79S10132 KLA-D
By: Ogden S.B. No. 5
A BILL TO BE ENTITLED
AN ACT
relating to certain fiscal matters affecting governmental
entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. TRANSFERRING CERTAIN TOBACCO SETTLEMENT PROCEEDS INTO
DEDICATED GENERAL REVENUE ACCOUNTS
SECTION 1.01. Subchapter G, Chapter 403, Government Code,
is amended by adding Sections 403.109 and 403.1091-403.1093 to read
as follows:
Sec. 403.109. SECONDARY HEALTH ACCOUNT FOR HIGHER
EDUCATION. (a) In this section:
(1) "Earnings account" means the account described by
Subsection (d).
(2) "Secondary account" means the secondary health
account for higher education.
(b) The secondary account and the earnings account are
dedicated accounts in the general revenue fund.
(c) The secondary account consists of:
(1) money transferred to the account at the direction
of the legislature; and
(2) donations to the account.
(d) The earnings account consists of the earnings received
from investment of the assets in the secondary account. The
comptroller shall periodically transfer those earnings from the
secondary account to the earnings account.
(e) Money in the secondary account may be used only for a
purpose described by Subsection (d) or (f).
(f) The comptroller shall manage and invest assets in the
secondary account in authorized investments under Section 404.024.
Any expenses incurred by the comptroller in managing and investing
assets in the secondary account shall be paid from the account.
(g) Money in the earnings account may be appropriated only
for a purpose specified in and subject to any conditions and
reporting requirements prescribed by Subchapter A, Chapter 63,
Education Code, for the use of money from the permanent health fund
for higher education.
(h) An institution of higher education that has accepted a
gift under former Subchapter I, Chapter 51, Education Code, that
was conditioned on the institution's receipt of state matching
funds from the eminent scholars fund may use money the institution
receives under this section to provide the state matching funds and
treat the money as if it were a distribution to the institution from
the eminent scholars fund for purposes of the former Subchapter I.
(i) An institution of higher education that receives a
distribution from the earnings account shall include in the report
required by Section 63.004, Education Code:
(1) the total amount of money the institution received
from the account;
(2) the purpose for which the money was used; and
(3) any other information required by the Legislative
Budget Board.
(j) Section 404.071 does not apply to the secondary account
or the earnings account.
Sec. 403.1091. SECONDARY ACCOUNTS FOR EACH INSTITUTION OF
HIGHER EDUCATION. (a) In this section:
(1) "Earnings account" means an account described by
Subsection (e).
(2) "Secondary account" means the secondary accounts
described by Subsection (b).
(b) In addition to the permanent endowment funds created by
Section 63.101, Education Code, there is a secondary account for
the benefit of each institution of higher education or group of
related components of an institution of higher education listed in
Section 63.101(a), Education Code.
(c) Each secondary account and earnings account is a
dedicated account in the general revenue fund.
(d) A secondary account consists of:
(1) money transferred to the account at the direction
of the legislature; and
(2) donations to the account.
(e) An earnings account for an institution or group of
related components of an institution consists of the earnings
received from investment of the assets in the corresponding
secondary account for the institution or group of components. The
comptroller shall periodically transfer those earnings from the
secondary account to the earnings account.
(f) Money in a secondary account may be used only for a
purpose described by Subsection (e) or (g).
(g) The comptroller shall manage and invest assets in a
secondary account in authorized investments under Section 404.024.
Any expenses incurred by the comptroller in managing and investing
assets in a secondary account shall be paid from the account.
(h) Money in an earnings account may be appropriated only
for a purpose specified in and subject to any conditions and
reporting requirements prescribed by Subchapter B, Chapter 63,
Education Code, for the use of money from the corresponding
permanent endowment fund established by that subchapter.
(i) An institution of higher education that has accepted a
gift under former Subchapter I, Chapter 51, Education Code, that
was conditioned on the institution's receipt of state matching
funds from the eminent scholars fund may use money the institution
receives under this section to provide the state matching funds and
treat the money as if it were a distribution to the institution from
the eminent scholars fund for purposes of the former Subchapter I.
(j) An institution of higher education that receives an
appropriation from an earnings account shall include in the report
required by Section 63.103, Education Code:
(1) the total amount of money the institution received
from the account;
(2) the purpose for which the money was used; and
(3) any other information required by the Legislative
Budget Board.
(k) Section 404.071 does not apply to a secondary account or
an earnings account.
Sec. 403.1092. SECONDARY ACCOUNT FOR HIGHER EDUCATION
NURSING, ALLIED HEALTH, AND OTHER HEALTH-RELATED PROGRAMS. (a) In
this section:
(1) "Earnings account" means the account described by
Subsection (d).
(2) "Secondary account" means the secondary account
for higher education nursing, allied health, and other
health-related programs.
(b) The secondary account and the earnings account are
dedicated accounts in the general revenue fund.
(c) The secondary account consists of:
(1) money transferred to the account at the direction
of the legislature; and
(2) donations to the account.
(d) The earnings account consists of the earnings received
from investment of the assets in the secondary account. The
comptroller shall periodically transfer those earnings from the
secondary account to the earnings account.
(e) Money in the secondary account may be used only for a
purpose described by Subsection (d) or (f).
(f) The comptroller shall manage and invest assets in the
secondary account in authorized investments under Section 404.024.
Any expenses incurred by the comptroller in managing and investing
assets in the secondary account shall be paid from the account.
(g) Money in the earnings account may be appropriated only
for a purpose specified in and subject to any conditions and
reporting requirements prescribed by Subchapter C, Chapter 63,
Education Code, for the use of money from the permanent fund for
higher education nursing, allied health, and other health-related
programs.
(h) The Texas Higher Education Coordinating Board shall
include in the report required by Section 63.203, Education Code:
(1) the name of each institution that received a grant
from the earnings account;
(2) the purpose for which the grant was used; and
(3) any additional information required by the
Legislative Budget Board.
(i) Section 404.071 does not apply to the secondary account
or the earnings account.
Sec. 403.1093. SECONDARY ACCOUNT FOR MINORITY HEALTH
RESEARCH AND EDUCATION. (a) In this section:
(1) "Earnings account" means the account described by
Subsection (d).
(2) "Secondary account" means the secondary account
for minority health research and education.
(b) The secondary account and the earnings account are
dedicated accounts in the general revenue fund.
(c) The secondary account consists of:
(1) money transferred to the account at the direction
of the legislature; and
(2) donations to the account.
(d) The earnings account consists of the earnings received
from investment of the assets in the secondary account. The
comptroller shall periodically transfer those earnings from the
secondary account to the earnings account.
(e) Money in the secondary account may be used only for a
purpose described by Subsection (d) or (f).
(f) The comptroller shall manage and invest assets in the
secondary account in authorized investments under Section 404.024.
Any expenses incurred by the comptroller in managing and investing
assets in the secondary account shall be paid from the account.
(g) Money in the earnings account may be appropriated only
to the Texas Higher Education Coordinating Board for the purpose of
providing grants as specified by Section 63.302(c), Education Code,
for money from the permanent fund for minority health research and
education.
(h) The Texas Higher Education Coordinating Board shall
report regarding the money received under this section in the
manner required by Section 63.302(f), Education Code, and shall
include in the report:
(1) the total amount distributed under this section;
(2) the name of each institution that received a
grant;
(3) the purpose of each grant, including a description
of any partnership formed; and
(4) any additional information required by the
Legislative Budget Board.
(i) Section 404.071 does not apply to the secondary account
or the earnings account.
SECTION 1.02. Section 403.1069, Government Code, is amended
to read as follows:
Sec. 403.1069. REPORTING REQUIREMENT. The Department of
State Health Services [department] shall provide a report to the
Legislative Budget Board on the permanent funds established under
this subchapter from which the department may receive an
appropriation of the available earnings [to the Legislative Budget
Board] no later than November 1 of each year. The report shall
include the total amount of money distributed from each fund, the
purpose for which the money was used, and any additional
information that may be requested by the Legislative Budget Board.
SECTION 1.03. (a) On November 1, 2006, all amounts held in
the following funds shall be transferred, in the estimated amount
listed, to the accounts established under Sections 403.109,
403.1091, 403.1092, and 403.1093, Government Code, as added by this
Act, as specified by this section: Fund Number Fund Name Amount
0810 Permanent Health Fund for
Higher Education $376,600,000
0811 Permanent Endowment Fund for Health Related Institutions -
University of Texas Health
Science Center at San Antonio $215,200,000
0812 Permanent Endowment Fund for
Health Related Institutions -
University of Texas M.D.
Anderson Cancer Center $107,600,000
0813 Permanent Endowment Fund for
Health Related Institutions -
University of Texas
Southwestern Medical
Center at Dallas $53,800,000
0814 Permanent Endowment Fund for
Health Related Institutions -
University of Texas Medical
Branch at Galveston $26,900,000
0815 Permanent Endowment Fund for
Health Related Institutions -
University of Texas Health
Science Center at Houston $26,900,000
0816 Permanent Endowment Fund for
Health Related Institutions -
University of Texas Health
Science Center at Tyler $26,900,000
0817 Permanent Endowment Fund for
Health Related Institutions -
University of Texas at El Paso $26,900,000
0818 Permanent Endowment Fund for
Health Related Institutions -
Texas A&M University Health
Science Center $25,600,000
0819 Permanent Endowment Fund for
Health Related Institutions -
University of North Texas
Health Science Center at
Fort Worth $25,400,000
0820 Permanent Endowment Fund for
Health Related Institutions -
Components of Texas Tech
University Health Science
Center in El Paso $26,500,000
0821 Permanent Endowment Fund for
Health Related Institutions -
Components of Texas Tech
University Health Science
Center other than El Paso $26,500,000
0822 Permanent Endowment Fund for
Health Related Institutions -
University of Texas Regional
Academic Health Center $21,500,000
0823 Permanent Endowment Fund for
Health Related Institutions -
Baylor College of Medicine $24,400,000
0824 Permanent Fund for Higher
Education Nursing, Allied
Health and Other Health
Related Programs $44,000,000
0825 Permanent Fund for Minority
Health Research and Education $24,400,000
Informational Total: $1,079,100,000
(b) Amounts transferred from the Permanent Health Fund for
Higher Education shall be deposited to the credit of the secondary
health account for higher education established under Section
403.109, Government Code, as added by this Act.
(c) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Health
Science Center at San Antonio shall be deposited to the credit of
the secondary account established for the benefit of The University
of Texas Health Science Center at San Antonio under Section
403.1091, Government Code, as added by this Act.
(d) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas M. D.
Anderson Cancer Center shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas M. D. Anderson Cancer Center under Section 403.1091,
Government Code, as added by this Act.
(e) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Southwestern
Medical Center at Dallas shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas Southwestern Medical Center at Dallas under Section 403.1091,
Government Code, as added by this Act.
(f) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Medical
Branch at Galveston shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas Medical Branch at Galveston under Section 403.1091,
Government Code, as added by this Act.
(g) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Health
Science Center at Houston shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas Health Science Center at Houston under Section 403.1091,
Government Code, as added by this Act.
(h) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Health
Science Center at Tyler shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas Health Science Center at Tyler under Section 403.1091,
Government Code, as added by this Act.
(i) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas at El Paso
shall be deposited to the credit of the secondary account
established for the benefit of The University of Texas at El Paso
under Section 403.1091, Government Code, as added by this Act.
(j) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - Texas A&M University Health
Science Center shall be deposited to the credit of the secondary
account established for the benefit of The Texas A&M University
Health Science Center under Section 403.1091, Government Code, as
added by this Act.
(k) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of North Texas Health
Science Center at Fort Worth shall be deposited to the credit of the
secondary account established for the benefit of the University of
North Texas Health Science Center at Fort Worth under Section
403.1091, Government Code, as added by this Act.
(l) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - Components of Texas Tech
University Health Sciences Center in El Paso shall be deposited to
the credit of the secondary account established for the benefit of
the components of Texas Tech University Health Sciences Center in
El Paso under Section 403.1091, Government Code, as added by this
Act.
(m) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - Components of Texas Tech
University Health Sciences Center other than El Paso shall be
deposited to the credit of the secondary account established for
the benefit of the components of Texas Tech University Health
Sciences Center other than El Paso under Section 403.1091,
Government Code, as added by this Act.
(n) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - University of Texas Regional
Academic Health Center shall be deposited to the credit of the
secondary account established for the benefit of The University of
Texas Regional Academic Health Center under Section 403.1091,
Government Code, as added by this Act.
(o) Amounts transferred from the Permanent Endowment Fund
for Health Related Institutions - Baylor College of Medicine shall
be deposited to the credit of the secondary account established for
the benefit of Baylor College of Medicine under Section 403.1091,
Government Code, as added by this Act.
(p) Amounts transferred from the Permanent Fund for Higher
Education Nursing, Allied Health, and Other Health Related Programs
shall be deposited to the credit of the secondary account for higher
education nursing, allied health, and other health-related
programs established under Section 403.1092, Government Code, as
added by this Act.
(q) Amounts transferred from the Permanent Fund for
Minority Health Research and Education shall be deposited to the
credit of the secondary account for minority health research and
education established under Section 403.1093, Government Code, as
added by this Act.
SECTION 1.04. (a) The transfers to accounts in the general
revenue fund made by this article may not result in a reduction in
the amount available for distribution from those accounts, and the
same amount that would have been distributed from the permanent
funds but for the transfers made by this article shall be
appropriated and distributed from the applicable accounts created
by this article. If the earnings from the secondary account that
are transferred to the earnings account are inadequate to make a
distribution of the same amount that would have been distributed
from the permanent funds, to the extent that the difference is
solely the result of an investment policy other than total return,
the comptroller shall transfer the difference to the applicable
earnings account from the unobligated portion of general revenue.
(b) The comptroller of public accounts shall determine the
amount of any loss to the Permanent Health Fund for Higher Education
and other funds administered by The University of Texas System as a
result of the transfer to general revenue under this article. On
August 31, 2007, the comptroller shall transfer from general
revenue to the applicable secondary account created by this Act, an
amount equal to the amount of the loss. In determining the amount
of the loss, the comptroller shall consider the difference in the
rate of return on investment of that secondary account and the rate
of return over the preceding three years on investment of the
Permanent University Fund.
(c) Notwithstanding any other provision of this article,
the total of distributions under Subsections (a) and (b) of this
section from the accounts created by this article, plus transfers
under Subsection (b) of this section, may not exceed $65 million for
any fiscal year.
SECTION 1.05. This article takes effect September 1, 2005,
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, this article takes effect November 1, 2005.
ARTICLE 2. INVESTMENT OF STATE AND OTHER GOVERNMENTAL ENTITY FUNDS
SECTION 2.01. Section 404.024, Government Code, is amended
by amending Subsections (b) and (l) and adding Subsections (m) and
(n) 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 whose other comparable
short-term obligations are rated in [that has received] the highest
short-term [credit] rating category, within which there may be
subcategories or gradations, including such subcategories or
gradations as "rating category" or "rated," indicating relative
standing by a nationally recognized statistical rating
organization, as defined by Rule 2a-7 (17 C.F.R. Part 270.2a-7),
promulgated under the Investment Company Act of 1940 by the
Securities and Exchange Commission [investment rating firm];
(6) commercial paper that:
(A) does not exceed 270 days to maturity; and
(B) except as provided by Subsection (i), is
issued by an entity whose other comparable short-term obligations
are rated in [has received] the highest short-term [credit] rating
category by a nationally recognized statistical rating
organization [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 long-term
[credit] rating categories for debt obligations by a nationally
recognized statistical rating organization [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;
(13) asset-backed securities, as defined by the
Securities and Exchange Commission in Rule 2a-7 (17 C.F.R. Part
270.2a-7), that are rated at least A or its equivalent by a
nationally recognized statistical rating organization and that
have a weighted-average maturity of five years or less; and
(14) corporate debt obligations that are rated at
least A or its equivalent by a nationally recognized statistical
rating organization and mature in five years or less from the date
on which the obligations were "acquired," as defined by the
Securities and Exchange Commission in Rule 2a-7 (17 C.F.R. Part
270.2a-7).
(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 described by Subsections
(b)(1)-(6), or a combination of cash and the described obligations.
Notwithstanding any provision to the contrary, cash may be
reinvested in the items permitted under Subsection (b) or mutual
funds secured by the items permitted under Subsection (b) [In this
subsection, "obligation" means an item described by Subsections
(b)(1)-(6)].
(m) In entering into a direct security repurchase agreement
or a reverse security repurchase agreement, the comptroller may
agree to accept cash on an overnight basis in lieu of the
securities, obligations, or participation certificates identified
in Section 404.001(3). Cash held by the state under this subsection
is not a deposit of state or public funds for the purposes of any
law, including this subchapter or Subchapter D, that requires a
deposit of state or public funds to be collateralized by eligible
securities.
(n) Notwithstanding any other law to the contrary, any
government investment pool created to function as a money market
mutual fund and managed by the comptroller or the Texas Treasury
Safekeeping Trust Company may invest the funds it receives in
investments that are "eligible securities," as defined by the
Securities and Exchange Commission in Rule 2a-7 (17 C.F.R. Part
270.2a-7), if it maintains a dollar-weighted average portfolio
maturity of 90 days or less, with the maturity of each portfolio
security calculated in accordance with Rule 2a-7 (17 C.F.R. Part
270.2a-7), and meets the diversification requirements of Rule 2a-7.
SECTION 2.02. Section 2256.011, Government Code, is amended
by amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) A fully collateralized repurchase agreement is an
authorized investment under this subchapter if the repurchase
agreement:
(1) has a defined termination date;
(2) except as provided by Subsection (e), is secured
by obligations described by Section 2256.009(a)(1); [and]
(3) requires the securities being purchased by the
entity to be pledged to the entity, held in the entity's name, and
deposited at the time the investment is made with the entity or with
a third party selected and approved by the entity; and
(4) is placed through a primary government securities
dealer, as defined by the Federal Reserve, or a financial
institution doing business in this state.
(e) For purposes of this section, an entity may agree to
secure the agreement by accepting cash on an overnight basis in lieu
of the obligations identified in Section 2256.009(a)(1). Cash held
by an entity under this subsection is not a deposit of public funds
for purposes of any statute, including Chapter 2257, that requires
a deposit of public funds to be collateralized by eligible
securities.
SECTION 2.03. Section 2256.016, Government Code, is amended
by amending Subsections (a) and (f) and adding Subsection (i) to
read as follows:
(a) An entity may invest its funds and funds under its
control through an eligible investment pool if the governing body
of the entity by rule, order, ordinance, or resolution, as
appropriate, authorizes investment in the particular pool. An
investment pool created to function as a money market mutual fund
may invest the funds it receives from entities in investments that
are "eligible securities," as defined by the Securities and
Exchange Commission in Rule 2a-7 (17 C.F.R. Part 270.2a-7),
promulgated under the Investment Company Act of 1940. Any other
[An] investment pool shall invest the funds it receives from
entities in authorized investments permitted by this subchapter.
(f) To be eligible to receive funds from and invest funds on
behalf of an entity under this chapter, a public funds investment
pool created to function as a money market mutual fund must:
(1) mark its portfolio to market daily, and, to the
extent reasonably possible, stabilize at a $1 net asset value. If
the ratio of the market value of the portfolio divided by the book
value of the portfolio is less than 0.995 or greater than 1.005,
portfolio holdings shall be sold as necessary to maintain the ratio
between 0.995 and 1.005;
(2) maintain a dollar-weighted average portfolio
maturity of 90 days or less, with the maturity of each portfolio
security calculated in accordance with Rule 2a-7 (17 C.F.R. Part
270.2a-7); and
(3) meet the diversification requirements of Rule 2a-7
(17 C.F.R. Part 270.2a-7) promulgated by the Securities and
Exchange Commission.
(i) In this section, "stated maturity date" means the
average life of a security with periodic principal payments, the
number of days until the next interest rate reset date for variable
rate securities, or the final maturity date for all other
securities.
SECTION 2.04. This article takes effect immediately 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 immediate
effect, this article takes effect November 1, 2005.
ARTICLE 3. COLLECTION OF DELINQUENT OBLIGATIONS TO STATE
SECTION 3.01. Section 403.019(c), Government Code, is
amended to read as follows:
(c) A contract under this section is not valid unless
approved by the attorney general. The attorney general shall
approve a contract if the attorney general determines that the
contract complies with the requirements of this section, that the
contract does not conflict with any contract formed under Section
2107.003(b), and that the contract [and] is in the best interest of
the state. No judicial action by any person on behalf of the state
under a contract authorized and approved by this section may be
brought unless approved by the attorney general.
SECTION 3.02. Section 2107.003, Government Code, is amended
to read as follows:
Sec. 2107.003. COLLECTION BY ATTORNEY GENERAL,
COMPTROLLER, OR OUTSIDE AGENT. (a) Except as provided by Section
2107.004 [Subsection (c)], a state agency shall report an
uncollected and delinquent obligation to [request] the attorney
general for collection. The state agency must report the
obligation on or before the 120th day after the date the obligation
becomes past due or delinquent [to collect an obligation before the
agency may employ, retain, or contract with a person other than a
full-time employee of the state agency to collect the obligation].
(b) The attorney general:
(1) shall provide legal services for collection of the
obligation;
(2) may authorize the requesting state agency to
employ, retain, or contract, subject to approval by the attorney
general, with one or more persons to collect the obligation; or
(3) if the attorney general determines it to be
economical and in the best interest of the state, may contract with
one or more persons [a person other than a full-time employee of the
agency] to collect the [an] obligation [that the attorney general
cannot collect].
(c) The comptroller may employ, retain, or contract with a
person other than a full-time state employee to collect delinquent
obligations that are owed the comptroller in the comptroller's
official capacity, are not collected through normal collection
procedures, and do not meet the guidelines adopted for collection
by the attorney general. A proposed contract under this subsection
shall be reviewed by the attorney general and may include a
collection fee computed on the amounts collected under the
contract.
(d) The agency contracting under Subsection (b) is entitled
to recover from the obligor, in addition to the amount of the
obligation, the costs incurred in undertaking the collection,
including the costs of a contract under this section. The obligor
is liable for costs of recovery under this section in an amount
equal to 30 percent of the sum of the amount of the obligation and
any penalty and interest due on the obligation.
(e) A contract formed under Subsection (b) must provide for
the compensation due to the contractor. The amount of the
compensation shall be equal to 30 percent of the sum of the
collected amount of:
(1) the obligation;
(2) any penalty; and
(3) any interest.
(f) A contract formed under Subsection (b) or (c) may permit
or require the contractor to pursue a judicial action to collect the
amount of the obligation in a proper court in or outside of this
state.
(g) In a suit in a Texas state court brought by a contractor
to collect an obligation under this section, the state is not:
(1) required to post security for costs;
(2) liable for costs; and
(3) liable for fees for:
(A) service of process;
(B) attorneys ad litem;
(C) arbitration; or
(D) mediation.
(h) An amount collected under a contract formed under
Subsection (b), including the costs of recovery and court costs or
other costs, shall be deposited in the fund or account to which the
obligation was required to be deposited. The contracting agency
shall pay the compensation due under the contract to the contractor
and shall pay to the applicable court any court costs collected.
(i) The contracting agency shall require a person
contracting under Subsection (b) to post a bond or other security in
an amount the contracting agency determines is sufficient to cover
all revenue or other property of the state that is expected to come
into the possession or control of the contractor in the course of
providing contract services.
(j) A person who contracts under Subsection (b) is an agent
of this state for purposes of determining priority of a claim to be
collected under the contract with respect to claims of other
creditors. The contractor does not exercise any sovereign power of
the state.
(k) The contracting state agency may provide a person
contracting under Subsection (b) any information, including
confidential information, that the agency is not prohibited from
sharing under an agreement with another state or with the United
States and that is:
(1) in the custody of the agency holding the claim; and
(2) necessary to the collection of the obligation.
(l) A person acting under a contract formed under Subsection
(b) or (c) and each employee or agent of that person is subject to
all prohibitions against the disclosure of confidential
information obtained from the contracting agency, the reporting
state agency, or their employees. A contractor or the contractor's
employee or agent who discloses confidential information in
violation of the prohibition is subject to the same penalties for
that disclosure as would apply to the contracting agency or its
employees.
(m) The contracting agency shall require a person who
contracts under Subsection (b) to obtain and maintain insurance
adequate to provide reasonable coverage for damages negligently,
recklessly, or intentionally caused by the contractor or the
contractor's employee or agent in the course of collecting an
obligation under the contract and to protect this state from
liability for those damages. The state is not liable for and may
not indemnify a person acting under a contract under Subsection (b)
for damages negligently, recklessly, or intentionally caused by the
contractor or the contractor's employee or agent in the course of
collecting an obligation under the contract.
(n) In addition to grounds for termination provided by the
contract terms, the attorney general or the contracting agency, as
applicable, may terminate a contract formed under Subsection (b) if
the contractor or the contractor's employee or agent:
(1) violates the federal Fair Debt Collection
Practices Act (15 U.S.C. Section 1692 et seq.);
(2) discloses confidential information to a person not
authorized to receive the information; or
(3) performs any act that results in a final judgment
for damages against this state.
SECTION 3.03. Section 2254.102(c), Government Code, is
amended to read as follows:
(c) This subchapter does not apply to a contract:
(1) with an agency to collect an obligation under
Section 2107.003(b); or
(2) for legal services entered into by an institution
of higher education under Section 153.006, Education Code.
ARTICLE 4. STATE AND LOCAL SALES AND USE TAXES IN GENERAL
SECTION 4.01. Sections 151.011(a) and (c), Tax Code, are
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 printing
[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.
(c) "Use" does not include the sale of tangible personal
property or a taxable service in the regular course of business, the
transfer of a taxable service as an integral part of the transfer of
tangible personal property in the regular course of business, or
the transfer of tangible personal property as an integral part of
the transfer of a taxable service in the regular course of business.
"Use" also does not include the sale outside this state of raw
materials that are processed, fabricated, or manufactured into
printed materials outside this state if the printed materials are
subsequently brought or delivered into this state.
SECTION 4.02. Section 321.203, Tax Code, is amended by
amending Subsections (b)-(e) and adding Subsection (n) 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 taxable items
[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 a taxable item [tangible personal property] by the
retailer is consummated at the retailer's place of business:
(1) from which the retailer ships or delivers the item
[property], if the retailer ships or delivers the item [property]
to a point designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the item [property], if the purchaser or lessee takes
possession of and removes the item [property] from a place of
business of the retailer.
(d) If neither the possession of a taxable item [tangible
personal property] is taken at nor shipment or delivery of the item
[property] 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 a taxable item [tangible personal property] is
consummated at the location in this state to which the item
[property] is shipped or delivered or at which possession is taken
by the customer if transfer of possession of the item [property]
occurs at, or shipment or delivery of the item [property]
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 item [property] is shipped or delivered
directly to the purchaser by the supplier.
(n) A sale of a service described by Section 151.0047 to
remodel, repair, or restore nonresidential real property is
consummated at the location of the job site. However, if the job
site includes areas in multiple municipalities, 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
agent who took the order operates.
SECTION 4.03. Section 323.203, Tax Code, is amended by
amending Subsections (b)-(e) and adding Subsection (m) 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 taxable items
[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 a taxable item [tangible personal property] by the
retailer is consummated at the retailer's place of business:
(1) from which the retailer ships or delivers the item
[property], if the retailer ships or delivers the item [property]
to a point designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the item [property], if the purchaser or lessee takes
possession of and removes the item [property] from a place of
business of the retailer.
(d) If neither the possession of a taxable item [tangible
personal property] is taken at nor shipment or delivery of the item
[property] 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 a taxable item [tangible personal property] is
consummated at the location in this state to which the item
[property] is shipped or delivered or at which possession is taken
by the customer if transfer of possession of the item [property]
occurs at, or shipment or delivery of the item [property]
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 item [property] is shipped or delivered
directly to the purchaser by the supplier.
(m) A sale of a service described by Section 151.0047 to
remodel, repair, or restore nonresidential real property is
consummated at the location of the job site. However, if the job
site includes areas in multiple municipalities, 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
agent who took the order operates.
SECTION 4.04. The following sections of the Tax Code are
repealed:
(1) Section 151.103(d);
(2) Section 151.202(c);
(3) Section 321.203(l), Tax Code, as added by Chapter
1310, Acts of the 78th Legislature, Regular Session, 2003; and
(4) Section 323.203(l).
SECTION 4.05. This article takes effect October 1, 2005, 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, this article takes effect November 1, 2005.
ARTICLE 5. MOTOR VEHICLE SALES AND USE TAX
SECTION 5.01. Section 152.002, Tax Code, is amended by
adding Subsection (f) to read as follows:
(f) Notwithstanding Subsection (a), the total consideration
of a used motor vehicle is the amount on which the tax is computed as
provided by Section 152.0412.
SECTION 5.02. Section 152.041(a), Tax Code, is amended to
read as follows:
(a) The tax assessor-collector of the county in which an
application for registration or for a Texas certificate of title is
made shall collect taxes imposed by this chapter, subject to
Section 152.0412, unless another person is required by this chapter
to collect the taxes.
SECTION 5.03. Subchapter C, Chapter 152, Tax Code, is
amended by adding Section 152.0412 to read as follows:
Sec. 152.0412. STANDARD PRESUMPTIVE VALUE; USE BY TAX
ASSESSOR-COLLECTOR. (a) In this section, "standard presumptive
value" means the average retail value of a motor vehicle as
determined by the Texas Department of Transportation, based on a
nationally recognized motor vehicle industry reporting service.
(b) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is equal to or greater than the standard
presumptive value of the vehicle, a county tax assessor-collector
shall compute the tax on the amount paid.
(c) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is less than the standard presumptive value
of the vehicle, a county tax assessor-collector shall compute the
tax on the standard presumptive value unless the purchaser
establishes the retail value of the vehicle as provided by
Subsection (d).
(d) A county tax assessor-collector shall compute the tax
imposed by this chapter on the retail value of a motor vehicle if:
(1) the retail value is shown on an appraisal
certified by an adjuster licensed under Chapter 4101, Insurance
Code, or by a motor vehicle dealer operating under Subchapter B,
Chapter 503, Transportation Code;
(2) the appraisal is on a form prescribed by the
comptroller for that purpose; and
(3) the purchaser of the vehicle obtains the appraisal
not later than the 20th day after the date of purchase.
(e) On request, a motor vehicle dealer operating under
Subchapter B, Chapter 503, Transportation Code, shall provide a
certified appraisal of the retail value of a motor vehicle. The
comptroller by rule shall establish a fee that a dealer may charge
for providing the certified appraisal. The county tax
assessor-collector shall retain a copy of a certified appraisal
received under this section for a period prescribed by the
comptroller.
(f) The Texas Department of Transportation shall maintain
information on the standard presumptive values of motor vehicles as
part of the department's registration and title system. The
department shall update the information at least quarterly each
calendar year.
(g) This section does not apply to a transaction described
by Section 152.024 or 152.025.
SECTION 5.04. Not later than December 1, 2005, the Texas
Department of Transportation shall:
(1) establish standard presumptive values for motor
vehicles as provided by Section 152.0412, Tax Code, as added by this
article;
(2) modify the department's registration and title
system as needed to include that information and administer that
section; and
(3) make that information available through the system
to all county tax assessor-collectors.
SECTION 5.05. (a) Except as provided by Subsection (b) of
this section, this article takes effect September 1, 2005, 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, this article takes effect November 1, 2005.
(b) Section 152.0412, Tax Code, as added by this article,
takes effect December 1, 2005.
ARTICLE 6. EFFECTIVE DATE
SECTION 6.01. Except as otherwise provided by this Act,
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, except as
otherwise provided by this Act, this Act takes effect on the 91st
day after the last day of the legislative session.