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By: McCall (Senate Sponsor - Duncan) H.B. No. 2425
(In the Senate - Received from the House May 12, 2003;
May 12, 2003, read first time and referred to Committee on Finance;
May 26, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 10, Nays 1; May 26, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2425 By: Duncan
A BILL TO BE ENTITLED
AN ACT
relating to state and certain local fiscal matters; making an
appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 103.051(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) To apply for compensation under this subchapter, the
claimant must file with the [judicial section of the] comptroller's
judiciary section [office]:
(1) an application for compensation provided for that
purpose by the comptroller;
(2) a verified copy of the pardon or court order
justifying the application for compensation; [and]
(3) a statement provided by the Texas Department of
Criminal Justice verifying the length of incarceration; and
(4) a certification of the claimant's actual innocence
of the crime for which the claimant was sentenced that is signed by
the attorney representing the state in the prosecution of felonies
in the county in which the sentence was rendered.
SECTION 2. Section 14(e), Article 42.12, Code of Criminal
Procedure, as added by Chapter 1188, Acts of the 76th Legislature,
Regular Session, 1999, is amended to read as follows:
(e) The clerk of a court that collects a fee imposed under
Subsection (c)(2) shall remit the fee to the comptroller not later
than the last day of the month following the end of the calendar
quarter in which the fee is collected, and the comptroller shall
deposit the fee into the general revenue fund. If the clerk does
not collect a fee imposed under Subsection (c)(2), the clerk is not
required to file any report required by the comptroller relating to
the collection of the fee. In requiring the payment of a fee under
Subsection (c)(2), the judge shall consider fines, fees, and other
necessary expenses for which the defendant is obligated in
establishing the amount of the fee. The judge may not:
(1) establish the fee in an amount that is greater than
25 percent of the defendant's gross income while the defendant is a
participant in residential aftercare; or
(2) require the defendant to pay the fee at any time
other than a time at which the defendant is both employed and a
participant in residential aftercare.
SECTION 3. Section 19(f), Article 42.12, Code of Criminal
Procedure, is amended to read as follows:
(f) A community corrections and supervision department
shall remit fees collected under Subsection (e) of this section to
the comptroller not later than the last day of the month following
the end of the calendar quarter in which the fee is collected. The
comptroller shall deposit the fee in the special revenue fund to the
credit of the sexual assault program established under Section
44.0061, Health and Safety Code. If the department does not collect
a fee imposed under Subsection (e), the department is not required
to file any report required by the comptroller relating to the
collection of the fee.
SECTION 4. Sections 42.259(c), (d), and (f), Education
Code, are amended to read as follows:
(c) Payments from the foundation school fund to each
category 2 school district shall be made as follows:
(1) 22 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of September of a fiscal year;
(2) 18 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of October;
(3) 9.5 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of November;
(4) 7.5 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of April;
(5) five percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of May;
(6) 10 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of June;
(7) 13 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of July; and
(8) 15 percent of the yearly entitlement of the
district shall be paid in an installment to be made after the fifth
day of September and not later than the 10th day of September of the
calendar year following the calendar year of the payment made under
Subdivision (1) [on or before the 25th day of August].
(d) Payments from the foundation school fund to each
category 3 school district shall be made as follows:
(1) 45 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of September of a fiscal year;
(2) 35 percent of the yearly entitlement of the
district shall be paid in an installment to be made on or before the
25th day of October; and
(3) 20 percent of the yearly entitlement of the
district shall be paid in an installment to be made after the fifth
day of September and not later than the 10th day of September of the
calendar year following the calendar year of the payment made under
Subdivision (1) [on or before the 25th day of August].
(f) Except as provided by Subsection (c)(8) or (d)(3), any
[Any] previously unpaid additional funds from prior years owed to a
district shall be paid to the district together with the September
payment of the current year entitlement.
SECTION 5. Section 44.901, Education Code, as amended by
Chapter 573, Acts of the 77th Legislature, Regular Session, 2001,
is amended to read as follows:
Sec. 44.901. ENERGY SAVINGS PERFORMANCE CONTRACTS [OR WATER
CONSERVATION MEASURES]. (a) In this section, "energy savings
performance contract" means a contract for energy or water
conservation measures to reduce energy or water consumption or
operating costs of school facilities in which the estimated savings
in utility costs resulting from the measures is guaranteed to
offset the cost of the measures over a specified period. The term
includes a contract for the installation or implementation of:
[The board of trustees of a school district may enter into a
contract for energy or water conservation measures to reduce energy
or water consumption or operating costs of school facilities in
accordance with this section.
[(b) A contract to which this section applies includes a
contract for the installation of:]
(1) insulation of a [the] building structure
[structures] and systems within the building;
(2) storm windows or doors, caulking or
weatherstripping, multiglazed windows or doors, heat absorbing or
heat reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
(3) automatic energy control systems, including
computer software and technical data licenses;
(4) heating, ventilating, or air-conditioning system
modifications or replacements that reduce energy or water
consumption;
(5) lighting fixtures that increase energy
efficiency;
(6) energy recovery systems;
(7) electric systems improvements;
(8) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(9) water-conserving landscape irrigation equipment;
(10) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
(A) landscape contouring, including the use of
berms, swales, and terraces; and
(B) the use of soil amendments that increase the
water-holding capacity of the soil, including compost;
(11) rainwater harvesting equipment and equipment to
make use of water collected as part of a storm-water system
installed for water quality control;
(12) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
(13) equipment needed to capture water from
nonconventional, alternate sources, including air conditioning
condensate or graywater, for nonpotable uses;
(14) metering equipment needed to segregate water use
in order to identify water conservation opportunities or verify
water savings; or
(15) other energy or water conservation-related
improvements or equipment, [(]including improvements or equipment
relating to renewable energy or nonconventional water sources or
water reuse[)].
(b) The board of trustees of a school district may enter
into an energy savings performance contract in accordance with this
section.
(c) Each [All] energy or water conservation measure
[measures] must comply with current local, state, and federal
construction, plumbing, and environmental codes and regulations.
Notwithstanding [anything to the contrary in] Subsection (a) [(b)],
an energy savings performance [a] contract may [for energy or water
conservation measures shall] not include improvements or equipment
that allow or cause water from any condensing, cooling, or
industrial process or any system of nonpotable usage over which the
public water supply system officials do not have sanitary control,
to be returned to the potable water supply.
(d) The [person with whom the] board may enter into energy
savings performance contracts only with persons who are [must be]
experienced in the design, implementation, and installation of the
energy or water conservation measures addressed by the contract.
(e) Before entering into an energy savings performance [a]
contract [for energy or water conservation measures], the board
shall require the provider of the energy or water conservation
measures to file with the board a payment and performance bond
relating to the installation of the [energy or water conservation]
measures in accordance with Chapter 2253, Government Code. The
[that is in an amount the] board [finds reasonable and necessary to
protect the interests of the school district and that] may also
require a separate bond to cover the value of the guaranteed savings
on the contract [and is conditioned on the faithful execution of the
terms of the contract].
(f) An energy savings performance contract [Energy or water
conservation measures with respect to existing buildings or
facilities] may be financed:
(1) under a lease/purchase contract that has a term
not to exceed 15 years from the final date of installation and that
meets federal tax requirements for tax-free municipal leasing or
long-term financing;
(2) with the proceeds of bonds; or
(3) under a contract with the provider of the energy or
water conservation measures that has a term not to exceed 15 years
from the final date of installation.
(g) An energy savings performance [A] contract [for energy
or water conservation measures] shall contain provisions requiring
[pursuant to which] the provider of the energy or water
conservation measures to guarantee [guarantees] the amount of the
savings to be realized by the school district under the contract.
If the term of an energy savings performance [a] contract [for
energy or water conservation measures] exceeds one year, the school
district's contractual obligations in any one year during the term
of the contract beginning after the final date of installation may
not exceed the total energy, water, wastewater, and operating cost
savings, including [but not limited to] electrical, gas, water,
wastewater, or other utility cost savings and operating cost
savings resulting from the measures, [automatic monitoring and
control] as determined by the school district in this subsection,
divided by the number of years in the contract term.
(h) An energy savings performance [A] contract shall [under
this section may] be let according to the procedures established
for procuring certain professional services by Section 2254.004,
Government Code [under competitive proposal procedures]. Notice of
the request for qualifications [proposals] shall be published in
the manner provided for competitive bidding. [Requests for
proposals must solicit quotations and must specify the relative
importance of guaranteed savings, price, return on investment,
financial performance and stability, quality, technical ability,
experience, and other evaluation factors. The contract shall be
awarded to the responsible offeror whose proposal, following
negotiations, is determined to be the most advantageous to the
school district considering the guaranteed savings and other
evaluation factors set forth in the request for proposals.]
(i) Before [To obtain the best final offers, the school
district may allow proposal revisions after submissions and before
the award of the contract.
[(j) Prior to] entering into an energy savings performance
[a] contract [under this section], the board must require that the
cost savings projected by an offeror be reviewed by a licensed
professional engineer who is not an officer or employee of an
offeror for the contract under review or otherwise associated with
the contract or the offeror. An engineer who reviews a contract
shall maintain the confidentiality of any proprietary information
the engineer acquires while reviewing the contract. Sections
1001.053 and 1001.407, Occupations Code, apply [Section 19, The
Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil
Statutes), applies] to work performed under the contract.
SECTION 6. Section 51.927, Education Code, as amended by
Chapter 573, Acts of the 77th Legislature, Regular Session, 2001,
is amended to read as follows:
Sec. 51.927. ENERGY SAVINGS PERFORMANCE CONTRACTS [OR WATER
CONSERVATION MEASURES]. (a) In this section, "energy savings
performance contract" means a contract for energy or water
conservation measures to reduce energy or water consumption or
operating costs of institutional facilities in which the estimated
savings in utility costs resulting from the measures is guaranteed
to offset the cost of the measures over a specified period. The
term [The governing board of an institution of higher education may
enter into a contract for energy or water conservation measures to
reduce energy or water consumption or operating costs of
institutional facilities in accordance with this section.
[(b) A contract to which this section applies] includes a
contract for the installation or implementation of:
(1) insulation of a building structure and systems
within a building;
(2) storm windows or doors, caulking or weather
stripping, multiglazed windows or doors, heat-absorbing or
heat-reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
(3) automatic energy control systems, including
computer software and technical data licenses;
(4) heating, ventilating, or air conditioning system
modifications or replacements that reduce energy or water
consumption;
(5) lighting fixtures that increase energy
efficiency;
(6) energy recovery systems;
(7) electric systems improvements;
(8) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(9) water-conserving landscape irrigation equipment;
(10) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
(A) landscape contouring, including the use of
berms, swales, and terraces; and
(B) the use of soil amendments that increase the
water-holding capacity of the soil, including compost;
(11) rainwater harvesting equipment and equipment to
make use of water collected as part of a storm-water system
installed for water quality control;
(12) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
(13) equipment needed to capture water from
nonconventional, alternate sources, including air conditioning
condensate or graywater, for nonpotable uses;
(14) metering equipment needed to segregate water use
in order to identify water conservation opportunities or verify
water savings; or
(15) other energy or water conservation-related
improvements or equipment, [(]including improvements or equipment
related to renewable energy or nonconventional water sources or
water reuse[)].
(b) The governing board of an institution of higher
education may enter into an energy savings performance contract in
accordance with this section.
(c) Each [All] energy or water conservation measure
[measures] must comply with current local, state, and federal
construction, plumbing, and environmental codes and regulations.
Notwithstanding [anything to the contrary in] Subsection (a) [(b)],
an energy savings performance [a] contract may [for energy or water
conservation measures shall] not include improvements or equipment
that allow or cause water from any condensing, cooling, or
industrial process or any system of nonpotable usage over which the
public water supply system officials do not have sanitary control,
to be returned to the potable water supply.
(d) The [entity with whom the] board may enter into energy
savings performance contracts only with entities that are [must be]
experienced in the design, implementation, and installation of the
energy or water conservation measures addressed by the contract.
(e) Before entering into an energy savings performance [a]
contract [for energy or water conservation measures], the board
shall require the provider of the energy or water conservation
measures to file with the board a payment and performance bond in
accordance with Chapter 2253, Government Code. The [that is in an
amount the] board may also require a separate bond to cover the
value of the guaranteed savings on [finds reasonable and necessary
to protect the interests of the institution and is conditioned on
the faithful execution of the terms of] the contract.
(f) The board may enter into an energy savings performance
[a] contract for a period of more than one year only [for energy or
water conservation measures with an entity] if the board finds that
the amount the institution would spend on the energy or water
conservation measures will not exceed the amount to be saved in
energy, water, wastewater, and operating costs over 15 years from
the date of installation. If the term of the [a] contract [for
energy or water conservation measures] exceeds one year, the
institution's [board's] contractual obligation in any year during
the term of the contract beginning after the final date of
installation may not exceed the total energy, water, wastewater,
and operating cost savings, including [but not limited to]
electrical, gas, water, wastewater, or other utility cost savings
and operating cost savings resulting from the measures [automatic
monitoring and control], as determined by the board in this
subsection, divided by the number of years in the contract term
beginning after the final date of installation. The board shall
consider all costs of the energy or water conservation measures,
including costs of design, engineering, installation, maintenance,
repairs, and debt service.
(g) An energy savings performance contract [Energy or water
conservation measures] may be financed:
(1) under a lease/purchase contract that has a term
not to exceed 15 years from the final date of installation and that
meets federal tax requirements for tax-free municipal leasing or
long-term financing, including a lease/purchase contract under the
master equipment lease purchase program administered by the Texas
Public Finance Authority under Chapter 1232, Government Code;
(2) with the proceeds of bonds; or
(3) under a contract with the provider of the energy or
water conservation measures that has a term not to exceed 15 years
from the final date of installation.
(h) An energy savings performance [A] contract [for energy
or water conservation measures] shall contain provisions requiring
[pursuant to which] the provider of the energy or water
conservation measures to guarantee [guarantees] the amount of the
savings to be realized by the institution of higher education under
the contract. [The Master Equipment Lease Purchase Program
operated by the Texas Public Finance Authority may be utilized by an
institution to fund a contract for energy or water conservation
measures so long as the costs of the energy or water conservation
measures, including costs of design, engineering, installation,
maintenance, repairs, and anticipated debt service requirements of
the Master Equipment Lease Purchase Program, do not exceed the
total energy and operating cost savings, as described in Subsection
(f), beginning after the final date of installation.]
(i) An energy savings performance [A] contract shall [under
this section may] be let according to the procedures established
for procuring certain professional services by Section 2254.004,
Government Code [under competitive sealed proposal procedures].
Notice of the request for qualifications [proposals] shall be given
in the manner provided by Section 2156.002 [for in Chapter 2156],
Government Code. The Texas Higher Education Coordinating Board, in
consultation with the State Energy Conservation Office [and the
Texas Energy Coordination Council] with regard to energy and water
conservation measures, shall establish guidelines and an approval
process for awarding energy savings performance contracts [awarded
under this section]. The guidelines must require that the cost
savings projected by an offeror be reviewed by a licensed
professional engineer who is not an officer or employee of an
offeror for the contract under review or otherwise associated with
the contract. An engineer who reviews a contract shall maintain the
confidentiality of any proprietary information the engineer
acquires while reviewing the contract. A contract is not required
to be reviewed or approved by the State Energy Conservation Office
[or Texas Energy Coordination Council]. Sections 1001.053 and
1001.407, Occupations Code, apply [Section 19, The Texas
Engineering Practice Act (Article 3271a, Vernon's Texas Civil
Statutes), applies] to work performed under the contract. [The
contract shall be awarded to the responsible offeror whose
proposal, following negotiations, is determined by the institution
to be the most advantageous to the institution considering the
guaranteed savings and other evaluation factors set forth in the
request for proposals, except that if the institution finds that no
offer is acceptable, it shall refuse all offers.]
(j) [In accordance with regulations adopted by the
institution, the institution may conduct discussions with offerors
who submit proposals and who are determined to be reasonably
qualified for the award of the contract. Offerors shall be treated
fairly and equally with respect to any opportunity for discussion
and revision of proposals. To obtain the best final offers, the
institution may allow proposal revisions after submissions and
before the award of the contract.
[(k) If provided in a request for proposals under Subsection
(i), proposals shall be opened in a manner that avoids disclosure of
the contents to competing offerors and keeps the proposals secret
during negotiations. All proposals are open for public inspection
after a contract is awarded unless the information is excepted from
disclosure under Chapter 552, Government Code.
[(l)] The legislature shall base an institution's
appropriation for energy, water, and wastewater costs during a
fiscal year on the sum of:
(1) the institution's estimated energy, water, and
wastewater costs for that fiscal year; and
(2) if an energy savings performance [a] contract
[under this section] is in effect, the institution's estimated net
savings resulting from the contract during the contract term,
divided by the number of years in the contract term.
SECTION 7. Section 54.619, Education Code, is amended by
adding Subsection (j) to read as follows:
(j) The board may temporarily suspend new enrollment in the
program on the request of the comptroller as the comptroller
considers necessary to ensure the actuarial soundness of the fund.
SECTION 8. Section 54.624, Education Code, is amended to
read as follows:
Sec. 54.624. SENIOR COLLEGE PLAN. (a) Through the senior
college plan, a prepaid tuition contract shall provide prepaid
tuition and required fees for the beneficiary to attend a public
senior college or university for a specified number of
undergraduate credit hours not to exceed the typical number of
hours required for a baccalaureate degree awarded by a public
senior college or university.
(b) When the beneficiary of a senior college plan prepaid
tuition contract enrolls in a public senior college or university,
the university shall accept as payment in full of the beneficiary's
tuition and required fees the lesser of:
(1) the amount of tuition and required fees charged by
the institution; or
(2) an amount paid by the board under the contract
equal to the weighted average amount of tuition and required fees of
all public senior colleges and universities for that semester or
other academic period as determined by the board.
(c) Each public senior college or university shall provide
the information requested by the board on or before June 1 each year
to assist the board in determining the weighted average amount of
tuition and required fees of all public senior colleges and
universities for each semester or other academic term of the
following academic year for purposes of this section.
SECTION 9. Section 403.016(f), Government Code, is amended
to read as follows:
(f)(1) Except as provided by Subdivisions [Subdivision]
(2) and (4) and subject to any limitation in rules adopted by the
comptroller, an automated clearinghouse, or the federal
government, the comptroller may use the electronic funds transfer
system to deposit payments only to one or more accounts of a payee
at one or more financial institutions, including credit unions.
(2) The comptroller may also use the electronic funds
transfer system to deposit a portion of an employee's gross pay into
the employee's account at a credit union as prescribed by
Subchapter G, Chapter 659.
(3) A single electronic funds transfer may contain
payments to multiple payees. Individual transfers or warrants are
not required for each payee.
(4) The comptroller may also use the electronic funds
transfer system to deposit a portion of an employee's gross pay into
an account of an eligible state employee organization for a
membership as prescribed by Subchapter G, Chapter 659.
SECTION 10. Section 403.020, Government Code, is amended to
read as follows:
Sec. 403.020. PERFORMANCE REVIEW OF SCHOOL DISTRICTS AND
INSTITUTIONS OF HIGHER EDUCATION. (a) In this section, "public
junior college" and "general academic teaching institution" have
the meanings assigned by Section 61.003, Education Code.
(b) The comptroller may periodically review the
effectiveness and efficiency of the budgets and operations of:
(1) school districts;
(2) public junior colleges; and
(3) general academic teaching institutions.
(c) A review of a school district may be initiated by the
comptroller or by the request of the [school] district. A review of
a public junior college or general academic teaching institution
may be initiated only at the request of:
(1) the governor;
(2) the Legislative Budget Board; or
(3) the governing body of the college or institution.
(d) A review may be initiated by a school district only by
resolution adopted by a majority of the members of the board of
trustees of the district. A review may be initiated by a public
junior college or general academic teaching institution only at the
request of the president of the college or institution or by a
resolution adopted by a majority of the governing body of the
college or institution.
(e) [(b)] If a review is initiated by the school district,
public junior college, or general academic teaching institution,
the district, college, or institution shall pay 25 percent of the
cost incurred in conducting the review.
(f) [(c)] The comptroller shall:
(1) prepare a report showing the results of each
review conducted under this section;
(2) file the report with:
(A) the school district, public junior college,
or general academic teaching institution that is the subject of the
report;
(B) [,] the governor;
(C) [,] the lieutenant governor;
(D) [,] the speaker of the house of
representatives;
(E) [,] the chairs of the standing committees of
the senate and of the house of representatives with jurisdiction
over public education;
(F) the commissioner of higher education, if a
public junior college or general academic teaching institution is
the subject of the report; [,] and
(G) the commissioner of education, if a school
district is the subject of the report; and
(3) make the entire report and a summary of the report
available to the public on the Internet.
SECTION 11. Section 403.027(g), Government Code, is amended
to read as follows:
(g) In this section, "digital signature" means an
electronic identifier intended by the person using it to have the
same force and effect as the use of a manual signature [has the
meaning assigned by Section 2.108(d), Business & Commerce Code].
SECTION 12. Section 403.054, Government Code, is amended by
amending Subsection (b) and adding Subsection (i) to read as
follows:
(b) The comptroller may not issue a replacement warrant if:
(1) the comptroller has paid the original warrant,
unless the comptroller:
(A) has received [obtained] a refund of the
payment; or
(B) is satisfied that the state agency on whose
behalf the comptroller issued the original warrant has taken
reasonable steps to obtain a refund of the payment;
(2) the period during which the comptroller may pay
the original warrant has expired under Section 404.046 or other
applicable law;
(3) the payee of the replacement warrant is not the
same as the payee of the original warrant; or
(4) the comptroller is prohibited by a payment law
[Section 403.055 or 481.0841, or by Section 57.48, Education Code,]
from issuing a warrant to the payee of the replacement warrant.
(i) In this section, "payment law" means:
(1) Section 403.055;
(2) Section 57.48, Education Code;
(3) Section 231.007, Family Code; or
(4) any similar law that prohibits the comptroller
from issuing a warrant or initiating an electronic funds transfer
to a person.
SECTION 13. Sections 403.092(a) and (b), Government Code,
are amended to read as follows:
(a) To allow efficient management of the cash flow of the
general revenue fund and to avoid a temporary cash deficiency in
that fund, the comptroller may transfer available [surplus] cash,
except constitutionally dedicated revenues, between funds that are
managed by or in the custody of the comptroller [state treasury].
As soon as practicable the comptroller shall return the available
[surplus] cash to the fund from which it was transferred. The
comptroller shall preserve the [fund] equity of the fund from which
the cash was transferred and shall allocate the earned [depository]
interest as if the transfer had not been made.
(b) If the comptroller submits a statement under Article
III, Section 49a, of the Texas Constitution when available
[surplus] cash transferred under Subsection (a) is in the general
revenue fund, the comptroller shall indicate in that statement that
the transferred available [surplus] cash is in the general revenue
fund, is a liability of that fund, and is not available for
appropriation by the legislature except as necessary to return cash
to the fund from which it was transferred as required by Subsection
(a).
SECTION 14. Sections 403.1042(b), (c), (e), and (f),
Government Code, are amended to read as follows:
(b) The advisory committee is composed of 11 members
appointed [by the advisory committee] as follows:
(1) one member appointed [nominated] by the
comptroller to represent a public hospital or hospital district
located in a county with a population of 50,000 or less or a public
hospital owned or maintained by a municipality;
(2) one member appointed [nominated] by the political
subdivision that, in the year preceding the appointment, received
the largest annual distribution paid from the account;
(3) one member appointed [nominated] by the political
subdivision that, in the year preceding the appointment, received
the second largest annual distribution paid from the account;
(4) four members appointed [nominated] by political
subdivisions that:
(A) in the year preceding the appointment,
received the 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, or 12th
largest annual distribution paid from the account; and
(B) do not have an appointee [a nominee] serving
on the advisory committee at the time of appointment;
(5) one member appointed [nominated] by the County
Judges and Commissioners Association of Texas;
(6) one member appointed [nominated] by the North and
East Texas County Judges and Commissioners Association;
(7) one member appointed [nominated] by the South
Texas County Judges and Commissioners Association; and
(8) one member appointed [nominated] by the West Texas
County Judges and Commissioners Association.
(c) A commissioners court that sets the tax rate for a
hospital district must approve any person appointed [nominated] by
the hospital district to serve on the advisory committee.
(e) Except as provided by this subsection, members
[Members] of the advisory committee serve staggered six-year terms
expiring on August 31 of each odd-numbered year. A member of the
advisory committee whose term expires or who attempts to resign
from the committee remains a member of the committee until the
member's successor is appointed.
(f) An individual or entity authorized to make an
appointment [or nominate someone for appointment] to the advisory
committee created under this section shall attempt to appoint [or
nominate] persons who represent the gender composition, minority
populations, and geographic regions of the state.
SECTION 15. Section 404.024, Government Code, is amended by
amending Subsection (b) and adding Subsection (l) to read as
follows:
(b) State funds not deposited in state depositories shall be
invested by the comptroller in:
(1) direct security repurchase agreements;
(2) reverse security repurchase agreements;
(3) direct obligations of or obligations the principal
and interest of which are guaranteed by the United States;
(4) direct obligations of or obligations guaranteed by
agencies or instrumentalities of the United States government;
(5) bankers' acceptances that:
(A) are eligible for purchase by the Federal
Reserve System;
(B) do not exceed 270 days to maturity; and
(C) are issued by a bank that has received the
highest short-term credit rating by a nationally recognized
investment rating firm;
(6) commercial paper that:
(A) does not exceed 270 days to maturity; and
(B) except as provided by Subsection (i), has
received the highest short-term credit rating by a nationally
recognized investment rating firm;
(7) contracts written by the treasury in which the
treasury grants the purchaser the right to purchase securities in
the treasury's marketable securities portfolio at a specified price
over a specified period and for which the treasury is paid a fee and
specifically prohibits naked-option or uncovered option trading;
(8) direct obligations of or obligations guaranteed by
the Inter-American Development Bank, the International Bank for
Reconstruction and Development (the World Bank), the African
Development Bank, the Asian Development Bank, and the International
Finance Corporation that have received the highest credit rating by
a nationally recognized investment rating firm;
(9) bonds issued, assumed, or guaranteed by the State
of Israel;
(10) obligations of a state or an agency, county,
city, or other political subdivision of a state;
(11) mutual funds secured by obligations that are
described by Subdivisions (1) through (6), including pooled funds:
(A) established by the Texas Treasury
Safekeeping Trust Company;
(B) operated like a mutual fund; and
(C) with portfolios consisting only of
dollar-denominated securities; and
(12) foreign currency for the sole purpose of
facilitating investment by state agencies that have the authority
to invest in foreign securities.
(l) The comptroller may lend securities under procedures
established by the comptroller. The procedures must be consistent
with industry practice and must include a requirement to fully
secure the loan with cash, obligations, or a combination of cash and
obligations. In this subsection, "obligation" means an item
described by Subsections (b)(1)-(6).
SECTION 16. Section 404.102, Government Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) The comptroller may incorporate a special-purpose trust
company called the Texas Treasury Safekeeping Trust Company. The
purposes of the trust company are to provide a means for the
comptroller to obtain direct access to services provided by the
Federal Reserve System and to enable the comptroller to manage,
disburse, transfer, safekeep, and invest funds and securities more
efficiently and economically by using established and reasonable
financial practices, including the pooling of funds and the lending
of securities to the extent practical or necessary. The
comptroller may deposit funds and securities with the trust company
to achieve its purpose.
(c) The trust company may establish government investment
pools consisting of state agency funds not required to be deposited
in the state treasury and local government funds that are placed
into the pools for investment or reinvestment by the trust company.
A state agency or local government may place funds into the pools
for investment or reinvestment as authorized by Subsection (a) or
other law. In this subsection, "local government" and "state
agency" have the meanings assigned by Section 2256.002.
SECTION 17. Section 404.107(b), Government Code, is amended
to read as follows:
(b) A participant that has money or securities on [Agencies
and local political subdivisions of the state and nonprofit
corporations, foundations, and other charitable organizations
created on behalf of the state or an agency or local political
subdivision of the state that are authorized or required to]
deposit [money and securities] with the trust company shall pay the
fees provided in [established on] the trust company's fee schedule
developed under Section 404.103(f). The trust company may:
(1) deduct a fee from the principal or earning of a
participant on deposit with the trust company; or
(2) require a participant to pay a fee from an amount
not on deposit with the trust company.
SECTION 18. Section 404.123(b), Government Code, is amended
to read as follows:
(b) The committee may impose a limit on the sum of the total
amount of the notes outstanding and the total outstanding liability
of the general revenue fund under Section 403.092 [may not at any
time exceed 25 percent of the taxes and revenues to be credited to
the general revenue fund for the fiscal year as determined by the
comptroller, based on the certification made by the comptroller in
the enactment of the General Appropriations Act applicable to that
fiscal year].
SECTION 19. Chapter 447, Government Code, as amended by
Chapters 573, 1158, and 1398, Acts of the 77th Legislature, Regular
Session, 2001, is reenacted to read as follows:
CHAPTER 447. STATE ENERGY CONSERVATION OFFICE
Sec. 447.001. GOVERNANCE AND GENERAL AUTHORITY. The state
energy conservation office:
(1) is under the direction and control of the
comptroller;
(2) shall promote the policies enumerated in this
chapter; and
(3) may act in any capacity authorized by state or
federal law.
Sec. 447.002. INFORMATION; PROCEDURES AND RULES; MEASURES
AND PROGRAMS. (a) The state energy conservation office shall
develop and provide energy and water conservation information for
the state.
(b) The state energy conservation office may establish
procedures and adopt rules relating to the development and
implementation of energy and water conservation measures and
programs applicable to state buildings and facilities.
(c) A procedure established or a rule adopted under
Subsection (b) may include provisions relating to:
(1) the retrofitting of existing state buildings and
facilities with energy-saving or water-saving devices; and
(2) the energy-related or water-related renovation of
those buildings and facilities.
(d) To the extent that the governor receives money
appropriated for energy and water efficiency measures and programs,
the governor, through the state energy conservation office, shall
implement measures and programs that the state energy conservation
office identifies as encouraging energy or water conservation by
state government.
(e) A state agency shall implement an energy or water
conservation measure or program in accordance with plans developed
under Section 447.009.
(f) The state energy conservation office shall coordinate
all water conservation-related activities with the Texas Water
Development Board. The board shall assist the office in the
development of all proposed water conservation and reuse
requirements and provide training and expertise to the office
regarding water conservation issues.
Sec. 447.003. LIAISON TO FEDERAL GOVERNMENT. The state
energy conservation office is the state liaison to the federal
government for the implementation and administration of federal
programs relating to state agency energy matters. The office shall
administer state programs established under:
(1) Part D, Title III, Energy Policy and Conservation
Act (42 U.S.C. Section 6321 et seq.), and its subsequent
amendments;
(2) Part G, Title III, Energy Policy and Conservation
Act (42 U.S.C. Section 6371 et seq.), and its subsequent
amendments; and
(3) other federal energy conservation programs as
assigned to the office by the governor or the legislature.
Sec. 447.004. DESIGN STANDARDS. (a) The state energy
conservation office shall establish and publish mandatory energy
and water conservation design standards for each new state building
or major renovation project, including a new building or major
renovation project of a state-supported institution of higher
education. The office shall define "major renovation project" for
purposes of this section and shall review and update the standards
biennially.
(b) The standards established under Subsection (a) must:
(1) include performance and procedural standards for
the maximum energy and water conservation allowed by the latest and
most cost-effective technology that is consistent with the
requirements of public health, safety, and economic resources;
(2) be stated in terms of energy and water consumption
levels;
(3) consider the various types of building uses; and
(4) allow for design flexibility.
(c) Any procedural standard established under this section
must be directed toward specific design and building practices that
produce good thermal resistance and low infiltration and toward
requiring practices in the design of mechanical and electrical
systems that maximize energy and water efficiency. The procedural
standards must address, as applicable:
(1) insulation;
(2) lighting;
(3) ventilation;
(4) climate control;
(5) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(6) water-conserving landscape irrigation equipment;
(7) landscaping measures that reduce watering demands
and capture and hold applied water and rainfall, including:
(A) landscape contouring, including the use of
berms, swales, and terraces; and
(B) the use of soil amendments that increase the
water-holding capacity of the soil, including compost;
(8) rainwater harvesting equipment and equipment to
make use of water collected as part of a storm-water system
installed for water quality control;
(9) equipment for recycling or reusing water
originating on the premises or from other sources, including
treated municipal effluent;
(10) equipment needed to capture water from
nonconventional, alternate sources, including air conditioning
condensate or graywater, for nonpotable uses;
(11) metering equipment needed to segregate water use
in order to identify water conservation opportunities or verify
water savings;
(12) special energy requirements of health-related
facilities of higher education and state agencies; and
(13) any other item that the state energy conservation
office considers appropriate.
(d) A state agency or an institution of higher education
shall submit a copy of its design and construction manuals to the
state energy conservation office as the office considers necessary
to demonstrate compliance by the agency or institution with the
standards established under this section.
(e) A state agency or an institution of higher education may
not begin construction of a new state building or a major renovation
project before the design architect or engineer for the
construction or renovation has:
(1) certified to the agency or institution that the
construction or renovation complies with the standards established
under this section; and
(2) provided a copy of that certification to the state
energy conservation office.
Sec. 447.005. ENERGY AND WATER EFFICIENCY PROJECTS.
Subject to applicable state and federal laws or guidelines, the
state energy conservation office may:
(1) implement an energy or water efficiency project at
a state agency; or
(2) assist the agency in implementing the project
through an energy or water efficiency program.
Sec. 447.006. ADDITIONAL ENERGY AND WATER SERVICES.
(a) The state energy conservation office may provide additional
energy and water services, including:
(1) training of designated state employees in energy
and water management, energy-accounting techniques,
water-accounting techniques, and energy efficient and water
efficient design and construction;
(2) technical assistance regarding energy efficient
and water efficient capital improvements, energy efficient and
water efficient building design, and cogeneration and thermal
storage investments;
(3) technical assistance to the state auditor or a
state agency regarding energy and water management performance
audits and the monitoring of utility bills to detect billing
errors;
(4) technical assistance to a state agency regarding
third-party financing of an energy efficient and water efficient
capital improvement project; and
(5) other energy-related and water-related assistance
that the office considers appropriate, if the assistance is
requested by a state agency, an institution of higher education, a
consortium of institutions of higher education, or another
governmental entity created by state law.
(b) Using available state, federal, or oil overcharge
funds, the state energy conservation office may provide technical
assistance to a state agency or an institution of higher education
in analyzing or negotiating rates for electricity or natural gas
supplies from a locally certificated electric supplier, a natural
gas supplier, or a state-owned energy resource, including a
transportation charge for natural gas.
(c) A state agency or an institution of higher education may
request the assistance of the state energy conservation office
before negotiating or contracting for the supply or transportation
of natural gas or electricity.
(d) A state agency or an institution of higher education
with expertise in rate analysis, negotiation, or any other matter
related to the procurement of electricity and natural gas supplies
from a locally certificated electric supplier, a natural gas
supplier, or a state-owned energy resource may assist the state
energy conservation office whenever practicable. The attorney
general on request shall assist the office and other state agencies
and institutions of higher education in negotiating rates for
electricity and other terms of electric utility service.
(e) Using available funds from any source, the state energy
conservation office may assist a state agency, an institution of
higher education, a consortium of institutions of higher education,
or another governmental entity created by state law to further the
goals and pursue the policies of the state in energy research as may
be determined by the governor or the legislature. The office may
assist a state agency in implementing current federal energy
policy.
(f) The state energy conservation office on request may
negotiate rates for electricity and other terms of electric utility
service for a state agency or an institution of higher education.
The office also may negotiate the rates and the other terms of
service for a group of agencies or institutions in a single
contract.
(g) The state energy conservation office may analyze the
rates for electricity charged to and the amount of electricity used
by state agencies and institutions of higher education to determine
ways the state could obtain lower rates and use less electricity.
Each state agency, including the Public Utility Commission of
Texas, and institution of higher education shall assist the office
in obtaining the information the office needs to perform its
analysis.
Sec. 447.007. ENERGY AND WATER AUDITS. (a) The state
energy conservation office may audit a state-owned building used by
a state agency to assist the agency in reducing energy and water
consumption and costs through improved energy and water efficiency.
(b) Based on any audit performed under Subsection (a), the
state energy conservation office may recommend changes to improve
energy and water efficiency.
(c) Each state agency or institution of higher education
shall review and audit utility billings and contracts to detect
billing errors. Any contract with a private person to conduct the
review or audit must comply with all applicable provisions of
Subchapter A, Chapter 2254, regarding professional services
contracts. The contract may not be awarded on a contingent fee
basis unless the governor determines that the contract is
necessary, reasonable, and prudent.
Sec. 447.008. ENERGY-SAVING AND WATER-SAVING DEVICES OR
MEASURES. (a) On approval by the state energy conservation
office, a state agency that reduces its energy or water expenses may
use any funds saved by the agency from appropriated utility funds
for the purchase of an energy-saving or water-saving device or
measure. For purposes of this section, "energy-saving or
water-saving device or measure" means a device or measure that
directly reduces:
(1) energy or water costs; or
(2) the energy or water consumption of equipment,
including a lighting, heating, ventilation, air-conditioning
system, or other water-using system, without materially altering
the quality of the equipment.
(b) A state agency, in accordance with the recommendations
of an energy or water audit, may purchase energy-saving and
water-saving devices or measures from appropriated utility funds if
the savings in utility funds projected by the audit will offset the
purchase. The agency shall retain in its files a copy of the
recommendation and repayment schedule as evidence of the projected
savings.
Sec. 447.009. ENERGY AND WATER MANAGEMENT PLANNING.
(a) The state energy conservation office shall provide energy and
water management planning assistance to a state agency or an
institution of higher education, including:
(1) preparation by the agency or institution of a
long-range plan for the delivery of reliable, cost-effective
utility services for the state agency or institution;
(2) assistance to the Department of Public Safety for
energy emergency contingency planning, using state or federal funds
when available;
(3) assistance to each state agency or institution of
higher education in preparing comprehensive energy and water
management plans; and
(4) assistance to state agencies other than
institutions of higher education in meeting the requirements of
Section 447.002, including assistance in scheduling and assigning
priorities to implementation plans to ensure that state agencies
adopt qualified cost-effective efficiency measures and programs
for all state facilities not later than September 1, 2006.
(b) A state agency or an institution of higher education
shall develop the plan described in Subsection (a)(1) and submit
the plan to the state energy conservation office upon request. The
agency or institution shall use the plan in preparing its five-year
construction and major renovation plans. After other energy-saving
or water-saving alternatives are considered, district heating and
cooling or on-site generation of electricity may be considered in
planning for reliable, efficient, and cost-effective utility
services.
(c) The state energy conservation office shall prepare
guidelines for preparation of the plan described in Subsection
(a)(3). A state agency or an institution of higher education that
occupies a state-owned building shall prepare and implement a
five-year energy and water management plan and shall submit that
plan to the office upon request. The agency or institution shall
update its plan biennially. A state agency or an institution of
higher education that occupies a building not owned by the state
shall cooperate with the office in addressing the energy or water
management of that building.
(d) The comprehensive energy and water management plan
described in Subsection (a)(3) shall be included in the five-year
construction and major repair and rehabilitation plans for
institutions of higher education as required by Section 61.0651,
Education Code.
SECTION 20. Subchapter A, Chapter 609, Government Code, is
amended by adding Section 609.014 to read as follows:
Sec. 609.014. COORDINATION OF PLANS. Notwithstanding any
other provision of this chapter, an institution of higher
education, as defined by Section 61.003, Education Code,
participating in a group benefits program under Chapter 1551,
Insurance Code, may participate under this chapter only in a
deferred compensation plan described by Subchapter C.
SECTION 21. Section 659.102, Government Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The supplemental optional benefits program may include
permanent life insurance, catastrophic illness insurance,
disability insurance, [or] prepaid legal services, or a qualified
transportation benefit.
(d) A qualified transportation benefit is a transportation
benefit meeting the requirements of Section 132(f), Internal
Revenue Code of 1986. The Employees Retirement System of Texas
shall determine a fee or charge that may be paid as a qualified
transportation benefit.
SECTION 22. Subchapter G, Chapter 659, Government Code, is
amended by adding Section 659.1031 to read as follows:
Sec. 659.1031. DEDUCTION OF MEMBERSHIP FEES FOR ELIGIBLE
STATE EMPLOYEE ORGANIZATIONS. (a) An employee of a state agency
may authorize in writing a deduction each pay period from the
employee's salary or wage payment for payment to an eligible state
employee organization of a membership fee in the organization.
(b) In this section, "eligible state employee organization"
means a state employee organization with a membership of at least
2,000 active or retired state employees who hold or who have held
certification from the Commission on Law Enforcement Officer
Standards and Education.
SECTION 23. Section 659.104(a), Government Code, is amended
to read as follows:
(a) An authorization for a deduction under this subchapter
must direct the comptroller or, if applicable, the appropriate
financial officer of an institution of higher education to transfer
the withheld funds to the program, eligible state employee
organization, or credit union designated by the employee.
SECTION 24. Section 659.110, Government Code, is amended to
read as follows:
Sec. 659.110. RULES. The comptroller may establish
procedures and adopt rules to administer the credit union and the
eligible state employee organization membership fee deduction
programs [program] authorized by this subchapter.
SECTION 25. Section 659.131(8), Government Code, is amended
to read as follows:
(8) "Indirect services" means [health and human]
services that:
(A) enable, augment, or otherwise support the
[are not] direct delivery of health and human services; and
(B) demonstrably benefit residents of this
state.
SECTION 26. Section 659.146(c), Government Code, is amended
to read as follows:
(c) A federation or fund that seeks statewide participation
in a state employee charitable campaign must apply on behalf of
itself and its affiliated agencies to the state policy committee
during the annual eligibility determination period specified by the
committee. The state policy committee shall review each
application and may approve a federation or fund for statewide
participation only if the federation or fund qualifies as a
statewide charitable organization [or as an international
federation or fund]. The state policy committee may approve an
affiliated charitable organization for statewide participation
only if the organization qualifies as a statewide charitable
organization [or is an affiliated agency of an international
federation or fund].
SECTION 27. Section 659.150(b), Government Code, is amended
to read as follows:
(b) A participating charitable organization may not use
contributions under this subchapter to:
(1) directly or indirectly fund [conduct] litigation;
or
(2) make expenditures that would require the
organization to register under Chapter 305 if the organization were
not an entity exempt from registration under that chapter.
SECTION 28. Section 659.253, Government Code, is amended to
read as follows:
Sec. 659.253. TRANSFER WITHIN AGENCY FROM EXEMPT TO
CLASSIFIED POSITION. (a) Except as provided by Subsection (b), a
[A] state employee who transfers [moves] within a state agency from
an exempt [a] position [exempt from the state's position
classification plan] to a classified position is entitled to [will]
receive an annual salary in the [proper] salary group to which the
classified position is allocated.
(b) During the fiscal biennium in which a state employee
transfers within a state agency from an exempt position to a
classified position, the employee's annual salary rate after the
transfer may not [to] exceed:
(1) the rate for the salary step equal to the rate
received by the employee when holding the [employee's current]
exempt position [salary] or the rate for the next higher salary
step, if the classified position is allocated [moving] to a
[position in a] salary group that is divided into steps; or
(2) the rate received by the employee when holding the
[employee's current] exempt position [salary] or the maximum rate
of the [new] salary group to which the classified position is
allocated, whichever is lower, if the classified position is
allocated to [moving to a position in] a salary group that is not
divided into steps.
[(b) Except as provided by this section, a state agency that
at any time during a state fiscal biennium pays a state employee an
exempt salary specifically established in the General
Appropriations Act may not subsequently during the state fiscal
biennium pay the employee a greater salary under Salary Schedule A,
B, or C of the General Appropriations Act.]
(c) A merit salary increase for [state agency that pays] a
state employee who transfers to a classified position from an
exempt position for which the [an exempt] salary is specifically
established in the General Appropriations Act [and that then
transfers the employee to a position in which the employee is paid
under Salary Schedule A, B, or C of the General Appropriations Act]
may not take effect if:
(1) the employee has spent less than [grant a merit
salary increase to the employee until at least] six months in the
classified position; or
(2) the increase would cause the salary limitation
prescribed by Subsection (b) to be exceeded [after the date that the
agency begins to pay the employee under Salary Schedule A, B, or C
of the General Appropriations Act].
(d) The Legislative Budget Board and the governor together
may approve an exception to the salary limitations prescribed by
Subsection (b) [this section] for a state employee:
(1) on receiving the employing state agency's
application for the exception; and
(2) if the employee's job responsibilities with the
state agency have changed substantially during the [state fiscal]
biennium.
(e) In this section:
(1) "Classified position" means a position classified
under the state's position classification plan.
(2) "Exempt position" means a position exempt from the
state's position classification plan.
SECTION 29. Subchapter K, Chapter 659, Government Code, is
amended by adding Section 659.2531 to read as follows:
Sec. 659.2531. TRANSFER WITHIN AGENCY BETWEEN CLASSIFIED
POSITIONS ALLOCATED TO SAME SALARY GROUP. (a) In this section:
(1) "Classified position" means a position classified
under the state's position classification plan.
(2) "Transfer" means the transfer of a state employee
within a state agency between two classified positions that:
(A) are allocated to the same salary group; and
(B) have different position titles as listed in
the General Appropriations Act.
(b) Except as provided by Subsection (c), a state employee's
annual salary rate immediately after a transfer may not exceed:
(1) the rate for the salary step that is one step
higher than the salary step at which the employee was paid
immediately before the transfer, if the classified position to
which the employee transfers is allocated to a salary group that is
divided into steps; or
(2) 103.4 percent of the employee's annual salary rate
immediately before the transfer, if the classified position to
which the employee transfers is allocated to a salary group that is
not divided into steps.
(c) A state employee's annual salary rate immediately after
a transfer may not exceed the maximum rate for the appropriate
salary group.
SECTION 30. Section 659.255, Government Code, is amended to
read as follows:
Sec. 659.255. MERIT SALARY INCREASES; ONE-TIME MERIT
PAYMENTS. (a) In this [This] section:
(1) "Classified employee" means a state employee who
holds a classified position.
(2) "Classified position" means a position [applies
only to positions] classified under the state's position
classification plan.
(3) "Merit salary increase" means an increase in
compensation to:
(A) a higher step rate in the same classified
salary group, if the classified employee is compensated under
Salary Schedule A of the General Appropriations Act; or
(B) a higher rate within the range of the same
classified salary group, if the classified employee is compensated
under Salary Schedule B of the General Appropriations Act.
(b) [A state agency administrator may grant merit salary
increases including one-time merit payments to employees
compensated under Salary Schedules A and B of the General
Appropriations Act whose job performance and productivity are
consistently above that normally expected or required. For
classified employees compensated under Salary Schedule A of the
General Appropriations Act, a merit increase involves an increase
in an employee's salary to a higher step rate in the same salary
group. For classified employees compensated under Salary Schedule
B of the General Appropriations Act, a merit increase involves an
increase in an employee's salary to a higher rate within the range
of the same salary group. Merit increases including one-time merit
payments are subject to the restrictions prescribed by Subsections
(c)-(e).
[(c)] The comptroller shall prescribe accounting and
reporting procedures as necessary to ensure the availability of
information reflecting each state agency's use of merit salary
increases, including one-time merit payments.
(c) Each state agency shall establish:
(1) a procedure for determining the eligibility of a
classified employee to receive a merit salary increase or a
one-time merit payment from the agency; and
(2) requirements for substantiating the eligibility
of a classified employee who receives a merit salary increase or a
one-time merit payment from the agency.
(d) Merit salary increases and [including] one-time merit
payments shall be applied throughout the range of classified salary
groups used by each state agency.
(e) A state agency may award a merit salary increase to a
classified employee in relation to the employee's performance in
the current classified position held by the employee if [For an
employee to be eligible for a merit salary increase or a one-time
merit payment, the following additional criteria must be met]:
(1) the employee has [must have] been employed by the
[state] agency in that position for at least six continuous months
before [prior to] the effective date [award] of the increase [or
payment];
(2) the effective date of the increase is at least six
months after the effective date of the employee's [must have
elapsed since the employee's] last:
(A) promotion; [, enhanced compensation award
authorized by the General Appropriations Act, one-time merit
payment,] or
(B) merit salary increase for performance in that
position [at the agency]; [and]
(3) the agency has complied with Subsection (c);
(4) the employee's job performance and productivity in
that position are consistently above that normally expected or
required; and
(5) the effective date of the increase is at least six
months after the effective date of the agency's last:
(A) payment to the employee of an enhanced
compensation award authorized by the General Appropriations Act; or
(B) one-time merit payment for performance in
that position.
(f) A state agency may make a one-time merit payment to a
classified employee in relation to the employee's performance in
the current classified position held by the employee if:
(1) the employee has been employed by the agency in
that position for at least six continuous months before the
effective date of the payment;
(2) the effective date of the payment is at least six
months after the effective date of the employee's last:
(A) promotion; or
(B) merit salary increase for performance in that
position;
(3) the agency has complied with Subsection (c);
(4) the employee's job performance and productivity in
that position are consistently above that normally expected or
required; and
(5) the effective date of the payment is at least six
months after the effective date of the agency's last:
(A) payment to the employee of an enhanced
compensation award authorized by the General Appropriations Act; or
(B) one-time merit payment for performance in
that position. [criteria for granting merit salary increases or
one-time merit payments must include specific criteria and
documentation to substantiate the granting of a merit increase or
one-time merit payment.]
SECTION 31. Subchapter K, Chapter 659, Government Code, is
amended by adding Section 659.262 to read as follows:
Sec. 659.262. ADMINISTRATION. The comptroller may
establish procedures and adopt rules to administer this subchapter.
SECTION 32. Section 661.152(d), Government Code, is amended
to read as follows:
(d) An employee accrues vacation leave and may carry
vacation leave forward from one fiscal year to the next in
accordance with the following schedule: Maximum Hours
Carried Forwar
Hours Accrued From One Fisca
Per Month for Year to the
Next
Employees With Total Full-time for a Full-tim
State Employment of: Employment Employee
the comptroller;
[(3)] the Legislative Reference Library;
(3) [(4)] the state auditor; and
(4) [(5)] the Legislative Budget Board.
(b) A state agency's annual report must cover an entire
fiscal year. The agency shall submit the report not later than
December 31 of each year [the date and in the form prescribed by the
comptroller].
SECTION 40. Section 2113.205(b), Government Code, is
amended to read as follows:
(b) The comptroller may authorize a [A] state agency to
[may] use money appropriated for a particular fiscal year to pay the
entire cost or amount of a service, including an Internet
connection, a periodical subscription, a maintenance contract, a
post office box rental, insurance, or a surety or honesty bond,
regardless of whether the service is provided over [it covers] more
than one fiscal year.
SECTION 41. Section 2162.001, Government Code, is amended
to read as follows:
Sec. 2162.001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Council" [, "council"] means the State Council on
Competitive Government.
(2) "Local government" means a county, municipality,
special district, school district, junior college district, or
other legally constituted political subdivision of the state.
SECTION 42. Section 2162.102, Government Code, is amended
by adding Subsection (d) to read as follows:
(d) To the extent the council determines is feasible, a
local government may voluntarily participate in a contract awarded
by the council or a state agency under this chapter. A local
government that purchases a good or a service under a contract
awarded under this chapter is considered to have satisfied any
state law requiring the local government to follow a competitive
purchasing procedure for the purchase.
SECTION 43. Section 2166.406, Government Code, as amended
by Chapter 573, Acts of the 77th Legislature, Regular Session,
2001, is amended to read as follows:
Sec. 2166.406. ENERGY SAVINGS PERFORMANCE CONTRACTS [OR
WATER CONSERVATION MEASURES]. (a) In this section, "energy
savings performance contract" means a contract for energy or water
conservation measures to reduce energy or water consumption or
operating costs of governmental facilities in which the estimated
savings in utility costs resulting from the measures is guaranteed
to offset the cost of the measures over a specified period. The term
[Notwithstanding any other provisions of this chapter, the
governing body of a state agency, without the consent of the
commission, may enter into a contract for energy conservation
measures to reduce energy or water consumption or operating costs
of governmental facilities in accordance with this section.
[(b) A contract authorized under this section] includes a
contract for the installation of:
(1) insulation of a [the] building structure and
systems within the building;
(2) storm windows or doors, caulking or weather
stripping, multiglazed windows or doors, heat absorbing or heat
reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
(3) automatic energy control systems, including
computer software and technical data licenses;
(4) heating, ventilating, or air-conditioning system
modifications or replacements that reduce energy or water
consumption;
(5) lighting fixtures that increase energy
efficiency;
(6) energy recovery systems;
(7) electric systems improvements;
(8) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(9) water-conserving landscape irrigation equipment;
(10) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
(A) landscape contouring, including the use of
berms, swales, and terraces; and
(B) the use of soil amendments that increase the
water-holding capacity of the soil, including compost;
(11) rainwater harvesting equipment and equipment to
make use of water collected as part of a storm-water system
installed for water quality control;
(12) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
(13) equipment needed to capture water from
nonconventional, alternate sources, including air conditioning
condensate or graywater, for nonpotable uses;
(14) metering equipment needed to segregate water use
in order to identify water conservation opportunities or verify
water savings; or
(15) other energy or water conservation-related
improvements or equipment including improvements or equipment
related to renewable energy or nonconventional water sources or
water reuse.
(b) Notwithstanding any other provision of this chapter, a
state agency, without the consent of the commission, may enter into
an energy savings performance contract in accordance with this
section.
(c) Each [All] energy or water conservation measure
[measures] must comply with current local, state, and federal
construction, plumbing, and environmental codes and regulations.
Notwithstanding [anything to the contrary in] Subsection (a) [(b)],
an energy savings performance [a] contract may [for energy or water
conservation measures shall] not include improvements or equipment
that allow or cause water from any condensing, cooling, or
industrial process or any system of nonpotable usage over which the
public water supply system officials do not have sanitary control
to be returned to the potable water supply.
(d) A state agency may enter into energy savings performance
[The entity with whom the board] contracts only with a person who is
[must be] experienced in the design, implementation, and
installation of the energy or water conservation measures addressed
by the contract.
(e) Before entering into an energy savings performance [a]
contract [for energy or water conservation measures], a [the
governing body of the] state agency shall require the provider of
the energy or water conservation measures to file with the agency
[governing body] a payment and performance bond relating to the
installation of the measures in accordance with Chapter 2253. The
agency may also require a separate bond to cover the value of the
guaranteed savings on the contract [that is in an amount the
governing body finds reasonable and necessary to protect the
interests of the state agency and that is conditioned on the
faithful execution of the terms of the contract].
(f) The state agency may enter into an energy savings
performance [a] contract for a period of more than one year only
[for energy or water conservation measures with an entity] if the
state agency finds that the amount the state agency would spend on
the energy or water conservation measures will not exceed the
amount to be saved in energy, water, wastewater, and operating
costs over 15 years from the date of installation.
(g) An energy savings performance contract [Energy or water
conservation measures] with respect to existing buildings or
facilities may be financed:
(1) under a lease/purchase contract that has a term
not to exceed 15 years from the final date of installation and that
meets federal tax requirements for tax-free municipal leasing or
long-term financing, including a lease/purchase contract under the
master equipment lease purchase program administered by the Texas
Public Finance Authority under Chapter 1232;
(2) with the proceeds of bonds; or
(3) under a contract with the provider of the energy or
water conservation measures that has a term not to exceed 15 years
from the final date of installation.
(h) An energy savings performance [A] contract [for energy
or water conservation measures] shall contain provisions requiring
[pursuant to which] the provider of the energy or water
conservation measures to guarantee [guarantees] the amount of the
savings to be realized by the state agency under the contract. If
the term of the [a] contract [for energy or water conservation
measures] exceeds one year, the agency's contractual obligation,
including costs of design, engineering, installation, and
anticipated debt service, in any one year during the term of the
contract beginning after the final date of installation may not
exceed the total energy, water, wastewater, and operating cost
savings, including [but not limited to] electrical, gas, water,
wastewater, or other utility cost savings and operating cost
savings resulting from the measures [automatic monitoring and
control], as determined by the state agency in this subsection,
divided by the number of years in the contract term.
(i) An energy savings performance [A] contract shall [under
this section may] be let according to the procedures established
for procuring certain professional services by Section 2254.004
[under competitive sealed proposal procedures]. Notice of the
request for qualifications [proposals] shall be given in the manner
provided by Section 2156.002 [for in Chapter 2156]. The State
Energy Conservation Office shall establish guidelines and an
approval process for awarding energy savings performance contracts
[awarded under this section]. The guidelines adopted under this
subsection must require that the cost savings projected by an
offeror be reviewed by a licensed professional engineer who is not
an officer or employee of an offeror for the contract under review
or otherwise associated with the contract. An engineer who reviews
a contract shall maintain the confidentiality of any proprietary
information the engineer acquires while reviewing the contract. An
energy savings performance contract may not be entered into unless
the contract has been approved by the State Energy Conservation
Office. Sections 1001.053 and 1001.407, Occupations Code, apply
[Section 19, The Texas Engineering Practice Act (Article 3271a,
Vernon's Texas Civil Statutes), applies] to work performed under
the contract. [The contract shall be awarded to the responsible
offeror whose proposal, following negotiations, is determined to be
the most advantageous to the state agency considering the savings
and other evaluation factors set forth in the request for proposals
except that if the state agency finds that no offer is acceptable,
it shall refuse all offers.]
(j) [In accordance with regulations adopted by the state
agency, the state agency may conduct discussions with offerors who
submit proposals and who are determined to be reasonably qualified
for the award of the contract. Offerors shall be treated fairly and
equally with respect to any opportunity for discussion and revision
of proposals.
[(k) If provided in a request for proposals, proposals shall
be opened in a manner that avoids disclosure of the contents to
competing offerors and keeps the proposals secret during
negotiations. All proposals are open for public inspection after a
contract is awarded unless the information is excepted from
disclosure under Chapter 552.
[(l) To obtain the best final offers, the state agency may
allow proposal revisions after submissions and before the award of
a contract for energy or water conservation measures. Final review
and approval of the contract will be provided by the State Energy
Conservation Office.
[(m)] The legislature shall base an agency's appropriation
for energy, water, and wastewater costs during a fiscal year on the
sum of:
(1) the agency's estimated energy, water, and
wastewater costs for that fiscal year; and
(2) if an energy savings performance [a] contract
[under this section] is in effect, the agency's estimated net
savings resulting from the contract during the contract term,
divided by the number of years in the contract term.
SECTION 44. Section 2201.002, Government Code, is amended
to read as follows:
Sec. 2201.002. USE OF FUND. [(a)] The fund may be used
[only] to finance:
(1) the acquisition, construction, repair,
improvement, or equipping of a building by a state agency for a
state purpose;
(2) the acquisition of real or personal property
necessary for a state agency to take an action described by
Subdivision (1); [or]
(3) the administration of the asset management
division of the General Land Office; or
(4) any other purpose for which funds may be
appropriated from general revenue.
[(b) The fund may not be used to pay for an activity of:
[(1) the Texas Department of Transportation;
[(2) an institution of higher education as defined by
Section 61.003, Education Code;
[(3) the Texas State Technical College System;
[(4) the Southwest Collegiate Institute for the Deaf;
[(5) the Employees Retirement System of Texas; or
[(6) the Teacher Retirement System of Texas.
[(c) The fund may not be used to pay salaries.]
SECTION 45. Section 2201.003(b), Government Code, is
amended to read as follows:
(b) At the end of each fiscal biennium the unencumbered
balance of the fund [in excess of $500 million] shall be transferred
to the credit of the general revenue fund.
SECTION 46. Section 2251.025(b), Government Code, is
amended to read as follows:
(b) The rate of interest that [Interest] accrues on an
overdue payment is [at] the rate in effect on September 1 of the
fiscal year in which the payment becomes overdue. The rate in
effect on September 1 is equal to the sum of:
(1) one percent; and
(2) the prime rate as published in the Wall Street
Journal on the first day of July of the preceding fiscal year that
does not fall on a Saturday or Sunday [each month].
SECTION 47. Section 2252.903(e), Government Code, is
amended by adding Subdivision (4) to read as follows:
(4) "Written contract" does not include a contract the
payments for which must be made through the comptroller's issuance
of warrants or initiation of electronic funds transfers under
Section 404.046, 404.069, or 2103.003.
SECTION 48. Section 2305.012, Government Code, is amended
to read as follows:
Sec. 2305.012. ADMINISTRATION [STAFF]; ASSISTANCE.
(a) The energy office shall [provide staff to] implement and
administer this chapter.
(b) The energy office or the governor through the energy
office may [also] enlist the assistance of a private entity or a
state agency, department, commission, or other entity to:
(1) evaluate or review a proposal;
(2) audit a program participant or a supervising state
agency;
(3) perform administrative duties under this chapter;
or
(4) develop eligibility or evaluation criteria.
SECTION 49. Section 2305.032(a), Government Code, is
amended to read as follows:
(a) The energy office under the loanstar revolving loan
program may [approve and finance projects that] provide loans to
finance energy and water efficiency measures for public facilities
[eligible applicants for energy-saving capital improvements.
Projects approved by the energy office should benefit:
[(1) a state agency or institution of higher
education;
[(2) a public school;
[(3) a political subdivision of the state;
[(4) a small to medium-sized business; and
[(5) a public or nonprofit hospital or health care
facility].
SECTION 50. Sections 2305.033(b) and (d), Government Code,
are amended to read as follows:
(b) In accordance with Part D, Title III [B], Energy Policy
and Conservation Act (42 U.S.C. Sec. 6321 et seq.), and its
subsequent amendments, the energy office, under the program, shall
distribute funds for projects that save measurable quantities of
energy.
(d) A proposal under Subsection (b) must:
(1) promote the conservation of energy; or [and]
(2) improve the efficient use of energy through
activities that result in quantifiable energy savings, including:
(A) energy audits of buildings;
(B) technical assistance in reducing energy
bills;
(C) training to building operators and fiscal
officers on various energy issues such as utility bill analysis and
energy management techniques; or [and]
(D) other technical assistance to programs for
which funds are appropriated.
SECTION 51. Section 2305.034, Government Code, is amended
to read as follows:
Sec. 2305.034. STATE AGENCIES PROGRAM. The energy office
is the supervising agency for the state agencies program that may
distribute funds through Chapter 447. Projects funded under this
section may include:
(1) energy manager training;
(2) energy savings performance contracting services,
including:
(A) education and training;
(B) contract review and approval;
(C) third-party contract review;
(D) development and dissemination of guidelines;
and
(E) identification of contract financing sources
[described by Section 51.927, Education Code];
(3) energy-efficient design assistance for new
facilities, including major renovation;
(4) projects for state building design standards
compliance;
(5) projects to create awareness of model energy codes
at the local and state levels;
(6) projects to develop and maintain the state's
utility database; and
(7) other appropriate energy and information
applications.
SECTION 52. Section 2305.039(b), Government Code, is
amended to read as follows:
(b) A project may:
(1) assist a service provider in providing services
such as:
(A) [traffic light synchronization;
[(B) fleet management;
[(C)] computerized transit routing that is
energy efficient;
(B) commuting solutions
[(D) car-care clinics;
[(E) vanpooling or ridesharing efforts]; and
(C) [(F)] public education related to mass
transit;
[(G) driver training in energy conservation
awareness; and
[(H) transportation services for the elderly or
persons with a disability;] and
(2) include studies to improve existing systems and
plan for future transportation systems in this state.
SECTION 53. Section 2306.783(a), Government Code, as added
by Chapter 432, Acts of the 77th Legislature, Regular Session,
2001, is amended to read as follows:
(a) The Texas Interagency Council for the Homeless is
composed of:
(1) one representative from each of the following
agencies, appointed by the administrative head of that agency:
(A) the Texas Department of Health;
(B) the Texas Department of Human Services;
(C) the Texas Department of Mental Health and
Mental Retardation;
(D) the Texas Department of Criminal Justice;
(E) the Texas Department on Aging;
(F) the Texas Rehabilitation Commission;
(G) the Texas Education Agency;
(H) the Texas Commission on Alcohol and Drug
Abuse;
(I) the Department of Protective and Regulatory
Services;
(J) the Health and Human Services Commission;
(K) the Texas Workforce Commission;
(L) the Texas Youth Commission; and
(M) the Texas Veterans Commission;
(2) [one representative from the office of the
comptroller appointed by the comptroller;
[(3)] two representatives from the department, one
each from the community affairs division and the housing finance
division, appointed by the director; and
(3) [(4)] three members representing service
providers to the homeless, one each appointed by the governor, the
lieutenant governor, and the speaker of the house of
representatives.
SECTION 54. Article 4.73(a), Insurance Code, is amended to
read as follows:
(a) The comptroller shall prepare a biennial report with
respect to results of the implementation of this subchapter. The
report must include:
(1) the number of certified capital companies holding
certified capital;
(2) the amount of certified capital invested in each
certified capital company;
(3) the amount of certified capital the certified
capital company has invested in qualified businesses as of January
1, 2006 [2004], and the cumulative total for each subsequent year;
(4) the total amount of tax credits granted under this
subchapter for each year that credits have been granted;
(5) the performance of each certified capital company
with respect to renewal and reporting requirements imposed under
this subchapter;
(6) with respect to the qualified businesses in which
certified capital companies have invested:
(A) the classification of the qualified
businesses according to the industrial sector and the size of the
business;
(B) the total number of jobs created by the
investment and the average wages paid for the jobs; and
(C) the total number of jobs retained as a result
of the investment and the average wages paid for the jobs; and
(7) the certified capital companies that have been
decertified or that have failed to renew the certification and the
reason for any decertification.
SECTION 55. Section 101.251, Insurance Code, is amended by
amending Subsections (b), (g), (i), and (j) and adding Subsection
(k) to read as follows:
(b) Except as provided by Subsection (j), an [unauthorized]
insurer shall pay to the comptroller, on a form prescribed by the
comptroller, a premium receipts tax of 4.85 percent of gross
premiums charged for insurance on a subject resident, located, or
to be performed in this state.
(g) The [unauthorized] insurer shall pay the premium
receipts tax required by this section before:
(1) March 1 following the calendar year in which the
insurance was effectuated, continued, or renewed; or
(2) another date specified by the comptroller.
(i) The tax under this section, if not paid when due, is a
liability [On default] of the [an unauthorized] insurer, the
insurer agent, and [in the payment of the tax,] the insured [shall
pay the tax].
(j) This section does not apply to premiums on:
(1) insurance procured by a licensed surplus lines
agent from an eligible surplus lines insurer as defined by Article
1.14-2 on which premium tax is paid in accordance with Article
1.14-2; [or]
(2) an independently procured contract of insurance on
which premium tax is paid in accordance with this chapter; or
(3) a contract of insurance written by an insurer that
holds a certificate of authority in this state and that is
authorized to write the contract.
(k) In this section, "insurer" has the meaning assigned by
Section 101.002 and includes an insurer that does not hold a
certificate of authority in this state, an eligible surplus lines
insurer, and an insurer that holds a certificate of authority in
this state.
SECTION 56. The heading to Chapter 302, Local Government
Code, is amended to read as follows:
CHAPTER 302. ENERGY SAVINGS PERFORMANCE CONTRACTS [OR WATER
CONSERVATION MEASURES] FOR LOCAL GOVERNMENTS
SECTION 57. Section 302.001, Local Government Code, is
amended to read as follows:
Sec. 302.001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Energy savings performance contract" means a
contract for energy or water conservation measures to reduce energy
or water consumption or operating costs of local government
facilities in which the estimated savings in utility costs
resulting from the measures is guaranteed to offset the cost of the
measures over a specified period. The term includes a contract for
the installation or implementation of:
(A) insulation of a building structure and
systems within the building;
(B) storm windows or doors, caulking or weather
stripping, multiglazed windows or doors, heat-absorbing or
heat-reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
(C) automatic energy control systems, including
computer software and technical data licenses;
(D) heating, ventilating, or air-conditioning
system modifications or replacements that reduce energy or water
consumption;
(E) lighting fixtures that increase energy
efficiency;
(F) energy recovery systems;
(G) electric systems improvements;
(H) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(I) water-conserving landscape irrigation
equipment;
(J) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
(i) landscape contouring, including the use
of berms, swales, and terraces; and
(ii) the use of soil amendments that
increase the water-holding capacity of the soil, including compost;
(K) rainwater harvesting equipment and equipment
to make use of water collected as part of a storm-water system
installed for water quality control;
(L) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
(M) equipment needed to capture water from
nonconventional, alternate sources, including air-conditioning
condensate or graywater, for nonpotable uses;
(N) metering equipment needed to segregate water
use in order to identify water conservation opportunities or verify
water savings; or
(O) other energy or water conservation-related
improvements or equipment, including improvements or equipment
relating to renewable energy or nonconventional water sources or
water reuse.
(2) "Local [, "local] government" means a county,
municipality, or other political subdivision of this state. The
term [local government] does not include a school district
authorized to enter into an energy savings performance [a] contract
[for energy or water conservation measures] under Section 44.901,
Education Code.
SECTION 58. Section 302.002, Local Government Code, is
amended to read as follows:
Sec. 302.002. ENERGY SAVINGS PERFORMANCE CONTRACTS [OR
WATER CONSERVATION MEASURES]. (a) The governing body of a local
government may enter into an energy savings performance [a]
contract [for energy or water conservation measures to reduce
energy or water consumption or operating costs of governmental
facilities] in accordance with this chapter.
(b) Each [A contract authorized under this chapter includes
a contract for the installation or implementation of:
[(1) insulation of the building structure and systems
within the building;
[(2) storm windows or doors, caulking or weather
stripping, multiglazed windows or doors, heat-absorbing or
heat-reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
[(3) automatic energy control systems, including
computer software and technical data licenses;
[(4) heating, ventilating, or air conditioning system
modifications or replacements that reduce energy or water
consumption;
[(5) lighting fixtures that increase energy
efficiency;
[(6) energy recovery systems;
[(7) electric systems improvements;
[(8) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
[(9) water-conserving landscape irrigation equipment;
[(10) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
[(A) landscape contouring, including the use of
berms, swales, and terraces; and
[(B) the use of soil amendments that increase the
water-holding capacity of the soil, including compost;
[(11) rainwater harvesting equipment and equipment to
make use of water collected as part of a storm-water system
installed for water quality control;
[(12) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
[(13) equipment needed to capture water from
nonconventional, alternate sources, including air conditioning
condensate or graywater, for nonpotable uses;
[(14) metering equipment needed to segregate water use
in order to identify water conservation opportunities or verify
water savings; or
[(15) other energy or water conservation-related
improvements or equipment, including improvements or equipment
related to renewable energy or nonconventional water sources or
water reuse.
[(c) All] energy or water conservation measure [measures]
must comply with current local, state, and federal construction,
plumbing, and environmental codes and regulations.
Notwithstanding Section 302.001(1) [anything to the contrary in
Subsection (b)], an energy savings performance [a] contract may
[for energy or water conservation measures shall] not include
improvements or equipment that allow or cause water from any
condensing, cooling, or industrial process or any system of
nonpotable usage over which public water supply system officials do
not have sanitary control to be returned to the potable water
supply.
SECTION 59. Section 302.003, Local Government Code, as
amended by Chapter 1319, Acts of the 77th Legislature, Regular
Session, 2001, is amended to read as follows:
Sec. 302.003. PAYMENT AND PERFORMANCE BOND.
Notwithstanding any other law [to the contrary], before entering
into an energy savings performance [a] contract [for energy
conservation measures], the governing body of the local government
shall require the provider of the energy or water conservation
measures to file with the governing body a payment and performance
bond relating to the installation of the [energy conservation]
measures in accordance with Chapter 2253, Government Code. The
governing body may also require a separate bond to cover the value
of the guaranteed savings on the contract.
SECTION 60. Section 302.004, Local Government Code, is
amended to read as follows:
Sec. 302.004. METHOD OF FINANCING; TERMS OF CONTRACT.
(a) An energy savings performance contract [Energy or water
conservation measures with respect to buildings or facilities] may
be financed:
(1) under a lease-purchase contract that has a term
not to exceed 15 years from the final date of installation and that
meets federal tax requirements for tax-free municipal leasing or
long-term financing;
(2) with the proceeds of bonds; or
(3) under a contract with the provider of the energy or
water conservation measures that has a term not to exceed 15 years
from the final date of installation.
(b) An energy savings performance [The] contract shall
contain provisions requiring [pursuant to which] the provider of
the energy or water conservation measures to guarantee [guarantees]
the amount of the savings to be realized by the local government
under the contract. If the term of the [a] contract [for energy or
water conservation measures] exceeds one year, the local
government's contractual obligations in any one year during the
term of the contract beginning after the final date of installation
may not exceed the total energy, water, wastewater, and operating
cost savings, including [but not limited to] electrical, gas,
water, wastewater, or other utility cost savings and operating cost
savings resulting from the measures as determined by the local
government in this subsection, divided by the number of years in the
contract term.
SECTION 61. Section 302.005, Local Government Code, as
amended by Chapters 573 and 1319, Acts of the 77th Legislature,
Regular Session, 2001, is reenacted and amended to read as follows:
Sec. 302.005. BIDDING PROCEDURES; AWARD OF CONTRACT.
(a) An energy savings performance [A] contract under this chapter
may be let in accordance with the procedures established for
procuring certain professional services by Section 2254.004,
Government Code. Notice of the request for qualifications shall be
published in the manner provided for competitive bidding.
(b) Before [(d) Prior to] entering into an energy savings
performance [a] contract [under this section], the governing body
must require that the cost savings projected by an offeror be
reviewed by a licensed [professional] engineer who is not an
officer or employee of an offeror for the contract under review or
otherwise associated with the contract or the offeror. An engineer
who reviews a contract shall maintain the confidentiality of any
proprietary information the engineer acquires while reviewing the
contract. Sections 1001.053 and 1001.407, Occupations Code, apply
[Section 19, The Texas Engineering Practice Act (Article 3271a,
Vernon's Texas Civil Statutes), applies] to work performed under
the contract.
SECTION 62. Section 74.103, Property Code, is amended by
adding Subsection (d) to read as follows:
(d) The comptroller may determine the liability of a holder
required to file a property report under Section 74.101 using the
best information available to the comptroller if the records of the
holder are unavailable or incomplete for any portion of the
required retention period.
SECTION 63. Section 74.501, Property Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) On receipt of a claim form and all necessary
documentation and as may be appropriate under the circumstances,
the comptroller may approve the claim of:
(1) the reported owner of the property;
(2) if the reported owner died testate:
(A) the appropriate legal beneficiaries of the
owner as provided by the last will and testament of the owner that
has been accepted into probate or filed as a muniment of title; or
(B) the executor of the owner's last will and
testament who holds current letters testamentary;
(3) if the reported owner died intestate:
(A) the legal heirs of the owner as provided by
Section 38, Texas Probate Code; or
(B) the court-appointed administrator of the
owner's estate;
(4) the legal heirs of the reported owner as
established by an affidavit of heirship order signed by a judge of
the county probate court or by a county judge;
(5) if the reported owner is a minor child or an adult
who has been adjudged incompetent by a court of law, the parent or
legal guardian of the child or adult;
(6) if the reported owner is a corporation:
(A) the president or chair of the board of
directors of the corporation, on behalf of the corporation; or
(B) any person who has legal authority to act on
behalf of the corporation;
(7) if the reported owner is a corporation that has
been dissolved or liquidated:
(A) the sole surviving shareholder of the
corporation, if there is only one surviving shareholder;
(B) the surviving shareholders of the
corporation in proportion to their ownership of the corporation, if
there is more than one surviving shareholder;
(C) the corporation's bankruptcy trustee; or
(D) the court-ordered receiver for the
corporation; or
(8) any other person that is entitled to receive the
unclaimed property under other law or comptroller policy.
(e) The comptroller may not pay to the following persons a
claim to which this section applies:
(1) a creditor, a judgment creditor, a lienholder, or
an assignee of the reported owner or of the owner's heirs; or
(2) a person holding a power of attorney from the
reported owner or the owner's heirs.
SECTION 64. Sections 111.104(b) and (c), Tax Code, are
amended to read as follows:
(b) A tax refund claim may be filed with the comptroller
only by the person who directly paid the tax to this state or by the
person's attorney, assignee, or other successor.
(c) A claim for a refund must:
(1) be written;
(2) state fully and in detail each reason or ground
[the grounds] on which the claim is founded; and
(3) be filed before the expiration of the applicable
limitation period as provided by this code or before the expiration
of six months after a jeopardy or deficiency determination becomes
final, whichever period expires later.
SECTION 65. Section 111.1042, Tax Code, is amended by
adding Subsection (d) to read as follows:
(d) If the right to a hearing is not exercised on a full or
partial denial of a claim for refund, the period during which the
comptroller informally reviewed the claim for refund does not toll
the limitation period for any subsequent claim for refund on the
same period and type of tax for which the claim for refund was fully
or partially denied.
SECTION 66. Section 111.105, Tax Code, is amended by
amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) A person claiming a refund under Section 111.104 [of
this code] is entitled to a hearing on the claim if the person
requests a hearing on or before the 30th day after the date [in
accordance with procedures prescribed by] the comptroller issues a
letter denying the claim for refund. The person is entitled to 20
days' notice of the time and place of the hearing.
(e) During the administrative hearing process, a person
claiming a refund under Section 111.104 must submit documentation
to enable the comptroller to verify the claim for refund. The
comptroller may issue a notice of demand that all evidence to
support the claim for refund must be produced before the expiration
of a specified date in the notice. The specified date in the notice
may not be earlier than 180 days after the date the refund is
claimed. The comptroller may not consider evidence produced after
the specified date in the notice in an administrative hearing. The
limitation provided by this subsection does not apply to a judicial
proceeding filed in accordance with Chapter 112.
SECTION 67. Section 111.107, Tax Code, is amended to read as
follows:
Sec. 111.107. WHEN REFUND OR CREDIT IS PERMITTED.
(a) Except as otherwise expressly provided, a person may request a
refund or a credit or the comptroller may make a refund or issue a
credit for the overpayment of a tax imposed by this title at any
time before the expiration of the period during which the
comptroller may assess a deficiency for the tax and not thereafter
unless the refund or credit is requested:
(1) under Subchapter B of Chapter 112 and the refund is
made or the credit is issued under a court order;
(2) under the provision of Section 111.104(c)(3)
applicable to a refund claim filed after a jeopardy or deficiency
determination becomes final; or
(3) under Chapter 153, except Section 153.1195(e),
153.121(d), 153.2225(e), or 153.224(d).
(b) A person may not refile a refund claim for the same
transaction or item, tax type, period, and ground or reason that was
previously denied by the comptroller.
SECTION 68. Sections 111.206(b), (c), and (d), Tax Code,
are amended to read as follows:
(b) A final determination that affects the amount of
liability of a tax imposed by this title shall be reported to the
comptroller before the expiration of 120 [60] days after the day on
which the determination becomes final. The report must include a
detailed statement of the reasons for the difference in tax
liability as required by the comptroller.
(c) Notwithstanding the expiration of a period of
limitation provided in this title, the comptroller may assess and
collect or bring suit for the collection of any tax deficiency,
including penalties and interest, resulting from a final
determination [or from investigation] at any time before the
expiration of one year after:
(1) the later of the day the report is required to be
filed as provided by Subsection (b) or the day [of this section is
received, if] the report is received [filed within the 60-day
period]; or
(2) [if the report is not made or is made after the
60-day period, the day the report is received or] the day the final
determination is discovered, if a report is not filed [whichever
period is the shorter].
(d) If a final determination [or investigation] results in
the taxpayer having overpaid the amount of tax due the state, the
taxpayer may file a claim for refund with the comptroller [shall
refund or issue a credit] for the amount of the overpayment before
the first anniversary of the date the final determination becomes
final. If the comptroller assesses tax by issuing a deficiency
determination within the [at any time during the one-year] period
provided by [during which assessments may be made under] Subsection
(c), the taxpayer may file a claim for refund for an amount of tax
that has been found due in a deficiency determination before the
180th day after the deficiency determination becomes final, but the
claim is limited to the items and the tax payment period for which
the determination was issued [of this section].
SECTION 69. Sections 111.207(a) and (b), Tax Code, are
amended to read as follows:
(a) In determining the expiration date for a period when a
tax imposed by this title may be assessed, [or] collected, or
refunded, the following periods are not considered:
(1) the period following the date of a tax payment made
under protest, but only if a lawsuit is timely filed in accordance
with Chapter 112;
(2) the period during which a judicial proceeding is
pending in a court of competent jurisdiction to determine the
amount of the tax due; and
(3) the period during which an administrative
redetermination or refund hearing [proceeding] is pending before
the comptroller [for a redetermination of the tax liability].
(b) The suspension of a period of limitation under
Subsection (a) is limited [of this section applies only] to the
issues that were contested [amount of taxes in issue] under
Subdivision (1), (2), or (3) of that subsection.
SECTION 70. Section 112.058(a), Tax Code, is amended to
read as follows:
(a) Payments [Except as provided in Subsections (b) and (c)
of this section, payments] made under protest are to be handled as
follows:
(1) An officer who receives payments made under
protest as required by Section 112.051 [of this code] shall each day
send to the comptroller the payments, a list of the persons making
the payments, and a written statement that the payments were made
under protest.
(2) The comptroller shall, immediately on receipt,
credit the payments to each fund to which the tax or fee paid under
protest is allocated by law.
(3) The comptroller shall maintain detailed records of
payments made under protest.
(4) A payment under protest bears pro rata interest.
The pro rata interest is the amount of interest earned by the
protested funds [that would be due if the amount had been placed in
the suspense account of the comptroller].
SECTION 71. Section 142.002, Tax Code, is amended by
amending Subdivisions (1), (2), (3), (4), and (6) and adding
Subdivisions (3-a), (3-b), and (3-c) to read as follows:
(1) "Agreement" means the Streamlined Sales and Use
Tax Agreement as amended and adopted on November 12, 2002 [January
27, 2001].
(2) "Certified automated system" means software
certified under [jointly by the states that are signatories to] the
agreement to calculate [compute] the tax imposed by each
jurisdiction on a transaction, determine the amount of tax to remit
to the appropriate state, and maintain a record of the transaction.
(3) "Certified service provider" means an agent
certified under [jointly by the states that are signatories to] the
agreement to perform all of the seller's sales tax functions, other
than the seller's obligation to remit tax on the seller's own
purchases.
(3-a) "Model 1 seller" means a seller that has
selected a certified service provider as the seller's agent to
perform all of the seller's sales and use tax functions, other than
the seller's obligation to remit tax on the seller's own purchases.
(3-b) "Model 2 seller" means a seller that has
selected a certified automated system to perform part of the
seller's sales and use tax functions, but retains responsibility
for remitting the tax.
(3-c) "Model 3 seller" means a seller that has sales in
at least five member states, has total annual sales revenue of at
least $500 million, has a proprietary system that calculates the
amount of tax due each jurisdiction, and has entered into a
performance agreement with the member states that establishes a tax
performance standard for the seller. The term includes an
affiliated group of sellers using the same proprietary system.
(4) "Sales tax" means a sales tax administered or
computed under Chapter 151 [this subtitle or Subtitle C, Title 3, or
in a similar manner].
(6) "Use tax" means a use tax administered or computed
under Chapter 151 [this subtitle or Subtitle C, Title 3, or in a
similar manner].
SECTION 72. Section 142.005, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c) The comptroller may enter into the agreement on behalf
of this state if the governor, lieutenant governor, speaker of the
house of representatives, and comptroller unanimously agree that it
would be in this state's best interest to be a signatory to the
agreement.
SECTION 73. Chapter 142, Tax Code, is amended by adding
Section 142.0055 to read as follows:
Sec. 142.0055. RULES. The comptroller may adopt rules
relating to the administration and collection of the sales and use
tax as necessary to comply with the agreement, including rules
establishing the requirements for a seller to be a Model 1 seller,
Model 2 seller, or Model 3 seller.
SECTION 74. Chapter 142, Tax Code, is amended by adding
Section 142.011 to read as follows:
Sec. 142.011. SETTLEMENT OF TAX, PENALTY, AND INTEREST. On
or after the later of the date on which the agreement takes effect
as provided by the terms of the agreement or this state becomes a
signatory to the agreement, the comptroller may settle a claim for
tax, penalty, or interest on tax imposed by Chapter 151 if necessary
for the comptroller to comply with the terms of the agreement.
SECTION 75. Section 151.011(a), Tax Code, is amended to
read as follows:
(a) Except as provided by Subsection (c) of this section,
"use" means the exercise of a right or power incidental to the
ownership of tangible personal property over tangible personal
property, including tangible personal property other than printed
material that has been processed, fabricated, or manufactured into
other property or attached to or incorporated into other property
transported into this state, and, except as provided by Section
151.056(b) of this code, includes the incorporation of tangible
personal property into real estate or into improvements of real
estate whether or not the real estate is subsequently sold.
SECTION 76. Subchapter A, Chapter 151, Tax Code, is amended
by adding Section 151.012 to read as follows:
Sec. 151.012. EFFECTIVE DATE OF TAX RATE CHANGES. (a) A
change in the rate of the tax imposed under Sections 151.051 and
151.101 must take effect on the first day of a calendar quarter.
(b) If the performance of a taxable service begins before
the effective date of a change in the tax rate and the performance
will not be completed until after that effective date, the change in
the tax rate applies to the first billing period for the service
performed on or after that effective date.
SECTION 77. Section 151.025, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) If any nontaxable charges are combined with and not
separately stated from taxable telecommunications service charges
on the customer bill or invoice of a provider of telecommunications
services, the combined charge is subject to tax unless the provider
can identify the portion of the charges that are nontaxable through
the provider's books and records kept in the regular course of
business. If the nontaxable charges cannot reasonably be
identified, the charges from the sale of both nontaxable services
and taxable telecommunications services are attributable to
taxable telecommunications services. The provider of
telecommunications services has the burden of proving nontaxable
charges.
SECTION 78. Section 151.103, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) A retailer who holds a sales tax permit issued by the
comptroller under this chapter shall collect any applicable local
use tax that is due from a purchaser even if the retailer is not
engaged in business in the local jurisdiction into which the
taxable item is shipped or delivered.
SECTION 79. Section 151.152(b), Tax Code, is amended to
read as follows:
(b) A resale certificate must:
(1) be signed by the purchaser or contain an
electronic form of the purchaser's signature authorized by the
comptroller and contain the purchaser's name and address;
(2) state the purchaser's tax permit number or that the
purchaser's application for a tax permit is pending before the
comptroller; and
(3) contain a description of the tangible personal
property sold, leased, or rented by the purchaser in the regular
course of business or transferred as an integral part of a taxable
service performed in the regular course of business.
SECTION 80. Section 151.202, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c) A person desiring to be a seller in this state must agree
to collect any applicable local use tax that may be imposed by a
local jurisdiction even if the seller is not engaged in business in
the local jurisdiction into which the taxable item is shipped or
delivered.
SECTION 81. Section 151.307(b), Tax Code, is amended to
read as follows:
(b) When an exemption is claimed because tangible personal
property is exported beyond the territorial limits of the United
States, proof of export may be shown only by:
(1) a bill of lading issued by a licensed and
certificated carrier of persons or property showing the seller as
consignor, the buyer as consignee, and a delivery point outside the
territorial limits of the United States;
(2) [documentation:
[(A) provided by a United States Customs Broker
licensed by the comptroller under Section 151.157;
[(B) certifying that delivery was made to a point
outside the territorial limits of the United States; and
[(C) to which a stamp issued under Section
151.158 is affixed in the manner required by that section or Section
151.157;
[(3)] import documents from the country of destination
showing that the property was imported into a country other than the
United States;
(3) [(4)] an original airway, ocean, or railroad bill
of lading and a forwarder's receipt if an air, ocean, or rail
freight forwarder takes possession of the property; or
(4) [(5)] any other manner provided by the comptroller
for an enterprise authorized to make tax-free purchases under
Section 151.156.
SECTION 82. Section 151.314, Tax Code, is amended by
amending Subsections (c), (e), (f), and (g) and adding Subsections
(c-1), (c-2), and (c-3) to read as follows:
(c) "Food products" shall not include:
(1) drugs, medicines, tonics, vitamins, dietary
supplements, and medicinal preparations in any form;
(2) carbonated and noncarbonated packaged soft
drinks, which are nonalcoholic beverages that contain natural or
artificial sweeteners [and diluted juices and ice and candy];
(3) ice; or
(4) candy [foods and drinks (which include meals, milk
and milk products, fruit and fruit products, sandwiches, salads,
processed meats and seafoods, vegetable juices, ice cream in cones
or small cups) served, prepared, or sold ready for immediate
consumption in or by restaurants, lunch counters, cafeterias,
vending machines, hotels, or like places of business or sold ready
for immediate consumption from pushcarts, motor vehicles, or any
other form of vehicle].
(c-1) For purposes of this section, diluted juice that is
more than 50 percent vegetable or fruit juice by volume is not
considered to be a soft drink.
(c-2) The exemption provided by Subsection (a) does not
include the following prepared food:
(1) food, food products, and drinks, including meals,
milk and milk products, fruit and fruit products, sandwiches,
salads, processed meats and seafoods, vegetable juice, and ice
cream in cones or small cups, served, prepared, or sold ready for
immediate consumption in or by restaurants, lunch counters,
cafeterias, vending machines, hotels, or like places of business or
sold ready for immediate consumption from pushcarts, motor
vehicles, or any other form of vehicle;
(2) food sold in a heated state or heated by the
seller; or
(3) two or more food ingredients mixed or combined by
the seller for sale as a single item, including items that are sold
in an unheated state by weight or volume as a single item, but not
including food that is only cut, repackaged, or pasteurized by the
seller.
(c-3) The exemption provided by Subsection (a) includes:
(1) bakery items sold without plates or other eating
utensils, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, doughnuts, Danish, cakes, tortes, pies,
tarts, muffins, bars, cookies, and tortillas; and
(2) eggs, fish, meat, and poultry, and foods
containing these raw animal foods, that require cooking by the
consumer as recommended by the Food and Drug Administration in
Chapter 3, Section 401.11 of its Food Code to prevent food-borne
illness and any other food that requires cooking by the consumer
before the food is edible.
(e) Food products, candy, and soft drinks [carbonated
beverages, and diluted juices] are exempted from the taxes imposed
by this chapter if sold at an exempt sale qualifying under this
subsection or if stored or used by the purchaser of the item at the
exempt sale. A sale is exempted under this subsection if:
(1) the sale is made by a person under 19 years old who
is a member of a nonprofit organization devoted to the exclusive
purpose of education or religious or physical training or by a group
associated with a public or private elementary or secondary school;
(2) the sale is made as a part of a fund-raising drive
sponsored by the organization or group; and
(3) all net proceeds from the sale go to the
organization or group for its exclusive use.
(f) The exemption provided by this section does
[Subsections (a), (b), and (c) of this section do] not apply to the
sale of food products through the use or operation of a vending
machine for which [edible products for human consumption] the
receipts or sales prices are determined by [price for which are
taxed subject to] Section 151.007(d) [of this code].
(g) The exemption provided by Subsection (d)(3) does not
apply to food products, meals, soft drinks, and candy [for human
consumption] sold to a person confined in a correctional facility
operated under the authority or jurisdiction of or under contract
with this state or a political subdivision of the state.
SECTION 83. Section 151.317(a), Tax Code, is amended to
read as follows:
(a) Subject to Subsection (d), gas and electricity are
exempted from the taxes imposed by this chapter when sold for:
(1) residential use;
(2) use in powering equipment exempt under Section
151.318 or 151.3185 by a person processing tangible personal
property for sale as tangible personal property, other than
preparation or storage of prepared food described by Section
151.314(c-2) [food for immediate consumption];
(3) use in lighting, cooling, and heating in the
manufacturing area during the actual manufacturing or processing of
tangible personal property for sale as tangible personal property,
other than preparation or storage of prepared food described by
Section 151.314(c-2) [food for immediate consumption];
(4) use directly in exploring for, producing, or
transporting, a material extracted from the earth;
(5) use in agriculture, including dairy or poultry
operations and pumping for farm or ranch irrigation;
(6) use directly in electrical processes, such as
electroplating, electrolysis, and cathodic protection;
(7) use directly in the off-wing processing, overhaul,
or repair of a jet turbine engine or its parts for a certificated or
licensed carrier of persons or property;
(8) use directly in providing, under contracts with or
on behalf of the United States government or foreign governments,
defense or national security-related electronics, classified
intelligence data processing and handling systems, or
defense-related platform modifications or upgrades;
(9) a direct or indirect use, consumption, or loss of
electricity by an electric utility engaged in the purchase of
electricity for resale; or
(10) use in timber operations, including pumping for
irrigation of timberland.
SECTION 84. Section 151.317(c), Tax Code, as amended by
Chapters 631 and 1467, Acts of the 76th Legislature, Regular
Session, 1999, is reenacted to read as follows:
(c) In this section, "residential use" means use:
(1) in a family dwelling or in a multifamily apartment
or housing complex or building or in a part of a building occupied
as a home or residence when the use is by the owner of the dwelling,
apartment, complex, or building or part of the building occupied;
or
(2) in a dwelling, apartment, house, or building or
part of a building occupied as a home or residence when the use is by
a tenant who occupies the dwelling, apartment, house, or building
or part of a building under a contract for an express initial term
for longer than 29 consecutive days.
SECTION 85. Section 151.318, Tax Code, is amended by
amending Subsections (b) and (s) and adding Subsection (q-1) to
read as follows:
(b) The exemption includes:
(1) chemicals, catalysts, and other materials that are
used during a manufacturing, processing, or fabrication operation
to produce or induce a chemical or physical change, to remove
impurities, or to make the product more marketable; [and]
(2) semiconductor fabrication cleanrooms and
equipment; and
(3) pharmaceutical biotechnology cleanrooms and
equipment that are installed as part of the construction of a new
facility with a value of at least $150 million and on which
construction began after July 1, 2003, and before August 31, 2004.
(q-1) For purposes of Subsection (b), "pharmaceutical
biotechnology cleanrooms and equipment" means all tangible
personal property, without regard to whether the property is
affixed to or incorporated into realty, used in connection with the
manufacturing, processing, or fabrication in a cleanroom
environment of a pharmaceutical biotechnology product, without
regard to whether the property is actually contained in the
cleanroom environment. The term includes integrated systems,
fixtures, and piping, all property necessary or adapted to reduce
contamination or to control airflow, temperature, humidity,
chemical purity, or other environmental conditions or
manufacturing tolerances, and production equipment and machinery.
The term does not include the building or a permanent, nonremovable
component of the building that houses the cleanroom environment.
The term includes moveable cleanroom partitions and cleanroom
lighting. "Pharmaceutical biotechnology cleanrooms and equipment"
are not "intraplant transportation equipment" as that term is used
in Subsection (c)(1).
(s) The following do not apply to the semiconductor
fabrication cleanrooms and equipment in Subsection (q) or the
pharmaceutical biotechnology cleanrooms and equipment in
Subsection (q-1):
(1) limitations in Subsection (a)(2) that refer to
tangible personal property directly causing chemical and physical
changes to the product being manufactured, processed, or fabricated
for ultimate sale;
(2) Subsection (c)(1); and
(3) Subsection (c)(4).
SECTION 86. Section 151.3181, Tax Code, is amended by
adding Subsection (h) to read as follows:
(h) The use of "pharmaceutical biotechnology cleanrooms and
equipment," as that term is defined by Section 151.318(q-1), to
manufacture, process, or fabricate a pharmaceutical biotechnology
product that is not sold is not a divergent use if the use occurs
during the certification process by the United States Food and Drug
Administration.
SECTION 87. Section 153.119(d), Tax Code, is amended to
read as follows:
(d) If the quantity of gasoline used in Texas by auxiliary
power units or power take-off equipment on any motor vehicle can be
accurately measured while the motor vehicle is stationary by any
metering or other measuring device or method designed to measure
the fuel separately from fuel used to propel the motor vehicle, the
comptroller may approve and adopt the use of any device as a basis
for determining the quantity of gasoline consumed in those
operations for tax credit or tax refund. The climate-control air
conditioning or heating system of a motor vehicle that has a primary
purpose of providing for the convenience or comfort of the operator
or passengers is not a power take-off system, and a refund may not
be allowed for the tax paid on any portion of the gasoline that is
used for that purpose.
SECTION 88. Section 153.222(d), Tax Code, is amended to
read as follows:
(d) If the quantity of diesel fuel used in Texas by
auxiliary power units or power take-off equipment on any motor
vehicle can be accurately measured while the motor vehicle is
stationary by any metering or other measuring device or method
designed to measure the fuel separately from fuel used to propel the
motor vehicle, the comptroller may approve and adopt the use of any
device as a basis for determining the quantity of diesel fuel
consumed in those operations for tax credit or tax refund. If no
separate metering device or other approved measuring method is
provided, the following credit or refund procedures are authorized.
A permitted supplier, a dyed diesel fuel bonded user, or an
agricultural bonded user who operates diesel-powered motor
vehicles equipped with a power take-off or a diesel-powered
auxiliary power unit mounted on the motor vehicle and using the fuel
supply tank of the motor vehicle may be allowed a deduction from the
taxable gallons used in this state in each motor vehicle so
equipped. The comptroller shall determine the percentage of the
deduction. A user who is required to pay the tax on diesel fuel used
in motor vehicles so equipped may file a claim for a refund not to
exceed the percentage allowed by the comptroller of the total
taxable fuel used in this state in each motor vehicle so equipped.
The climate-control air conditioning or heating system of a motor
vehicle that has a primary purpose of providing for the convenience
or comfort of the operator or passengers is not a power take-off
system, and a refund may not be allowed for the tax paid on any
portion of the diesel fuel that is used for that purpose.
SECTION 89. Section 171.001, Tax Code, is amended by
amending Subsections (a) and (b) and adding Subsection (d) to read
as follows:
(a) A franchise tax is imposed on:
(1) each corporation that does business in this state
or that is organized under the laws of [chartered or authorized to
do business in] this state, and
(2) each limited liability company that does business
in this state or that is organized under the laws of this state [or
is authorized to do business in this state].
(b) In this chapter:
(1) "Banking corporation" means each state, national,
domestic, or foreign bank, whether organized under the laws of this
state, another state, or another country, or under federal law,
including a limited banking association organized under Subtitle A,
Title 3, Finance Code, and each bank organized under Section 25(a),
Federal Reserve Act (12 U.S.C. Secs. 611-631) (edge corporations),
but does not include a bank holding company as that term is defined
by Section 2, Bank Holding Company Act of 1956 (12 U.S.C. Sec.
1841).
(2) "Beginning date" means:
(A) for a corporation chartered in this state,
the date on which the corporation's charter takes effect; and
(B) for a foreign corporation, the earlier of the
date on which:
(i) the corporation's certificate of
authority takes effect; or
(ii) the corporation begins doing business
in this state.
(3) "Corporation" includes:
(A) a limited liability company, as defined under
the Texas Limited Liability Company Act;
(B) a savings and loan association; and
(C) a banking corporation.
(4) "Charter" includes a limited liability company's
certificate of organization.
(5) "Internal Revenue Code" means, except as otherwise
provided in this chapter, the Internal Revenue Code of 1986 in
effect for the federal tax year beginning on or after January 1,
1996, and before January 1, 1997, and any regulations adopted under
that code applicable to that period.
(6)(A) "Investment partnership":
(i) means a partnership in which:
(a) not less than 90 percent of either
the original federal income tax basis under the Internal Revenue
Code or the current fair market value of the partnership's total
assets consist of qualified investment securities and operating
assets reasonably necessary to carry on the partnership's
investment activities and not less than 90 percent of the
partnership's gross income is passive investment income; or
(b) not less than 90 percent of the
partnership interests are owned directly or indirectly by an
Employee Stock Ownership Plan that has received a favorable
determination letter from the Internal Revenue Service; and
(ii) does not include a partnership that is
a dealer in securities, as defined by Section 475(c)(1), Internal
Revenue Code.
(B) For purposes of Paragraph (A)(i)(a), a
partnership shall exclude the basis in or value of an interest in a
limited liability company and the gross income from an interest in a
limited liability company unless the limited liability company
would qualify as an investment partnership if the limited liability
company were organized as a partnership.
(7) "Investment partnership interest" means a limited
partnership interest in an investment partnership or a beneficial
interest in a trust or business trust that is an investment
partnership.
(8) "Officer" and "director" include a limited
liability company's directors and managers and a limited banking
association's directors and managers and participants if there are
no directors or managers.
(9) "Partnership" includes:
(A) a joint venture;
(B) a general partnership;
(C) a limited partnership, except an Exempt
Wholesale Generator, as defined by the Energy Policy Act of 1992 (15
U.S.C. Sec. 79z-5A) and the Utilities Code, if that entity entered
into contracts prior to December 31, 2002, for the sale of
electricity that do not provide for modification to pricing by
reason of amendments to this chapter; and
(D) a trust or business trust.
(10) "Partner" includes a beneficiary in a trust or
business trust.
(11) "Partnership interest" includes a beneficial
interest in a trust or business trust.
(12) "Passive investment income" means dividends,
interest, or other gross income attributable to the ownership or
disposition of qualified investment securities.
(13) "Public partnership" means a partnership that is:
(A) a publicly traded partnership as defined by
Section 7704(b), Internal Revenue Code of 1986, as effective
January 1, 2003, and was formed on or before January 1, 2003,
without regard to whether such partnership qualifies under any
exceptions to Section 7704(a), Internal Revenue Code of 1986, as
effective January 1, 2003;
(B) a limited partnership to the extent the
limited partnership interests are owned directly or indirectly by
an entity described by Paragraph (A) or a trust or business trust to
the extent the beneficial interests are owned directly or
indirectly by an entity described by Paragraph (A);
(C) a limited partnership to the extent the
limited partnership interests are owned directly or indirectly by
an entity qualifying as a financial asset securitization investment
trust as defined by Section 860L, Internal Revenue Code of 1986, as
effective January 1, 2003; a real estate investment trust as
defined by Section 856, Internal Revenue Code of 1986, as effective
January 1, 2003; a qualified REIT subsidiary as defined by Section
856(i), Internal Revenue Code of 1986, as effective January 1,
2003; a real estate mortgage investment conduit as defined by
Section 860D, Internal Revenue Code of 1986, as effective January
1, 2003; or a regulated investment company as defined by Section
851, Internal Revenue Code of 1986, as effective January 1, 2003; or
(D) a trust or business trust that qualifies as
an entity described in paragraph (C).
(14) "Public partnership interest" means:
(A) a limited partnership interest in a publicly
traded partnership as defined by Section 7704(b), Internal Revenue
Code of 1986, as effective January 1, 2003, and was formed on or
before January 1, 2003, without regard to whether such partnership
qualifies under any exceptions to Section 7704(a), Internal Revenue
Code of 1986, as effective January 1, 2003;
(B) a limited partnership interest owned
directly or indirectly by an entity described by Paragraph (A) or a
beneficial interest in a trust or business trust owned directly or
indirectly by an entity described by paragraph (A);
(C) a limited partnership interest owned
directly or indirectly by an entity qualifying as a financial asset
securitization investment trust as defined by Section 860L,
Internal Revenue Code of 1986, as effective January 1, 2003; a real
estate investment trust as defined by Section 856, Internal Revenue
Code of 1986, as effective January 1, 2003; a qualified REIT
subsidiary as defined by Section 856(i), Internal Revenue Code of
1986, as effective January 1, 2003; a real estate mortgage
investment conduit as defined by Section 860D, Internal Revenue
Code of 1986, as effective January 1, 2003; or a regulated
investment company as defined by Section 851, Internal Revenue Code
of 1986, as effective January 1, 2003; or
(D) a beneficial interest in a trust or business
trust that qualifies as an entity described in paragraph (C).
(15) "Qualified investment securities":
(A) means:
(i) common stock, including preferred or
debt securities convertible into common stock, and preferred stock;
(ii) bonds, debentures, and other debt
securities;
(iii) deposits and any other obligations of
banks and other financial institutions;
(iv) stock and bond index securities,
futures contracts, options on securities, and other similar
financial securities and instruments;
(v) an investment partnership interest or a
public partnership interest; and
(vi) an interest in a limited liability
company that would qualify as an investment partnership if the
limited liability company were organized as a partnership; and
(B) does not include an interest in a partnership
unless that partnership is an investment partnership or a public
partnership.
(16) [(7)] "Savings and loan association" means a
savings and loan association or savings bank, whether organized
under the laws of this state, another state, or another country, or
under federal law.
(17) [(8)] "Shareholder" includes a limited liability
company's member and a limited banking association's participant.
(18) "Temporary amortization" means the amortization
of the Texas asset basis using the straight-line method over 30
privilege periods, beginning with the privilege period covered by
the report which corresponds to the first period a limited partner
became subject to the franchise tax under Subsection (d).
(19) "Texas asset basis" means a limited partner's
total net asset basis for financial accounting purposes computed in
accordance with generally accepted accounting principles less the
adjusted tax basis of the partner's total net assets for federal
income tax purposes as of the first day of the tax year covered by
the report which corresponds to the first period a limited partner
became subject to the franchise tax under Subsection (d).
(20) "Tiered partnership arrangement" means an
ownership structure in which some or all of the interests in one
partnership (a "lower tier partnership") are owned by a second
partnership (an "upper tier partnership"). A tiered partnership
arrangement may have two or more tiers.
(d)(1) Except as otherwise provided in this subsection, a
corporation does business in this state if the corporation is a
general or limited partner in a partnership whose activities, if
conducted directly by the corporation, would cause that corporation
to be subject to the franchise tax.
(2) Notwithstanding any other provision in this
subsection, a corporation is not doing business in this state
solely by reason of owning an investment partnership interest or a
public partnership interest.
(3) A corporation is not doing business in this state
solely by reason of owning a beneficial interest in a trust or
business trust that does business in this state, unless the
corporation and its related entities, as defined in Section
171.1101(b)(2)(A), have the power or authority to:
(A) remove and/or replace the trustee of the
trust or business trust or, if more than one trustee, a majority of
the trustees of the trust or business trust; or
(B) compel the trustee or trustees of the trust
or business trust to take actions, or refrain from taking actions,
relating to the management, activities or policies of the trust or
business trust.
(4) Partners owning interests in upper tier
partnerships are considered to be partners in lower tier
partnerships for purposes of this subsection, except that partners
owning upper tier public partnership interests are not considered
to be partners in lower tier partnerships.
(5) If this subsection is found by any court of
competent jurisdiction to be invalid as extending the Texas
franchise tax beyond the limits of the United States Constitution
and federal law adopted under the United States Constitution, then
the franchise tax will be imposed on the partnership and the
franchise tax liability of the partnership shall be calculated
under Tax Code Section 171.006(b) as if the partnership were a
corporation.
SECTION 90. Subchapter A, Chapter 171, Tax Code, is amended
by adding Section 171.006 to read as follows:
Sec. 171.006. WITHHOLDING TAX OBLIGATION IMPOSED ON
PARTNERSHIPS WITH RESPECT TO NONREPORTING CORPORATE PARTNERS.
(a) Each partnership that does business in this state other than a
public partnership or an investment partnership is subject to a
franchise tax withholding obligation as described by this section.
(b) The withholding tax payable by a partnership shall be
equal to the amount of tax computed under Section 171.002 as if such
partnership were a corporation, multiplied by the nonreporting
corporate partners' percentage share of the partnership's federal
taxable income determined as if such partnership were a
corporation. If a lower tier partnership is subject to this
section, an upper tier partnership's income attributable to the
interest in the lower tier partnership shall be deducted for
purposes of computing the upper tier partnership's withholding tax
payable under this section.
(c) In determining whether a partner is a nonreporting
corporate partner, a partnership may rely on the statement of a
person owning an interest in the partnership, on a form prescribed
by the comptroller, that the person is not a corporate partner. An
upper tier partnership submitting a statement under this subsection
to a lower tier partnership must disclose any direct partner or
indirect partner in the upper tier partnership or any tiered
partnership arrangement that is a corporate partner. Public
partnerships and investment partnerships are not required to
identify or disclose interests directly or indirectly owned by
corporations or limited liability companies.
(d) Each nonreporting corporate partner shall be allowed a
credit against its franchise tax liability under this chapter for
any withholding tax paid by a partnership in connection with the
nonreporting corporate partner's interest in the partnership.
(e) A partnership shall not be liable for failing to
withhold tax as required by this section with respect to the
interest of a nonreporting corporate partner to the extent the
nonreporting corporate partner pays the tax against which the
withholding tax may be credited.
(f) A partnership is subject to the application of
Subchapters D and E, other than Section 171.203, with regard to any
withholding tax imposed by this section as if the partnership were a
corporation. A partnership that does not owe any withholding tax
for a period specified by Subchapter D because it does not have any
nonreporting corporate partners shall not be required to file a
report under Section 171.201 or 171.202 for that period, but shall
file an information report for that period stating that the
partnership has no nonreporting corporate partners and including
such other information as the comptroller may require. The reports
required by this subsection shall include copies of all partner
reporting agreements received by the partnership during any
partnership reporting period. If a partnership fails to timely
file a copy of a partner reporting agreement, the partnership shall
treat the corporate partner submitting the agreement as a
nonreporting corporate partner.
(g) A partner reporting agreement filed with a partnership
is effective until revoked in writing by a corporate partner or
until the comptroller notifies the partnership in writing to treat
the interest of a corporate partner as an interest of a nonreporting
corporate partner because of the corporate partner's failure to
comply with the terms of the partner reporting agreement.
(h) Every partnership that withholds tax under this section
shall furnish to each nonreporting corporate partner a written
statement, as prescribed by the comptroller, showing the amount of
withheld tax under this section allocable to such corporate
partner's interest in the partnership and such other information as
the comptroller may require.
(i) In this section:
(1) "Corporate partner" means a direct partner or an
indirect partner that is a corporation or limited liability company
that is not exempted from the franchise tax. The term does not
include:
(A) an interest directly or indirectly owned by a
corporation or limited liability company in or through an
investment partnership interest or a public partnership interest;
or
(B) a beneficial interest directly or indirectly
held or owned by a corporation or limited liability company in a
trust or business trust that is not deemed to be doing business in
this State pursuant to sections 171.001(d)(2) or 171.001(d)(3).
(2) "Direct partner" means a person that directly owns
an interest in a partnership.
(3) "Indirect partner" means, with respect to a lower
tier partnership, a person that owns an interest in an upper tier
partnership.
(4) "Nonreporting corporate partner" means a
corporate partner that does not file a partner reporting agreement
with a partnership. The term does not include:
(A) an interest directly or indirectly owned by a
corporation or limited liability company in or through an
investment partnership interest or a public partnership interest;
or
(B) a beneficial interest directly or indirectly
held or owned by a corporation or limited liability company in a
trust or business trust that is not deemed to be doing business in
this State pursuant to sections 171.001(d)(2) or 171.001(d)(3).
(5) "Partner reporting agreement" means a form
prescribed by the comptroller in which a corporate partner consents
to the imposition of the franchise tax under this chapter on such
corporate partner, agrees to file returns and make timely payment
of all taxes imposed by this chapter, and agrees to be subject to
personal jurisdiction in this state for purposes of the collection
of any unpaid franchise tax under this chapter, together with
related interest and penalties.
SECTION 91. Subsection (c), Section 171.1032, Tax Code, is
amended to read as follows:
(c) A corporation shall include in its gross receipts
computed under Subsection (a) the corporation's share of the gross
receipts of each partnership and joint venture in which the
corporation owns an interest directly or indirectly [of which the
corporation is a part] apportioned to this state as though the
corporation directly earned the receipts[, including receipts from
business done with the corporation]. A corporation owning an
interest in an upper tier partnership is considered to be a partner
in each lower tier partnership, and the corporation's share of the
gross receipts of each partnership shall be computed and
apportioned to this state as though the corporation directly earned
the receipts at the partnership tier at which the receipts were
originally earned.
SECTION 92. Subsection (d), Section 171.1051, Tax Code, is
amended to read as follows:
(d) A corporation shall include in its gross receipts
computed under Subsection (a) the corporation's share of the gross
receipts of each partnership and joint venture in which the
corporation owns an interest directly or indirectly [of which the
corporation is a part]. A corporation owning an interest in an
upper tier partnership is considered to be a partner in each lower
tier partnership, and the corporation's share of the gross receipts
of each partnership shall be computed as though the corporation
directly earned the receipts at the partnership tier at which the
receipts were originally earned.
SECTION 93. Subsection (d), Section 171.110, Tax Code, is
amended to read as follows:
(d) A corporation's reportable federal taxable income is
the corporation's federal taxable income after Schedule C special
deductions and before net operating loss deductions as computed
under the Internal Revenue Code, except that an S corporation's
reportable federal taxable income is the amount of the income
reportable to the Internal Revenue Service as taxable to the
corporation's shareholders. A corporation shall include in its
earned surplus and gross receipts for earned surplus its share of a
partnership's items of income or loss, regardless if the
partnership is taxed as a corporation for federal income tax
purposes.
SECTION 94. Subchapter C, Chapter 171, Tax Code, is amended
by adding Section 171.1101 to read as follows:
Sec. 171.1101. RELATED ENTITY EXPENSE ADD-BACK. (a) For
the purpose of determining net taxable earned surplus under Section
171.110, a corporation must add back to reportable federal taxable
income any excess management fees, excess royalty payments, and
excess interest payments made to a related entity during the
taxable year to the extent deducted in calculating reportable
federal taxable income.
(b) For purposes of this section:
(1) "Excess management fees" means the amount by which
a corporation's total management fee expenses exceed an arms length
charge for those fees in a transaction between unrelated parties.
The term includes all management fee expenses made for the purpose
of tax avoidance and not for legitimate business purposes.
(2) "Excess royalty payments" means the amount by
which a corporation's total royalty payments exceed an arms length
charge for those payments in a transaction between unrelated
parties. The term includes all royalty payments made for the
purpose of tax avoidance and not for legitimate business purposes.
(3) "Excess interest payments" means the amount by
which an interest payment exceeds the amount implied by the rate as
set forth in Tax Code Section 111.060(b), as determined when the
loan transaction was entered into or during the term of the loan.
(4) "Interest payments" means expenses allowed as
deductions under Section 163, Internal Revenue Code, for purposes
of determining reportable federal taxable income.
(5) "Management fee" means a payment made directly or
indirectly to a parent from a subsidiary for supervision and
oversight of its business affairs.
(6)(A) "Related entity" means a person that, with
respect to the corporation during all or any portion of a privilege
period, is:
(i) a component member as defined by
Section 1563(b), Internal Revenue Code;
(ii) a person to or from whom there is
attribution of stock ownership in accordance with Section 1563(e),
Internal Revenue Code;
(iii) a person that, notwithstanding its
form of organization, bears the same relationship to the
corporation as a person described by Subparagraphs (i) and (ii);
(iv) a stockholder who is an individual, or
a member of the stockholder's family enumerated in Section 318,
Internal Revenue Code, if the stockholder and the members of the
stockholder's family own, directly, indirectly, beneficially, or
constructively, in the aggregate, at least 50 percent of the value
of the corporation's outstanding stock;
(v) a stockholder, or a stockholder's
partnership, limited liability company, estate, trust, or
corporation, if the stockholder and the stockholder's
partnerships, limited liability companies, estates, trusts, and
corporations own, directly, indirectly, beneficially, or
constructively, in the aggregate, at least 50 percent of the value
of the corporation's outstanding stock; or
(vi) a corporation, or a party related to
such corporation in a manner that would require an attribution of
stock from the corporation to the party or from the party to the
corporation under the attribution rules of the Internal Revenue
Code, if such corporation owns, directly, indirectly,
beneficially, or constructively, at least 50 percent of the value
of the corporation's outstanding stock.
(B) The attribution rules of Section 318,
Internal Revenue Code, shall apply for purposes of determining
whether the ownership requirements under this subdivision have been
met.
(7) "Royalty payments" means payments, including
royalty and copyright fees, for the use of trademarks, copyrights,
trade names, trade dress, service marks, mask works, trade secrets,
and other similar types of intangible assets.
(c) For the purpose of computing its net taxable earned
surplus, a corporation must subtract management fees, royalty
payments and interest payments directly or indirectly received from
a related entity during the taxable year to the extent included in
calculating reportable federal taxable income unless such royalty
or interest payments would not be required to be added back under
this section.
(d) The comptroller shall have exclusive jurisdiction to
interpret this section.
SECTION 95. Subchapter C, Chapter 171, Tax Code, is amended
by adding Section 171.1102 to read as follows:
Sec. 171.1102. TEMPORARY AMORTIZATION OF TEXAS ASSET BASIS.
For the purpose of determining net taxable earned surplus under
Section 171.110, a corporate limited partner may deduct the
temporary amortization of the Texas asset basis from reportable
federal taxable income.
SECTION 96. Subchapter C, Chapter 171, Tax Code, is amended
by adding Section 171.1103 to read as follows:
Sec. 171.1103. PREEXISTING ELECTRIC RELIABILITY COUNCIL
CONTRACTS. For purposes of determining net taxable earned surplus
under Section 171.110 for report years ending on or before December
31, 2007, an entity formed on or after October 1, 2000, and on or
before September 30, 2002, that derives income predominantly from
the sale of electricity must subtract from reportable taxable
income any income (and add any loss) derived directly or indirectly
from contracts that:
(1) are for the sale of electricity at wholesale
within the Electric Reliability Council of Texas, Inc (or its
successor) market;
(2) were entered into prior to December 31, 2002; and
(3) do not provide for modification of pricing by
reason of amendments to this chapter that are effective on or after
May 31, 2003.
SECTION 97. Subsection (e), Section 171.1121, Tax Code, is
amended to read as follows:
(e) A corporation shall include in its earned surplus and
gross receipts for earned surplus its share of a partnership's
items of income or loss, regardless if the partnership is taxed as a
corporation for federal income tax purposes. [A corporation's share
of a partnership's gross receipts that is included in the
corporation's federal taxable income must be used in computing the
corporation's gross receipts under this section.] Unless otherwise
provided by this chapter, a corporation may not deduct costs
incurred from the corporation's share of a partnership's gross
receipts. The gross receipts must be apportioned as though the
corporation directly earned them. A corporation owning an interest
in an upper tier partnership is considered to be a partner in each
lower tier partnership, and the corporation's share of the gross
receipts of each partnership shall be computed and apportioned as
though the corporation directly earned the receipts at the
partnership tier at which the receipts were originally earned.
SECTION 98. Section 171.151, Tax Code, is amended to read as
follows:
Sec. 171.151. PRIVILEGE PERIOD COVERED BY TAX. The
franchise tax shall be paid for each of the following:
(1) an initial period beginning on the corporation's
beginning date and ending on the day before the first anniversary of
the beginning date;
(2) a second period beginning on the first anniversary
of the beginning date and ending on December 31 following that date;
[and]
(3) after the initial and second periods have expired,
a regular annual period beginning each year on January 1 and ending
the following December 31;
(4) for a corporation that becomes subject to the tax
imposed under this chapter by the enactment of Section
171.001(d)(1), an initial period beginning on September 1, 2003 and
ending on December 31, 2003; and
(5) for a corporation that becomes subject to the tax
imposed under this chapter by the enactment of Section
171.001(d)(1), a regular annual period beginning on January 1, 2004
and ending on December 31, 2004.
SECTION 99. Section 171.152, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) Payment of the tax covering the initial period provided
by Section 171.151(4) is due on April 1, 2004.
SECTION 100. Section 171.153, Tax Code, is amended by
adding Subsection (d) to read as follows:
(d) The tax covering the initial period provided by Section
171.151(4) is based on the business done by the corporation during
the period beginning on September 1, 2003 and ending on December 31,
2003.
SECTION 101. Section 171.1532, Tax Code, is amended by
adding Subsection (c) to read as follows:
(c) The tax covering the initial period provided by Section
171.151(4) is based on the business done by the corporation during
the period beginning on September 1, 2003 and ending on December 31,
2003.
SECTION 102. Subchapter F, Chapter 171, Tax Code, is
amended by adding Section 171.2515 to read as follows:
Section. 171.2515. FORFEITURE OF RIGHT OF PARTNERSHIP TO
TRANSACT BUSINESS IN THIS STATE. (a) The comptroller may, for the
same reasons and using the same procedure the comptroller uses in
relation to the forfeiture of the corporate privileges of a
corporation, forfeit the right of a partnership subject to a tax
imposed by this subchapter to transact business in this state.
(b) The provisions of this subchapter, including Section
171.255, that apply to the forfeiture of corporate privileges apply
to forfeiture of a partnership's right to transact business in this
state.
SECTION 103. Subchapter G, Chapter 171, Tax Code, is
amended by adding Section 171.3015 to read as follows:
Section. 171.3015. FORFEITURE OF CERTIFICATE OR REGISTRATION
OF PARTNERSHIP. (a) A partnership's certificate or registration
may be forfeited for the same reasons and using the same procedure
that are used in relation to the forfeiture of a corporation's
charter or certificate of authority.
(b) The provisions of this subchapter that apply to the
forfeiture of a corporation's charter or certificate of authority
apply to the forfeiture of a partnership's certificate or
registration.
SECTION 104. Section 201.057(i), Tax Code, is amended to
read as follows:
(i) If, before the commission certifies that a well produces
high-cost gas or before the comptroller approves an application for
an exemption or tax reduction under this section, the tax imposed by
this chapter is paid on high-cost gas that otherwise qualifies for
the exemption or tax reduction provided by this section, the
producer or producers of the gas are entitled to a credit against
other taxes imposed by this chapter in an amount equal to the amount
of the tax paid on the gas that otherwise qualified for the
exemption or tax reduction on or after the first day of the next
month after the month in which the application for certification
under this section was filed with the commission. If the
application for certification is submitted to the commission after
January 1, 2004, the total allowable credit for taxes paid for
reporting periods before the date the application is filed may not
exceed the total tax paid on the gas that otherwise qualified for
the exemption or tax reduction and that was produced during the 24
consecutive calendar months immediately preceding the month in
which the application for certification under this section was
filed with the commission. The credit is allocated to each producer
according to the producer's proportionate share in the gas. To
receive a credit, one or more of the producers must apply to the
comptroller for the credit not later than the first anniversary
after the date the comptroller approves the application for an
exemption or tax reduction under this section. If a producer
demonstrates that the producer does not have sufficient tax
liability under this chapter to claim the credit within five years
from the date the application for the credit is made, the producer
is entitled to a refund in the amount of any credit the comptroller
determines may not be claimed within that five years. Nothing in
this subsection shall relieve the obligation imposed by Subsection
(b) to pay tax when due on high-cost gas produced from co-production
projects on or before July 31, 1995.
SECTION 105. Section 201.101, Tax Code, is amended to read
as follows:
Sec. 201.101. MARKET VALUE. (a) The market value of gas is
its value at the mouth of the well from which it is produced. The
value of gas at the mouth of the well is determined by ascertaining
the producer's actual marketing costs and subtracting those costs
from the producer's gross cash receipts from the sale of the gas.
(b) Marketing costs are the costs incurred by the producer
to get the gas from the mouth of the well to the market, including:
(1) costs for compressing the gas sold;
(2) costs for dehydrating the gas sold;
(3) costs for sweetening the gas sold; and
(4) costs for delivering the gas to the purchaser.
(c) Marketing costs do not include:
(1) costs incurred in producing the gas;
(2) costs incurred in normal lease separation of the
oil or condensate; or
(3) insurance premiums on the marketing facility.
(d) Marketing costs are determined by adding:
(1) a reasonable charge for depreciation of the
marketing facility being used, provided that, if the facility is
rented, the actual rental fee is added;
(2) a return on the producer-owned investment equal to
six percent per year on the average depreciable balance;
(3) costs of direct or allocated labor associated with
the marketing facility;
(4) costs of materials, supplies, maintenance,
repairs, and fuel associated with the marketing facility; and
(5) ad valorem taxes paid on the marketing facility.
(e) If the facility is used for a purpose other than
marketing the gas being sold, the cost shall be allocated
accordingly.
(f) If the facility is handling gas for outside parties, the
average cost for handling all of the gas shall be applied against
the facility owner's gas.
(g) The actual cost being charged a producer by an outside
party for marketing functions may be used for tax purposes if no
other benefit or value accrues to the producer.
(h) A producer receiving a cost reimbursement from the gas
purchaser shall include the reimbursement in the gross cash
receipts and is entitled to deduct the actual marketing costs
incurred.
SECTION 106. Section 201.102, Tax Code, is amended to read
as follows:
Sec. 201.102. CASH SALES. If gas is sold for cash only, the
tax shall be computed on the producer's gross cash receipts.
Payments from a purchaser of gas to a producer for the purpose of
reimbursing the producer for taxes due under this chapter are [not]
part of the gross cash receipts unless the reimbursement amount for
taxes due under this chapter is separately stated in the sales
contract.
SECTION 107. Section 313.021(2), Tax Code, is amended to
read as follows:
(2) "Qualified property" means:
(A) land:
(i) that is located in an area designated as
a reinvestment zone under Chapter 311 or 312 or as an enterprise
zone under Chapter 2303, Government Code;
(ii) on which a person proposes to
construct a new building or erect or affix a new improvement that
does not exist before the date the owner applies for a limitation on
appraised value under this subchapter;
(iii) that is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(iv) on which, in connection with the new
building or new improvement described by Subparagraph (ii), the
owner of the land proposes to:
(a) make a qualified investment in an
amount equal to at least the minimum amount required by Section
313.023; and
(b) create at least 25 new jobs;
(B) the new building or other new improvement
described by Paragraph (A)(ii); and
(C) tangible personal property that:
(i) is not subject to a tax abatement
agreement entered into by a school district under Chapter 312; and
(ii) except for new equipment described in
Section 151.318(q) or (q-1), is first placed in service in the new
building or in or on the new improvement described by Paragraph
(A)(ii), or on the land on which that new building or new
improvement is located, if the personal property is ancillary and
necessary to the business conducted in that new building or in or on
that new improvement.
SECTION 108. Section 321.003, Tax Code, is amended to read
as follows:
Sec. 321.003. OTHER PORTIONS OF TAX APPLICABLE. Subtitles
A and B, Title 2, and Chapters 142 and [Chapter] 151 apply to the
taxes and to the administration and enforcement of the taxes
imposed by this chapter in the same manner that those laws apply to
state taxes, unless modified by this chapter.
SECTION 109. Section 321.203, Tax Code, is amended by
amending Subsections (b), (c), (d), (e), and (g) and adding
Subsections (g-1), (g-2), (g-3), and (l) to read as follows:
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales of tangible personal
property are consummated at that place of business except as
provided by Subsection (e).
(c) If a retailer has more than one place of business in this
state, a sale of tangible personal property [a taxable item] by the
retailer is consummated at the retailer's place of business:
(1) from which the retailer ships or delivers the
property [item], if the retailer ships or delivers the property
[item] to a point designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the property [item], if the purchaser or lessee takes
possession of and removes the property [item] from a place of
business of the retailer.
(d) If neither the possession of tangible personal property
[a taxable item] is taken at nor shipment or delivery of the
property [item] is made from the retailer's place of business in
this state, the sale is consummated at:
(1) the retailer's place of business in this state
where the order is received; or
(2) if the order is not received at a place of business
of the retailer, the place of business from which the retailer's
salesman who took the order operates.
(e) A sale of tangible personal property is consummated at
the location in this state to which the property [a taxable item] is
shipped or delivered or at which possession is taken by the customer
if transfer of possession of the property [a taxable item] occurs
at, or shipment or delivery of the property [item] originates from,
a location in this state other than a place of business of the
retailer and if:
(1) the retailer is an itinerant vendor who has no
place of business;
(2) the retailer's place of business where the
purchase order is initially received or from which the retailer's
salesman who took the order operates is outside this state; or
(3) the purchaser places the order directly with the
retailer's supplier and the property [item] is shipped or delivered
directly to the purchaser by the supplier.
(g) The [sale of telecommunications services is consummated
at the location of the telephone or other telecommunications device
from which the call or other transmission originates, unless the
point of origin cannot be determined, in which case the sale is at
the address to which the call is billed. However, the] sale of
mobile telecommunications services is consummated in accordance
with [the provisions of] Section 151.061.
(g-1) The sale of telecommunications services sold based on
a price that is measured by individual calls is consummated at the
location where the call originates and terminates or the location
where the call either originates or terminates and at which the
service address is also located.
(g-2) Except as provided by Subsection (g-3), the sale of
telecommunications services sold on a basis other than on a
call-by-call basis is consummated at the location of the customer's
place of primary use. In this subsection, "place of primary use"
has the meaning assigned by Section 151.061(a)(2).
(g-3) A sale of post-paid calling services is consummated at
the location of the origination point of the telecommunications
signal as first identified by the seller's telecommunications
system or by information received by the seller from the seller's
service provider if the system used to transport the signal is not
that of the seller.
(l) Except as otherwise provided by this section, the sale
of a taxable service, other than a service described by Section
151.330(f), is consummated at the location at which the service is
performed or otherwise delivered.
SECTION 110. Section 321.3022, Tax Code, is amended by
amending Subsection (a) and adding Subsection (i) to read as
follows:
(a) The comptroller on request shall provide to a
municipality that has adopted a tax under this chapter and that has
a population of not more than 275,000 information relating to the
amount of tax paid to the municipality under this chapter during the
preceding or current calendar year by each person doing business in
the municipality who annually remits to the comptroller state and
local sales tax payments of more than $25,000 [$100,000].
(i) Notwithstanding Chapter 551, Government Code, the
governing body of a municipality is not required to confer with one
or more employees or a third party in an open meeting to receive
information or question the employees or third party regarding the
information received by the municipality under this section.
SECTION 111. Section 322.107, Tax Code, is amended to read
as follows:
Sec. 322.107. EXEMPTION: SALES TAX ON ITEMS LEAVING
ENTITY. There are exempted from the sales tax of a taxing entity
the receipts of the sale of a taxable item that, under a sales
contract, is shipped to a point outside the entity by means of:
(1) facilities operated by the retailer;
(2) delivery by the retailer to a carrier for shipment
to a consignee at that point; or
(3) delivery by the retailer to a [customs broker or a]
forwarding agent for shipment outside the entity.
SECTION 112. Section 323.003, Tax Code, is amended to read
as follows:
Sec. 323.003. OTHER PORTIONS OF TAX APPLICABLE. Subtitles
A and B, Title 2, and Chapters 142 and [Chapter] 151 apply to the
taxes and to the administration and enforcement of the taxes
imposed by this chapter in the same manner that those laws apply to
state taxes unless modified by this chapter.
SECTION 113. Section 323.203, Tax Code, is amended by
amending Subsections (b), (c), (d), (e), and (g) and adding
Subsections (g-1), (g-2), (g-3), and (l) to read as follows:
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales of tangible personal
property are consummated at that place of business except as
provided by Subsection (e).
(c) If a retailer has more than one place of business in this
state, a sale of tangible personal property [a taxable item] by the
retailer is consummated at the retailer's place of business:
(1) from which the retailer ships or delivers the
property [item], if the retailer ships or delivers the property
[item] to a point designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the property [item], if the purchaser or lessee takes
possession of and removes the property [item] from a place of
business of the retailer.
(d) If neither the possession of tangible personal property
[a taxable item] is taken at nor shipment or delivery of the
property [item] is made from the retailer's place of business in
this state, the sale is consummated at:
(1) the retailer's place of business in this state
where the order is received; or
(2) if the order is not received at a place of business
of the retailer, the place of business from which the retailer's
salesman who took the order operates.
(e) A sale of tangible personal property is consummated at
the location in this state to which the property [a taxable item] is
shipped or delivered or at which possession is taken by the customer
if transfer of possession of the property [a taxable item] occurs
at, or shipment or delivery of the property [taxable item]
originates from, a location in this state other than a place of
business of the retailer and if:
(1) the retailer is an itinerant vendor who has no
place of business;
(2) the retailer's place of business where the
purchase order is initially received or from which the retailer's
salesman who took the order operates is outside this state; or
(3) the purchaser places the order directly with the
retailer's supplier and the property [taxable item] is shipped or
delivered directly to the purchaser by the supplier.
(g) The sale of [telecommunications services is consummated
at the location of the telephone or other telecommunications device
from which the call or other transmission originates, unless the
point of origin cannot be determined, in which case the sale is at
the address to which the call is billed. However, the sale of]
mobile telecommunications services is consummated in accordance
with [the provisions of] Section 151.061.
(g-1) The sale of telecommunications services sold based on
a price that is measured by individual calls is consummated at the
location where the call originates and terminates or the location
where the call either originates or terminates and at which the
service address is also located.
(g-2) Except as provided by Subsection (g-3), the sale of
telecommunications services sold on a basis other than on a
call-by-call basis is consummated at the location of the customer's
place of primary use. In this subsection, "place of primary use"
has the meaning assigned by Section 151.061(a)(2).
(g-3) A sale of post-paid calling services is consummated at
the location of the origination point of the telecommunications
signal as first identified by the seller's telecommunications
system or by information received by the seller from the seller's
service provider if the system used to transport the signal is not
that of the seller.
(l) Except as otherwise provided by this section, the sale
of a taxable service, other than a service described by Section
151.330(f), is consummated at the location at which the service is
performed or otherwise delivered.
SECTION 114. Section 256.009, Transportation Code, is
amended to read as follows:
Sec. 256.009. REPORT TO COMPTROLLER. (a) Not later than
January 30 of each year, the county auditor or, if the county does
not have a county auditor, the official having the duties of the
county auditor shall file a report with the comptroller that
includes:
(1) an account of how the money allocated to a county
under Section 256.002 during the preceding year was spent;
(2) a description, including location, of any new
roads constructed in whole or in part with the money allocated to a
county under Section 256.002 during the preceding year;
(3) any other information related to the
administration of Sections 256.002 and 256.003 that the comptroller
requires; and
(4) [stating] the total amount of expenditures for
county road and bridge construction, maintenance, rehabilitation,
right-of-way acquisition, and utility construction and other
appropriate road expenditures of county funds in the preceding
county fiscal year that are required by the constitution or other
law to be spent on public roads or highways.
(b) The report must be in a form prescribed by the
comptroller.
(c) [(b)] The comptroller may distribute money under
Section 256.002(a) to a county only if the most recent report
required by Subsection (a) has been filed.
(d) A county official or employee shall provide to the
comptroller on request any information necessary to determine the
legality of the use of money allocated under Section 256.002.
SECTION 115. (a) The comptroller of public accounts shall
conduct a study of the economic and other costs to political
subdivisions of this state of changing the sourcing laws relating
to the sale of tangible personal property to comply with the
Streamlined Sales and Use Tax Agreement.
(b) The comptroller of public accounts may request from a
political subdivision of this state any information the comptroller
requires to complete the study, and the political subdivision shall
provide the requested information as soon as possible.
(c) Not later than December 31, 2004, the comptroller shall
provide to the lieutenant governor, speaker of the house of
representatives, and presiding officers of the senate and house
committees having primary jurisdiction over the comptroller a
report on the results of the study.
SECTION 116. The following are repealed:
(1) Section 44.901, Education Code, as amended by
Chapter 1319, Acts of the 77th Legislature, Regular Session, 2001;
(2) Section 51.927, Education Code, as amended by
Chapter 1319, Acts of the 77th Legislature, Regular Session, 2001;
(3) Section 395.103, Finance Code;
(4) Subchapters O and P, Chapter 403, Government Code;
(5) Section 609.515, Government Code;
(6) Section 659.131(10), Government Code;
(7) Section 659.146(b), Government Code;
(8) Section 659.152, Government Code;
(9) Section 815.211, Government Code;
(10) Section 840.210, Government Code;
(11) Section 2166.406, Government Code, as amended by
Chapter 1319, Acts of the 77th Legislature, Regular Session, 2001;
(12) Section 2305.025, Government Code;
(13) Section 2305.032(c), Government Code;
(14) Section 2305.033(c), Government Code;
(15) Section 2305.073, Government Code;
(16) Section 2305.074, Government Code;
(17) Section 2305.076, Government Code;
(18) Article 4.74, Insurance Code;
(19) Section 1551.054, Insurance Code, as effective
June 1, 2003;
(20) Section 302.003, Local Government Code, as
amended by Chapter 573, Acts of the 77th Legislature, Regular
Session, 2001;
(21) Section 111.207(d), Tax Code;
(22) Sections 112.058(b) and (c), Tax Code;
(23) Section 151.025(c), Tax Code;
(24) Section 151.157, Tax Code;
(25) Section 151.158, Tax Code;
(26) Section 151.159, Tax Code;
(27) Sections 151.307(c), (d), and (e), Tax Code;
(28) Section 151.326(c), Tax Code;
(29) Section 151.712, Tax Code;
(30) Section 151.713, Tax Code;
(31) Chapter 326, Tax Code;
(32) Sections 256.003(b) and (c), Transportation
Code; and
(33) Sections 1.02(b)-(i), Chapter 753, Acts of the
76th Legislature, Regular Session, 1999.
SECTION 117. (a) For the fiscal biennium beginning
September 1, 2003, the comptroller is appropriated from the general
revenue fund the amount needed to return any available cash that was
transferred to that fund from a fund outside the state treasury and
to maintain the equity of the fund from which the transfer was made,
as required by Section 403.092, Government Code, as amended by this
Act.
(b) The changes in law made by this Act to Sections 54.619
and 54.624, Education Code, apply to each academic term or semester
that begins after the effective date of this Act, other than a term
or semester before the 2003 fall semester.
(c) The changes in law made by this Act to Section 403.1042,
Government Code, do not affect the entitlement of a member serving
on the tobacco settlement permanent trust account advisory
committee immediately before the effective date of this Act to
serve the remainder of the member's current term. As the terms of
the members of the tobacco settlement permanent trust account
investment advisory committee first expire after the effective date
of this Act, the entities authorized to appoint the committee
members under Section 403.1042(b), Government Code, as amended by
this Act, shall appoint their successors.
(d) Section 659.2531, Government Code, as added by this Act,
applies only to a transfer that takes effect on or after September
1, 2003. A transfer that takes effect before September 1, 2003, is
governed by the law in effect on the effective date of the transfer,
and the former law is continued in effect for that purpose. In this
subsection, "transfer" has the meaning assigned by Section
659.2531, Government Code, as added by this Act.
(e) The changes in law made by this Act to Section 659.255,
Government Code, apply only to a merit salary increase or a one-time
merit payment that takes effect or is made on or after September 1,
2003. A merit salary increase or a one-time merit payment that
takes effect or is made before September 1, 2003, is governed by the
law in effect on the date the increase takes effect or the payment
is made, and the former law is continued in effect for that purpose.
(f) The rate of interest that accrues on a payment that
becomes overdue on or after September 1, 2004, is the rate
determined under Section 2251.025(b), Government Code, as amended
by this Act. The rate of interest that accrues on a payment that
becomes overdue before September 1, 2004, is the rate determined
under the law in effect before July 1, 2004, and the former law is
continued in effect for that purpose.
(g) The changes in law made by this Act to Section 2252.903,
Government Code, apply only to a written contract that is entered
into on or after September 1, 2003. A written contract that is
entered into before September 1, 2003, is governed by the law in
effect on the date the contract is entered into, and the former law
is continued in effect for that purpose.
(h) The changes in law made by this Act to Section 74.103,
Property Code, apply only to an examination begun on or after
September 1, 2003. An examination begun before September 1, 2003,
is governed by the law in effect on the date the examination begins,
and the former law is continued in effect for that purpose.
(i) The changes in law made by this Act to Chapter 111, Tax
Code, apply only to a claim for a refund made on or after the
effective date of this Act, without regard to whether the taxes that
are the subject of the claim were due before, on, or after that
date.
(j) The changes in law made by this Act to Sections
153.119(d) and 153.222(d), Tax Code, apply only to fuel used on or
after September 1, 2003, for climate-control air conditioning or
heating in a motor vehicle. Fuel used before that date is governed
by the law in effect on the date the fuel is used, and that law is
continued in effect for that purpose.
SECTION 118. The comptroller shall adopt rules and forms as
necessary to implement Article 4.73(a), Insurance Code, as amended
by this Act, not later than the 90th day after the effective date of
this Act.
SECTION 119. (a) Except as provided by this section, this
Act takes effect immediately if it receives a vote of two-thirds of
all the members elected to each house, as provided by Section 39,
Article III, Texas Constitution. If this Act does not receive the
vote necessary for immediate effect, this Act takes effect
September 1, 2003.
(b) The amendments by this Act to the following sections
take effect September 1, 2003:
(1) Section 14(e), Article 42.12, Code of Criminal
Procedure, as added by Chapter 1188, Acts of the 76th Legislature,
Regular Session, 1999;
(2) Section 19(f), Article 42.12, Code of Criminal
Procedure;
(3) Section 659.253, Government Code;
(4) Section 659.255, Government Code;
(5) Sections 2101.0115(a) and (b), Government Code;
(6) Section 2113.205(b), Government Code;
(7) Section 2252.903(e), Government Code;
(8) Section 74.103, Property Code;
(9) Section 74.501, Property Code;
(10) Section 112.058(a), Tax Code;
(11) Section 153.119(d), Tax Code;
(12) Section 153.222(d), Tax Code;
(13) Section 201.057(i), Tax Code;
(14) Section 201.101, Tax Code;
(15) Section 201.102, Tax Code; and
(16) Section 256.009, Transportation Code.
(c) The amendments by this Act to Section 2251.025(b),
Government Code, and Sections 321.203 and 323.203, Tax Code, take
effect July 1, 2004. Sections 151.103(d) and 151.202(c), Tax Code,
as added by this Act, take effect July 1, 2004.
(d) The repeal by this Act of Section 395.103, Finance Code,
and Sections 112.058(b) and (c), Tax Code, takes effect September
1, 2003.
(e) Sections 659.2531 and 659.262, Government Code, as
added by this Act, take effect September 1, 2003.
(f) The amendments by this Act to the following sections
take effect October 1, 2003:
(1) Section 142.002, Tax Code;
(2) Section 142.005, Tax Code;
(3) Section 151.011(a), Tax Code;
(4) Section 151.152(b), Tax Code;
(5) Section 151.307(b), Tax Code;
(6) Section 151.314, Tax Code;
(7) Section 151.317, Tax Code;
(8) Section 321.003, Tax Code;
(9) Section 322.107, Tax Code; and
(10) Section 323.003, Tax Code.
(g) Sections 142.0055, 142.011, and 151.012, Tax Code, as
added by this Act, take effect October 1, 2003.
(h) The repeal by this Act of the following provisions takes
effect October 1, 2003:
(1) Section 151.157, Tax Code;
(2) Section 151.158, Tax Code;
(3) Section 151.159, Tax Code;
(4) Sections 151.307(c), (d), and (e), Tax Code;
(5) Section 151.326(c), Tax Code;
(6) Section 151.712, Tax Code;
(7) Section 151.713, Tax Code; and
(8) Chapter 326, Tax Code.
(i) The repeal by this Act of Section 151.025(c), Tax Code,
takes effect July 1, 2003, if this Act receives a vote of two-thirds
of all the members elected to each house, as provided by Section 39,
Article III, Texas Constitution. If this Act does not receive the
vote necessary for effect on that date, the repeal of Section
151.025(c), Tax Code, takes effect October 1, 2003.
(j) Section 151.025(d), Tax Code, as added by this Act,
takes effect July 1, 2003, if this Act receives a vote of two-thirds
of all the members elected to each house, as provided by Section 39,
Article III, Texas Constitution. If this Act does not receive the
vote necessary for effect on that date, Section 151.025(d), Tax
Code, takes effect October 1, 2003.
(k) The change in law made by Sections 89 through 103 of this
Act does not affect taxes or fees imposed before the effective date
of this Act, and the former law is continued in effect for purposes
of the liability for and collection of those taxes and fees.
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