By:  Keffer of Eastland                                           H.B. No. 2234


A BILL TO BE ENTITLED
AN ACT
relating to taxes, fees, and programs administered by the Comptroller. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 161.081, Health and Safety Code, is amended to read as follows: (1) "Attempt" means committing an act amounting to more than mere preparation that tends but fails to effect the commission of the offense intended. (2) [(1)] "Cigarette" has the meaning assigned by Section 154.001, Tax Code. (3) [(2)] "Permit holder" has the meaning assigned by Section 154.001 or 155.001, Tax Code, as applicable. (4) [(3)] "Retail sale" means a transfer of possession from a retailer to a consumer in connection with a purchase, sale, or exchange for value of cigarettes or tobacco products. (5) [(4)] "Retailer" has the meaning assigned by Section 154.001 or 155.001, Tax Code, as applicable. (6) [(5)] "Tobacco product" has the meaning assigned by Section 155.001, Tax Code. (7) [(6)] "Wholesaler" has the meaning assigned by Section 154.001 or 155.001, Tax Code, as applicable. SECTION 2. Subchapter H, Chapter 161, Health and Safety Code, is amended by adding Section 161.0821 to read as follows: Sec. 161.0821. PURCHASE OF CIGARETTES OR TOBACCO PRODUCTS BY PERSONS YOUNGER THAN 18 YEARS OF AGE PROHIBITED. (a) A person who is younger than 18 years of age commits an offense if the person purchases or attempts to purchase cigarettes or tobacco products. (b) An offense under this section is a Class C misdemeanor. SECTION 3. Subsection (a) of Section 285.063, Health and Safety Code, is amended to read as follows: (a) The adoption or abolition of the tax or change in the tax rate takes effect on the first day of the first calendar quarter occurring after the expiration of the first complete calendar quarter occurring after the date on which the comptroller receives a notice of the results of the election. Following an election to adopt the tax under this section, the district must submit to the comptroller a description of the boundaries of the district and a map of the district clearly showing the district's boundaries at the same time it submits the results of the election held as provided by this chapter. SECTION 4. Section 775.0753, Health and Safety Code, is amended by adding Subsection (d) to read as follows: (d) The district must submit to the comptroller a description of the boundaries of the district and a map of the district clearly showing the district's boundaries at the same time it submits the results of the election held as provided by this chapter. SECTION 5. Section 776.0753, Health and Safety Code, is amended by adding Subsection (d) to read as follows: (d) The district must submit to the comptroller a description of the boundaries of the district and a map of the district clearly showing the district's boundaries at the same time it submits the results of the election held as provided by this chapter. SECTION 6. Article 1.16(b), Insurance Code, is amended to read as follows: (b) Assessments for the expenses of such domestic examination which shall be sufficient to meet all the expenses and disbursements necessary to comply with the provisions of the laws of Texas relating to the examination of insurance companies and to comply with the provisions of this Article and Articles 1.17 and 1.18 of this Code, shall be made by the State Board of Insurance upon the corporations or associations to be examined taking into consideration annual premium receipts, and/or admitted assets that are not attributable to 90 percent of pension plan contracts as defined in Section 818(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 818(a)), and/or insurance in force; provided such assessments shall be made and collected as follows: (1) expenses attributable directly to a specific examination including employees' salaries and expenses and expenses provided by Article 1.28 of this Code shall be collected at the time of examination; (2) assessments calculated annually for each corporation or association which take into consideration annual premium receipts, and/or admitted assets that are not attributable to 90 percent of pension plan contracts as defined in Section 818(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 818(a)), and/or insurance in force shall be assessed annually for each such corporation or association. In computing the assessments, the board may not consider insurance premiums for insurance contracted for by a state or federal governmental entity to provide welfare benefits to designated welfare recipients or contracted for in accordance with or in furtherance of Title 2, Human Resources Code, or the federal Social Security Act (42 U.S.C. Section 301 et seq.). The amount of all examination and evaluation fees paid in each taxable year to the State of Texas by an insurance carrier shall be allowed as a credit on the amount of premium taxes due [under this article]. The limitations provided by Sections 803.007(1) and (2)(B) of this code for domestic insurance companies apply to foreign insurance companies. SECTION 7. Sections 221.002(b) and (c), Insurance Code, are amended to read as follows: (b) Except as provided by Subsection (c), in determining an insurer's taxable premiums [premium receipts], the insurer shall include the total gross amounts of premiums, membership fees, assessments, dues, revenues, and any other considerations on insurance written by the insurer in a calendar year from any kind of insurance written on each and every kind of property or risks located in this state, including: (1) fire insurance; (2) ocean marine insurance; (3) inland marine insurance; (4) accident insurance; (5) credit insurance; (6) livestock insurance; (7) fidelity insurance; (8) guaranty insurance; (9) surety insurance; (10) casualty insurance; (11) workers' compensation insurance; (12) employers' liability insurance; [and] (13) crop insurance written by a farm mutual insurance company; and (14) home warranty insurance. (c) The following premium receipts are not included in determining an insurer's taxable premium receipts: (1) premium receipts received from the business of title insurance; (2) premium receipts received from the business of life insurance, personal accident insurance, life and accident insurance, or health and accident insurance for profit, written by a life insurance company, life and accident insurance company, health and accident insurance company, or for mutual benefit or protection in this state; (3) premium receipts received from another authorized insurer for reinsurance; (4) returned premiums and dividends paid to policyholders; [and] (5) premiums excluded by another law of this state; and (6) premium finance charges clearly identified in a premium note or other evidence of premiums payable that are separately stated to the policyholder in an invoice, billing or contract. SECTION 8. Section 222.002(b), Insurance Code, is amended to read as follows: (b) Except as otherwise provided by this section, in determining an insurer's taxable gross premiums or a health maintenance organization's taxable gross revenues, the insurer or health maintenance organization shall include the total gross amounts of premiums, membership fees, assessments, dues, revenues, and other considerations received by the insurer or health maintenance organization in a calendar year from any kind of health maintenance organization certificate or contract or insurance policy or contract covering risks on individuals or groups [a person] located in this state and arising from the business of a health maintenance organization or the business of life insurance, accident insurance, health insurance, life and accident insurance, life and health insurance, health and accident insurance, life, health, and accident insurance, including variable life insurance, credit life insurance, and credit accident and health insurance for profit or otherwise or for mutual benefit or protection. SECTION 9. Section 223.003(a), Insurance Code, is amended to read as follows: (a) An annual tax is imposed on all [each title insurance company that receives] premiums from the business of title insurance. The rate of the tax is 1.35 percent of [the] title insurance [company's] taxable premiums for a calendar year, including any premiums retained by a title insurance agent as provided by Section 223.005. For purposes of this chapter, a person engages in the business of title insurance if the person engages in an activity described by Section 2501.005. SECTION 10. Section 252.003, Insurance Code is amended to read as follows: Sec. 252.003. PREMIUMS SUBJECT TO TAXATION. An insurer shall pay maintenance taxes under this chapter on the correctly reported gross premiums [collected] from writing insurance in this state against loss or damage by: (1) bombardment; (2) civil war or commotion; (3) cyclone; (4) earthquake; (5) excess or deficiency of moisture; (6) explosion as defined by Article 5.52; (7) fire; (8) flood; (9) frost and freeze; (10) hail; (11) insurrection; (12) invasion; (13) lightning; (14) military or usurped power; (15) an order of a civil authority made to prevent the spread of a conflagration, epidemic, or catastrophe; (16) rain; (17) riot; (18) the rising of the waters of the ocean or its tributaries; (19) smoke or smudge; (20) strike or lockout; (21) tornado; (22) vandalism or malicious mischief; (23) volcanic eruption; (24) water or other fluid or substance resulting from the breakage or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires, water pipes, or other conduits or containers; (25) weather or climatic conditions; [or] (26) windstorm; (27) an event covered under a home warranty insurance policy; or (28) an event covered under an inland marine insurance policy. SECTION 11. Section 271.002(a), Insurance Code, is amended to read as follows: (a) A maintenance fee is imposed on all [each insurer with gross] premiums subject to assessment under Section 271.006. SECTION 12. Section 1502.053, Insurance Code, is amended to read as follows: Section 1502.053. EXEMPTION FROM CERTAIN TAXES. (a) A children's health benefit plan issuer is not subject to the premium tax or the tax on revenues imposed under Chapter 222 with respect to money received for coverage provided under that plan. (b) A children's health benefit plan issuer is not subject to the retaliatory tax imposed under Chapter 281 with respect to money received for coverage provided under that plan. SECTION 13. Section 383.101, Local Government Code, is amended by adding Subsection (d) to read as follows: (d) The district must submit to the comptroller a description of the boundaries of the district and a map of the district clearly showing the district's boundaries at the same time it submits the results of the election held as provided by this chapter. SECTION 14. Section 387.012, Local Government Code, is amended to read as follows: Section 387.012. EFFECTIVE DATE OF TAX. (a) The adoption of the tax, the change of the tax rate, or the repeal of the tax takes effect on the first day of the first calendar quarter occurring after the expiration of the first complete quarter occurring after the date the comptroller receives a notice of the results of the election adopting, changing, or repealing the tax. (b) The district must submit to the comptroller a description of the boundaries of the district and a map of the district clearly showing the district's boundaries at the same time it submits the results of the election held as provided by this chapter. SECTION 15. Section 111.009, Tax Code, is amended by amending subsection (a) and adding new subsections (e) and (f), to read as follows: (a) A person having a direct interest in a determination may petition the comptroller for a redetermination and may assert legal and factual grounds to challenge the assessment. (e) The person filing the petition may assert credits or claim a refund for the same tax type and same period to offset the assessment. Any credits asserted or refund claimed must be included in the petition or must be filed within the applicable limitations period, except as otherwise provided by this section. The comptroller shall promulgate procedural rules that ensure that redetermination proceedings are expeditiously finalized and that provide that all parties receive equal time to prepare and submit their positions prior to the hearing. (f) A credit or refund for the same tax type and same period may be filed in the redetermination proceeding for all issues if the credit is asserted or the refund is claimed within one (1) year from the date of filing of the petition for redetermination. This provision does not authorize the filing of a separate refund or credit that is not authorized by Section 111.107(b). SECTION 16. Section 111.010, Tax Code, is amended by adding Subsection (e) to read as follows: (e) A judgment in a suit arising under this section remains valid and enforceable until satisfied and does not require periodic renewal. The provisions of Section 34.001, Civil Practice and Remedies Code, shall not apply to a judgment in a suit arising under this section. SECTION 17. Section 111.016, Tax Code, is amended by adding Subsection (e) to read as follows: (e) The Comptroller may assess the responsible individual liable under subsection(b) of this section at any time before the expiration of one year after the later of the date the tax liability of the corporation, association, limited liability company, limited partnership or other legal entity becomes final or the date the bankruptcy proceeding is closed or dismissed. SECTION 18. Subchapter B, Chapter 111, Tax Code, is amended by adding Section 111.0511 to read as follows: Sec. 111.0511. RESTRICTED OR CONDITIONAL PAYMENTS OF TAXES, PENALTIES, AND INTEREST PROHIBITED. Unless the restriction or condition is authorized by this title, a restriction or condition placed on a check in payment of taxes by the maker that purports to limit the amount of taxes owed to an amount less than that stated in the comptroller's records, or a restriction or condition placed on a check in payment of penalties and interest on delinquent taxes by the maker that purports to limit the amount of the penalties and interest to an amount less than the amount of penalties and interest accrued on the delinquent taxes, is void. SECTION 19. Section 111.0625. Tax Code, is amended to read as follows: Section 111.0625. ELECTRONIC TRANSFER OF CERTAIN PAYMENTS. (a) The comptroller by rule shall require a taxpayer who paid $100,000 or more during the preceding fiscal year in a category of payments required under this title to transfer payments in that category by means of electronic funds transfer in accordance with Section 404.095, Government Code, if the comptroller reasonably anticipates the person will pay at least that amount during the current fiscal year. (b) The comptroller may by rule reduce the amount provided in subsection (a) of this section to $50,000 or more. SECTION 20. Section 111.107(a), Tax Code, is amended to read as follows: (a) Except as otherwise expressly provided, a person may request a refund or a credit or the comptroller may make a refund or issue a credit for the overpayment of a tax imposed by this title at any time before the expiration of the period during which the comptroller may assess a deficiency for the tax and not thereafter unless the refund or credit is requested: (1) under Subchapter B of Chapter 112 and the refund is made or the credit is issued under a court order; (2) under the provision of Section 111.104(c)(3) applicable to a refund claim filed after a jeopardy or deficiency determination becomes final; or (3) under Chapter 162 [153], except Section 162.126(f) [153.1195(e)], 162.128(d) [153.121(d)], 162.228(f) [153.2225(e)], or 162.230(d) [153.224(d)]. SECTION 21. Section 151.006, Tax Code, is amended to read as follows: Sec. 151.006. SALE FOR RESALE. "Sale for resale" means a sale of: (1) tangible personal property or a taxable service to a purchaser who acquires the property or service for the purpose of reselling it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business in the form or condition in which it is acquired or as an attachment to or integral part of other tangible personal property or taxable service; (2) tangible personal property to a purchaser for the sole purpose of the purchaser's leasing or renting it in the United States of America or a possession or territory of the United States of America or in the United Mexican States in the normal course of business to another person, but not if incidental to the leasing or renting of real estate; (3) tangible personal property to a purchaser who acquires the property for the purpose of transferring it in the United States of America or a possession or territory of the United States of America or in the United Mexican States as an integral part of a taxable service; or (4) a taxable service performed on tangible personal property that is held for sale by the purchaser of the taxable service. SECTION 22. Section 151.011(a), Tax Code, is amended to read as follows: (a) Except as provided by Subsection (c) of this section, "use" means the exercise of a right or power incidental to the ownership of tangible personal property over tangible personal property, including tangible personal property other than printing [printed] material that has been processed, fabricated, or manufactured into other property or attached to or incorporated into other property transported into this state, and, except as provided by Section 151.056(b) of this code, includes the incorporation of tangible personal property into real estate or into improvements of real estate whether or not the real estate is subsequently sold. SECTION 23. Section 151.3111(b), Tax Code, is amended to read as follows: (b) Subsection (a) does not apply to the performance of a service on: (1) tangible personal property that would be exempted solely because of the exempt status of the seller of the property; (2) tangible personal property that is exempted solely because of the application of Section 151.303, 151.304, or 151.306; (3) motor vehicles, trailers, or semitrailers as defined, taxed, or exempted by Chapter 152; [or] (4) a taxable boat or motor as defined by Section 160.001;[.] (5) [(6)] tangible [Tangible] personal property exempt under Section 151.326; or (6) through December 31, 2007, tangible personal property that is exempted solely because of the application of Section 151.3162. SECTION 24. Section 151.3162(d), Tax Code, is amended to read as follows: (d) The exemption provided by Subsection (b) takes effect January 1, 2008. Until that date, a person is entitled to an exemption [a credit or refund] of a portion of the taxes paid under this chapter on an item that after January 1, 2008, will be exempted from the taxes imposed by this chapter under Subsection (b). SECTION 25. Subsection (c)(1) of Section 151.318, Tax Code, is amended to read as follows: (c) The exemption does not include: (1) intraplant transportation equipment, including intraplant transportation equipment used to move a product or raw material in connection with the manufacturing process and specifically including all piping and conveyor systems, provided that the following remain eligible for the exemption: (A) piping or conveyor systems that are a component part of a single item of manufacturing equipment or pollution control equipment eligible for the exemption under Subsection (a)(2), (a)(4), or (a)(5); (B) piping or conveyor systems through which the product or an intermediate or preliminary product that will become an ingredient or component part of the product is recycled or circulated in a loop between the single item of manufacturing equipment and the ancillary equipment that supports only that single item of manufacturing equipment if the single item of manufacturing equipment and the ancillary equipment operate together to perform a specific step in the manufacturing process; and (C) piping or conveyor systems through which the product or an intermediate or preliminary product that will become an ingredient or component part of the product is recycled back to another single item of manufacturing equipment and its ancillary equipment in the same manufacturing process; (2) hand tools; (3) maintenance supplies not otherwise exempted under this section, maintenance equipment, janitorial supplies or equipment, office equipment or supplies, equipment or supplies used in sales or distribution activities, research or development of new products, or transportation activities; (4) machinery and equipment or supplies to the extent not otherwise exempted under this section used to maintain or store tangible personal property; or (5) tangible personal property used in the transmission or distribution of electricity, including transformers, cable, switches, breakers, capacitor banks, regulators, relays, reclosers, fuses, interruptors, reactors, arrestors, resistors, insulators, instrument transformers, and telemetry units not otherwise exempted under this section, and lines, conduit, towers, and poles. SECTION 26. Sec. 154.111(b), Tax Code, is amended to read as follows: (b) An application for a permit required by this chapter must be accompanied by a fee of: (1) $300 for a bonded agent's permit; (2) $300 for a distributor's permit; (3) $200 for a wholesaler's permit; (4) $15 for each permit for a vehicle if the applicant is also applying for a permit as a bonded agent, distributor, or wholesaler or has received a current permit from the comptroller under Sections 154.101 and 154.110; [and] (5) $180 for a retailer's permit; and (6) $300 for a manufacturer's permit. SECTION 27. Section 154.509, Tax Code, is amended to read as follows: Sec. 154.509. PERMITS. A person commits an offense if the person: (1) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, receives or possesses cigarettes without having a valid permit; (2) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, receives or possesses cigarettes without having a permit posted where it can be easily seen by the public; (3) as a distributor or wholesaler, does not deliver an invoice to the purchaser as required by Section 154.203; (4) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, sells cigarettes without having a valid permit; or (5) as a manufacturer, bonded agent, or importer, stores, distributes, or delivers cigarettes in unstamped packages without having a valid permit. SECTION 28. Section 155.049(b), Tax Code, is amended to read as follows: (b) An application for a permit required by this chapter must be accompanied by a fee of: (1) $300 for a bonded agent's permit; (2) $300 for a distributor's permit; (3) $200 for a wholesaler's permit; (4) $15 for each permit for a vehicle if the applicant is also applying for a permit as a bonded agent, distributor, or wholesaler or has received a current permit from the comptroller under Sections 155.041 and 155.048; [and] (5) $180 for a retailer's permit; and (6) $300 for a manufacturer's permit. SECTION 29. Section 155.207, Tax Code, is amended to read as follows: Sec. 155.207. PERMITS. A person commits an offense if the person: (1) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, receives or possesses tobacco products without having a valid permit; (2) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, receives or possesses tobacco products without having a permit posted where it can be easily seen by the public; (3) as a distributor or wholesaler, does not deliver an invoice to the purchaser as required by Section 155.102; (4) as a manufacturer, distributor, bonded agent, importer, wholesaler, or retailer, sells tobacco products without having a valid permit; or (5) as a manufacturer, bonded agent, or importer, stores, distributes, or delivers tobacco products on which the tax has not been paid without having a valid permit. SECTION 30. Section 156.051(b), Tax Code, is amended to read as follows: (b) The price of a room or space in a hotel does not include the cost of food served by the hotel and the cost of personal services performed by the hotel for the person except for those services related to cleaning and readying the room or space for use or possession. SECTION 31. Section 156.052, Tax Code, is amended to read as follows: Sec. 156.052. RATE OF TAX. The rate of the tax imposed by this chapter is six percent of the price paid for a room or space in a hotel. SECTION 32. Section 156.053, Tax Code, is amended to read as follows: Sec. 156.053. COLLECTION OF TAX. A person owning, operating, managing, or controlling a hotel, or subletting a room or space in a hotel, shall collect for the state the tax that is imposed by this chapter and that is calculated on the amount paid for the [a] room or space in the hotel. SECTION 33. Section 162.001, Tax Code, is amended by adding subdivision (63) to read as follows: (63) "Dyed diesel fuel retail dealer" means a dealer who acquires dyed diesel fuel from a licensed supplier, permissive supplier, or distributor for resale and delivery by the dealer into the fuel supply tanks of motorboats, refrigeration units or other off-highway equipment at a retail location. SECTION 34. Section 162.101(b), Tax Code, is amended to read as follows: (b) A tax is imposed at the time gasoline is imported into this state, other than by a bulk transfer, for delivery to a destination in this state. The supplier or permissive supplier shall collect the tax imposed by this subchapter from the person who imports the gasoline into this state. If the seller is not a supplier or permissive supplier, then the person who imports the gasoline into this state shall pay the tax. SECTION 35. Section 162.101(c), Tax Code, is amended to read as follows: (c) A tax is imposed on the removal [sale or transfer] of gasoline from [in] the bulk transfer/terminal system in this state [by a supplier to a person who does not hold a supplier's license]. The supplier shall collect the tax imposed by this subchapter from the person who orders the removal from [sale or transfer in] the bulk transfer terminal system. SECTION 36. Section 162.103(d), Tax Code, is amended to read as follows: (d) A person who sells gasoline in this state, other than by a bulk transfer, on which tax has not been paid for any purpose other than a purpose exempt under Section 162.104 shall at the time of sale collect the tax from the purchaser or recipient of gasoline in addition to the selling price and is liable to this state for the taxes collected at the time and in the manner provided by this chapter. SECTION 37. Section 162.128(d), Tax Code, is amended to read as follows: (d) A supplier, [or] permissive supplier, distributor, importer, exporter or blender that determines taxes were erroneously reported and remitted or that paid more taxes than were due this state because of a mistake of fact or law may take a credit on the monthly tax report on which the error has occurred and tax payment made to the comptroller. The credit must be taken before the expiration of the applicable period of limitation as provided by Chapter 111. SECTION 38. Section 162.201(b), Tax Code, is amended to read as follows: (b) A tax is imposed at the time diesel fuel is imported into this state, other than by a bulk transfer, for delivery to a destination in this state. The supplier or permissive supplier shall collect the tax imposed by this subchapter from the person who imports the diesel fuel into this state. If the seller is not a supplier or permissive supplier, the person who imports the diesel fuel into this state shall pay the tax. SECTION 39. Section 162.201(c), Tax Code, is amended to read as follows: (c) A tax is imposed on the removal [sale or transfer] of diesel fuel from [in] the bulk transfer/terminal system [in this state by a supplier to a person who does not hold a supplier's license]. The supplier shall collect the tax imposed by this subchapter from the person who orders the removal from [sale or transfer in] the bulk transfer/terminal system. SECTION 40. Section 162.204(a), Tax Code, is amended to read as follows: (a) The tax imposed by this subchapter does not apply to: (1) diesel fuel sold to the United States for its exclusive use, provided that the exemption does not apply to diesel fuel sold or delivered to a person operating under a contract with the United States; (2) diesel fuel sold to a public school district in this state for the district's exclusive use; (3) diesel fuel sold to a commercial transportation company that provides public school transportation services to a school district under Section 34.008, Education Code, and that uses the diesel fuel only to provide those services; (4) diesel fuel exported by either a licensed supplier or a licensed exporter from this state to any other state, provided that: (A) for diesel fuel in a situation described by Subsection (d), the bill of lading indicates the destination state and the supplier collects the destination state tax; or (B) for diesel fuel in a situation described by Subsection (e), the bill of lading indicates the destination state, the diesel fuel is subsequently exported, and the exporter is licensed in the destination state to pay that state's tax and has an exporter's license issued under this subchapter; (5) diesel fuel moved by truck or railcar between licensed suppliers or licensed permissive suppliers and in which the diesel fuel removed from the first terminal comes to rest in the second terminal, provided that the removal from the second terminal rack is subject to the tax imposed by this subchapter; (6) diesel fuel delivered or sold into a storage facility of a licensed aviation fuel dealer from which the diesel fuel will be delivered solely into the fuel supply tanks of aircraft or aircraft servicing equipment, or sold from one licensed aviation fuel dealer to another licensed aviation fuel dealer who will deliver the diesel fuel exclusively into the fuel supply tanks of aircraft or aircraft servicing equipment; (7) diesel fuel exported to a foreign country if the bill of lading indicates the foreign destination and the fuel is actually exported to the foreign country; (8) dyed diesel fuel sold or delivered by a supplier to another supplier and dyed diesel fuel sold or delivered by a supplier or distributor into the bulk storage facility of a dyed diesel retail dealer, dyed diesel fuel bonded user or to a purchaser who provides a signed statement as provided by Section 162.206; (9) the volume of water, fuel ethanol, biodiesel, or mixtures thereof that are blended together with taxable diesel fuel when the finished product sold or used is clearly identified on the retail pump, storage tank, and sales invoice as a combination of diesel fuel and water, fuel ethanol, biodiesel, or mixtures thereof; (10) dyed diesel fuel sold by a supplier or permissive supplier to a distributor, or by a distributor to another distributor; (11) dyed diesel fuel delivered by a license holder into the fuel supply tanks of railway engines, motorboats, or refrigeration units or other stationary equipment powered by a separate motor from a separate fuel supply tank; (12) dyed kerosene when delivered by a supplier, distributor, or importer into a storage facility at a retail business from which all deliveries are exclusively for heating, cooking, lighting, or similar nonhighway use; or (13) diesel fuel used by a person, other than a political subdivision, who owns, controls, operates, or manages a commercial motor vehicle as defined by Section 548.001, Transportation Code, if the fuel: (A) is delivered exclusively into the fuel supply tank of the commercial motor vehicle; and (B) is used exclusively to transport passengers for compensation or hire between points in this state on a fixed route or schedule. SECTION 41. Section 162.205(a), Tax Code, is amended to read as follows: (a) A person shall obtain the appropriate license or licenses issued by the comptroller before conducting the activities of: (1) a supplier, who may also act as a distributor, importer, exporter, blender, motor fuel transporter, or aviation fuel dealer without securing a separate license, but who is subject to all other conditions, requirements, and liabilities imposed on those license holders; (2) a permissive supplier, who may also act as a distributor, importer, exporter, blender, motor fuel transporter, or aviation fuel dealer without securing a separate license but who is subject to all other conditions, requirements, and liabilities imposed on those license holders; (3) a distributor, who may also act as an importer, exporter, blender, or motor fuel transporter without securing a separate license, but who is subject to all other conditions, requirements, and liabilities imposed on those license holders; (4) an importer, who may also act as an exporter, blender, or motor fuel transporter without securing a separate license, but who is subject to all other conditions, requirements, and liabilities imposed on those license holders; (5) a terminal operator; (6) an exporter; (7) a blender; (8) a motor fuel transporter; (9) an aviation fuel dealer; (10) an interstate trucker; [or] (11) a dyed diesel fuel bonded user; or (12) a dyed diesel fuel retail dealer. SECTION 42. Section 162.206(k), Tax Code, is added to read as follows: (k) Properly completed signed statements should be in the possession of the licensed supplier or distributor at the time the sale of dyed diesel fuel occurs. If the licensed supplier or distributor is not in possession of these signed statements within 60 days from the date written notice requiring possession of them is given to the licensed supplier or distributor by the comptroller, exempt sales claimed by the licensed supplier or distributor that require delivery of the signed statements shall be disallowed. If the licensed supplier or distributor delivers the signed statements to the comptroller within the 60-day period, the comptroller may verify the reason or basis for the signed statements before allowing the exempt sales. An exempt sale may not be granted on the basis of signed statements delivered to the comptroller after the 60-day period. SECTION 43. Section 162.211(b), Tax Code, is amended to read as follows: (b) The license issued to an aviation fuel dealer or dyed diesel fuel retail dealer is permanent and is valid until the license is surrendered by the holder or canceled by the comptroller. SECTION 44. Subsections (a), (b), and (c), Section 162.213, Tax Code, are amended to read as follows: (a) The comptroller, on or before December 20 of each year, shall make available to all license holders an alphabetical list of licensed suppliers, permissive suppliers, distributors, aviation fuel dealers, importers, exporters, blenders, terminal operators, dyed diesel fuel retail dealers, and dyed diesel fuel bonded users. A supplemental list of additions and deletions shall be made available to the license holders each month. A current and effective license or the list furnished by the comptroller is evidence of the validity of the license until the comptroller notifies license holders of a change in the status of a license holder. (b) A licensed supplier or permissive supplier who sells diesel fuel tax-free to a supplier, [or] permissive supplier or aviation fuel dealer whose license has been canceled or revoked under this chapter, or who sells dyed diesel fuel to a distributor, dyed diesel fuel retail dealer or dyed diesel fuel bonded user whose license has been canceled or revoked under this chapter, is liable for any tax due on diesel fuel sold after receiving notice of the cancellation or revocation. (c) The comptroller shall notify all license holders under this chapter when a canceled or revoked license is subsequently reinstated and include in the notice the effective date of the reinstatement. Sales to a supplier, permissive supplier, distributor, aviation fuel dealer, dyed diesel fuel retail dealer or dyed diesel fuel bonded user after the effective date of the reinstatement may be made tax-free. SECTION 45. Section 162.215(d), Tax Code, is amended to read as follows: (d) An aviation fuel dealer and a dyed diesel fuel retail dealer are [is] not required to file a return. SECTION 46. Section 162.216, Tax Code, is amended by redesignating existing Subsections (m) and (n) as (n) and (o), and by adding new Subsection (m) to read as follows: (m) A dyed diesel fuel retail dealer shall keep a record showing the number of gallons of: (1) dyed and undyed diesel fuel inventories on hand at the first of each month; (2) dyed and undyed diesel fuel purchased or received, showing the name of the seller and the date of each purchase or receipt; (3) dyed and undyed diesel fuel sold or used, showing the date of the sale or use; (4) dyed and undyed diesel fuel lost by fire, theft, or accident; and (5) for dyed diesel fuel an invoice containing: (A) the stamped or preprinted name and address of the seller; (B) the name of the purchaser; (C) the date of delivery of the dyed diesel fuel; (D) the number of gallons of dyed diesel fuel delivered; (E) the type or description of the off-highway equipment into which the dyed diesel fuel is delivered; and (F) a notice stating "DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE". (n) The comptroller may require selective schedules from a supplier, permissive supplier, distributor, importer, exporter, blender, terminal operator, motor fuel transporter, dealer, aviation fuel dealer, dyed diesel fuel bonded user, and interstate trucker for any purchase, sale, or delivery of diesel fuel if the schedules are not inconsistent with the requirements of this chapter. (o) [(n)] The records required by this section must be kept until the fourth anniversary of the date they are created and are open to inspection at all times by the comptroller and the attorney general. SECTION 47. 162.230(d), Tax Code is amended to read as follows: (d) A supplier, [or] permissive supplier, distributor, importer, exporter or blender that determines taxes were erroneously reported and remitted or that paid more taxes than were due to this state because of a mistake of fact or law may take a credit on the monthly tax report on which the error has occurred and tax payment made to the comptroller. The credit must be taken before the expiration of the applicable period of limitation as provided by Chapter 111. SECTION 48. Sections 162.409(a) and (d), Tax Code, are amended to read as follows: Section 162.409. ISSUANCE OF BAD CHECK TO LICENSED DISTRIBUTOR, [OR] LICENSED SUPPLIER, OR PERMISSIVE SUPPLIER. (a) A person commits an offense if: (1) the person issues or passes a check or similar sight order for the payment of money knowing that the issuer does not have sufficient funds in or on deposit with the bank or other drawee for the payment in full of the check or order as well as all other checks or orders outstanding at the time of issuance; (2) the payee on the check or order is a licensed distributor, [or] licensed supplier, or permissive supplier; and (3) the payment is for an obligation or debt that includes a tax under this chapter to be collected by the licensed distributor, [or] licensed supplier, or permissive supplier. (d) A person who makes payment on an obligation or debt that includes a tax under this chapter and pays with an insufficient funds check issued to a licensed distributor, [or] licensed supplier, or permissive supplier may be held liable for a penalty equal to the total amount of tax not paid to the licensed distributor, [or] licensed supplier, or permissive supplier. SECTION 49. Section 171.052, Tax Code, is amended to read as follows: An insurance organization[, title insurance company, or title insurance agent] authorized to engage in insurance business in this state now required to pay an annual tax under Chapter 221, 222, or 224 [4 or 9], Insurance Code, measured by its gross premium receipts is exempted from the franchise tax. A nonadmitted insurance organization that is required to pay a gross premium receipts tax during a tax year is exempted from the franchise tax for that same tax year. [Farm mutuals, local mutual aid associations, and burial associations are not subject to the franchise tax.] SECTION 50. Subsection (h) of Section 171.109, Tax Code, is amended to read as follows: (h) A parent or investor corporation must use the cost method of accounting in reporting and calculating the franchise tax on its investments in subsidiary corporations or other investees. In calculating the historical cost of an investment in a subsidiary under the cost method of accounting, the cost may not be adjusted by the preacquisition retained earnings of the subsidiary corporation or other investee [The retained earnings of a subsidiary corporation or other investee before acquisition by the parent or investor corporation may not be excluded from the cost of the subsidiary corporation or investee to the parent or investor corporation and must be included by the parent or investor corporation in calculating its surplus]. SECTION 51. Section 171.110, Tax Code, is amended by adding a Subsection (m) to read as follows: (m) Except as otherwise provided by this section, in computing taxable earned surplus, a corporation is deemed to have made an election to use the same methods used in filing its federal income tax return. The corporation shall report based on its own financial condition. Consolidated reporting is prohibited. SECTION 52. Subsection (b) of Section 171.1121, Tax Code, is amended to read as follows: (b) Except as otherwise provided by this section, a corporation shall use the same accounting methods to apportion taxable earned surplus as it used to compute taxable earned surplus [in computing reportable federal taxable income]. SECTION 53. Section 183.053(b), Tax Code, is amended to read as follows: (b) The total of bonds, certificates of deposit, letters of credit, or other security determined to be sufficient by the comptroller of a permittee subject to the tax imposed by this chapter shall be in an amount that the comptroller determines to be sufficient to protect the fiscal interests of the state. The comptroller may not set the amount of security at less than $1,000 or more than the greater of $100,000 or four times the amount of the permittee's average monthly tax liability [$50,000]. SECTION 54. Section 201.102, Tax Code, is amended to read as follows: Section 201.102. CASH SALES. If gas is sold for cash only, the tax shall be computed on the producer's gross cash receipts. Payments from a purchaser of gas to a producer for the purpose of reimbursing the producer for taxes due under this chapter are not part of the gross cash receipts [unless the reimbursement amount for taxes due under this chapter is separately stated in the sales contract]. SECTION 55. Section 201.352, Tax Code, is amended to read as follows: Sec. 201.352. UNLAWFUL PRODUCTION OR PURCHASE [REMOVAL] OF GAS. On notice from the comptroller, no person may produce or make payment for [remove] natural or casinghead gas from a lease in this state if the owner or operator of the lease has failed to file a report or pay a tax as required by this chapter. The comptroller may request the railroad commission to place a seal on the well or to otherwise disconnect the lease from any pipeline, metering or custody transfer facility after notice to the operator of such facility and the operator shall not reopen or otherwise reconnect such facility until authorized to do so by the railroad commission. SECTION 56. Section 321.203, Tax Code, is amended by amending subsections (b), (c), (d), (e), and (g) and adding subsection (n), to read as follows: (b) If a retailer has only one place of business in this state, all of the retailer's retail sales of taxable items [tangible personal property] are consummated at that place of business except as provided by Subsection (e). (c) If a retailer has more than one place of business in this state, a sale of a taxable item [tangible personal property] by the retailer is consummated at the retailer's place of business: (1) from which the retailer ships or delivers the item [property], if the retailer ships or delivers the item [property] to a point designated by the purchaser or lessee; or (2) where the purchaser or lessee takes possession of and removes the item [property], if the purchaser or lessee takes possession of and removes the item [property] from a place of business of the retailer. (d) If neither the possession of a taxable item [tangible personal property] is taken at nor shipment or delivery of the item [property] is made from the retailer's place of business in this state, the sale is consummated at: (1) the retailer's place of business in this state where the order is received; or (2) if the order is not received at a place of business of the retailer, the place of business from which the retailer's salesman who took the order operates. (e) A sale of a taxable item [tangible personal property] is consummated at the location in this state to which the item [property] is shipped or delivered or at which possession is taken by the customer if transfer of possession of the item [property] occurs at, or shipment or delivery of the item [property] originates from, a location in this state other than a place of business of the retailer and if: (1) the retailer is an itinerant vendor who has no place of business; (2) the retailer's place of business where the purchase order is initially received or from which the retailer's salesman who took the order operates is outside this state; or (3) the purchaser places the order directly with the retailer's supplier and the property is shipped or delivered directly to the purchaser by the supplier. (n) A sale of a service described in Section 151.0047 to remodel, repair, or restore nonresidential real property is consummated at the location of the job site. However, if the job site includes areas in multiple municipalities then the sale is consummated at: (1) the retailer's place of business in this state where the order is received; or (2) if the order is not received at a place of business of the retailer, the place of business from which the retailer's salesman who took the order operates. SECTION 57. Section 321.302(c), Tax Code, is amended to read as follows: (c) If a municipality determines that a person doing business in the municipality is not included in a comptroller's report, the municipality shall report to the comptroller the name and address of the person. Within 90 days after receiving the report from a municipality, the comptroller shall send to the municipality: (1) an explanation as to why the person is not obligated for the municipal tax; (2) a statement that the person is obligated for the municipal tax and the tax is delinquent; or (3) a certification that the person is obligated for the municipal tax and that the full amount of the tax due has been credited to the municipality's account. In this section the phrase ' full amount of the tax due' means the amount of municipal tax to be allocated that can be determined without a comptroller's audit of the person's records. SECTION 58. Section 321.503, Tax Code, is amended to read as follows: Section 321.503. STATE'S SHARE. Before sending any money to a municipality under this subchapter the comptroller shall deduct two percent of the amount of the taxes collected within the municipality during the period for which a distribution is made as the state's charge for its services under this chapter and shall[, subject to the premiums payments under Section 321.501(c),] credit the money deducted to the general revenue fund. SECTION 59. Section 323.102(c), Tax Code, is amended to read as follows: (c) A tax imposed under Section 323.105 of this code or Chapter 326 or 383, Local Government Code, takes effect on the first day of the first calendar quarter after the expiration of the first complete calendar quarter occurring after the date on which the comptroller receives a notice of the action as required by Section 323.405(b). SECTION 60. Section 323.203, Tax Code, is amended by amending Subsections (b), (c), (d), (e), and (g) and adding Subsection (m), to read as follows: (b) If a retailer has only one place of business in this state, all of the retailer's retail sales of taxable items [tangible personal property] are consummated at that place of business except as provided by Subsection (e). (c) If a retailer has more than one place of business in this state, a sale of a taxable item [tangible personal property] by the retailer is consummated at the retailer's place of business: (1) from which the retailer ships or delivers the item [property], if the retailer ships or delivers the item [property] to a point designated by the purchaser or lessee; or (2) where the purchaser or lessee takes possession of and removes the item [property], if the purchaser or lessee takes possession of and removes the item [property] from a place of business of the retailer. (d) If neither the possession of a taxable item [tangible personal property] is taken at nor shipment or delivery of the item [property] is made from the retailer's place of business in this state, the sale is consummated at: (1) the retailer's place of business in this state where the order is received; or (2) if the order is not received at a place of business of the retailer, the place of business from which the retailer's salesman who took the order operates. (e) A sale of a taxable item [tangible personal property] is consummated at the location in this state to which the item [property] is shipped or delivered or at which possession is taken by the customer if transfer of possession of the item [property] occurs at, or shipment or delivery of the item [property] originates from, a location in this state other than a place of business of the retailer and if: (1) the retailer is an itinerant vendor who has no place of business; (2) the retailer's place of business where the purchase order is initially received or from which the retailer's salesman who took the order operates is outside this state; or (3) the purchaser places the order directly with the retailer's supplier and the property is shipped or delivered directly to the purchaser by the supplier. (m) A sale of a service described in Section 151.0047 to remodel, repair, or restore nonresidential real property is consummated at the location of the job site. However, if the job site includes areas in multiple municipalities then the sale is consummated at: (1) the retailers place of business in this state where the order is received; or (2) if the order is not received at a place of business of the retailer, the place of business from which the retailer's salesman who took the order operates. SECTION 61. Section 323.503, Tax Code, is amended to read as follows: Section 323.503. STATE'S SHARE. Before sending any money to a county under this subchapter the comptroller shall deduct two percent of the amount of the taxes collected within the county during the period for which a distribution is made as the state's charge for its services under this chapter and shall[, subject to premiums payments under Section 323.501(c),] credit the money deducted to the general revenue fund. SECTION 62. Section 16.001(a) and (b), Utilities Code, are amended to read as follows: Section 16.001. ASSESSMENT ON UTILITY GROSS RECEIPTS [PUBLIC UTILITIES]. (a) To defray the expenses incurred in the administration of this title, an assessment is imposed on each telecommunications utility, electric [public] utility, retail electric provider, and electric cooperative within the jurisdiction of the commission that serves the ultimate consumer, including each interexchange telecommunications carrier. (b) An assessment under this section is equal to one sixth of one percent of the telecommunications utility's electric [public] utility's, retail electric provider's, or electric cooperative's gross receipts from rates charged to the ultimate consumer in this state. SECTION 63. Section 16.002(b), Utilities Code, is amended to read as follows: (b) A telecommunications utility, electric [public] utility, retail electric provider, or electric cooperative may instead make quarterly payments due August 15, November 15, February 15, and May 15. SECTION 64. The following sections of the Tax Code are repealed: (1) Section 151.103(d); (2) Section 151.202(c); (3) Section 321.203(l), Tax Code, as added by Section 115, Chapter 1310, Acts of the 78th Legislature, 2003. and (4) Section 323.203(l). SECTION 65. The changes made by this Act to Section 201.102, Tax Code, apply to a refund claim or determination under Chapter 111, Tax Code, without regard to whether the taxes that are the subject of the refund claim or determination were due before, on, or after the effective date of this Act. SECTION 66. The changes made by this Act to Section 111.009, Tax Code, apply to a petition for redetermination filed on or after the effective date of this Act. SECTION 67. Effective date. This Act takes effect October 1, 2005.