director
186-27 of the taxable entity [corporation];
187-1 (3) the name and address of the agent of the taxable
187-2 entity [corporation] designated under Section 171.354; and
187-3 (4) other information required by the comptroller.
187-4 (b) The taxable entity [corporation] shall file the report
187-5 before May 16 of each year after the beginning of the regular
187-6 annual period. The report shall be filed on forms supplied by the
187-7 comptroller.
187-8 (c) The comptroller shall grant an extension of time to a
187-9 taxable entity [corporation] that is not required by rule to make
187-10 its tax payments by electronic funds transfer for the filing of a
187-11 report required by this section to any date on or before the next
187-12 November 15, if a taxable entity [corporation]:
187-13 (1) requests the extension, on or before May 15, on a
187-14 form provided by the comptroller; and
187-15 (2) remits with the request:
187-16 (A) not less than 90 percent of the amount of
187-17 tax reported as due on the report filed on or before November 15;
187-18 or
187-19 (B) 100 percent of the tax paid in the previous
187-20 year.
187-21 (e) The comptroller shall grant an extension of time for the
187-22 filing of a report required by this section by a taxable entity
187-23 [corporation] required by rule to make its tax payments by
187-24 electronic funds transfer to any date on or before the next August
187-25 15, if the taxable entity [corporation]:
187-26 (1) requests the extension, on or before May 15, on a
187-27 form provided by the comptroller; and
188-1 (2) remits with the request:
188-2 (A) not less than 90 percent of the amount of
188-3 tax reported as due on the report filed on or before August 15; or
188-4 (B) 100 percent of the tax paid in the previous
188-5 year.
188-6 (f) The comptroller shall grant an extension of time to a
188-7 taxable entity [corporation] required by rule to make its tax
188-8 payments by electronic funds transfer for the filing of a report
188-9 due on or before August 15 to any date on or before the next
188-10 November 15, if the taxable entity [corporation]:
188-11 (1) requests the extension, on or before August 15, on
188-12 a form provided by the comptroller; and
188-13 (2) remits with the request the difference between the
188-14 amount remitted under Subsection (e) and 100 percent of the amount
188-15 of tax reported as due on the report filed on or before November
188-16 15.
188-17 SECTION 3.29. Section 171.2022, Tax Code, is amended to read
188-18 as follows:
188-19 Sec. 171.2022. EXEMPTION FROM REPORTING REQUIREMENTS. A
188-20 taxable entity [corporation] that does not owe any tax under this
188-21 chapter for any period is not required to file a report under
188-22 Section 171.201, 171.202, or 171.2021. The exemption applies only
188-23 to a period for which no tax is due.
188-24 SECTION 3.30. Section 171.204, Tax Code, is amended to read
188-25 as follows:
188-26 Sec. 171.204. INFORMATION REPORT. To determine eligibility
188-27 for the exemption provided by Section 171.2022, or to determine the
189-1 amount of the franchise tax or the correctness of a franchise tax
189-2 report, the comptroller may require [an officer of] a taxable
189-3 entity [corporation] that may be subject to the tax imposed under
189-4 this chapter to file an information report with the comptroller
189-5 stating the amount of the taxable entity's [corporation's] taxable
189-6 capital and earned surplus, or any other information the
189-7 comptroller may request.
189-8 SECTION 3.31. Section 171.205, Tax Code, is amended to read
189-9 as follows:
189-10 Sec. 171.205. ADDITIONAL INFORMATION REQUIRED BY
189-11 COMPTROLLER. The comptroller may require a taxable entity
189-12 [corporation] on which the franchise tax is imposed to furnish to
189-13 the comptroller information from the taxable entity's
189-14 [corporation's] books and records that has not been filed
189-15 previously and that is necessary for the comptroller to determine
189-16 the amount of the tax.
189-17 SECTION 3.32. Section 171.206, Tax Code, is amended to read
189-18 as follows:
189-19 Sec. 171.206. CONFIDENTIAL INFORMATION. Except as provided
189-20 by Section 171.207 of this code, the following information is
189-21 confidential and may not be made open to public inspection:
189-22 (1) information that is obtained from a record or
189-23 other instrument that is required by this chapter to be filed with
189-24 the comptroller; or
189-25 (2) information, including information about the
189-26 business affairs, operations, profits, losses, or expenditures of a
189-27 taxable entity [corporation], obtained by an examination of the
190-1 books and records, officers, or employees of a taxable entity
190-2 [corporation] on which a tax is imposed by this chapter.
190-3 SECTION 3.33. Section 171.208, Tax Code, is amended to read
190-4 as follows:
190-5 Sec. 171.208. PROHIBITION OF DISCLOSURE OF INFORMATION. A
190-6 person, including a state officer or employee or a shareholder of a
190-7 taxable entity [corporation], who has access to a report filed
190-8 under this chapter may not make known in a manner not permitted by
190-9 law the amount or source of the taxable entity's [corporation's]
190-10 income, profits, losses, expenditures, or other information in the
190-11 report relating to the financial condition of the taxable entity
190-12 [corporation].
190-13 SECTION 3.34. Section 171.209, Tax Code, is amended to read
190-14 as follows:
190-15 Sec. 171.209. RIGHT OF OWNER [SHAREHOLDER] TO EXAMINE OR
190-16 RECEIVE REPORTS. If an owner in [a person owning at least one
190-17 share of outstanding stock of] a taxable entity [corporation] on
190-18 whom the franchise tax is imposed presents evidence of the
190-19 ownership to the comptroller, the person is entitled to examine or
190-20 receive a copy of an initial or annual report that is filed under
190-21 Section 171.201 or 171.202 of this code and that relates to the
190-22 taxable entity [corporation].
190-23 SECTION 3.35. Section 171.211, Tax Code, is amended to read
190-24 as follows:
190-25 Sec. 171.211. EXAMINATION OF [CORPORATE] RECORDS. To
190-26 determine the franchise tax liability of a taxable entity
190-27 [corporation], the comptroller may investigate or examine the
191-1 records of the taxable entity [corporation].
191-2 SECTION 3.36. The heading to Subchapter F, Chapter 171, Tax
191-3 Code, is amended to read as follows:
191-4 SUBCHAPTER F. FORFEITURE OF CORPORATE AND BUSINESS PRIVILEGES
191-5 SECTION 3.37. Subchapter F, Chapter 171, Tax Code, is
191-6 amended by adding Sections 171.260-171.275 to read as follows:
191-7 Sec. 171.260. FORFEITURE OF RIGHT TO TRANSACT BUSINESS:
191-8 LIMITED PARTNERSHIPS. The comptroller shall forfeit the right of a
191-9 domestic or foreign limited partnership subject to the tax imposed
191-10 by this chapter to transact business in this state if the limited
191-11 partnership:
191-12 (1) does not file, in accordance with this chapter and
191-13 before the 45th day after the date notice of forfeiture is mailed,
191-14 a report required by this chapter;
191-15 (2) does not pay, before the 45th day after the date
191-16 notice of forfeiture is mailed, a tax imposed by this chapter or
191-17 does not pay, before that date, a penalty imposed by this chapter
191-18 relating to that tax; or
191-19 (3) does not permit the comptroller to investigate or
191-20 examine the records of the limited partnership to determine the
191-21 limited partnership's liability under this chapter.
191-22 Sec. 171.261. EFFECTS OF FORFEITURE: LIMITED PARTNERSHIPS.
191-23 If the limited partnership's right to transact business is
191-24 forfeited under this subchapter:
191-25 (1) the limited partnership is denied the right to sue
191-26 in a court of this state; and
191-27 (2) each partner, whether a limited or general
192-1 partner, of the limited partnership is liable for a debt of the
192-2 limited partnership as provided by Section 171.264.
192-3 Sec. 171.262. SUIT ON CAUSE OF ACTION ARISING BEFORE
192-4 FORFEITURE: LIMITED PARTNERSHIPS. In a suit against a limited
192-5 partnership on a cause of action arising before the forfeiture of
192-6 the limited partnership's right to transact business, a court may
192-7 not grant affirmative relief to the limited partnership unless its
192-8 right to transact business is revived under this chapter.
192-9 Sec. 171.263. EXCEPTION TO FORFEITURE: LIMITED
192-10 PARTNERSHIPS. The forfeiture of a limited partnership's right to
192-11 transact business does not apply to the privilege to defend in a
192-12 suit to forfeit the limited partnership's certificate of limited
192-13 partnership or registration of foreign limited partnership.
192-14 Sec. 171.264. LIABILITY OF PARTNERS: LIMITED PARTNERSHIPS.
192-15 (a) If the right to transact business of a limited partnership is
192-16 forfeited for the failure to file a report or pay a tax or penalty,
192-17 each partner of the limited partnership, whether a limited or
192-18 general partner, is liable for each debt of the limited partnership
192-19 that is created or incurred in this state after the date on which
192-20 the report, tax, or penalty is due and before the right to transact
192-21 business is revived. The liability includes liability for any tax
192-22 or penalty imposed by this chapter on the limited partnership that
192-23 becomes due and payable after the date of the forfeiture.
192-24 (b) All partners are liable jointly and severally for the
192-25 liability imposed under this subchapter.
192-26 (c) If a limited partnership's certificate of limited
192-27 partnership or registration of foreign limited partnership and its
193-1 right to transact business are forfeited and revived under this
193-2 chapter, the liability under this section of a partner of the
193-3 limited partnership is not affected by the revival of the
193-4 certificate or registration and the right to transact business.
193-5 Sec. 171.265. NOTICE OF FORFEITURE: LIMITED PARTNERSHIPS.
193-6 (a) To forfeit the right to transact business of a limited
193-7 partnership, the comptroller must notify the limited partnership
193-8 that the forfeiture will occur without a judicial proceeding unless
193-9 the limited partnership:
193-10 (1) files, within the time established by Section
193-11 171.260, the report to which that section refers; or
193-12 (2) pays, within the time established by Section
193-13 171.260, the delinquent tax and penalty to which that section
193-14 refers.
193-15 (b) The notice must be written or printed and be verified by
193-16 the seal of the comptroller's office.
193-17 (c) The comptroller shall mail the notice to the limited
193-18 partnership at least 45 days before the forfeiture of the right to
193-19 transact business. The comptroller shall address the notice to the
193-20 limited partnership and mail it to the registered office of the
193-21 limited partnership, the last known address of the limited
193-22 partnership, or to any other place of business of the limited
193-23 partnership.
193-24 (d) The comptroller shall keep at the comptroller's office a
193-25 record of the date on which the notice is mailed. For the purposes
193-26 of this chapter, the notice and the record of the mailing date
193-27 constitute legal and sufficient notice of the forfeiture.
194-1 Sec. 171.266. JUDICIAL PROCEEDING NOT REQUIRED FOR
194-2 FORFEITURE: LIMITED PARTNERSHIPS. The forfeiture of the right to
194-3 transact business of a limited partnership is effected by the
194-4 comptroller without a judicial proceeding.
194-5 Sec. 171.267. REVIVAL OF RIGHT TO TRANSACT BUSINESS:
194-6 LIMITED PARTNERSHIPS. The comptroller shall revive the right to
194-7 transact business of a limited partnership if the limited
194-8 partnership, before the forfeiture of its certificate of limited
194-9 partnership or registration of foreign limited partnership, pays
194-10 any tax, penalty, or interest due under this chapter.
194-11 Sec. 171.268. REVOCATION OF REGISTRATION: LIMITED LIABILITY
194-12 PARTNERSHIPS. The comptroller shall certify to the secretary of
194-13 state for revocation and the secretary of state shall revoke the
194-14 registration of a limited liability partnership on which the tax
194-15 imposed by this chapter is imposed if the limited liability
194-16 partnership:
194-17 (1) does not file, in accordance with this chapter and
194-18 before the 45th day after the date notice of revocation is mailed,
194-19 a report required by this chapter;
194-20 (2) does not pay, before the 45th day after the date
194-21 notice of revocation is mailed, a tax imposed by this chapter or
194-22 does not pay, before that date, a penalty imposed by this chapter
194-23 relating to that tax; or
194-24 (3) does not permit the comptroller to investigate or
194-25 examine the records of the limited liability partnership to
194-26 determine the limited liability partnership's liability under this
194-27 chapter.
195-1 Sec. 171.269. EFFECTS OF REVOCATION: LIMITED LIABILITY
195-2 PARTNERSHIPS. If the limited liability partnership's registration
195-3 is revoked under this subchapter:
195-4 (1) the limited liability partnership is denied the
195-5 right to sue in a court of this state; and
195-6 (2) each partner of the limited liability partnership
195-7 is liable for a debt of the limited liability partnership as
195-8 provided by Section 171.272.
195-9 Sec. 171.270. SUIT ON CAUSE OF ACTION ARISING BEFORE
195-10 REVOCATION: LIMITED LIABILITY PARTNERSHIP. In a suit against a
195-11 limited liability partnership on a cause of action arising before
195-12 the revocation of the limited liability partnership's registration,
195-13 a court may not grant affirmative relief to the limited liability
195-14 partnership unless its registration is revived under this chapter.
195-15 Sec. 171.271. EXCEPTION TO REVOCATION: LIMITED LIABILITY
195-16 PARTNERSHIP. The revocation of a limited liability partnership's
195-17 registration does not apply to the privilege to defend in a suit to
195-18 revoke the limited liability partnership's registration.
195-19 Sec. 171.272. LIABILITY OF PARTNERS: LIMITED LIABILITY
195-20 PARTNERSHIP. (a) If the registration of a limited liability
195-21 partnership is revoked for the failure to file a report or pay a
195-22 tax or penalty, each partner of the limited liability partnership
195-23 is liable for each debt of the limited liability partnership that
195-24 is created or incurred in this state after the date on which the
195-25 report, tax, or penalty is due and before the registration is
195-26 revived. The liability includes liability for any tax or penalty
195-27 imposed by this chapter on the limited liability partnership that
196-1 becomes due and payable after the date of the revocation.
196-2 (b) All partners are liable jointly and severally for the
196-3 liability imposed under this subchapter.
196-4 (c) If a limited liability partnership's registration is
196-5 revoked and revived under this chapter, the liability under this
196-6 section of a partner of the limited liability partnership is not
196-7 affected by the revival of the certificate or registration and the
196-8 registration.
196-9 Sec. 171.273. NOTICE OF REVOCATION: LIMITED LIABILITY
196-10 PARTNERSHIPS. (a) To forfeit the registration of a limited
196-11 liability partnership, the comptroller must notify the limited
196-12 liability partnership that the revocation will occur without a
196-13 judicial proceeding unless the limited liability partnership:
196-14 (1) files, within the time established by Section
196-15 171.268, the report to which that section refers; or
196-16 (2) pays, within the time established by Section
196-17 171.268, the delinquent tax and penalty to which that section
196-18 refers.
196-19 (b) The notice must be written or printed and be verified by
196-20 the seal of the comptroller's office.
196-21 (c) The comptroller shall mail the notice to the limited
196-22 liability partnership at least 45 days before the revocation of the
196-23 registration. The comptroller shall address the notice to the
196-24 limited liability partnership and mail it to the last known address
196-25 of the limited liability partnership, or to any other place of
196-26 business of the limited liability partnership.
196-27 (d) The comptroller shall keep at the comptroller's office a
197-1 record of the date on which the notice is mailed. For the purposes
197-2 of this chapter, the notice and the record of the mailing date
197-3 constitute legal and sufficient notice of the revocation.
197-4 Sec. 171.274. JUDICIAL PROCEEDING NOT REQUIRED FOR
197-5 REVOCATION: LIMITED LIABILITY PARTNERSHIPS. The revocation of the
197-6 registration of a limited liability partnership is effected by the
197-7 comptroller without a judicial proceeding.
197-8 Sec. 171.275. REVIVAL OF REGISTRATION: LIMITED LIABILITY
197-9 PARTNERSHIPS. The comptroller shall revive the registration of a
197-10 limited liability partnership if the limited liability partnership
197-11 pays any tax, penalty, or interest due under this chapter.
197-12 SECTION 3.38. Subchapter G, Chapter 171, Tax Code, is
197-13 amended by adding Sections 171.318-171.326 to read as follows:
197-14 Sec. 171.318. GROUNDS FOR FORFEITURE OF CERTIFICATE OF
197-15 LIMITED PARTNERSHIPS OR REGISTRATION OF FOREIGN LIMITED
197-16 PARTNERSHIPS. It is a ground for the forfeiture of a limited
197-17 partnership's certificate or registration if:
197-18 (1) the right to transact business of the limited
197-19 partnership is forfeited under this chapter and the limited
197-20 partnership does not pay, before the 120th day after the date the
197-21 right to transact business is forfeited, the amount necessary for
197-22 the limited partnership to revive under this chapter its right to
197-23 transact business; or
197-24 (2) the limited partnership does not permit the
197-25 comptroller to investigate or examine the records of the limited
197-26 partnership to determine the limited partnership's liability under
197-27 this chapter.
198-1 Sec. 171.319. CERTIFICATION BY COMPTROLLER: LIMITED
198-2 PARTNERSHIPS. After the 120th day after the date that the right to
198-3 transact business of a limited partnership is forfeited under this
198-4 chapter, the comptroller shall certify the name of the limited
198-5 partnership to the secretary of state.
198-6 Sec. 171.320. FORFEITURE BY SECRETARY OF STATE: LIMITED
198-7 PARTNERSHIPS. The secretary of state shall forfeit the certificate
198-8 or registration of a limited partnership if:
198-9 (1) the secretary receives the comptroller's
198-10 certification under Section 171.319;
198-11 (2) the limited partnership does not revive its
198-12 forfeited right to transact business before the 120th day after the
198-13 date that the right to transact business was forfeited; and
198-14 (3) the limited partnership does not have assets from
198-15 which a judgment for any tax, penalty, or court costs imposed by
198-16 this chapter may be satisfied.
198-17 Sec. 171.321. JUDICIAL PROCEEDING NOT REQUIRED FOR
198-18 FORFEITURE BY SECRETARY OF STATE: LIMITED PARTNERSHIPS. The
198-19 forfeiture by the secretary of state of a limited partnership's
198-20 certificate or registration under this chapter is effected without
198-21 a judicial proceeding.
198-22 Sec. 171.322. RECORD OF FORFEITURE BY SECRETARY OF STATE:
198-23 LIMITED PARTNERSHIPS. The secretary of state shall effect a
198-24 forfeiture of a limited partnership's certificate or registration
198-25 under this chapter by inscribing on the limited partnership's
198-26 record in the secretary's office the words "Certificate Forfeited"
198-27 or "Registration Forfeited," the date on which this inscription is
199-1 made, and a citation to this chapter as authority for the
199-2 forfeiture.
199-3 Sec. 171.323. REVIVAL OF CERTIFICATE OF LIMITED PARTNERSHIPS
199-4 OR REGISTRATION OF FOREIGN LIMITED PARTNERSHIPS AFTER FORFEITURE BY
199-5 SECRETARY OF STATE. A limited partnership whose certificate or
199-6 registration is forfeited under this chapter by the secretary of
199-7 state is entitled to have its certificate or registration revived
199-8 and to have its right to transact business revived if:
199-9 (1) the limited partnership files each report that is
199-10 required by this chapter and that is delinquent;
199-11 (2) the limited partnership pays the tax, penalty, and
199-12 interest that is imposed by this chapter and that is due at the
199-13 time the request under Section 171.324 to set aside forfeiture is
199-14 made; and
199-15 (3) the forfeiture of the limited partnership's
199-16 certificate or registration is set aside in a proceeding under
199-17 Section 171.324.
199-18 Sec. 171.324. PROCEEDING TO SET ASIDE FORFEITURE BY
199-19 SECRETARY OF STATE: LIMITED PARTNERSHIPS. (a) If a limited
199-20 partnership's certificate or registration is forfeited under this
199-21 chapter by the secretary of state, a partner of the limited
199-22 partnership at the time of the forfeiture of the certificate or
199-23 registration or of the right to transact business of the limited
199-24 partnership may request in the name of the limited partnership that
199-25 the secretary of state set aside the forfeiture of the certificate
199-26 or registration.
199-27 (b) If a request is made, the secretary of state shall
200-1 determine if each delinquent report has been filed and any
200-2 delinquent tax, penalty, or interest has been paid. If each report
200-3 has been filed and the tax, penalty, or interest has been paid, the
200-4 secretary shall set aside the forfeiture of the limited
200-5 partnership's certificate or registration.
200-6 Sec. 171.325. RIGHT TO TRANSACT BUSINESS AFTER FORFEITURE BY
200-7 SECRETARY OF STATE IS SET ASIDE: LIMITED PARTNERSHIPS. If the
200-8 secretary of state sets aside under this chapter the forfeiture of
200-9 a limited partnership's certificate or registration, the
200-10 comptroller shall revive the right to transact business of the
200-11 limited partnership.
200-12 Sec. 171.326. USE OF LIMITED PARTNERSHIP NAME AFTER REVIVAL
200-13 OF CERTIFICATE OR REGISTRATION. If a limited partnership's
200-14 certificate or registration is forfeited under this chapter by the
200-15 secretary of state and if the limited partnership requests the
200-16 secretary to set aside the forfeiture under Section 171.324, the
200-17 limited partnership shall determine from the secretary whether the
200-18 limited partnership's name is available for use. If the name is
200-19 not available, the limited partnership shall file an amendment to
200-20 its certificate or application or adopt a new name for use in this
200-21 state as a precondition to reinstatement.
200-22 SECTION 3.39. Section 171.351, Tax Code, is amended to read
200-23 as follows:
200-24 Sec. 171.351. VENUE OF SUIT TO ENFORCE CHAPTER. Venue of a
200-25 civil suit against a taxable entity [corporation] to enforce this
200-26 chapter is either in a county where the taxable entity's
200-27 [corporation's] principal office is located according to its
201-1 charter or certificate of authority or in Travis County.
201-2 SECTION 3.40. Section 171.353, Tax Code, is amended to read
201-3 as follows:
201-4 Sec. 171.353. APPOINTMENT OF RECEIVER. If a court forfeits
201-5 a taxable entity's [corporation's] charter or certificate of
201-6 authority, the court may appoint a receiver for the taxable entity
201-7 [corporation] and may administer the receivership under the laws
201-8 relating to receiverships.
201-9 SECTION 3.41. Section 171.354, Tax Code, is amended to read
201-10 as follows:
201-11 Sec. 171.354. AGENT FOR SERVICE OF PROCESS. Each taxable
201-12 entity [corporation] on which a tax is imposed by this chapter
201-13 shall designate a resident of this state as the taxable entity's
201-14 [corporation's] agent for the service of process.
201-15 SECTION 3.42. Sections 171.362(a), (d), and (e), Tax Code,
201-16 are amended to read as follows:
201-17 (a) If a taxable entity [corporation] on which a tax is
201-18 imposed by this chapter fails to pay the tax when it is due and
201-19 payable or fails to file a report required by this chapter when it
201-20 is due, the taxable entity [corporation] is liable for a penalty of
201-21 five percent of the amount of the tax due.
201-22 (d) If a taxable entity [corporation] electing to remit
201-23 under Paragraph (A) of Subdivision (2) of Subsection (c) of Section
201-24 171.202 of this code remits less than the amount required, the
201-25 penalties imposed by this section and the interest imposed under
201-26 Section 111.060 of this code are assessed against the difference
201-27 between the amount required to be remitted under Paragraph (A) of
202-1 Subdivision (2) of Subsection (c) of Section 171.202 and the amount
202-2 actually remitted on or before May 15.
202-3 (e) If a taxable entity [corporation] remits the entire
202-4 amount required by Subsection (c) of Section 171.202 of this code,
202-5 no penalties will be imposed against the amount remitted on or
202-6 before November 15.
202-7 SECTION 3.43. Sections 171.363(a) and (b), Tax Code, are
202-8 amended to read as follows:
202-9 (a) A taxable entity [corporation] commits an offense if the
202-10 taxable entity [corporation] is subject to the provisions of this
202-11 chapter and the taxable entity [corporation] wilfully:
202-12 (1) fails to file a report;
202-13 (2) fails to keep books and records as required by
202-14 this chapter;
202-15 (3) files a fraudulent report;
202-16 (4) violates any rule of the comptroller for the
202-17 administration and enforcement of the provisions of this chapter;
202-18 or
202-19 (5) attempts in any other manner to evade or defeat
202-20 any tax imposed by this chapter or the payment of the tax.
202-21 (b) A person commits an offense if the person is an
202-22 accountant or an agent for or an officer or employee of a taxable
202-23 entity [corporation] and the person knowingly enters or provides
202-24 false information on any report, return, or other document filed by
202-25 the taxable entity [corporation] under this chapter.
202-26 SECTION 3.44. Section 171.401, Tax Code, is amended to read
202-27 as follows:
203-1 Sec. 171.401. REVENUE DEPOSITED IN GENERAL REVENUE FUND.
203-2 The revenue from the tax imposed by this chapter [on corporations]
203-3 shall be deposited to the credit of the general revenue fund.
203-4 SECTION 3.45. Section 171.501(a), Tax Code, is amended to
203-5 read as follows:
203-6 (a) A taxable entity [corporation] that has been certified a
203-7 qualified business as provided by Chapter 2303, Government Code,
203-8 may apply for and be granted a refund of franchise tax paid with an
203-9 initial or annual report if the governing body or bodies certify to
203-10 the Texas Department of Commerce that the business has created 10
203-11 or more new jobs in its enterprise zone held by qualified employees
203-12 during the calendar year that contains the end of the accounting
203-13 period on which the report is based. The Texas Department of
203-14 Commerce shall certify eligibility for any refund to the
203-15 comptroller.
203-16 SECTION 3.46. Section 171.652, Tax Code, is amended to read
203-17 as follows:
203-18 Sec. 171.652. CREDIT. A taxable entity [corporation] that
203-19 meets the eligibility requirements under this subchapter is
203-20 entitled to a credit in the amount allowed by this subchapter
203-21 against the tax imposed under this chapter.
203-22 SECTION 3.47. Section 171.653, Tax Code, is amended to read
203-23 as follows:
203-24 Sec. 171.653. CREDIT FOR WAGES PAID TO INMATE. (a) The
203-25 amount of the credit for wages paid by a taxable entity
203-26 [corporation] to an inmate is equal to 10 percent of that portion
203-27 of the wages paid that the department apportions to the state under
204-1 Section 497.004(b)(3), Government Code, as reimbursement for the
204-2 cost of the inmate's confinement.
204-3 (b) A taxable entity [corporation] is eligible for the
204-4 credit under this section only if it receives before the due date
204-5 of its franchise tax report for the privilege period for which the
204-6 credit is claimed a written certification from the department
204-7 stating the amount of the wages that the taxable entity
204-8 [corporation] paid to an inmate during the privilege period and the
204-9 amount of those wages that the department apportioned to the state
204-10 as reimbursement for the cost of the inmate's confinement.
204-11 (c) A taxable entity [corporation] is eligible for the
204-12 credit under this section only if the inmate for whom it is paid
204-13 has been continuously employed for not less than six months.
204-14 SECTION 3.48. Section 171.654, Tax Code, is amended to read
204-15 as follows:
204-16 Sec. 171.654. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
204-17 INMATE. (a) The amount of the credit for wages paid by a taxable
204-18 entity [corporation] to an employee who was employed by the taxable
204-19 entity [corporation] when the employee was an inmate is equal to 10
204-20 percent of that portion of the wages paid that, were the employee
204-21 still an inmate, the department would apportion to the state under
204-22 Section 497.004(b)(3), Government Code, as reimbursement for the
204-23 cost of the inmate's confinement.
204-24 (b) A taxable entity [corporation] is eligible for the
204-25 credit under this section only if:
204-26 (1) the employee who was formerly an inmate was
204-27 continuously employed for not less than six months while an inmate
205-1 and has been continuously employed by the taxable entity
205-2 [corporation] for at least one year after the date that the
205-3 employee was released from prison;
205-4 (2) the nature of the employment is substantially
205-5 similar to the employment the employee had with the taxable entity
205-6 [corporation] when the employee was an inmate or the employment
205-7 requires more skills or provides greater opportunities for the
205-8 employee;
205-9 (3) the taxable entity [corporation] has provided the
205-10 department a statement of the amount of wages paid the employee
205-11 during the accounting period on which the credit is computed; and
205-12 (4) the taxable entity [corporation] receives before
205-13 the due date of its franchise tax report for the privilege period
205-14 for which the credit is claimed a written certification from the
205-15 department stating the amount of the wages that, were the employee
205-16 still an inmate, the department would have apportioned to the state
205-17 as reimbursement for the cost of the inmate's confinement.
205-18 (c) A taxable entity [corporation] may claim a credit under
205-19 this section only for:
205-20 (1) wages paid an employee after the employee has been
205-21 employed by the taxable entity [corporation] for more than one year
205-22 after the date of the employee's release from prison; and
205-23 (2) wages paid the employee for not longer than one
205-24 year.
205-25 SECTION 3.49. Section 171.656, Tax Code, is amended to read
205-26 as follows:
205-27 Sec. 171.656. APPLICATION FOR CREDIT. (a) A taxable entity
206-1 [corporation] must apply for a credit under this subchapter on or
206-2 with the tax report for the period for which the credit is claimed.
206-3 (b) The comptroller shall promulgate a form for the
206-4 application for the credit. A taxable entity [corporation] must
206-5 use this form in applying for the credit.
206-6 SECTION 3.50. Section 171.657, Tax Code, is amended to read
206-7 as follows:
206-8 Sec. 171.657. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
206-9 taxable entity [corporation] may claim a credit under this
206-10 subchapter for wages paid during an accounting period only against
206-11 the tax owed for the corresponding privilege period.
206-12 SECTION 3.51. Section 171.682, Tax Code, is amended to read
206-13 as follows:
206-14 Sec. 171.682. CREDIT. A taxable entity [corporation] that
206-15 meets the eligibility requirements under this subchapter is
206-16 entitled to a credit in the amount allowed by this subchapter
206-17 against the tax imposed under this chapter.
206-18 SECTION 3.52. Section 171.683, Tax Code, is amended to read
206-19 as follows:
206-20 Sec. 171.683. CREDIT FOR WAGES PAID TO ELIGIBLE CHILD.
206-21 (a) The amount of the credit for wages paid by a taxable entity
206-22 [corporation] to an eligible child is equal to 10 percent of that
206-23 portion of the wages the taxable entity [corporation] paid to the
206-24 eligible child or the commission for the benefit of the child.
206-25 (b) A taxable entity [corporation] is eligible for the
206-26 credit under this section only if it files, on or before the due
206-27 date of its franchise tax report for the privilege period for
207-1 which the credit is claimed, a written certification issued by the
207-2 commission stating the amount of the wages that the taxable entity
207-3 [corporation] paid to an eligible child or to the commission for
207-4 the benefit of the child during:
207-5 (1) the privilege period; and
207-6 (2) not more than six months of the preceding
207-7 privilege period for wages for which a credit has not previously
207-8 been claimed.
207-9 (c) A taxable entity [corporation] is eligible for the
207-10 credit under this section only if the eligible child to whom or for
207-11 whose benefit it pays wages has been continuously employed by the
207-12 taxable entity [corporation] for not less than six months.
207-13 SECTION 3.53. Section 171.684, Tax Code, is amended to read
207-14 as follows:
207-15 Sec. 171.684. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
207-16 ELIGIBLE CHILD. (a) The amount of the credit for wages paid by a
207-17 taxable entity [corporation] to an employee who was first employed
207-18 by the taxable entity [corporation] when the employee was an
207-19 eligible child is equal to 10 percent of the wages paid the
207-20 employee.
207-21 (b) A taxable entity [corporation] is eligible for the
207-22 credit under this section only if:
207-23 (1) the employee who was formerly an eligible child
207-24 was continuously employed for not less than six months while an
207-25 eligible child and has been continuously employed by the taxable
207-26 entity [corporation] for at least one year after the date that the
207-27 employee was released from commitment to the commission or released
208-1 under supervision by the commission; and
208-2 (2) the nature of the employment is substantially
208-3 similar to the employment the employee had with the taxable entity
208-4 [corporation] when the employee was an eligible child or the
208-5 employment requires more skills or provides greater opportunities
208-6 for the employee.
208-7 (c) A taxable entity [corporation] may claim a credit under
208-8 this section only for:
208-9 (1) wages paid an employee after the employee has been
208-10 employed by the taxable entity [corporation] for more than one year
208-11 after the earlier of the date of the employee's release from
208-12 commitment to the commission or release under supervision by the
208-13 commission; and
208-14 (2) wages paid the employee for not longer than one
208-15 year.
208-16 SECTION 3.54. Section 171.686, Tax Code, is amended to read
208-17 as follows:
208-18 Sec. 171.686. APPLICATION FOR CREDIT. (a) A taxable entity
208-19 [corporation] must apply for a credit under this subchapter on or
208-20 with the tax report for the period for which the credit is claimed.
208-21 (b) The comptroller shall promulgate a form for the
208-22 application for the credit. A taxable entity [corporation] must
208-23 use this form in applying for the credit.
208-24 SECTION 3.55. Section 171.687, Tax Code, is amended to read
208-25 as follows:
208-26 Sec. 171.687. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
208-27 taxable entity [corporation] may claim a credit under this
209-1 subchapter for wages paid during an accounting period only against
209-2 the tax owed for the corresponding privilege period.
209-3 SECTION 3.56. Section 3.03(a), Texas Revised Limited
209-4 Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes),
209-5 is amended to read as follows:
209-6 (a) Except as provided by Subsection (d) of this section and
209-7 Subtitle F, Title 2, Tax Code, a limited partner is not liable for
209-8 the obligations of a limited partnership unless the limited
209-9 partner is also a general partner or, in addition to the exercise
209-10 of the limited partner's rights and powers as a limited partner,
209-11 the limited partner participates in the control of the business.
209-12 However, if the limited partner does participate in the control of
209-13 the business, the limited partner is liable only to persons who
209-14 transact business with the limited partnership reasonably
209-15 believing, based on the limited partner's conduct, that the limited
209-16 partner is a general partner.
209-17 SECTION 3.57. Section 9.01(a), Texas Revised Limited
209-18 Partnership Act (Article 6132a-1, Vernon's Texas Civil Statutes),
209-19 is amended to read as follows:
209-20 (a) Except as provided by Subtitles F and G, Title 2, Tax
209-21 Code, the [The] laws of the state under which a foreign limited
209-22 partnership is formed govern its organization and internal affairs
209-23 and the liability of its partners.
209-24 SECTION 3.58. Chapter 13, Texas Revised Limited Partnership
209-25 Act (Article 6132a-1, Vernon's Texas Civil Statutes), is amended by
209-26 adding Section 13.10 to read as follows:
209-27 Sec. 13.10. FORFEITURE OF RIGHT TO TRANSACT BUSINESS OR
210-1 CANCELLATION OF CERTIFICATE OR REGISTRATION. (a) A limited
210-2 partnership that does not comply with Subtitle F, Title 2, Tax
210-3 Code, forfeits the right to transact business and is subject to
210-4 cancellation of its certificate or registration.
210-5 (b) Subject to Subtitles F and G, Title 2, Tax Code, the
210-6 comptroller may specify procedures for effecting the forfeiture or
210-7 cancellation and providing for relief from the forfeiture and
210-8 cancellation.
210-9 SECTION 3.59. Section 15(2), Texas Uniform Partnership Act
210-10 (Article 6132b, Vernon's Texas Civil Statutes), is amended to read
210-11 as follows:
210-12 (2) Except as provided by Subtitle F, Title 2, Tax
210-13 Code, a [A] partner in a registered limited liability partnership
210-14 is not individually liable for debts and obligations of the
210-15 partnership arising from errors, omissions, negligence,
210-16 incompetence, or malfeasance committed in the course of the
210-17 partnership business by another partner or a representative of the
210-18 partnership not working under the supervision or direction of the
210-19 first partner at the time the errors, omissions, negligence,
210-20 incompetence, or malfeasance occurred, unless the first partner:
210-21 (a) was directly involved in the specific
210-22 activity in which the errors, omissions, negligence, incompetence,
210-23 or malfeasance were committed by the other partner or
210-24 representative; or
210-25 (b) had notice or knowledge of the errors,
210-26 omissions, negligence, incompetence, or malfeasance by the other
210-27 partner or representative at the time of occurrence.
211-1 SECTION 3.60. Section 45-A, Texas Uniform Partnership Act
211-2 (Article 6132b, Vernon's Texas Civil Statutes), is amended by
211-3 adding Subsection (7) to read as follows:
211-4 (7) The secretary of state shall revoke registration on
211-5 notice from the comptroller that a registered limited liability
211-6 partnership has not complied with Subtitle F, Title 2, Tax Code.
211-7 SECTION 3.61. Section 3.08(a)(1), Texas Revised Partnership
211-8 Act (Article 6132b-3.08, Vernon's Texas Civil Statutes), is amended
211-9 to read as follows:
211-10 (1) Except as provided by Subtitle F, Title 2, Tax
211-11 Code, a [A] partner in a registered limited liability partnership
211-12 is not individually liable for debts and obligations of the
211-13 partnership arising from errors, omissions, negligence,
211-14 incompetence, or malfeasance committed while the partnership is a
211-15 registered limited liability partnership and in the course of the
211-16 partnership business by another partner or a representative of the
211-17 partnership not working under the supervision or direction of the
211-18 first partner unless the first partner:
211-19 (A) was directly involved in the specific
211-20 activity in which the errors, omissions, negligence, incompetence,
211-21 or malfeasance were committed by the other partner or
211-22 representative; or
211-23 (B) had notice or knowledge of the errors,
211-24 omissions, negligence, incompetence, or malfeasance by the other
211-25 partner or representative at the time of occurrence and then failed
211-26 to take reasonable steps to prevent or cure the errors, omissions,
211-27 negligence, incompetence, or malfeasance.
212-1 SECTION 3.62. Section 3.08(b), Texas Revised Partnership Act
212-2 (Article 6132b-3.08, Vernon's Texas Civil Statutes), is amended by
212-3 adding Subdivision (16) to read as follows:
212-4 (16) The secretary of state shall revoke registration
212-5 on notice from the comptroller that a registered limited liability
212-6 partnership has not complied with Subtitle F, Title 2, Tax Code.
212-7 SECTION 3.63. The following provisions of the Tax Code are
212-8 repealed:
212-9 (1) Section 171.056;
212-10 (2) Section 171.074;
212-11 (3) Section 171.079;
212-12 (4) Section 171.080;
212-13 (5) Section 171.085;
212-14 (6) Section 171.104;
212-15 (7) Section 171.107; and
212-16 (8) Section 171.111.
212-17 SECTION 3.64. (a) Subject to other provisions of this
212-18 section, this article takes effect for initial or annual reports
212-19 originally due January 1, 1998, or later, and for final reports
212-20 originally due on the effective date of this Act or later.
212-21 (b) For an entity becoming subject to the franchise tax
212-22 under this article:
212-23 (1) no income or losses occurring before January 1,
212-24 1997, which would have been included in federal taxable income on a
212-25 federal period ending December 31, 1996, or earlier had the entity
212-26 been required to file a return for federal income tax purposes
212-27 through December 31, 1996, shall be considered for purposes of the
213-1 earned surplus component;
213-2 (2) for entities in existence on January 1, 1997,
213-3 which would have been subject to the franchise tax had this article
213-4 been in effect on January 1, 1997, the first report due under this
213-5 article will be either a final report, if applicable, or an annual
213-6 report due May 15, 1998; and
213-7 (3) for entities which would have become subject to
213-8 the franchise tax after January 1, 1997, even if this article had
213-9 been effective on January 1, 1997, the first report due under this
213-10 article will be an initial report or a final report, if applicable.
213-11 (c) For purposes of this article, an existing partnership
213-12 shall be considered as continuing if it is not terminated.
213-13 (d) A partnership shall be considered as terminated only if:
213-14 (1) no part of any business, financial operation, or
213-15 venture of the partnership continues to be carried on by any of its
213-16 partners in a partnership; or
213-17 (2) within a 12-month period there is a sale or
213-18 exchange of 50 percent or more of the total interest in partnership
213-19 capital and profits.
213-20 (e) In the case of a merger or consolidation of two or more
213-21 partnerships, the resulting partnership shall, for purposes of this
213-22 article, be considered the continuation of any merging or
213-23 consolidating partnership whose members own an interest of more
213-24 than 50 percent in the capital and profits of the resulting
213-25 partnership.
213-26 (f) In the case of a division of a partnership into two or
213-27 more partnerships, the resulting partnerships (other than any
214-1 resulting partnership the members of which had an interest of 50
214-2 percent or less in the capital and profits of the prior
214-3 partnership) shall, for purposes of this article, be considered a
214-4 continuation of the prior partnership.
214-5 ARTICLE 4. SALES TAX
214-6 SECTION 4.01. Section 151.0028, Tax Code, is amended by
214-7 adding Subsection (c) to read as follows:
214-8 (c) "Amusement services" includes the provision of a sports
214-9 or athletic event.
214-10 SECTION 4.02. Subchapter A, Chapter 151, Tax Code, is
214-11 amended by adding Section 151.0029 to read as follows:
214-12 Sec. 151.0029. "APPRAISAL SERVICES." "Appraisal services"
214-13 means services to establish or evaluate the value of real or
214-14 tangible personal property.
214-15 SECTION 4.03. Subchapter A, Chapter 151, Tax Code, is
214-16 amended by adding Section 151.00295 to read as follows:
214-17 Sec. 151.00295. "BOAT DOCK SERVICES." "Boat dock services"
214-18 means the providing of dry stack storage, boat-on-trailer storage,
214-19 slips, or docks at a marina or other facility, including a
214-20 boathouse, for the mooring or dry storage of a vessel, as defined
214-21 by Section 31.003, Parks and Wildlife Code, manufactured or used
214-22 for recreational purposes.
214-23 SECTION 4.04. Section 151.0031, Tax Code, is amended to read
214-24 as follows:
214-25 Sec. 151.0031. "COMPUTER PROGRAM." "Computer program" means
214-26 a series of instructions that are coded for acceptance or use by a
214-27 computer system and that are designed to permit the computer system
215-1 to process data and provide results and information. The series of
215-2 instructions may be contained in or on magnetic tapes, punched
215-3 cards, printed instructions, or other tangible or electronic media.
215-4 For purposes of this chapter, the term includes a computer program
215-5 created or developed exclusively for a client who retains all
215-6 rights to the program.
215-7 SECTION 4.05. Subchapter A, Chapter 151, Tax Code, is
215-8 amended by adding Section 151.00335 to read as follows:
215-9 Sec. 151.00335. "COMMERCIAL RESEARCH, DEVELOPMENT, OR
215-10 TESTING SERVICES." (a) "Commercial research, development, or
215-11 testing services" includes:
215-12 (1) commercial physical and biological research and
215-13 development;
215-14 (2) analyzing, developing, creating, or testing items,
215-15 products, or processes using methods of scientific experimentation
215-16 and observation; and
215-17 (3) commercial research involving business, marketing,
215-18 opinion, and other economic, sociological, and education research.
215-19 (b) "Commercial research, development, or testing services"
215-20 does not include:
215-21 (1) research and development directly engaged in by
215-22 aircraft and spacecraft manufacturers;
215-23 (2) research by a nonprofit establishment funded by an
215-24 endowment, grant, or contribution; or
215-25 (3) medical tests performed:
215-26 (A) on a human or animal; or
215-27 (B) on tissue, fluids, or other substances
216-1 removed from a human or animal in connection with diagnosis,
216-2 treatment, or another medical service provided by a licensed
216-3 practitioner of the healing arts.
216-4 SECTION 4.06. Subchapter A, Chapter 151, Tax Code, is
216-5 amended by adding Section 151.00365 to read as follows:
216-6 Sec. 151.00365. "DIVING SERVICES." (a) "Diving services"
216-7 means providing personnel for underwater services, including:
216-8 (1) exploration or salvage;
216-9 (2) the location of property or persons;
216-10 (3) construction, remodeling, maintenance, or repair
216-11 services to the extent not otherwise taxed; and
216-12 (4) accompanying recreational divers.
216-13 (b) "Diving services" does not include scuba-diving training
216-14 and instruction.
216-15 SECTION 4.07. Subchapter A, Chapter 151, Tax Code, is
216-16 amended by adding Section 151.0037 to read as follows:
216-17 Sec. 151.0037. "EMPLOYMENT AGENCY SERVICES." "Employment
216-18 agency services" means services performed in an effort to locate or
216-19 find employment for an employer or a person seeking employment,
216-20 including executive, professional, administrative, secretarial,
216-21 clerical, service, manufacturing, and health care personnel. The
216-22 term includes employment services by an employment registry
216-23 service, or a casting bureau or agency for the theater or motion
216-24 pictures.
216-25 SECTION 4.08. Section 151.0038(a), Tax Code, is amended to
216-26 read as follows:
216-27 (a) "Information service" means:
217-1 (1) furnishing general or specialized news or other
217-2 current information, including financial information, unless
217-3 furnished to:
217-4 (A) a newspaper or to a radio or television
217-5 station licensed by the Federal Communications Commission; or
217-6 (B) a member of a homeowners association of a
217-7 residential subdivision or condominium development, and is
217-8 furnished by the association or on behalf of the association; [or]
217-9 (2) electronic data retrieval or research; or
217-10 (3) time and temperature services.
217-11 SECTION 4.09. Subchapter A, Chapter 151, Tax Code, is
217-12 amended by adding Sections 151.0041, 151.0042, 151.0043, 151.0044,
217-13 151.00441, 151.00442, and 151.00443 to read as follows:
217-14 Sec. 151.0041. "LOW-LEVEL RADIOACTIVE WASTE DISPOSAL
217-15 SERVICES." "Low-level radioactive waste disposal services" means
217-16 the disposal of low-level radioactive waste by a private entity
217-17 under Chapter 402, Health and Safety Code.
217-18 Sec. 151.0042. "MANAGEMENT, CONSULTING, OR PUBLIC RELATIONS
217-19 SERVICES." (a) "Management, consulting, or public relations
217-20 services" includes:
217-21 (1) directing, analyzing, evaluating, or giving advice
217-22 about the management of a business, including:
217-23 (A) business operations;
217-24 (B) organizational structure;
217-25 (C) financial planning and budgeting;
217-26 (D) business strategies and marketing objectives
217-27 and policies;
218-1 (E) information systems, including hardware or
218-2 software needs, options, or solutions;
218-3 (F) human resources and employee management
218-4 policies, practices, and planning; or
218-5 (G) production scheduling or control processes;
218-6 (2) facilities support management services;
218-7 (3) services to determine or influence the opinion or
218-8 sentiments of the public or specific individuals, governmental
218-9 officials, or groups, including services the performance of which
218-10 would require a person to be registered under Chapter 305,
218-11 Government Code; and
218-12 (4) services relating to gathering or compiling
218-13 economic, sociological, consumer, or other information.
218-14 (b) "Management, consulting, or public relations services"
218-15 does not include, except for services provided to a client for
218-16 which registration is required under Chapter 305, Government Code:
218-17 (1) legal services provided by an attorney; or
218-18 (2) accounting services provided by a certified public
218-19 accountant, enrolled agent, or bookkeeping firm to produce
218-20 financial reports or prepare tax returns.
218-21 Sec. 151.0043. "MOTOR VEHICLE REPAIR SERVICES." (a) "Motor
218-22 vehicle repair services" means the repair, remodeling, maintenance,
218-23 or restoration of a motor vehicle, including testing or diagnostic
218-24 services, body repair and painting, engine repair, transmission
218-25 repair, exhaust system repair, brake repair, and air conditioning
218-26 repair.
218-27 (b) "Motor vehicle repair services" does not include any
219-1 vehicle emissions tests required by law, safety inspections tests
219-2 required by law, and other similar tests required by law.
219-3 Sec. 151.0044. "MOTOR VEHICLE WASH OR DETAIL SERVICES."
219-4 (a) "Motor vehicle wash or detail services" includes:
219-5 (1) cleaning of the exterior or interior of a motor
219-6 vehicle, including washing, waxing, polishing, buffing, detailing,
219-7 shampooing, vacuuming, finishing, or steam cleaning; or
219-8 (2) providing an automated facility that provides the
219-9 services described in Subdivision (1).
219-10 (b) "Motor vehicle wash or detail services" does not include
219-11 the services described in Subsection (a)(1) if the services are
219-12 provided through the use or operation of a token- or coin-operated
219-13 self-service or automated facility.
219-14 Sec. 151.00441. "NOTARY SERVICES." "Notary services" means,
219-15 for a person other than a county clerk, county tax
219-16 assessor-collector, magistrate, or clerk of a court of record,
219-17 notarizing documents and exercising the power to:
219-18 (1) take acknowledgments or proofs of written
219-19 instruments;
219-20 (2) protest instruments permitted by law to be
219-21 protested;
219-22 (3) administer oaths; or
219-23 (4) certify copies of documents not recordable in the
219-24 public records.
219-25 Sec. 151.00442. "OIL WELL SERVICE." (a) "Oil well service"
219-26 means, if provided by a person described by Subsection (b),
219-27 cementing the casing seat of an oil or gas well, shooting,
220-1 fracturing, or acidizing the sands or other formations of the earth
220-2 in an oil or gas well, or surveying or testing the sands or other
220-3 formations or their contents in an oil or gas well by using
220-4 instruments or equipment at least a part of which is located in the
220-5 well bore when the survey or test is made.
220-6 (b) The provider of a taxable oil well service is a person
220-7 who:
220-8 (1) owns, controls, or furnishes the tools,
220-9 instruments, and equipment used in providing the oil well service;
220-10 or
220-11 (2) uses any chemical, electrical, or mechanical
220-12 process in providing the service at any oil or gas well during and
220-13 in connection with the drilling and completion, or reworking or
220-14 reconditioning, of the well.
220-15 (c) "Oil well service" does not mean the business of
220-16 drilling an oil or gas well or a service incidental to that
220-17 business performed by persons engaged in the business of drilling.
220-18 Sec. 151.00443. "PATENT BROKERAGE." "Patent brokerage"
220-19 means the negotiation as an agent of a patent holder or a
220-20 prospective purchaser of a patent right of the sale, purchase, or
220-21 other transfer of patent rights or licenses under a patent right.
220-22 The term includes services provided to a patent holder for locating
220-23 investment in the manufacture or production of the item or process
220-24 subject to the patent. The term does not include the services of:
220-25 (1) a patent attorney in establishing a patent right
220-26 for the inventor or creator or the successor of an inventor or
220-27 creator who acquires an interest in the creation or process before
221-1 receiving a patent; or
221-2 (2) an attorney at law in defending a patent right,
221-3 representing an estate that has an interest in a patent right, or
221-4 negotiating the sale of a business having assets that may include a
221-5 patent right.
221-6 SECTION 4.10. Section 151.0045, Tax Code, is amended to read
221-7 as follows:
221-8 Sec. 151.0045. "PERSONAL SERVICES." (a) "Personal
221-9 services" means those personal services listed as personal services
221-10 under Group 721, Major Group 72 of the Standard Industrial
221-11 Classification Manual, 1987 [1972], and includes massage parlors,
221-12 escort services, dating services, shopping services for
221-13 individuals, privately operated wedding chapels, and Turkish baths
221-14 under Group 729 of said manual but does not include any other
221-15 services listed under Group 729 unless otherwise covered under this
221-16 chapter [Act], prepared by the statistical policy division of the
221-17 office on management and budget, office of the president of the
221-18 United States.
221-19 (b) "Personal services" includes:
221-20 (1) services provided by tanning salons or tattoo
221-21 parlors; or
221-22 (2) diet or weight-reducing services.
221-23 SECTION 4.11. Section 151.0048(a), Tax Code, is amended to
221-24 read as follows:
221-25 (a) Except as provided by Subsection (b), "real property
221-26 service" means:
221-27 (1) landscaping;
222-1 (2) the care and maintenance of lawns, yards, or
222-2 ornamental trees or other plants;
222-3 (3) the removal or collection of garbage, rubbish, or
222-4 other solid waste other than:
222-5 (A) hazardous waste;
222-6 (B) industrial solid waste;
222-7 (C) waste material that results from an activity
222-8 associated with the exploration, development, or production of oil,
222-9 gas, geothermal resources, or any other substance or material
222-10 regulated by the Railroad Commission of Texas under Section 91.101,
222-11 Natural Resources Code;
222-12 (D) domestic sewage or an irrigation return
222-13 flow, to the extent the sewage or return flow does not constitute
222-14 garbage or rubbish; and
222-15 (E) industrial discharges subject to regulation
222-16 by permit issued pursuant to Chapter 26, Water Code;
222-17 (4) building or grounds cleaning, janitorial, or
222-18 custodial services;
222-19 (5) a structural pest control service covered by
222-20 Section 2, Texas Structural Pest Control Act (Article 135b-6,
222-21 Vernon's Texas Civil Statutes); [or]
222-22 (6) the surveying of real property; or
222-23 (7) custom map making, which includes the provision of
222-24 a topological representation of an area of land, submerged land, or
222-25 water specifically prepared under special order or for limited
222-26 distribution without regard to the medium in which the
222-27 representation is presented.
223-1 SECTION 4.12. Sections 151.005 and 151.006, Tax Code, are
223-2 amended to read as follows:
223-3 Sec. 151.005. "SALE" OR "PURCHASE." "Sale" or "purchase"
223-4 means any of the following when done or performed for
223-5 consideration:
223-6 (1) a transfer of title or possession of tangible
223-7 personal property;
223-8 (2) the exchange, barter, lease, or rental of tangible
223-9 personal property, including the license or distribution of films,
223-10 videotapes, or disks for theatrical or other public exhibition or
223-11 broadcast;
223-12 (3) the performance of a taxable service, contracting
223-13 to perform a taxable service or to make a taxable service
223-14 available, or, in the case of an amusement service, a transfer of
223-15 title to or possession of a ticket or other admission document, the
223-16 collection of an admission fee, whether by individual performance,
223-17 subscription series, or membership privilege, the collection of
223-18 dues or a fee, charge, or assessment, including an initiation fee,
223-19 by a club or organization for membership or a special privilege,
223-20 status, or membership classification in the club or organization,
223-21 or the use of a coin-operated machine;
223-22 (4) the production, fabrication, processing, printing,
223-23 or imprinting of tangible personal property for consumers who
223-24 directly or indirectly furnish the materials used in the
223-25 production, fabrication, processing, printing, or imprinting;
223-26 (5) the furnishing and distribution of tangible
223-27 personal property by a social club or fraternal organization to
224-1 anyone;
224-2 (6) the furnishing, preparation, or service of food,
224-3 meals, or drinks;
224-4 (7) a transfer of the possession of tangible personal
224-5 property if the title to the property is retained by the seller as
224-6 security for the payment of the price; or
224-7 (8) a transfer of the title or possession of tangible
224-8 personal property that has been produced, fabricated, or printed to
224-9 the special order of the customer.
224-10 Sec. 151.006. "SALE FOR RESALE." "Sale for resale" means a
224-11 sale of:
224-12 (1) tangible personal property or a taxable service to
224-13 a purchaser who acquires the property or service for the purpose of
224-14 reselling it in the United States of America or a possession or
224-15 territory of the United States of America or in the United Mexican
224-16 States in the normal course of business in the form or condition in
224-17 which it is acquired or as an attachment to or integral part of
224-18 other tangible personal property or taxable service;
224-19 (2) tangible personal property to a purchaser for the
224-20 sole purpose of the purchaser's leasing or renting it in the United
224-21 States of America or a possession or territory of the United States
224-22 of America or in the United Mexican States to another person, but
224-23 not if incidental to the leasing or renting of real estate;
224-24 (3) tangible personal property to a purchaser who
224-25 acquires the property for the purpose of transferring it in the
224-26 United States of America or a possession or territory of the United
224-27 States of America or in the United Mexican States as an integral
225-1 part of a taxable service; or
225-2 (4) a taxable service, other than a transportation,
225-3 warehouse or storage, or appraisal service, performed on tangible
225-4 personal property that is held for sale by the purchaser of the
225-5 taxable service.
225-6 SECTION 4.13. Subchapter A, Chapter 151, Tax Code, is
225-7 amended by adding Sections 151.0073 and 151.0074 to read as
225-8 follows:
225-9 Sec. 151.0073. "SANITIZING, STERILIZING, OR DISINFECTION
225-10 SERVICES." "Sanitizing, sterilizing, or disinfection services"
225-11 means the cleaning of real or tangible personal property through
225-12 the use of agents and processes designed to remove bacteriological,
225-13 viral, or other pathogenic materials.
225-14 Sec. 151.0074. "SECRETARIAL OR MAILING SERVICES."
225-15 "Secretarial or mailing services" includes:
225-16 (1) letter or resume writing services;
225-17 (2) editing or proofreading services; or
225-18 (3) addressing, packaging, sorting, collating,
225-19 folding, labeling, or any other service to prepare an item for
225-20 shipping or mailing.
225-21 SECTION 4.14. Subchapter A, Chapter 151, Tax Code, is
225-22 amended by adding Section 151.0082 to read as follows:
225-23 Sec. 151.0082. "SLUDGE DISPOSAL SERVICES." "Sludge disposal
225-24 services" means the recycling of sludge, as that term is defined by
225-25 Section 361.003, Health and Safety Code.
225-26 SECTION 4.15. Section 151.0101(a), Tax Code, is amended to
225-27 read as follows:
226-1 (a) "Taxable services" means:
226-2 (1) amusement services;
226-3 (2) cable television services;
226-4 (3) personal services;
226-5 (4) motor vehicle parking and storage services;
226-6 (5) the repair, remodeling, maintenance, and
226-7 restoration of tangible personal property, except:
226-8 (A) aircraft; and
226-9 (B) a ship, boat, or other vessel, other than:
226-10 (i) a taxable boat or motor as defined by
226-11 Section 160.001;
226-12 (ii) a sports fishing boat; or
226-13 (iii) any other vessel used for pleasure;
226-14 [(C) the repair, maintenance, and restoration of
226-15 a motor vehicle; and]
226-16 [(D) the repair, maintenance, creation, and
226-17 restoration of a computer program, including its development and
226-18 modification, not sold by the person performing the repair,
226-19 maintenance, creation, or restoration service;]
226-20 (6) telecommunications services;
226-21 (7) credit reporting services;
226-22 (8) debt collection services;
226-23 (9) insurance services;
226-24 (10) information services;
226-25 (11) real property services;
226-26 (12) data processing services;
226-27 (13) real property repair and remodeling;
227-1 (14) security services; [and]
227-2 (15) telephone answering services;
227-3 (16) motor vehicle repair services;
227-4 (17) motor vehicle wash or detail services;
227-5 (18) employment agency services;
227-6 (19) management, consulting, or public relations
227-7 services;
227-8 (20) commercial research, development, or testing
227-9 services;
227-10 (21) transportation services;
227-11 (22) appraisal services;
227-12 (23) traffic or crowd control services;
227-13 (24) warehouse or storage services;
227-14 (25) boat dock services;
227-15 (26) secretarial or mailing services;
227-16 (27) diving services;
227-17 (28) sanitizing, sterilizing, or disinfection
227-18 services;
227-19 (29) patent brokerage;
227-20 (30) notary services;
227-21 (31) sludge disposal services;
227-22 (32) low-level radioactive waste disposal services;
227-23 and
227-24 (33) oil well service.
227-25 SECTION 4.16. Subchapter A, Chapter 151, Tax Code, is
227-26 amended by adding Section 151.01034 to read as follows:
227-27 Sec. 151.01034. "TRAFFIC OR CROWD CONTROL SERVICES." (a)
228-1 "Traffic or crowd control services" means:
228-2 (1) marking, painting, or designating traffic flow
228-3 lanes, parking lanes, or walkways;
228-4 (2) rerouting traffic flow for repairs; or
228-5 (3) crowd control consultation or planning.
228-6 (b) "Traffic or crowd control services" does not include
228-7 crowd control security personnel or road-race management or race
228-8 director services.
228-9 SECTION 4.17. Subchapter A, Chapter 151, Tax Code, is
228-10 amended by adding Section 151.0106 to read as follows:
228-11 Sec. 151.0106. "TRANSPORTATION SERVICES." (a)
228-12 "Transportation services" means transportation of passengers or
228-13 property that originates and terminates in this state, other than
228-14 the regularly scheduled transport of passengers by airline, train,
228-15 or boat, including any combination of the following:
228-16 (1) freight hauled by rail or by motor vehicle;
228-17 (2) private mail or package delivery or courier
228-18 service;
228-19 (3) towing of a motor vehicle;
228-20 (4) bus or van service, including airport or bus
228-21 terminal shuttle service; and
228-22 (5) limousine service.
228-23 (b) "Transportation services" does not include
228-24 transportation of passengers or of passengers and tangible personal
228-25 property by means of a private passenger motor vehicle, other than
228-26 a limousine, that is taxed under Chapter 192.
228-27 SECTION 4.18. Subchapter A, Chapter 151, Tax Code, is
229-1 amended by adding Section 151.014 to read as follows:
229-2 Sec. 151.014. "WAREHOUSE OR STORAGE SERVICES." (a)
229-3 "Warehouse or storage services" means the provision of space and
229-4 facilities for the keeping and storage of tangible personal
229-5 property and includes the rental of space and equipment used for
229-6 safekeeping of the stored items and security at the place of
229-7 storage without regard to whether the retailer or purchaser has or
229-8 limits access to the storage area and without regard to whether the
229-9 storage facility or warehouse is located in a foreign trade zone.
229-10 The term includes coin-operated lockers and cold storage and
229-11 refrigerated lockers for food and perishables.
229-12 (b) "Warehouse or storage services" does not include:
229-13 (1) the use of a safety deposit box or other storage
229-14 facility provided in a bank or other financial institution; or
229-15 (2) grain or other agricultural product warehousing
229-16 described by Chapter 14, Agriculture Code, or other cooperative
229-17 storage by members who are agricultural producers.
229-18 SECTION 4.19. Section 151.051(b), Tax Code, is amended to
229-19 read as follows:
229-20 (b) Except as provided by Section 151.0511, the [The] sales
229-21 tax rate is 6-1/4 percent of the sales price of the taxable item
229-22 sold.
229-23 SECTION 4.20. Subchapter C, Chapter 151, Tax Code, is
229-24 amended by adding Section 151.0511 to read as follows:
229-25 Sec. 151.0511. RATE FOR GAS AND ELECTRICITY. (a) The sales
229-26 tax rate is 3.25 percent of the sales price of gas and electricity
229-27 sold for use by a person exploring for, producing, or transporting
230-1 a material extracted from the earth.
230-2 (b) Gas and electricity sold for a use other than a use
230-3 listed in Subsection (a) or exempted under this chapter is taxed at
230-4 the rate provided under Section 151.051.
230-5 SECTION 4.21. Section 151.101(b), Tax Code, is amended to
230-6 read as follows:
230-7 (b) The tax is at the same percentage rate as is provided by
230-8 Section 151.051 or 151.0511 of this code on the sales price of the
230-9 taxable item.
230-10 SECTION 4.22. Section 151.301, Tax Code, is amended to read
230-11 as follows:
230-12 Sec. 151.301. "Exempted From the Taxes Imposed by This
230-13 Chapter." If a taxable item is exempted from the taxes imposed by
230-14 this chapter, the sale, storage, use or other consumption of the
230-15 item is not subject to the sales tax imposed by Sections [Section]
230-16 151.051 and 151.0511 [of this code] or the use tax imposed by
230-17 Section 151.101 [of this code] if the item meets the qualifications
230-18 for exemption as provided in this subchapter; and when an item is
230-19 exempted from the taxes imposed by this chapter the receipts from
230-20 its sale are excluded from the computation of the taxes.
230-21 SECTION 4.23. Section 151.302, Tax Code, is amended by
230-22 adding Subsections (e) and (f) to read as follows:
230-23 (e) An appraisal service may be purchased for resale only if
230-24 the service is resold in the form or condition in which it is
230-25 purchased.
230-26 (f) A transportation service or warehouse or storage service
230-27 may be purchased for resale only if the service is resold in the
231-1 form or condition in which it is purchased and not resold incident
231-2 to a sale of another taxable item.
231-3 SECTION 4.24. Section 151.304, Tax Code, is amended by
231-4 adding Subsection (h) to read as follows:
231-5 (h) This section does not apply to the sale or the storage,
231-6 use, or consumption of an aircraft, as that term is defined by
231-7 Section 151.328.
231-8 SECTION 4.25. Section 151.307, Tax Code, is amended by
231-9 amending Subsections (b), (c), and (d) and adding Subsections (e)
231-10 and (f) to read as follows:
231-11 (b) When an exemption is claimed because tangible personal
231-12 property is irrevocably committed to the stream of export or
231-13 exported by the seller, or exported by a United States Customs
231-14 Broker licensed by the comptroller under Section 151.157, beyond
231-15 the territorial limits of the United States, proof of export may be
231-16 shown only by:
231-17 (1) a bill of lading issued by a licensed and
231-18 certificated carrier of persons or property showing the seller as
231-19 consignor, the buyer as consignee, and a delivery point outside the
231-20 territorial limits of the United States;
231-21 (2) documentation[:]
231-22 [(A)] provided to a seller by a United States
231-23 Customs Broker licensed by the comptroller under Section 151.157
231-24 that:
231-25 (A) shows the name and address of the seller and
231-26 the buyer;
231-27 (B) shows a delivery point outside the
232-1 territorial limits of the United States; and
232-2 (C) is accompanied by a copy of the invoice,
232-3 receipt, or other document issued by the seller evidencing the
232-4 sales price of the tangible personal property[;]
232-5 [(B) certifying that delivery was made to a
232-6 point outside the territorial limits of the United States; and]
232-7 [(C) to which a stamp issued under Section
232-8 151.158 is affixed in the manner required by that section or
232-9 Section 151.157];
232-10 (3) import documents from the country of destination
232-11 showing that the property was imported into a country other than
232-12 the United States;
232-13 (4) an original airway, ocean, or railroad bill of
232-14 lading and a forwarder's receipt if an air, ocean, or rail freight
232-15 forwarder takes possession of the property; or
232-16 (5) any other manner provided by the comptroller for
232-17 an enterprise authorized to make tax-free purchases under Section
232-18 151.156.
232-19 (c) A United States Customs Broker may not rely on the type
232-20 of evidence described by Subsection (b)(2) to establish that the
232-21 tangible personal property was delivered to a point outside the
232-22 territorial limits of the United States but instead must maintain
232-23 evidence of the type described by Subsection (b)(1), (b)(3), or
232-24 (b)(4).
232-25 (d) If a United States Customs Broker does not maintain the
232-26 documentation as required by Subsection (c) or if the comptroller
232-27 establishes that the tangible personal property was not delivered
233-1 to a point outside the territorial limits of the United States, the
233-2 customs broker is:
233-3 (1) liable for the tax on the original purchase price
233-4 of the tangible personal property, plus applicable penalties and
233-5 interest computed from the date the retailer delivered the property
233-6 to the customs broker; and
233-7 (2) not eligible for the exemption authorized by this
233-8 section.
233-9 (e) Except for tangible personal property for which proof of
233-10 export is shown under Subsection (b)(5), a purchaser who takes
233-11 possession in this state of tangible personal property to which
233-12 this section otherwise applies is liable for sales tax on the
233-13 original purchase price of the tangible personal property and is
233-14 not eligible for the exemption provided by this section
233-15 [Documentation, including the stamp affixed to the documentation,
233-16 that is provided by a customs broker licensed by the comptroller
233-17 under Section 151.157 is presumed valid in the absence of clear and
233-18 convincing evidence that the tangible personal property covered by
233-19 the documentation was not exported outside the territorial limits
233-20 of the United States].
233-21 (f) [(d)] In this section:
233-22 (1) "Air forwarder" means a licensed International Air
233-23 Transportation Association freight forwarder.
233-24 (2) "Ocean forwarder" means a licensed Federal
233-25 Maritime Commission freight forwarder.
233-26 SECTION 4.26. Section 151.308(a), Tax Code, is amended to
233-27 read as follows:
234-1 (a) The following are exempted from the taxes imposed by
234-2 this chapter:
234-3 (1) oil as taxed by Chapter 202;
234-4 (2) sulphur as taxed by Chapter 203;
234-5 (3) motor fuels and special fuels as defined, taxed,
234-6 or exempted by Chapter 153;
234-7 (4) cement as taxed by Chapter 181;
234-8 (5) motor vehicles, trailers, and semitrailers as
234-9 defined, taxed, or exempted by Chapter 152 or 157, other than a
234-10 mobile office as defined by Section 152.001(16);
234-11 (6) mixed beverages, ice, or nonalcoholic beverages
234-12 and the preparation or service of these items if the receipts are
234-13 taxable by Chapter 183 [202, Alcoholic Beverage Code];
234-14 (7) alcoholic beverages when sold to the holder of a
234-15 private club registration permit or to the agent or employee of the
234-16 holder of a private club registration permit if the holder or agent
234-17 or employee is acting as the agent of the members of the club and
234-18 if the beverages are to be served on the premises of the club;
234-19 (8) [oil well service as taxed by Subchapter E,
234-20 Chapter 191; and]
234-21 [(9)] insurance premiums subject to gross premiums
234-22 taxes;
234-23 (9) aviation fuel as defined, taxed, or exempted by
234-24 Chapter 161; and
234-25 (10) coal as taxed by Chapter 162.
234-26 SECTION 4.27. Section 151.3101, Tax Code, is amended by
234-27 adding Subsection (c) to read as follows:
235-1 (c) This section does not exempt:
235-2 (1) a sports or athletic event provided by an
235-3 institution of higher education or a private or independent
235-4 institution of higher education, as those terms are defined by
235-5 Section 61.003, Education Code; or
235-6 (2) a musical concert performance or other amusement
235-7 that is not solely for educational purposes if an institution of
235-8 higher education or a private or independent institution of higher
235-9 education, as those terms are defined by Section 61.003, Education
235-10 Code, contracts with an entity other than another institution of
235-11 higher education or a private or independent institution of higher
235-12 education for the provision of the amusement.
235-13 SECTION 4.28. Section 151.3111, Tax Code, is amended by
235-14 adding Subsection (d) to read as follows:
235-15 (d) This section does not apply to:
235-16 (1) transportation services;
235-17 (2) appraisal services; or
235-18 (3) sanitizing, sterilizing, or disinfection services.
235-19 SECTION 4.29. Section 151.316, Tax Code, is amended by
235-20 amending Subsection (a) and adding Subsection (e) to read as
235-21 follows:
235-22 (a) The following items are exempted from the taxes imposed
235-23 by this chapter:
235-24 (1) horses, mules, and work animals;
235-25 (2) animal life the products of which ordinarily
235-26 constitute food for human consumption;
235-27 (3) feed for farm and ranch animals;
236-1 (4) feed for animals that are held for sale in the
236-2 regular course of business;
236-3 (5) seeds and annual plants the products of which:
236-4 (A) ordinarily constitute food for human
236-5 consumption;
236-6 (B) are to be sold in the regular course of
236-7 business; or
236-8 (C) are used to produce feed for animals
236-9 exempted by this section;
236-10 (6) fertilizers, fungicides, insecticides, herbicides,
236-11 defoliants, and desiccants exclusively used or employed on a farm
236-12 or ranch in the production of:
236-13 (A) food for human consumption;
236-14 (B) feed for animal life; or
236-15 (C) other agricultural products to be sold in
236-16 the regular course of business;
236-17 (7) machinery and equipment exclusively used or
236-18 employed on a farm or ranch in the building or maintaining of roads
236-19 or water facilities or in the production of:
236-20 (A) food for human consumption;
236-21 (B) grass;
236-22 (C) feed for animal life; or
236-23 (D) other agricultural products to be sold in
236-24 the regular course of business; and
236-25 (8) machinery and equipment exclusively used in, and
236-26 pollution control equipment required as a result of, the
236-27 processing, packing, or marketing of agricultural products by an
237-1 original producer at a location operated by the original producer
237-2 for processing, packing, or marketing the producer's own products
237-3 if:
237-4 (A) 50 percent or more of the products
237-5 processed, packed, or marketed at or from the location are produced
237-6 by the original producer and not purchased or acquired from others;
237-7 and
237-8 (B) the producer does not process, pack, or
237-9 market for consideration any agricultural products that belong to
237-10 other persons in an amount greater than five percent of the total
237-11 agricultural products processed, packed, or marketed by the
237-12 producer[; and]
237-13 [(9) ice exclusively used by commercial fishing boats
237-14 in the storing of aquatic species including but not limited to
237-15 shrimp, other crustaceans, finfish, mollusks, and other similar
237-16 creatures].
237-17 (e) A transportation service is exempt from the taxes
237-18 imposed by this chapter if the service is:
237-19 (1) purchased by an original producer for the
237-20 transportation of items exempt under Subsection (a) or (b); or
237-21 (2) sold or purchased by an original producer for the
237-22 transportation of unprocessed agricultural products.
237-23 SECTION 4.30. Section 151.317, Tax Code, is amended to read
237-24 as follows:
237-25 Sec. 151.317. GAS AND ELECTRICITY. (a) Gas and electricity
237-26 are exempted from the taxes imposed by this chapter except when
237-27 sold for commercial use.
238-1 (b) The sale, production, distribution, lease, or rental of,
238-2 and the use, storage, or other consumption in this state of, gas
238-3 and electricity, except when sold for residential or commercial
238-4 use, are exempted from the taxes imposed by a city under Chapter
238-5 321 [the Local Sales and Use Tax Act], unless sales for residential
238-6 use are further exempted by the city as provided by Chapter 321
238-7 [the Local Sales and Use Tax Act]. The sale, production,
238-8 distribution, lease, or rental of, and the use, storage, or other
238-9 consumption in this state of, gas and electricity, except when sold
238-10 for commercial use, are exempted from the taxes imposed by any
238-11 other entity under Title 3 or another law that authorizes the
238-12 imposition of a local sales and use tax. For purposes of this
238-13 subsection, "commercial use" has the meaning assigned that term by
238-14 Subsection (c) but does not include exploring for, producing, or
238-15 transporting a material extracted from the earth.
238-16 (c) In this section:
238-17 (1) "Residential use" means use:
238-18 (A) in a family dwelling or in a multifamily
238-19 apartment or housing complex or building or in a part of a building
238-20 occupied as a home or residence when the use is by the owner of the
238-21 dwelling, apartment, complex, or building or part of the building
238-22 occupied; or
238-23 (B) in a dwelling, apartment, house, or building
238-24 or part of a building occupied as a home or residence when the use
238-25 is by a tenant who occupies the dwelling, apartment, house, or
238-26 building or part of a building under a contract for an express
238-27 initial term for longer than 29 consecutive days.
239-1 (2) "Commercial use" means use by a person engaged in
239-2 selling, warehousing, or distributing a commodity or a professional
239-3 or personal service, or in exploring for, producing, or
239-4 transporting a material extracted from the earth, but does not
239-5 include:
239-6 (A) use by a person engaged in:
239-7 (i) processing tangible personal property
239-8 for sale as tangible personal property, other than preparation or
239-9 storage of food for immediate consumption;
239-10 (ii) [exploring for, producing, or
239-11 transporting, a material extracted from the earth;]
239-12 [(iii)] agriculture, including dairy or
239-13 poultry operations and pumping for farm or ranch irrigation;
239-14 (iii) [(iv)] electrical processes such as
239-15 electroplating, electrolysis, and cathodic protection; or
239-16 (iv) [(v)] the off-wing processing,
239-17 overhaul, or repair of a jet turbine engine or its parts for a
239-18 certificated or licensed carrier of persons or property; or
239-19 (B) a direct or indirect use, consumption, or
239-20 loss of electricity by an electric utility engaged in the purchase
239-21 of electricity for resale.
239-22 SECTION 4.31. Section 151.318, Tax Code, is amended by
239-23 amending Subsections (a) and (c) and adding Subsections (r) and (s)
239-24 to read as follows:
239-25 (a) The following items are exempted from the taxes imposed
239-26 by this chapter:
239-27 (1) tangible personal property that will become an
240-1 ingredient or component part of tangible personal property
240-2 manufactured, processed, or fabricated for ultimate sale;
240-3 (2) tangible personal property directly used or
240-4 consumed in or during the actual manufacturing, processing, or
240-5 fabrication of tangible personal property for ultimate sale if the
240-6 use or consumption of the property is necessary or essential to the
240-7 manufacturing, processing, or fabrication operation and directly
240-8 makes or causes a chemical or physical change to the product being
240-9 manufactured, processed, or fabricated for ultimate sale; [and]
240-10 (3) services performed directly on the product being
240-11 manufactured prior to its distribution for sale and for the purpose
240-12 of making the product more marketable; and
240-13 (4) actuators, boilers, cooling towers, generators,
240-14 heat exchangers, and computerized control units that are used in
240-15 generating electricity or steam, if the electricity or steam is
240-16 produced for ultimate sale or to power or supply equipment that
240-17 qualifies for exemption under Subsection (a)(2).
240-18 (c) The exemption does not include:
240-19 (1) machinery, equipment, or replacement parts or
240-20 their accessories having a useful life when new in excess of six
240-21 months;
240-22 (2) intraplant transportation equipment, including
240-23 intraplant transportation equipment used to move a product or raw
240-24 material in connection with the manufacturing process and
240-25 specifically including all piping and conveyor systems;
240-26 (3) maintenance or janitorial supplies or equipment,
240-27 or other machinery, equipment, materials, or supplies that are used
241-1 incidentally in a manufacturing, processing, or fabrication
241-2 operation;
241-3 (4) [(3)] hand tools; [or]
241-4 (5) [(4)] office equipment or supplies, equipment or
241-5 supplies used in sales or distribution activities, research or
241-6 development of new products, or transportation activities, or other
241-7 tangible personal property not used in an actual manufacturing,
241-8 processing, or fabrication operation;
241-9 (6) ice exclusively used by commercial fishing boats
241-10 in the storing of aquatic species including shrimp, other
241-11 crustaceans, finfish, mollusks, and other similar creatures;
241-12 (7) machinery and equipment or supplies used to
241-13 manufacture, maintain, repair, or remodel items that are not sold;
241-14 or
241-15 (8) machinery and equipment or supplies used to
241-16 maintain or store tangible personal property.
241-17 (r) A taxpayer claiming exemption under this section must
241-18 maintain proof that purchases of taxable services and tangible
241-19 personal property are exempted under this section and not excluded
241-20 from the exemption.
241-21 (s) Transportation services are exempted from the taxes
241-22 imposed by this chapter if the services are purchased by a
241-23 manufacturer for the transportation of:
241-24 (1) items exempt under Subsection (a)(1); or
241-25 (2) fuel, including coal or natural gas, used or
241-26 consumed in or during the manufacturing, processing, or fabrication
241-27 of tangible property for ultimate sale.
242-1 SECTION 4.32. Sections 151.319(c), (d), and (f), Tax Code,
242-2 are amended to read as follows:
242-3 (c) A transaction involving the sale of a handbill,
242-4 circular, flyer, advertising supplement, or similar item that is
242-5 printed to the special order of a customer is exempted from the
242-6 taxes imposed by this chapter only if the item is printed or
242-7 purchased by a newspaper for the exclusive purpose of distributing
242-8 it as part of the newspaper [being distributed as a part of a
242-9 newspaper, is actually distributed as a part of the newspaper, and
242-10 is delivered to the person who is responsible for the distribution
242-11 of the newspaper in which the item is distributed and not to the
242-12 customer].
242-13 (d) The following items are exempted from the taxes imposed
242-14 by this chapter:
242-15 (1) except as provided by Subsection (c), tangible
242-16 personal property that enters into and becomes an ingredient or
242-17 component part of a newspaper, whether or not the newspaper is
242-18 printed for ultimate sale in this state;
242-19 (2) tangible personal property used or consumed in or
242-20 during a phase of actual printing or processing of a newspaper if
242-21 the use of the property is necessary or essential to the processing
242-22 or printing operation; and
242-23 (3) chemicals, catalysts, and other materials that are
242-24 used for the purpose of producing a chemical or physical change or
242-25 removing impurities during the printing or processing of a
242-26 newspaper or are used for placing a newspaper in its final
242-27 distributable form.
243-1 (f) In this section, "newspaper" means a publication that is
243-2 printed on newsprint, the average sales price of which for each
243-3 copy over a 30-day period does not exceed 75 cents, and that is
243-4 printed and distributed at a daily, weekly, or other short interval
243-5 for the dissemination of news of a general character and of a
243-6 general interest. Except as provided by Subsection (c),
243-7 "newspaper" ["Newspaper"] does not include a magazine, handbill,
243-8 circular, flyer, sales catalog, or similar printed item [unless the
243-9 printed item is printed for distribution as a part of a newspaper
243-10 and is actually distributed as a part of a newspaper]. For the
243-11 purposes of this section, an advertisement is news of a general
243-12 character and of a general interest. Notwithstanding any other
243-13 provision of this subsection, "newspaper" includes:
243-14 (1) a publication containing articles and essays of
243-15 general interest by various writers and advertisements that is
243-16 produced for the operator of a licensed and certified carrier of
243-17 persons and distributed by the operator to its customers during
243-18 their travel on the carrier; and
243-19 (2) a publication for the dissemination of news of a
243-20 general character and of a general interest that is printed on
243-21 newsprint and distributed to the general public free of charge at a
243-22 daily, weekly, or other short interval.
243-23 SECTION 4.33. Section 151.328(a), Tax Code, is amended to
243-24 read as follows:
243-25 (a) Aircraft are exempted from the taxes imposed by this
243-26 chapter if:
243-27 (1) sold to a person using the aircraft as a
244-1 certificated or licensed carrier of persons or property;
244-2 (2) sold to a person who:
244-3 (A) has a sales tax permit issued under this
244-4 chapter; and
244-5 (B) uses the aircraft for the purpose of
244-6 providing flight instruction that is:
244-7 (i) recognized by the Federal Aviation
244-8 Administration;
244-9 (ii) under the direct or general
244-10 supervision of a flight instructor certified by the Federal
244-11 Aviation Administration; and
244-12 (iii) designed to lead to a pilot
244-13 certificate or rating issued by the Federal Aviation Administration
244-14 or otherwise required by a rule or regulation of the Federal
244-15 Aviation Administration; or
244-16 (3) sold to a foreign government[; or]
244-17 [(4) sold to a person for use and registration in
244-18 another state or nation before any use in this state other than
244-19 flight training in the aircraft and the transportation of the
244-20 aircraft out of this state].
244-21 SECTION 4.34. Section 151.330, Tax Code, is amended by
244-22 adding Subsections (j)-(m) to read as follows:
244-23 (j) The benefit of the following services is derived solely
244-24 at the location at which the services are provided:
244-25 (1) amusement services;
244-26 (2) personal services;
244-27 (3) motor vehicle parking and storage services;
245-1 (4) real property services;
245-2 (5) real property repair and remodeling;
245-3 (6) motor vehicle repair services;
245-4 (7) motor vehicle wash or detail services;
245-5 (8) oil well services;
245-6 (9) warehouse or storage services;
245-7 (10) boat dock services;
245-8 (11) diving services; and
245-9 (12) notary services.
245-10 (k) The benefit of employment agency services is derived
245-11 solely at the physical location where the employment position is
245-12 filled.
245-13 (l) The benefit of the following services is derived at the
245-14 location of the property that is the subject of the services:
245-15 (1) appraisal services; and
245-16 (2) traffic or crowd control services.
245-17 (m) The benefit of secretarial or mailing services is
245-18 derived at the location of the individual receiving the property or
245-19 other outcome of the service.
245-20 SECTION 4.35. Section 151.338, Tax Code, is amended to read
245-21 as follows:
245-22 Sec. 151.338. ENVIRONMENT AND CONSERVATION SERVICES. (a)
245-23 The services involved in the repair, remodeling, maintenance, or
245-24 restoration of tangible personal property are not taxable under
245-25 this chapter if the repair, remodeling, maintenance, or restoration
245-26 is required by statute, ordinance, order, rule, or regulation of
245-27 any commission, agency, court, or political, governmental, or
246-1 quasi-governmental entity in order to protect the environment or to
246-2 conserve energy.
246-3 (b) This section does not apply to a service that was not
246-4 taxable under this chapter on September 30, 1997.
246-5 SECTION 4.36. Section 151.346(c), Tax Code, is amended to
246-6 read as follows:
246-7 (c) An exemption authorized by this section does not apply
246-8 to:
246-9 (1) a service that would have been taxable under this
246-10 chapter as it existed on September 1, 1987; or
246-11 (2) a service that was not taxable under this chapter
246-12 on September 30, 1997.
246-13 SECTION 4.37. Section 151.410, Tax Code, is amended to read
246-14 as follows:
246-15 Sec. 151.410. Method of Reporting Sales Tax: General Rule.
246-16 A seller shall compute the sales tax imposed by Subchapter C of
246-17 this chapter to be paid to the comptroller by multiplying the
246-18 applicable percentage rate of the sales tax times the total
246-19 receipts of the seller from all sales of taxable tangible personal
246-20 property and of taxable services.
246-21 SECTION 4.38. Section 151.416, Tax Code, is amended to read
246-22 as follows:
246-23 Sec. 151.416. Commingled Receipts and Tax. A seller who has
246-24 an accounting system under which the taxes collected under this
246-25 chapter are commingled with the receipts from the sales of taxable
246-26 items may compute his taxable receipts by:
246-27 (1) subtracting from the total receipts of the seller
247-1 the receipts from the sales of items that are exempted or are
247-2 specifically excluded from the taxes imposed by this chapter to
247-3 obtain a remainder consisting of the commingled receipts from
247-4 taxable sales and the taxes collected; and
247-5 (2) dividing this remainder by one plus the applicable
247-6 sales tax rate expressed as a decimal fraction to obtain a quotient
247-7 that is the taxable receipts that may be reported under Section
247-8 151.410 of this code.
247-9 SECTION 4.39. Sections 151.712(a) and (b), Tax Code, are
247-10 amended to read as follows:
247-11 (a) A person may not sign or certify [proof of export]
247-12 documentation for the purpose of showing an exemption under Section
247-13 151.307(b)(2) unless:
247-14 (1) the person is:
247-15 (A) a customs broker licensed by the comptroller
247-16 under Section 151.157; or
247-17 (B) an authorized employee of a customs broker
247-18 licensed by the comptroller under Section 151.157; and
247-19 (2) the tangible personal property was delivered by
247-20 the seller to the customs broker for export as described by Section
247-21 151.307(b)(2) [the export of which the person certifies is exported
247-22 on the date and to the place shown on the export documentation
247-23 signed by the person].
247-24 (b) A person who provides [proof of] documentation for the
247-25 purpose of claiming the exemption under Section 151.307(b)(2) [that
247-26 tangible personal property has been exported outside of the United
247-27 States] or a person who may benefit from the provision of the
248-1 [proof of] documentation, including a customs broker, authorized
248-2 employee, [authorized independent contractor,] seller of the
248-3 property or agent or employee of the seller, or a consumer of the
248-4 property or agent or employee of the consumer, may not sell or buy
248-5 the [proof of documentation, including stamps required for the]
248-6 documentation. This subsection does not apply to a customs broker
248-7 who accepts a fee for providing documentation under Section
248-8 151.307(b).
248-9 SECTION 4.40. Section 321.002(a), Tax Code, is amended by
248-10 adding Subdivision (4) to read as follows:
248-11 (4) "Expanded tax base" means the sale, use, storage,
248-12 rental, or other consumption of a taxable item that was not subject
248-13 to the tax imposed by Chapter 151 on September 30, 1997. The term
248-14 does not include the sale, use, or other consumption of gas and
248-15 electricity for residential use if the municipality is authorized
248-16 to impose a tax on the residential use of gas and electricity.
248-17 SECTION 4.41. Subchapter C, Chapter 321, Tax Code, is
248-18 amended by adding Sections 321.211 and 321.2111 to read as follows:
248-19 Sec. 321.211. ELECTION FOR USE OF EXPANDED TAX BASE REVENUE:
248-20 GENERAL PURPOSE TAX. (a) The governing body of each municipality
248-21 that has adopted the tax authorized by Section 321.101(a) shall
248-22 call and hold an election on November 4, 1997, on the question of
248-23 the use of revenue from the expanded tax base collected under that
248-24 provision.
248-25 (b) The order calling the election under this section must
248-26 allow the voters of the municipality to vote on whether the
248-27 expanded tax base revenue is required to be used to:
249-1 (1) reduce municipal property taxes; or
249-2 (2) provide additional revenue for the municipality
249-3 that can be used for any general purpose of the municipality in
249-4 accordance with Section 321.506.
249-5 (c) In addition to the purposes described by Subsection (b),
249-6 the governing body may authorize a vote on the additional options
249-7 of using the revenue to:
249-8 (1) provide funding for one or more specific projects
249-9 or types of projects; or
249-10 (2) provide funding for a combination of the purposes
249-11 described by this subsection and Subsection (b).
249-12 (d) The ballot at the election held under this section shall
249-13 be printed to permit voting in separate propositions on the
249-14 purposes described by Subsection (b) or in three or more separate
249-15 propositions if necessary to vote on the purposes described by
249-16 Subsections (b) and (c). If the governing body authorizes a vote
249-17 on using the revenue for a combination of purposes, the ballot at
249-18 the election must specify an amount or percentage of the amount of
249-19 revenue that shall be used for each purpose. Regardless of the
249-20 number of propositions on the ballot, a voter may be allowed to
249-21 vote in favor of only one proposition. A voter may not be allowed
249-22 to vote against any proposition.
249-23 (e) The municipality may use the revenue from the expanded
249-24 tax base only for the purpose or combination of purposes expressed
249-25 in the proposition that receives a majority of the votes cast in
249-26 the election. If no proposition receives a majority of the votes
249-27 cast in the election, the governing body shall call another
250-1 election to vote on the two propositions that received the highest
250-2 and second-highest number of votes in the election or that tie for
250-3 the highest number of votes. If more than two propositions tie for
250-4 the highest number of votes in the election or two or more
250-5 propositions tie for the second-highest number of votes, the
250-6 governing body shall draw lots to determine which two propositions
250-7 are to be voted on in the subsequent election.
250-8 (f) Not later than the fifth day after the date the final
250-9 canvass of the original election is completed, the governing body
250-10 shall order the subsequent election under Subsection (e). The
250-11 subsequent election shall be held not earlier than the 20th or
250-12 later than the 30th day after the date the final canvass of the
250-13 original election is completed. A subsequent election, however,
250-14 may be held after the 30th but not later than the 45th day after
250-15 the date the final canvass of the original election is completed if
250-16 the later date is necessary to:
250-17 (1) permit a joint election to be held with another
250-18 political subdivision in accordance with Chapter 271, Election
250-19 Code; or
250-20 (2) avoid holding the election on:
250-21 (A) a legal state or national holiday; or
250-22 (B) a weekend day within three days of a legal
250-23 state or national holiday.
250-24 (g) The municipality may use the revenue from the expanded
250-25 tax base only for the purpose or combination of purposes expressed
250-26 in the proposition that receives a majority of the votes cast in
250-27 the subsequent election.
251-1 (h) If, before the date the use of the revenue from the
251-2 expanded tax base is finally determined under this section, a
251-3 municipality receives a distribution of the municipality's share of
251-4 taxes under this chapter that includes revenue from the expanded
251-5 tax base, the municipality shall deposit the expanded tax base
251-6 revenue in a special account and may not use that money for any
251-7 purpose until the approved use is finally determined.
251-8 Sec. 321.2111. ELECTION FOR USE OF EXPANDED TAX BASE
251-9 REVENUE: TAX LEVIED FOR BENEFIT OF ANOTHER ENTITY. (a) This
251-10 section applies to a municipality in which a sales and use tax has
251-11 been adopted at an election held before September 1, 1997, and the
251-12 municipality levies the tax for the benefit of another entity such
251-13 as an industrial development corporation.
251-14 (b) The governing body of each municipality to which this
251-15 section applies shall call and hold an election on November 4,
251-16 1997, on the question of the use of revenue from the expanded tax
251-17 base collected under the law authorizing the imposition of the tax.
251-18 (c) The order calling the election under this section must
251-19 allow the voters of the municipality to vote on whether the
251-20 expanded tax base revenue is required to be used to:
251-21 (1) reduce municipal property taxes; or
251-22 (2) provide additional revenue that can be used for
251-23 any general purpose of the entity.
251-24 (d) In addition to the purposes described by Subsection (c),
251-25 the governing body may authorize a vote on the additional options
251-26 of using the revenue to:
251-27 (1) provide funding for one or more specific projects
252-1 or types of projects that the entity is otherwise authorized to
252-2 undertake;
252-3 (2) rebate revenue to the municipality to provide
252-4 additional revenue for the municipality that can be used for one or
252-5 more specific projects or types of projects;
252-6 (3) rebate revenue to the municipality to provide
252-7 additional revenue for the municipality that can be used for any
252-8 general purpose of the municipality in accordance with Section
252-9 321.506; or
252-10 (4) provide funding for a combination of the purposes
252-11 described by this subsection and Subsection (c).
252-12 (e) The ballot at the election held under this section shall
252-13 be printed to permit voting in separate propositions on the
252-14 purposes described by Subsection (c) or in three or more
252-15 propositions if necessary to vote on the purposes described by
252-16 Subsections (c) and (d). If the governing body authorizes a vote
252-17 on using the revenue for a combination of purposes, the ballot at
252-18 the election must specify an amount or percentage of an amount of
252-19 revenue that shall be used for each purpose. Regardless of the
252-20 number of propositions on the ballot, a voter may be allowed to
252-21 vote in favor of only one proposition. A voter may not be allowed
252-22 to vote against any proposition.
252-23 (f) The entity or municipality, as appropriate, may use the
252-24 revenue from the expanded tax base only for the purpose or
252-25 combination of purposes expressed in the proposition that receives
252-26 a majority of the votes cast in the election. If no proposition
252-27 receives a majority of the votes cast in the election, the
253-1 governing body of the municipality shall call another election to
253-2 vote on the two propositions that received the highest and
253-3 second-highest number of votes in the election or that tie for the
253-4 highest number of votes. If more than two propositions tie for the
253-5 highest number of votes in the main election or two or more
253-6 propositions tie for the second-highest number of votes, the
253-7 governing body shall draw lots to determine which propositions are
253-8 to be voted on in the subsequent election.
253-9 (g) Not later than the fifth day after the date the final
253-10 canvass of the original election is completed, the governing body
253-11 shall order the subsequent election under Subsection (f). The
253-12 subsequent election shall be held not earlier than the 20th or
253-13 later than the 30th day after the date the final canvass of the
253-14 original election is completed. A subsequent election, however,
253-15 may be held after the 30th but not later than the 45th day after
253-16 the date the final canvass of the original election is completed if
253-17 the later date is necessary to:
253-18 (1) permit a joint election to be held with another
253-19 political subdivision in accordance with Chapter 271, Election
253-20 Code; or
253-21 (2) avoid holding the election on:
253-22 (A) a legal state or national holiday; or
253-23 (B) a weekend day within three days of a legal
253-24 state or national holiday.
253-25 (h) The entity or municipality, as appropriate, may use the
253-26 revenue from the expanded tax base only for the purpose or
253-27 combination of purposes expressed in the proposition that receives
254-1 a favorable vote of a majority of the votes cast in the subsequent
254-2 election.
254-3 (i) If, before the date the use of the revenue from the
254-4 expanded tax base is finally determined under this section, a
254-5 municipality receives a distribution of the entity's share of taxes
254-6 under this chapter that includes revenue from the expanded tax
254-7 base, the municipality shall deposit the expanded tax base revenue
254-8 in a special account and the entity or municipality may not use
254-9 that money for any purpose until the approved use is finally
254-10 determined.
254-11 SECTION 4.42. Subchapter C, Chapter 321, Tax Code, is
254-12 amended by adding Section 321.2112 to read as follows:
254-13 Sec. 321.2112. ELECTION FOR USE OF EXPANDED TAX BASE
254-14 REVENUE: GENERAL PURPOSE TAX IN CERTAIN MUNICIPALITIES. (a) This
254-15 section applies only to a municipality with a population of more
254-16 than 1.5 million.
254-17 (b) The governing body of each municipality to which this
254-18 section applies that has adopted the tax authorized by Section
254-19 321.101(a) shall call and hold an election on November 4, 1997, on
254-20 the question of the use of revenue from the expanded tax base
254-21 collected under that provision.
254-22 (c) The order calling the election under this section must
254-23 allow the voters of the municipality to vote on whether the
254-24 expanded tax base revenue is required to be used to:
254-25 (1) provide funding for the construction or renovation
254-26 of one or more sports facilities described by Subsection (e); or
254-27 (2) provide additional revenue for the municipality
255-1 that can be used for any general purpose of the municipality in
255-2 accordance with Section 321.506.
255-3 (d) In addition to the purposes described by Subsection (b),
255-4 the governing body may authorize a vote on the additional options
255-5 of using the revenue to:
255-6 (1) reduce municipal property taxes;
255-7 (2) provide funding for one or more other specific
255-8 projects or types of projects; or
255-9 (3) provide funding for a combination of the purposes
255-10 described by this subsection and Subsection (c).
255-11 (e) A municipality may use revenue from the expanded sales
255-12 tax base to provide funding for the construction or renovation of
255-13 one or more sports facilities only if:
255-14 (1) the facility on which the revenue is to be spent
255-15 is owned and operated or managed by the municipality;
255-16 (2) the municipality does not lease or sell any
255-17 interest in the facility; and
255-18 (3) the municipality will receive at least 50 percent
255-19 of the gross revenue from the facility, including revenues from
255-20 parking and concessions.
255-21 (f) The ballot at the election held under this section shall
255-22 be printed to permit voting in separate propositions on the
255-23 purposes described by Subsection (c) or in three or more separate
255-24 propositions if necessary to vote on the purposes described by
255-25 Subsections (c) and (d). If the governing body authorizes a vote
255-26 on using the revenue for a combination of purposes, the ballot at
255-27 the election must specify an amount or percentage of the amount of
256-1 revenue that shall be used for each purpose. Regardless of the
256-2 number of propositions on the ballot, a voter may be allowed to
256-3 vote in favor of only one proposition. A voter may not be allowed
256-4 to vote against any proposition.
256-5 (g) Any advertisement or other information relating to the
256-6 election under this section that is prepared or approved by the
256-7 municipality must include information describing who will receive
256-8 revenue from each sports facility included on the ballot and the
256-9 estimated rental fees the municipality will receive from the use of
256-10 the facility by professional sports teams or other regular users.
256-11 (h) The municipality may use the revenue from the expanded
256-12 tax base only for the purpose or combination of purposes expressed
256-13 in the proposition that receives a majority of the votes cast in
256-14 the election. If no proposition receives a majority of the votes
256-15 cast in the election, the governing body shall call another
256-16 election to vote on the two propositions that received the highest
256-17 and second-highest number of votes in the election or that tie for
256-18 the highest number of votes. If more than two propositions tie for
256-19 the highest number of votes in the election or two or more
256-20 propositions tie for the second-highest number of votes, the
256-21 governing body shall draw lots to determine which two propositions
256-22 are to be voted on in the subsequent election.
256-23 (i) Not later than the fifth day after the date the final
256-24 canvass of the original election is completed, the governing body
256-25 shall order the subsequent election under Subsection (e). The
256-26 subsequent election shall be held not earlier than the 20th or
256-27 later than the 30th day after the date the final canvass of the
257-1 original election is completed. A subsequent election, however,
257-2 may be held after the 30th but not later than the 45th day after
257-3 the date the final canvass of the original election is completed if
257-4 the later date is necessary to:
257-5 (1) permit a joint election to be held with another
257-6 political subdivision in accordance with Chapter 271, Election
257-7 Code; or
257-8 (2) avoid holding the election on:
257-9 (A) a legal state or national holiday; or
257-10 (B) a weekend day within three days of a legal
257-11 state or national holiday.
257-12 (j) The municipality may use the revenue from the expanded
257-13 tax base only for the purpose or combination of purposes expressed
257-14 in the proposition that receives a majority of the votes cast in
257-15 the subsequent election.
257-16 (k) If, before the date the use of the revenue from the
257-17 expanded tax base is finally determined under this section, a
257-18 municipality receives a distribution of the municipality's share of
257-19 taxes under this chapter that includes revenue from the expanded
257-20 tax base, the municipality shall deposit the expanded tax base
257-21 revenue in a special account and may not use that money for any
257-22 purpose until the approved use is finally determined.
257-23 (l) In this section, "sports facility" means an arena,
257-24 coliseum, stadium, or other type of area or facility that is used
257-25 or is planned for use for one or more professional or amateur
257-26 sports events, community events, or other sports events, including
257-27 rodeos, livestock shows, agricultural expositions, promotional
258-1 events, and other civic or charitable events. The term includes
258-2 any store, restaurant, on-site hotel, concession, automobile
258-3 parking facility, area transportation facility, road, street, water
258-4 or sewer facility, or other on-site or off-site improvement that
258-5 relates to and enhances the use, value, or appeal of a sports
258-6 facility.
258-7 SECTION 4.43. Subchapter F, Chapter 321, Tax Code, is
258-8 amended by adding Section 321.508 to read as follows:
258-9 Sec. 321.508. USE OF TAX REVENUE FROM EXPANDED TAX BASE.
258-10 (a) Notwithstanding any other law, a municipality that imposes a
258-11 tax under this chapter or an entity for whom the municipality
258-12 levies a sales and use tax may use revenue from the expanded tax
258-13 base only for the purpose or purposes authorized by the voters
258-14 under the applicable provisions of this chapter.
258-15 (b) If the voters of a municipality vote to use all or part
258-16 of the expanded tax base revenue to reduce municipal property
258-17 taxes, and the municipality also imposes the additional sales and
258-18 use tax under Section 321.101(b), the expanded tax base revenue is
258-19 treated as revenue from the additional sales and use tax and
258-20 Section 321.507 and the applicable provisions of Title 1 apply.
258-21 (c) If the voters of a municipality vote to use all or part
258-22 of the expanded tax base revenue to reduce municipal property
258-23 taxes, and the municipality does not impose the additional sales
258-24 and use tax under Section 321.101(b), the vote, as to the expanded
258-25 tax base, has the effect of a vote on the additional sales and use
258-26 tax and Section 321.507 and the applicable provisions of Title 1
258-27 apply to the expanded tax base revenue.
259-1 SECTION 4.44. (a) Chapter 322, Tax Code, is amended by
259-2 adding Subchapter E to read as follows:
259-3 SUBCHAPTER E. EXPANDED TAX BASE
259-4 Sec. 322.401. COMPUTATION OF EXPANDED TAX BASE INDEX. (a)
259-5 Not later than September 1, 1997, the comptroller shall compute an
259-6 expanded tax base index for each taxing entity that imposes a
259-7 sales and use tax on January 1, 1997.
259-8 (b) The expanded tax base index for a taxing entity is
259-9 computed by subtracting from 1 a fraction, expressed as a
259-10 percentage and rounded down to the nearest one-eighth of one
259-11 percent:
259-12 (1) the numerator of which is the total amount of
259-13 sales and use tax collected in the entity area on the sale, use,
259-14 storage, and other consumption of all taxable items under this
259-15 chapter for the period beginning on July 1, 1996, and extending
259-16 through June 30, 1997; and
259-17 (2) the denominator of which is the total amount of
259-18 sales and use taxes that the comptroller estimates would have been
259-19 collected in the entity area on the sale, use, storage, and other
259-20 consumption of all taxable items that will be subject to the tax
259-21 imposed by Chapter 151 on October 1, 1997, including taxable items
259-22 subject to the tax on September 30, 1997, had those items been
259-23 taxed for the entire period beginning on July 1, 1996, and
259-24 extending through June 30, 1997.
259-25 (c) The comptroller shall establish each expanded tax base
259-26 index using generally accepted statistical techniques and any
259-27 relevant information available to the comptroller.
260-1 (d) The comptroller shall notify each taxing entity of the
260-2 entity's expanded tax base index.
260-3 Sec. 322.402. TAX RATE ADJUSTMENT. (a) Effective on
260-4 October 1, 1997, the taxing entity shall reduce the rate at which
260-5 the taxing entity is imposing the sales and use tax rate by the
260-6 percentage equal to the entity's expanded tax base index.
260-7 (b) In addition to the reduction required by Subsection (a),
260-8 if the taxing entity is imposing the sales and use tax at the
260-9 maximum level allowed by law, the maximum tax rate is also reduced
260-10 accordingly.
260-11 (c) If the taxing entity is not imposing the sales and use
260-12 tax at the maximum level allowed by law, the maximum tax rate at
260-13 which the taxing entity may impose the sales and use tax is
260-14 automatically reduced by a percentage equal to the entity's
260-15 expanded tax base index. The comptroller shall compute the amount
260-16 of the reduction required by this subsection and notify the taxing
260-17 entity of the new maximum rate.
260-18 (d) The comptroller shall deliver to each taxing entity
260-19 required to reduce a tax rate under this section the expanded tax
260-20 base index on or before September 15, 1997.
260-21 (e) Except for mandamus to compute or recompute the expanded
260-22 tax base, a determination under this section is not subject to
260-23 appeal.
260-24 Sec. 322.403. RECOMPUTATION. (a) Not later than August 1,
260-25 1999, the comptroller shall recompute each taxing entity's expanded
260-26 tax base index, taking into account at least one year's actual
260-27 economic experience and any other factor the comptroller determines
261-1 is appropriate. The comptroller shall notify each taxing entity
261-2 of the entity's recomputed expanded tax base index.
261-3 (b) Effective on the earlier of October 1, 1999, or the
261-4 first day of the next calendar quarter that begins at least 30 days
261-5 after the date the comptroller notifies the taxing entity of the
261-6 entity's recomputed expanded tax base index under Subsection (a),
261-7 the taxing entity shall adjust the rate at which the entity is
261-8 imposing the sales and use tax rate and the entity's maximum tax
261-9 rate as necessary to reflect the recomputed expanded tax base
261-10 index.
261-11 Sec. 322.404. EXEMPTION ELECTION. (a) A taxing entity is
261-12 exempt from the application of this subchapter if the voters of the
261-13 entity, voting at an election called and held for that purpose,
261-14 authorize the exemption.
261-15 (b) If the election is held after the taxing entity's tax
261-16 rate is reduced under this subchapter, the ballot at an election
261-17 held under this section must be printed to permit voting for or
261-18 against the proposition: "The increase of the local sales and use
261-19 tax rate of ________ (insert name of taxing entity) to _____
261-20 (insert rate not to exceed the rate at which the taxing entity was
261-21 imposing the tax on September 1, 1997), and the corresponding
261-22 increase of the maximum tax rate to _____ (insert rate not to
261-23 exceed the maximum tax rate allowed by law on September 1, 1997)."
261-24 (c) If the election is held before the taxing entity's tax
261-25 rate is reduced under this subchapter, the ballot at an election
261-26 held under this section must be printed to permit voting for or
261-27 against the proposition: "Exempting _________ (insert name of
262-1 taxing entity) from the state-mandated automatic tax rate
262-2 reduction."
262-3 (d) A notice of the election and a certified copy of the
262-4 order canvassing the election results shall be:
262-5 (1) sent to the Texas Department of Transportation and
262-6 comptroller; and
262-7 (2) filed in the deed records of each county in which
262-8 the taxing entity is located.
262-9 (e) Section 41.001(a), Election Code, does not apply to an
262-10 election held under this section.
262-11 Sec. 322.405. EFFECTIVE DATE OF RATE INCREASE. A rate
262-12 increase authorized by Section 322.404(b) takes effect on the first
262-13 day of the first calendar quarter occurring after the expiration of
262-14 the first complete calendar quarter occurring after the date the
262-15 comptroller receives the notice under Section 322.404(d).
262-16 (b) This section takes effect on the earliest date on which
262-17 it may take effect under Section 39, Article III, Texas
262-18 Constitution.
262-19 (c) An election under Section 322.404, Tax Code, as added by
262-20 this section, may not be held before September 1, 1997, but the
262-21 ordering of an election before that date is not invalid.
262-22 SECTION 4.45. Section 323.002, Tax Code, is amended to read
262-23 as follows:
262-24 Sec. 323.002. DEFINITIONS. (a) The words used in this
262-25 chapter and defined by Chapters 151 and 321 have the meanings
262-26 assigned by Chapters 151 and 321.
262-27 (b) In this chapter, "expanded tax base" means the sale,
263-1 use, storage, rental, or other consumption of a taxable item that
263-2 was not subject to the tax imposed by Chapter 151 on September 30,
263-3 1997.
263-4 SECTION 4.46. Subchapter C, Chapter 323, Tax Code, is
263-5 amended by adding Sections 323.210 and 323.2101 to read as follows:
263-6 Sec. 323.210. ELECTION FOR USE OF EXPANDED TAX BASE REVENUE;
263-7 GENERAL COUNTY TAX. (a) This section applies to a county that has
263-8 adopted the county sales and use tax authorized by this chapter at
263-9 an election held before September 1, 1997.
263-10 (b) The commissioners court of each county to which this
263-11 section applies shall call and hold an election on November 4,
263-12 1997, on the question of the use of revenue from the expanded tax
263-13 base collected under this chapter.
263-14 (c) The order calling the election under this section shall
263-15 allow the voters of the county to vote on whether the expanded tax
263-16 base revenue is required to be used to:
263-17 (1) provide further reduction of county property
263-18 taxes; or
263-19 (2) provide additional revenue for the county that can
263-20 be used for any general purpose of the county.
263-21 (d) In addition to the purposes described by Subsection (c),
263-22 the commissioners court may authorize a vote on the additional
263-23 options of using the revenue to:
263-24 (1) provide funding for one or more specific projects
263-25 or types of projects; or
263-26 (2) provide funding for a combination of the purposes
263-27 described by this subsection and Subsection (c).
264-1 (e) The ballot at the election held under this section shall
264-2 be printed to permit voting in separate propositions on the
264-3 purposes described by Subsection (c) or in three or more separate
264-4 propositions if necessary to vote on the purposes described by
264-5 Subsections (c) and (d). If the commissioners court authorizes a
264-6 vote on using the revenue for a combination of purposes, the ballot
264-7 at the election must specify an amount or percentage of the amount
264-8 of revenue that shall be used for each purpose. Regardless of the
264-9 number of propositions on the ballot, a voter may be allowed to
264-10 vote in favor of only one proposition. A voter may not be allowed
264-11 to vote against any proposition.
264-12 (f) The county may use the revenue from the expanded tax
264-13 base only for the purpose or combination of purposes expressed in
264-14 the proposition that receives a majority of the votes cast in the
264-15 election. If no proposition receives a majority of the votes cast
264-16 in the election, the commissioners court shall call another
264-17 election to vote on the two propositions that received the highest
264-18 and second-highest number of votes in the election or that tie for
264-19 the highest number of votes. If more than two propositions tie for
264-20 the highest number of votes in the main election or two or more
264-21 propositions tie for the second-highest number of votes, the
264-22 commissioners court shall draw lots to determine which two
264-23 propositions are to be voted on in the subsequent election.
264-24 (g) Not later than the fifth day after the date the final
264-25 canvass of the original election is completed, the commissioners
264-26 court shall order the subsequent election under Subsection (f).
264-27 The subsequent election shall be held not earlier than the 20th or
265-1 later than the 30th day after the date the final canvass of the
265-2 original election is completed. A subsequent election, however,
265-3 may be held after the 30th but not later than the 45th day after
265-4 the date the final canvass of the original election is completed if
265-5 the later date is necessary to:
265-6 (1) permit a joint election to be held with another
265-7 political subdivision in accordance with Chapter 271, Election
265-8 Code; or
265-9 (2) avoid holding the election on:
265-10 (A) a legal state or national holiday; or
265-11 (B) a weekend day within three days of a legal
265-12 state or national holiday.
265-13 (h) The county may use the revenue from the expanded tax
265-14 base only for the purpose or combination of purposes expressed in
265-15 the proposition that receives a majority of the votes cast in the
265-16 subsequent election.
265-17 (i) If, before the date the use of the revenue from the
265-18 expanded tax base is finally determined under this section, a
265-19 county receives a distribution of the county's share of taxes under
265-20 this chapter that includes revenue from the expanded tax base, the
265-21 county shall deposit the expanded tax base revenue in a special
265-22 account and may not use that money for any purpose until the
265-23 approved use is finally determined.
265-24 Sec. 323.2101. ELECTION FOR USE OF EXPANDED TAX BASE: TAX
265-25 LEVIED FOR SPECIAL PURPOSE. (a) This section applies to a county
265-26 in which a sales and use tax has been adopted at an election held
265-27 before September 1, 1997, and the county may use the revenue from
266-1 that tax only for a special purpose such as to provide funding for
266-2 health services or for the operation of a county landfill and a
266-3 criminal detention center.
266-4 (b) The commissioners court of each county to which this
266-5 section applies shall call and hold an election on November 4,
266-6 1997, on the question of the use of revenue from the expanded tax
266-7 base collected under the law authorizing the imposition of the tax.
266-8 (c) The order calling the election under this section shall
266-9 allow the voters of the county to vote on whether the expanded tax
266-10 base revenue is required to be used to:
266-11 (1) reduce county property taxes; or
266-12 (2) provide additional revenue that can be used for
266-13 any special purpose for which the tax is imposed.
266-14 (d) In addition to the purposes described by Subsection (c),
266-15 the commissioners court may authorize a vote on the additional
266-16 options of using the revenue to:
266-17 (1) provide funding for one or more specific projects
266-18 or types of projects that the county is otherwise authorized to
266-19 undertake under the law authorizing the imposition of the tax;
266-20 (2) provide funding that can be used for one or more
266-21 specific projects or types of projects that the county is generally
266-22 authorized to undertake;
266-23 (3) provide additional revenue for the county that can
266-24 be used for any general purpose of the county; or
266-25 (4) provide funding for a combination of the purposes
266-26 described by this subsection and Subsection (c).
266-27 (e) The ballot at the election held under this section shall
267-1 be printed to permit voting in separate propositions on the
267-2 purposes described by Subsection (c) or in three or more
267-3 propositions if necessary to vote on the purposes described by
267-4 Subsections (c) and (d). If the commissioners court authorizes a
267-5 vote on using the revenue for a combination of purposes, the ballot
267-6 at the election must specify an amount or percentage of an amount
267-7 of revenue that shall be used for each purpose. Regardless of the
267-8 number of propositions on the ballot, a voter may be allowed to
267-9 vote in favor of only one proposition. A voter may not be allowed
267-10 to vote against any proposition.
267-11 (f) The county may use the revenue from the expanded tax
267-12 base only for the purpose or combination of purposes expressed in
267-13 the proposition that receives a majority of the votes cast in the
267-14 election. If no proposition receives a majority of the votes cast
267-15 in the election, the commissioners court shall call another
267-16 election to vote on the two propositions that received the highest
267-17 and second-highest number of votes in the election or that tie for
267-18 the highest number of votes. If more than two propositions tie for
267-19 the highest number of votes in the election or two or more
267-20 propositions tie for the second-highest number of votes, the
267-21 commissioners court shall draw lots to determine which two
267-22 propositions are to be voted on in the subsequent election.
267-23 (g) Not later than the fifth day after the date the final
267-24 canvass of the original election is completed, the commissioners
267-25 court shall order the subsequent election under Subsection (f).
267-26 The subsequent election shall be held not earlier than the 20th or
267-27 later than the 30th day after the date the final canvass of the
268-1 original election is completed. A subsequent election, however,
268-2 may be held after the 30th but not later than the 45th day after
268-3 the date the final canvass of the original election is completed if
268-4 the later date is necessary to:
268-5 (1) permit a joint election to be held with another
268-6 political subdivision in accordance with Chapter 271, Election
268-7 Code; or
268-8 (2) avoid holding the election on:
268-9 (A) a legal state or national holiday; or
268-10 (B) a weekend day within three days of a legal
268-11 state or national holiday.
268-12 (h) The county may use the revenue from the expanded tax
268-13 base only for the purpose or combination of purposes expressed in
268-14 the proposition that receives a majority of the votes cast in the
268-15 subsequent election.
268-16 (i) If, before the date the use of the revenue from the
268-17 expanded tax base is finally determined under this section, a
268-18 county receives a distribution of the county's share of taxes under
268-19 this chapter that includes revenue from the expanded tax base, the
268-20 county shall deposit the expanded tax base revenue in a special
268-21 account and may not use that money for any purpose until the
268-22 approved use is finally determined.
268-23 SECTION 4.47. Subchapter F, Chapter 323, Tax Code, is
268-24 amended by adding Section 323.506 to read as follows:
268-25 Sec. 323.506. USE OF TAX REVENUE FROM EXPANDED TAX BASE.
268-26 (a) Notwithstanding any other law, a county that imposes a county
268-27 sales and use tax under this chapter or under another chapter for a
269-1 special purpose may use revenue from the expanded tax base only for
269-2 the purpose or purposes authorized by the voters under the
269-3 applicable provisions of this chapter.
269-4 (b) If the voters of the county vote to use all or part of
269-5 the additional revenue to reduce county property taxes, the county
269-6 shall use the money as required by Section 323.505 and the
269-7 applicable provisions of Title 1.
269-8 (c) If the voters of the county vote to use all or part of
269-9 the additional revenue for a purpose other than to reduce county
269-10 property taxes, that revenue is not considered to be sales and use
269-11 tax revenue for the purposes of Title 1.
269-12 SECTION 4.48. (a) Subtitle C, Title 3, Tax Code, is amended
269-13 by adding Chapter 326 to read as follows:
269-14 CHAPTER 326. EXPANDED TAX BASE FOR CERTAIN POLITICAL SUBDIVISIONS
269-15 SUBCHAPTER A. GENERAL PROVISIONS
269-16 Sec. 326.001. DEFINITIONS. In this chapter:
269-17 (1) "Expanded tax base" means the sale, use, storage,
269-18 rental, or other consumption of a taxable item that was not subject
269-19 to the tax imposed by Chapter 151 on September 30, 1997.
269-20 (2) "Political subdivision" includes a crime control
269-21 and prevention district, hospital district, and municipal
269-22 management or improvement district. The term does not include a
269-23 municipality, a county, a transportation authority created under
269-24 Subtitle K, Title 6, Transportation Code, or another entity for
269-25 whose benefit a municipality levies a sales and use tax.
270-1 (Sections 326.002-326.020 reserved for expansion
270-2 SUBCHAPTER B. POLITICAL SUBDIVISION THAT IMPOSES AN AD VALOREM
270-3 TAX
270-4 Sec. 326.021. APPLICATION OF SUBCHAPTER. This subchapter
270-5 applies to a political subdivision that imposes an ad valorem tax
270-6 and voted to impose a sales and use tax governed by Chapter 321 or
270-7 323 before September 1, 1997.
270-8 Sec. 326.022. ELECTION FOR USE OF EXPANDED TAX BASE. (a)
270-9 The governing body of a political subdivision to which this
270-10 subchapter applies shall call and hold an election on November 4,
270-11 1997, on the question of the use of the revenue from the expanded
270-12 tax base collected under the law authorizing the imposition of the
270-13 tax.
270-14 (b) The order calling the election under this section must
270-15 allow the voters of the political subdivision to vote on whether
270-16 the expanded tax base revenue is required to be used to:
270-17 (1) reduce property taxes of the political
270-18 subdivision; or
270-19 (2) provide additional revenue for the political
270-20 subdivision that can be used for any general purpose of the
270-21 political subdivision.
270-22 (c) In addition to the purposes described by Subsection (b),
270-23 the governing body may authorize a vote on the additional options
270-24 of using the revenue to:
270-25 (1) provide funding for one or more specific projects
270-26 or types of projects otherwise authorized for the political
270-27 subdivision; or
271-1 (2) provide funding for a combination of the purposes
271-2 described by this subsection and Subsection (b).
271-3 (d) The ballot at the election held under this section shall
271-4 be printed to permit voting in separate propositions on the
271-5 purposes described by Subsection (b) or in three or more
271-6 propositions if necessary to vote on the purposes described by
271-7 Subsections (b) and (c). If the governing body authorizes a vote
271-8 on using the revenue for a combination of purposes, the ballot at
271-9 the election must specify an amount or percentage of the amount of
271-10 revenue that shall be used for each purpose. Regardless of the
271-11 number of propositions on the ballot, a voter may be allowed to
271-12 vote in favor of only one proposition. A voter may not be allowed
271-13 to vote against any proposition.
271-14 (e) The political subdivision may use the revenue from the
271-15 expanded tax base only for the purpose or combination of purposes
271-16 expressed in the proposition that receives a majority of the votes
271-17 cast in the election. If no proposition receives a majority of the
271-18 votes cast in the election, the governing body shall call another
271-19 election to vote on the two propositions that received the highest
271-20 and second-highest number of votes in the election or that tie for
271-21 the highest number of votes. If more than two propositions tie for
271-22 the highest number of votes in the election or two or more
271-23 propositions tie for the second-highest number of votes, the
271-24 governing body shall draw lots to determine which two propositions
271-25 are to be voted on in the subsequent election.
271-26 (f) Not later than the fifth day after the date the final
271-27 canvass of the original election is completed, the governing body
272-1 shall order the subsequent election under Subsection (e). The
272-2 subsequent election shall be held not earlier than the 20th or
272-3 later than the 30th day after the date the final canvass of the
272-4 original election is completed. A subsequent election, however,
272-5 may be held after the 30th but not later than the 45th day after
272-6 the date the final canvass of the original election is completed if
272-7 the later date is necessary to:
272-8 (1) permit a joint election to be held with another
272-9 political subdivision in accordance with Chapter 271, Election
272-10 Code; or
272-11 (2) avoid holding the election on:
272-12 (A) a legal state or national holiday; or
272-13 (B) a weekend day within three days of a legal
272-14 state or national holiday.
272-15 (g) The political subdivision may use the revenue from the
272-16 expanded tax base only for the purpose or combination of purposes
272-17 expressed in the proposition that receives a majority of the votes
272-18 cast in the subsequent election.
272-19 (h) If, before the date the use of the revenue from the
272-20 expanded tax base is finally determined under this section, a
272-21 political subdivision receives a distribution of the political
272-22 subdivision's share of taxes under this chapter that includes
272-23 revenue from the expanded tax base, the political subdivision shall
272-24 deposit the expanded tax base revenue in a special account and may
272-25 not use that money for any purpose until the approved use is
272-26 finally determined.
272-27 Sec. 326.023. USE OF TAX REVENUE. (a) Notwithstanding any
273-1 other law, a political subdivision to which this subchapter applies
273-2 may use the revenue from the expanded tax base only for the purpose
273-3 or purposes authorized by the voters under this chapter.
273-4 (b) If the voters of a political subdivision vote to use all
273-5 or part of the additional revenue to reduce property taxes, the
273-6 vote is considered a vote to impose the municipal additional sales
273-7 and use tax or a vote to impose the county sales and use tax and
273-8 Section 321.507 or 323.505, as appropriate, applies. Regardless,
273-9 the applicable provisions of Title 1 apply.
273-10 (Sections 326.024-326.050 reserved for expansion
273-11 SUBCHAPTER C. POLITICAL SUBDIVISION THAT DOES NOT
273-12 IMPOSE AN AD VALOREM TAX
273-13 Sec. 326.051. APPLICATION OF SUBCHAPTER. This subchapter
273-14 applies to a political subdivision that does not impose an ad
273-15 valorem tax and voted to impose a sales and use tax governed by
273-16 Chapter 321 or 323 before September 1, 1997.
273-17 Sec. 326.052. COMPUTATION OF EXPANDED TAX BASE INDEX. (a)
273-18 Not later than September 1, 1997, the comptroller shall compute an
273-19 expanded tax base index for each political subdivision to which
273-20 this subchapter applies.
273-21 (b) Not later than August 1, 1999, the comptroller shall
273-22 recompute the expanded tax base index for each political
273-23 subdivision in accordance with Section 322.403.
273-24 (c) In computing and recomputing the expanded tax base
273-25 index, the comptroller shall use the procedures prescribed by
273-26 Subchapter E, Chapter 322. For purposes of that computation:
273-27 (1) "entity area," as that term is used in Subchapter
274-1 E, Chapter 322, means the area included in the political
274-2 subdivision; and
274-3 (2) "taxing entity," as that term is used in
274-4 Subchapter E, Chapter 322, means the political subdivision.
274-5 Sec. 326.053. REDUCTION OF TAX BASE. After the comptroller
274-6 computes or recomputes the expanded tax base index, the political
274-7 subdivision shall reduce the actual and maximum tax rate in
274-8 accordance with the requirements of Subchapter E, Chapter 322.
274-9 Sec. 326.054. EXEMPTION ELECTION. The voters of a political
274-10 subdivision may exempt the political subdivision from the
274-11 application of this subchapter in accordance with the procedures
274-12 prescribed by Subchapter E, Chapter 322, and any resulting tax
274-13 increase takes effect as provided by that subchapter, except that
274-14 the political subdivision is not required to send notice or a
274-15 certified copy of the order canvassing the election results to the
274-16 Texas Department of Transportation.
274-17 (b) This section takes effect on the earliest date on which
274-18 it may take effect under Section 39, Article III, Texas
274-19 Constitution.
274-20 (c) An election under Section 326.054, Tax Code, as added by
274-21 this section, may not be held before September 1, 1997, but the
274-22 ordering of an election before that date is not invalid.
274-23 SECTION 4.49. The following provisions of the Tax Code are
274-24 repealed:
274-25 (1) Section 151.007(d);
274-26 (2) Section 151.157(g);
274-27 (3) Sections 151.158 and 151.159;
275-1 (4) Section 151.3071;
275-2 (5) Section 151.320;
275-3 (6) Sections 151.328(f) and (g); and
275-4 (7) Subchapter E, Chapter 191.
275-5 SECTION 4.50. (a) There are exempted from the taxes imposed
275-6 by Chapter 151, Tax Code, the receipts from the sale, use, storage,
275-7 rental, or other consumption in this state of items or services
275-8 that became subject to the taxes because of the terms of this
275-9 article and that are the subject of a written contract or bid
275-10 entered into on or before March 1, 1997.
275-11 (b) The exemption provided by this section expires January
275-12 1, 2000.
275-13 SECTION 4.51. Except as provided by this article, this
275-14 article takes effect October 1, 1997.
275-15 ARTICLE 5. INSURANCE PREMIUM TAXES
275-16 SECTION 5.01. Section 11(a), Article 1.14-1, Insurance Code,
275-17 is amended to read as follows:
275-18 (a) Except as to premiums on insurance procured by a
275-19 licensed surplus lines agent from an eligible surplus lines insurer
275-20 as defined in Article 1.14-2 and premiums on independently procured
275-21 insurance on which a tax has been paid pursuant to this Article or
275-22 Article 1.14-2, every unauthorized insurer shall pay to the
275-23 comptroller, on a form prescribed by the comptroller, before March
275-24 1 next succeeding the calendar year in which the insurance was so
275-25 effectuated, continued or renewed or another date as prescribed by
275-26 the comptroller a premium receipts tax of 5.85 [4.85] percent of
275-27 gross premiums charged for such insurance on subjects resident,
276-1 located or to be performed in this state. Such insurance on
276-2 subjects resident, located or to be performed in this state
276-3 procured through negotiations or an application, in whole or in
276-4 part occurring or made within or from within or outside of this
276-5 state, or for which premiums in whole or in part are remitted
276-6 directly or indirectly from within or outside of this state, shall
276-7 be deemed to be insurance procured, or continued or renewed in this
276-8 state. The term "premium" includes all premiums, membership fees,
276-9 assessments, dues and any other consideration for insurance. Such
276-10 tax shall be in lieu of all other insurance taxes. On default of
276-11 any such unauthorized insurer in the payment of such tax the
276-12 insured shall pay the tax. If the tax prescribed by this
276-13 subsection is not paid within the time stated, Subtitles A and B,
276-14 Title 2, Tax Code, and their subsequent amendments, apply.
276-15 SECTION 5.02. Section 12(a), Article 1.14-1, Insurance Code,
276-16 is amended to read as follows:
276-17 (a) Every insured who procures insurance in accordance with
276-18 Section 2(b)(4) [2(b)4] of this Article must file a report with the
276-19 comptroller and pay an independently procured insurance tax of 5.85
276-20 [4.85] percent.
276-21 SECTION 5.03. Section 12(a), Article 1.14-2, Insurance Code,
276-22 is amended to read as follows:
276-23 (a) The premiums charged for surplus lines insurance are
276-24 subject to a premium receipts tax of 5.85 [4.85] percent of gross
276-25 premiums charged for such insurance. The term premium includes all
276-26 premiums, membership fees, assessments, dues or any other
276-27 consideration for insurance. Such tax shall be in lieu of all
277-1 other insurance taxes. The surplus lines agent shall collect from
277-2 the insured the amount of the tax at the time of delivery of the
277-3 cover note, certificate of insurance, policy or other initial
277-4 confirmation of insurance, in addition to the full amount of the
277-5 gross premium charged by the insurer for the insurance. No agent
277-6 shall absorb such tax nor shall any agent, as an inducement for
277-7 insurance or for any other reason, rebate all or any part of such
277-8 tax or his commission. The surplus lines agent shall report to the
277-9 comptroller on or before March 1 of each year the amount of gross
277-10 premiums received for such insurance placed through an eligible
277-11 surplus lines insurer during the calendar year ending on the
277-12 preceding December 31 and shall pay to the comptroller the tax as
277-13 provided for by this Article. If a surplus lines policy covers
277-14 risks or exposures only partially in this state, the tax payable
277-15 shall be computed on the portions of the premium which are properly
277-16 allocated to the risks or exposures located in this state. In
277-17 determining the amount of premiums taxable in this state, all
277-18 premiums written, procured, or received in this state and all
277-19 premiums on policies negotiated in this state shall be deemed
277-20 written on property or risks located or resident in this state,
277-21 except such premiums as are properly allocated or apportioned and
277-22 reported as premiums which may be subject to taxation by any other
277-23 state or states. Premiums that are properly allocated to any other
277-24 state or states that are specifically exempt from taxation under
277-25 the regulations of that state or states are not taxable in this
277-26 state. Premiums on risks or exposures which are properly allocated
277-27 to federal waters, international waters or under the jurisdiction
278-1 of a foreign government shall not be taxable by this state. In
278-2 event of cancellation and rewriting of any surplus lines insurance
278-3 contract the additional premium for premium receipts tax purposes
278-4 shall be the premium in excess of the unearned premium of the
278-5 canceled insurance contract.
278-6 SECTION 5.04. Subsection (b), Article 1.16, Insurance Code,
278-7 is amended to read as follows:
278-8 (b) Assessments for the expenses of such domestic
278-9 examination which shall be sufficient to meet all the expenses and
278-10 disbursements necessary to comply with the provisions of the laws
278-11 of Texas relating to the examination of insurance companies and to
278-12 comply with the provisions of this Article and Articles 1.17 and
278-13 1.18 of this Code, shall be made by the Texas Department [State
278-14 Board] of Insurance upon the corporations or associations to be
278-15 examined taking into consideration annual premium receipts, and/or
278-16 admitted assets that are not attributable to 90 percent of pension
278-17 plan contracts as defined in Section 818(a) of the Internal Revenue
278-18 Code of 1986 (26 U.S.C. Section 818(a)), and/or insurance in force;
278-19 provided such assessments shall be made and collected as follows:
278-20 (1) expenses attributable directly to a specific examination
278-21 including employees' salaries and expenses and expenses provided by
278-22 Article 1.28 of this Code shall be collected at the time of
278-23 examination; (2) assessments calculated annually for each
278-24 corporation or association which take into consideration annual
278-25 premium receipts, and/or admitted assets that are not attributable
278-26 to 90 percent of pension plan contracts as defined in Section
278-27 818(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section
279-1 818(a)), and/or insurance in force shall be assessed annually for
279-2 each such corporation or association. In computing the
279-3 assessments, the department [board] may not consider insurance
279-4 premiums for insurance contracted for by a state or federal
279-5 governmental entity to provide welfare benefits to designated
279-6 welfare recipients or contracted for in accordance with or in
279-7 furtherance of Title 2, Human Resources Code, or the federal Social
279-8 Security Act (42 U.S.C. Section 301 et seq.). The amount of the
279-9 assessments paid in each taxable year to or for the use of the
279-10 State of Texas by any insurance corporation or association hereby
279-11 affected may not [shall] be allowed as a credit on the amount of
279-12 premium taxes to be paid by any such insurance corporation or
279-13 association [for such taxable year except as provided by Article
279-14 1.28 of this Code].
279-15 SECTION 5.05. Section 2, Article 1.28, Insurance Code, is
279-16 amended to read as follows:
279-17 Sec. 2. The amount of the examination expenses paid to this
279-18 state [incurred by representatives of the State Board of Insurance
279-19 that is directly attributable to an examination of the books,
279-20 records, accounts, and principal offices of a domestic insurance
279-21 company located outside this state as provided by this article] is
279-22 not allowed as a credit on or offset to the amount of premium taxes
279-23 to be paid by the domestic insurance company to the state, and this
279-24 article prevails over any conflicting provisions in [Articles 1.16,
279-25 4.10, and 4.11 of this code or] any other law of this state.
279-26 SECTION 5.06. Section 1, Article 4.10, Insurance Code, is
279-27 amended to read as follows:
280-1 Sec. 1. PAYMENT OF TAX. Every insurance carrier, including
280-2 Lloyd's and reciprocal or interinsurance exchanges and any other
280-3 organization or concern receiving gross premiums from the business
280-4 of fire, marine, marine inland, accident, credit, livestock,
280-5 fidelity, guaranty, surety, casualty, workers' compensation,
280-6 employers' liability, or any other kind or character of insurance,
280-7 except title insurance and except as provided in Sections 2, 3, and
280-8 4 of this article, shall pay to the comptroller [for transmittal to
280-9 the state treasurer] a tax upon such gross premium receipts as
280-10 provided in this article. Any such insurance carrier doing other
280-11 kinds of insurance business shall pay the tax levied upon its gross
280-12 premiums received from such other kinds of business as provided in
280-13 Articles 4.03 and 4.11 of this code.
280-14 SECTION 5.07. Section 6(b), Article 4.10, Insurance Code,
280-15 is amended to read as follows:
280-16 (b) A semiannual prepayment of premium tax must be made on
280-17 March 1st and August 1st by all insurers with net tax liability for
280-18 the previous calendar year in excess of $1,000. The tax paid on
280-19 each date must equal one-half of the total premium tax paid for the
280-20 previous calendar year. Should no premium tax have been paid
280-21 during the previous calendar year, the semiannual payment shall
280-22 equal the tax which would be owed on the aggregate of the gross
280-23 premium receipts for the two previous calendar quarters at the
280-24 [minimum] tax rate specified by law. The comptroller is authorized
280-25 to [certify for] refund [to the State Treasurer] any overpayment of
280-26 premium taxes that results from the semiannual prepayment system
280-27 herein established.
281-1 SECTION 5.08. Article 4.10, Insurance Code, is amended by
281-2 adding Section 6A and amending Section 10 to read as follows:
281-3 Sec. 6A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
281-4 Notwithstanding Section 6 of this article, for the 1998 tax year, a
281-5 semiannual prepayment of premium tax must be made on March 1, 1998,
281-6 and August 1, 1998, by all insurers with net tax liability for the
281-7 previous calendar year in excess of $1,000. The tax paid on each
281-8 date must equal 66.5 percent of the total premium tax paid during
281-9 the previous calendar year. If an insurer did not pay premium
281-10 taxes during the previous calendar year, the semiannual payment
281-11 shall equal the tax that would be owed on the aggregate of the
281-12 gross premium receipts for the two previous calendar quarters at
281-13 the tax rate specified by law for the 1998 tax year. The
281-14 comptroller is authorized to refund any overpayment of premium
281-15 taxes that results from the semiannual prepayment system
281-16 established by this section.
281-17 (b) This section expires September 1, 1999.
281-18 Sec. 10. Rate of tax. There is imposed on each such
281-19 insurance carrier an annual tax equal to 2.25 percent [3.5%] of its
281-20 premium receipts. [Any insurance carrier may qualify for a tax
281-21 rate lower than the 3.5% imposed by this article. Such
281-22 qualification for a lower rate can be accomplished in the following
281-23 two ways:]
281-24 [(a) If such insurance carrier for the year ending
281-25 December 31 preceding owns Texas investments in an amount in total
281-26 value which is not less than 85% nor more than 90% of the amount
281-27 such insurance carrier owned in the comparison state in similar
282-1 investments as herein defined, the tax imposed shall be equal to
282-2 2.4% of its gross premium receipts.]
282-3 [(b) If such insurance carrier for the year ending
282-4 December 31 preceding owns Texas investments in an amount in total
282-5 value which is in excess of 90% of the amount such insurance
282-6 carrier owned in the comparison state in similar investments as
282-7 herein defined, the tax imposed shall be equal to 1.6% of its gross
282-8 premium receipts.]
282-9 SECTION 5.09. Section 2(c), Article 4.11, Insurance Code, is
282-10 amended to read as follows:
282-11 (c) "Gross premiums" are the total gross amount of all
282-12 premiums, membership fees, assessments, dues, and any other
282-13 considerations for such insurance received during the taxable year
282-14 on each and every kind of such insurance policy or contract
282-15 covering persons located in the State of Texas and arising from the
282-16 types of insurance specified in Section 1 of this article, but
282-17 deducting returned premiums, any dividends applied to purchase
282-18 paid-up additions to insurance or to shorten the endowment or
282-19 premium payment period, and excluding those premiums received from
282-20 insurance carriers for reinsurance and there shall be no deduction
282-21 for premiums paid for reinsurance. For purposes of this article, a
282-22 stop-loss or excess loss insurance policy issued to a health
282-23 maintenance organization, as defined under the Texas Health
282-24 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
282-25 Code), shall be considered reinsurance. [Such gross premiums shall
282-26 not include premiums received from the Treasury of the State of
282-27 Texas or from the Treasury of the United States for insurance
283-1 contracted for by the state or federal government for the purpose
283-2 of providing welfare benefits to designated welfare recipients or
283-3 for insurance contracted for by the state or federal government in
283-4 accordance with or in furtherance of the provisions of Title 2,
283-5 Human Resources Code, or the Federal Social Security Act.] The
283-6 gross premiums receipts so reported shall not include the amount of
283-7 premiums paid on group health, accident, and life policies in which
283-8 the group covered by the policy consists of a single nonprofit
283-9 trust established to provide coverage primarily for municipal or
283-10 county employees of this state. To the extent allowed by federal
283-11 law, "gross premiums" includes any contributions made by the
283-12 carrier to an employee benefit plan.
283-13 SECTION 5.10. Article 4.11, Insurance Code, is amended by
283-14 amending Section 5F and adding Section 5I to read as follows:
283-15 Sec. 5F. TAX RATE--1995 THROUGH 1997 [AND AFTERWARDS].
283-16 (a) Except for gross premiums on life insurance taxed under
283-17 Section 5G of this article and gross revenues of health maintenance
283-18 organizations taxed under Subsection (b) of this section and
283-19 Section 5H of this article, beginning with tax year 1995, through
283-20 tax year 1997, there is imposed on each insurance carrier an annual
283-21 tax equal to 1.75 percent of its gross premiums.
283-22 (b) Beginning with tax year 1995, through tax year 1997,
283-23 there is imposed on each health maintenance organization operating
283-24 under the Texas Health Maintenance Organization Act (Chapter 20A,
283-25 Vernon's Texas Insurance Code) an annual tax equal to 1.75 percent
283-26 of its gross amount of its revenues collected for issuance of
283-27 health maintenance certificates or contracts.
284-1 Sec. 5I. TAX RATE--1998 AND AFTERWARDS. Beginning with tax
284-2 year 1998, there is imposed on each insurance carrier and health
284-3 maintenance organization covered under this article a tax equal to
284-4 2.25 percent of its gross premiums or revenues collected for
284-5 issuance of certificates or contracts.
284-6 SECTION 5.11. Section 13(a), Article 4.11, Insurance Code,
284-7 is amended to read as follows:
284-8 (a) A semiannual prepayment of premium tax must be made on
284-9 March 1 and August 1 by all insurers with net tax liability for the
284-10 previous calendar year in excess of $1,000. The tax paid on each
284-11 date must equal one-half of the total premium tax paid for the
284-12 previous calendar year. Should no premium tax have been paid
284-13 during the previous calendar year, the semiannual payment shall
284-14 equal the tax which would be owed on the aggregate of the gross
284-15 premium receipts for the two previous calendar quarters at the
284-16 [minimum] tax rate specified by law. The comptroller is authorized
284-17 to [certify for] refund [to the state treasurer] any overpayment of
284-18 premium taxes that results from the semiannual prepayment system
284-19 herein established.
284-20 SECTION 5.12. Article 4.11, Insurance Code, is amended by
284-21 adding Section 13A to read as follows:
284-22 Sec. 13A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
284-23 Notwithstanding Section 13 of this article, for the 1998 tax year,
284-24 a semiannual prepayment of premium tax must be made on March 1,
284-25 1998, and August 1, 1998, by all insurers with net tax liability
284-26 for the previous calendar year in excess of $1,000. The tax paid
284-27 on each date must equal 66.5 percent of the total premium tax paid
285-1 during the previous calendar year. If an insurer did not pay
285-2 premium taxes during the previous calendar year, the semiannual
285-3 payment shall equal the tax that would be owed on the aggregate of
285-4 the gross premium receipts for the two previous calendar quarters
285-5 at the tax rate specified by law for the 1998 tax year. The
285-6 comptroller is authorized to refund any overpayment of premium
285-7 taxes that results from the semiannual prepayment system
285-8 established by this section.
285-9 (b) This section expires September 1, 1999.
285-10 SECTION 5.13. Section 3(b), Article 9.59, Insurance Code, is
285-11 amended to read as follows:
285-12 (b) A semiannual prepayment of premium tax must be made on
285-13 March 1 and August 1 by all insurers with net tax liability for the
285-14 previous calendar year of more than $1,000. The tax paid on each
285-15 date must equal one-half of the total premium tax paid for the
285-16 previous calendar year. If no premium tax has been paid during the
285-17 previous calendar year, the semiannual payment shall equal the tax
285-18 that would be owed on the aggregate of the gross premium receipts
285-19 for the two previous calendar quarters at the [minimum] tax rate
285-20 specified by law. The comptroller may [certify for] refund [to the
285-21 state treasurer] any overpayment of premium taxes that results from
285-22 the semiannual prepayment system established by this subsection.
285-23 SECTION 5.14. Article 9.59, Insurance Code, is amended by
285-24 adding Section 3A and amending Section 4 to read as follows:
285-25 Sec. 3A. PREPAYMENTS FOR 1998 TAX YEAR. (a)
285-26 Notwithstanding Section 3 of this article, for the 1998 tax year, a
285-27 semiannual prepayment of premium tax must be made on March 1, 1998,
286-1 and August 1, 1998, by all insurers with net tax liability for the
286-2 previous calendar year in excess of $1,000. The tax paid on each
286-3 date must equal 66.5 percent of the total premium tax paid during
286-4 the previous calendar year. If an insurer did not pay premium
286-5 taxes during the previous calendar year, the semiannual payment
286-6 shall equal the tax that would be owed on the aggregate of the
286-7 gross premium receipts for the two previous calendar quarters at
286-8 the tax rate specified by law for the 1998 tax year. The
286-9 comptroller is authorized to refund any overpayment of premium
286-10 taxes that results from the semiannual prepayment system
286-11 established by this section.
286-12 (b) This section expires September 1, 1999.
286-13 Sec. 4. RATE OF TAX. There is imposed on all premium on
286-14 title insurance an annual tax equal to two percent (2.0%).
286-15 [Any title insurance company may remit on a tax rate
286-16 lower than the two percent (2.0%) imposed by this article. If such
286-17 title insurance company as of the preceding December 31 owns Texas
286-18 investments in an amount in total value which is in excess of
286-19 ninety percent (90%) of the amount such title insurance company
286-20 owned in the comparison state in similar investments as herein
286-21 defined, the tax imposed shall be equal to 1.3 percent (1.3%) of
286-22 premium.]
286-23 SECTION 5.15. Sections 32(b)(3)-(5), Texas Health
286-24 Maintenance Organization Act (Article 20A.32, Vernon's Texas
286-25 Insurance Code), are amended to read as follows:
286-26 (3) The [Except as provided by Subdivision (4) of this
286-27 subsection, the] amount paid by a health maintenance organization
287-1 in each taxable year under Subdivision (1)(B) of this subsection
287-2 may not [shall] be allowed as a credit on the amount of premium
287-3 taxes to be paid by the health maintenance organization [for that
287-4 taxable year].
287-5 (4) [The amount directly attributable to an
287-6 examination of the books, records, accounts, or principal offices
287-7 of a health maintenance organization located outside this state may
287-8 not be allowed as a credit against the amount of premium taxes to
287-9 be paid by the health maintenance organization.]
287-10 [(5)] The funds received by the board shall be
287-11 deposited in the state treasury to the credit of the Texas
287-12 Department of Health health maintenance organization fund, and
287-13 those funds shall be appropriated to the Texas Department of Health
287-14 to carry out the statutory duties of the board under this chapter.
287-15 SECTION 5.16. The following provisions of the Insurance Code
287-16 are repealed:
287-17 (1) Sections 7, 8, 9, and 13, Article 4.10;
287-18 (2) Section 8, Article 4.11;
287-19 (3) Article 4.11B;
287-20 (4) Article 4.11C; and
287-21 (5) Sections 7, 13, and 14, Article 9.59.
287-22 SECTION 5.17. This article takes effect January 1, 1998.
287-23 ARTICLE 6. LOTTERY REVENUE
287-24 SECTION 6.01. Section 466.015, Government Code, is amended
287-25 by amending Subsection (c) and adding Subsection (d) to read as
287-26 follows:
287-27 (c) The commission may adopt rules governing the
288-1 establishment and operation of the lottery, including rules
288-2 governing:
288-3 (1) the type of lottery games to be conducted;
288-4 (2) the price of each ticket;
288-5 (3) the number of winning tickets and amount of the
288-6 prize paid on each winning ticket, except that the total amount of
288-7 prizes awarded under this chapter may not exceed the amount
288-8 described in Subsection (d);
288-9 (4) the frequency of the drawing or selection of a
288-10 winning ticket;
288-11 (5) the number and types of locations at which a
288-12 ticket may be sold;
288-13 (6) the method to be used in selling a ticket;
288-14 (7) the use of vending machines or electronic or
288-15 mechanical devices of any kind, other than machines or devices that
288-16 dispense currency or coins as prizes;
288-17 (8) the manner of paying a prize to the holder of a
288-18 winning ticket;
288-19 (9) the investigation of possible violations of this
288-20 chapter or any rule adopted under this chapter;
288-21 (10) the means of advertising to be used for the
288-22 lottery;
288-23 (11) the qualifications of vendors of lottery services
288-24 or equipment;
288-25 (12) the confidentiality of information relating to
288-26 the operation of the lottery, including:
288-27 (A) trade secrets;
289-1 (B) security measures, systems, or procedures;
289-2 (C) security reports;
289-3 (D) bids or other information regarding the
289-4 commission's contracts, if disclosure of the information would
289-5 impair the commission's ability to contract for facilities, goods,
289-6 or services on terms favorable to the commission;
289-7 (E) personnel information unrelated to
289-8 compensation, duties, qualifications, or responsibilities; and
289-9 (F) information obtained by commission security
289-10 officers or investigators;
289-11 (13) the development and availability of a model
289-12 agreement governing the division of a prize among multiple
289-13 purchasers of a winning ticket purchased through a group purchase
289-14 or pooling arrangement;
289-15 (14) the criteria to be used in evaluating bids for
289-16 contracts for lottery facilities, goods, and services; or
289-17 (15) any other matter necessary or desirable as
289-18 determined by the commission, to promote and ensure:
289-19 (A) the integrity, security, honesty, and
289-20 fairness of the operation and administration of the lottery; and
289-21 (B) the convenience of players and holders of
289-22 winning tickets.
289-23 (d) The total amount of lottery prizes that the commission
289-24 may award for all lottery games in any fiscal year may not exceed
289-25 an amount equal to the gross revenue from the sale of tickets in
289-26 that fiscal year multiplied by the percentage amount of lottery
289-27 prizes awarded for all lottery games in fiscal year 1997 as
290-1 determined by the comptroller minus an amount equal to five percent
290-2 of gross lottery revenue for the fiscal year in which the prizes
290-3 are being awarded.
290-4 SECTION 6.02. Section 466.355(b), Government Code, is
290-5 amended to read as follows:
290-6 (b) Money in the state lottery account may be used only for
290-7 the following purposes and shall be distributed as follows:
290-8 (1) the payment of prizes to the holders of winning
290-9 tickets;
290-10 (2) the payment of costs incurred in the operation and
290-11 administration of the lottery, including any fees received by a
290-12 lottery operator, provided that the costs incurred in a fiscal
290-13 biennium may not exceed an amount equal to 15 percent of the gross
290-14 revenue accruing from the sale of tickets in that biennium;
290-15 (3) the establishment of a pooled bond fund, lottery
290-16 prize reserve fund, unclaimed prize fund, and prize payment
290-17 account; and
290-18 (4) the balance, after creation of a reserve
290-19 sufficient to pay the amounts needed or estimated to be needed
290-20 under Subdivisions (1) through (3), to be transferred to the
290-21 foundation school [unobligated portion of the general revenue]
290-22 fund, on or before the 15th day of each month.
290-23 SECTION 6.03. This article takes effect September 1, 1997.
290-24 SECTION 6.04. (a) Except as provided by Subsection (b) of
290-25 this section, the change in law made to Section 466.015, Government
290-26 Code, by this article, applies to a ticket sold on or after the
290-27 effective date of this article. A ticket sold before that date is
291-1 governed by the law in effect when the ticket was sold, and that
291-2 law is continued in effect for that purpose.
291-3 (b) In fiscal year 1998, the total amount of lottery prizes
291-4 that the Texas Lottery Commission may award under Section
291-5 466.015(d), Government Code, as added by this article, may not
291-6 exceed an amount equal to the gross revenue from the sale of
291-7 lottery tickets multiplied by the percentage amount of lottery
291-8 prizes awarded for all lottery games in fiscal year 1997 as
291-9 determined by the comptroller minus an amount equal to four and
291-10 one-half percent of gross lottery revenue for the 1998 fiscal year.
291-11 SECTION 6.05. The change in law made to Section 466.355,
291-12 Government Code, by this article applies only to a transfer from
291-13 the state lottery account made on or after the effective date of
291-14 this article.
291-15 ARTICLE 7. ALCOHOLIC BEVERAGE TAXES
291-16 SECTION 7.01. Sections 201.03, 201.04, and 201.09, Alcoholic
291-17 Beverage Code, are amended to read as follows:
291-18 Sec. 201.03. Tax on Distilled Spirits. (a) A tax is
291-19 imposed on the first sale of distilled spirits at the rate of $2.64
291-20 [$2.40] per gallon.
291-21 (b) The minimum tax imposed on packages of distilled spirits
291-22 containing two ounces or less is 5.5 [five] cents per package.
291-23 (c) Should packages containing less than one-half pint but
291-24 more than two ounces ever be legalized in this state, the minimum
291-25 tax imposed on each of these packages is $0.134 [$0.122].
291-26 Sec. 201.04. Tax on Vinous Liquor. (a) A tax is imposed on
291-27 the first sale of vinous liquor that does not contain over 14
292-1 percent of alcohol by volume at the rate of 22.44 [20.4] cents per
292-2 gallon.
292-3 (b) A tax is imposed on vinous liquor that contains more
292-4 than 14 percent of alcohol by volume at the rate of 44.88 [40.8]
292-5 cents per gallon.
292-6 (c) A tax is imposed on artificially carbonated and natural
292-7 sparkling vinous liquor at the rate of 56.76 [51.6] cents per
292-8 gallon.
292-9 Sec. 201.09. REFUND DUE ON DISPOSITION OUTSIDE OF STATE.
292-10 The holder of any permit authorizing the transportation of liquor
292-11 out of this state may apply to the commission for a refund of the
292-12 excise tax on liquor on which the state tax has been paid on proper
292-13 proof that the liquor was sold or disposed of outside of this
292-14 state. This section does not apply to the holder of an airline
292-15 beverage permit or passenger train permit.
292-16 SECTION 7.02. Section 201.42, Alcoholic Beverage Code, is
292-17 amended to read as follows:
292-18 Sec. 201.42. Tax on Ale and Malt Liquor. A tax is imposed
292-19 on the first sale of ale and malt liquor at the rate of $0.2178
292-20 [$0.198] per gallon.
292-21 SECTION 7.03. Section 203.01, Alcoholic Beverage Code, is
292-22 amended to read as follows:
292-23 Sec. 203.01. Tax on Beer. A tax is imposed on the first
292-24 sale of beer manufactured in this state or imported into this state
292-25 at the rate of $6.60 [six dollars] per barrel.
292-26 SECTION 7.04. (a) This article takes effect September 1,
292-27 1997.
293-1 (b) In addition to the holders of any alcoholic beverage
293-2 license or permit, the provisions of this article also apply to the
293-3 holder of a food and beverage certificate issued by the Texas
293-4 Alcoholic Beverage Commission.
293-5 ARTICLE 8. MOTOR FUEL AND AVIATION FUEL TAXES
293-6 SECTION 8.01. Section 153.001, Tax Code, is amended by
293-7 amending Subdivisions (1), (4), (8), (16), (18), (19), (25), and
293-8 (27) and adding Subdivisions (28), (29), and (30) to read as
293-9 follows:
293-10 (1) "Aviation fuel [dealer]" has the meaning assigned
293-11 to that term by Section 161.001 [means a person who:]
293-12 [(A) is the operator of an aircraft servicing
293-13 facility;]
293-14 [(B) delivers gasoline or diesel fuel
293-15 exclusively into the fuel supply tanks of aircraft or into
293-16 equipment used solely for servicing aircraft and used exclusively
293-17 off-highway; and]
293-18 [(C) does not use, sell, or distribute gasoline
293-19 or diesel fuel on which a fuel tax is required to be collected or
293-20 paid to this state].
293-21 (4) "Dealer" means a person who is the operator of a
293-22 service station or other retail outlet and who delivers motor fuel
293-23 into the fuel supply tanks of motor vehicles, commercial vessels,
293-24 or motorboats.
293-25 (8) "Diesel tax prepaid user" means a person:
293-26 (A) whose purchases of diesel fuel are not for
293-27 commercial vessel or agricultural use and are predominantly for
294-1 nonhighway use;
294-2 (B) who acquires diesel fuel on which the tax
294-3 imposed under Section 153.202(c) has been paid;
294-4 (C) whose only diesel-powered motor vehicles are
294-5 passenger cars or light trucks; and
294-6 (D) [(C)] who elects to prepay an annual diesel
294-7 fuel tax to the comptroller on each diesel-powered motor vehicle.
294-8 (16) "Liquefied gas" means all combustible gases that
294-9 exist in the gaseous state at 60 degrees Fahrenheit and at a
294-10 pressure of 14.7 pounds per square inch absolute, but does not
294-11 include gasoline, [or] diesel fuel, or aviation fuel.
294-12 (18) "Motorboat" means a vessel propelled by
294-13 machinery, whether or not the machinery is the principal source of
294-14 propulsion. The term does not include a commercial vessel.
294-15 (19) "Motor fuel" includes gasoline, diesel fuel,
294-16 liquefied gas, and other products that are usable as propellants of
294-17 a motor vehicle, but does not include aviation fuel.
294-18 (25) "Supplier" means a person who:
294-19 (A) refines, distills, manufactures, produces,
294-20 or blends for sale or distribution diesel fuel in this state;
294-21 (B) imports or exports diesel fuel other than in
294-22 the fuel supply tanks of motor vehicles;
294-23 (C) sells or delivers diesel fuel in bulk
294-24 quantities to dealers, users, [aviation fuel dealers,] or other
294-25 suppliers; or
294-26 (D) is engaged in the business of selling or
294-27 delivering diesel fuel in bulk quantities to consumers for
295-1 nonhighway uses.
295-2 (27) "User" means a person who owns or operates a
295-3 motor vehicle, a motorboat, or a motor-fuel-powered motor or
295-4 engine, other than a commercial vessel or a motor or engine for
295-5 agricultural use, having fuel supply tanks into which gasoline or
295-6 diesel fuel is delivered.
295-7 (28) "Agricultural use" means propelling farm
295-8 machinery and operating pumping equipment in the production of an
295-9 agricultural product or processing farm and ranch products in the
295-10 hands of the producer only.
295-11 (29) "Bonded limited tax-paid user" means a user who
295-12 does not possess or use tax-free diesel fuel.
295-13 (30) "Commercial vessel" means a vessel propelled by
295-14 machinery, whether or not the machinery is the principal source of
295-15 propulsion, that is used exclusively for commercial purposes, other
295-16 than the provision of entertainment or gambling services.
295-17 SECTION 8.02. Section 153.013, Tax Code, is amended by
295-18 adding Subsection (c) to read as follows:
295-19 (c) In the absence of evidence to the contrary, any
295-20 gasoline, diesel fuel, or other product capable of being used as
295-21 the propellant of a gasoline-powered engine or diesel engine is
295-22 presumed to be motor fuel subject to the provisions of this chapter
295-23 unless the product is in the possession of an aviation fuel
295-24 distributor or aviation fuel dealer or in the fuel supply tanks of
295-25 an aircraft, in which case the fuel or product is presumed to be
295-26 aviation gasoline or aviation diesel fuel subject to the provisions
295-27 of Chapter 161. A cargo manifest identifying fuel as aviation fuel
296-1 is sufficient evidence to establish the fuel as aviation fuel and
296-2 subject the fuel to the provisions of Chapter 161. If an
296-3 enforcement act or procedure is authorized by this chapter and by
296-4 Chapter 161, the enforcement officer is not required to state or
296-5 determine whether the action is taken under this chapter or Chapter
296-6 161.
296-7 SECTION 8.03. Section 153.102, Tax Code, is amended by
296-8 adding Subsection (c) to read as follows:
296-9 (c) The tax rate for gasoline used in this state for a
296-10 nonhighway use other than commercial vessel or agricultural use and
296-11 other than an excepted use is four cents for each gross or
296-12 volumetric gallon or fractional part of a gallon.
296-13 SECTION 8.04. Section 153.104, Tax Code, is amended to read
296-14 as follows:
296-15 Sec. 153.104. EXCEPTIONS. The tax imposed by this
296-16 subchapter does not apply to gasoline:
296-17 (1) brought into this state in the fuel supply tank of
296-18 a motor vehicle operated by a person not required to be permitted
296-19 as an interstate trucker or in the fuel supply tank having a
296-20 capacity of 60 gallons or less of a motor or engine not used for
296-21 highway purposes and not removed from the tank;
296-22 (2) delivered by a permitted distributor to a common
296-23 or contract carrier, oceangoing vessel (including ship, tanker, or
296-24 boat), or a barge for export from this state if the gasoline is
296-25 moved forthwith outside the state;
296-26 (3) sold by a permitted distributor to another
296-27 permitted distributor;
297-1 (4) sold to the federal government for its exclusive
297-2 use;
297-3 (5) that is aviation fuel and is taxed under Chapter
297-4 161 [delivered by a permitted distributor into a storage facility
297-5 of a permitted aviation fuel dealer from which gasoline will be
297-6 delivered solely into the fuel supply tanks of aircraft or aircraft
297-7 servicing equipment;]
297-8 [(6) sold by one aviation fuel dealer to another
297-9 aviation fuel dealer who will deliver the aviation fuel exclusively
297-10 into the fuel supply tanks of aircraft or aircraft servicing
297-11 equipment];
297-12 (6) [(7)] sold to a public school district in this
297-13 state for its exclusive use; or
297-14 (7) [(8)] sold to a commercial transportation company
297-15 that provides public school transportation services to a school
297-16 district under Section 34.008 [21.181], Education Code, and used by
297-17 the company exclusively to provide those services.
297-18 SECTION 8.05. Section 153.114, Tax Code, is amended to read
297-19 as follows:
297-20 Sec. 153.114. LIST OF DISTRIBUTORS[, AVIATION FUEL DEALERS,]
297-21 AND GASOLINE JOBBERS. The comptroller, on or before December 20 of
297-22 each year, shall mail or distribute to all permitted distributors a
297-23 printed alphabetical list of permitted distributors[, aviation fuel
297-24 dealers,] and gasoline jobbers. A distributor [and an aviation fuel
297-25 dealer] on the list is [are] qualified to purchase gasoline tax
297-26 free during the following calendar year. A gasoline jobber on the
297-27 list is qualified to purchase gasoline tax-paid during the
298-1 following calendar year. A supplemental list of additions and
298-2 deletions shall be delivered to the distributors each month. A
298-3 current and effective permit or the list furnished by the
298-4 comptroller is evidence of the validity of the permit until the
298-5 comptroller notifies distributors of a change in the status of a
298-6 permit holder.
298-7 SECTION 8.06. Section 153.117(f), Tax Code, is amended to
298-8 read as follows:
298-9 (f) The comptroller may require selective schedules from a
298-10 distributor, dealer, [aviation fuel dealer,] interstate trucker,
298-11 gasoline jobber, or common or contract carrier for any purchases,
298-12 sales, or deliveries of gasoline when the schedules are not
298-13 inconsistent with the requirements of this chapter.
298-14 SECTION 8.07. Sections 153.119(a), (b), and (d), Tax Code,
298-15 are amended to read as follows:
298-16 (a) A person who exports, sells to the federal government,
298-17 to a public school district in this state, or to a commercial
298-18 transportation company for exclusive use in providing public school
298-19 transportation services to a school district under Section 34.008
298-20 [21.181], Education Code, without having added the amount of the
298-21 tax imposed by this chapter to his selling price, loses by fire or
298-22 other accident, or uses gasoline for the purpose of operating or
298-23 propelling a commercial vessel or for agricultural use [motorboat,
298-24 tractor used for agricultural purposes, or stationary engine, or
298-25 for another purpose except in a vehicle operated or intended to be
298-26 operated on the public highways of this state,] and who has paid
298-27 the tax imposed on gasoline by this chapter either directly or
299-1 indirectly is, when the person has complied with the invoice and
299-2 filing provisions of this section and the rules of the comptroller,
299-3 entitled to reimbursement of the tax paid by him, less a filing fee
299-4 and any amount allowed distributors, wholesalers or jobbers,
299-5 dealers, or others under Section 153.105(e) [153.105(c) of this
299-6 code]. A public school district that has paid the tax imposed
299-7 under this chapter on gasoline used by the district or a commercial
299-8 transportation company that has paid the tax imposed under this
299-9 chapter on gasoline used by the company exclusively to provide
299-10 public school transportation services to a school district under
299-11 Section 34.008 [21.181], Education Code, is entitled to
299-12 reimbursement of the amount of the tax paid in the same manner and
299-13 subject to the same procedures as other exempted users.
299-14 (b) A person who uses gasoline for the purpose of operating
299-15 a stationary engine, for the purpose of operating a motorboat, for
299-16 the purpose of operating a railway engine, or for another purpose
299-17 except in a vehicle operated or intended to be operated on the
299-18 public highways of this state and who has paid the tax imposed on
299-19 gasoline by this chapter either directly or indirectly and is not
299-20 otherwise entitled to a full refund is, when the person has
299-21 complied with the invoice and filing provisions of this section and
299-22 the rules of the comptroller, entitled to reimbursement of the tax
299-23 paid by the person, less a filing fee, any amount allowed
299-24 distributors, wholesalers or jobbers, dealers, or others under
299-25 Section 153.105(e), and four cents for each gallon or fractional
299-26 part of a gallon used. A person may file a refund claim under this
299-27 subsection for a portion of the tax paid on the gasoline used in
300-1 motor vehicles that are operated exclusively off the public
300-2 highways except for incidental travel on the public highways as
300-3 determined by the comptroller, but not for that portion used in
300-4 incidental travel.
300-5 (d) If the quantity of gasoline used in Texas by auxiliary
300-6 power units or power take-off equipment on any motor vehicle can be
300-7 accurately measured while the motor vehicle is stationary by any
300-8 metering or other measuring device or method designed to measure
300-9 the fuel separately from fuel used to propel the motor vehicle, the
300-10 comptroller may approve and adopt the use of any device as a basis
300-11 for determining the quantity of gasoline consumed in those
300-12 operations for tax credit or tax refund under Subsection (b).
300-13 SECTION 8.08. Section 153.1195(d), Tax Code, is amended to
300-14 read as follows:
300-15 (d) This section does not apply to a sale of gasoline that
300-16 is delivered into the fuel supply tank of a motor vehicle, a
300-17 commercial vessel, or a motorboat and for which payment is made
300-18 through the use and acceptance of a credit card.
300-19 SECTION 8.09. Section 153.120(a), Tax Code, is amended to
300-20 read as follows:
300-21 (a) A refund claim must be filed on a form provided by the
300-22 comptroller, be supported by the original invoice issued by the
300-23 seller, and contain:
300-24 (1) the stamped or preprinted name and address of the
300-25 seller;
300-26 (2) the name of the purchaser;
300-27 (3) the date of delivery of the gasoline;
301-1 (4) the date of the issuance of the invoice (if
301-2 different from the date of fuel delivery);
301-3 (5) the number of gallons of gasoline delivered;
301-4 (6) the amount of tax, either separately stated from
301-5 the selling price or a notation that the selling price includes the
301-6 tax; and
301-7 (7) the type of vehicle or equipment, such as a
301-8 motorboat, commercial vessel, railway engine, farm machine, highway
301-9 vehicle, off-highway vehicle, or refrigeration unit or stationary
301-10 engine, distinguishing agricultural and other user, into which the
301-11 fuel is delivered.
301-12 SECTION 8.10. Section 153.202, Tax Code, is amended by
301-13 adding Subsections (c), (d), (e), and (f) to read as follows:
301-14 (c) The tax rate for diesel fuel sold or used in this state
301-15 for a nonhighway use other than commercial vessel or agricultural
301-16 use and other than an excepted use is four cents for each gross or
301-17 volumetric gallon or fractional part of a gallon.
301-18 (d) A tax is imposed on diesel fuel purchased tax-free
301-19 before January 1, 1998, that would have been subject to payment of
301-20 the tax imposed by Subsection (c) if the diesel fuel had been
301-21 purchased on or after January 1, 1998. The rate of tax is four
301-22 cents for each volumetric gallon or fractional part of a gallon of
301-23 diesel fuel held on that date. The tax imposed by this subsection
301-24 does not apply to a person who on January 1, 1998, holds less than
301-25 2,000 gallons of diesel fuel.
301-26 (e) Each person shall gauge or meter each storage tank
301-27 containing tax-free diesel fuel at the end of December 31, 1997.
302-1 Each person shall report the volume of tax-free diesel fuel so
302-2 measured and remit the taxes imposed by this section not later than
302-3 January 21, 1998, on forms and according to procedures adopted by
302-4 the comptroller for that purpose.
302-5 (f) This subsection and Subsections (d) and (e) expire
302-6 January 1, 1999.
302-7 SECTION 8.11. Section 153.203, Tax Code, is amended to read
302-8 as follows:
302-9 Sec. 153.203. EXCEPTIONS. The tax imposed by this
302-10 subchapter does not apply to:
302-11 (1) diesel fuel delivered by a permitted supplier to a
302-12 common or contract carrier, oceangoing vessel (including ship,
302-13 tanker, or boat), or barge for export from this state, if the
302-14 diesel fuel is moved forthwith outside this state;
302-15 (2) diesel fuel sold by a permitted supplier to the
302-16 federal government for its exclusive use;
302-17 (3) diesel fuel sold or delivered by a permitted
302-18 supplier to another permitted supplier or bonded tax-free user[, to
302-19 the bulk storage facility of a diesel tax prepaid user,] or to a
302-20 purchaser who provides a signed statement as provided by Section
302-21 153.205 [of this code], but not including a delivery of tax-free
302-22 diesel fuel into the fuel supply tanks of a motor vehicle, except
302-23 for a motor vehicle owned by the federal government;
302-24 (4) diesel fuel that is aviation fuel and that is
302-25 taxed under Chapter 161 [sold or delivered by a permitted supplier
302-26 into the storage facility of a permitted aviation fuel dealer,
302-27 from which diesel fuel will be sold or delivered solely into the
303-1 fuel supply tanks of aircraft or aircraft servicing equipment];
303-2 (5) diesel fuel sold or delivered by a permitted
303-3 supplier into fuel supply tanks of commercial vessels [railway
303-4 engines, motorboats,] or refrigeration units for agricultural use
303-5 or other stationary equipment for agricultural use powered by a
303-6 separate motor from a separate fuel supply tank;
303-7 (6) kerosene when delivered by a permitted supplier
303-8 into a storage facility at a retail business from which all
303-9 deliveries are exclusively for heating, cooking, lighting, or
303-10 similar non-motor or non-engine [nonhighway] use;
303-11 (7) [diesel fuel sold or delivered by one aviation
303-12 fuel dealer to another aviation fuel dealer who will deliver the
303-13 diesel fuel exclusively into the supply tanks of aircraft or
303-14 aircraft servicing equipment;]
303-15 [(8)] diesel fuel sold by a permitted supplier to a
303-16 public school district in this state for its exclusive use; [or]
303-17 (8) [(9)] diesel fuel sold by a permitted supplier to
303-18 a commercial transportation company that provides public school
303-19 transportation services to a school district under Section 34.008
303-20 [21.181], Education Code, and used by the company exclusively to
303-21 provide those services; or
303-22 (9) diesel fuel brought into this state in the fuel
303-23 supply tank having a capacity of 60 gallons or less of a motor or
303-24 engine not used for highway purposes and not removed from the tank.
303-25 SECTION 8.12. Section 153.205(a), Tax Code, is amended to
303-26 read as follows:
303-27 (a) The first sale or use of diesel fuel in this state is
304-1 taxable, except that the sale of diesel fuel may be made without
304-2 collecting the tax if the purchaser furnishes to a permitted
304-3 supplier a signed statement that stipulates that:
304-4 (1) the purchaser does not operate any diesel-powered
304-5 motors or engines, other than a commercial vessel or other than for
304-6 agricultural use [motor vehicles on the public highway];
304-7 (2) all of the diesel fuel will be consumed by the
304-8 purchaser and no diesel fuel purchased on a signed statement will
304-9 be resold; and
304-10 (3) none of the diesel fuel purchased in this state
304-11 will be delivered or permitted by the purchaser to be delivered
304-12 into fuel supply tanks of motor vehicles or used to power any motor
304-13 or engine other than a commercial vessel or other than for an
304-14 agricultural use.
304-15 SECTION 8.13. Subchapter C, Chapter 153, Tax Code, is
304-16 amended by adding Section 153.2055 to read as follows:
304-17 Sec. 153.2055. STATEMENT FOR PURCHASE OF CERTAIN DIESEL
304-18 FUEL. (a) The first sale or use of diesel fuel in this state is
304-19 taxable, except that the sale of diesel fuel may be made without
304-20 the collection of the tax imposed under Section 153.202(a) but with
304-21 the collection of the tax imposed under Section 153.202(c) if the
304-22 purchaser furnishes to a permitted supplier a signed statement that
304-23 stipulates that:
304-24 (1) the purchaser does not operate any diesel-powered
304-25 motor vehicles on the public highways;
304-26 (2) all of the diesel fuel will be consumed by the
304-27 purchaser and no diesel fuel purchased on a signed statement will
305-1 be resold; and
305-2 (3) none of the diesel fuel purchased in this state
305-3 will be delivered or permitted by the purchaser to be delivered
305-4 into fuel supply tanks of motor vehicles.
305-5 (b) A person may not make a purchase of diesel fuel under
305-6 this section using a signed statement:
305-7 (1) for the purchase of more than 3,000 gallons of
305-8 diesel fuel in a single transaction; or
305-9 (2) in a calendar month in which the person has
305-10 previously purchased more than 10,000 gallons of diesel fuel from
305-11 all sources.
305-12 (c) The signed statement from the purchaser relieves the
305-13 permitted supplier from the burden of proof that the sale of diesel
305-14 fuel was taxable only under Section 153.202(c) to the purchaser
305-15 and remains in effect unless:
305-16 (1) the statement is revoked in writing by the
305-17 purchaser or supplier;
305-18 (2) the comptroller notifies the supplier in writing
305-19 that the purchaser may no longer make purchases under this section;
305-20 or
305-21 (3) the supplier is put on notice by making sales of
305-22 diesel fuel taxable under Section 153.202(a) to a purchaser who
305-23 has previously submitted a signed statement to the supplier.
305-24 (d) A sale taxable under Section 153.202(a) to a person who
305-25 has previously submitted a signed statement creates a rebuttable
305-26 presumption that the supplier had reasonable notice that all
305-27 subsequent sales should have been taxable.
306-1 (e) A person who makes a use that is taxable under Section
306-2 153.202(a) of any part of the diesel fuel purchased under a signed
306-3 statement shall, in addition to any criminal penalty, forfeit the
306-4 person's right to purchase diesel fuel tax free or under this
306-5 section for a period of one year from the date of the offense, and
306-6 any tax, interest, and penalty found to be due through false or
306-7 erroneous execution or continuance of a promissory statement by the
306-8 purchaser, if assessed to the supplier, is a debt of the purchaser
306-9 to the supplier until paid and is recoverable at law in the same
306-10 manner as the purchase price of the fuel. The person may, however,
306-11 claim a refund of the tax paid on any diesel fuel as permitted
306-12 under Section 153.222.
306-13 (f) The statement must be signed by the purchaser or the
306-14 purchaser's representative.
306-15 (g) The comptroller's regulations may allow separate
306-16 operating divisions of corporations to give separate signed
306-17 statements as if they were different legal entities.
306-18 (h) The comptroller may promulgate necessary forms and rules
306-19 to administer and enforce this section.
306-20 (i) A permitted supplier may not make a sale of diesel fuel
306-21 on which only the tax imposed by Section 153.202(c) is collected
306-22 to a purchaser using a signed statement:
306-23 (1) for the sale of more than 3,000 gallons of diesel
306-24 fuel in a single transaction; or
306-25 (2) in a calendar month in which the supplier has
306-26 previously sold more than 10,000 gallons of diesel fuel to the
306-27 purchaser.
307-1 (j) A sale of diesel fuel may be made with the collection of
307-2 only the tax imposed by Section 153.202(c) to a purchaser who
307-3 operates one or more motor vehicles on the public highways and who
307-4 furnishes to a permitted supplier a signed statement only as
307-5 provided in this subsection. The statement must stipulate that all
307-6 the diesel fuel will be consumed by the purchaser for purposes
307-7 other than operating a motor vehicle on the public highways and
307-8 that no diesel fuel purchased on a signed statement will be resold
307-9 or delivered into the fuel supply tanks of a motor vehicle. Diesel
307-10 fuel that may be sold under this subsection with the collection of
307-11 only the taxes imposed under Section 153.202(c) may only be of a
307-12 type that may not be legally used by the purchaser for the
307-13 operation of a motor vehicle on the public highways under state or
307-14 federal law. Subsections (a), (c)(3), and (d) do not apply to sales
307-15 of fuel under this subsection.
307-16 SECTION 8.14. Sections 153.206(a), (c), and (i), Tax Code,
307-17 are amended to read as follows:
307-18 (a) A supplier who makes a sale or use of diesel fuel in
307-19 this state for a purpose other than those exceptions listed in
307-20 Section 153.203 [of this code] shall at the time of sale or use be
307-21 liable to the state for the tax imposed in this subchapter and
307-22 shall report and pay the tax in the manner provided in the
307-23 subchapter. A supplier who makes a sale of diesel fuel to the
307-24 holder of a diesel tax prepaid user permit or a bonded limited
307-25 tax-paid user or who makes a sale under a statement under Section
307-26 153.2055 shall collect the tax at the rate provided by Section
307-27 153.202(c).
308-1 (c) A user, except a diesel tax prepaid user, shall report
308-2 and pay to the state the tax at the rate imposed on each gallon of
308-3 diesel fuel delivered by him into the fuel supply tanks of a motor
308-4 vehicle, unless the tax has been paid to a permitted supplier or a
308-5 dealer, or, as a diesel tax prepaid user, the tax has been prepaid
308-6 directly to the comptroller. If the diesel fuel delivered under
308-7 this section into the fuel supply tanks of a motor vehicle is fuel
308-8 on which the tax imposed under Section 153.202(c) has been paid,
308-9 the user shall pay the difference between the tax imposed under
308-10 Section 153.202(a) and the tax imposed under Section 153.202(c);
308-11 otherwise, the amount paid shall be the amount of tax imposed under
308-12 Section 153.202(a).
308-13 (i) A bonded limited tax-paid user or permitted interstate
308-14 trucker is entitled to deduct one-half of one percent of the
308-15 taxable gallons of diesel fuel on payment of the taxes to this
308-16 state for the expense of recordkeeping, reporting, and remitting
308-17 the tax.
308-18 SECTION 8.15. Section 153.207(a), Tax Code, is amended to
308-19 read as follows:
308-20 (a) A supplier, bonded limited tax-paid user, bonded
308-21 tax-free user, interstate trucker, diesel tax prepaid user,
308-22 [aviation fuel dealer,] or diesel fuel jobber shall file an
308-23 application with the comptroller for one of the nonassignable
308-24 permits provided for in this subchapter.
308-25 SECTION 8.16. Section 153.208, Tax Code, is amended by
308-26 amending Subsections (b), (c), and (d) and adding Subsection (e) to
308-27 read as follows:
309-1 (b) A supplier's permit authorizes a person to sell tax-free
309-2 diesel fuel to:
309-3 (1) another supplier;
309-4 (2) a bonded tax-free user;
309-5 (3) if applicable, an agricultural operator [an
309-6 aviation fuel dealer]; and
309-7 (4) [a diesel prepaid user if delivered into his bulk
309-8 storage facilities only; and]
309-9 [(5)] a person issuing a signed statement under
309-10 Section 153.205.
309-11 (c) A supplier's permit authorizes a person to supply diesel
309-12 fuel on which the tax under Section 153.202(c) has been paid to:
309-13 (1) a bonded limited tax-paid user;
309-14 (2) a diesel prepaid user;
309-15 (3) a permitted supplier; and
309-16 (4) a person issuing a signed statement under Section
309-17 153.2055.
309-18 (d) A supplier's permit authorizes a person to supply fully
309-19 tax-paid diesel fuel to suppliers and other purchasers.
309-20 (e) [(d)] A supplier may not make a tax-free sale or
309-21 delivery of diesel fuel into the fuel supply tanks of a diesel
309-22 motor or engine, other than a commercial vessel or other than for
309-23 an agricultural use, or of a motor vehicle other than a motor
309-24 vehicle owned by the United States.
309-25 SECTION 8.17. Section 153.209, Tax Code, is amended to read
309-26 as follows:
309-27 Sec. 153.209. BONDED TAX-FREE USER PERMIT. A bonded
310-1 tax-free user permit authorizes a user whose purchases of diesel
310-2 fuel are exclusively for commercial vessel or agricultural
310-3 [predominantly for nonhighway] use to purchase diesel fuel tax free
310-4 from permitted suppliers [and to report and pay taxes to this
310-5 state on that part of the diesel fuel that is delivered into the
310-6 fuel supply tanks of motor vehicles owned or operated by him].
310-7 SECTION 8.18. Subchapter C, Chapter 153, Tax Code, is amended
310-8 by adding Sections 153.2095 and 153.2096 to read as follows:
310-9 Sec. 153.2095. BONDED LIMITED TAX-PAID USER PERMIT. A
310-10 bonded limited tax-paid user permit authorizes a user whose
310-11 purchases of diesel fuel are predominantly for nonhighway use,
310-12 other than for commercial vessel or agricultural use, to purchase
310-13 diesel fuel on which the tax has been paid under Section
310-14 153.202(c) from permitted suppliers and to report and pay taxes to
310-15 this state in accordance with Section 153.206(c) on that part of
310-16 the diesel fuel that is delivered into the fuel supply tanks of
310-17 motor vehicles owned or operated by him.
310-18 Sec. 153.2096. AGRICULTURAL OPERATOR'S PERMIT. An
310-19 agricultural operator's permit authorizes a user whose purchases of
310-20 diesel fuel are predominantly for nonhighway agricultural use to
310-21 purchase diesel fuel tax-free from permitted suppliers and to
310-22 report and pay taxes as imposed by Section 153.202(a) to this state
310-23 on that part of the diesel fuel that is delivered into the fuel
310-24 supply tanks of motor vehicles owned or operated by the
310-25 agricultural user.
310-26 SECTION 8.19. Sections 153.210(a) and (b), Tax Code, are
310-27 amended to read as follows:
311-1 (a) A diesel tax prepaid user permit authorizes a person
311-2 whose use of diesel fuel is, other than commercial vessel or
311-3 agricultural use, predominantly for nonhighway use, but who owns or
311-4 operates one or more passenger cars or light trucks only in the
311-5 weight class shown in this section to elect to prepay an annual tax
311-6 on the fuel delivered from his own [tax-free] storage rather than
311-7 obtain a bonded limited tax-paid user permit. If he elects to
311-8 obtain a diesel tax prepaid user permit, he must prepay the tax at
311-9 the rate prescribed for each motor vehicle based on the class of
311-10 registered gross weight. A person whose purchases of diesel fuel
311-11 are predominantly for highway use does not qualify for a diesel tax
311-12 prepaid user permit.
311-13 (b) The vehicle classes and amounts of tax are:
311-14 Class A Less than 2,500 pounds ....... $ 37.20 [46.50]
311-15 Class B 2,500 to 3,500 pounds ....... 66.00 [82.50]
311-16 Class C 3,501 to 4,500 pounds ...... 82.80 [103.50]
311-17 Class D 4,501 to 7,000 pounds ...... 99.60 [124.50]
311-18 Class E 7,001 to 10,000 pounds ....... 116.40 [145.50]
311-19 SECTION 8.20. Section 153.214, Tax Code, is amended to read
311-20 as follows:
311-21 Sec. 153.214. SUPPLIER MAY PERFORM OTHER FUNCTIONS. A
311-22 supplier may operate under the supplier's permit as a user or[,]
311-23 dealer[, or aviation fuel dealer] without securing a separate
311-24 permit, but is subject to all other conditions, requirements, and
311-25 liabilities imposed on those permittees.
311-26 SECTION 8.21. Section 153.215(a), Tax Code, is amended to
311-27 read as follows:
312-1 (a) A supplier's, agricultural operator's, bonded tax-free
312-2 user's, and bonded limited tax-paid user's [user] permit is
312-3 permanent and valid as long as the permittee has in force and
312-4 effect the required bond or security and furnishes timely reports
312-5 as required, or until the permit is surrendered by the holder or
312-6 canceled by the comptroller. The comptroller may cancel a
312-7 supplier's, agricultural operator's, bonded tax-free user's, or
312-8 bonded limited tax-paid user's permit if no purchase, sale, or use
312-9 of diesel fuel has been reported by the supplier, agricultural
312-10 operator, bonded tax-free user, or bonded limited tax-paid user for
312-11 the prior 12 months.
312-12 SECTION 8.22. Section 153.217, Tax Code, is amended to read
312-13 as follows:
312-14 Sec. 153.217. LIST OF SUPPLIERS, BONDED TAX-FREE USERS,
312-15 BONDED LIMITED TAX-PAID USERS, AGRICULTURAL OPERATORS, [AVIATION
312-16 FUEL DEALERS,] AND DIESEL FUEL JOBBERS. (a) The comptroller, on
312-17 or before December 20 of each calendar year, shall mail or
312-18 distribute to each supplier a printed alphabetical list of
312-19 permitted suppliers, bonded tax-free users, bonded limited tax-paid
312-20 users, agricultural operators, [aviation fuel dealers,] and diesel
312-21 fuel jobbers. A permitted supplier, a bonded tax-free user, and an
312-22 agricultural operator [aviation fuel dealer] on the list are
312-23 qualified to purchase diesel fuel tax free during the following
312-24 calendar year. A bonded limited tax-paid user on the list is
312-25 entitled to purchase diesel fuel on which the tax imposed under
312-26 Section 153.202(c) has been paid. A diesel fuel jobber on the
312-27 list is qualified to purchase diesel fuel tax-paid during the
313-1 following calendar year. A supplemental list of additions and
313-2 deletions shall be delivered to each supplier each month.
313-3 (b) The comptroller, on or before January 31 of each
313-4 calendar year, shall mail or distribute to each supplier a printed
313-5 alphabetical list of diesel tax prepaid user permittees who are
313-6 qualified to purchase diesel fuel on which the tax imposed by
313-7 Section 153.202(c) has been paid [tax free] during the ensuing
313-8 calendar year. A supplemental list of additions and deletions
313-9 shall be delivered to each supplier each month.
313-10 SECTION 8.23. Sections 153.218(a), (b), (c), and (j), Tax
313-11 Code, are amended to read as follows:
313-12 (a) The comptroller shall determine the amount of security
313-13 required of a supplier, agricultural operator, bonded tax-free
313-14 user, bonded limited tax-paid user, or diesel fuel jobber taking
313-15 into consideration the amount of tax that has or is expected to
313-16 become due from the person, any past history of the person as a
313-17 supplier, bonded tax-free user, bonded limited tax-paid user, or
313-18 diesel fuel jobber and the necessity to protect the state against
313-19 the failure to pay the tax as it becomes due.
313-20 (b) If it is determined that the posting of security is
313-21 necessary to protect the state, the comptroller may require a
313-22 supplier or bonded tax-free user to post a surety bond equal to two
313-23 times the most amount of tax that could accrue on tax-free diesel
313-24 fuel purchased or acquired during a reporting period. A diesel
313-25 fuel jobber or bonded limited tax-paid user shall post a bond in an
313-26 amount determined by the comptroller according to the past payment
313-27 history of the jobber or bonded limited tax-paid user. The minimum
314-1 bond for a supplier or diesel fuel jobber is $30,000, and the
314-2 maximum bond is $600,000. The minimum bond for a bonded tax-free
314-3 user, agricultural operator, or bonded limited tax-paid user is
314-4 $10,000, and the maximum bond is $600,000. However, if the
314-5 comptroller determines there is undue risk of loss of tax revenues,
314-6 the comptroller may require one or more bonds or securities in a
314-7 total amount exceeding $600,000.
314-8 (c) A supplier, agricultural operator, bonded tax-free user,
314-9 bonded limited tax-paid user, or diesel fuel jobber who has filed a
314-10 bond or other security under this subchapter is exempted from the
314-11 bond or other security requirements of this subchapter and is
314-12 entitled, on request, to have the comptroller return, refund, or
314-13 release the bond or security if in the judgment of the comptroller
314-14 the person has for four consecutive years continuously complied
314-15 with the conditions of the bond or other security filed under this
314-16 subchapter. However, if the comptroller determines that the
314-17 revenues of the state would be jeopardized by the return, refund,
314-18 or release of the bond or security, the comptroller may elect not
314-19 to return, refund, or release the bond or security, and may
314-20 reimpose a requirement of a bond or other security as the
314-21 comptroller determines is necessary to protect the revenues of the
314-22 state.
314-23 (j) The comptroller shall notify immediately the issuer of a
314-24 letter of credit of a final determination of the supplier's,
314-25 agricultural operator's, bonded tax-free user's, or bonded limited
314-26 tax-paid user's delinquent liability or a judgment secured in any
314-27 action by this state to recover diesel taxes, costs, penalties, and
315-1 interest found to be due this state by a supplier, agricultural
315-2 operator, bonded tax-free user, or bonded limited tax-paid user in
315-3 whose behalf the letter of credit was issued. The letter of credit
315-4 allowed as security for the remittance of taxes under this
315-5 subchapter shall contain a statement that the issuer agrees to
315-6 respond to the comptroller's notice of liability with amounts to
315-7 satisfy the comptroller's delinquency claim against the supplier,
315-8 agricultural operator, bonded tax-free user, or bonded limited
315-9 tax-paid user.
315-10 SECTION 8.24. Sections 153.219(c)-(i), Tax Code, are amended
315-11 to read as follows:
315-12 (c) An agricultural operator or a [A] bonded limited
315-13 tax-paid user, bonded tax-free user, or other user with nonhighway
315-14 equipment uses who files a claim for a refund shall keep a record
315-15 showing the number of gallons of:
315-16 (1) inventories of all diesel fuel on hand at the
315-17 first of each month;
315-18 (2) all diesel fuel purchased or received, showing the
315-19 name of the seller and the date of each purchase;
315-20 (3) all diesel fuel deliveries into the fuel supply
315-21 tanks of motor vehicles;
315-22 (4) diesel fuel used for other purposes, showing the
315-23 purpose for which used; and
315-24 (5) all diesel fuel lost by fire or other accident.
315-25 (d) [An aviation fuel dealer shall keep a record showing the
315-26 number of gallons of:]
315-27 [(1) all diesel fuel inventories on hand at the first
316-1 of each month;]
316-2 [(2) all diesel fuel purchased or received, showing
316-3 the name of the seller and the date of each purchase or receipt;]
316-4 [(3) all diesel fuel sold, distributed, or used in
316-5 aircraft or aircraft servicing equipment; and]
316-6 [(4) diesel fuel lost by fire or other accident.]
316-7 [(e) The records of an aviation fuel dealer made under
316-8 Subsection (d)(3) of this section must show:]
316-9 [(1) the name of the purchaser or user of diesel fuel;]
316-10 [(2) the date of the sale, distribution, or use of the
316-11 diesel fuel; and]
316-12 [(3) the registration or "N" number of the airplane or
316-13 a description or number of the aircraft servicing equipment in
316-14 which diesel fuel is used.]
316-15 [(f)] A permitted interstate trucker shall keep a record of:
316-16 (1) the total miles traveled in all states by all
316-17 vehicles traveling into or from Texas and the total quantity of
316-18 diesel fuel consumed in those vehicles; and
316-19 (2) the total miles traveled in Texas and the total
316-20 quantity of diesel fuel delivered into the fuel supply tanks of
316-21 motor vehicles in Texas.
316-22 (e) [(g)] The comptroller may require selective schedules
316-23 from a supplier, dealer, [aviation fuel dealer,] interstate
316-24 trucker, diesel fuel jobber, or common or contract carrier for a
316-25 purchase, sale, or delivery of diesel fuel if the schedules are not
316-26 inconsistent with the requirements of this chapter.
316-27 (f) [(h)] The records required must be kept for four years
317-1 and are open to inspection at all times by the comptroller or the
317-2 attorney general.
317-3 (g) [(i)] A diesel fuel jobber shall keep a record showing
317-4 the number of gallons of:
317-5 (1) all diesel fuel inventories on hand at the first
317-6 of each month;
317-7 (2) all diesel fuel purchased or received, showing the
317-8 name of the seller and date of each purchase or receipt;
317-9 (3) all diesel fuel sold, distributed, or used,
317-10 showing the name of the purchaser and the date of the sale or use;
317-11 and
317-12 (4) all diesel fuel lost by fire or other accident.
317-13 (h) Each person required to keep a record under this section
317-14 shall for each record relating to the possession, sale, purchase,
317-15 or use of diesel fuel identify whether the diesel fuel was tax-free
317-16 fuel, diesel fuel on which the tax imposed under Section
317-17 153.202(c) has been paid, or diesel fuel on which the tax imposed
317-18 by Section 153.202(a) or (b) has been paid.
317-19 SECTION 8.25. Sections 153.220(a), (d), and (e), Tax Code,
317-20 are amended to read as follows:
317-21 (a) A delivery of diesel fuel into the fuel supply tanks of
317-22 a motor vehicle operated for commercial purposes and described by
317-23 Section 153.001(12) shall be evidenced by an invoice issued in
317-24 duplicate by a dealer or an invoice or a distribution log issued by
317-25 an agricultural operator or a bonded limited tax-paid user or other
317-26 user.
317-27 (d) The invoice or distribution log must contain:
318-1 (1) the name and address of the person making the
318-2 delivery stamped or preprinted on it;
318-3 (2) a statement:
318-4 (A) of the amount of the diesel fuel tax
318-5 separate from the selling price; or
318-6 (B) [a statement] that the diesel fuel tax is
318-7 included in the selling price and the rate of the tax;
318-8 (3) a statement that no diesel fuel tax was collected
318-9 by the seller if the invoice is to be used by the seller to support
318-10 a refund claim; and
318-11 (4) spaces for providing the following:
318-12 (A) the name of the purchaser;
318-13 (B) the date of delivery of the fuel;
318-14 (C) the number of gallons delivered;
318-15 (D) the odometer or hubmeter reading;
318-16 (E) the state highway license or unit number;
318-17 (F) the type of vehicle or equipment, such as a
318-18 commercial vessel, motorboat, railway engine, farm machine, highway
318-19 vehicle, off-highway vehicle, or refrigeration unit or stationary
318-20 engine, distinguishing agricultural and other user, into which the
318-21 fuel is delivered; and
318-22 (G) the signature of the recipient.
318-23 (e) If the delivery of [tax-paid] diesel fuel on which the
318-24 tax imposed by Section 153.202(a) or (b) has been paid is made
318-25 through an automated method whereby the purchase is automatically
318-26 applied to the purchaser's account, one invoice may be issued at
318-27 the time of billing covering multiple purchases made during a
319-1 30-day billing cycle.
319-2 SECTION 8.26. Sections 153.221(b) and (c), Tax Code, are
319-3 amended to read as follows:
319-4 (b) On or before the 25th day of the month following the end
319-5 of each calendar quarter, an agricultural operator, a bonded
319-6 tax-free user, a bonded limited tax-paid user, or an interstate
319-7 trucker shall file a report and, if applicable, remit the amount of
319-8 tax due [except as provided by Subsection (d) of this section]. A
319-9 report must be executed and filed with the comptroller and contain
319-10 complete and detailed information on diesel fuel transactions
319-11 during the preceding calendar quarter and other information
319-12 required by the comptroller on forms provided for that purpose. A
319-13 person [bonded user or interstate trucker] required to file a
319-14 report under this section who has not sold, used, or distributed
319-15 any diesel fuel during the reporting period shall file with the
319-16 comptroller the report setting forth the facts or information. The
319-17 failure of an agricultural operator, a bonded tax-free user, a
319-18 bonded limited tax-paid user, or an interstate trucker to obtain
319-19 forms from the comptroller is no excuse for the failure to file a
319-20 report containing all the information required to be reported.
319-21 (c) No report is required to be filed by:
319-22 (1) [an aviation fuel dealer;]
319-23 [(2)] a trip permit user;
319-24 (2) [(3)] a diesel tax prepaid user;
319-25 (3) [(4)] a person issuing signed statements;
319-26 (4) [(5)] a common or contract carrier; or
319-27 (5) [(6)] a diesel fuel jobber.
320-1 SECTION 8.27. Sections 153.222(a), (b), and (d), Tax Code,
320-2 are amended to read as follows:
320-3 (a) A dealer or diesel fuel jobber who has paid tax on
320-4 diesel fuel that has been used or sold for use by the dealer or
320-5 diesel fuel jobber for powering a commercial vessel or for an
320-6 agricultural use [any purpose other than propelling a motor vehicle
320-7 on the public highways of this state] or that has been sold to the
320-8 United States or a public school district in this state for the
320-9 exclusive use of the purchaser, or to a commercial transportation
320-10 company for exclusive use in providing public school transportation
320-11 services to a school district under Section 34.008 [21.181],
320-12 Education Code, without adding the amount of the tax to his selling
320-13 price, and a user who has paid tax on any diesel fuel that has been
320-14 used by him for powering a commercial vessel or for an agricultural
320-15 use [a purpose other than propelling a motor vehicle on the public
320-16 highways], is a public school district and has paid the tax on
320-17 diesel fuel purchased for its exclusive use, or is a commercial
320-18 transportation company and has paid the tax on diesel fuel used by
320-19 the company exclusively to provide public school transportation
320-20 services to a school district under Section 34.008 [21.181],
320-21 Education Code, may file a claim for a refund of taxes paid, less
320-22 the deduction allowed vendors and a filing fee.
320-23 (b) A dealer or diesel fuel jobber who has paid the tax
320-24 imposed under Section 153.202(a) on diesel fuel that has been used
320-25 or sold for use by the dealer or diesel fuel jobber for any
320-26 purpose, other than propelling a motor vehicle on the public
320-27 highways of this state or other than powering a commercial vessel
321-1 or other than for an agricultural use, and a user who has paid the
321-2 tax imposed by Section 153.202(a) on any diesel fuel that has been
321-3 used by him for a purpose, other than propelling a motor vehicle on
321-4 the public highways and other than powering a commercial vessel or
321-5 other than for an agricultural use, may file a claim for a refund
321-6 of taxes paid, less the deduction allowed vendors, a filing fee,
321-7 and four cents for each gallon or fraction of a gallon sold or
321-8 used. A person may file a refund claim under this subsection for a
321-9 portion of the tax paid on the diesel fuel used in motor vehicles
321-10 that are operated exclusively off the public highways except for
321-11 incidental travel on the public highways as determined by the
321-12 comptroller, but not for that portion used in the incidental
321-13 travel.
321-14 (d) If the quantity of diesel fuel used in Texas by
321-15 auxiliary power units or power take-off equipment on any motor
321-16 vehicle can be accurately measured while the motor vehicle is
321-17 stationary by any metering or other measuring device or method
321-18 designed to measure the fuel separately from fuel used to propel
321-19 the motor vehicle, the comptroller may approve and adopt the use of
321-20 any device as a basis for determining the quantity of diesel fuel
321-21 consumed in those operations for tax credit or tax refund under
321-22 Subsection (b). If no separate metering device or other approved
321-23 measuring method is provided, the following credit or refund
321-24 procedures are authorized. A permitted supplier or bonded limited
321-25 tax-paid user who operates diesel-powered motor vehicles equipped
321-26 with a power take-off or a diesel-powered auxiliary power unit
321-27 mounted on the motor vehicle and using the fuel supply tank of the
322-1 motor vehicle may be allowed a deduction from the taxable gallons
322-2 used in this state in each motor vehicle so equipped, subject to
322-3 the payment of the tax imposed under Section 153.202(c). The
322-4 comptroller shall determine the percentage of the deduction. A
322-5 user who is required to pay the tax on diesel fuel used in motor
322-6 vehicles so equipped may file a claim for a refund not to exceed
322-7 the percentage allowed by the comptroller of the total taxable fuel
322-8 used in this state in each motor vehicle so equipped.
322-9 SECTION 8.28. Section 153.403, Tax Code, is amended to read
322-10 as follows:
322-11 Sec. 153.403. CRIMINAL OFFENSES. Except as provided by
322-12 Section 153.404 [of this code], a person commits an offense if the
322-13 person:
322-14 (1) refuses to stop and permit the inspection and
322-15 examination of a motor vehicle transporting or using motor fuel on
322-16 the demand of a peace officer or the comptroller;
322-17 (2) is required to hold a valid trip permit or
322-18 interstate trucker's permit, but operates a motor vehicle in this
322-19 state without a valid trip permit or interstate trucker's permit;
322-20 (3) operates a liquefied gas-propelled motor vehicle
322-21 that is required to be licensed in Texas, including a motor vehicle
322-22 equipped with dual carburetion, and does not display a current
322-23 liquefied gas tax decal or multistate fuels tax agreement decal;
322-24 (4) transports gasoline or diesel fuel that is not
322-25 aviation fuel in any cargo tank that has a connection by pipe,
322-26 tube, valve, or otherwise with the fuel injector or carburetor or
322-27 with the fuel supply tank feeding the fuel injector or carburetor
323-1 of the motor vehicle transporting the product;
323-2 (5) sells or delivers gasoline or diesel fuel that is
323-3 not aviation fuel from a fuel supply tank that is connected with
323-4 the fuel injector or carburetor of a motor vehicle;
323-5 (6) owns or operates a motor vehicle for which reports
323-6 or mileage records are required by this chapter without an
323-7 operating odometer or other device in good working condition to
323-8 record accurately the miles traveled;
323-9 (7) as a diesel tax prepaid user fails to prepay the
323-10 tax on every diesel-powered motor vehicle owned or operated by him;
323-11 (8) makes a tax-free sale or delivery of liquefied gas
323-12 into the fuel supply tank of a motor vehicle that does not display
323-13 a current Texas liquefied gas tax decal;
323-14 (9) makes a sale or delivery of liquefied gas on which
323-15 the person knows the tax is required to be collected, if at the
323-16 time the sale is made the person does not hold a valid dealer's
323-17 permit;
323-18 (10) makes a tax-free sale or delivery of liquefied
323-19 gas into the fuel supply tank of a motor vehicle bearing
323-20 out-of-state license plates;
323-21 (11) makes a delivery of liquefied gas into the fuel
323-22 supply tank of a motor vehicle bearing Texas license plates and no
323-23 Texas liquefied gas tax decal, unless licensed under a multistate
323-24 fuels tax agreement;
323-25 (12) refuses to permit the comptroller or the attorney
323-26 general to inspect, examine, or audit a book or record required to
323-27 be kept by a distributor, supplier, user, dealer, interstate
324-1 trucker, [aviation fuel dealer,] jobber, common or contract
324-2 carrier, or any person required to hold a permit under this
324-3 chapter;
324-4 (13) refuses to permit the comptroller or the attorney
324-5 general to inspect or examine any plant, equipment, materials, or
324-6 premises where motor fuel is produced, processed, stored, sold,
324-7 delivered, or used;
324-8 (14) refuses to permit the comptroller or the attorney
324-9 general to measure or gauge the contents of or take samples from a
324-10 storage tank or container on premises where motor fuel is produced,
324-11 processed, stored, sold, delivered, or used;
324-12 (15) is a distributor, bonded tax-free user,
324-13 agricultural operator, bonded limited tax-paid user, interstate
324-14 trucker, or supplier and fails or refuses to make or deliver to the
324-15 comptroller a report required by this chapter to be made and
324-16 delivered to the comptroller;
324-17 (16) conceals motor fuel with the intent of engaging
324-18 in any conduct proscribed by this chapter or refuses to make sales
324-19 of motor fuel on the volume-corrected basis prescribed by this
324-20 chapter;
324-21 (17) refuses, while transporting motor fuel, to stop
324-22 the motor vehicle he is operating when called on to do so by a
324-23 person authorized to stop the motor vehicle;
324-24 (18) refuses to surrender a motor vehicle and cargo
324-25 for impoundment after being ordered to do so by a person authorized
324-26 to impound the motor vehicle and cargo;
324-27 (19) transports motor fuel for which a cargo manifest
325-1 is required to be carried without possessing or exhibiting on
325-2 demand by an officer authorized to make the demand a cargo manifest
325-3 containing the information required to be shown on the manifest;
325-4 (20) mutilates, destroys, or secretes a book or record
325-5 required by this chapter to be kept by a distributor, supplier,
325-6 user, dealer, interstate trucker, [aviation fuel dealer,] jobber,
325-7 or person required to hold a permit under this chapter;
325-8 (21) is a distributor, supplier, user, dealer,
325-9 interstate trucker, [aviation fuel dealer,] jobber, or other person
325-10 required to hold a permit under this chapter, or the agent or
325-11 employee of one of those persons and makes a false entry or fails
325-12 to make an entry in the books and records required under this
325-13 chapter to be made by the person;
325-14 (22) transports in any manner motor fuel under a false
325-15 cargo manifest;
325-16 (23) engages in a motor fuel transaction that requires
325-17 that the person have a permit under this chapter without then and
325-18 there holding the required permit;
325-19 (24) makes and delivers to the comptroller a report
325-20 required under this chapter to be made and delivered to the
325-21 comptroller, if the report contains false information;
325-22 (25) forges, falsifies, or alters an invoice
325-23 prescribed by law;
325-24 (26) makes any statement, knowing said statement to be
325-25 false, in a claim for a tax refund filed with the comptroller;
325-26 (27) furnishes to a supplier a signed statement for
325-27 purchasing diesel fuel of a type that may be legally used by the
326-1 purchaser for the operation of a motor vehicle on the public
326-2 highway under state or federal law tax free when he owns, operates,
326-3 or acquires a diesel-powered motor vehicle;
326-4 (28) holds a supplier's permit and:
326-5 (A) sells to a dealer diesel fuel on which the
326-6 tax imposed under Section 153.202(a) has not been paid; or
326-7 (B) sells diesel fuel on which only the tax
326-8 imposed by Section 153.202(c) has been paid to a person other than
326-9 a bonded limited tax-paid user, a diesel tax prepaid user, or a
326-10 person who has issued a statement under Section 153.2055 [an
326-11 aviation fuel dealer's permit and makes a taxable sale or use of
326-12 any gasoline or diesel fuel];
326-13 (29) fails to remit any tax funds collected by a
326-14 distributor, supplier, user, dealer, interstate trucker, jobber, or
326-15 any other person required to hold a permit under this chapter;
326-16 (30) makes a sale of diesel fuel that is not aviation
326-17 fuel tax free into a storage facility of a person who:
326-18 (A) is not permitted as a supplier[, as an
326-19 aviation fuel dealer], as a bonded tax-free user, or as an
326-20 agricultural operator [a diesel tax prepaid user of diesel fuel];
326-21 or
326-22 (B) does not furnish to the permitted supplier a
326-23 signed statement prescribed in Section 153.205 [of this code];
326-24 (31) makes a sale of gasoline that is not aviation
326-25 fuel tax free to any person who is not permitted as [either] a
326-26 distributor [or an aviation fuel dealer];
326-27 (32) is a dealer who purchases any motor fuel tax free
327-1 when not authorized to make a tax-free purchase under this chapter;
327-2 or
327-3 (33) is a dealer who purchases motor fuel with the
327-4 intent to evade any tax imposed by this chapter.
327-5 SECTION 8.29. Section 153.5025, Tax Code, is amended to read
327-6 as follows:
327-7 Sec. 153.5025. ALLOCATION OF OTHER [UNCLAIMED REFUNDABLE]
327-8 NONDEDICATED TAXES. (a) The comptroller by rule shall devise a
327-9 method of determining as accurately as possible the:
327-10 (1) number of gallons of fuel that is not used to
327-11 propel a motor vehicle on the public highways; and
327-12 (2) amount of taxes collected under this chapter from
327-13 fuel:
327-14 (A) that is not used to propel a motor vehicle
327-15 on the public highways;
327-16 (B) that would have been refunded under this
327-17 chapter if refund claims had been filed in accordance with this
327-18 chapter or on which the tax imposed by Section 153.102(c) or
327-19 153.202(c) is applicable; and
327-20 (C) that is not subject to allocation under
327-21 Section 153.502.
327-22 (b) The comptroller shall allocate to the general revenue
327-23 fund the amount determined under Subsection (a)(2).
327-24 (c) The determination and allocation shall be made
327-25 periodically as prescribed by rule.
327-26 SECTION 8.30. Subtitle E, Title 2, Tax Code, is amended by
327-27 adding Chapter 161 to read as follows:
328-1 CHAPTER 161. AVIATION FUELS TAX
328-2 SUBCHAPTER A. GENERAL PROVISIONS
328-3 Sec. 161.001. DEFINITIONS. In this chapter:
328-4 (1) "Aircraft" means any vehicle or contrivance that
328-5 is used or intended for use for flight in the air.
328-6 (2) "Aviation fuel" means a product offered for sale,
328-7 sold, or used as the propellant fuel in an aircraft engine. The
328-8 term includes aviation gasoline (AVGAS) or aviation diesel (JET)
328-9 fuel.
328-10 (3) "Aviation fuel dealer" means a person who:
328-11 (A) operates an aircraft servicing facility;
328-12 (B) delivers aviation fuel exclusively into the
328-13 fuel supply tanks of aircraft; and
328-14 (C) does not use, sell, or distribute aviation
328-15 fuel on which a motor fuel tax under Chapter 153 is imposed.
328-16 (4) "Aviation fuel distributor" means a person who:
328-17 (A) refines, manufactures, produces, or blends
328-18 aviation fuel for sale or distribution in this state;
328-19 (B) imports or exports aviation fuel other than
328-20 in the fuel supply tank of an aircraft;
328-21 (C) sells or delivers aviation fuel to other
328-22 aviation fuel distributors; or
328-23 (D) sells or delivers aviation fuel in bulk
328-24 quantities to aviation fuel dealers in this state.
328-25 (5) "Cargo tank" means an assembly that is used for
328-26 transporting, hauling, or delivering liquids and that consists of a
328-27 tank having one or more compartments, mounted on a wagon,
329-1 automobile, truck, trailer, or wheels, and includes accessory
329-2 piping, valves, and meters, but does not include a fuel supply tank
329-3 connected to the carburetor or fuel injector of a motor vehicle.
329-4 (6) "Motor vehicle" means a self-propelled vehicle
329-5 licensed or required to be licensed for use on a public highway or
329-6 used on a public highway.
329-7 (7) "Public highway" means a way or place of whatever
329-8 nature open to the use of the public as a matter of right for the
329-9 purpose of vehicular travel, even if the way or place is
329-10 temporarily closed for the purpose of construction, maintenance, or
329-11 repair.
329-12 (8) "Sale" means a transfer of title, exchange, or
329-13 barter of aviation fuel, but does not include transfer of
329-14 possession of aviation fuel on consignment.
329-15 Sec. 161.002. CARGO CARRIER RECORDS. (a) All common and
329-16 contract carriers operating in this state shall keep for four
329-17 years, open to inspection by the comptroller, a complete record of
329-18 each intrastate and interstate transportation of aviation fuel.
329-19 (b) The record must show:
329-20 (1) the date of transportation;
329-21 (2) the name of the consignor and consignee;
329-22 (3) the means of transportation; and
329-23 (4) the quantity and the kind of aviation fuel
329-24 transported.
329-25 (c) The records must also include:
329-26 (1) full data concerning the diversion of shipments
329-27 and the number of gallons diverted from interstate to intrastate
330-1 commerce and from intrastate to interstate commerce; and
330-2 (2) the points of origin and destination, the number
330-3 of gallons shipped or transported, the date, the consignee and the
330-4 consignor, and the kind of aviation fuel that has been diverted.
330-5 Sec. 161.003. AVIATION FUEL TRANSPORTING DOCUMENT. (a)
330-6 Except as provided by Subsection (c), a person who transports
330-7 aviation fuel on the public highways, regardless of whether a tax
330-8 is due on the fuel under this chapter, shall record the shipment of
330-9 the cargo on a cargo manifest containing any information required
330-10 by the comptroller.
330-11 (b) The cargo manifest shall be carried with the aviation
330-12 fuel until the fuel is resold or removed from the cargo tank.
330-13 (c) This section does not apply to a pipeline operating as a
330-14 common carrier or to aviation fuel carried in the fuel supply tanks
330-15 of an aircraft.
330-16 (d) Each person, other than a common carrier, transporting
330-17 aviation fuel under this chapter shall also carry a copy of the
330-18 aviation fuel distributor permit or proof of tax payment on the
330-19 fuel being transported.
330-20 Sec. 161.004. CANCELLATION OF PERMITS. (a) The comptroller
330-21 may cancel or refuse to issue or reissue an aviation fuel
330-22 distributor permit to any person who violates or fails to comply
330-23 with this chapter or a rule of the comptroller for the
330-24 administration of this chapter.
330-25 (b) Before a permit may be canceled or the issuance or
330-26 reissuance of a permit refused, the comptroller shall give the
330-27 permittee or permit applicant a hearing, at the office of the
331-1 comptroller in Austin or at another specified comptroller's office,
331-2 granting the permit holder or applicant an opportunity to show
331-3 cause why the proposed action should not be taken. If a permit is
331-4 in effect, the permit remains in force pending the determination of
331-5 the hearing. The comptroller shall deliver to the permit holder or
331-6 applicant a written notice of the hearing not later than the 10th
331-7 day before the date of the hearing. The notice may be delivered
331-8 directly by the comptroller or by registered or certified mail
331-9 addressed to the last known address of the permit holder or
331-10 applicant. Notice by mail is considered delivered when the notice
331-11 is deposited in the United States mail.
331-12 (c) The comptroller may prescribe rules of procedure and
331-13 evidence for hearings in accordance with Chapter 2001, Government
331-14 Code.
331-15 Sec. 161.005. SUMMARY SUSPENSION OF PERMIT. (a) The
331-16 comptroller may suspend a person's permit without notice or a
331-17 hearing for the person's failure to comply with this chapter or a
331-18 rule adopted under this chapter if the person's continued operation
331-19 constitutes an immediate and substantial threat to the collection
331-20 of taxes imposed by this chapter and attributable to the person's
331-21 operation.
331-22 (b) If the comptroller summarily suspends a person's permit,
331-23 proceedings for a preliminary hearing before the comptroller or the
331-24 comptroller's representative must be initiated simultaneously with
331-25 the summary suspension. The preliminary hearing shall be set for a
331-26 date not later than 10 days after the date of the summary
331-27 suspension, unless the parties agree to a later date.
332-1 (c) At the preliminary hearing, the permit holder must show
332-2 cause why the permit should not remain suspended pending a final
332-3 hearing on suspension or revocation.
332-4 (d) Chapter 2001, Government Code, does not apply to a
332-5 summary suspension under this section.
332-6 (e) To initiate a proceeding to suspend summarily a person's
332-7 permit, the comptroller shall serve notice on the permit holder
332-8 informing the permit holder of the right to a preliminary hearing
332-9 before the comptroller or the comptroller's representative and of
332-10 the time and place of the preliminary hearing. The notice must be
332-11 personally served on the permit holder or an officer, employee, or
332-12 agent of the permit holder, or sent by certified or registered
332-13 mail, return receipt requested, to the permit holder's mailing
332-14 address as it appears on the comptroller's records. The notice
332-15 must state the alleged violations that constitute the grounds for
332-16 summary suspension. The suspension is effective at the time the
332-17 notice is served. If the notice is served in person, the permit
332-18 holder shall immediately surrender the permit to the comptroller or
332-19 to the comptroller's representative. If notice is served by mail,
332-20 the permit holder shall immediately return the permit to the
332-21 comptroller.
332-22 (f) Section 161.004, governing hearings for permit
332-23 cancellation or refusal to issue a permit under this chapter,
332-24 governs a final administrative hearing under this section.
332-25 Sec. 161.006. ENFORCEMENT OF PERMIT CANCELLATION,
332-26 SUSPENSION, OR REFUSAL. (a) The comptroller may examine any books
332-27 and records incident to the conduct of the business of a person
333-1 whose permit has been canceled or suspended on the person's failure
333-2 to file the reports required by this chapter or to remit all taxes
333-3 due. The comptroller shall issue an audit deficiency determination
333-4 of the amount of delinquent taxes, penalties, and interest,
333-5 containing a demand for payment. The deficiency determination
333-6 shall provide that if neither a payment is made nor a request for a
333-7 redetermination is filed within 30 days after the date of the
333-8 notice of the deficiency, the amount of the determination becomes
333-9 due and payable. If the amount is not paid on or before the 44th
333-10 day after service of the notice of the deficiency determination,
333-11 the bond or other security required under this chapter shall be
333-12 forfeited. The demand for payment shall be addressed to both the
333-13 surety or sureties and the person who owes the delinquency.
333-14 (b) If the forfeiture of the bond or other security does not
333-15 satisfy the delinquency, the comptroller shall certify the taxes,
333-16 penalty, and interest delinquent to the attorney general, who may
333-17 file suit against the person or the person's surety or both to
333-18 collect the amount due. After a person has been given notice of an
333-19 order of cancellation or summary suspension, it shall be unlawful
333-20 for the person to continue to operate the person's business under a
333-21 canceled or suspended permit. The attorney general may file suit
333-22 to enjoin the person from continuing to operate under the person's
333-23 permit until the permit is reissued by the comptroller.
333-24 (c) An appeal from an order of the comptroller canceling or
333-25 suspending or refusing the issuance or reissuance of a permit may
333-26 be taken to a district court of Travis County by the aggrieved
333-27 permittee or applicant. The trial shall be de novo under the same
334-1 rules as ordinary civil suits, except that:
334-2 (1) an appeal must be perfected and filed within 30
334-3 days after the effective date of the order, decision, or ruling of
334-4 the comptroller;
334-5 (2) the trial of the case shall begin within 10 days
334-6 after its filing; and
334-7 (3) the order, decision, or ruling of the comptroller
334-8 may be suspended or modified by the court pending a trial on the
334-9 merits.
334-10 Sec. 161.007. Inspection of Premises and Records. For the
334-11 purpose of determining the amount of tax collected and payable to
334-12 the state, the amount of tax accruing and due, and whether a tax
334-13 liability has been incurred under this chapter, the comptroller
334-14 may:
334-15 (1) inspect any premises where motor vehicle fuel,
334-16 aviation fuel, crude petroleum, natural gas, or any derivatives or
334-17 condensates of crude petroleum, natural gas, or their products,
334-18 methyl alcohol, ethyl alcohol, or other blending agents are
334-19 produced, made, prepared, stored, transported, sold, or offered for
334-20 sale or exchange;
334-21 (2) examine all the books and records required to be
334-22 kept by, and any and all records incident to the business of, any
334-23 aviation fuel distributor, any aviation fuel dealer, or any person
334-24 receiving or possessing, delivering, or selling motor vehicle fuel,
334-25 aviation fuel, crude oil, or derivatives or condensates of crude
334-26 petroleum, natural gas, or their products, or any blending agents;
334-27 (3) examine and either gauge or measure the contents
335-1 of all storage tanks, containers, and other property or equipment;
335-2 and
335-3 (4) take samples of any of these products stored on
335-4 the premises.
335-5 Sec. 161.008. Authority to Stop and Examine. To enforce
335-6 this chapter, the comptroller, a law enforcement officer of the
335-7 Department of Public Safety, or any other peace officer may stop a
335-8 motor vehicle that appears to be transporting aviation fuel in
335-9 order to examine the cargo manifest required to be carried, examine
335-10 a permit or copy of a permit that may be required to be carried,
335-11 take samples from the fuel supply or cargo tanks, or make any other
335-12 investigation that could reasonably be made to determine whether
335-13 the required taxes have been paid or accounted for by a dealer or
335-14 any person required to be permitted under this chapter.
335-15 Sec. 161.009. IMPOUNDMENT AND SEIZURE. (a) If after
335-16 examination or other investigation the comptroller or a peace
335-17 officer has reasonable cause to believe that the owner or operator
335-18 of any motor vehicle or cargo tanks, or any person receiving or
335-19 possessing, delivering, or selling aviation fuel, has not paid all
335-20 aviation fuel taxes due or does not have a valid permit entitling
335-21 that person to possess or transport tax-free aviation fuel, the
335-22 comptroller or peace officer may impound the fuel, vehicle, cargo
335-23 tanks, storage tanks, equipment, paraphernalia, or other tangible
335-24 personal property used for or incident to the storage, sale, or
335-25 transportation of that aviation fuel. The comptroller may demand
335-26 payment of all taxes, penalties, interest due to this state, and
335-27 costs of impoundment unless proof is produced within three working
336-1 days after the beginning of impoundment that:
336-2 (1) the owner, operator, or other person has paid the
336-3 taxes established by the comptroller to be due on the aviation fuel
336-4 stored, sold, used, or transported and any other taxes due to this
336-5 state; or
336-6 (2) the owner, operator, or other person holds a valid
336-7 permit to possess or transport tax-free aviation fuel.
336-8 (b) If the owner or operator does not produce the required
336-9 documentation or required permit or does not pay the taxes,
336-10 penalties, interest, and costs due within three working days after
336-11 the beginning of the impoundment, the comptroller may seize the
336-12 impounded property to satisfy the tax liability.
336-13 (c) The comptroller may seize:
336-14 (1) all aviation fuel on which taxes are imposed by
336-15 this chapter that is found in the possession, custody, or control
336-16 of any person for the purpose of being sold, transported, removed,
336-17 or used by the person in violation of this chapter;
336-18 (2) all aviation fuel that is removed or is deposited,
336-19 stored, or concealed in any place with the intent to avoid payment
336-20 of taxes;
336-21 (3) any automobile, truck, tank truck, boat, trailer
336-22 conveyance, or other vehicle used in the removal or transportation
336-23 of the aviation fuel to avoid payment of taxes; and
336-24 (4) all equipment, paraphernalia, storage tanks, or
336-25 tangible personal property incident to and used for avoiding the
336-26 payment of taxes and found in the place, building, or vehicle where
336-27 the aviation fuel is found.
337-1 Sec. 161.010. SALE OF SEIZED PROPERTY. (a) The comptroller
337-2 may sell property seized under Section 161.009.
337-3 (b) Notice of the time and place of a sale shall be given to
337-4 the delinquent person in writing by certified mail at least 20 days
337-5 before the date set for the sale. The notice shall be enclosed in
337-6 an envelope addressed to the person at the person's last known
337-7 address or place of business and be deposited in the United States
337-8 mail, postage prepaid. The notice shall also be published once a
337-9 week for two consecutive weeks before the date set for the sale in
337-10 a newspaper of general circulation published in the county in which
337-11 the property seized is to be sold. If there is no newspaper of
337-12 general circulation in the county, notice shall be posted in three
337-13 public places in the county 14 days before the date set for the
337-14 sale. The notice must contain a description of the property to be
337-15 sold, a statement of the amount due, including interest, penalties,
337-16 and costs, the name of the delinquent, and the further statement
337-17 that unless the amount due, interest, penalties, and costs are paid
337-18 on or before the time fixed in the notice for the sale, the
337-19 property, or as much of it as may be necessary, will be sold at
337-20 public auction in accordance with the law and the notice.
337-21 (c) At the sale, the comptroller shall sell the property and
337-22 shall deliver to the purchaser a bill of sale for personal property
337-23 and a deed for real property sold. The bill of sale or deed vests
337-24 the interest or title of the person liable for the amount in the
337-25 purchaser. The unsold portion of any property seized may be left
337-26 at the place of sale at the risk of the person liable for the
337-27 amount.
338-1 (d) The proceeds of a sale shall be allocated according to
338-2 the following priorities:
338-3 (1) the payment of expenses of seizure, appraisal,
338-4 custody, advertising, and auction and any other expenses incident
338-5 to the seizure and sale;
338-6 (2) the payment of the tax, penalty, and interest; and
338-7 (3) the repayment of the remaining balance to the
338-8 person liable for the amount unless a claim is presented before the
338-9 sale by any other person who has an ownership interest evidenced by
338-10 a financing statement or lien, in which case the comptroller shall
338-11 withhold the remaining balance pending a determination of the
338-12 rights of the respective parties.
338-13 Sec. 161.011. PRESUMPTIONS. An aviation fuel distributor
338-14 who fails to keep the records, issue the invoices, or file the
338-15 reports required by this chapter is presumed to have sold or used
338-16 for taxable purposes all aviation fuel shown by an audit by the
338-17 comptroller to have been sold to the distributor. Any aviation
338-18 fuel unaccounted for is presumed to have been sold or used for
338-19 taxable purposes. The comptroller may establish the amount of
338-20 taxes, penalties, and interest due from the records of deliveries
338-21 or from any records or information available to the comptroller.
338-22 If a tax claim developed through this procedure is not paid, after
338-23 the opportunity to request a redetermination the claim and any
338-24 audit made by the comptroller or any report filed by the
338-25 distributor are admissible in any suit or judicial proceedings
338-26 filed by the attorney general and are prima facie evidence of the
338-27 correctness of the claim or audit.
339-1 Sec. 161.012. ADDITIONAL TAX APPLIES TO AVIATION FUEL DEALER
339-2 INVENTORIES. (a) On the effective date of an increase in the
339-3 rates of the taxes imposed by this chapter, a dealer that possesses
339-4 for the purpose of sale 2,000 or more gallons of aviation fuel at
339-5 each business location on which the taxes imposed by this chapter
339-6 at a previous rate have been paid shall report to the comptroller
339-7 the volume of that aviation fuel and, at the time of the report,
339-8 shall pay a tax on that aviation fuel at a rate equal to the rate
339-9 of the tax increase.
339-10 (b) On the effective date of a reduction of the rates of
339-11 taxes imposed by this chapter, an aviation fuel dealer that
339-12 possesses for the purpose of sale 2,000 or more gallons of aviation
339-13 fuel at each business location on which the taxes imposed by this
339-14 chapter at the previous rate have been paid becomes entitled to a
339-15 refund in an amount equal to the difference in the amount of taxes
339-16 paid on that aviation fuel at the previous rate and at the rate in
339-17 effect on the effective date of the reduction in the tax rates.
339-18 The rules of the comptroller shall provide for the method of
339-19 claiming a refund under this chapter and may require that the
339-20 refund be paid through the aviation fuel distributor from whom the
339-21 dealer received the aviation fuel.
339-22 (Sections 161.013-161.050 reserved for expansion
339-23 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX
339-24 Sec. 161.051. TAX IMPOSED; RATE. (a) A tax is imposed on
339-25 the sale or delivery of aviation fuel in this state.
339-26 (b) The aviation fuel tax rate is four cents for each gallon
339-27 or fractional part delivered to an aviation fuel dealer or other
340-1 person.
340-2 Sec. 161.052. COMPUTATION OF TAX. (a) The amount of the
340-3 tax shall be computed and paid to the state on the
340-4 temperature-adjusted volume of gallons of taxable aviation fuel
340-5 sold to an aviation fuel dealer or other person purchasing aviation
340-6 fuel for the person's own use or for resale if the sale is made in
340-7 a single delivery of 5,000 gallons or more or in a lesser quantity
340-8 if required by municipal ordinance. The comptroller may publish
340-9 and distribute a table to be used for converting the measurement of
340-10 gross gallons of aviation fuel to temperature-adjusted gallons.
340-11 (b) The amount of the tax shall be computed and paid to the
340-12 state on the gross or volumetric gallons of taxable aviation fuel
340-13 sold if the sale is made in a single delivery of less than 5,000
340-14 gallons or in a quantity less than the maximum prescribed by an
340-15 applicable municipal ordinance if the maximum is less than 5,000
340-16 gallons.
340-17 (c) For a permitted aviation fuel distributor whose aviation
340-18 fuel deliveries are made to retail outlets operated by the
340-19 distributor or made by the distributor on consignment, the tax on
340-20 sales to users and consumers shall be computed on the basis of
340-21 actual sales.
340-22 (d) If the comptroller is not satisfied with a tax return or
340-23 the amount of tax required to be paid to the state by any aviation
340-24 fuel distributor who elects to report on the basis of actual sales,
340-25 the comptroller may compute and determine the amount to be paid on
340-26 the basis of the beginning inventory, showing the total gallons of
340-27 aviation fuel in storage at the location on the first day of the
341-1 calendar month, plus the total gallons of aviation fuel delivered
341-2 into the storage facility during the month, less the total gallons
341-3 of aviation fuel in the storage facility at the end of the calendar
341-4 month.
341-5 Sec. 161.053. EXCEPTIONS. The tax imposed by Section
341-6 161.051 does not apply to aviation fuel:
341-7 (1) delivered as cargo by a permitted aviation fuel
341-8 distributor to a common or contract carrier, an oceangoing vessel,
341-9 including a ship, tanker, or boat, or a barge for export from this
341-10 state if the aviation fuel is moved immediately outside this state;
341-11 (2) sold by a permitted aviation fuel distributor to
341-12 the federal government for its exclusive use;
341-13 (3) sold or delivered by a permitted aviation fuel
341-14 distributor to another permitted aviation fuel distributor; or
341-15 (4) sold or delivered by a permitted aviation fuel
341-16 distributor into the fuel supply tanks of aircraft used for aerial
341-17 application of agricultural chemicals to crops or land used for
341-18 growing crops.
341-19 Sec. 161.054. COLLECTION OF TAX. (a) A permitted aviation
341-20 fuel distributor who uses or makes a sale of aviation fuel in this
341-21 state for any purpose other than those exceptions listed in Section
341-22 161.053 at the time of use or sale is liable to the state for the
341-23 tax imposed by this chapter and shall report and pay the tax in the
341-24 manner provided by this chapter.
341-25 (b) Aviation fuels are considered to be used when withdrawn
341-26 from storage for delivery into a fuel supply tank.
341-27 (c) An aviation fuel distributor shall pay the tax at the
342-1 rate imposed on each gallon of aviation fuel delivered to an
342-2 aviation fuel dealer or used in an aircraft by the distributor.
342-3 (d) The tax on one percent of the taxable gallons of
342-4 aviation fuel sold or distributed in this state shall be allocated
342-5 to the permitted aviation fuel distributor making the first taxable
342-6 sale or use of aviation fuel in this state. That allocation may be
342-7 deducted by the aviation fuel distributor in the payment to the
342-8 state of the taxes imposed for the expense of collecting,
342-9 accounting for, reporting, and remitting the tax collected and for
342-10 keeping records.
342-11 Sec. 161.055. PERMITS. A person acting as an aviation fuel
342-12 distributor must obtain from the comptroller an aviation fuel
342-13 distributor permit.
342-14 Sec. 161.056. PERMIT APPLICATION FORMS. The comptroller
342-15 shall promulgate the application form for a permit, which must
342-16 contain the following information:
342-17 (1) the name under which the applicant transacts or
342-18 intends to transact business;
342-19 (2) the principal office, residence, or place of
342-20 business in this state of the applicant;
342-21 (3) if the applicant is not an individual, the names
342-22 of the principal officers of an applicant corporation or the names
342-23 of each partner in an applicant partnership and the office, street,
342-24 or post office address of each officer or partner; and
342-25 (4) other information required by the comptroller.
342-26 Sec. 161.057. PERMITS: PERIOD OF VALIDITY. A permit is
342-27 valid so long as the permit holder has in force and effect the
343-1 required bond or security and furnishes timely reports as required
343-2 or until the permit is surrendered by the holder or canceled by the
343-3 comptroller.
343-4 Sec. 161.058. DISPLAY OF PERMIT. A permit must be posted
343-5 in a conspicuous place or kept available for inspection at the
343-6 principal place of business of the permit holder. A copy of the
343-7 permit must be kept at each place of business or other place of
343-8 storage from which aviation fuel is sold, distributed, or used by
343-9 the permit holder and in each motor vehicle used by the permit
343-10 holder to transport on the public highways aviation fuel purchased
343-11 by the permit holder for resale, distribution, or use.
343-12 Sec. 161.059. LIST OF PERMIT HOLDERS. The comptroller, on
343-13 or before December 20 of each year, shall prepare and deliver to
343-14 each aviation fuel distributor a printed alphabetical list of
343-15 permitted aviation fuel distributors who are qualified to purchase
343-16 aviation fuel tax free during the following calendar year. A
343-17 supplemental list of additions and deletions shall be delivered to
343-18 each aviation fuel distributor each succeeding month.
343-19 Sec. 161.060. BONDS AND OTHER SECURITY FOR TAXES. (a) The
343-20 comptroller shall determine the amount of security required of an
343-21 aviation fuel distributor taking into consideration the amount of
343-22 tax that has or is expected to become due from the person, any
343-23 history of the person as a permit holder under Chapter 153, and the
343-24 necessity to protect the state against the failure to pay the tax
343-25 as it becomes due.
343-26 (b) If it is determined that the posting of security is
343-27 necessary to protect the state, the comptroller may require an
344-1 aviation fuel distributor to post a bond. An aviation fuel
344-2 distributor shall post a bond equal to twice the maximum amount of
344-3 tax that could accrue on tax-free aviation fuel purchased or
344-4 acquired during a reporting period. The minimum bond is $30,000.
344-5 The maximum bond is $600,000 unless the comptroller believes there
344-6 is undue risk of loss of tax revenues, in which event the
344-7 comptroller may require one or more bonds or securities in a total
344-8 amount exceeding $600,000.
344-9 (c) An aviation fuel distributor who has filed a bond or
344-10 other security under this subchapter is exempted from the bond or
344-11 other security requirements of this subchapter and is entitled, on
344-12 request, to have the comptroller return, refund, or release the
344-13 bond or security if in the judgment of the comptroller the person
344-14 has for four consecutive years continuously complied with the
344-15 conditions of the bond or other security filed under this
344-16 subchapter. However, if the comptroller determines that the
344-17 revenues of the state would be jeopardized by the return, refund,
344-18 or release of the bond or security, the comptroller may elect not
344-19 to return, refund, or release the bond or security and may reimpose
344-20 a requirement of a bond or other security the comptroller
344-21 determines necessary to protect the revenues of the state.
344-22 (d) A bond must be a continuing instrument, must constitute
344-23 a new and separate obligation in the penal sum named in the bond
344-24 for each calendar year or portion of a year while the bond is in
344-25 force, and must remain in effect until the surety on the bond is
344-26 released and discharged.
344-27 (e) In lieu of filing a surety bond, an applicant for a
345-1 permit may substitute the following security:
345-2 (1) cash in the form of United States currency in an
345-3 amount equal to the required bond to be deposited in the suspense
345-4 account of the state treasury;
345-5 (2) an assignment to the comptroller of a certificate
345-6 of deposit in any bank or savings and loan association in this
345-7 state that is a member of the Federal Deposit Insurance Corporation
345-8 in an amount at least equal to the bond amount required; or
345-9 (3) an irrevocable letter of credit to the comptroller
345-10 from any bank or savings and loan association in this state that is
345-11 a member of the Federal Deposit Insurance Corporation in an amount
345-12 of credit at least equal to the bond amount required.
345-13 (f) If the amount of an existing bond becomes insufficient
345-14 or a security becomes unsatisfactory or unacceptable, the
345-15 comptroller may require the filing of a new or additional bond or
345-16 security.
345-17 (g) A surety bond or other form of security may not be
345-18 released until it is determined by examination or audit that no
345-19 tax, penalty, or interest liability exists. The cash or securities
345-20 shall be released within 60 days after the comptroller determines
345-21 that no liability exists.
345-22 (h) The comptroller may use the cash or certificate of
345-23 deposit security to satisfy a final determination of delinquent
345-24 liability or a judgment secured in any action by this state to
345-25 recover aviation fuel taxes, costs, penalties, and interest found
345-26 to be due this state by a person in whose behalf the cash or
345-27 certificate security was deposited.
346-1 (i) A surety on a bond furnished by a permittee shall be
346-2 released and discharged from liability to the state accruing on the
346-3 bond after the expiration of 30 days after the date on which the
346-4 surety files with the comptroller a written request to be released
346-5 and discharged. The request does not relieve, release, or
346-6 discharge the surety from a liability already accrued or that
346-7 accrues before the expiration of the 30-day period. The
346-8 comptroller, promptly on receipt of the request, shall notify the
346-9 permittee who furnished the bond, and unless the permittee, before
346-10 the expiration date of the existing security, files with the
346-11 comptroller a new bond with a surety company duly authorized to do
346-12 business under the laws of the state, or other authorized security,
346-13 in the amount required in this section, the comptroller shall
346-14 cancel the permit in the manner provided by this chapter.
346-15 (j) The comptroller shall notify immediately the issuer of a
346-16 letter of credit of a final determination of the distributor's
346-17 delinquent liability or a judgment secured in any action by this
346-18 state to recover aviation fuel taxes, costs, penalties, and
346-19 interest found to be due this state by a distributor in whose
346-20 behalf the letter of credit was issued. The letter of credit
346-21 allowed as security for the remittance of taxes under this
346-22 subchapter shall contain a statement that the issuer agrees to
346-23 respond to the comptroller's notice of liability with amounts to
346-24 satisfy the comptroller's delinquency claim against the
346-25 distributor.
346-26 (k) A permit holder may request an examination or audit to
346-27 obtain release of the security when the permit holder relinquishes
347-1 the permit or when the permit holder desires to substitute one form
347-2 of security for an existing one.
347-3 Sec. 161.061. RECORDS. (a) A permitted aviation fuel
347-4 distributor shall keep a complete and separate record of the number
347-5 of gallons of aviation gasoline and the number of gallons of
347-6 aviation diesel fuel:
347-7 (1) on hand as inventory at the first of each month;
347-8 (2) refined, compounded, or blended during the month;
347-9 (3) purchased or received during the month, showing
347-10 the name of the seller and the date of each purchase or receipt,
347-11 with the amount of tax separately stated;
347-12 (4) sold, distributed, or used during the month,
347-13 showing the name of the purchaser and the date of sale,
347-14 distribution, or use and the registration or "N" number or a
347-15 description of the aircraft in which the aviation fuel is
347-16 delivered; and
347-17 (5) lost during the month by fire or other accident.
347-18 (b) An aviation fuel dealer shall keep a complete and
347-19 separate record of the number of gallons of aviation gasoline and
347-20 the number of gallons of aviation diesel fuel:
347-21 (1) on hand as inventory at the first of each month;
347-22 (2) purchased or received during the month, showing
347-23 the name of the seller and the date of each purchase or receipt;
347-24 (3) sold, distributed, or used during the month,
347-25 showing the name of the purchaser and the date of sale,
347-26 distribution, or use and the registration or "N" number or a
347-27 description of the aircraft in which the aviation fuel is
348-1 delivered; and
348-2 (4) lost during the month by fire or other accident.
348-3 Sec. 161.062. REPORTS AND PAYMENTS. (a) On or before the
348-4 25th day of each month, an aviation fuel distributor shall file a
348-5 report of aviation fuel transactions and remit the amount of tax
348-6 required to be collected during the preceding month. The report
348-7 must be filed on a form provided by the comptroller and contain the
348-8 information required by the comptroller, including complete and
348-9 detailed information of aviation fuel transactions during the
348-10 preceding month. A permitted aviation fuel distributor who has not
348-11 sold, used, or distributed any aviation fuel during a reporting
348-12 period shall nevertheless file a report for that period with the
348-13 comptroller. The failure of an aviation fuel distributor to obtain
348-14 forms from the comptroller is not an acceptable excuse for the
348-15 failure to file a report. The report must be executed by the
348-16 aviation fuel distributor or the aviation fuel distributor's
348-17 representative.
348-18 (b) The comptroller may require selective schedules from an
348-19 aviation fuel distributor or common or contract cargo carrier for a
348-20 purchase, sale, delivery, or transportation of aviation fuel if the
348-21 schedules are not inconsistent with the requirements of this
348-22 chapter. The records required must be kept for four years and are
348-23 open to inspection at all times by the comptroller, the attorney
348-24 general, or their authorized representatives.
348-25 Sec. 161.063. TAX ON INITIAL INVENTORY. (a) A tax is
348-26 imposed on aviation fuel held by an aviation fuel dealer on January
348-27 1, 1998, other than for the excepted uses under Section 161.053.
349-1 The rate of the tax is four cents for each volumetric gallon or
349-2 fractional part of a gallon of aviation fuel held on that date.
349-3 (b) Each aviation fuel dealer shall gauge or meter each
349-4 storage tank containing aviation fuel at the end of December 31,
349-5 1997. Each aviation fuel dealer shall report the volume of
349-6 aviation fuel so measured and remit the taxes imposed by this
349-7 section not later than February 21, 1998, on forms and according to
349-8 procedures adopted by the comptroller for that purpose.
349-9 (c) This section expires January 1, 1999.
349-10 (Sections 161.064-161.100 reserved for expansion
349-11 SUBCHAPTER C. REFUNDS
349-12 Sec. 161.101. REFUNDS ON TAXES PAID. (a) A person who
349-13 qualifies for a tax refund under Subsection (b) or (c) and who
349-14 fully complies with the invoice and filing provisions of this
349-15 chapter and the rules of the comptroller is entitled to
349-16 reimbursement of the tax paid by the person, less a filing fee and
349-17 any amount allowed permitted aviation fuel distributors.
349-18 (b) A person who exports as cargo or loses by fire or other
349-19 accident 100 gallons or more of aviation fuel on which the tax has
349-20 been paid, sells aviation fuel on which the tax has been paid in
349-21 any quantity to the United States government for the exclusive use
349-22 of the government, or uses aviation fuel for the purpose of
349-23 operating an aircraft for aerial application of agricultural
349-24 chemicals to crops or land used for growing crops may file a claim
349-25 for a refund on the net tax paid to the state in the manner
349-26 provided by this subchapter or as the comptroller may direct.
349-27 (c) The right to receive a refund under this section is not
350-1 assignable, except that a person residing or maintaining a place of
350-2 business outside the state who purchases 100 gallons or more of
350-3 aviation fuel and immediately exports as cargo the entire quantity
350-4 may assign the person's right to claim a refund to the permitted
350-5 distributor from whom the aviation fuel was purchased or to any
350-6 permitted aviation fuel distributor who has paid the tax on the
350-7 aviation fuel either directly or through another permitted dealer
350-8 in this state. If a distributor has secured an assignment and the
350-9 proof of export as cargo required by the comptroller, the
350-10 distributor may credit the tax paid on any monthly report filed
350-11 with the comptroller before the expiration of one year after the
350-12 first day of the month following the date of delivery to the
350-13 exporter of the aviation fuel.
350-14 (d) An aviation fuel dealer or user who establishes proof
350-15 satisfactory to the comptroller of delivery into aircraft of motor
350-16 vehicle fuel on which the state motor fuel tax has been paid may
350-17 request a refund of the amount by which the motor fuel tax paid
350-18 exceeds the amount of the tax imposed by this chapter on the fuel.
350-19 Sec. 161.102. CREDITS FOR BAD DEBTS. (a) A permitted
350-20 aviation fuel distributor may take a credit on the monthly report
350-21 to be filed with the comptroller if:
350-22 (1) the distributor has paid the taxes imposed by this
350-23 chapter on aviation fuel sold on account;
350-24 (2) the distributor determines that the account is
350-25 uncollectible and worthless; and
350-26 (3) the account is written off as a bad debt on the
350-27 accounting books of the distributor.
351-1 (b) The amount of the credit that may be taken under
351-2 Subsection (a) may equal but may not exceed the amount of taxes
351-3 paid on the aviation fuel to which the written-off account applies.
351-4 (c) If, after a credit is taken under Subsection (a), the
351-5 account on which the credit was based is paid, or if the
351-6 comptroller otherwise determines that the credit was not authorized
351-7 by Subsection (a), the unpaid taxes shall be paid by the
351-8 distributor taking the credit, plus a penalty of 10 percent of the
351-9 amount of the unpaid taxes and interest at the rate provided by
351-10 Section 111.060 beginning on the day that the credit was taken.
351-11 (d) This section does not apply to a sale of aviation fuel
351-12 that is delivered into the fuel supply tank of an aircraft for
351-13 which payment is made through the use and acceptance of a credit
351-14 card.
351-15 Sec. 161.103. REFUND PROCEDURE. A refund claim must be
351-16 filed with the comptroller on a form provided by the comptroller
351-17 and must show the date of filing, the period covered in the claim,
351-18 the number of gallons of aviation fuel subject to refund, and other
351-19 information required by the comptroller. A claim must be supported
351-20 by one or more original invoices issued to the claimant or such
351-21 other information as the comptroller considers necessary.
351-22 Sec. 161.104. LIMITATIONS ON REFUNDS. (a) A refund claim
351-23 must be filed with the comptroller within one year after the first
351-24 day of the calendar month following the purchase, export, or loss
351-25 by fire, theft, or other accident of the aviation fuel on which the
351-26 claim is based.
351-27 (b) If on the audit of an aviation fuel distributor the
352-1 comptroller determines that a tax-free sale was made to an
352-2 unauthorized purchaser and the unauthorized purchaser could have
352-3 filed for a refund if tax had been paid at the time of sale, the
352-4 unauthorized purchaser may file a refund claim within one year
352-5 after the date of final assessment.
352-6 (c) A person who files a refund claim on any aviation fuel
352-7 used for a purpose for which a tax refund is not authorized, or who
352-8 files an invoice supporting a refund claim on which the date,
352-9 amounts, or any material information has been falsified or altered,
352-10 forfeits the right to the entire amount of the refund claim filed.
352-11 This forfeiture provision does not apply if a claimant provides
352-12 proof satisfactory to the comptroller that the incorrect refund
352-13 claim filed was due to a clerical or mathematical calculation
352-14 error.
352-15 Sec. 161.105. REFUND PAYMENTS AND FILING FEE. (a) After
352-16 examination and approval of a refund claim, the comptroller before
352-17 issuance of a refund warrant shall deduct from the amount of the
352-18 refund payment:
352-19 (1) the one percent deducted originally by the
352-20 aviation fuel distributor on the sale or delivery of the aviation
352-21 fuel; and
352-22 (2) $10 as a filing fee.
352-23 (b) The filing fees shall be set aside for use by the
352-24 comptroller in the administration and enforcement of this chapter
352-25 and for payment of expenses in furnishing the claim forms and other
352-26 forms. All filing fees shall be paid into the state treasury and
352-27 shall be paid out on vouchers and warrants in the manner prescribed
353-1 by law.
353-2 (Sections 161.106-161.150 reserved for expansion
353-3 SUBCHAPTER D. PENALTIES AND OFFENSES
353-4 Sec. 161.151. CIVIL PENALTY AND INTEREST; FAILURE TO PAY OR
353-5 REPORT. (a) If a person having a permit as an aviation fuel
353-6 distributor fails to file a report as required by this chapter or
353-7 fails to pay a tax imposed by this chapter when due, the person
353-8 forfeits five percent of the amount due as a penalty, and if the
353-9 person fails to file the report or pay the tax within 30 days after
353-10 the day on which the tax or report is due, the person forfeits an
353-11 additional five percent.
353-12 (b) The minimum penalty imposed by this section is $10.
353-13 (c) The comptroller may add a penalty of 75 percent of the
353-14 amount of taxes, penalties, and interest due if failure to file the
353-15 report or pay the tax when it becomes due is attributable to fraud
353-16 or an intent to evade the application of this chapter or a rule
353-17 adopted under this chapter or Chapter 111.
353-18 Sec. 161.152. VENUE OF COLLECTION SUITS. A suit,
353-19 injunction, or other proceeding at law available for the
353-20 establishment or collection of any claim for delinquent taxes,
353-21 penalties, or interest due under this chapter and the enforcement
353-22 of this chapter may be brought in Travis County or any other county
353-23 in which venue lies under other law.
353-24 Sec. 161.153. PROHIBITED ACTS; CIVIL PENALTIES. A person
353-25 forfeits to the state a civil penalty of not less than $25 or more
353-26 than $200 if the person:
353-27 (1) refuses to stop and permit the inspection and
354-1 examination of a motor vehicle transporting aviation fuel on demand
354-2 of a peace officer or the comptroller;
354-3 (2) transports aviation fuel on the public highways in
354-4 a cargo tank that has a connection by pipe, tube, valve, or
354-5 otherwise with the fuel injector or carburetor or with the fuel
354-6 supply tank feeding the fuel injector or carburetor of the motor
354-7 vehicle transporting the product;
354-8 (3) fails or refuses to comply with or violates a
354-9 provision of this chapter; or
354-10 (4) fails or refuses to comply with or violates a rule
354-11 adopted for the administration of this chapter by the comptroller.
354-12 Sec. 161.154. CRIMINAL OFFENSES. Except as provided by
354-13 Section 161.155, a person commits an offense if the person
354-14 intentionally or knowingly:
354-15 (1) refuses to stop and permit the inspection and
354-16 examination of a motor vehicle transporting or using aviation fuel
354-17 on the demand of a peace officer or the comptroller;
354-18 (2) transports aviation fuel on the public highways in
354-19 any tank that has a connection by pipe, tube, valve, or otherwise
354-20 with the fuel injector or carburetor or with the fuel supply tank
354-21 feeding the fuel injector or carburetor of the motor vehicle;
354-22 (3) refuses to permit the comptroller or the attorney
354-23 general to inspect, examine, or audit any books and records
354-24 required to be kept by an aviation fuel distributor, aviation fuel
354-25 dealer, common or contract carrier, or any person required to hold
354-26 a permit under this chapter;
354-27 (4) refuses to permit the comptroller or the attorney
355-1 general to inspect or examine any plant, equipment, materials, or
355-2 premises where aviation fuel is produced, processed, stored, sold,
355-3 delivered, or used;
355-4 (5) refuses to permit the comptroller or the attorney
355-5 general to measure or gauge the contents of or take samples from
355-6 any storage tank or container on premises where aviation fuel is
355-7 produced, processed, stored, sold, delivered, or used;
355-8 (6) is an aviation fuel distributor or dealer and
355-9 fails or refuses to make or deliver to the comptroller a report
355-10 required by this chapter to be made and delivered to the
355-11 comptroller;
355-12 (7) conceals aviation fuel with the intent of engaging
355-13 in any conduct prohibited by this chapter;
355-14 (8) refuses, while transporting aviation fuel, to stop
355-15 the motor vehicle the person is operating when called on to do so
355-16 by a person authorized to stop the motor vehicle;
355-17 (9) refuses to surrender a motor vehicle and cargo for
355-18 impoundment after being ordered to do so by a person authorized to
355-19 impound the motor vehicle and cargo;
355-20 (10) transports aviation fuel in any quantity for
355-21 which a cargo manifest is required to be carried without possessing
355-22 or exhibiting on demand by an officer authorized to make the demand
355-23 a cargo manifest containing the information required to be shown on
355-24 the manifest;
355-25 (11) mutilates, destroys, or secretes a record
355-26 required by this chapter to be kept by any person required to hold
355-27 a permit required by this chapter;
356-1 (12) is an aviation fuel distributor or other person
356-2 required to hold a permit under this chapter, or is the agent or
356-3 employee of such a person, and makes a false entry or fails to make
356-4 an entry in the books and records required under this chapter to be
356-5 made by the person;
356-6 (13) transports in any manner aviation fuel under a
356-7 false cargo manifest;
356-8 (14) engages in an aviation fuel transaction that
356-9 requires that the person have a permit under this chapter without
356-10 then and there holding the required permit;
356-11 (15) makes and delivers to the comptroller a report
356-12 required under this chapter to be made and delivered to the
356-13 comptroller if the report contains false information;
356-14 (16) forges, falsifies, or alters an invoice for any
356-15 fuel if the invoice is prescribed by law;
356-16 (17) makes any statement, knowing the statement to be
356-17 false, in a claim for a tax refund filed with the comptroller;
356-18 (18) fails to remit any tax funds collected by an
356-19 aviation fuel distributor or any other person;
356-20 (19) holds an aviation fuel dealer's permit and makes
356-21 a sale or use of any gasoline or diesel fuel required to be taxed
356-22 under Chapter 153;
356-23 (20) makes a sale of aviation fuel tax free to any
356-24 person who is not permitted as an aviation fuel distributor or
356-25 except as otherwise authorized by this chapter; or
356-26 (21) is an aviation fuel distributor or aviation fuel
356-27 dealer who purchases aviation fuel with the intent to evade any tax
357-1 imposed by this chapter.
357-2 Sec. 161.155. CRIMINAL OFFENSES; CONTINUING VIOLATION.
357-3 Each day that a refusal prohibited by Section 161.154(3), (4), or
357-4 (5) continues is a separate offense.
357-5 Sec. 161.156. CRIMINAL PENALTIES. (a) An offense under
357-6 Section 161.154(1) or (2) is a Class C misdemeanor.
357-7 (b) An offense under Section 161.154(3), (4), (5), or (6) is
357-8 a Class B misdemeanor.
357-9 (c) An offense under Section 161.154(7), (8), (9), or (10)
357-10 is a Class A misdemeanor.
357-11 (d) An offense under Section 161.154(11), (12), (13), (14),
357-12 (15), (16), or (17) is a felony of the third degree.
357-13 (e) An offense under Section 161.154(18), (19), (20), or
357-14 (21) is a felony of the second degree.
357-15 (f) Violations of three or more separate offenses under
357-16 Sections 161.154(11) through (17) committed pursuant to one scheme
357-17 or continuous course of conduct may be considered as one offense
357-18 and punished as a felony of the second degree.
357-19 Sec. 161.157. CRIMINAL PENALTIES: CORPORATIONS AND
357-20 ASSOCIATIONS. (a) Except as provided by Subsection (b),
357-21 Subchapter E, Chapter 12, Penal Code, applies to offenses under
357-22 this chapter committed by a corporation or association.
357-23 (b) The court may not fine a corporation or association
357-24 under Section 12.51(c), Penal Code, unless the amount of the fine
357-25 under that subsection is greater than the amount that could be
357-26 fixed by the court under Section 12.51(b), Penal Code.
357-27 (c) In addition to a sentence imposed on a corporation, the
358-1 court shall give notice of the conviction to the attorney general
358-2 as required by Article 17A.09, Code of Criminal Procedure.
358-3 Sec. 161.158. CRIMINAL PROSECUTIONS: VENUE. An offense
358-4 under this chapter must be prosecuted in Travis County or in the
358-5 county in which the offense occurred.
358-6 Sec. 161.159. REMEDIES CUMULATIVE. The remedies provided
358-7 by this chapter for the state are cumulative. An action taken by
358-8 the comptroller or the attorney general does not constitute an
358-9 election to pursue a remedy to the exclusion of any other remedy
358-10 provided by this chapter or other law.
358-11 (Sections 161.160-161.200 reserved for expansion
358-12 SUBCHAPTER E. ALLOCATION OF REVENUE; OTHER TAXES
358-13 Sec. 161.201. TAX ADMINISTRATION ACCOUNT. (a) Before any
358-14 other allocation of the taxes collected under this chapter is made,
358-15 one percent of the gross amount of taxes shall be deposited in a
358-16 special account, subject to the use of the comptroller in the
358-17 administration and enforcement of this chapter.
358-18 (b) The unexpended portion of the special account shall
358-19 revert, at the end of the fiscal year, to the unobligated portion
358-20 of the general revenue fund.
358-21 Sec. 161.202. ALLOCATION OF REVENUE. Each month the
358-22 comptroller, after making deductions for refund purposes and
358-23 setting aside other amounts as provided by this chapter, shall
358-24 allocate the taxes collected under this chapter to the general
358-25 revenue fund.
358-26 Sec. 161.203. OTHER TAXES. A political subdivision may not
358-27 impose a tax, other than property taxes, on aviation fuel.
359-1 SECTION 8.31. The following sections or subsections of Title
359-2 2, Tax Code, are repealed:
359-3 (1) Section 153.110;
359-4 (2) Section 153.111;
359-5 (3) Section 153.112(b);
359-6 (4) Sections 153.117(d) and (e);
359-7 (5) Section 153.118(d);
359-8 (6) Section 153.213; and
359-9 (7) Section 153.215(b).
359-10 SECTION 8.32. (a) This article does not affect rights,
359-11 privileges, duties, obligations, or powers that matured, penalties
359-12 that were incurred, or proceedings that were begun before its
359-13 effective date.
359-14 (b) The provisions of Chapter 153, Tax Code, amended by this
359-15 article, as they existed immediately before the effective date of
359-16 this article, remain in effect only for the purposes of collecting,
359-17 administering, and allocating the taxes imposed under that chapter
359-18 before the effective date of this article.
359-19 SECTION 8.33. (a) This article takes effect January 1,
359-20 1998.
359-21 (b) Effective September 1, 1997, the comptroller may adopt
359-22 rules in anticipation of the effective date of Chapter 161, Tax
359-23 Code, as added by this article, and may prescribe, print, and
359-24 distribute forms and other information that will be needed on the
359-25 effective date of that chapter.
359-26 ARTICLE 9. HOTEL OCCUPANCY TAX
359-27 SECTION 9.01. Sections 156.052 and 156.101, Tax Code, are
360-1 amended to read as follows:
360-2 Sec. 156.052. Rate of Tax. The rate of the tax imposed by
360-3 this chapter is 6.25 [six] percent of the price paid for a room in
360-4 a hotel.
360-5 Sec. 156.101. Exception--Permanent Resident. This chapter
360-6 does not impose a tax on the occupancy or right to occupancy by the
360-7 same individual of [a person who has the right to use or possess] a
360-8 room in a hotel for at least 30 consecutive days, so long as there
360-9 is no interruption of payment for the period.
360-10 SECTION 9.02. This article takes effect September 1, 1997.
360-11 ARTICLE 10. CIGARETTE AND TOBACCO PRODUCTS TAX
360-12 SECTION 10.01. Section 154.021(b), Tax Code, is amended to
360-13 read as follows:
360-14 (b) The tax rates are:
360-15 (1) $30.50 [$20.50] per thousand on cigarettes
360-16 weighing three pounds or less per thousand; and
360-17 (2) the rate provided by Subdivision (1) plus $2.10
360-18 per thousand on cigarettes weighing more than three pounds per
360-19 thousand.
360-20 SECTION 10.02. Section 155.021(b), Tax Code, is amended to
360-21 read as follows:
360-22 (b) The tax rates are:
360-23 (1) 1.5 cents [one cent] per 10 or fraction of 10 on
360-24 cigars weighing three pounds or less per thousand;
360-25 (2) $11.25 [$7.50] per thousand on cigars that:
360-26 (A) weigh more than three pounds per thousand;
360-27 and
361-1 (B) sell at factory list price, exclusive of any
361-2 trade discount, special discount, or deal, for 3.3 cents or less
361-3 each;
361-4 (3) $16.50 [$11] per thousand on cigars that:
361-5 (A) weigh more than three pounds per thousand;
361-6 (B) sell at factory list price, exclusive of any
361-7 trade discount, special discount, or deal, for more than 3.3 cents
361-8 each; and
361-9 (C) contain no substantial amount of nontobacco
361-10 ingredients; and
361-11 (4) $22.50 [$15] per thousand on cigars that:
361-12 (A) weigh more than three pounds per thousand;
361-13 (B) sell at factory list price, exclusive of any
361-14 trade discount, special discount, or deal, for more than 3.3 cents
361-15 each; and
361-16 (C) contain a substantial amount of nontobacco
361-17 ingredients.
361-18 SECTION 10.03. Section 155.0211(b), Tax Code, is amended to
361-19 read as follows:
361-20 (b) The tax rate for tobacco products other than cigars is
361-21 52.820 [35.213] percent of the manufacturer's list price, exclusive
361-22 of any trade discount, special discount, or deal.
361-23 SECTION 10.04. This article takes effect September 1, 1997.
361-24 ARTICLE 11. MANUFACTURED HOUSING SALES AND USE TAX
361-25 SECTION 11.01. (a) Section 158.051, Tax Code, is amended to
361-26 read as follows:
361-27 Sec. 158.051. Tax Imposed. A tax is imposed on the initial
362-1 sale in this state of every new manufactured home at the rate of
362-2 6.25 [five] percent of the amount of the sales price determined as
362-3 provided by Section 158.052 of this code.
362-4 (b) This section takes effect October 1, 1997.
362-5 ARTICLE 12. GAS, ELECTRIC, AND WATER SERVICE TAX
362-6 SECTION 12.01. The heading to Subchapter B, Chapter 182, Tax
362-7 Code, is amended to read as follows:
362-8 SUBCHAPTER B. GAS, ELECTRIC, AND WATER SERVICE
362-9 [UTILITY] COMPANIES
362-10 SECTION 12.02. Section 182.021, Tax Code, is amended to read
362-11 as follows:
362-12 Sec. 182.021. Definitions. In this subchapter:
362-13 (1) "Service ["Utility] company" means a person,
362-14 including a cooperative or nonprofit corporation or a political
362-15 subdivision of this state, who conducts business in this state [who
362-16 owns or operates a gas, electric light, electric power, or water
362-17 works, or water and light plant used for local sale and
362-18 distribution located within an incorporated city or town in this
362-19 state].
362-20 (2) "Business" means selling:
362-21 (A) [the providing of] gas, electric light,
362-22 electric power, or water to any person for any use, other than for
362-23 resale to another person; or
362-24 (B) the transportation of gas, electric light,
362-25 electric power, or water.
362-26 SECTION 12.03. Section 182.022, Tax Code, is amended to read
362-27 as follows:
363-1 Sec. 182.022. Imposition and Rate of Tax. (a) A tax is
363-2 imposed on each service [utility] company doing business in this
363-3 state [located in an incorporated city or town having a population
363-4 of more than 1,000, according to the last federal census next
363-5 preceding the filing of the report].
363-6 (b) The tax rate is 2.25 [rates are:]
363-7 [(1) .581] percent of the gross receipts from business
363-8 done in this state [an incorporated city or town having a
363-9 population of more than 1,000 but less than 2,500, according to the
363-10 last federal census next preceding the filing of the report;]
363-11 [(2) 1.07 percent of the gross receipts from business
363-12 done in an incorporated city or town having a population of 2,500
363-13 or more but less than 10,000, according to the last federal census
363-14 next preceding the filing of the report; and]
363-15 [(3) 1.997 percent of the gross receipts from business
363-16 done in an incorporated city or town having a population of 10,000
363-17 or more, according to the last federal census next preceding the
363-18 filing of the report].
363-19 SECTION 12.04. Section 182.024, Tax Code, is amended to read
363-20 as follows:
363-21 Sec. 182.024. Political Subdivisions. No city or other
363-22 political subdivision of this state may impose an occupation tax or
363-23 charge of any sort on a service [utility] company taxed under this
363-24 subchapter.
363-25 SECTION 12.05. Section 182.026, Tax Code, is amended to read
363-26 as follows:
363-27 Sec. 182.026. EFFECT AND APPLICABILITY OF SUBCHAPTER [NOT
364-1 APPLICABLE]. (a) This subchapter does not apply to the retail
364-2 sale of:
364-3 (1) water in bottles or other similar containers of
364-4 five gallons or less; or
364-5 (2) natural gas to an electric utility company [a
364-6 utility company owned and operated by a city, town, county, water
364-7 improvement district, or conservation district].
364-8 (b) This subchapter does not:
364-9 (1) affect collection of ad valorem taxes; or
364-10 (2) impair or alter a provision of a contract,
364-11 agreement, or franchise made between a city and a public utility
364-12 company relating to a payment made to the city.
364-13 SECTION 12.06. Section 182.023, Tax Code, is repealed.
364-14 SECTION 12.07. This article takes effect January 1, 1998,
364-15 and applies to gross receipts received from business done in this
364-16 state on or after that date. Gross receipts from business done in
364-17 this state before that date are governed by the law in effect when
364-18 the business was done, and that law is continued in effect for that
364-19 purpose.
364-20 ARTICLE 13. INTERSTATE MOTOR CARRIER SALES AND USE TAX
364-21 SECTION 13.01. Subtitle E, Title 2, Tax Code, is amended by
364-22 adding Chapter 157 to read as follows:
364-23 CHAPTER 157. INTERSTATE MOTOR CARRIER SALES AND USE TAX
364-24 SUBCHAPTER A. GENERAL PROVISIONS
364-25 Sec. 157.001. DEFINITIONS. In this chapter:
364-26 (1) "Person" includes an individual, firm,
364-27 partnership, joint venture, corporation, association, organization,
365-1 or group or combination acting as a unit.
365-2 (2) "Motor carrier" means:
365-3 (A) a person who transports persons or property
365-4 for hire or who holds himself out to the public as willing to
365-5 transport persons or property for hire by motor vehicle;
365-6 (B) a person who leases, rents, or otherwise
365-7 provides a motor vehicle for the use of others and who in
365-8 connection therewith in the regular course of business provides,
365-9 procures, or arranges for, directly, indirectly, or by course of
365-10 dealing, a driver or operator therefor;
365-11 (C) a person who operates a motor vehicle over
365-12 the public highways of this state for the purpose of transporting
365-13 persons or property when the transportation is incidental to a
365-14 primary business enterprise, other than transportation, in which
365-15 such person is engaged; or
365-16 (D) a person who engages in transportation by
365-17 motor vehicle of persons or property for compensation, other than
365-18 transportation referred to in Paragraph (A) of this subdivision,
365-19 under continuing contracts with one person or a limited number of
365-20 persons either:
365-21 (i) for the furnishing of transportation
365-22 services through the assignment of motor vehicles for a continuing
365-23 period of time to the exclusive use of each person served; or
365-24 (ii) for the furnishing of transportation
365-25 services designed to meet the distinct and peculiar needs of each
365-26 individual customer which are not normally provided by a common
365-27 carrier.
366-1 (3) "Interstate motor vehicle" means a motor vehicle
366-2 whose registration fees could be apportioned if the motor vehicle
366-3 were registered in a state or province of a country which was a
366-4 member of the International Registration Plan. For the purposes of
366-5 this chapter, a bus used in transportation of chartered parties
366-6 shall be considered an interstate motor vehicle if it meets all the
366-7 standards required of other motor vehicles for apportioned
366-8 registration fees.
366-9 (4) "Truck-tractor" means every motor vehicle designed
366-10 or used primarily for drawing other vehicles, and not so
366-11 constructed as to carry a load other than a part of the weight of
366-12 the vehicle and load so drawn.
366-13 (5) "Commercial motor vehicle" means any motor vehicle
366-14 (other than a motorcycle or passenger car) designed or used
366-15 primarily for the transportation of property or persons.
366-16 (6) "Trailer" means every vehicle designed or used to
366-17 carry its load wholly on its own structure and to be drawn by a
366-18 motor vehicle.
366-19 (7) "Semitrailer" means a vehicle of the trailer type
366-20 so designed or used in conjunction with a motor vehicle that some
366-21 part of its own weight and that of its load rests upon or is
366-22 carried by another vehicle, including a van, flatbed, tank,
366-23 dumpster, dolly, jeep, stinger, auxiliary axle, or converter gear.
366-24 (8) "Trip-lease equipment" means a motor vehicle
366-25 leased between any person and a motor carrier on a single trip
366-26 basis and driven by the lessor or an employee of the lessor.
366-27 (9) "Purchase" means a lease of or a transfer of title
367-1 to a motor vehicle, trailer, or semitrailer for consideration.
367-2 (10) "Preceding year" means the period of 12
367-3 consecutive calendar months immediately prior to January 1 or any
367-4 other day that the comptroller may designate.
367-5 (11) "Lease" means an agreement by an owner of a motor
367-6 vehicle, trailer, or semitrailer to give to another for longer than
367-7 180 days under a single agreement exclusive use of the vehicle
367-8 without a driver for consideration.
367-9 (Sections 157.002-157.100 reserved for expansion
367-10 SUBCHAPTER B. IMPOSITION OF TAX
367-11 Sec. 157.101. TAXES IMPOSED. Sales and use taxes are
367-12 imposed on interstate motor vehicles, trailers, and semitrailers:
367-13 (1) purchased in this state or purchased outside this
367-14 state and brought into this state by a motor carrier that is a
367-15 resident of this state or is domiciled or doing business in this
367-16 state;
367-17 (2) hired with a driver by a motor carrier that is a
367-18 resident of this state or is domiciled or doing business in this
367-19 state to transport persons or property over the carrier's routes
367-20 and under the authority of the carrier's permits; or
367-21 (3) contracted by a motor carrier that is a resident
367-22 of this state or is domiciled or doing business in this state for
367-23 use as trip-leased equipment.
367-24 Sec. 157.102. TAX RATE. (a) Except as provided in
367-25 Subsections (c), (d), and (e) of this section, the payment of the
367-26 tax is the responsibility of the motor carrier operating the motor
367-27 vehicle and the tax rate on an interstate motor vehicle shall be
368-1 calculated as follows:
368-2 (1) The carrier's total miles operated in Texas by
368-3 interstate truck-tractors and interstate commercial motor vehicles
368-4 during the preceding year is divided by the total miles operated by
368-5 the same interstate truck-tractors and interstate commercial motor
368-6 vehicles operated in Texas during the preceding year;
368-7 (2) The percentage calculated in Subdivision (1) of
368-8 this subsection is multiplied by 6-1/4 percent of the purchase
368-9 price of each interstate motor vehicle purchased in Texas or first
368-10 brought into the State of Texas during the reporting period. If a
368-11 lease price is used in this formula, charges for gasoline,
368-12 maintenance, insurance, and pass-through charges, such as federal
368-13 highway use tax and fees for licensing and registration, may be
368-14 excluded from the lease price;
368-15 (3)(A) From the amount computed in Subdivision (2) of
368-16 this subsection may be deducted the amount of sales and use tax
368-17 paid on the interstate motor vehicle multiplied by the formula in
368-18 Subdivision (1) of this subsection;
368-19 (B) If an operator is paying sales or use tax on
368-20 lease payments, he may take the credit allowed by Paragraph (A) of
368-21 this subdivision on a quarterly basis.
368-22 (b) If a motor carrier has not operated in Texas during the
368-23 preceding year, it shall estimate the miles it will drive during
368-24 the year and use the estimate in the calculations set forth in
368-25 Subsection (a) of this section. The carrier shall adjust any
368-26 overpayments or underpayments of tax based on actual mileage in the
368-27 first reporting period after a year of operation.
369-1 (c)(1) The payment of the tax is the responsibility of the
369-2 motor carriers operating the motor vehicle, and the tax rate on an
369-3 interstate trailer or semitrailer being purchased or first brought
369-4 into Texas during a reporting period shall be calculated as
369-5 follows:
369-6 (A) The number of truck-tractors operated in
369-7 Texas by the motor carrier during the reporting period is divided
369-8 by the total number of truck-tractors operated by a motor carrier
369-9 in the reporting period;
369-10 (B) The percentage calculated in Paragraph (A)
369-11 of this subdivision is multiplied by 6-1/4 percent of the purchase
369-12 price of all trailers and semitrailers purchased during the
369-13 reporting period;
369-14 (C) The amount calculated in Paragraph (B) of
369-15 this subdivision is multiplied by the formula in Subsection (a)(1)
369-16 of this section;
369-17 (D) From the amount calculated in Paragraph (C)
369-18 of this subdivision shall be deducted the amount of sales and use
369-19 taxes paid on all trailers and semitrailers purchased in the
369-20 reporting period multiplied by the percentages calculated in
369-21 Paragraph (A) of this subdivision and in Subsection (a)(1) of this
369-22 section;
369-23 (2) However, if the motor carrier can prove that the
369-24 actual number of trailers or semitrailers being purchased in Texas
369-25 or first brought into Texas during a reporting period is less than
369-26 the number under the formula in Subsection (c)(1) of this section,
369-27 the motor carrier may pay tax on the lesser number using the
370-1 formula in Subsection (a) of this section. If a motor carrier
370-2 chooses to use the actual number of trailers or semitrailers
370-3 purchased in Texas or first brought into Texas during a reporting
370-4 period and then uses the formula for other reporting periods, the
370-5 motor carrier must remit tax on trailers and semitrailers purchased
370-6 during the period it used the actual count when the trailers or
370-7 semitrailers are first brought into the state.
370-8 (d) If a motor carrier contracts to hire an interstate motor
370-9 vehicle with a driver to transport persons or property over the
370-10 carrier's routes and under the authority of the carrier's permits,
370-11 the tax rate is $25 per truck-tractor per contract and $25 per
370-12 trailer or semitrailer per contract and is the responsibility of
370-13 the motor carrier operating the motor vehicle. However, if a sales
370-14 and use tax of at least 6-1/4 percent of the purchase price of the
370-15 motor vehicle has been paid or if tax under Subsection (a), (b), or
370-16 (c) of this section has been paid, no tax is due on the vehicle
370-17 under this subsection. This subsection may not be utilized by a
370-18 motor carrier contracting with a person being controlled or having
370-19 controlling interest in the motor carrier. Controlling interest is
370-20 defined as 50 percent of ownership.
370-21 (e) If a motor carrier contracts to use trip-leased
370-22 equipment, the tax rate is $5 per motor vehicle per contract and is
370-23 the responsibility of the motor carrier operating the motor
370-24 vehicle. However, if a sales and use tax of at least 6-1/4 percent
370-25 of the purchase price of the motor vehicle has been paid or if tax
370-26 under Subsection (a) of this section has been paid, no tax is due
370-27 on the vehicle under this subsection. This subsection may not be
371-1 utilized by a motor carrier contracting with a person being
371-2 controlled or having controlling interest in the motor carrier.
371-3 Controlling interest is defined as 50 percent of ownership.
371-4 (Sections 157.103-157.200 reserved for expansion)
371-5 SUBCHAPTER C. ENFORCEMENT AND COLLECTION
371-6 Sec. 157.201. PERMITS. (a) Motor carriers required to pay
371-7 tax under this chapter shall be permitted by the comptroller.
371-8 (b) The permit may be used by the motor carrier to register
371-9 motor vehicles, trailers, and semitrailers with the county tax
371-10 assessor-collector without paying the motor vehicle sales and use
371-11 tax under Chapter 152 of this code if the motor vehicle is being
371-12 registered as an apportioned motor vehicle or if the motor vehicle
371-13 is a bus used in the interstate transportation of chartered
371-14 parties.
371-15 (c) Lessors may title an interstate motor vehicle, trailer,
371-16 and semitrailer leased for periods in excess of 180 days under the
371-17 permit authority of the motor carrier operating the vehicle without
371-18 payment of taxes imposed by Chapter 152 of this code, if the motor
371-19 vehicle is being registered as an apportioned motor vehicle or if
371-20 the motor vehicle is a bus used in the interstate transportation of
371-21 chartered parties.
371-22 Sec. 157.202. REPORTS. (a) The motor carriers subject to
371-23 the provisions of this chapter shall report and pay the tax to the
371-24 comptroller quarterly on or before the last day of the month
371-25 succeeding each calendar quarter.
371-26 (b) Notwithstanding the provisions of Subsection (a) of this
371-27 section, the comptroller may prescribe the date and period for
372-1 filing reports and payments in order to facilitate the collection
372-2 of the tax including a longer reporting period for motor carriers
372-3 owing a minimal amount of tax.
372-4 Sec. 157.203. RECORDS. Motor carriers are required to keep
372-5 records and supporting documents including mileage records
372-6 regarding the payment of motor carrier sales and use tax in such
372-7 form as the comptroller may reasonably require. The motor carriers
372-8 must keep the records for at least three years.
372-9 Sec. 157.204. PENALTY AND INTEREST. Any person who fails to
372-10 timely pay the tax required by this chapter forfeits five percent
372-11 of the amount due as a penalty, and after the first 30 days,
372-12 forfeits an additional five percent. The penalty may never be less
372-13 than $1. Delinquent taxes shall draw interest at the rate provided
372-14 by Section 111.060, beginning 60 days from the date due.
372-15 Sec. 157.205. ENFORCEMENT BY COMPTROLLER; RULES AND
372-16 REGULATIONS. (a) The comptroller shall enforce the provisions of
372-17 this chapter and may prescribe, adopt, and enforce rules relating
372-18 to the administration and enforcement of this chapter.
372-19 (b) The comptroller may promulgate such forms as are
372-20 necessary for the administration and enforcement of this chapter.
372-21 SECTION 13.02. It is the intent of the legislature that
372-22 Chapter 157, Tax Code, be reenacted to continue that chapter in
372-23 effect without interruption as it exists on August 31, 1997,
372-24 notwithstanding the repeal of that chapter by Section 31(b),
372-25 Chapter 705, Acts of the 74th Legislature, Regular Session, 1995.
372-26 SECTION 13.03. This article takes effect September 1, 1997.
373-1 ARTICLE 14. CEMENT PRODUCTION TAX
373-2 SECTION 14.01. Section 181.002, Tax Code, is amended to read
373-3 as follows:
373-4 Sec. 181.002. RATE OF TAX. The rate of the tax imposed by
373-5 this chapter is $0.05 [$0.0275] for each 100 pounds or fraction of
373-6 100 pounds of taxable cement.
373-7 SECTION 14.02. This article takes effect September 1, 1997,
373-8 and applies to cement distributed, sold, or used on or after that
373-9 date. Cement distributed, sold, or used before that date is
373-10 governed by the law in effect when the distribution, sale, or use
373-11 was made and that law is continued in effect for that purpose.
373-12 ARTICLE 15. COAL AND LIGNITE USE TAX
373-13 SECTION 15.01. Subtitle E, Title 2, Tax Code, is amended by
373-14 adding Chapter 162 to read as follows:
373-15 CHAPTER 162. COAL TAX
373-16 SUBCHAPTER A. GENERAL PROVISIONS
373-17 Sec. 162.001. DEFINITIONS. In this chapter:
373-18 (1) "Coal" includes lignite.
373-19 (2) "Lignite" means coal commonly referred to as brown
373-20 coal, of intermediate grade between peat and bituminous coal.
373-21 (3) "Use" includes storage for use in this state, but
373-22 does not include:
373-23 (A) the use by a producer of coal who owns the
373-24 coal in place and who produces the coal for the producer's own use;
373-25 or
373-26 (B) the storage for use or shipment out of this
373-27 state.
374-1 (Sections 162.002-162.020 reserved for expansion
374-2 SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX
374-3 Sec. 162.021. TAX IMPOSED. (a) A tax is imposed on the
374-4 purchase in this state of coal for use in this state.
374-5 (b) A tax is imposed on the use of coal in this state.
374-6 Sec. 162.022. RATE OF TAX. The rate of the taxes imposed by
374-7 this chapter is 7.5 percent of the total price paid for the coal,
374-8 without regard to where the purchase occurs, delivered at the site
374-9 at which the coal will be used, including transportation costs to
374-10 that site.
374-11 Sec. 162.023. USE TAX DEDUCTION. A person may deduct from
374-12 the amount of tax otherwise imposed by Section 162.021(b) the
374-13 amount of tax reported and paid under Section 162.021(a).
374-14 Sec. 162.024. PAYMENT OF TAX. On or before the 25th day of
374-15 each month, each person on whom a tax is imposed by this chapter
374-16 shall send to the comptroller the amount of tax due under this
374-17 chapter for the preceding month.
374-18 Sec. 162.025. REPORTS. On or before the 25th day of each
374-19 month, each person on whom a tax is imposed by this chapter shall
374-20 file with the comptroller a report stating:
374-21 (1) the amount of coal purchased by the person for
374-22 use in this state and used in this state during the preceding
374-23 month;
374-24 (2) the total price of that coal; and
374-25 (3) any other information required by the comptroller.
374-26 Sec. 162.026. RECORDS. A person on whom a tax is imposed by
374-27 this chapter shall keep a complete record of:
375-1 (1) the amount of coal purchased by the person for use
375-2 in this state;
375-3 (2) the use of coal in this state by the person; and
375-4 (3) any other information required by the comptroller.
375-5 (Sections 162.027-162.050 reserved for expansion
375-6 SUBCHAPTER C. PENALTIES AND OFFENSES
375-7 Sec. 162.051. INTEREST ON DELINQUENT TAX. A tax imposed by
375-8 this chapter that is delinquent draws interest as provided by
375-9 Section 111.060.
375-10 Sec. 162.052. PENALTY. (a) A person on whom a tax is
375-11 imposed by this chapter and who fails to file a report as required
375-12 by this chapter or does not pay the tax when it is due forfeits to
375-13 the state a penalty of 12 percent of the amount of tax delinquent.
375-14 (b) If a report required by this chapter is not filed or a
375-15 tax imposed by this chapter is not paid within 30 days after it is
375-16 due, the person on whom the tax is imposed forfeits to the state a
375-17 penalty of an additional 12 percent of the amount of tax
375-18 delinquent.
375-19 (c) The minimum penalty under this section is $1.
375-20 Sec. 162.053. CRIMINAL PENALTY. (a) A person who violates
375-21 this chapter commits an offense.
375-22 (b) An offense under this section is a Class C misdemeanor.
375-23 (Sections 162.054-162.070 reserved for expansion
375-24 SUBCHAPTER D. ALLOCATION AND USE
375-25 Sec. 162.071. ALLOCATION OF TAX REVENUE. All of the revenue
375-26 from the tax imposed by this chapter shall be deposited to the
375-27 credit of the general revenue fund.
376-1 SECTION 15.02. This article takes effect December 1, 1997,
376-2 and applies to coal purchased on or after that date.
376-3 ARTICLE 16. PARI-MUTUEL WAGERING
376-4 SECTION 16.01. Section 6.08(c), Texas Racing Act (Article
376-5 179e, Vernon's Texas Civil Statutes), is amended to read as
376-6 follows:
376-7 (c) A horse racing association shall set aside for the
376-8 state[:]
376-9 [(1)] an amount equal to 3.25 [one] percent of each
376-10 live pari-mutuel pool[, from the first $100 million of the total
376-11 amount of all live pari-mutuel pools of the association in a
376-12 calendar year;]
376-13 [(2) an amount equal to two percent of each live
376-14 pari-mutuel pool, from the next $100 million of the total amount of
376-15 all live pari-mutuel pools of the association in a calendar year;]
376-16 [(3) an amount equal to three percent of each live
376-17 pari-mutuel pool, from the next $100 million of the total amount of
376-18 all live pari-mutuel pools of the association in a calendar year;]
376-19 [(4) an amount equal to four percent of each live
376-20 pari-mutuel pool, from the next $100 million of the total amount of
376-21 all live pari-mutuel pools of the association in a calendar year;
376-22 and]
376-23 [(5) an amount equal to five percent of each live
376-24 pari-mutuel pool, from the total amount of all live pari-mutuel
376-25 pools of the association in a calendar year not covered by
376-26 Subdivisions (1) through (4) of this subsection].
376-27 SECTION 16.02. Section 6.09(b), Texas Racing Act (Article
377-1 179e, Vernon's Texas Civil Statutes), is amended to read as
377-2 follows:
377-3 (b) Of the amount so retained from the pari-mutuel pools,
377-4 the association shall pay to the state for the privilege of
377-5 conducting pari-mutuel wagering during the greyhound race meetings
377-6 held by such association:
377-7 (1) an amount equal to 3.25[:]
377-8 [(A) two] percent of each live pari-mutuel
377-9 pool[, from the first $100 million of the total amount of all live
377-10 pari-mutuel pools of the association in a calendar year;]
377-11 [(B) three percent of each live pari-mutuel
377-12 pool, from the next $100 million of the total amount of all live
377-13 pari-mutuel pools of the association in a calendar year;]
377-14 [(C) four percent of each live pari-mutuel pool,
377-15 from the next $100 million of the total amount of all live
377-16 pari-mutuel pools of the association in a calendar year; and]
377-17 [(D) five percent of each live pari-mutuel pool,
377-18 from the total amount of all live pari-mutuel pools of the
377-19 association in a calendar year not covered by Paragraphs (A)-(C) of
377-20 this subdivision]; and
377-21 (2) 50 percent of the breakage.
377-22 SECTION 16.03. Section 6.091(a), Texas Racing Act (Article
377-23 179e, Vernon's Texas Civil Statutes), is amended to read as
377-24 follows:
377-25 (a) An association shall distribute from the total amount
377-26 deducted as provided by Sections 6.08(a) and 6.09(a) of this Act
377-27 from each simulcast pari-mutuel pool the following shares:
378-1 (1) an amount equal to 3.25 [one] percent of each pool
378-2 as the amount set aside for the state;
378-3 (2) an amount equal to 0.25 percent of each pool set
378-4 aside to the Texas Commission on Alcohol and Drug Abuse to be
378-5 expended for the prevention of problem gambling;
378-6 (3) if the association is a horse racing association,
378-7 an amount equal to one percent of a multiple two wagering pool or
378-8 multiple three wagering pool as the amount set aside for the
378-9 Texas-bred program to be used as provided by Section 6.08(f) of
378-10 this Act;
378-11 (4) if the association is a greyhound association, an
378-12 amount equal to one percent of a multiple two wagering pool or a
378-13 multiple three wagering pool as the amount set aside for the
378-14 Texas-bred program for greyhound races, to be distributed and used
378-15 in accordance with rules of the commission adopted to promote
378-16 greyhound breeding in this state; and
378-17 (5) the remainder as the amount set aside for purses,
378-18 expenses, the sending association, and the receiving location
378-19 pursuant to a contract approved by the commission between the
378-20 sending association and the receiving location.
378-21 SECTION 16.04. This article takes effect September 1, 1997.
378-22 ARTICLE 17. GAS TARIFFS
378-23 SECTION 17.01. Article IV, Gas Utility Regulatory Act
378-24 (Article 1446e, Vernon's Texas Civil Statutes), is amended by
378-25 adding Section 4.065 to read as follows:
378-26 Sec. 4.065. TAX ADJUSTMENT. (a) Each gas utility shall add
378-27 a tax adjustment provision to the utility's rates and file a tariff
379-1 or tariffs reflecting that provision with each regulatory
379-2 authority having original jurisdiction over the utility's rates
379-3 under Section 2.01 of this Act.
379-4 (b) The tax adjustment provision takes effect and becomes
379-5 part of the gas utility's rates on the date the related tariff or
379-6 tariffs are filed under Subsection (a) of this section.
379-7 (c) The tax adjustment provision shall require the gas
379-8 utility to track changes that occur since 1996 in costs incurred
379-9 for ad valorem taxes and for gross receipts payments made under
379-10 Subchapter B, Chapter 182, Tax Code, by the utility within the
379-11 regulatory authority's jurisdiction. If the tariffs of a gas
379-12 utility in effect on September 1, 1997, allow the utility to
379-13 recover some or all of those costs, the tax adjustment provision
379-14 for that utility must take that into account.
379-15 (d) The initial tariffs filed under this section must
379-16 include data, methodology, and computations supporting the tax
379-17 adjustment provisions and the related tariff or tariffs. Each
379-18 regulatory authority with whom a tariff is filed under this section
379-19 may review the tax adjustment provision and any supporting data,
379-20 methodology, and computation to ensure that the gas utility is
379-21 accurately recovering through its rates the changes in costs
379-22 described by Subsection (c) of this section. The regulatory
379-23 authority may order changes in the tax adjustment provision and
379-24 related tariffs to be thereafter observed and in effect if the
379-25 regulatory authority determines that the gas utility is not
379-26 accurately recovering those changes in costs.
379-27 SECTION 17.02. This article takes effect January 1, 1998.
380-1 ARTICLE 18. INTERIOR DESIGN PROFESSIONAL FEE
380-2 SECTION 18.01. Article 249e, Revised Statutes, is amended by
380-3 adding Section 6A to read as follows:
380-4 Sec. 6A. INCREASE IN FEES. (a) Each of the following fees
380-5 imposed by Section 6 of this article is increased by $200:
380-6 (1) registration application fee;
380-7 (2) annual registration renewal fee; and
380-8 (3) reciprocal registration fee.
380-9 (b) Of the fee increase collected, $50 shall be deposited to
380-10 the credit of the foundation school fund and $150 shall be
380-11 deposited to the credit of the general revenue fund. This
380-12 subsection applies to the disposition of each fee increase
380-13 regardless of any other provision of law providing for a different
380-14 disposition of funds.
380-15 SECTION 18.02. This article takes effect September 1, 1997,
380-16 and applies to a fee imposed on or after that date. A fee imposed
380-17 before the effective date of this article is governed by the law in
380-18 effect on that date, and that law is continued in effect for that
380-19 purpose.
380-20 ARTICLE 19. TAXICAB PERMITS
380-21 SECTION 19.01. Subtitle H, Title 2, Tax Code, is amended by
380-22 adding Chapter 192 to read as follows:
380-23 CHAPTER 192. TAXICABS
380-24 SUBCHAPTER A. GENERAL PROVISIONS
380-25 Sec. 192.001. DEFINITIONS. In this chapter:
380-26 (1) "Tax" means the tax imposed under this chapter.
380-27 (2) "Tax year" means the calendar year.
381-1 (3) "Taxicab" means a private passenger motor vehicle
381-2 that:
381-3 (A) is licensed or otherwise regulated by a
381-4 municipality under Section 215.004, Local Government Code; or
381-5 (B) provides passenger or tangible personal
381-6 property and passenger transportation services for compensation and
381-7 is designed for carrying no more than eight passengers.
381-8 (4) "Taxpayer" means a person who owes a tax under
381-9 this chapter.
381-10 Sec. 192.002. LIMOUSINES EXCLUDED. This chapter does not
381-11 apply to a limousine that provides transportation services subject
381-12 to the tax imposed by Chapter 151.
381-13 (Sections 192.003-192.050 reserved for expansion)
381-14 SUBCHAPTER B. IMPOSITION AND PAYMENT OF TAX
381-15 Sec. 192.051. TAX IMPOSED. (a) A tax is imposed on the
381-16 operation of a taxicab in this state.
381-17 (b) The amount of the tax is $100 for each tax year that the
381-18 taxicab is operated.
381-19 Sec. 192.052. PAYMENT OF TAX. The owner of the taxicab
381-20 shall pay the tax before January 1 of the tax year.
381-21 Sec. 192.053. OPERATIONS BEGINNING AFTER TAX YEAR STARTS.
381-22 (a) A taxpayer shall pay the full amount of the tax for a taxicab
381-23 that begins operating in this state after the beginning of the tax
381-24 year but before July 1.
381-25 (b) A taxpayer shall pay $50 for a taxicab that begins
381-26 operating in this state on or after July 1 for that tax year.
381-27 Sec. 192.054. CESSATION OF OPERATIONS. A taxpayer that
382-1 begins operating a taxicab in this state during a tax year that is
382-2 taken out of service or ceases operating for any reason during the
382-3 tax year, including termination of the use of the vehicle as a
382-4 taxicab or destruction of the vehicle, owes the full tax for the
382-5 tax year.
382-6 Sec. 192.055. NO CREDIT OR REBATE. A taxpayer is not
382-7 entitled to any credit or rebate of the tax paid.
382-8 Sec. 192.056. DUE DATE OF PAYMENT. The tax is due before
382-9 the beginning of the tax year or before a taxicab may begin
382-10 operating in this state.
382-11 (Sections 192.057-192.100 reserved for expansion
382-12 SUBCHAPTER C. PERMIT AND INSIGNIA
382-13 Sec. 192.101. APPLICATION FOR TAXICAB OPERATION PERMIT.
382-14 (a) A taxpayer shall submit with the payment of the tax an
382-15 application for a taxicab operation permit.
382-16 (b) The comptroller shall provide a form to apply for the
382-17 taxicab operation permit and the taxpayer must use that form in
382-18 applying for the permit.
382-19 (c) The comptroller may require that the taxpayer include on
382-20 the application form any information that the comptroller considers
382-21 necessary to collect, administer, and enforce the tax.
382-22 (d) The comptroller may provide for an application form in
382-23 which a taxpayer who owns more than one taxicab may apply for an
382-24 operation permit for each of the taxicabs at the same time.
382-25 Sec. 192.102. ISSUANCE OF TAXICAB OPERATION PERMIT AND
382-26 INSIGNIA. (a) Except as provided by Subsection (b), on receipt of
382-27 an application form that is properly completed and the payment of
383-1 the tax, the comptroller shall issue to the taxpayer:
383-2 (1) a taxicab operation permit stating that the tax
383-3 has been paid for the taxicab; and
383-4 (2) a taxicab operation permit insignia to be affixed
383-5 to the taxicab as provided by Section 192.103.
383-6 (b) The comptroller may refuse to issue a taxicab operation
383-7 permit and taxicab operation permit insignia if the comptroller
383-8 determines that the taxpayer is delinquent in the payment of any
383-9 tax owed to the state.
383-10 (c) The comptroller shall provide for the issuance of the
383-11 taxicab operation permit and taxicab operation permit insignia in a
383-12 manner that ensures that the permit and insignia are issued to a
383-13 taxpayer for a specific taxicab and are not transferrable.
383-14 Sec. 192.103. DESIGN AND PLACEMENT OF TAXICAB OPERATION
383-15 PERMIT INSIGNIA. (a) The comptroller shall prepare the design of
383-16 the taxicab operation permit insignia.
383-17 (b) The comptroller shall require the attachment of a
383-18 taxicab operating permit insignia to the windshield of the taxicab
383-19 in a manner that best promotes the enforcement of this chapter by
383-20 the law enforcement personnel of this state.
383-21 (c) The taxpayer shall place the taxicab operation permit
383-22 insignia on the taxicab windshield in the manner required by the
383-23 comptroller.
383-24 (Sections 192.104-192.150 reserved for expansion
383-25 SUBCHAPTER D. ENFORCEMENT
383-26 Sec. 192.151. PENALTY AND INTEREST. The penalty and
383-27 interest provisions of Subchapter B, Chapter 111, apply to the tax.
384-1 Sec. 192.152. OFFENSE: FAILURE TO DISPLAY INSIGNIA. (a) A
384-2 person commits an offense if the person operates a taxicab without
384-3 displaying a taxicab operating permit insignia.
384-4 (b) An offense under this section is a Class C misdemeanor.
384-5 (c) Any peace officer of the state may enforce this section.
384-6 (d) A peace officer who exhibits a badge or other sign of
384-7 authority may stop a taxicab not displaying a taxicab operating
384-8 permit insignia on the windshield and require the owner or operator
384-9 to produce a taxicab operating permit.
384-10 (e) It is a defense to prosecution under this section that a
384-11 taxicab operating permit for the taxicab is in effect at the time
384-12 of the arrest.
384-13 Sec. 192.153. OFFENSE: DISPLAY OF FICTITIOUS INSIGNIA.
384-14 (a) A person commits an offense if the person:
384-15 (1) displays or causes or permits to be displayed a
384-16 taxicab operating permit insignia knowing it to be fictitious or
384-17 issued for another taxicab; or
384-18 (2) transfers a taxicab operating permit insignia from
384-19 a windshield or location to another windshield or location.
384-20 (b) An offense under this section is a Class C misdemeanor.
384-21 (c) A taxicab on which is displayed a taxicab operating
384-22 permit insignia in violation of this section and that is operated
384-23 or parked on a public roadway may be impounded by a peace officer
384-24 or other authorized employee of this state or a political
384-25 subdivision of this state in which the taxicab is operated or
384-26 parked.
385-1 (Sections 192.154-192.200 reserved for expansion
385-2 SUBCHAPTER E. REVENUE
385-3 Sec. 192.201. DISTRIBUTION OF REVENUE FROM TAX. The revenue
385-4 from the tax shall be deposited as follows:
385-5 (1) 25 percent to the credit of the foundation school
385-6 fund; and
385-7 (2) 75 percent to the credit of the general revenue
385-8 fund.
385-9 SECTION 19.02. Subchapter C, Chapter 548, Transportation
385-10 Code, is amended by adding Section 548.1055 to read as follows:
385-11 Sec. 548.1055. DISPLAY OF TAXICAB OPERATING PERMIT INSIGNIA
385-12 AS PREREQUISITE TO ISSUANCE OF INSPECTION CERTIFICATE. (a) An
385-13 inspection station or inspector may not issue an inspection
385-14 certificate for a taxicab, as that term is defined by Section
385-15 192.001, Tax Code, unless a current taxicab operating permit
385-16 insignia required under Chapter 192, Tax Code, is displayed on the
385-17 taxicab.
385-18 (b) An inspection station is not liable to a person,
385-19 including the state, for issuing an inspection certificate in
385-20 reliance on the presence of a current taxicab operating permit
385-21 insignia displayed on the taxicab.
385-22 SECTION 19.03. (a) Except as provided by Subsections (b)
385-23 and (c) of this section, this article takes effect September 1,
385-24 1997.
385-25 (b) Notwithstanding any provisions of Chapter 192, Tax Code,
385-26 as added by this article, no taxicab permit is required before
385-27 January 1, 1998.
386-1 (c) Section 19.02 of this article takes effect January 1,
386-2 1998.
386-3 ARTICLE 20. COIN-OPERATED MACHINES
386-4 SECTION 20.01. Article 8801, Revised Statutes, is amended by
386-5 amending Subdivisions (3) and (6) and adding Subdivision (8) to
386-6 read as follows:
386-7 (3) The term "coin-operated machine" means every
386-8 machine or device of any kind or character that [which] is operated
386-9 by or with coins, or metal slugs, tokens or checks, "music
386-10 coin-operated machines," "service coin-operated machines,"
386-11 "cash-dispensing machines," and "skill or pleasure coin-operated
386-12 machines" as those terms are hereinafter defined, shall be included
386-13 in such terms.
386-14 (6) The term "service coin-operated machines" means
386-15 [every pay toilet, pay telephone and all other] machines or devices
386-16 which dispense service only and not merchandise, music, skill or
386-17 pleasure.
386-18 (8) The term "cash-dispensing machine" means an
386-19 automated or electronic machine that, on insertion of a properly
386-20 coded card, the entry of data through a keyboard, or both,
386-21 dispenses currency or cash. The term does not include a machine
386-22 used in the retail purchase of tangible personal property without
386-23 regard to whether the purchase includes an amount, received in
386-24 cash, over and above the sales price of the items purchased.
386-25 SECTION 20.02. Article 8802(1), Revised Statutes, is amended
386-26 to read as follows:
386-27 (1) Every "owner", save an owner holding an import
387-1 license and holding coin-operated machines solely for re-sale, who
387-2 exhibits, displays, or who permits to be exhibited or displayed in
387-3 this State any "coin-operated machine" shall pay, and there is
387-4 hereby levied on each "coin-operated machine", as defined herein in
387-5 Article 8801, except as are exempt herein, an annual occupation tax
387-6 of $60.00. An annual occupation tax of $100 is imposed on
387-7 "cash-dispensing machines." The tax shall be paid to the
387-8 comptroller by cashier's check or money order. The annual tax
387-9 levied by this chapter may be collected by the comptroller on a
387-10 quarterly basis. The comptroller may establish procedures for
387-11 quarterly collection and set due dates for the tax payments. The
387-12 tax due from the owner of a coin-operated machine first exhibited
387-13 or displayed in this State later than March 31 shall be prorated on
387-14 a quarterly basis, with one-fourth of the annual tax due for each
387-15 quarter or portion of a quarter remaining in the calendar year. No
387-16 refund or credit of the annual tax levied by this chapter may be
387-17 allowed to any owner who ceases the exhibition or display of any
387-18 coin-operated machine prior to the end of any calendar year.
387-19 Subtitle B, Title 2, Tax Code, applies to the administration,
387-20 collection, and enforcement of the taxes, penalties, and interest
387-21 imposed by this chapter.
387-22 SECTION 20.03. Article 8803, Revised Statutes, is amended to
387-23 read as follows:
387-24 Art. 8803. EXEMPTIONS FROM TAX. The following machines are
387-25 exempt from the tax under this chapter:
387-26 (1) machines selling newspapers;
387-27 (2) pay toilets;
388-1 (3) a machine the sales of which are exempted by
388-2 Section 151.305, Tax Code;
388-3 (4) machines that provide change only if no charge is
388-4 made for the service;
388-5 (5) machines dispensing pressurized air;
388-6 (6) laundromat machines used to wash or dry clothes;
388-7 and
388-8 (7) any machine dispensing an item or providing a
388-9 service that is subject to:
388-10 (A) the sales and use tax under Chapter 151, Tax
388-11 Code;
388-12 (B) the cigarette tax under Chapter 154, Tax
388-13 Code;
388-14 (C) the cigars and tobacco products tax under
388-15 Chapter 155, Tax Code; or
388-16 (D) any other state tax excluding ad valorem
388-17 taxes and franchise taxes [Gas meters, pay telephones, pay toilets,
388-18 food vending machines, confection vending machines, beverage
388-19 vending machines, merchandise vending machines, and cigarette
388-20 vending machines which are now subject to an occupation or gross
388-21 receipts tax, stamp vending machines, and "service coin-operated
388-22 machines," as that term is defined, are expressly exempt from the
388-23 tax levied herein, and the other provisions of this Chapter].
388-24 SECTION 20.04. This article takes effect October 1, 1997.
388-25 ARTICLE 21. RENTER'S TAX RELIEF
388-26 SECTION 21.01. Title 1, Tax Code, is amended by adding
388-27 Chapter 51 to read as follows:
389-1 CHAPTER 51. PROPERTY TAX RELIEF FOR RENTERS
389-2 Sec. 51.001. DEFINITIONS. In this chapter:
389-3 (1) "Dwelling unit" means a structure or separately
389-4 secured portion of a structure designed or used for human
389-5 habitation by an individual or group of individuals constituting a
389-6 single household.
389-7 (2) "Landlord" means a person required to register
389-8 under Section 51.004.
389-9 (3) "Rent" includes the total amount charged by a
389-10 landlord or by another person on the landlord's behalf for the use
389-11 and occupancy of a dwelling unit, not including refundable property
389-12 deposits.
389-13 (4) "Tenant" means a person who rents or leases a
389-14 dwelling unit.
389-15 Sec. 51.002. REBATE TO TENANT OF LANDLORD'S PROPERTY TAX
389-16 SAVINGS. A tenant is entitled to a rebate of a portion of the
389-17 landlord's school district ad valorem tax savings for 1997, 1998,
389-18 and 1999 as provided by this chapter to the extent the landlord
389-19 does not reduce rents in the amount of those tax savings.
389-20 Sec. 51.003. EXCEPTIONS. (a) This chapter does not apply
389-21 to property or a dwelling unit that is subject to the state ad
389-22 valorem tax.
389-23 (b) This chapter does not apply to:
389-24 (1) a dwelling unit that did not exist as an
389-25 inhabitable dwelling unit on or before January 1, 1996; or
389-26 (2) property that did not include a dwelling unit on
389-27 January 1, 1996.
390-1 Sec. 51.004. LANDLORD REGISTRATION AND REPORT. (a) Each
390-2 person who in 1997, 1998, or 1999 owns property containing four or
390-3 more dwelling units held for rent or lease, considering all the
390-4 property owned by the person at any time during the year, shall
390-5 register with the comptroller not later than January 31 of the year
390-6 following that year. For purposes of this section, a person who
390-7 leases property containing four or more dwelling units from the
390-8 owner or owners of the property and leases the dwelling units
390-9 without direct supervision or control by the owners is considered
390-10 the owner of the property.
390-11 (b) The registration must include information the
390-12 comptroller requires to administer this chapter, including:
390-13 (1) identification and ownership of the property
390-14 containing the dwelling units and the number and location of the
390-15 dwelling units;
390-16 (2) information relating to school district ad valorem
390-17 taxes imposed on the property for that year, including the
390-18 appraised value and taxable value of the property for those
390-19 purposes; and
390-20 (3) information, including names and addresses,
390-21 relating to the tenants of the dwelling units during that year and
390-22 to the rents charged to those tenants during that year.
390-23 Sec. 51.005. FEE IMPOSED. (a) A fee is imposed on each
390-24 landlord.
390-25 (b) The amount of the fee is equal to the amount of the
390-26 landlord's property tax reduction for the year, computed by
390-27 determining the amount by which school district ad valorem taxes
391-1 imposed on all property containing a dwelling unit owned by the
391-2 landlord for the year for which the fee is imposed is less than the
391-3 sum of the school tax base for each of those properties for that
391-4 year.
391-5 (c) The amount of the fee, including a reduction for any
391-6 credits allowed against the fee, may not be less than zero.
391-7 (d) The school tax base for a year on a property is computed
391-8 by multiplying the taxable value of the property for taxation by a
391-9 school district for the year times the total school district ad
391-10 valorem tax rate imposed on the property for 1996.
391-11 (e) For purposes of Subsection (d), the comptroller shall
391-12 reduce the taxable value of the property for the year for which the
391-13 fee is imposed by the portion of that value attributable to
391-14 improvements to the property made after January 1, 1996, that were
391-15 not considered in determining the appraised value of the property
391-16 for 1996 school district taxes.
391-17 Sec. 51.006. CREDIT FOR RENT REDUCTION. (a) A landlord is
391-18 entitled to a credit against the fee imposed by this chapter for a
391-19 calendar year in an amount equal to the total amount of rent
391-20 reduction the landlord provides to the tenants of the landlord's
391-21 dwelling units in that year.
391-22 (b) The total amount of a landlord's rent reduction is the
391-23 amount by which the total rent charged by the landlord for the year
391-24 in which the fee is imposed to tenants of the landlord's dwelling
391-25 units is less than the amount that would have been charged to those
391-26 tenants in that year using the applicable rents in effect on
391-27 January 1, 1997, or the most recent date before that date on which
392-1 a rent was charged if the unit was not occupied on January 1, 1997.
392-2 (c) In determining the amount of a landlord's rent
392-3 reduction, the percentage by which the landlord reduced rent on a
392-4 dwelling unit occupied by a family member of the landlord in excess
392-5 of the percentage of rent reduction to other dwelling units in the
392-6 same structure may not be considered.
392-7 Sec. 51.007. PRORATION. (a) The comptroller by rule shall
392-8 provide for a proportional reduction of the amount of a fee imposed
392-9 under this chapter and the amount of credit against the fee to the
392-10 extent a landlord establishes that the landlord did not own the
392-11 applicable property for the entire year for which the fee is
392-12 imposed.
392-13 (b) The comptroller by rule shall provide for the exclusion
392-14 from the fee and applicable calculations under this chapter of a
392-15 portion of real property containing one or more dwelling units that
392-16 is not used directly or indirectly in connection with the
392-17 residential use of the property.
392-18 Sec. 51.008. COLLECTION OF FEE. (a) The comptroller by
392-19 rule shall provide for the payment of the fee and the collection of
392-20 delinquent fees.
392-21 (b) The fee is subject to Subtitle B, Title 2, Tax Code.
392-22 (c) Penalties and interest on a delinquent fee shall be
392-23 deposited to the credit of the general revenue fund.
392-24 (d) After deduction for the costs of administering this
392-25 chapter, the fees collected under this section shall be held with
392-26 the state treasury in trust for payments to renters under this
392-27 chapter.
393-1 Sec. 51.009. PAYMENT OF REBATE TO TENANTS. (a) The
393-2 comptroller shall rebate the amount of a fee collected from a
393-3 landlord under this chapter to each tenant of the landlord during
393-4 the year for which the fee is imposed in proportion to the total
393-5 rent paid by each tenant to the landlord during the year. The
393-6 comptroller shall rebate only the amount of the fee actually
393-7 received or collected from the landlord, and this section does not
393-8 obligate the state to pay the amount of a rebate from state funds.
393-9 (b) The comptroller shall prescribe procedures for payment
393-10 of rebates under this section, including procedures by which a
393-11 person may apply to receive the rebate if the comptroller is unable
393-12 to deliver the rebate to the person using information provided by
393-13 the landlord.
393-14 (c) The comptroller shall transfer any amount of a fee
393-15 collected under this chapter that the comptroller is not able to
393-16 rebate to the appropriate tenant to the general revenue fund.
393-17 Sec. 51.010. ADMINISTRATIVE AUTHORITY. The comptroller
393-18 shall prescribe rules, procedures, and forms as necessary to
393-19 administer this chapter.
393-20 Sec. 51.011. EXPIRATION. This chapter expires January 1,
393-21 2005.
393-22 SECTION 21.02. This article takes effect September 1, 1997.
393-23 ARTICLE 22. EFFECTIVE DATE; CONTINGENCY; EMERGENCY
393-24 SECTION 22.01. (a) Except as otherwise provided by this
393-25 Act, this Act takes effect September 1, 1997, but only if the
393-26 constitutional amendment proposed by H.J.R. No. 4, 75th
393-27 Legislature, Regular Session, 1997, is approved by the voters. If
394-1 that amendment is not approved by the voters, this Act has no
394-2 effect.
394-3 (b) The change in law made by this Act to a tax or fee does
394-4 not affect the liability for a tax or fee. The liability for a tax
394-5 or fee is governed by the law in effect when the tax or fee became
394-6 due, and that law is continued in effect for the collection of the
394-7 tax or fee and for civil and criminal enforcement of the liability
394-8 for that tax or fee.
394-9 SECTION 22.02. The importance of this legislation and the
394-10 crowded condition of the calendars in both houses create an
394-11 emergency and an imperative public necessity that the
394-12 constitutional rule requiring bills to be read on three several
394-13 days in each house be suspended, and this rule is hereby suspended.