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79S20068 T
By: Rodriguez H.B. No. 21
A BILL TO BE ENTITLED
AN ACT
relating to state taxes and financing schools through those taxes;
providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. SCHOOL FINANCE
SECTION 1.01. Section 12.013(b), Education Code, is amended
to read as follows:
(b) A home-rule school district is subject to:
(1) a provision of this title establishing a criminal
offense;
(2) a provision of this title relating to limitations
on liability; and
(3) a prohibition, restriction, or requirement, as
applicable, imposed by this title or a rule adopted under this
title, relating to:
(A) the Public Education Information Management
System (PEIMS) to the extent necessary to monitor compliance with
this subchapter as determined by the commissioner;
(B) educator certification under Chapter 21 and
educator rights under Sections 21.407, 21.408, and 22.001;
(C) criminal history records under Subchapter C,
Chapter 22;
(D) student admissions under Section 25.001;
(E) school attendance under Sections 25.085,
25.086, and 25.087;
(F) inter-district or inter-county transfers of
students under Subchapter B, Chapter 25;
(G) elementary class size limits under Section
25.112, in the case of any campus in the district that is considered
low-performing under Section 39.132;
(H) high school graduation under Section 28.025;
(I) special education programs under Subchapter
A, Chapter 29;
(J) bilingual education under Subchapter B,
Chapter 29;
(K) prekindergarten programs under Subchapter E,
Chapter 29;
(L) safety provisions relating to the
transportation of students under Sections 34.002, 34.003, 34.004,
and 34.008;
(M) computation and distribution of state aid
under Chapters 31, 42, and 43;
(N) extracurricular activities under Section
33.081;
(O) health and safety under Chapter 38;
(P) public school accountability under
Subchapters B, C, D, and G, Chapter 39;
(Q) [equalized wealth under Chapter 41;
[(R)] a bond or other obligation or tax rate
under Chapters 42, 43, and 45; and
(R) [(S)] purchasing under Chapter 44.
SECTION 1.02. Section 12.029(b), Education Code, is amended
to read as follows:
(b) If [Except as provided by Subchapter H, Chapter 41, if]
two or more school districts having different status, one of which
is home-rule school district status, consolidate into a single
district, the petition under Section 13.003 initiating the
consolidation must state the status for the consolidated district.
The ballot shall be printed to permit voting for or against the
proposition: "Consolidation of (names of school districts) into a
single school district governed as (status of school district
specified in the petition)."
SECTION 1.03. Section 12.106(a), Education Code, is amended
to read as follows:
(a) A charter holder is entitled to receive for the
open-enrollment charter school funding under Chapter 42 as if the
school were a school district [without a tier one local share for
purposes of Section 42.253 and without any local revenue ("LR") for
purposes of Section 42.302]. In determining funding for an
open-enrollment charter school, adjustments under Sections 42.102,
42.103, 42.104, and 42.105 [and the district enrichment tax rate
("DTR") under Section 42.302] are based on the average adjustment
[and average district enrichment tax rate] for the state.
SECTION 1.04. Section 13.051(c), Education Code, is amended
to read as follows:
(c) Territory that does not have residents may be detached
from a school district and annexed to another school district if:
(1) the total taxable value of the property in the
territory according to the most recent certified appraisal roll for
each school district is not greater than:
(A) five percent of the district's taxable value
of all property in that district [as determined under Subchapter M,
Chapter 403, Government Code]; and
(B) $5,000 property value per student in average
daily attendance as determined under Section 42.005; and
(2) the school district from which the property will
be detached does not own any real property located in the territory.
SECTION 1.05. Section 13.231(b), Education Code, is amended
to read as follows:
(b) In this section, "taxable value" means the market value
of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted
under Section 11.251, Tax Code;
(6) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(7) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(8) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(10) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(11) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(12) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section [has the meaning assigned by Section 403.302,
Government Code].
SECTION 1.06. Sections 21.402(a) and (b), Education Code,
are amended to read as follows:
(a) Except as provided by Subsection (d), (e), or (f), a
school district must pay each classroom teacher, full-time
librarian, full-time counselor certified under Subchapter B, or
full-time school nurse not less than the minimum monthly salary,
based on the employee's level of experience, determined by the
following formula:
MS = SF X AWABA [FS]
where:
"MS" is the minimum monthly salary;
"SF" is the applicable salary factor specified by Subsection
(c); and
"AWABA" is the average weighted adjusted basic allotment,
which is computed by:
(1) multiplying the basic allotment under Section
42.101 by the average adjustment for the state under Sections
42.102, 42.103, 42.104, and 42.105; and
(2) multiplying the product determined under
Subdivision (1) by the average for the state of the sum of weights
to which school districts are entitled under Sections 42.151,
42.152, 42.153, 42.154, 42.156, 42.157, and 42.158.
["FS" is the amount, as determined by the commissioner under
Subsection (b), of state and local funds per weighted student
available to a district eligible to receive state assistance under
Section 42.302 with an enrichment tax rate, as defined by Section
42.302, equal to the maximum rate authorized under Section 42.303,
except that the amount of state and local funds per weighted student
does not include the amount attributable to the increase in the
guaranteed level made by H.B. No. 3343, Acts of the 77th
Legislature, Regular Session, 2001.]
(b) Not later than June 1 of each year, the commissioner
shall determine the average weighted adjusted basic allotment
[amount of state and local funds per weighted student available,
for purposes of Subsection (a), to a district described by that
subsection] for the following school year.
SECTION 1.07. Section 21.410(h), Education Code, is amended
to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section. The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.]
SECTION 1.08. Section 21.411(h), Education Code, is amended
to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section. The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.]
SECTION 1.09. Section 21.412(h), Education Code, is amended
to read as follows:
(h) A grant a school district receives under this section is
in addition to any funding the district receives under Chapter 42.
The commissioner shall distribute funds under this section with the
Foundation School Program payment to which the district is entitled
as soon as practicable after the end of the school year as
determined by the commissioner. [A district to which Chapter 41
applies is entitled to the grants paid under this section. The
commissioner shall determine the timing of the distribution of
grants to a district that does not receive Foundation School
Program payments.]
SECTION 1.10. Section 29.008(b), Education Code, is amended
to read as follows:
(b) Except as provided by Subsection (c), costs of an
approved contract for residential placement may be paid from a
combination of federal and[,] state[, and local] funds. [The local
share of the total contract cost for each student is that portion of
the local tax effort that exceeds the district's local fund
assignment under Section 42.252, divided by the average daily
attendance in the district. If the contract involves a private
facility, the state share of the total contract cost is that amount
remaining after subtracting the local share. If the contract
involves a public facility, the state share is that amount
remaining after subtracting the local share from the portion of the
contract that involves the costs of instructional and related
services. For purposes of this subsection, "local tax effort"
means the total amount of money generated by taxes imposed for debt
service and maintenance and operation less any amounts paid into a
tax increment fund under Chapter 311, Tax Code.]
SECTION 1.11. Section 29.203(b), Education Code, is amended
to read as follows:
(b) A school district is entitled to the allotment provided
by Section 42.157 for each eligible student using a public
education grant. [If the district has a wealth per student greater
than the guaranteed wealth level but less than the equalized wealth
level, a school district is entitled under rules adopted by the
commissioner to additional state aid in an amount equal to the
difference between the cost to the district of providing services
to a student using a public education grant and the sum of the state
aid received because of the allotment under Section 42.157 and
money from the available school fund attributable to the student.]
SECTION 1.12. Section 37.0061, Education Code, is amended
to read as follows:
Sec. 37.0061. FUNDING FOR ALTERNATIVE EDUCATION SERVICES IN
JUVENILE RESIDENTIAL FACILITIES. A school district that provides
education services to pre-adjudicated and post-adjudicated
students who are confined by court order in a juvenile residential
facility operated by a juvenile board is entitled to count such
students in the district's average daily attendance for purposes of
receipt of state funds under the Foundation School Program. The [If
the district has a wealth per student greater than the guaranteed
wealth level but less than the equalized wealth level, the]
district in which the student is enrolled on the date a court orders
the student to be confined to a juvenile residential facility shall
transfer to the district providing education services an amount
equal to the difference between the average Foundation School
Program costs per student of the district providing education
services and the sum of the state aid and the money from the
available school fund received by the district that is attributable
to the student for the portion of the school year for which the
district provides education services to the student.
SECTION 1.13. Section 42.001(b), Education Code, is amended
to read as follows:
(b) The public school finance system of this state shall
adhere to a standard of neutrality that provides for substantially
equal access to similar revenue per student [at similar tax effort,
considering all state and local tax revenues of districts] after
acknowledging all legitimate student and district cost
differences.
SECTION 1.14. Section 42.002(b), Education Code, is amended
to read as follows:
(b) The Foundation School Program consists of:
(1) a basic allotment that provides [two tiers that in
combination provide] for:
(A) sufficient financing for all school
districts to provide a basic program of education that is rated
academically acceptable or higher under Section 39.072 and meets
other applicable legal standards; and
(B) substantially equal access to funds to
provide an enriched program; and
(2) a facilities component as provided by Chapter 46.
SECTION 1.15. Section 42.007(c), Education Code, is amended
to read as follows:
(c) The funding elements must include:
(1) a basic allotment for the purposes of Section
42.101 that [, when combined with the guaranteed yield component
provided by Subchapter F,] represents the cost per student of a
regular education program that meets all mandates of law and
regulation;
(2) adjustments designed to reflect the variation in
known resource costs and costs of education beyond the control of
school districts;
(3) appropriate program cost differentials and other
funding elements for the programs authorized under Subchapter C,
with the program funding level expressed as dollar amounts and as
weights applied to the adjusted basic allotment for the appropriate
year;
[(4) the maximum guaranteed level of qualified state
and local funds per student for the purposes of Subchapter F;
[(5) the enrichment and facilities tax rate under
Subchapter F;
[(6) the computation of students in weighted average
daily attendance under Section 42.302;] and
(4) [(7)] the amount to be appropriated for the school
facilities assistance program under Chapter 46.
SECTION 1.16. Section 42.101, Education Code, is amended to
read as follows:
Sec. 42.101. BASIC ALLOTMENT. For each student in average
daily attendance, not including the time students spend each day in
special education programs in an instructional arrangement other
than mainstream or career and technology education programs, for
which an additional allotment is made under Subchapter C, a
district is entitled to an allotment of $4,285 [$2,537]. A greater
amount for any school year may be provided by appropriation.
SECTION 1.17. Section 42.251, Education Code, is amended to
read as follows:
Sec. 42.251. FINANCING; GENERAL RULE. (a) The sum of the
basic allotment under Subchapter B and the special allotments under
Subchapter C [, computed in accordance with this chapter,
constitute the tier one allotments. The sum of the tier one
allotments and the guaranteed yield allotments under Subchapter F,
computed in accordance with this chapter,] constitute the total
cost of the Foundation School Program.
(b) The program shall be financed by:
(1) [ad valorem tax revenue generated by an equalized
uniform school district effort;
[(2) ad valorem tax revenue generated by local school
district effort in excess of the equalized uniform school district
effort;
[(3)] state available school funds distributed in
accordance with law; and
(2) [(4)] state funds appropriated for the purposes of
public school education and allocated to each district in an amount
sufficient to finance the cost of each district's Foundation School
Program not covered by state available school [other] funds
[specified in this subsection].
SECTION 1.18. Section 42.253(a), Education Code, is amended
to read as follows:
(a) For each school year the commissioner shall determine:
(1) the amount of money to which a school district is
entitled under Subchapters B and C; and
(2) [the amount of money to which a school district is
entitled under Subchapter F;
[(3)] the amount of money allocated to the district
from the available school fund[;
[(4) the amount of each district's tier one local share
under Section 42.252; and
[(5) the amount of each district's tier two local share
under Section 42.302].
SECTION 1.19. Section 42.253(b), Education Code, is amended
to read as follows:
(b) Except as provided by this subsection, the commissioner
shall base the determinations under Subsection (a) on the estimates
provided to the legislature under Section 42.254 [, or, if the
General Appropriations Act provides estimates for that purpose, on
the estimates provided under that Act, for each school district for
each school year]. [The commissioner shall reduce the entitlement
of each district that has a final taxable value of property for the
second year of a state fiscal biennium that is higher than the
estimate under Section 42.254 or the General Appropriations Act, as
applicable. A reduction under this subsection may not reduce the
district's entitlement below the amount to which it is entitled at
its actual taxable value of property.]
SECTION 1.20. Sections 42.253(c), (g), and (h), Education
Code, are amended to read as follows:
(c) Each school district is entitled to an amount from the
foundation school fund equal to the amount determined for the
district under Subsection [difference for that district between the
sum of Subsections] (a)(1) [and (a)(2) and the sum of Subsections
(a)(3), (a)(4), and (a)(5)].
(g) If a school district demonstrates to the satisfaction of
the commissioner that the estimate of the district's [tax rate,]
student enrollment [, or taxable value of property] used in
determining the amount of state funds to which the district is
entitled are so inaccurate as to result in undue financial hardship
to the district, the commissioner may adjust funding to that
district in that school year to the extent that funds are available
for that year[, including funds in the reserve account. Funds in
the reserve account may not be used under this subsection until any
reserve funds have been used for purposes of Subsection (f)].
(h) If the amount appropriated for purposes of the
Foundation School Program is less than the amount to which school
districts are entitled for the second year of a state fiscal
biennium, the commissioner shall certify the amount of the
difference to the Legislative Budget Board not later than January 1
of the second year of the state fiscal biennium. The Legislative
Budget Board shall propose to the legislature that the certified
amount be transferred to the foundation school fund from the
economic stabilization fund and appropriated for the purpose of
increases in allocations under this subsection. If the legislature
fails during the regular session to enact the transfer and
appropriation proposed under this subsection [Subsection (f) and
there are not funds available under Subsection (j)], the
commissioner shall reduce the total amount of state funds allocated
to each district proportionately [by an amount determined by a
method under which the application of the same number of cents of
increase in tax rate in all districts applied to the taxable value
of property of each district, as determined under Subchapter M,
Chapter 403, Government Code, results in a total levy equal to the
total reduction]. The following fiscal year, a district's
entitlement under this section is increased by an amount equal to
the reduction made under this subsection.
SECTION 1.21. Section 42.254, Education Code, is amended to
read as follows:
Sec. 42.254. ESTIMATE [ESTIMATES] REQUIRED. (a) Not later
than October 1 of each even-numbered year,[:
[(1)] the agency shall submit to the legislature an
estimate of the [tax rate and] student enrollment of each school
district for the following biennium[; and
[(2) the comptroller shall submit to the legislature
an estimate of the total taxable value of all property in the state
as determined under Subchapter M, Chapter 403, Government Code, for
the following biennium].
(b) The agency [and the comptroller] shall update the
information provided to the legislature under Subsection (a) not
later than March 1 of each odd-numbered year.
SECTION 1.22. Section 42.259(b), Education Code, is amended
to read as follows:
(b) Payments from the foundation school fund to each
[category 1] school district shall be made in 12 equal installments
not later than the 25th day of each month [as follows:
[(1) 15 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) 80 percent of the yearly entitlement of the
district shall be paid in eight equal installments to be made on or
before the 25th day of October, November, December, January, March,
May, June, and July; and
[(3) 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 February].
SECTION 1.23. Section 42.259(f), Education Code, is amended
to read as follows:
(f) Any [Except as provided by Subsection (c)(8) or (d)(3),
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 1.24. Section 43.002(b), Education Code, is amended
to read as follows:
(b) Of the amounts available for transfer from the general
revenue fund to the available school fund for the months of January
and February of each fiscal year, no more than the amount necessary
to enable the comptroller to distribute from the available school
fund an amount equal to [9-1/2 percent of the estimated annual
available school fund apportionment to category 1 school districts,
as defined by Section 42.259, and] 3-1/2 percent of the estimated
annual available school fund apportionment to [category 2] school
districts[, as defined by Section 42.259,] may be transferred from
the general revenue fund to the available school fund. Any
remaining amount that would otherwise be available for transfer for
the months of January and February shall be transferred from the
general revenue fund to the available school fund in equal amounts
in June and in August of the same fiscal year.
SECTION 1.25. The heading to Section 45.003, Education
Code, is amended to read as follows:
Sec. 45.003. BOND [AND TAX] ELECTIONS.
SECTION 1.26. Section 45.003(a), Education Code, is amended
to read as follows:
(a) Bonds described by Section 45.001 may not be issued and
taxes described by Section 45.001 [or 45.002] may not be levied
unless authorized by a majority of the qualified voters of the
district, voting at an election held for that purpose, at the
expense of the district, in accordance with the Election Code,
except as provided by this section. Each election must be called by
resolution or order of the governing board or commissioners court.
The resolution or order must state the date of the election, the
proposition or propositions to be submitted and voted on, the
polling place or places, and any other matters considered necessary
or advisable by the governing board or commissioners court.
SECTION 1.27. Section 45.111(b), Education Code, is amended
to read as follows:
(b) The governing body of the district shall provide for the
payment of the certificates issued under this section by
appropriating and pledging any local school funds derived from
maintenance taxes levied and assessed under Section [Sections
45.002 and] 130.122; Chapter 273, Acts of the 53rd Legislature,
Regular Session, 1953 (Article 2784g, Vernon's Texas Civil
Statutes); or other similar law that limits the amount of tax that
may be levied for maintenance purposes, as distinguished from bond
requirements. The appropriation and pledge may be in the nature of
a continuing irrevocable pledge to apply the first moneys collected
annually from the tax levy to the payment of the obligations or by
the irrevocable present levy and appropriation of the amount of the
maintenance tax required to meet the annual debt service
requirements of the obligations, in which event the governing body
shall covenant to annually set aside the amount in the annual tax
levy, showing the same is a portion of the maintenance tax. The
governing body shall annually budget the amount required to pay the
principal and interest of the obligations that may be scheduled to
become due in any fiscal year. This section may not be construed as
permitting the levy of a maintenance tax in excess of the amount
approved by the qualified voters of the district.
SECTION 1.28. Section 46.003(a), Education Code, is amended
to read as follows:
(a) For each year, except as provided by Sections 46.005 and
46.006, a school district is guaranteed a specified amount per
student in state and local funds for each cent of tax effort, up to
the maximum rate under Subsection (b), to pay the principal of and
interest on eligible bonds issued to construct, acquire, renovate,
or improve an instructional facility. The amount of state support
is determined by the formula:
FYA = (FYL X ADA X BTR X 100) - (BTR X (DPV/100))
where:
"FYA" is the guaranteed facilities yield amount of state
funds allocated to the district for the year;
"FYL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is $35 or a
greater amount for any year provided by appropriation;
"ADA" is the greater of the number of students in average
daily attendance, as determined under Section 42.005, in the
district or 400;
"BTR" is the district's bond tax rate for the current year,
which is determined by dividing the amount budgeted by the district
for payment of eligible bonds by the quotient of the district's
taxable value of property [as determined under Subchapter M,
Chapter 403, Government Code, or, if applicable, Section 42.2521,]
divided by 100; and
"DPV" is the district's taxable value of property [as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, Section 42.2521].
SECTION 1.29. Section 46.006(g), Education Code, is amended
to read as follows:
(g) In this section, "wealth per student" means a school
district's taxable value of property [as determined under
Subchapter M, Chapter 403, Government Code, or, if applicable,
Section 42.2521,] divided by the district's average daily
attendance as determined under Section 42.005.
SECTION 1.30. Section 46.032(a), Education Code, is amended
to read as follows:
(a) Each school district is guaranteed a specified amount
per student in state and local funds for each cent of tax effort to
pay the principal of and interest on eligible bonds. The amount of
state support, subject only to the maximum amount under Section
46.034, is determined by the formula:
EDA = (EDGL X ADA X EDTR X 100) - (EDTR X (DPV/100))
where:
"EDA" is the amount of state funds to be allocated to the
district for assistance with existing debt;
"EDGL" is the dollar amount guaranteed level of state and
local funds per student per cent of tax effort, which is $35 or a
greater amount for any year provided by appropriation;
"ADA" is the number of students in average daily attendance,
as determined under Section 42.005, in the district;
"EDTR" is the existing debt tax rate of the district, which is
determined by dividing the amount budgeted by the district for
payment of eligible bonds by the quotient of the district's taxable
value of property [as determined under Subchapter M, Chapter 403,
Government Code, or, if applicable, under Section 42.2521,] divided
by 100; and
"DPV" is the district's taxable value of property [as
determined under Subchapter M, Chapter 403, Government Code, or, if
applicable, under Section 42.2521].
SECTION 1.31. Sections 56.208(a) and (b), Education Code,
are amended to read as follows:
(a) The Early High School Graduation Scholarship program is
financed under the Foundation School Program. [Funding for the
state tuition credits is not subject to the provisions of Sections
42.253(e) through (k).]
(b) The commissioner of education shall reduce the total
annual amount of foundation school fund payments made to a school
district by an amount equal to [F x A, where:
[(1) "F" is the lesser of one or the quotient of the
district's local share for the preceding school year under Section
42.252 divided by the amount of money to which the district was
entitled under Subchapters B and C, Chapter 42, for the preceding
school year; and
[(2) "A" is] the amount of state tuition credits under
this subchapter applied by institutions of higher education on
behalf of eligible persons who graduated from the district that has
not been used to compute a previous reduction under this
subsection.
SECTION 1.32. Section 87.208, Education Code, is amended to
read as follows:
Sec. 87.208. SEABORNE CONSERVATION CORPS. If the board of
regents of The Texas A&M University System administers a program
that is substantially similar to the Seaborne Conservation Corps as
it was administered by the board during the 1998-1999 school year,
the program is entitled, for each student enrolled, to allotments
from the Foundation School Program under Chapter 42 as if the
program were a school district[, except that the program has a local
share applied that is equivalent to the local fund assignment of the
school district in which the principal facilities of the program
are located].
SECTION 1.33. Section 96.707(k), Education Code, is amended
to read as follows:
(k) For each student enrolled in the academy, the academy is
entitled to allotments from the Foundation School Program under
Chapter 42 as if the academy were a school district[, except that
the academy has a local share applied that is equivalent to the
local fund assignment of the Beaumont Independent School District].
SECTION 1.34. Section 105.301(e), Education Code, is
amended to read as follows:
(e) The academy is not subject to the provisions of this
code, or to the rules of the Texas Education Agency, regulating
public schools, except that:
(1) professional employees of the academy are entitled
to the limited liability of an employee under Section 22.0511,
22.0512, or 22.052;
(2) a student's attendance at the academy satisfies
compulsory school attendance requirements; and
(3) for each student enrolled, the academy is entitled
to allotments from the foundation school program under Chapter 42
as if the academy were a school district [without a tier one local
share for purposes of Section 42.253].
SECTION 1.35. Section 2175.304(c), Government Code, is
amended to read as follows:
(c) The procedures established under Subsection (b) must
give preference to transferring the property directly to a public
school or school district or to an assistance organization
designated by the school district before disposing of the property
in another manner. If more than one public school or school
district or assistance organization seeks to acquire the same
property on substantially the same terms, the system, institution,
or agency shall give preference to a public school that is
considered low-performing by the commissioner of education or to a
school district that has a relatively low taxable wealth per
student, as determined by the commissioner of education [that
entitles the district to an allotment of state funds under
Subchapter F, Chapter 42, Education Code], or to the assistance
organization designated by such a school district.
SECTION 1.36. Section 5.10(a), Tax Code, is amended to read
as follows:
(a) The comptroller shall conduct an annual study in each
appraisal district to determine the degree of uniformity of and the
median level of appraisals by the appraisal district within each
major category of property. The comptroller shall publish a report
of the findings of the study, including in the report the median
levels of appraisal for each major category of property, the
coefficient of dispersion around the median level of appraisal for
each major category of property, and any other standard statistical
measures that the comptroller considers appropriate. [In
conducting the study, the comptroller shall apply appropriate
standard statistical analysis techniques to data collected as part
of the annual study of school district taxable values required by
Section 403.302, Government Code.]
SECTION 1.37. Section 5.101(a), Tax Code, is amended to
read as follows:
(a) The comptroller shall appoint a technical advisory
committee for the purpose of providing professional and practical
expertise to the comptroller and to review and comment on the
methodology used by the comptroller to conduct the annual study
[studies] required by Section 5.10 [of this code and by Section
403.302, Government Code]. A member of the committee serves at the
will of the comptroller.
SECTION 1.38. Section 5.16(a), Tax Code, is amended to read
as follows:
(a) The comptroller may inspect the records or other
materials of an appraisal office or taxing unit, including the
relevant records and materials in the possession or control of a
consultant, advisor, or expert hired by the appraisal office or
taxing unit, for the purpose of:
(1) establishing, reviewing, or evaluating the value
of or an appraisal of any property; or
(2) conducting a study, review, or audit required by
Section 5.10 or 5.102 [or by Section 403.302, Government Code].
SECTION 1.39. Section 6.02(b), Tax Code, is amended to read
as follows:
(b) A taxing unit that has boundaries extending into two or
more counties may choose to participate in only one of the appraisal
districts. In that event, the boundaries of the district chosen
extend outside the county to the extent of the unit's boundaries.
To be effective, the choice must be approved by resolution of the
board of directors of the district chosen. [The choice of a school
district to participate in a single appraisal district does not
apply to property annexed to the school district under Subchapter C
or G, Chapter 41, Education Code, unless:
[(1) the school district taxes property other than
property annexed to the district under Subchapter C or G, Chapter
41, Education Code, in the same county as the annexed property; or
[(2) the annexed property is contiguous to property in
the school district other than property annexed to the district
under Subchapter C or G, Chapter 41, Education Code.]
SECTION 1.40. Section 21.01, Tax Code, is amended to read as
follows:
Sec. 21.01. REAL PROPERTY. Real property is taxable by a
taxing unit if located in the unit on January 1 [, except as
provided by Chapter 41, Education Code].
SECTION 1.41. Section 21.02(a), Tax Code, is amended to
read as follows:
(a) Except as provided by [Subsection (b) and] Sections
21.021, 21.04, and 21.05, tangible personal property is taxable by
a taxing unit if:
(1) it is located in the unit on January 1 for more
than a temporary period;
(2) it normally is located in the unit, even though it
is outside the unit on January 1, if it is outside the unit only
temporarily;
(3) it normally is returned to the unit between uses
elsewhere and is not located in any one place for more than a
temporary period; or
(4) the owner resides (for property not used for
business purposes) or maintains the owner's [his] principal place
of business in this state (for property used for business purposes)
in the unit and the property is taxable in this state but does not
have a taxable situs pursuant to Subdivisions (1) through (3) of
this section.
SECTION 1.42. Section 26.05(a), Tax Code, as amended by
S.B. No. 1652, Acts of the 79th Legislature, Regular Session, 2005,
is amended to read as follows:
(a) The governing body of each taxing unit, before the later
of September 30 or the 60th day after the date the certified
appraisal roll is received by the taxing unit, shall adopt a tax
rate for the current tax year and shall notify the assessor for the
unit of the rate adopted. The tax rate for a school district is the
rate authorized by Section 45.003(b), Education Code, or Chapter
46, Education Code. The tax rate for a taxing unit other than a
school district consists of two components, each of which must be
approved separately. The components are:
(1) for a taxing unit other than a school district, the
rate that, if applied to the total taxable value, will impose the
total amount published under Section 26.04(e)(3)(C), less any
amount of additional sales and use tax revenue that will be used to
pay debt service, or, for a school district, the rate published
under Section 44.004(c)(2)(A)(ii)(b), Education Code; and
(2) the rate that, if applied to the total taxable
value, will impose the amount of taxes needed to fund maintenance
and operation expenditures of the unit for the next year.
SECTION 1.43. Section 313.022(b), Tax Code, is amended to
read as follows:
(b) For purposes of determining the required minimum amount
of a qualified investment under Section 313.021(2)(A)(iv)(a), and
the minimum amount of a limitation on appraised value under Section
313.027(b), school districts to which this subchapter applies are
categorized according to the taxable value of property in the
district for the preceding tax year [determined under Subchapter M,
Chapter 403, Government Code], as follows: CATEGORY TAXABLE VALUE OF PROPERTY
I $10 billion or more
II $1 billion or more but less than $10 billion
III $500 million or more but less than $1 billion
IV $100 million or more but less than $500 million
V less than $100 million
SECTION 1.44. Section 313.052, Tax Code, is amended to read
as follows:
Sec. 313.052. CATEGORIZATION OF SCHOOL DISTRICTS. For
purposes of determining the required minimum amount of a qualified
investment under Section 313.021(2)(A)(iv)(a) and the minimum
amount of a limitation on appraised value under this subchapter,
school districts to which this subchapter applies are categorized
according to the taxable value of industrial property in the
district for the preceding tax year [determined under Subchapter M,
Chapter 403, Government Code], as follows: CATEGORY TAXABLE VALUE OF INDUSTRIAL PROPERTY
I $200 million or more
II $90 million or more but less than $200 million
III $1 million or more but less than $90 million
IV $100,000 or more but less than $1 million
V less than $100,000
SECTION 1.45. The following provisions of the Education
Code are repealed:
(1) Sections 7.055(b)(34), 13.054(f) and (g),
22.004(b)-(i), 29.203(g), 42.103(e), 42.158(e), 42.2511-42.2522,
42.253(e), (e-1), and (f), 42.2531, 42.257, 42.259(a), (c), and
(d), 42.260, 44.004(b)-(e), (h), and (i), 45.002, 45.003(d),
45.006, 45.105(e), 46.009(f), 46.013, and 46.037;
(2) Subchapter F, Chapter 42; and
(3) Chapter 41.
SECTION 1.46. The following provisions of the Government
Code are repealed:
(1) Sections 322.008(b) and 825.405(h) and (i); and
(2) Subchapter M, Chapter 403.
SECTION 1.47. The following sections of the Tax Code are
repealed: 6.02(g), 6.03(m), 21.02(b) and (c), 25.25(k), 26.012(5),
26.08, and 26.085.
SECTION 1.48. Section 39.901, Utilities Code, is repealed.
ARTICLE 2. UNIFORM GROUP BENEFITS PROGRAM FOR PUBLIC SCHOOL
EMPLOYEES
SECTION 2.01. Subtitle H, Title 8, Insurance Code, is
amended by adding Chapter 1582 to read as follows:
CHAPTER 1582. TEXAS PUBLIC SCHOOL EMPLOYEES UNIFORM GROUP BENEFITS
PROGRAM
Sec. 1582.001. SHORT TITLE. This chapter may be cited as
the Texas Public School Employees Uniform Group Benefits Act.
Sec. 1582.002. DEFINITIONS. The definitions adopted under
Chapter 1575 apply to this chapter.
Sec. 1582.003. UNIFORM GROUP BENEFITS PROGRAM ESTABLISHED.
(a) Notwithstanding any other law, the trustee shall:
(1) consolidate the programs administered under
Chapters 1575, 1576, 1578, 1579, and 1581 into one uniform group
benefits program for active employees, retirees, and dependents of
active employees and retirees; and
(2) administer the uniform group benefits program
established under Subsection (a)(1) in accordance with this code
and all other applicable law.
(b) The uniform group benefits program established under
Subsection (a) must provide coverage that is comparable to the
basic coverage provided under Chapter 1551.
Sec. 1582.004. PARTICIPATION. Notwithstanding any other
law, each public school participates in the consolidated uniform
group benefits program under this chapter.
Sec. 1582.005. STATE CONTRIBUTION. The state shall
contribute the amount specified by the General Appropriations Act
to fund the coverage provided under this chapter in a manner
analogous to that provided by Subchapter G, Chapter 1551.
Sec. 1582.006. RULES. The trustee shall adopt rules as
necessary to implement this chapter.
ARTICLE 3. TAX
SECTION 3.01. Title 2, Tax Code, is amended by adding
Subtitle L to read as follows:
SUBTITLE L. PERSONAL INCOME TAX
CHAPTER 261. PERSONAL INCOME TAX
SUBCHAPTER A. IMPOSITION OF TAX
Sec. 261.001. TAX IMPOSED. (a) A tax is imposed for each
tax year:
(1) on the taxable income of every resident of this
state; and
(2) on the taxable income derived from sources in this
state of every nonresident.
(b) The tax rates for an individual are:
(1) one percent of the amount of taxable income that
does not exceed $25,000;
(2) $250, plus an amount equal to two percent of the
amount of taxable income that exceeds $25,000 but does not exceed
$50,000;
(3) $750, plus an amount equal to 3.5 percent of the
amount of taxable income that exceeds $50,000 but does not exceed
$75,000;
(4) $1,625, plus an amount equal to five percent of the
amount of taxable income that exceeds $75,000 but does not exceed
$100,000;
(5) $2,875, plus an amount equal to 6.5 percent of the
amount of taxable income that exceeds $100,000 but does not exceed
$150,000;
(6) $6,125, plus an amount equal to seven percent of
the amount of taxable income that exceeds $150,000 but does not
exceed $200,000; and
(7) $9,625, plus an amount equal to 7.5 percent of the
amount of taxable income that exceeds $200,000.
Sec. 261.002. JOINT RETURN. If persons subject to this tax
file a joint federal income tax return with a spouse, they may file
a joint return under this chapter but they may not combine their
incomes for the purpose of determining the amount of tax owed. The
separate incomes of each spouse are taxed as individual incomes
under Section 261.001.
Sec. 261.003. MEANING OF TERMS. (a) In this chapter:
(1) an individual is a resident of this state if the
individual:
(A) is domiciled in this state, unless the
individual does not maintain a permanent abode in this state and
does maintain a permanent abode elsewhere and spends, in the
aggregate, not more than 30 days of the tax year in this state; or
(B) is not domiciled in this state but maintains
a permanent abode in this state and spends, in the aggregate, more
than 183 days of the tax year in this state; and
(2) an individual is a nonresident if the individual
is not a resident of this state.
(b) Any term used in this chapter and not defined by or for
purposes of this chapter has the same meaning as when used in a
comparable context in the laws of the United States relating to
federal income taxes, unless a different meaning is clearly
required. Any reference in this chapter to federal law means the
provisions of the Internal Revenue Code of 1986 in effect on
December 31, 2005, and other provisions of federal laws relating to
federal income taxes in effect on December 31, 2005.
[Sections 261.004-261.050 reserved for expansion]
SUBCHAPTER B. COMPUTATION OF TAXABLE INCOME
Sec. 261.051. TAXABLE INCOME. The taxable income of a
resident of this state is the resident's federal adjusted gross
income as defined by federal law minus an amount equal to the
product of:
(1) $3,200; and
(2) the number of deductions claimed on the resident's
federal income tax return.
Sec. 261.052. CREDIT FOR INCOME TAX PAID TO ANOTHER STATE.
(a) A resident individual is allowed a credit against the tax
otherwise due under this chapter for the amount of any income tax
imposed on the individual for the tax year by another state of the
United States on income that is derived from sources in that state
and that is subject to tax under this chapter.
(b) The credit provided by this section may not exceed the
proportion of the tax otherwise due under this chapter that the
amount of the taxpayer's adjusted gross income derived from sources
in the other taxing jurisdiction bears to the taxpayer's entire
adjusted gross income as modified by this subchapter.
Sec. 261.053. DUAL RESIDENCE; REDUCTION OF TAX. If a
taxpayer is a resident of this state and is regarded as a resident
of another jurisdiction for purposes of personal income taxation,
the comptroller shall reduce the tax on that portion of the
taxpayer's income that is subject to tax in both jurisdictions
solely by virtue of dual residence. The reduction shall be in an
amount equal to that portion of the lower of the two taxes
applicable to the income taxed twice that the tax imposed by this
state bears to the combined taxes of the two jurisdictions on the
income taxed twice.
Sec. 261.054. NONRESIDENT INDIVIDUALS--TAXABLE INCOME.
The taxable income of a nonresident individual is that part of the
individual's federal adjusted gross income derived from sources in
this state determined under Section 261.055.
Sec. 261.055. ADJUSTED GROSS INCOME FROM SOURCES IN THIS
STATE--NONRESIDENT. (a) The adjusted gross income of a
nonresident derived from sources in this state is the net amount of
items of income, gain, loss, and deduction entering into the
nonresident's federal adjusted gross income that are derived from
or connected with sources in this state, including:
(1) the nonresident's distributive share of
partnership income and deductions determined under Section
261.403; and
(2) the nonresident's share of estate or trust income
and deductions derived from sources in this state.
(b) Items of income, gain, loss, and deduction derived from
or connected with sources in this state are those items
attributable to:
(1) the ownership or disposition of an interest in
real or tangible personal property in this state; and
(2) a business, trade, profession, or occupation
conducted in this state.
(c) Income from intangible personal property, including
annuities, dividends, interest, and gains from the disposition of
intangible personal property, constitutes income derived from
sources in this state only to the extent that the income is from
property used in a business, trade, profession, or occupation
carried on in this state.
(d) Deductions for capital losses, net long-term capital
gains, and net operating losses derived from or connected with
sources in this state, are determined in the same manner as the
corresponding federal deductions. However, the extent to which the
deductions are derived from or connected with sources in this state
is determined under the comptroller's rules.
(e) For a nonresident individual who is a shareholder of a
corporation that is an electing small business corporation for
federal income tax purposes, the undistributed taxable income of
the corporation does not constitute income derived from sources in
this state and a net operating loss of the corporation does not
constitute a loss or deduction connected with sources in this
state.
(f) If a business, trade, profession, or occupation is
carried on partly in and partly outside this state, the items of
income and deduction derived from or connected with sources in this
state are determined by apportionment and allocation consistent
with Chapter 141 under the comptroller's rules.
(g) Compensation paid by the United States for service in
the armed forces of the United States performed by a nonresident is
not income derived from sources in this state.
[Sections 261.056-261.100 reserved for expansion]
SUBCHAPTER C. WITHHOLDING TAX
Sec. 261.101. EMPLOYER TO WITHHOLD TAX FROM WAGES. (a)
Each employer maintaining an office or doing business in this state
and making payment of wages taxable under this chapter to a resident
or nonresident individual shall withhold from those wages for each
payroll period a tax computed in a manner as to result, so far as
practicable, in withholding from the employee's wages during each
calendar year an amount equivalent to the amount of tax reasonably
estimated to be due from the employee under this chapter from the
amount of the wages paid by the employer and included in the
employee's adjusted gross income during the calendar year. The
method of determining the amount to be withheld shall be prescribed
by the comptroller's rules. Payments by the United States for
service in the armed forces of the United States are not subject to
state withholding.
(b) The comptroller may enter into agreements with the tax
departments of other states that require income tax to be withheld
from the payment of wages and salaries to govern the amounts to be
withheld from the wages and salaries of residents of those states
under this chapter. The agreements may provide for recognition of
anticipated tax credits in determining the amounts to be withheld,
and the comptroller, by rule, may relieve employers in this state
from withholding income tax on wages and salaries paid to
nonresident employees. An agreement authorized by this section is
subject to the condition that the tax department of the other state
grants similar treatment to residents of this state.
Sec. 261.102. INFORMATION STATEMENT FOR EMPLOYEE. An
employer required to withhold the tax under Section 261.101 from
the wages of an employee shall furnish to each employee from whom
the employer withheld the tax during the calendar year a written
statement as prescribed by rule showing the amount of wages paid by
the employer to the employee, the amount deducted and withheld as
tax, and other information the comptroller prescribes. The
withholding statement shall be given to the employee from whom the
tax is withheld on or before February 15 of the year succeeding the
calendar year in which the withholding occurs or, if the employee's
employment ends during the calendar year, before the 31st day after
the last day on which wages are paid to the employee.
Sec. 261.103. CREDIT FOR TAX WITHHELD. Wages on which the
withholding tax applies are included fully as taxable income under
this chapter as if no withholding were required. The amount of
withholding tax actually withheld under this subchapter in a
calendar year is considered to have been paid to the comptroller on
behalf of the employee from whom withheld, and the employee shall be
credited with having paid that amount of tax for the tax year in
which the wages are taxed. For a tax year of less than 12 months,
the credit shall be made under rules of the comptroller.
Sec. 261.104. EMPLOYER'S RETURN AND PAYMENT OF TAX
WITHHELD. (a) An employer required to deduct and withhold tax
under this chapter shall, for each calendar quarter, on or before
the 15th day of the month following the end of the calendar quarter,
file a withholding return as prescribed by the comptroller and pay
to the comptroller or to a depository designated by the
comptroller, the taxes required to be withheld, except that for the
fourth quarter of the calendar year, the return shall be filed and
the taxes paid on or before January 31 of the succeeding year. If
the amount required to be withheld by an employer for a calendar
month exceeds $500, the employer shall, not later than the 15th day
of the succeeding month, pay the withheld amount to the comptroller
or to a depository designated by the comptroller. The amount paid
is allowed as a credit against the liability shown on the employer's
quarterly withholding return required by this section. If the
amount required to be deducted and withheld by an employer is less
than $100 in a calendar quarter, the comptroller by rule may permit
an employer to file a withholding return on or before July 31 for
the semiannual period ending on June 30 and on or before January 31
of the succeeding year for the semiannual period ending on December
31. The comptroller may, if it is necessary for the protection of
the revenue, require an employer to make a return and pay to the
comptroller the tax withheld at any time. If the amount of wages
paid by an employer is not sufficient under this chapter to require
the withholding of tax from the wages of any of the employer's
employees, the comptroller by rule may permit the employer to file
an annual return on or before January 31 of the succeeding calendar
year.
(b) If an employer fails to collect the tax, truthfully
account for the tax, pay the tax, or make returns of the tax as
required by this section, the comptroller may serve a notice
requiring the employer to collect the taxes that became collectible
after service of notice, to deposit the taxes in a bank approved by
the comptroller, in a separate account, in trust for and payable to
the comptroller, and to keep the amount of the tax in the account
until paid to the comptroller. A notice remains in effect until a
notice of cancellation is served by the comptroller.
Sec. 261.105. EMPLOYER'S LIABILITY FOR WITHHELD TAXES. An
employer required to withhold a tax under this chapter is liable for
the tax. For purposes of assessment and collection, any amount
required to be withheld and paid to the comptroller, and any
additions to tax, penalties, and interest with respect to it, is the
tax of the employer. Any amount of tax actually deducted and
withheld under this chapter shall be held to be a special fund in
trust for the comptroller. An employee does not have a right of
action against his employer in respect to money withheld from the
employee's wages and paid to the comptroller in compliance or in
intended compliance with this chapter.
Sec. 261.106. EMPLOYER'S FAILURE TO WITHHOLD. If an
employer fails to withhold tax as required, and thereafter the tax
against which that tax may be credited is paid, the tax so required
to be withheld may not be collected from the employer, but the
employer is liable for additions to tax, penalties, or interest
otherwise applicable resulting from a failure to withhold.
[Sections 261.107-261.200 reserved for expansion]
SUBCHAPTER D. ACCOUNTING PERIODS AND METHODS
Sec. 261.201. PERIOD FOR COMPUTATION OF TAXABLE INCOME.
(a) For purposes of the tax imposed by this chapter, a taxpayer's
tax year is the same as the taxpayer's tax year for federal income
tax purposes.
(b) If a taxpayer's tax year is changed for federal income
tax purposes, the taxpayer's tax year for purposes of the tax
imposed by this chapter shall be similarly changed.
Sec. 261.202. METHODS OF ACCOUNTING. (a) A taxpayer's
method of accounting is the same as the taxpayer's method of
accounting for federal income tax purposes. If a single method of
accounting has not been regularly used by the taxpayer, taxable
income for purposes of this chapter shall be computed under any
method that in the opinion of the comptroller fairly reflects
income.
(b) If a taxpayer's method of accounting is changed for
federal income tax purposes, the taxpayer's method of accounting
for purposes of this chapter is changed in the same manner.
Sec. 261.203. ADJUSTMENTS. In computing a taxpayer's
taxable income for any tax year under a method of accounting
different from the method under which the taxpayer's taxable income
for the previous year was computed, there shall be taken into
account those adjustments that are determined, under rules
prescribed by the comptroller, to be necessary solely by reason of
the change in order to prevent amounts from being duplicated or
omitted.
Sec. 261.204. LIMITATION ON ADDITIONAL TAX. (a) If a
taxpayer's method of accounting is changed, other than from an
accrual to an installment method, an additional tax that results
from adjustments determined to be necessary solely because of the
change may not be greater than if those adjustments were ratably
allocated and included for the tax year of the change and not more
than two preceding tax years during which the taxpayer used the
method of accounting from which the change is made.
(b) If a taxpayer's method of accounting is changed from an
accrual to an installment method, an additional tax for the year of
the change of method and for a subsequent year that is attributable
to the receipt of installment payments properly accrued in a prior
year shall be reduced by the portion of tax for any prior tax year
attributable to the accrual of the installment payments, under
rules adopted by the comptroller.
[Sections 261.205-261.400 reserved for expansion]
SUBCHAPTER E. PARTNERS AND PARTNERSHIPS
Sec. 261.401. ENTITY NOT TAXABLE. A partnership as an
entity is not subject to the tax imposed by this chapter. Persons
carrying on business as partners are liable for the tax imposed by
this chapter only in their separate or individual capacities.
Sec. 261.402. RESIDENT PARTNER--ADJUSTED GROSS INCOME. (a)
Partnership income, gain, loss, or deduction shall be allocated in
accordance with each partner's distributive share for federal
income tax purposes.
(b) Each item of partnership income, gain, loss, or
deduction has the same character for a partner under this chapter as
it has for federal income tax purposes. If an item is not
characterized for federal income tax purposes, it has the same
character for a partner as if realized directly from the source from
which realized by the partnership or incurred in the same manner as
incurred by the partnership.
(c) If a partner's distributive share of an item of
partnership income, gain, loss, or deduction is determined for
federal income tax purposes by a special provision in the
partnership agreement with respect to the item, and the principal
purpose of the provision is the avoidance or evasion of tax under
this chapter, the partner's distributive share of the item and a
modification required with respect to it is determined in
accordance with the partner's distributive share of the taxable
income or loss of the partnership generally, excluding those items
requiring separate computation under Section 702, Internal Revenue
Code of 1986.
Sec. 261.403. NONRESIDENT PARTNER--ADJUSTED GROSS INCOME
FROM SOURCES IN THIS STATE. (a) In determining the adjusted gross
income of a nonresident partner of any partnership, there shall be
included only that part derived from or connected with sources in
this state of the partner's distributive share of items of
partnership income, gain, loss, and deduction entering into the
partner's federal adjusted gross income, as that part is determined
under rules adopted by the comptroller and consistent with the
rules adopted under Section 261.055.
(b) Except as authorized by Subsection (c), in determining
the sources of a nonresident partner's income, no effect is given to
a provision in the partnership agreement that:
(1) characterizes payments to the partner as being for
services or for the use of capital, or allocates to the partner, as
income or gain from sources outside this state, a greater
proportion of the partner's distributive share of partnership
income or gain than the ratio of partnership income or gain from
sources outside this state to partnership income or gain from all
sources; or
(2) allocates to the partner a greater proportion of a
partnership item of loss or deduction connected with sources in
this state than the partner's proportionate share, for federal
income tax purposes, of partnership loss or deduction generally.
(c) The comptroller may, on application, authorize the use
of other methods of determining a nonresident partner's portion of
partnership items derived from or connected with sources in this
state, and the modifications related to it, that are appropriate
and equitable, on terms the comptroller may require.
(d) A nonresident partner's distributive share of items of
income, gain, loss, or deduction is determined under Section
261.402(a). The character of partnership items for a nonresident
partner is determined under Section 261.402(b). The effect of a
special provision in a partnership agreement, other than a
provision described by Subsection (b), having as a principal
purpose the avoidance or evasion of tax under this chapter is
determined under Section 261.402(c).
[Sections 261.404-261.500 reserved for expansion]
SUBCHAPTER F. TAX RETURNS AND PAYMENTS
Sec. 261.501. PERSONS REQUIRED TO MAKE RETURNS OF INCOME. A
state income tax return shall be made by every individual who has
adjusted gross income from sources in this state, except that the
comptroller by rule may prescribe minimum gross income amounts to
exempt individuals from this requirement.
Sec. 261.502. RETURNS BY FIDUCIARIES. (a) An income tax
return for a deceased individual shall be made and filed by the
executor, administrator, or other person charged with the care of
the property of the decedent. A final return of a decedent is due
when it would have been due if the decedent had not died.
(b) An income tax return for an individual who is unable to
make a return because of minority or other disability shall be made
and filed by the individual's duly authorized agent, guardian,
conservator, fiduciary, or other person charged with the care of
the individual or the individual's property other than a receiver
in possession of only a part of the individual's property.
(c) If two or more fiduciaries are acting jointly, the
return may be made by any one of them.
Sec. 261.503. NOTICE OF QUALIFICATION AS RECEIVER. A
receiver, trustee in bankruptcy, assignee for benefit of creditors,
or other similar fiduciary shall give notice of the person's
qualification to the comptroller, as may be required by rule.
Sec. 261.504. CHANGE OF STATUS AS RESIDENT OR NONRESIDENT
DURING YEAR. (a) If the status of an individual changes during the
individual's tax year from resident to nonresident or from
nonresident to resident, the comptroller by rule may require the
individual to file one return for the portion of the year during
which the individual is a resident and one for the portion of the
year during which the individual is a nonresident.
(b) Except as provided by Subsection (c), the taxable income
of an individual is determined as provided by Section 261.051 for
residents and Section 261.054 for nonresidents as if the
individual's tax year for federal income tax purposes were limited
to the period of the individual's resident and nonresident status
respectively.
(c) There shall be included in determining taxable income
from sources in or outside this state, as the case may be, income,
gain, loss, or deduction accrued prior to the change of status even
though not otherwise includable or allowable in respect to the
period before the change, but the taxation or deduction of items
accrued before the change of status is not affected by the change.
(d) If two returns are required to be filed under this
section, the total of the taxes due may not be less than would be due
if the total of the taxable incomes reported on the two returns were
includable in one return.
Sec. 261.505. TIME AND PLACE FOR FILING RETURNS AND PAYING
TAX. The income tax return required by this chapter shall be filed
not later than the 15th day of the fourth month following the end of
the taxpayer's tax year. A person required to make and file a
return under this chapter shall pay a tax due to the comptroller not
later than the last day that the filing of the return is allowed
without penalty, excluding an extension of time for filing the
return. The comptroller by rule shall prescribe the place for
filing a return, statement, or other document required by this
chapter and for the payment of a tax.
Sec. 261.506. ESTIMATED TAX. (a) An individual subject to
the income tax imposed by this chapter shall make estimated
payments of the tax. Section 6654, Internal Revenue Code of 1986,
other than Subsections (a), (b), (d)(2), and (e) of that section,
governing the payment of estimated federal income taxes on
individuals applies to the payments required by this section,
including exemptions from the estimated tax payment requirement. A
reference in that section to the federal income tax imposed on
individuals is construed as a reference to the tax imposed by this
chapter as required to administer this section. A power or duty
given by Section 6654, Internal Revenue Code of 1986, to the United
States secretary of the treasury is assigned to the comptroller for
purposes of the estimated payments required by this section.
(b) The comptroller shall adopt rules for the
administration of this section.
(c) Payment of the estimated tax or an installment is
considered payment on account of the tax imposed by this chapter.
Sec. 261.507. EXTENSION OF TIME FOR FILING AND PAYMENT. (a)
The comptroller, on terms the comptroller may require, may grant a
reasonable extension of time for payment of tax or an installment,
or for filing a return, statement, or other document required under
this chapter. Except for an extension for a taxpayer who is outside
the United States, an extension for filing a return, statement, or
document may not exceed six months.
(b) If the time for the payment of an amount of tax is
extended, the comptroller may require the taxpayer to furnish a
bond or other security in an amount not exceeding twice the amount
of tax for which the extension of time for payment is granted, on
terms the comptroller may require.
Sec. 261.508. CHANGE OF ELECTION. An election expressly
authorized by this chapter may be changed as authorized by the
comptroller or by the comptroller's rule.
Sec. 261.509. SIGNING OF RETURNS AND OTHER DOCUMENTS. (a)
A return, statement, or other document required to be made or filed
under this chapter shall be signed as provided by the comptroller.
An individual's name signed to a return, statement, or other
document is prima facie evidence that the individual signed the
return, statement, or other document.
(b) A return, statement, or other document required of a
partnership must be signed by at least one partner. A partner's
name signed to a return, statement, or other document is prima facie
evidence that the partner is authorized to sign on behalf of the
partnership.
(c) The making or filing of a return, statement, or other
document or copy required to be made or filed under this chapter,
including a copy of a federal return, constitutes a certification
by the person making or filing the return, statement, or other
document or copy that the statements contained in it are true and
that a copy filed is a true copy.
[Sections 261.510-261.520 reserved for expansion]
SUBCHAPTER G. INFORMATION RETURNS
Sec. 261.521. GENERAL REQUIREMENTS. The comptroller by
rule may require the keeping of records, the content and form of
returns and statements, and the filing of copies of federal income
returns and determinations. The comptroller may require a person,
by rule or by notice served on the person, to make returns, render
statements, or keep records, as the comptroller considers
sufficient to show whether the person is liable under this chapter
for tax or for the collection of tax.
Sec. 261.522. PARTNERSHIP RETURN. Each partnership having
a resident partner or having income derived from sources in this
state, determined in accordance with the applicable rules
prescribed by Section 261.055 as in the case of a nonresident
individual, shall make a return for the tax year stating all items
of income, gain, loss, and deduction, and the names and addresses of
the individuals, whether residents or nonresidents, who would be
entitled to share in the net income if distributed and the amount of
the distributive share of each individual, and other relevant
information the comptroller requires. The return must be filed not
later than the 15th day of the fourth month following the end of
each tax year. For purposes of this section, "tax year" means a
year or period that would be a tax year of the partnership if it were
subject to tax under this chapter.
Sec. 261.523. INFORMATION RETURNS. The comptroller by rule
may require returns of information to be made and filed not later
than February 28 of each year by a person making payment or
crediting in a calendar year the amount of $600 or more ($10 or more
in the case of interest or dividends) to a person who may be subject
to the tax imposed under this chapter. The returns may be required
of any person, including a lessee or mortgagor of real or personal
property, a fiduciary, an employer, and an officer or employee of
this state, or of any municipality or other political subdivision
of this state, having the control, receipt, custody, disposal, or
payment of dividends, interest, rents, salaries, wages, premiums,
annuities, compensations, remunerations, emoluments, or other
fixed or determinable gains, profits, or income, except interest
coupons payable to bearer. A copy of the withholding statement
required to be furnished by an employer to an employee constitutes
the return of information required to be made under this section for
wages.
Sec. 261.524. REPORT OF CHANGE IN FEDERAL TAXABLE INCOME.
(a) If the amount of a taxpayer's federal taxable income reported
on the taxpayer's federal income tax return for a tax year is
changed or corrected by the United States Internal Revenue Service
or other competent authority, or as the result of a renegotiation of
a contract or subcontract with the United States, the taxpayer
shall:
(1) report the change or correction in federal taxable
income not later than the 90th day after the final determination of
the change, correction, or renegotiation, or as required by the
comptroller; and
(2) concede the accuracy of the determination or state
in what way it is erroneous.
(b) A taxpayer filing an amended federal income tax return
shall also file, not later than the 90th day after filing, an
amended return under this chapter, and shall give any information
required by the comptroller.
(c) The comptroller by rule may prescribe exceptions to the
requirements of this section.
[Sections 261.525-261.600 reserved for expansion]
SUBCHAPTER H. ADDITIONS TO TAX; PENALTIES
Sec. 261.601. FAILURE TO FILE TAX RETURN. (a) A person who
does not file a return required under this chapter on or before the
prescribed date is subject to the following penalty based on a
percentage of the full amount of tax owed on the prescribed day:
(1) if the return is filed not later than the 30th day
after the prescribed date, five percent;
(2) if the return is filed later than the 30th day
after the prescribed date, but not later than the 60th day after the
prescribed date, 10 percent;
(3) if the return is filed later than the 60th day
after the prescribed date, but not later than the 90th day after the
prescribed date, 15 percent;
(4) if the return is filed later than the 90th day
after the prescribed date, but not later than the 120th day after
the prescribed date, 20 percent; or
(5) if the return is filed later than the 120th day
after the prescribed date, 25 percent.
(b) The prescribed date is determined with regard to an
extension of time for filing.
(c) In determining the amount owed on the prescribed date,
the taxpayer is entitled to credit for a portion of the tax paid on
or before the prescribed date and other credit that may be claimed
on the return.
(d) The penalty required by this section does not apply if
the taxpayer shows that the failure to file a return was not the
result of wilful neglect before the prescribed date or at any time
during the delinquency and that good cause for the failure existed
at all times before filing.
Sec. 261.602. FAILURE TO FILE INFORMATION RETURN. (a) A
person who does not file a statement of payment to another person as
required by this chapter or a duplicate statement of tax withheld on
wages on or before the prescribed date for filing shall, after
notice and demand by the comptroller, pay a penalty of $5 for each
statement not timely filed.
(b) The total amount of penalties imposed under this section
on any person during a single calendar year may not exceed $2,000.
(c) The prescribed date for filing is determined with regard
to any extension of time for filing.
(d) The penalty required by this section is not applicable
if the person required to file the statement shows that the failure
to file did not result from wilful neglect and that there was good
cause for the failure.
Sec. 261.603. FAILURE TO PAY TAX. (a) A person who does not
pay any amount of tax owed by the person on the prescribed date
shall pay, in addition to all other penalties and interest, a
penalty of 10 percent of the amount of the tax due and owing on the
prescribed date.
(b) The prescribed date is determined with regard to
extensions of time allowed by the comptroller.
(c) A failure to pay all or part of an estimated tax is
considered to be an underpayment of estimated tax. The comptroller
by rule shall prescribe the method of determining the amount and
period of underpayment.
Sec. 261.604. FAILURE TO PAY WITHHOLDING TAX. (a) An
employer who fails to pay the tax withheld by the employer or
required to be withheld by the employer at the time required by this
chapter is liable for the amount of the unpaid tax in addition to
the amount of the penalty prescribed by Section 261.603 together
with interest on the full amount of tax and penalty due.
(b) Amounts assessed under this section may not be collected
from the employee by the employer.
(c) The comptroller has the same rights and powers for the
collection of the tax, penalties, and interest against an employer
as are prescribed for the collection of the tax against an
individual.
Sec. 261.605. PENALTIES AND INTEREST TREATED AS TAX. The
penalties and interest provided by this subchapter shall be paid on
notice and demand and shall be assessed, collected, and paid in the
same manner as other taxes. The comptroller may issue a deficiency
notice for all or part of a penalty or interest along with or
separate from the amount of tax owed in absence of penalties or
interest.
[Sections 261.606-261.630 reserved for expansion]
SUBCHAPTER I. CREDITS AND REFUNDS
Sec. 261.631. CREDITS AND REFUNDS. (a) Within the
applicable period of limitations the comptroller may credit an
overpayment of income tax and interest on the overpayment against a
liability of a tax imposed by the tax laws of this state on the
person who made the overpayment, and the balance shall be refunded
by the comptroller out of the proceeds of the tax retained by the
comptroller.
(b) If the amount allowable as a credit for tax withheld
from the taxpayer exceeds the tax to which the credit relates, the
excess is an overpayment.
(c) If there has been an overpayment of tax required to be
deducted and withheld under Section 261.101, refund shall be made
to the employer only to the extent that the amount of the
overpayment was not deducted and withheld by the employer.
(d) The comptroller may prescribe rules providing for
crediting against the estimated tax for a tax year the amount
determined to be an overpayment of the income tax for a preceding
tax year.
(e) If an amount of income tax is assessed and collected
after the expiration of the period of limitations properly
applicable, the amount is an overpayment.
Sec. 261.632. ABATEMENTS. (a) The comptroller may abate
any unpaid portion of a tax or a tax liability that is excessive in
amount, assessed after the expiration of the applicable period of
limitations, or erroneously or illegally assessed.
(b) The comptroller may abate the unpaid portion of a tax or
a tax liability if the comptroller determines under uniform rules
prescribed by the comptroller that the administration and
collection costs involved would not warrant collection of the
amount due.
Sec. 261.633. EXTENDED LIMITATION PERIOD. (a) If a
taxpayer is required by Section 261.524 to report a change or
correction in federal taxable income reported on a federal income
tax return, or to report a change or correction that is treated in
the same manner as if it were an overpayment for federal income tax
purposes, or to file an amended return with the comptroller, a claim
for credit or refund of a resulting overpayment of tax must be filed
by the taxpayer not later than the second anniversary of the date
the notice of the change or correction or the amended return was
required to be filed with the comptroller. If the report or amended
return required by Section 261.524 is not filed within the period
prescribed by that section, interest on a resulting refund or
credit ceases to accrue after the period. The amount of credit or
refund may not exceed the amount of the reduction in tax
attributable to the federal change, correction, or items amended on
the taxpayer's amended federal income tax return. This subsection
does not affect the time within which or the amount for which a
claim for credit or refund may be filed under a provision other than
this section.
(b) If a claim for credit or refund relates to an
overpayment of tax on account of the deductibility by the taxpayer
of a debt as a debt that became worthless or a loss from
worthlessness of a security or the effect that the deductibility of
a debt or of a loss has on the application to the taxpayer of a
carryover, the claim may be made, under rules adopted by the
comptroller, not later than the seventh anniversary of the date
prescribed by law for filing the return for the year with respect to
which the claim is made.
(c) If a claim for credit or refund relates to an
overpayment attributable to a net operating loss carryback, the
claim may be made, under rules adopted by the comptroller, not later
than the 15th day of the 40th month following the end of the tax year
of the net operating loss that resulted in the carryback or the
period prescribed by Section 111.104, whichever expires later.
[Sections 261.634-261.650 reserved for expansion]
SUBCHAPTER J. MISCELLANEOUS ENFORCEMENT PROVISIONS
Sec. 261.651. TAXPAYER NOT RESIDENT. If notice and demand
for the payment of a tax is given to a nonresident and it appears to
the comptroller that it is not practicable to locate property of the
taxpayer sufficient in amount to cover the amount of tax due, the
comptroller may authorize the institution of any available action
or proceeding to collect or enforce the claim in any place by any
procedure by which a civil judgment of a court of record of this
state could be collected or enforced. The comptroller may
designate agents or retain counsel outside this state for the
purpose of collecting taxes due under this chapter and require of
them bonds or other security for the faithful performance of their
duties. The comptroller may enter into agreements with the tax
department of another state for the collection of taxes from
persons found in this state who are delinquent in the payment of
income taxes imposed by that state on condition that the agreeing
state afford similar assistance in the collection of taxes from
persons found in that state who are delinquent in the payment of
taxes imposed by this chapter.
Sec. 261.652. INCOME TAX CLAIMS OF OTHER STATES. The courts
of this state shall recognize and enforce liabilities for personal
income taxes lawfully imposed by another state that extends a like
comity to this state, and the duly authorized officer of the other
state may sue for the collection of personal income tax in the
courts of this state. A certificate by the secretary of state of
the other state that an officer suing for the collection of the tax
is duly authorized to collect the tax is conclusive proof of the
officer's authority. For the purposes of this section, "taxes"
includes additions to tax, interest, and penalties.
Sec. 261.653. ORDER TO COMPEL COMPLIANCE. (a) On
application of the attorney general, a judge of a court of
appropriate jurisdiction for the county in which a taxpayer or
other person who intentionally or knowingly refuses to file a tax
return required by this chapter may, by order, direct the person to
file the return. A person who fails or refuses to obey the order is
guilty of contempt of court.
(b) If any person intentionally or knowingly refuses to make
available any books, papers, records, or memorandums for
examination by the comptroller or wilfully refuses to attend and
testify, in accordance with the powers conferred on the comptroller
by Chapter 111, on application of the comptroller, a judge in the
court of appropriate jurisdiction for the county where the person
resides may by order direct the person to comply with the
comptroller's request for books, papers, records, or memorandums or
for the person's attendance and testimony. If the books, papers,
records, or memorandums required by the comptroller are in the
custody of a corporation, the order of the court may be directed to
any principal officer of the corporation. A person who fails or
refuses to obey the order is guilty of contempt of court.
Sec. 261.654. TRANSFEREES. (a) The liability, at law or in
equity, of a transferee of property of a taxpayer for any tax,
addition to tax, penalty, or interest due under this chapter, is
assessed, paid, and collected in the same manner and subject to the
same provisions and limitations as in the case of the tax to which
the liability relates except as otherwise provided by this section.
"Transferee" includes an heir or a recipient of a donation, legacy,
devise, or distribution.
(b) The period of limitation for assessment of liability of
a transferee is:
(1) the first anniversary of the expiration of the
period of limitation against the initial transferor if the
transferee is the initial transferee;
(2) the first anniversary of the expiration of the
period of limitation against the preceding transferee, but not
later than the third anniversary of the expiration of the period of
limitation for assessment against the initial transferor, if the
transferee is not the initial transferee; or
(3) notwithstanding Subdivisions (1) and (2), if
before the expiration of the period of limitation under Subdivision
(1) or (2) a proceeding for the collection of the liability has been
begun against the initial transferor or the last preceding
transferee, respectively, the first anniversary of the date on
which the proceeding is terminated.
(c) If, before the expiration of the period of limitation
applicable to a transferee, the comptroller and the transferee
consent in writing to an assessment after that time, the liability
may be assessed at any time before the expiration of the agreed
period. The period of limitation on credit or refund to the
transferee of overpayments of tax made by the transferee or of
overpayments of tax made by the transferor of which the transferee
is legally entitled to credit or refund is extended by an agreement
under this subsection and any extension of the agreement.
(d) If a person dies, the period of limitation for
assessment against that person is the period that would be in effect
had death not occurred.
Sec. 261.655. JEOPARDY DETERMINATIONS. (a) If the
comptroller issues a jeopardy determination for a tax for a current
period, the comptroller shall terminate the tax period of the
taxpayer immediately, and the notice and demand for a return and
immediate payment of the tax shall apply to the terminated period
and to income accrued and deductions incurred on or before
termination date if not otherwise properly includable or deductible
for the period.
(b) The comptroller may abate the jeopardy determination if
the comptroller finds that jeopardy does not exist.
Sec. 261.656. BANKRUPTCY OR RECEIVERSHIP. (a) On the
adjudication of bankruptcy of any taxpayer in any bankruptcy
proceeding or the appointment of a receiver for any taxpayer in any
receivership proceeding before any court of the United States or
any state or territory, any deficiency, together with additions to
tax and interest provided by law, determined by the comptroller may
be immediately assessed.
(b) Claims for the deficiency and additions to tax and
interest may be presented, for adjudication in accordance with law,
to the court before which the bankruptcy or receivership proceeding
is pending, despite the pendency of any protest before the
comptroller. A protest against a proposed assessment may not be
filed with the comptroller after the adjudication of bankruptcy or
appointment of the receiver.
Sec. 261.657. EVIDENCE OF RELATED FEDERAL DETERMINATION.
Evidence of a federal determination relevant to the taxes imposed
by this chapter is admissible in an administrative or judicial
proceeding relating to those taxes.
[Sections 261.658-261.670 reserved for expansion]
SUBCHAPTER K. OFFENSES
Sec. 261.671. ATTEMPT TO EVADE OR DEFEAT TAX. (a) A person
commits an offense if the person intentionally or knowingly
attempts in any manner to evade or defeat a tax imposed by this
chapter or the payment of tax imposed by this chapter.
(b) An offense under this section is a felony of the third
degree.
Sec. 261.672. FAILURE TO COLLECT OR PAY. (a) A person
commits an offense if the person is required under this chapter to
collect, truthfully account for, and pay a tax imposed by this
chapter and the person intentionally or knowingly fails to collect
or truthfully account for and pay the tax.
(b) An offense under this section is a felony of the third
degree.
Sec. 261.673. FAILURE TO FILE RETURN, SUPPLY INFORMATION,
OR PAY TAX. (a) A person commits an offense if the person is
required under this chapter to pay a tax, or required by this
chapter or rule adopted under this chapter to make a return, to keep
records, or to supply information, and the person intentionally or
knowingly fails to pay the tax, make the return, keep the records,
or supply the information at the time or times required by law.
(b) An offense under this section is a Class A misdemeanor.
[Sections 261.674-261.680 reserved for expansion]
SUBCHAPTER L. POWERS OF COMPTROLLER
Sec. 261.681. COOPERATION WITH OTHER JURISDICTIONS. The
comptroller may permit the United States secretary of the treasury
or the secretary's delegate, or the proper officer of any state or
other jurisdiction imposing an income tax on the incomes of
individuals, or the authorized representative of either officer, to
inspect the income tax returns of an individual, or may furnish to
the officer or authorized representative an abstract of the return
of income of an individual or supply the officer with information
concerning an item of income contained in a return, or disclosed by
the report of an investigation of the income or return of income of
an individual, but permission may be granted only if the statutes of
the United States or of the other jurisdiction, as applicable,
grant substantially similar privileges to the comptroller.
Sec. 261.682. COOPERATION WITH OTHER TAX OFFICIALS OF THIS
STATE. The comptroller may permit other tax officials of this state
to inspect tax returns and reports filed under this chapter but the
inspection shall be permitted only for purposes of enforcing a tax
law and only to the extent and under the conditions prescribed by
rule of the comptroller.
Sec. 261.683. CONTRACT WITH SECRETARY OF TREASURY FOR
COLLECTION OF TAX. The comptroller may enter into an agreement with
the United States secretary of the treasury or the secretary's
delegate under which, to the extent provided by the terms of the
agreement, the secretary or delegate will administer, enforce, and
collect a tax imposed by this chapter on behalf of this state. The
cost of the services performed by the secretary or delegate in
administering, enforcing, or collecting the tax under the terms of
the agreement may be paid from the appropriations for the general
operations of the comptroller.
Sec. 261.684. ARMED FORCES RELIEF PROVISIONS. (a) The
period of service in the armed forces of the United States in a
combat zone plus a period of continuous hospitalization outside
this state attributable to that service plus the next 180 days shall
be disregarded in determining, under rules of the comptroller,
whether an act required by this chapter was performed by a taxpayer
or the taxpayer's representative within the time prescribed.
(b) If an individual dies during an induction period while
in active service as a member of the armed forces of the United
States and the death occurred while the individual was serving in a
combat zone or as a result of wounds, disease, or injury incurred
while serving, the tax imposed by this chapter does not apply to the
tax year in which the individual dies or to any prior tax year
ending on or after the first day the individual so served in a
combat zone.
Sec. 261.685. DISPOSITION OF PROCEEDS. The revenue from
the tax imposed by this chapter shall be deposited to the credit of
a special account in the general revenue fund and may be
appropriated only for a purpose provided by Section 24, Article
VIII, Texas Constitution.
SECTION 3.02. Section 111.201, Tax Code, is amended to read
as follows:
Sec. 111.201. ASSESSMENT LIMITATION. (a) No tax imposed by
this title may be assessed after four years from the date that the
tax becomes due and payable except as provided by Subsection (b).
(b) A tax imposed by Chapter 261 may not be assessed after
six years from the date the tax becomes due and payable.
SECTION 3.03. (a) Except as provided by Subsection (b) of
this section, this article applies to income earned, accrued, or
received on or after the effective date of this article.
(b) Income, deductions, losses, credits against income, or
other adjustment allowed in determining the amount of tax under
this article or the amount of federal adjusted gross income under
this article, including carryovers, are not prohibited in computing
the taxes for a tax period beginning on January 1, 2006, because
those adjustments may have accrued or otherwise originated before
the effective date of this article.
(c) In 2006, the comptroller by rule may suspend the
application of Section 261.506, Tax Code, as added by this article,
in whole or in part, and may extend the deadlines for estimated tax
payments under that section.
ARTICLE 4. EFFECTIVE DATE
SECTION 4.01. (a) Except as provided by Subsection (b) of
this section and subject to Subsection (c) of this section, this Act
takes effect January 1, 2006, only if a constitutional amendment
that provides for the approval of the income tax imposed by this Act
is approved by the voters at an election to be held November 8,
2005.
(b) Subject to Subsection (c) of this section, Article 2 of
this Act takes effect September 1, 2006, only if a constitutional
amendment that provides for the approval of the income tax imposed
by this Act is approved by the voters at an election to be held
November 8, 2005.
(c) If the constitutional amendment that provides for the
approval of the income tax imposed by this Act is not approved by
the voters, this Act has no effect.