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By: Keffer of Eastland, Grusendorf H.B. No. 3
A BILL TO BE ENTITLED
AN ACT
relating to property tax relief and protection of taxpayers, taxes
and fees, and other matters relating to the financing of public
schools; providing civil and criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PROPERTY TAXATION
PART A. LIMITATION ON SCHOOL DISTRICT TAX RATE
SECTION 1A.01. Section 45.003, Education Code, is amended
by amending Subsection (d) and adding Subsections (e) and (f) to
read as follows:
(d) A proposition submitted to authorize the levy of
maintenance taxes must include the question of whether the
governing board or commissioners court may levy, assess, and
collect annual ad valorem taxes for the further maintenance of
public schools, at a rate not to exceed the rate, which may be not
more than $.997 [$1.50] on the $100 valuation of taxable property in
the district, stated in the proposition.
(e) An election held before September 1, 2005, authorizing a
maintenance tax at a rate of at least $.997 on the $100 valuation of
taxable property in the district is sufficient to authorize a rate
not to exceed $.997.
(f) A district permitted by special law on January 1, 2005,
to impose an ad valorem tax at a rate greater than $1.50 may
continue to impose a rate that is $.503 less than the rate
previously authorized.
PART B. BUY-DOWN OF SCHOOL DISTRICT TAXES
SECTION 1B.01. Chapter 403, Government Code, is amended by
adding Subchapter O to read as follows:
SUBCHAPTER O. DISTRIBUTION OF INCREASES
IN AVAILABLE STATE REVENUE FOR SCHOOL DISTRICT TAX RATE REDUCTION
Sec. 403.351. DEFINITIONS. In this subchapter:
(1) "Available state revenue" means state revenue from
any source other than federal funds or revenue that, under a
provision of the Texas Constitution, may be used only for a
particular purpose.
(2) "Increase in available state revenue" means the
amount by which the estimate made by the comptroller in advance of a
regular session of the legislature under Section 49a(a), Article
III, Texas Constitution, of available state revenue for the
succeeding fiscal biennium exceeds the estimate made by the
comptroller at that time under that section of available state
revenue for the current fiscal biennium.
Sec. 403.352. CERTIFICATION OF INCREASE IN AVAILABLE STATE
REVENUE. In the statement required by Section 49a, Article III,
Texas Constitution, in advance of a regular session of the
legislature, the comptroller shall certify:
(1) the amount, if any, of the increase in available
state revenue for the succeeding fiscal biennium; and
(2) the total amount of school district maintenance
and operations taxes levied under Section 3(e), Article VII, Texas
Constitution, for the tax year beginning in the second year of the
current fiscal biennium.
Sec. 403.353. DISTRIBUTION OF AVAILABLE STATE REVENUE FOR
TAX RATE REDUCTION. (a) For the fiscal biennium following a
certification under Section 403.352, the comptroller shall
distribute to the school districts in this state for tax rate
reduction an amount of available state revenue that is equal to the
sum of:
(1) 15 percent of the increase in available state
revenue for the current fiscal biennium certified under Section
403.352; and
(2) the amount of available state revenue distributed
in the preceding fiscal biennium under this section for school
district tax rate reduction.
(b) The comptroller shall distribute the amount required by
Subsection (a) in equal amounts in each fiscal year of the fiscal
biennium. The amount distributed in each fiscal year shall be
apportioned among the school districts in amounts that, applied to
the total taxable value of property in each district determined
under Subchapter M, for the most recent year for which the
information is available, would reduce the rate of each school
district's maintenance and operations tax by the same percentage,
except that a school district tax rate may not be reduced to less
than 75 cents for each $100 of taxable value.
(c) The money received by each school district under this
section must be applied to reducing the rollback tax rate of the
district as provided by Section 26.08, Tax Code.
SECTION 1B.02. Subchapter E, Chapter 42, Education Code, is
amended by adding Section 42.2518 to read as follows:
Sec. 42.2518. ADDITIONAL STATE AID FOR PROPERTY TAX RELIEF.
(a) For any school year, a school district is entitled to
additional state aid to the extent that an increase in the
guaranteed level of state and local funds per weighted student per
cent of tax effort under Section 42.302 applicable to that school
year does not compensate the district for a reduction in district ad
valorem tax revenue caused by ad valorem tax rate reduction made
pursuant to Subchapter O, Chapter 403, Government Code.
(b) A determination by the commissioner under this section
is final and may not be appealed.
SECTION 1B.03. Sections 26.08(i) and (k), Tax Code, are
amended to read as follows:
(i) For purposes of this section, the rollback tax rate of a
school district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, and state funds for property tax rate
relief that will be distributed to the district under Subchapter O,
Chapter 403, Government Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42, Education Code, and
Subchapter O, Chapter 403, Government Code, and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapters 41 and 42, Education Code, for the current
year had been in effect for the preceding year;
(2) the rate of $0.06 per $100 of taxable value; and
(3) the district's current debt rate.
(k) For purposes of this section, for the [2003, 2004,]
2005, 2006, 2007, or 2008 tax year, for a school district that is
entitled to state funds under Section 4(a-1), (a-2), (a-3), (a-4),
(a-5), or (a-6), Article 3.50-9, Insurance Code, the rollback tax
rate of the district is the sum of:
(1) the tax rate that, applied to the current total
value for the district, would impose taxes in an amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, and state funds for property tax rate
relief that will be distributed to the district under Subchapter O,
Chapter 403, Government Code, for the school year beginning in the
current tax year using that tax rate, would provide the same amount
of state funds distributed under Chapter 42, Education Code, and
Subchapter O, Chapter 403, Government Code, and maintenance and
operations taxes of the district per student in weighted average
daily attendance for that school year that would have been
available to the district in the preceding year if the funding
elements for Chapters 41 and 42, Education Code, for the current
year had been in effect for the preceding year;
(2) the tax rate that, applied to the current total
value for the district, would impose taxes in the amount that, when
added to state funds that would be distributed to the district under
Chapter 42, Education Code, and Subchapter O, Chapter 403,
Government Code, for the school year beginning in the current tax
year using that tax rate, permits the district to comply with
Section 3, Article 3.50-9, Insurance Code;
(3) the rate of $0.06 per $100 of taxable value; and
(4) the district's current debt rate.
PART C. MANDATORY SALES PRICE DISCLOSURE
SECTION 1C.01. The heading to Subchapter C, Chapter 22, Tax
Code, is amended to read as follows:
SUBCHAPTER C. [OTHER] REPORTS OF POLITICAL SUBDIVISION ACTIONS
SECTION 1C.02. Chapter 22, Tax Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. REPORT OF SALES PRICE
Sec. 22.61. SALES PRICE DISCLOSURE REPORT. (a) Except as
provided by Subsection (b), not later than the 10th day after the
date the deed is recorded in the county real property records, the
purchaser or grantee of real property under a recorded deed
conveying an interest in the real property shall file a sales price
disclosure report with the chief appraiser of the appraisal
district established for the county in which the property is
located.
(b) This section does not apply to a sale or other transfer
of real property if the sale or other transfer is made:
(1) pursuant to a court order;
(2) to or from a trustee in bankruptcy;
(3) pursuant to a power of sale under a deed of trust
or other encumbrance secured by the property;
(4) by a deed in lieu of foreclosure;
(5) by one co-owner to one or more other co-owners;
(6) to a spouse or to a person or persons in the first
degree of lineal consanguinity of one or more of the sellers or
grantors;
(7) of an interest less than a full fee simple
interest; or
(8) to an entity having the power to acquire the
property by eminent domain.
(c) A sales price disclosure report must be signed by the
purchaser or grantee of the real property described in the report.
Sec. 22.62. REPORT FORM. (a) A sales price disclosure
report filed under this subchapter must read as follows, with the
appropriate information included in the blanks:
SALES PRICE DISCLOSURE REPORT
Section 22.61, Tax Code, requires a purchaser or grantee
under a deed to prepare this report, sign it, and file it with the
chief appraiser of the appraisal district established for the
county in which the property is located not later than the third day
after the date the deed is recorded. This report is not required to
be filed if the sale or transfer is made: (1) under a court order;
(2) to or from a trustee in bankruptcy; (3) under a deed of trust or
other encumbrance secured by the property; (4) by a deed in lieu of
foreclosure; (5) between co-owners; or (6) between spouses or
between family members in the first degree of lineal consanguinity.
Knowingly making a false statement on this form is grounds for
prosecution of a Class A misdemeanor or a state jail felony under
Section 37.10, Penal Code. The chief appraiser may not use the
information in this form as the sole basis on which to increase the
market value of the property.
Seller's or grantor's name: ___________________
Purchaser's or grantee's name: ________________
Purchaser's or grantee's address: _____________
Property description (as stated in deed): _____
Sales price or other consideration paid for the property:
________
The method used to finance the sales price or consideration
was: ⌖ none (cash sale) ⌖ cash and third-party financing ⌖ cash
and seller financing ⌖ exchange of other property ⌖ other,
describe: ______________________________________________________
Describe any unusual or extraordinary terms of the sale or
transfer that affected the amount of the sales price or
consideration: _____________________________
Describe any other facts or circumstances that affected the
amount of the sales price or consideration: ______________________
To the best of my knowledge, this statement is true and
accurate.
Purchaser's or grantee's signature: _______________
Date: ____________
Return this form to: ______________________________.
(b) The appraisal district shall include at the end of the
form instructions for the filing of the form by mail, hand delivery,
or, if permitted by the chief appraiser, facsimile machine or other
electronic means.
(c) Each appraisal district shall prepare and make
available sales price disclosure report forms that conform to the
requirements of this section. Except for instructions for the
filing of the form, no additional information may be required to be
included in a sales price disclosure report form.
(d) Each county clerk's or combined county and district
clerk's office shall provide at no charge a sales price disclosure
report form to each grantee or agent of a grantee who appears in
person and tenders a deed to real property for recording. The sales
price disclosure form must be the form that is prepared and made
available by the appraisal district established for the county in
which the property is located.
(e) At the end of a calendar month in which a deed to real
property has been recorded in the deed records of the county, the
county clerk or the combined county and district clerk shall
provide the appraisal district established for the county with a
copy of the grantee index or a report or list of deeds to real
property filed for recording in that month.
Sec. 22.63. FILING AND RECEIPT OF REPORT. (a) A purchaser
or grantee may file a sales price disclosure report with a chief
appraiser by mail, hand delivery, or facsimile machine or other
electronic means.
(b) On receipt of the completed sales price disclosure
report, the chief appraiser shall provide to the purchaser or
grantee a written acknowledgement that the report has been
received. If the acknowledgement of receipt is mailed, the chief
appraiser shall mail it to the purchaser or grantee at the address
provided in the report.
Sec. 22.64. PREPARATION OF REPORT; IMMUNITY FROM LIABILITY.
(a) A sales price disclosure report must be prepared by the
purchaser or grantee of the property described in the report or by a
title insurance company, lender, real estate agent, or attorney.
(b) A title insurance company, lender, real estate agent, or
attorney who prepares a sales price disclosure report is not liable
to any person for preparing the report or for any unintentional
errors or omissions in the report.
(c) The applicable title insurance company, lender, real
estate agent, or attorney shall provide a sales price disclosure
report form and filing instructions to each purchaser or grantee of
real property unless the insurance company, lender, real estate
agent, or attorney prepares the disclosure report or has confirmed
that another person described by Subsection (a), other than the
purchaser or grantee, will prepare and file the disclosure report.
Sec. 22.65. ACTION TO COMPEL COMPLIANCE. The chief
appraiser may bring an action for an injunction to compel a person
to comply with the requirements of this subchapter. If the court
finds that this subchapter applies and that the person has failed to
fully comply with its requirements, the court:
(1) shall order the person to comply; and
(2) may assess costs and reasonable attorney's fees
against the person.
SECTION 1C.03. Section 23.013, Tax Code, is amended to read
as follows:
Sec. 23.013. MARKET DATA COMPARISON METHOD OF APPRAISAL.
(a) If the chief appraiser uses the market data comparison method
of appraisal to determine the market value of real property, the
chief appraiser shall use comparable sales data and shall adjust
the comparable sales to the subject property.
(b) The chief appraiser may use information contained in a
sales price disclosure report filed under Subchapter D, Chapter 22,
in determining the market value of real property but may not
increase the market value of the real property described in the
report solely on the basis of the information contained in the
report.
PART D. CONFIDENTIALITY OF CERTAIN APPRAISAL INFORMATION
SECTION 1D.01. Chapter 25, Tax Code, is amended by adding
Section 25.027 to read as follows:
Sec. 25.027. CONFIDENTIALITY OF PHOTOGRAPHS OF CERTAIN
RESIDENTIAL PROPERTY. (a) Information in appraisal records is
confidential and is available only for the official use of the
appraisal district, this state, the comptroller, and taxing units
and political subdivisions of this state if the information is a
photograph or a floor plan of an improvement to real property that
is designed primarily for use as a human residence, including a
residence homestead.
(b) This section does not apply to an aerial photograph that
depicts five or more separately owned buildings.
PART E. TEXAS ECONOMIC DEVELOPMENT ACT
SECTION 1E.01. Section 313.051, Tax Code, is amended by
adding Subsection (a-1) and amending Subsection (b) to read as
follows:
(a-1) Notwithstanding Subsection (a), if on January 1,
2002, this chapter applied to a school district in whose territory
is located a federal nuclear facility, this subchapter continues to
apply to the school district regardless of whether the school
district ceased or ceases to be described by Subsection (a) after
that date.
(b) The governing body of a school district to which this
subchapter applies may enter into an agreement in the same manner as
a school district to which Subchapter B applies may do so under
Subchapter B, subject to Sections 313.052-313.054. Except as
otherwise provided by this subchapter, the provisions of Subchapter
B apply to a school district to which this subchapter applies. For
purposes of this subchapter, a property owner is required to create
only at least 10 new jobs on the owner's qualified property. At
least 10 [80] percent of all the new jobs created must be qualifying
jobs as defined by Section 313.021(3).
SECTION 1E.02. Section 313.051(b), Tax Code, as amended by
this part, applies only to a limitation on the appraised value for
school district maintenance and operations ad valorem tax purposes
for which the owner files an application on or after the effective
date of this Act. A limitation on the appraised value for school
district maintenance and operations ad valorem tax purposes for
which the owner files an application before the effective date of
this Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
PART F. PROPERTY TAX RELIEF FOR CULTURALLY SIGNIFICANT SITES
SECTION 1F.01. Section 11.24, Tax Code, is amended to read
as follows:
Sec. 11.24. HISTORIC AND CULTURALLY SIGNIFICANT SITES. The
governing body of a taxing unit by official action of the body
adopted in the manner required by law for official actions may
exempt from taxation part or all of the assessed value of a
structure or archeological site and the land necessary for access
to and use of the structure or archeological site, if the structure
or archeological site is:
(1) designated as a Recorded Texas Historic Landmark
under Chapter 442, Government Code, or a state archeological
landmark under Chapter 191, Natural Resources Code, by the Texas
Historical Commission; or
(2) designated as a historically, culturally, or
archeologically significant site in need of tax relief to encourage
its preservation pursuant to an ordinance or other law adopted by
the governing body of the unit.
SECTION 1F.02. The change in law made by Section 1F.01 of
this part applies only to a tax year that begins on or after the
effective date of this Act.
SECTION 1F.03. This part takes effect immediately if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this part takes effect on the 91st day after the last day of
the legislative session.
PART G. INFORMATION ON TAX BILLS RELATING TO
PROPERTY VALUES AND TAXES
SECTION 1G.01. Section 31.01, Tax Code, is amended by
amending Subsection (c) and adding Subsection (c-1) to read as
follows:
(c) The tax bill or a separate statement accompanying the
tax bill shall:
(1) identify the property subject to the tax;
(2) state the appraised value, assessed value, and
taxable value of the property;
(3) if the property is land appraised as provided by
Subchapter C, D, E, or H, Chapter 23, state the market value and the
taxable value for purposes of deferred or additional taxation as
provided by Section 23.46, 23.55, 23.76, or 23.9807, as applicable;
(4) state the assessment ratio for the unit;
(5) state the type and amount of any partial exemption
applicable to the property, indicating whether it applies to
appraised or assessed value;
(6) state the total tax rate for the unit;
(7) state the amount of tax due, the due date, and the
delinquency date;
(8) explain the payment option and discounts provided
by Sections 31.03 and 31.05, if available to the unit's taxpayers,
and state the date on which each of the discount periods provided by
Section 31.05 concludes, if the discounts are available;
(9) state the rates of penalty and interest imposed
for delinquent payment of the tax;
(10) include the name and telephone number of the
assessor for the unit and, if different, of the collector for the
unit; [and]
(11) for real property, state for the current tax year
and each of the preceding five tax years:
(A) the appraised value and taxable value of the
property;
(B) the total tax rate for the unit;
(C) the amount of taxes imposed on the property
by the unit; and
(D) the difference, expressed as a percent
increase or decrease, as applicable, in the amount of taxes imposed
on the property by the unit compared to the amount imposed for the
preceding tax year;
(12) for real property, state the differences,
expressed as a percent increase or decrease, as applicable, in the
following for the current tax year as compared to the fifth tax year
before that tax year:
(A) the appraised value and taxable value of the
property;
(B) the total tax rate for the unit; and
(C) the amount of taxes imposed on the property
by the unit; and
(13) include any other information required by the
comptroller.
(c-1) If for any of the preceding six tax years any
information required by Subsection (c)(11) or (12) to be included
in a tax bill or separate statement is unavailable, the tax bill or
statement must state that the information is not available for that
year. This subsection expires December 31, 2011.
PART H. DEPOSIT OF CERTAIN TRAFFIC PENALTIES
IN FOUNDATION SCHOOL PROGRAM
SECTION 1H.01. Subchapter D, Chapter 542, Transportation
Code, is amended by adding Section 542.405 to read as follows:
Sec. 542.405. DEPOSIT OF REVENUE FROM CERTAIN TRAFFIC
PENALTIES FOR FOUNDATION SCHOOL PROGRAM. (a) In this section,
"photographic traffic signal enforcement system" means a system
that:
(1) consists of a camera system and vehicle sensor
installed to exclusively work in conjunction with an electrically
operated traffic-control signal;
(2) is capable of producing one or more recorded
photographic or digital images that depict the license plate
attached to the front or the rear of a motor vehicle that is not
operated in compliance with the instructions of the traffic-control
signal; and
(3) is designed to enforce compliance with the
instructions of the traffic-control signal by imposition of a civil
or administrative penalty against the owner of the motor vehicle.
(b) This section applies only to a civil or administrative
penalty imposed on the owner of a motor vehicle by a local authority
that operates or contracts for the operation of a photographic
traffic signal enforcement system with respect to a highway under
its jurisdiction or that operates or contracts for the operation of
any other type of electronic traffic law enforcement system
consisting of a camera system that automatically produces one or
more recorded photographs or digital images of the license plate on
a motor vehicle or the operator of a motor vehicle.
(c) Of the gross amount received by a local authority from
the imposition of a civil or administrative penalty against the
owner of a motor vehicle, the local authority may retain $1 and
shall remit the remainder to the comptroller for deposit to the
credit of the foundation school fund.
(d) The comptroller shall adopt rules and forms to implement
and enforce this section.
SECTION 1H.02. Section 542.405, Transportation Code, as
added by this part, applies to revenue received by a local authority
unit of this state from the imposition of a civil or administrative
penalty on or after the effective date of this article, regardless
of whether the penalty was imposed before, on, or after the
effective date of this article.
PART I. SPLIT PAYMENT OF RESIDENCE HOMESTEAD TAXES
SECTION 1I.01. Section 31.03, Tax Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) The governing body of a taxing unit that collects its
own taxes may provide, in the manner provided by law for official
action by the body, that a person who pays one-half of the unit's
taxes on the taxpayer's residential homestead as defined in Section
11.13, before December 1 may pay the remaining one-half of the taxes
without penalty or interest before July 1 of the following year.
(e) The split payment option for residential homesteads set
forth in Subsection (d) applies to taxes for all units for which the
adopting taxing unit collects taxes.
PART J. AD VALOREM TAXATION--RAIL FACILITY
SECTION 1J.01. (a) Section 25.07(b), Tax Code, is amended
to read as follows:
(b) Except as provided by Sections 11.11(b) [Subsections
(b)] and (c) [of Section 11.11 of this code], a leasehold or other
possessory interest in exempt property may not be listed if:
(1) the property is permanent university fund land;
(2) the property is county public school fund
agricultural land;
(3) the property is a part of a public transportation
facility owned by an incorporated city or town and:
(A) is an airport passenger terminal building or
a building used primarily for maintenance of aircraft or other
aircraft services, for aircraft equipment storage, or for air
cargo;
(B) is an airport fueling system facility;
(C) is in a foreign-trade zone:
(i) that has been granted to a joint airport
board under Chapter 129, Acts of the 65th Legislature, Regular
Session, 1977 (Article 1446.8, Vernon's Texas Civil Statutes);
(ii) the area of which in the portion of the
zone located in the airport operated by the joint airport board does
not exceed 2,500 acres; and
(iii) that is established and operating
pursuant to federal law; or
(D)(i) is in a foreign trade zone established
pursuant to federal law after June 1, 1991, which operates pursuant
to federal law;
(ii) is contiguous to or has access via a
taxiway to an airport located in two counties, one of which has a
population of 500,000 or more according to the federal decennial
census most recently preceding the establishment of the foreign
trade zone; and
(iii) is owned, directly or through a
corporation organized under the Development Corporation Act of 1979
(Article 5190.6, Vernon's Texas Civil Statutes), by the same
incorporated city or town which owns the airport;
(4) the interest is in a part of:
(A) a park, market, fairground, or similar public
facility that is owned by an incorporated city or town; or
(B) a convention center, visitor center, sports
facility with permanent seating, concert hall, arena, or stadium
that is owned by an incorporated city or town as such leasehold or
possessory interest serves a governmental, municipal, or public
purpose or function when the facility is open to the public,
regardless of whether a fee is charged for admission;
(5) the interest involves only the right to use the
property for grazing or other agricultural purposes;
(6) the property is owned by the Texas National
Research Laboratory Commission or by a corporation formed by the
Texas National Research Laboratory Commission under Section
465.008(g), Government Code, and is used or is useful in connection
with an eligible undertaking as defined by Section 465.021,
Government Code; [or]
(7) the property is:
(A) owned by a municipality, a public port, or a
navigation district created or operating under Section 59, Article
XVI, Texas Constitution, or under a statute enacted under Section
59, Article XVI, Texas Constitution; and
(B) used as an aid or facility incidental to or
useful in the operation or development of a port or waterway or in
aid of navigation-related commerce; or
(8) the property is part of a rail facility owned by a
rural rail transportation district created or operating under
Chapter 623, Acts of the 67th Legislature, Regular Session, 1981
(Article 6550c, Vernon's Texas Civil Statutes).
(b) This section applies only to the appraisal records for a
tax year that begins on or after January 1, 2006.
(c) This section takes effect January 1, 2006.
PART K. EFFECTIVE DATES
SECTION 1K.01. (a) As soon as practicable after the
effective date of this Act, but not later than September 1, 2005,
each appraisal district shall prepare and make available sales
price disclosure report forms as provided by Section 22.62, Tax
Code, as added by this article.
(b) Subchapter D, Chapter 22, Tax Code, as added by this
article, applies only to a sale of real property that occurs on or
after September 1, 2005.
SECTION 1K.02. Section 25.027, Tax Code, as added by this
article, prohibits the disclosure of information in appraisal
records made confidential under that section only on or after the
effective date of that section.
SECTION 1K.03. (a) Except as provided by this section, this
article takes effect January 1, 2006, and applies only to an ad
valorem tax year that begins on or after that date.
(b) This section and Part D of this article take effect
immediately if this Act receives a vote of two-thirds of all the
members elected to each house, as provided by Section 39, Article
III, Texas Constitution. If this Act does not receive the vote
necessary for immediate effect, this section and Part D of this
article take effect on the 91st day after the last day of the
legislative session.
ARTICLE 2. REFORMED FRANCHISE TAX
SECTION 2.01. Title 2, Tax Code, is amended by adding
Subtitle K to read as follows:
SUBTITLE K. REFORMED FRANCHISE TAX
CHAPTER 251. REFORMED FRANCHISE TAX
Sec. 251.001. DEFINITIONS. In this chapter:
(1) "Business" means an entity that employs an
individual to perform services and includes a sole proprietorship
with one or more employees.
(2) "Calendar quarter," "commission," "compensation
fund," and "contribution" have the meanings assigned those terms by
Section 201.011, Labor Code.
(3) "Employer" has the meaning assigned by Subchapter
C, Chapter 201, Labor Code.
(4) "Taxable business" means a business to which this
chapter applies.
(5) "Wages" means wages, as defined under Subchapter
F, Chapter 201, Labor Code, paid by a taxable business and includes
the amounts excluded by Sections 201.082(1) and (9), Labor Code.
Sec. 251.002. RULES. The comptroller may adopt rules to
implement and administer this chapter.
Sec. 251.0025. RULES: AVOIDANCE OF DOUBLE TAXATION. (a)
The comptroller shall adopt rules that shall work in conjunction
with the rules adopted under Section 171.0013, so that when a
taxable business entity is owned through an ownership chain,
whether or not each entity in the chain is subject to taxation under
this chapter, the direct and indirect owners of the taxable
business entity are not subject to taxation with respect to the same
wages.
(b) The avoidance of double taxation rules adopted under
this section shall apply regardless of whether the direct or
indirect owner itself elects to be subject to the tax under this
chapter, is subject to the tax under Chapter 171, or is exempt from
taxation under this chapter or Chapter 171.
Sec. 251.003. LOCATION OF SERVICE. (a) The tax imposed by
this chapter applies to wages for a service performed in this state
or in and outside this state if:
(1) the service is localized in this state; or
(2) the service is not localized in any state and some
of the service is performed in this state and:
(A) the base of operations is in this state, or
there is no base of operations, but the service is directed or
controlled from this state; or
(B) the base of operations or place from which
the service is directed or controlled is not in a state in which a
part of the service is performed, and the residence of the person
who performs the service is in this state.
(b) The tax imposed by this chapter applies to wages for a
service performed anywhere in the United States, including service
performed entirely outside this state, if:
(1) the service is not localized in a state;
(2) the service is performed by an individual who is
one of a class of employees who are required to travel outside this
state in performance of their duties; and
(3) the individual's base of operations is in this
state or, if there is no base of operations, the individual's
service is directed or controlled from this state.
(c) The tax imposed by this chapter applies to wages for a
service performed outside the United States by a citizen of the
United States.
(d) For the purposes of this section, service is localized
in a state if the service is performed entirely within the state or
the service performed outside the state is incidental to the
service performed in the state. In this section, a service that is
"incidental" includes a service that is temporary or that consists
of isolated transactions.
Sec. 251.004. TAXABLE BUSINESS. Subject to Section
251.007, the tax imposed by this chapter applies only to a business
that is an employer that pays or is required to pay a contribution
under Subtitle A, Title 4, Labor Code.
Sec. 251.005. ELECTION OF TAXES. (a) Except as otherwise
provided by this section, a business may elect to pay the tax
imposed under this chapter or the tax imposed under Chapter 171.
(b) Except as provided by Subsection (b-1), a business that
is wholly or partially in the business of leasing employees,
including but not limited to leasing between members of an
affiliated group, shall pay the tax under this chapter, and for the
purposes of this chapter and Chapter 171, the business is
considered to have elected the tax under this chapter.
(b-1) Notwithstanding Subsection (b), a business described
by Subsection (b) that was in existence and paid the tax imposed
under Chapter 171 for the business's most recent report year ending
on or before January 1, 2005, may elect to pay either the tax
imposed under this chapter or the tax imposed under Chapter 171.
(c) A business that does not have any employees in this
state may not elect to pay the tax under this chapter.
(d) The comptroller shall promulgate a form for a business
to use to make an election under this section.
(e) The election cannot be changed until after the third
anniversary of the date the election is made.
Sec. 251.006. TAX IMPOSED. If a business elects to pay the
tax under this chapter, the tax is imposed on the business for each
employee for whom the business pays or is required to pay a
contribution for a calendar quarter without regard to whether:
(1) the employee is full-time or part-time; or
(2) the wages paid were for the entire calendar
quarter or a portion of the calendar quarter.
Sec. 251.007. TAX IMPOSED ON EMPLOYERS. (a)
Notwithstanding Section 251.006, if a business elects to pay the
tax under this chapter, the tax is imposed on the business for each
individual who performs a service for the business for
compensation, without regard to whether the business pays a
contribution for a calendar quarter for the individual, if the
individual is an employee of the business as provided by this
section for all or a part of the calendar quarter.
(b) An individual is an employee of a business for purposes
of this section if the business has a right to direct and control
how the individual performs the service for which the individual is
provided compensation, indicated by factors that include, but are
not limited to:
(1) whether the individual is subject to the
business's instructions about when, where, and how to work;
(2) whether the individual is trained to perform
services in a particular manner;
(3) the extent to which the individual has
unreimbursed business expenses;
(4) the extent to which the individual has a
significant investment in the facilities the individual uses in
performing the services;
(5) the extent to which the individual makes the
individual's services available to the relevant market, by
advertising, maintaining a visible business location, or
otherwise;
(6) the extent to which the individual can realize a
profit or loss;
(7) the manner in which the individual is paid by the
business;
(8) whether a written contract between the individual
and the business provides that the individual is or is not an
employee;
(9) whether the business provides the individual with
employee-type benefits, including insurance, a pension plan,
vacation pay, or sick pay;
(10) whether the relationship between the individual
and the business is considered permanent or for a limited period;
and
(11) the extent to which services performed by the
individual are a key aspect of the affairs of the business.
Sec. 251.008. BASE AMOUNT OF WAGES. The base amount of
wages for each employee is the total amount of wages paid to the
employee during the calendar quarter.
Sec. 251.009. RATE. (a) Except as provided by Subsection
(b), the rate of the tax for a business that elects to pay the tax
under this chapter is equal to 1.15 percent of the base amount of
wages for each employee as determined under Section 251.008.
(b) For a corporation that elects to pay the tax under this
chapter and that had no employees in this state at any time between
January 1, 2004, and January 1, 2005, but currently has employees in
this state, the rate of the tax is equal to the greater of:
(1) 1.15 percent of the base amount of wages for each
employee as determined under Section 251.008; or
(2) the amount of the franchise tax paid by the
corporation in the previous report year.
(c) Subsection (b) expires December 31, 2008.
Sec. 251.010. EXEMPTION FOR GOVERNMENTAL ENTITIES. The tax
imposed under this chapter does not apply to a governmental entity.
Sec. 251.011. EXEMPTION FOR SMALL BUSINESS. A business
whose gross receipts in this state as determined under Section
171.1032 for the applicable calendar year are less than or equal to
$150,000 is exempt from the taxes imposed under this chapter for
that year.
Sec. 251.012. EXEMPTION FOR CERTAIN CHARITIES. (a) The tax
imposed under this chapter does not apply to an organization exempt
from federal income tax under Section 501(a) of the Internal
Revenue Code of 1986 by being listed as an exempt organization in
Section 501(c)(3) of that code.
(b) An organization exempt from federal income tax under
Section 501(a) of the Internal Revenue Code of 1986 by being listed
as an exempt organization under a provision of Section 501(c) other
than Section 501(c)(3) may elect to pay the tax under this chapter
or to pay the tax under Chapter 171. If the organization elects to
pay the tax under Chapter 171, and Chapter 171 provides that the
organization is exempt from taxation under that chapter, the
organization may claim or continue to claim that exemption in the
manner provided by Chapter 171.
Sec. 251.013. TAX NOT DEDUCTED FROM WAGES. A taxable
business may not deduct the tax imposed under this chapter from any
wages of the taxable business's employees.
Sec. 251.014. CRIMINAL PENALTY. (a) A person who violates
Section 251.013 commits an offense.
(b) An offense under this section is a Class A misdemeanor.
Sec. 251.015. CIVIL PENALTY. (a) A person who violates
Section 251.013 is liable to the state for a civil penalty not to
exceed $500 for each violation. Each day a violation continues may
be considered a separate violation for purposes of a civil penalty
assessment.
(b) A person who does not pay the tax imposed by this chapter
on wages paid to an individual who performs services for the person
because the person determines that the individual is not an
employee for purposes of this chapter is liable to the state for a
civil penalty equal to twice the amount of tax owed under this
chapter in relation to the individual unless the person can
demonstrate that there was a reasonable basis for the
determination.
(c) On request of the comptroller, the attorney general
shall file suit to collect a penalty under this section.
Sec. 251.016. REPORTS AND PAYMENT. (a) Each taxable
business shall, on or before the last day of the month immediately
following each calendar quarter, file a report on wages in a form
prescribed by the commission.
(b) The tax imposed under this chapter is due at the same
time, collected in the same manner, and subject to the same
penalties and interest as contributions assessed under Subtitle A,
Title 4, Labor Code.
(c) To the extent practicable, the commission shall combine
the reporting and payment of contributions and the reporting and
payment of the tax imposed under this chapter.
Sec. 251.017. ENFORCEMENT. The comptroller may enforce the
collection of the tax under this chapter as provided by Subtitles A
and B.
Sec. 251.018. DISPOSITION OF PROCEEDS. All proceeds from
the collection of the taxes imposed under this chapter shall be
deposited to the credit of the general revenue fund.
Sec. 251.019. CREDITS AGAINST INSURANCE PREMIUM TAXES. (a)
Subject to Subsection (b), a business that pays insurance premium
taxes under Subtitle B, Title 3, Insurance Code, and elects to pay
the tax under this chapter is entitled to a credit of the entire
amount of tax paid under this chapter against any premium tax that
the business may owe.
(b) The business may not receive a credit in an amount that
exceeds the amount of the tax or assessment due after applying any
other credits. The business may carry any unused credit forward for
not more than five years but it may not, at any time, receive a
credit in an amount that exceeds the amount of the tax or assessment
due, after applying any other credits.
(c) The business may not convey, assign, or transfer the
credit allowed under this section to another entity unless all of
the assets of the business are conveyed, assigned, or transferred
in the same transaction.
(d) The comptroller shall adopt rules to implement this
section.
Sec. 251.0195. PROVISIONS APPLICABLE TO CERTAIN
BUSINESSES. (a) Notwithstanding Section 251.019, a business that
may owe insurance premium taxes under Subtitle B, Title 3,
Insurance Code, is not entitled to a credit of the taxes paid under
this chapter against any tax imposed on those gross receipts.
(b) A tax paid under this chapter by a taxable business that
may owe insurance premium taxes under Subtitle B, Title 3,
Insurance Code, is considered a disallowed expense for purposes of
Article 5.13-2, Insurance Code, and may not be included by the
taxable business in determining insurance rates or premiums.
Sec. 251.020. CREDITS FOR CERTAIN PROVIDERS OF HEALTH CARE
SERVICES. (a) Except as provided by Subsection (f), a taxable
business that participates in either the Medicaid program or the
Medicare program as a provider of health care services and that
receives not less than 15 percent of the business's revenue during a
calendar quarter from payments received under the Medicaid or
Medicare program, or both, is entitled to a credit in the amount
provided by Subsection (b) against the taxes imposed under this
chapter for that calendar quarter.
(b) The amount of the credit is equal to 40 percent of the
total amount of payments the taxable business received from
payments under the Medicaid and Medicare programs during that
calendar quarter that can be verified, if necessary.
(c) A taxable business may not receive a credit in an amount
that exceeds the amount of the tax or assessment due after applying
any other credits.
(d) A taxable business may not convey, assign, or transfer
the credit allowed under this section to another entity unless all
of the assets of the business are conveyed, assigned, or
transferred in the same transaction.
(e) The comptroller shall adopt rules to implement this
section. The Health and Human Services Commission shall assist the
comptroller in the formulation and adoption of the rules.
(f) A taxable business that participates in the Medicaid or
Medicare program as a provider of durable medical equipment or as a
vendor of pharmaceuticals may not count payments for those services
for purposes of qualifying for the exemption under this section.
Sec. 251.0205. APPLICATION OF HEALTH CARE CREDIT TO OTHER
PROVIDERS. (a) In this section, "physician" means:
(1) an individual licensed to practice medicine in
this state;
(2) a professional association organized under the
Texas Professional Association Act (Article 1528f, Vernon's Texas
Civil Statutes);
(3) an approved nonprofit health corporation
certified under Chapter 162, Occupations Code; or
(4) another person wholly owned by physicians and
engaged in the practice of medicine as permitted by Subtitle B,
Title 3, Occupations Code.
(b) The credit provided by Section 251.020 also applies to a
physician that participates in the Medicaid program, the Medicare
program, or the Children's Health Insurance Program (CHIP) as a
provider of health care services and that receives not less than 15
percent of the provider's revenues during a calendar quarter from
payments received under the Medicaid program, Medicare program, or
Children's Health Insurance Program (CHIP), or any combination of
the three.
SECTION 2.02. Section 171.001(a), Tax Code, is amended to
read as follows:
(a) Subject to Section 171.0012, a [A] franchise tax is
imposed on:
(1) each corporation that does business in this state
or that is chartered in this state; and
(2) each limited liability company that does business
in this state or that is organized under the laws of this state.
SECTION 2.03. Section 171.001(b)(3), Tax Code, is amended
to read as follows:
(3) "Corporation":
(A) includes:
(i) [(A)] a limited liability company, as
defined under the Texas Limited Liability Company Act;
(ii) [(B)] a savings and loan association;
[and]
(iii) [(C)] a banking corporation;
(iv) a sole proprietorship with one or more
employees;
(v) a partnership owned solely by natural
persons with one or more employees;
(vi) a form of business, with or without
employees, that is operating, organized, or registered under the
laws of this state in a manner that provides liability limitations
for a person who holds an ownership interest in the business; and
(vii) a partnership or joint venture owned
at least in part by another form of business and with one or more
employees; and
(B) does not include:
(i) a trust, estate, or escrow;
(ii) a real estate investment trust and its
subsidiary entities;
(iii) a master limited partnership;
(iv) a family limited partnership;
(v) a regulated investment company;
(vi) a real estate mortgage investment
conduit;
(vii) an investment partnership;
(viii) a sole proprietorship without any
employees;
(ix) a partnership without any employees;
or
(x) an entity, arrangement, or investment
vehicle without any employees that is used solely for a finance,
securitization, or monetization purpose, or any partner,
beneficiary, or member of such entity.
SECTION 2.04. Section 171.001, Tax Code, is amended by
adding Subsection (d) to read as follows:
(d) For purposes of Subsection (a), a corporation does
business in this state if the corporation is a foreign corporation
and is:
(1) holding a partnership interest, including an
interest as an assignee, as a general partner in a general
partnership that is doing business in this state;
(2) holding a partnership interest, including an
interest as an assignee, as a general partner in a limited
partnership that is doing business in this state; or
(3) holding a partnership interest, including an
interest as an assignee, as a limited partner in a limited
partnership that is doing business in this state.
SECTION 2.05. Subchapter A, Chapter 171, Tax Code, is
amended by adding Sections 171.0012 and 171.0013 to read as
follows:
Sec. 171.0012. ELECTION OF TAXES. (a) Except as provided
by Subsection (b), a corporation may elect to pay the tax imposed
under this chapter or the tax imposed under Chapter 251.
(b) A business that is in the business of leasing employees
may not elect to pay the tax imposed under this chapter and shall
pay the tax imposed under Chapter 251.
(c) The comptroller shall promulgate a form for a
corporation to use to make an election under this section. If the
corporation is an entity described in Sections
171.001(b)(3)(A)(iv)-(vii) and any interests in the corporation
are owned by natural persons, the election form must be signed by
each of those natural persons and by an authorized officer of the
business. The election form shall provide that the business and
those natural persons agree that the taxable earned surplus of the
business shall be calculated pursuant to this chapter without
regard to any exclusion, exemption, or prohibition in Section 24,
Article VIII, Texas Constitution.
(d) The election cannot be changed until after the third
anniversary of the date the election is made.
Sec. 171.0013. RULES: AVOIDANCE OF DOUBLE TAXATION. (a)
The comptroller shall adopt rules that shall work in conjunction
with the rules adopted under Section 251.0025, so that when a
corporation is owned through an ownership chain, whether or not
each entity in the chain is subject to taxation under this chapter,
the direct and indirect owners of the corporation are not subject to
taxation with respect to the same taxable earned surplus.
(b) The avoidance of double taxation rules adopted under
this section shall apply regardless of whether the direct or
indirect owner itself elects to be subject to the tax under Chapter
251, is subject to the tax under this chapter, or is exempt from
taxation under this chapter or Chapter 251.
SECTION 2.06. Section 171.110, Tax Code, is amended by
adding Subsections (m)-(o) to read as follows:
(m) Notwithstanding any other provision of this chapter, in
determining net taxable earned surplus, payments to related
entities for the following purposes are disallowed to the extent
they exceed arm's-length rates and terms:
(1) intangible expenses;
(2) interest charges; or
(3) management fees.
(n) For the purpose of Subsection (m), the comptroller has
the same power as the Internal Revenue Service under Section 482,
Internal Revenue Code of 1986, as effective January 1, 2006.
(o) For purposes of Subsections (m) and (n), "arm's-length
rates and terms" means that:
(1) two or more related members enter into a written
agreement for the transaction;
(2) such agreement is of a duration and contains rates
and payment terms substantially similar to those that the related
member would be able to obtain from an unrelated entity; and
(3) the borrower or payor substantially adheres to the
payment terms of the agreement governing the transaction or any
amendments to it, provided that there is a presumption that an
interest rate does not exceed arm's-length rates and terms if the
rate conforms to Sections 482 and 1274, Internal Revenue Code of
1986, as effective January 1, 2006.
SECTION 2.07. Chapter 111, Tax Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. FORFEITURE OF RIGHT TO
TRANSACT BUSINESS IN THIS STATE
Sec. 111.401. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to a taxpayer that is a corporation, banking corporation,
limited liability company, state or federal savings and loan
association, and any other kind of business association, company,
joint venture, partnership, or other combination of entities or
persons engaged in business that qualifies under the law of this
state for liability limitations for its owners or shareholders that
are substantially equivalent to those for a corporation.
Sec. 111.402. APPLICATION TO NONCORPORATE ENTITIES. (a)
The comptroller may, for the same reasons and using the same
procedures the comptroller uses in relation to the forfeiture of
the corporate privileges of a corporation, forfeit the right to
transact business in this state of another entity to which this
subchapter applies and that is subject to a tax imposed by this
title.
(b) The comptroller may, for the same reasons and using the
same procedures the comptroller uses in relation to the forfeiture
of a corporation's charter or certificate of authority, forfeit the
certificate or registration of another entity to which this
subchapter applies and that is subject to a tax imposed by this
title.
(c) The provisions of this subchapter, including Section
111.407, that apply to the forfeiture of a corporation's corporate
privileges and charter or certificate of authority apply to the
forfeiture of another entity's right to transact business in this
state and certificate or registration.
Sec. 111.403. FORFEITURE OF CORPORATE PRIVILEGES. The
comptroller shall forfeit the corporate privileges of a corporation
on which a tax is imposed under this title if the corporation:
(1) does not file, in accordance with this title and on
or before the 45th day after the date notice of forfeiture is
mailed, a report required by this title; or
(2) does not pay, on or before the 45th day after the
date notice of forfeiture is mailed, a tax imposed under this title
or does not pay, on or before the 45th day, a penalty imposed
relating to that tax.
Sec. 111.404. EFFECTS OF FORFEITURE. If the corporate
privileges of a corporation are forfeited under this subchapter:
(1) the corporation shall be denied the right to sue or
defend in a court of this state; and
(2) each director or officer of the corporation is
liable for a debt of the corporation as provided by Section 111.407.
Sec. 111.405. SUIT ON CAUSE OF ACTION ARISING BEFORE
FORFEITURE. In a suit against a corporation on a cause of action
arising before the forfeiture of the corporate privileges of the
corporation, affirmative relief may not be granted to the
corporation unless its corporate privileges are revived under this
subchapter.
Sec. 111.406. EXCEPTION TO FORFEITURE. The forfeiture of
the corporate privileges of a corporation does not apply to the
privilege to defend in a suit to forfeit the corporation's charter
or certificate of authority.
Sec. 111.407. LIABILITY OF DIRECTOR AND OFFICERS. (a) If
the corporate privileges of a corporation are forfeited for the
failure to file a report or pay a tax or penalty imposed under this
title, each director or officer of the corporation is liable for
each debt of the corporation that is created or incurred in this
state after the date on which the report, tax, or penalty is due and
before the corporate privileges are revived. The liability
includes liability for any tax or penalty imposed under this title
on the corporation that becomes due and payable after the date of
the forfeiture.
(b) The liability of a director or officer is in the same
manner and to the same extent as if the director or officer were a
partner and the corporation were a partnership.
(c) A director or officer is not liable for a debt of the
corporation if the director or officer shows that the debt was
created or incurred:
(1) over the director's objection; or
(2) without the director's knowledge and that the
exercise of reasonable diligence to become acquainted with the
affairs of the corporation would not have revealed the intention to
create the debt.
(d) If a corporation's charter or certificate of authority
and its corporate privileges are forfeited and revived under this
subchapter, the liability under this section of a director or
officer of the corporation is not affected by the revival of the
charter or certificate and the corporate privileges.
Sec. 111.408. NOTICE OF FORFEITURE. (a) If the comptroller
proposes to forfeit the corporate privileges of a corporation, the
comptroller shall notify the corporation that the forfeiture will
occur without a judicial proceeding unless the corporation:
(1) files, within the time established by Section
111.403, the report to which that section refers; or
(2) pays, within the time established by Section
111.403, the delinquent tax and penalty to which that section
refers.
(b) The notice shall be written or printed and shall be
verified by the seal of the comptroller's office.
(c) The comptroller shall mail the notice to the corporation
not later than the 45th day before the forfeiture of corporate
privileges. The notice shall be addressed to the corporation and
mailed to the address named in the corporation's charter as its
principal place of business or to another known place of business of
the corporation.
(d) The comptroller shall keep at the comptroller's office a
record of the date on which the notice is mailed. For the purposes
of this subchapter, the notice and the record of the mailing date
constitute legal and sufficient notice of the forfeiture.
Sec. 111.409. JUDICIAL PROCEEDING NOT REQUIRED FOR
FORFEITURE. The forfeiture of the corporate privileges of a
corporation is effected by the comptroller without a judicial
proceeding.
Sec. 111.410. REVIVAL OF CORPORATE PRIVILEGES. The
comptroller shall revive the corporate privileges of a corporation
if the corporation, before the forfeiture of its charter or
certificate of authority, pays any tax, penalty, or interest due
under this title.
Sec. 111.411. BANKING CORPORATIONS AND SAVINGS AND LOAN
ASSOCIATIONS. (a) Except as provided by Subsection (b), this
subchapter does not apply to a banking corporation that is
organized under the laws of this state or under federal law and has
its main office in this state.
(b) The banking commissioner shall appoint a conservator
under Subtitle A, Title 3, Finance Code, to pay the tax of a banking
corporation that is organized under the laws of this state and that
the commissioner certifies as being delinquent in the payment of
the corporation's tax.
Sec. 111.412. SAVINGS AND LOAN ASSOCIATION. (a) Except as
provided by Subsection (b), this subchapter does not apply to a
savings and loan association that is organized under the laws of
this state or under federal law and has its main office in this
state.
(b) The savings and loan commissioner shall appoint a
conservator under Subtitle B or C, Title 3, Finance Code, to pay the
tax of a savings and loan association that is organized under the
laws of this state and that the commissioner certifies as being
delinquent in the payment of the association's tax.
Sec. 111.413. GROUNDS FOR FORFEITURE OF CHARTER OR
CERTIFICATE OF AUTHORITY. It is a ground for the forfeiture of a
corporation's charter or certificate of authority if the corporate
privileges of the corporation are forfeited under this subchapter
and the corporation does not pay, on or before the 120th day after
the date the corporate privileges are forfeited, the amount
necessary for the corporation to revive under this subchapter its
corporate privileges.
Sec. 111.414. CERTIFICATION BY COMPTROLLER. After the
120th day after the date the corporate privileges of a corporation
are forfeited under this subchapter, the comptroller shall certify
the name of the corporation to the attorney general and the
secretary of state.
Sec. 111.415. SUIT FOR JUDICIAL FORFEITURE. On receipt of
the comptroller's certification, the attorney general shall bring
suit to forfeit the charter or certificate of authority of a
corporation if a ground exists for the forfeiture of the charter or
certificate.
Sec. 111.416. RECORD OF JUDICIAL FORFEITURE. (a) If a
district court forfeits a corporation's charter or certificate of
authority under this subchapter, the clerk of the court shall
promptly mail to the secretary of state a certified copy of the
court's judgment. On receipt of the copy of the judgment, the
secretary of state shall inscribe on the corporation's record at
the secretary's office the words "Judgment of Forfeiture" and the
date of the judgment.
(b) If a court forfeits a corporation's charter or
certificate of authority under this subchapter, the court may
appoint a receiver for the corporation and may administer the
receivership under the laws relating to receiverships.
(c) If an appeal of the judgment is perfected, the clerk of
the court shall promptly certify to the secretary of state that the
appeal has been perfected. On receipt of the certification, the
secretary of state shall inscribe on the corporation's record at
the secretary's office the word "Appealed" and the date on which the
appeal was perfected.
(d) If final disposition of an appeal is made, the clerk of
the court making the disposition shall promptly certify to the
secretary of state the type of disposition made and the date of the
disposition. On receipt of the certification, the secretary of
state shall inscribe on the corporation's record at the secretary's
office a brief note of the type of final disposition made and the
date of the disposition.
Sec. 111.417. REVIVAL OF CHARTER OR CERTIFICATE OF
AUTHORITY AFTER JUDICIAL FORFEITURE. A corporation whose charter
or certificate of authority is judicially forfeited under this
subchapter is entitled to have its charter or certificate revived
and to have its corporate privileges revived if:
(1) the corporation files each report that is required
by this title and that is delinquent;
(2) the corporation pays the tax, penalty, and
interest that is imposed under this title and that is due at the
time the suit under Section 111.418 to set aside forfeiture is
filed; and
(3) the forfeiture of the corporation's charter or
certificate is set aside in a suit under Section 111.418.
Sec. 111.418. SUIT TO SET ASIDE JUDICIAL FORFEITURE. If a
corporation's charter or certificate of authority is judicially
forfeited under this subchapter, a stockholder, director, or
officer of the corporation at the time of the forfeiture of the
charter or certificate or of the corporate privileges of the
corporation may bring suit in a district court of Travis County in
the name of the corporation to set aside the forfeiture of the
charter or certificate. The suit must be in the nature of a bill of
review. The secretary of state and attorney general must be made
defendants in the suit.
Sec. 111.419. RECORD OF SUIT TO SET ASIDE JUDICIAL
FORFEITURE. If a court under this subchapter sets aside the
forfeiture of a corporation's charter or certificate of authority,
the secretary of state shall inscribe on the corporation's record
in the secretary's office the words "Charter Revived by Court
Order" or "Certificate Revived by Court Order," a citation to the
suit, and the date of the court's judgment.
Sec. 111.420. CORPORATE PRIVILEGES AFTER JUDICIAL
FORFEITURE IS SET ASIDE. If a court under this subchapter sets
aside the forfeiture of a corporation's charter or certificate of
authority, the comptroller shall revive the corporate privileges of
the corporation and shall inscribe on the corporation's record in
the comptroller's office a note of the revival.
Sec. 111.421. FORFEITURE BY SECRETARY OF STATE. The
secretary of state may forfeit the charter or certificate of
authority of a corporation if:
(1) the secretary receives the comptroller's
certification under Section 111.414;
(2) the corporation does not revive its forfeited
corporate privileges on or before the 120th day after the date that
the corporate privileges were forfeited; and
(3) the corporation does not have assets from which a
judgment for any tax, penalty, or court costs imposed by this title
may be satisfied.
Sec. 111.422. JUDICIAL PROCEEDING NOT REQUIRED FOR
FORFEITURE BY SECRETARY OF STATE. The forfeiture by the secretary
of state of a corporation's charter or certificate of authority
under this subchapter is effected without a judicial proceeding.
Sec. 111.423. RECORD OF FORFEITURE BY SECRETARY OF STATE.
The secretary of state shall effect a forfeiture of a corporation's
charter or certificate of authority under this subchapter by
inscribing on the corporation's record in the secretary's office
the words "Charter Forfeited" or "Certificate Forfeited," the date
on which this inscription is made, and a citation to this subchapter
as authority for the forfeiture.
Sec. 111.424. REVIVAL OF CHARTER OR CERTIFICATE OF
AUTHORITY AFTER FORFEITURE BY SECRETARY OF STATE. A corporation
whose charter or certificate of authority is forfeited under this
subchapter by the secretary of state is entitled to have its charter
or certificate revived and to have its corporate privileges revived
if:
(1) the corporation files each report that is required
by this title and that is delinquent;
(2) the corporation pays the tax, penalty, and
interest that is imposed by this title and that is due at the time
the request under Section 111.425 to set aside forfeiture is made;
and
(3) the forfeiture of the corporation's charter or
certificate is set aside in a proceeding under Section 111.425.
Sec. 111.425. PROCEEDING TO SET ASIDE FORFEITURE BY
SECRETARY OF STATE. (a) If a corporation's charter or certificate
of authority is forfeited under this subchapter by the secretary of
state, a stockholder, director, or officer of the corporation at
the time of the forfeiture of the charter or certificate or of the
corporate privileges of the corporation may request in the name of
the corporation that the secretary of state set aside the
forfeiture of the charter or certificate.
(b) If a request is made, the secretary of state shall
determine if each delinquent report has been filed and any
delinquent tax, penalty, or interest has been paid. If each report
has been filed and the tax, penalty, or interest has been paid, the
secretary shall set aside the forfeiture of the corporation's
charter or certificate of authority.
Sec. 111.426. CORPORATE PRIVILEGES AFTER FORFEITURE BY
SECRETARY OF STATE IS SET ASIDE. If the secretary of state sets
aside under this subchapter the forfeiture of a corporation's
charter or certificate of authority, the comptroller shall revive
the corporate privileges of the corporation.
Sec. 111.427. USE OF CORPORATE NAME AFTER REVIVAL OF
CHARTER OR CERTIFICATE OF AUTHORITY. If a corporation's charter or
certificate of authority is forfeited under this subchapter by the
secretary of state and if the corporation requests the secretary to
set aside the forfeiture under Section 111.425, the corporation
shall determine from the secretary whether the corporation's name
is available for use. If the name is not available, the corporation
shall amend its charter or certificate to change its name.
SECTION 2.08. Subchapter A, Chapter 171, Tax Code, is
amended by adding Section 171.006 to read as follows:
Sec. 171.006. DISALLOWED EXPENSE FOR CERTAIN TAXABLE
BUSINESSES. A tax paid under this chapter by a taxable business
that may owe insurance premium taxes under Subtitle B, Title 3,
Insurance Code, is considered a disallowed expense for purposes of
Article 5.13-2, Insurance Code, and may not be included by the
taxable business in determining insurance rates or premiums.
SECTION 2.09. Section 203.001, Insurance Code, as effective
April 1, 2005, is amended by adding Subsection (d) to read as
follows:
(d) This section does not prohibit the imposition of a tax
imposed by Chapter 171 or 251, Tax Code, unless a specific exemption
for insurers or health maintenance organizations is provided in
those chapters.
SECTION 2.10. The following provisions of the Tax Code are
repealed:
(1) Sections 171.052, 171.0525, and 171.0527; and
(2) Subchapter U, Chapter 171, as added by Chapters
209 and 1274, Acts of the 78th Legislature, Regular Session, 2003.
SECTION 2.11. This article takes effect January 1, 2006.
ARTICLE 3. SALES AND USE TAXES
PART A. STATE SALES AND USE TAXES
SECTION 3A.01. Section 151.051(b), Tax Code, is amended to
read as follows:
(b) The sales tax rate is 7.25 [6 1/4] percent of the sales
price of the taxable item sold.
SECTION 3A.02. Subchapter A, Chapter 151, Tax Code, is
amended by adding Section 151.0029 to read as follows:
Sec. 151.0029. BILLBOARD ADVERTISING SERVICE. (a)
"Billboard advertising service" means a service allowing a
purchaser to obtain outdoor advertising on a billboard, including
the rental of the billboard space.
(b) In this section, "billboard" means a sign that:
(1) is a separate and fixed structure directly
attached to land or a building;
(2) is designed to have its content changed at
frequent intervals in an economically feasible manner; and
(3) is designed to prominently display outdoor
advertising that is visible to the occupants of motor vehicles
driving by the sign.
SECTION 3A.03. Chapter 151, Tax Code, is amended by adding
Section 151.0037 to read as follows:
Sec. 151.0037. ELECTIVE COSMETIC PROCEDURES. (a) In this
section, "elective cosmetic procedures" means a cosmetic medical
procedure performed on an individual that is directed at improving
the procedure subject's appearance and that does not meaningfully
promote the proper function of the body or prevent or treat illness
or disease. "Cosmetic medical procedure" includes but is not
limited to cosmetic surgery, hair transplants, cosmetic
injections, cosmetic soft tissue fillers, dermabrasion and
chemical peel, laser hair removal, laser skin resurfacing, laser
treatment of leg veins, sclerotherapy, and cosmetic dentistry.
"Cosmetic medical procedure" does not include reconstructive
surgery or dentistry.
(b) This section does not apply to reconstructive surgery or
dentistry that includes any surgery or dentistry performed on
abnormal structures caused by or related to congenital defects,
developmental abnormalities, injury, trauma, infection, tumors, or
disease, including procedures to improve function or give a more
normal appearance.
SECTION 3A.04. Subchapter A, Chapter 151, Tax Code, is
amended by adding Sections 151.0043 and 151.0044 to read as
follows:
Sec. 151.0043. "MOTOR VEHICLE REPAIR SERVICES." (a)
"Motor vehicle repair services" means the repair, remodeling,
maintenance, or restoration of a motor vehicle, including testing
or diagnostic services, body repair and painting, engine repair,
transmission repair, exhaust system repair, brake repair, and air
conditioning repair.
(b) "Motor vehicle repair services" does not include any
vehicle emissions tests required by law, safety inspection tests
required by law, and other similar tests required by law.
Sec. 151.0044. "MOTOR VEHICLE WASH OR DETAIL SERVICES."
"Motor vehicle wash or detail services" includes:
(1) cleaning of the exterior or interior of a motor
vehicle, including washing, waxing, polishing, buffing, detailing,
shampooing, vacuuming, finishing, or steam cleaning; and
(2) providing a self-service, automated, or
coin-operated facility that provides the services described in
Subdivision (1).
SECTION 3A.05. Section 151.008, Tax Code, is amended by
adding Subsection (c) to read as follows:
(c) An individual is not a "seller" or "retailer" for
purposes of this section if:
(1) the individual is not engaged in the active
conduct of a trade or business in this state for the purposes of
affecting sales of taxable items; and
(2) the only sales made by the individual are sales of
taxable personal property described by Section 151.304(b)(5).
SECTION 3A.06. Section 151.0101(a), Tax Code, is amended to
read as follows:
(a) "Taxable services" means:
(1) amusement services;
(2) cable television services;
(3) personal services;
(4) motor vehicle parking and storage services;
(5) the repair, remodeling, maintenance, and
restoration of tangible personal property, including motor vehicle
repair services, except:
(A) aircraft;
(B) a ship, boat, or other vessel, other than:
(i) a taxable boat or motor as defined by
Section 160.001;
(ii) a sports fishing boat; or
(iii) any other vessel used for pleasure;
and
(C) [the repair, maintenance, and restoration of
a motor vehicle; and
[(D)] the repair, maintenance, creation, and
restoration of a computer program, including its development and
modification, not sold by the person performing the repair,
maintenance, creation, or restoration service;
(6) telecommunications services;
(7) credit reporting services;
(8) debt collection services;
(9) insurance services;
(10) information services;
(11) real property services;
(12) data processing services;
(13) real property repair and remodeling;
(14) security services;
(15) telephone answering services;
(16) Internet access service; [and]
(17) a sale by a transmission and distribution
utility, as defined in Section 31.002, Utilities Code, of
transmission or delivery of service directly to an electricity
end-use customer whose consumption of electricity is subject to
taxation under this chapter;
(18) billboard advertising services;
(19) motor vehicle wash or detail services; and
(20) elective cosmetic procedures.
SECTION 3A.07. Section 151.304(b), Tax Code, is amended to
read as follows:
(b) In this section, "occasional sale" means:
(1) one or two sales of taxable items, other than an
amusement service, at retail during a 12-month period by a person
who does not habitually engage, or hold himself out as engaging, in
the business of selling taxable items at retail;
(2) the sale of the entire operating assets of a
business or of a separate division, branch, or identifiable segment
of a business;
(3) a transfer of all or substantially all the
property used by a person in the course of an activity if after the
transfer the real or ultimate ownership of the property is
substantially similar to that which existed before the transfer;
[or]
(4) the sale of not more than 10 admissions for
amusement services during a 12-month period by a person who does not
hold himself out as engaging, or does not habitually engage, in
providing amusement services; or
(5) the sale of taxable personal property by an
individual if:
(A) the property was originally bought by the
individual or a member of the individual's family for the personal
use of the individual or the individual's family;
(B) the individual does not hold a permit issued
under this chapter and is not required to obtain a permit as a
"seller" or "retailer" as those terms are defined by Section
151.008;
(C) the individual does not employ an auctioneer,
broker, or factor, other than an online auction, to sell the
property; and
(D) the sale would otherwise not be considered an
occasional sale under this section.
SECTION 3A.08. (a) Subchapter H, Chapter 151, Tax Code, is
amended by adding Section 151.3131 to read as follows:
Sec. 151.3131. PARKING AND STORAGE SERVICES. (a) Motor
vehicle parking and storage services are exempted under this
section from the taxes imposed by this chapter only if the services
are:
(1) provided at a parking facility owned or operated
by:
(A) a health facility;
(B) a nonprofit corporation that has donated land
on which a health facility is located or land that a health facility
uses to enhance the delivery of health services provided by the
health facility; or
(C) an entity that contracts with the health
facility or nonprofit corporation to provide the motor vehicle
parking and storage services; and
(2) the motor vehicle parking and storage services are
primarily used by patients of and visitors to the health facility
and people who work at the health facility.
(b) A person who operates a facility that provides motor
vehicle parking and storage services is not exempted under this
section until the person submits to the comptroller, in the form
required by the comptroller, notice that the person operates a
facility eligible for exemption and the comptroller verifies that
the facility is eligible. The comptroller shall maintain a list of
facilities in this state that provide motor vehicle parking and
storage services that are exempted from the taxes imposed under
this chapter.
(c) A facility that provides motor vehicle parking and
storage services exempted under this section shall prominently
display at the entrance or payment area of the facility a notice
that the parking and storage services provided are exempted from
the taxes imposed under this chapter.
(d) In this section, "health facility" means:
(1) a hospital, clinic, nursing home, extended care
facility, outpatient facility, rehabilitation facility, medical or
dental laboratory, medical or dental office building, x-ray or
scanning facility, medical or dental research, diagnostic, or
educational facility;
(2) an adult care facility, foster care facility,
live-care facility, retirement home or village, home for the aging,
or other facility that furnishes medical or nursing attention or
services and food and shelter to an individual for more than one
year;
(3) a multiunit housing facility for the staff,
nurses, interns, and other employees of a health facility and for
their relatives or for patients or relatives of patients admitted
for treatment or care in a health facility; or
(4) any other structure or facility that is related to
or essential to the operation of a health facility.
(b) A facility that provides motor vehicle parking and
storage services exempted under Section 151.3131, Tax Code, as
added by this section, that is in existence on the effective date of
this part and that provides users with a separate statement of the
amount charged for services and taxes may not:
(1) collect taxes imposed under Chapter 151, Tax Code,
on or after the date on which the facility is exempted; or
(2) increase the amount charged for motor vehicle
parking and storage services before the 180th day after the date on
which the facility is exempted.
(c) A facility that provides motor vehicle parking and
storage services exempted under Section 151.3131, Tax Code, as
added by this section, that is in existence on the effective date of
this part, and that charges tax inclusive of rates for motor vehicle
parking and storage services:
(1) shall reduce each rate charged to an amount not to
exceed the amount obtained by multiplying each rate charged by the
percentage obtained by dividing 1.00 by 1.00 plus the combined
state, local, and transportation authority tax rate otherwise
applicable to the facility on the date on which the facility is
exempted; and
(2) may not increase those rates before the 180th day
after the date on which the facility is exempted.
(d) A facility that provides motor vehicle parking and
storage services exempted under Section 151.3131, Tax Code, as
added by this section, and that is not in existence on the effective
date of this Act, may not collect taxes imposed under Chapter 151,
Tax Code, on or after the date on which the facility is exempted.
SECTION 3A.09. Subchapter H, Chapter 151, Tax Code, is
amended by adding Section 151.3132 to read as follows:
Sec. 151.3132. DIAPERS. (a) Diapers are exempt from the
taxes imposed by this chapter.
(b) The exemption under Subsection (a) applies to:
(1) the sale or use of disposable diapers;
(2) the sale or use of reusable cloth diapers; and
(3) diaper services that provide diaper rental and
laundry.
SECTION 3A.10. Section 151.315, Tax Code, is amended to
read as follows:
Sec. 151.315. WATER. Water, other than water sold in a
sealed container, is exempted from the taxes imposed by this
chapter.
SECTION 3A.11. Section 151.423, Tax Code, is amended to
read as follows:
Sec. 151.423. REIMBURSEMENT TO TAXPAYER FOR TAX
COLLECTIONS. A taxpayer may deduct and withhold .33 [one-half] of
one percent of the amount of taxes due from the taxpayer on a timely
return as reimbursement for the cost of collecting the taxes
imposed by this chapter. The comptroller shall provide a card with
each form distributed for the collection of taxes under this
chapter. The card may be inserted by the taxpayer with the tax
payment to provide for contribution of all or part of the
reimbursement provided by this section for use as grants under
Subchapter M, Chapter 56, Education Code. If the taxpayer chooses
to contribute the reimbursement for the grants, the taxpayer shall
include the amount of the reimbursement contribution with the tax
payment. The comptroller shall transfer money contributed under
this section for grants under Subchapter M, Chapter 56, Education
Code, to the appropriate fund.
SECTION 3A.12. There are exempted from the taxes imposed by
Chapter 151, Tax Code, the receipts from the sale, use, storage,
rental, or other consumption in this state of services that became
subject to the taxes because of the terms of this part and that are
the subject of a written contract or bid entered into on or before
June 1, 2005. The exemption provided by this section expires July
1, 2007.
SECTION 3A.13. This part takes effect July 1, 2005, if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this part takes effect October 1, 2005.
PART B. MOTOR VEHICLE SALES AND USE TAX
SECTION 3B.01. Section 152.002, Tax Code, is amended by
adding Subsection (f) to read as follows:
(f) Notwithstanding Subsection (a), the total consideration
of a used motor vehicle is the amount on which the tax is computed as
provided by Section 152.0412.
SECTION 3B.02. Section 152.021(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 7.35 [6 1/4] percent of the total
consideration.
SECTION 3B.03. Section 152.022(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 7.35 [6 1/4] percent of the total
consideration.
SECTION 3B.04. Section 152.026(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 10 percent of the gross rental receipts
from the rental of a rented motor vehicle for 30 days or less and
7.35 [6 1/4] percent of the gross rental receipts from the rental of
a rented motor vehicle for longer than 30 days.
SECTION 3B.05. Section 152.028(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 7.35 [6 1/4] percent of the total
consideration.
SECTION 3B.06. Section 152.041(a), Tax Code, is amended to
read as follows:
(a) The tax assessor-collector of the county in which an
application for registration or for a Texas certificate of title is
made shall collect taxes imposed by this chapter, subject to
Section 152.0412, unless another person is required by this chapter
to collect the taxes.
SECTION 3B.07. Subchapter C, Chapter 152, Tax Code, is
amended by adding Section 152.0412 to read as follows:
Sec. 152.0412. STANDARD PRESUMPTIVE VALUE; USE BY TAX
ASSESSOR-COLLECTOR. (a) In this section, "standard presumptive
value" means the average retail value of a motor vehicle as
determined by the Texas Department of Transportation, based on a
nationally recognized motor vehicle industry reporting service.
(b) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is equal to or greater than the standard
presumptive value of the vehicle, a county tax assessor-collector
shall compute the tax on the amount paid.
(c) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is less than the standard presumptive value
of the vehicle, a county tax assessor-collector shall compute the
tax on the standard presumptive value unless the purchaser
establishes the retail value of the vehicle as provided by
Subsection (d).
(d) A county tax assessor-collector shall compute the tax
imposed by this chapter on the retail value of a motor vehicle if:
(1) the retail value is shown on an appraisal
certified by an adjuster licensed under Chapter 4101, Insurance
Code, or by a motor vehicle dealer operating under Subchapter B,
Chapter 503, Transportation Code;
(2) the appraisal is on a form prescribed by the
comptroller for that purpose; and
(3) the purchaser of the vehicle obtains the appraisal
not later than the 20th day after the date of purchase.
(e) On request, a motor vehicle dealer operating under
Subchapter B, Chapter 503, Transportation Code, shall provide a
certified appraisal of the retail value of a motor vehicle. The
comptroller by rule shall establish a fee that a dealer may charge
for providing the certified appraisal. The county tax
assessor-collector shall retain a copy of a certified appraisal
received under this section for a period prescribed by the
comptroller.
(f) The Texas Department of Transportation shall maintain
information on the standard presumptive values of motor vehicles as
part of the department's registration and title system. The
department shall update the information at least quarterly each
calendar year.
(g) This section does not apply to a transaction described
by Section 152.024 or 152.025.
SECTION 3B.08. Not later than October 1, 2005, the Texas
Department of Transportation shall:
(1) establish standard presumptive values for motor
vehicles as provided by Section 152.0412, Tax Code, as added by this
part;
(2) modify the department's registration and title
system as needed to include that information and administer that
section; and
(3) make that information available through the system
to all county tax assessor-collectors.
SECTION 3B.09. (a) Except as provided by Subsection (b) of
this section, this part takes effect July 1, 2005, if this Act
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this part takes effect September 1, 2005.
(b) Section 152.0412, Tax Code, as added by this part, takes
effect October 1, 2005.
PART C. BOAT AND MOTOR BOAT SALES AND USE TAX
SECTION 3C.01. Section 160.021(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 7.35 [6 1/4] percent of the total
consideration.
SECTION 3C.02. Section 160.022(b), Tax Code, is amended to
read as follows:
(b) The tax rate is 7.35 [6 1/4] percent of the total
consideration.
SECTION 3C.03. This part takes effect July 1, 2005, if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this part takes effect September 1, 2005.
PART D. TAX ON DISCRETIONARY FOOD AND DRINK ITEMS
SECTION 3D.01. Subtitle E, Title 2, Tax Code, is amended by
adding Chapter 164 to read as follows:
CHAPTER 164. TAX ON DISCRETIONARY FOOD AND DRINK ITEMS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 164.001. DEFINITIONS. In this chapter:
(1) "Snack food" means any item that is ordinarily
sold for consumption without further preparation and that is not
generally considered a major component of a well-balanced meal.
The term includes:
(A) bakery items, including pastries, donuts,
cakes, tortes, pies, tarts, bars, and cookies;
(B) candy;
(C) chips, including chips made from potatoes,
flour, or corn;
(D) popcorn;
(E) pretzels; and
(F) roasted nuts.
(2) "Soft drink" means a nonalcoholic beverage that
contains natural or artificial sweeteners. The term does not
include a beverage that:
(A) contains:
(i) milk or milk products;
(ii) soy, rice, or similar milk
substitutes; or
(iii) more than 50 percent of vegetable or
fruit juice by volume;
(B) is intended by the manufacturer for
consumption by an infant and that is commonly referred to as "infant
formula"; or
(C) is intended by the manufacturer for use for
weight reduction.
[Sections 164.002-164.050 reserved for expansion]
SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX
Sec. 164.051. TAX IMPOSED. (a) A tax is imposed on each
sale at retail of soft drinks or snack food.
(b) The tax rate is three percent of the sales price of the
soft drinks or snack food.
(c) The tax imposed under this chapter is in addition to any
other tax imposed by state law.
Sec. 164.052. EXCEPTIONS TO APPLICATION OF TAX. The tax
imposed under this chapter does not apply to a food or a beverage
sold in or by a restaurant, lunch counter, cafeteria, hotel,
organization listed as a 501(c)(3) under the Internal Revenue Code
of 1986, or other business for consumption on the premises of the
business.
Sec. 164.053. RULES. The comptroller by rule shall
prescribe the manner in which the tax imposed under this chapter is
administered, imposed, and collected.
[Sections 164.054-164.100 reserved for expansion]
SUBCHAPTER C. ALLOCATION OF TAX
Sec. 164.101. ALLOCATION OF TAX. The revenue from the tax
imposed under this chapter shall be deposited to the credit of the
general revenue fund.
SECTION 3D.02. This part takes effect July 1, 2005, if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this part takes effect September 1, 2005.
ARTICLE 4. CIGARETTE AND TOBACCO PRODUCTS TAXES
PART A. RATES
SECTION 4A.01. Section 154.021(b), Tax Code, is amended to
read as follows:
(b) The tax rates are:
(1) $71.10 [$20.50] per thousand on cigarettes
weighing three pounds or less per thousand; and
(2) the rate provided by Subdivision (1) plus $2.10
per thousand on cigarettes weighing more than three pounds per
thousand.
SECTION 4A.02. Section 155.021(b), Tax Code, is amended to
read as follows:
(b) The tax rates are:
(1) 3.44 cents [one cent] per 10 or fraction of 10 on
cigars weighing three pounds or less per thousand;
(2) $25.80 [$7.50] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
and
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for 3.3 cents or less
each;
(3) $37.84 [$11] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain no substantial amount of nontobacco
ingredients; and
(4) $51.60 [$15] per thousand on cigars that:
(A) weigh more than three pounds per thousand;
(B) sell at factory list price, exclusive of any
trade discount, special discount, or deal, for more than 3.3 cents
each; and
(C) contain a substantial amount of nontobacco
ingredients.
SECTION 4A.03. Section 155.0211(b), Tax Code, is amended to
read as follows:
(b) The tax rate for tobacco products other than cigars is
40 [35.213] percent of the manufacturer's list price, exclusive of
any trade discount, special discount, or deal.
SECTION 4A.04. This part takes effect July 1, 2005, if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this part takes effect September 1, 2005.
ARTICLE 5. TELECOMMUNICATIONS INFRASTRUCTURE FUND
SECTION 5.01. Section 57.048, Utilities Code, is amended by
adding Subsections (f)-(i) to read as follows:
(f) Notwithstanding any other provision of this title, a
certificated telecommunications utility may recover from the
utility's customers an assessment imposed on the utility under this
subchapter after the total amount deposited to the credit of the
fund, excluding interest and loan repayments, is equal to $1.5
billion, as determined by the comptroller. A certificated
telecommunications utility may recover only the amount of the
assessment imposed after the total amount deposited to the credit
of the fund, excluding interest and loan repayments, is equal to
$1.5 billion, as determined by the comptroller. The utility may
recover the assessment through a monthly billing process.
(g) The comptroller shall publish in the Texas Register the
date on which the total amount deposited to the credit of the fund,
excluding interest and loan repayments, is equal to $1.5 billion.
(h) Not later than February 15 of each year, a certificated
telecommunications utility that wants to recover the assessment
under Subsection (f) shall file with the commission an affidavit or
affirmation stating the amount that the utility paid to the
comptroller under this section during the previous calendar year
and the amount the utility recovered from its customers in
cumulative payments during that year.
(i) The commission shall maintain the confidentiality of
information the commission receives under this section that is
claimed to be confidential for competitive purposes. The
confidential information is exempt from disclosure under Chapter
552, Government Code.
SECTION 5.02. Section 57.0485, Utilities Code, is amended
to read as follows:
Sec. 57.0485. ALLOCATION OF REVENUE [ACCOUNTS]. [(a)] The
comptroller shall deposit [50 percent of] the money collected by
the comptroller under Section 57.048 to the credit of the general
revenue fund [public schools account in the fund. The comptroller
shall deposit the remainder of the money collected by the
comptroller under Section 57.048 to the credit of the qualifying
entities account in the fund.
[(b) Interest earned on money in an account shall be
deposited to the credit of that account].
SECTION 5.03. Section 57.051, Utilities Code, is amended to
read as follows:
Sec. 57.051. SUNSET PROVISION. The Telecommunications
Infrastructure Fund [Board] is subject to Chapter 325, Government
Code (Texas Sunset Act). Unless continued in existence as provided
by that chapter, [the board is abolished and] this subchapter
expires September 1, 2011 [2005].
SECTION 5.04. Sections 57.048(c) and (d), Utilities Code,
are repealed.
SECTION 5.05. If, on the day before the effective date of
this article, the assessment prescribed by Section 57.048,
Utilities Code, is imposed at a rate of less than 1.25 percent, the
comptroller shall, on the effective date of this article, reset the
rate of the assessment to 1.25 percent.
SECTION 5.06. This article takes effect July 1, 2005, if
this Act receives a vote of two-thirds of all the members elected to
each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
effect on that date, this article takes effect September 1, 2005.
ARTICLE 6. SUPREME COURT JURISDICTION
SECTION 6.01. (a) The supreme court has exclusive
jurisdiction over a challenge to the constitutionality of this Act
or any part of this Act and may issue injunctive or declaratory
relief in connection with the challenge.
(b) The supreme court shall rule on a challenge filed under
this section on or before the 120th day after the date the challenge
is filed.
(c) This section does not apply to an action pending on the
date on which the last legislative vote enacting this Act is taken.
ARTICLE 7. SEVERABILITY
SECTION 7.01. If any provision of this Act or its
application to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of this
Act that can be given effect without the invalid provision or
application, and to this end the provisions of this Act are declared
to be severable.
ARTICLE 8. EFFECTIVE DATE
SECTION 8.01. (a) Except as provided by Subsection (b) of
this section, this Act takes effect July 1, 2005, if this Act
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this Act takes effect September 1, 2005.
(b) If a section, part, or article of this bill provides a
different effective date than provided by Subsection (a) of this
section, that section, part, or article takes effect according to
its terms.