This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
79R9331 CBH/JD/DAK-D
By: Keffer of Eastland, Grusendorf H.B. No. 3
Substitute the following for H.B. No. 3:
By: Keffer of Eastland C.S.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 $1.00 [$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 $1.00 on the $100 valuation of
taxable property in the district is sufficient to authorize a rate
not to exceed $1.00.
(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 $0.50 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 third 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; or
(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.
(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: _____________________________
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.
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, if permitted by the chief
appraiser, 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. CONFIDENTIAL INFORMATION. (a) A sales price
disclosure report filed with a chief appraiser under this
subchapter is confidential and not open to public inspection. The
report and the information it contains may not be disclosed to
another person other than an employee of the appraisal district who
appraises property, except as provided by Subsection (b).
(b) Information that is confidential under Subsection (a)
may be disclosed:
(1) in a judicial or administrative proceeding under a
lawful subpoena;
(2) to a purchaser, grantee, seller, or grantor named
in the report or in the deed to which the report applies or to a
representative of the purchaser, grantee, seller, or grantor under
a written authorization signed by the purchaser, grantee, seller,
or grantor;
(3) to the comptroller or to an assessor for a taxing
unit in which the property described in the report is located;
(4) in a judicial or administrative proceeding related
to real property taxation:
(A) to which the purchaser, grantee, seller, or
grantor is a party;
(B) to which an owner of the property described
in the report is a party; or
(C) by the appraisal district for the purpose of
establishing a value of the property or of providing evidence of
comparable sales to appraise another property;
(5) for statistical purposes if the information is
provided in a form that does not identify a specific property or
specific purchaser, grantee, seller, or grantor;
(6) if and to the extent that the information is
required to be included in a public document or record that the
appraisal office is required to prepare or maintain; or
(7) to a taxing unit or its legal representative that
is engaged in the collection of delinquent taxes on the property
described in the report.
(c) Information that is disclosed under this section does
not lose its confidential character.
(d) A person, other than the purchaser, grantee, seller, or
grantor, who obtains a sales price disclosure report or information
from the report commits an offense if the person:
(1) discloses the report or information to a person
who is not authorized under this section to receive the report or
information; or
(2) permits such a person to view, read, or copy the
report or information.
(e) An offense under Subsection (d) is a Class B
misdemeanor.
(f) It is a defense to prosecution under Subsection (d) that
the person who received information contained in the sales price
disclosure report obtained the information from:
(1) a purchaser, grantee, seller, or grantor of the
property described in the report; or
(2) a document or record other than the sales price
disclosure report.
Sec. 22.65. 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.
Sec. 22.66. 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. PROCEDURES FOR ADOPTION OF TAX RATE
SECTION 1E.01. Section 26.05(d), Tax Code, is amended to
read as follows:
(d) The governing body of a taxing unit other than a school
district may not adopt a tax rate that exceeds the lower of the
rollback tax rate or [103 percent of] the effective tax rate
calculated as provided by this chapter until the governing body has
held a public hearing on the proposed tax rate and has otherwise
complied with Sections [Section] 26.06 and [Section] 26.065. The
governing body of a taxing unit shall reduce a tax rate set by law or
by vote of the electorate to the lower of the rollback tax rate or
[103 percent of] the effective tax rate and may not adopt a higher
rate unless it first complies with Section 26.06.
SECTION 1E.02. Section 26.06(e), Tax Code, is amended to
read as follows:
(e) The meeting to vote on the tax increase may not be
earlier than the third day or later than the 14th day after the date
of the public hearing. The meeting must be held inside the
boundaries of the taxing unit in a publicly owned building or, if a
suitable publicly owned building is not available, in a suitable
building to which the public normally has access. If the governing
body does not adopt a tax rate that exceeds the lower of the
rollback tax rate or [103 percent of] the effective tax rate by the
14th day, it must give a new notice under Subsection (d) before it
may adopt a rate that exceeds the lower of the rollback tax rate or
[103 percent of] the effective tax rate.
PART F. EFFECTIVE DATES
SECTION 1F.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 1F.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 1F.03. (a) The change in law made by Sections 1E.01
and 1E.02 of this article applies to the ad valorem tax rate of a
taxing unit beginning with the 2005 tax year, except as provided by
Subsection (b) of this section.
(b) If the governing body of a taxing unit adopts an ad
valorem tax rate for the taxing unit for the 2005 tax year before
the effective date of those sections, the change in law made by
those sections applies to the ad valorem tax rate of that taxing
unit beginning with the 2006 tax year, and the law in effect when
the tax rate was adopted applies to the 2005 tax year with respect
to that taxing unit.
SECTION 1F.04. (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 Sections 1D.01-1E.02 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 Sections
1D.01-1E.02 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.
(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 as provided by Sections 251.004 and 251.006.
(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 commission may adopt rules to
implement and administer this chapter.
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
251.006, 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. TAX IMPOSED. Subject to Section 251.006, the
tax is imposed on each taxable business for each employee for whom
the taxable 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. 251.006. TAX IMPOSED ON EMPLOYEES. (a)
Notwithstanding Sections 251.004 and 251.005, a tax is imposed on
each 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. 251.007. 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 up to an amount that does not
exceed $90,000 for the calendar year.
Sec. 251.008. RATE. The rate of the tax is equal to 1.15
percent of the base amount of wages for each employee as determined
under Section 251.007.
Sec. 251.009. EXEMPTION FOR GOVERNMENTAL ENTITIES. The tax
imposed under this chapter does not apply to a governmental entity.
Sec. 251.010. EXEMPTION FOR CERTAIN CHARITIES. 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 the code.
Sec. 251.011. 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. 251.012. CRIMINAL PENALTY. (a) A person who violates
Section 251.011 commits an offense.
(b) An offense under this section is a Class A misdemeanor.
Sec. 251.013. CIVIL PENALTY. (a) A person who violates
Section 251.011 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 this
determination.
(c) On request of the commission, the attorney general shall
file suit to collect a penalty under this section.
Sec. 251.014. 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. 251.015. 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. 251.016. CREDITS AGAINST INSURANCE PREMIUM TAXES. (a)
Subject to Subsection (b), a taxable business that pays a tax under
this chapter is entitled to a credit of the entire amount of tax
paid under this chapter against any insurance premium taxes under
Subtitle B, Title 3, Insurance Code, that the taxable business may
owe.
(b) 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. The taxable 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) 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.
(d) The commission shall adopt rules to implement this
section. The comptroller shall assist the commission in the
formulation and adoption of the rules.
Sec. 251.017. 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 commission shall adopt rules to implement this
section. The comptroller and the Health and Human Services
Commission shall assist the commission 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 Subsection (b).
SECTION 2.02. In 2006, a business subject to the tax imposed
under Chapter 251, Tax Code, as added by this Act, for the first
calendar quarter of 2006 must file its report on wages for the first
calendar quarter on or before April 30, 2006, as provided by that
chapter. The business may delay payment of the tax owed for the
first calendar quarter until its payment of tax under Chapter 251,
Tax Code, as added by this Act, for the second calendar quarter is
due and may submit payments for both the first and second quarters
together. A business that owes the tax for the first calendar
quarter of 2006 but not for the second calendar quarter of 2006 may
submit its payment for the first calendar quarter on or before July
31, 2006.
SECTION 2.03. (a) Chapter 171, Tax Code, is repealed
effective January 1, 2006.
(b) Any corporation that is subject to the franchise tax
imposed under Chapter 171, Tax Code, on December 31, 2005, shall
file a final franchise tax return and pay a transitional tax as
required by this subsection on or before May 15, 2006. The
transitional tax is equal to the tax the corporation would have paid
in 2006 under Chapter 171, Tax Code, if Chapter 171, Tax Code, had
not been repealed. The provisions of Chapter 171, Tax Code,
relating to the computation and payment of the franchise tax remain
in effect after the repeal of Chapter 171, Tax Code, by this article
for the purposes of computing and paying the transitional tax
required by this subsection.
(c) Chapter 171, Tax Code, and Subtitle B, Title 2, Tax
Code, continue to apply to audits, deficiencies, redeterminations,
and refunds of any tax due or collected under Chapter 171, including
the tax due as provided by Subsection (b) of this section, until
barred by limitations.
(d) The repeal of Chapter 171, Tax Code, does not affect:
(1) the status of a corporation that has had its
corporate privileges, certificate of authority, or corporate
charter revoked, suit filed against it, or a receiver appointed
under Subchapter F, G, or H of that chapter;
(2) the ability of the comptroller, secretary of
state, or attorney general to take action against a corporation
under Subchapter F, G, or H of that chapter for actions that took
place before the repeal; or
(3) the right of a corporation to contest a
forfeiture, revocation, lawsuit, or appointment of a receiver under
Subchapter F, G, or H of that chapter.
(e) A corporation that has any unused credits under
Subchapter O, Chapter 171, Tax Code, that the corporation was
allowed to carry forward under that subchapter may apply those
credits to not more than 50 percent of the tax imposed by Chapter
251, Tax Code, as added by this Act, for each payment period until
the earlier of the date the credit would have expired under the
terms of Subchapter O, Chapter 171, Tax Code, had it continued in
existence, or December 31, 2025.
(f) A corporation that has any unused credits under
Subchapter P, Chapter 171, Tax Code, that the corporation was
allowed to carry forward under that subchapter may apply those
credits to not more than 50 percent of the tax imposed by Chapter
251, Tax Code, as added by this Act, for each payment period until
the earlier of the date the credit would have expired under the
terms of Subchapter P, Chapter 171, Tax Code, had it continued in
existence, or December 31, 2010.
(g) A corporation that has any unused credits under
Subchapter Q, Chapter 171, Tax Code, that the corporation was
allowed to carry forward under that subchapter may apply those
credits to not more than 50 percent of the tax imposed by Chapter
251, Tax Code, as added by this Act, for each payment period until
the earlier of the date the credit would have expired under the
terms of Subchapter Q, Chapter 171, Tax Code, had it continued in
existence, or December 31, 2010.
(h) The comptroller shall adopt rules to administer
Subsections (e)-(g) of this section.
SECTION 2.04. 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 2.05. 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. 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.04. 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; and
(19) motor vehicle wash or detail services.
SECTION 3A.05. 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.06. Sections 151.319(a) and (b), Tax Code, are
repealed.
SECTION 3A.07. 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.08. 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 food or a beverage sold
in or by a restaurant, lunch counter, cafeteria, hotel, 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) $70.50 [$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.
PART B. FEE ON CIGARETTES MANUFACTURED BY CERTAIN COMPANIES
SECTION 4B.01. Chapter 161, Health and Safety Code, is
amended by adding Subchapter U to read as follows:
SUBCHAPTER U. FEE ON CIGARETTES AND CIGARETTE TOBACCO PRODUCTS
MANUFACTURED BY CERTAIN COMPANIES
Sec. 161.601. PURPOSE. The purpose of this subchapter is
to:
(1) prevent nonsettling manufacturers from
undermining this state's policy of discouraging underage smoking by
offering cigarettes and cigarette tobacco products at prices that
are substantially below the prices of cigarettes and cigarette
tobacco products of other manufacturers;
(2) protect the tobacco settlement agreement and
funding, which has been reduced because of the growth of sales of
nonsettling manufacturer cigarettes and cigarette tobacco
products, for programs that are funded wholly or partly by payments
to this state under the tobacco settlement agreement and recoup for
this state settlement payment revenue lost because of sales of
nonsettling manufacturer cigarettes and cigarette tobacco
products;
(3) provide funding to enforce and administer this
subchapter and any legislation relating to nonsettling
manufacturers; and
(4) provide funding for any other purpose the
legislature determines.
Sec. 161.602. DEFINITIONS. In this subchapter:
(1) "Brand family" means each style of cigarettes or
cigarette tobacco products sold under the same trademark and
differentiated from one another by means of additional modifiers,
including "menthol," "lights," "kings," and "100s." The term
includes any style of cigarettes or cigarette tobacco products that
have a brand name, trademark, logo, symbol, motto, selling message,
recognizable pattern of colors, or other indication of product
identification that is identical to, similar to, or identifiable
with a previously known brand of cigarettes or cigarette tobacco
products.
(2) "Cigarette" means any product that contains
nicotine and is intended to be burned or heated under ordinary
conditions of use. The term includes:
(A) a roll of tobacco wrapped in paper or another
substance that does not contain tobacco;
(B) tobacco, in any form, that is functional in a
product that, because of the product's appearance, the type of
tobacco used in the filler, or the product's packaging and
labeling, is likely to be offered to or purchased by a consumer as a
cigarette; or
(C) a roll of tobacco wrapped in any substance
containing tobacco that, because of the product's appearance, the
type of tobacco used in the filler, or the product's packaging and
labeling, is likely to be offered to or purchased by a consumer as a
cigarette.
(3) "Cigarette tobacco product" means roll-your-own
tobacco or tobacco that, because of the tobacco's appearance, type,
packaging, or labeling, is suitable for use in making cigarettes
and is likely to be offered to or purchased by a consumer for that
purpose.
(4) "Manufacturer" means a person that manufactures,
fabricates, or assembles cigarettes for sale or distribution. For
purposes of this subchapter, the term includes a person that is the
first importer into the United States of cigarettes and cigarette
tobacco products manufactured outside the United States.
(5) "Nonsettling manufacturer" means a manufacturer
of cigarettes that did not sign the tobacco settlement agreement.
(6) "Nonsettling manufacturer cigarettes" means
cigarettes manufactured, fabricated, assembled, or imported by a
nonsettling manufacturer.
(7) "Nonsettling manufacturer cigarette tobacco
products" means cigarette tobacco products manufactured,
fabricated, assembled, or imported by a nonsettling manufacturer.
(8) "Tobacco settlement agreement" means the
Agreement Regarding Disposition of Settlement Proceeds filed on
July 24, 1998, in the United States District Court, Eastern
District of Texas, in the case styled The State of Texas v. The
American Tobacco Co., et al., No. 5-96CV-91. The term includes the
subsequent Clarification of Agreement Regarding Disposition of
Settlement Proceeds filed on July 24, 1998, in that litigation.
Sec. 161.603. FEE IMPOSED. (a) A fee is imposed on the
sale, use, consumption, or distribution in this state of:
(1) nonsettling manufacturer cigarettes if a stamp is
required to be affixed to a package of those cigarettes under
Chapter 154, Tax Code;
(2) nonsettling manufacturer cigarettes that are
sold, purchased, or distributed in this state but that are not
required to have a stamp affixed to a package of those cigarettes
under Chapter 154, Tax Code; and
(3) nonsettling manufacturer cigarette tobacco
products that are subject to the tax imposed by Section 155.0211,
Tax Code.
(b) The fee imposed by this section does not apply to
cigarettes or cigarette tobacco products that are included in
computing payments due to be made by a settling manufacturer under
the tobacco settlement agreement.
(c) The fee imposed by this subchapter is in addition to any
other privilege, license, fee, or tax required or imposed by state
law.
(d) Except as otherwise provided by this subchapter, the fee
imposed by this subchapter is imposed, collected, paid,
administered, and enforced in the same manner, taking into account
that the fee is imposed on nonsettling manufacturers, as the taxes
imposed by Chapters 154 and 155, Tax Code, as appropriate.
Sec. 161.604. RATE OF FEE. (a) Except as provided by
Subsection (b), the fee is imposed at the rate of two cents for:
(1) each nonsettling manufacturer cigarette; and
(2) each 0.09 ounce of nonsettling manufacturer
cigarette tobacco product.
(b) On January 1 of each year, the comptroller shall
increase the rate of the tax prescribed by Subsection (a) by the
greater of:
(1) three percent; or
(2) the percentage increase in the most recent annual
revised Consumer Price Index for all Urban Consumers, as published
by the federal Bureau of Labor Statistics of the United States
Department of Labor.
Sec. 161.605. DISTRIBUTOR'S REPORT. (a) A distributor
required to file a report under Section 154.210 or 155.111, Tax
Code, shall, in addition to the information required by those
sections, include in that required report, as appropriate:
(1) the number and denominations of stamps affixed to
individual packages of nonsettling manufacturer cigarettes during
the preceding month;
(2) the number of individual packages of nonsettling
manufacturer cigarettes sold or purchased in this state or
otherwise distributed in this state for sale in the United States;
and
(3) any other information the comptroller considers
necessary or appropriate to determine the amount of the fee imposed
by this subchapter or to enforce this subchapter.
(b) The information required by Subsections (a)(1) and (2)
must be itemized for each place of business and by manufacturer and
brand family.
(c) The requirement to report information under this
section shall be enforced in the same manner as the requirement to
deliver to or file with the comptroller a report required under
Section 154.210 or 155.111, Tax Code, as appropriate.
Sec. 161.606. NOTICE AND PAYMENT OF FEE. (a) Each month,
not later than the 10th day after the date the comptroller receives
the information required by Section 161.605, the comptroller shall:
(1) compute the amount of the fee imposed by this
subchapter that each nonsettling manufacturer owes for that
reporting period based on that information and any other
information available to the comptroller; and
(2) mail to each nonsettling manufacturer a notice of
the amount of the fee the manufacturer owes.
(b) Not later than the 15th day of the month after the month
in which the comptroller mails a nonsettling manufacturer a notice
under Subsection (a), the nonsettling manufacturer shall send to
the comptroller the amount of the fee due according to the notice.
Sec. 161.607. CERTIFICATION TO ATTORNEY GENERAL. (a) Not
later than the first day of each month, a nonsettling manufacturer
who is required to pay the fee imposed by this subchapter shall
certify to the attorney general that the manufacturer is in
compliance with this subchapter and has paid in full the fee imposed
by this subchapter.
(b) The attorney general shall develop, maintain, and
publish on the attorney general's Internet website a directory
listing of all nonsettling manufacturers that have provided
current, accurate, and complete certifications.
(c) The attorney general shall provide the list described by
Subsection (b) to any person on request.
Sec. 161.608. PREPAYMENT BEFORE OFFERING NONSETTLING
MANUFACTURER CIGARETTES OR CIGARETTE TOBACCO PRODUCTS FOR SALE OR
DISTRIBUTION IN THIS STATE. (a) If cigarettes or cigarette tobacco
products of a nonsettling manufacturer are not offered for sale or
distribution in this state on the date this subchapter takes
effect, the nonsettling manufacturer may not offer those cigarettes
or cigarette tobacco products for sale or distribution in this
state after that date unless the manufacturer first prepays the fee
imposed by this subchapter for sales of cigarettes and cigarette
tobacco products that will occur in the first calendar month in
which they are sold or distributed in this state.
(b) The amount a nonsettling manufacturer is required to
prepay under this section is equal to the greater of:
(1) the rate prescribed by Section 161.604 in effect
on that date multiplied by:
(A) the number of cigarettes the comptroller
reasonably projects that the nonsettling manufacturer will sell or
distribute in this state during that calendar month; and
(B) each 0.09 ounce of nonsettling manufacturer
cigarette tobacco products the comptroller reasonably projects
that the nonsettling manufacturer will sell or distribute in this
state during that calendar month; or
(2) $50,000.
(c) The fee imposed by this section does not apply to
cigarettes or cigarette tobacco products that are included in
computing payments due to be made by a settling manufacturer under
the tobacco settlement agreement.
(d) The comptroller may require a nonsettling manufacturer
to provide any information reasonably necessary to determine the
prepayment amount.
(e) The comptroller shall establish procedures to:
(1) reimburse a nonsettling manufacturer if the actual
sales or distributions in the first calendar month are less than the
projected sales or distributions; and
(2) require additional payments if the actual sales or
distributions in the first calendar month are greater than the
projected sales or distributions.
(f) A nonsettling manufacturer shall pay the fee imposed by
this subchapter in the manner provided by Section 161.606 beginning
in the second calendar month in which the manufacturer offers the
cigarettes or cigarette tobacco products for sale or distribution
in this state.
Sec. 161.609. REPORT TO ATTORNEY GENERAL BEFORE OFFERING
NONSETTLING MANUFACTURER CIGARETTES OR CIGARETTE TOBACCO PRODUCTS
FOR SALE OR DISTRIBUTION IN THIS STATE. (a) In addition to
prepaying the fee required by Section 161.608, a nonsettling
manufacturer described by Section 161.608(a) shall, before the date
the cigarettes or cigarette tobacco products are offered for sale
or distribution in this state, provide to the attorney general on a
form prescribed by the attorney general:
(1) the nonsettling manufacturer's complete name,
address, and telephone number;
(2) the date that the nonsettling manufacturer will
begin offering cigarettes or cigarette tobacco products for sale or
distribution in this state;
(3) the names of the brand families of the cigarettes
or cigarette tobacco products that the nonsettling manufacturer
will offer for sale or distribution in this state;
(4) a statement that the nonsettling manufacturer
intends to comply with this subchapter; and
(5) the name, address, telephone number, and signature
of an officer of the nonsettling manufacturer attesting to all of
the included information.
(b) The attorney general shall make the information
provided under this section available to the comptroller.
Sec. 161.610. PENALTIES FOR NONCOMPLIANCE. (a) Cigarettes
and cigarette tobacco products of a nonsettling manufacturer that
has not complied with this subchapter, including full payment of
the fee imposed by this subchapter, shall be treated as cigarettes
for which the tax assessed by Chapter 154 or 155, Tax Code, as
appropriate, has not been paid, and the manufacturer is subject to
all penalties imposed by those chapters for violations of those
chapters.
(b) The comptroller shall provide to a nonsettling
manufacturer a notice of noncompliance with this subchapter if the
manufacturer:
(1) does not pay in full the fee imposed by this
subchapter; or
(2) is not included on the list described by Section
161.607(b).
(c) On receipt of the notice of noncompliance, the
nonsettling manufacturer may not:
(1) pay the tax imposed by Chapter 154 or 155, Tax
Code, as appropriate;
(2) affix to a package of cigarettes the stamp
required by Section 154.041, Tax Code; or
(3) otherwise purchase, sell, or distribute
cigarettes in this state.
Sec. 161.611. APPLICATION OF SUBCHAPTER. This subchapter
applies without regard to Section 154.022, Tax Code, or any other
law that might be read to create an exemption for interstate sales.
SECTION 4B.02. (a) Not later than the 30th day after the
date this part takes effect, a nonsettling manufacturer, as that
term is defined by Section 161.602, Health and Safety Code, as added
by this part, that is offering cigarettes or cigarette tobacco
products for sale or distribution in this state on the effective
date of this part, shall provide to the attorney general on a form
prescribed by the attorney general:
(1) the nonsettling manufacturer's complete name,
address, and telephone number;
(2) the date that the nonsettling manufacturer began
offering cigarettes or cigarette tobacco products for sale or
distribution in this state;
(3) the names of the brand families of the cigarettes
or cigarette tobacco products that the nonsettling manufacturer
offers for sale or distribution in this state;
(4) a statement that the nonsettling manufacturer
intends to comply with Subchapter U, Chapter 161, Health and Safety
Code, as added by this part; and
(5) the name, address, telephone number, and signature
of an officer of the nonsettling manufacturer attesting to all of
the included information.
(b) The attorney general shall make the information
provided under Subsection (a) of this section available to the
comptroller.
SECTION 4B.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.
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. EFFECTIVE DATE
SECTION 6.01. (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.