By:  Isett                                                        H.B. No. 2636

Substitute the following for H.B. No. 2636:                                   

By:  Edwards                                                  C.S.H.B. No. 2636



A BILL TO BE ENTITLED

AN ACT

relating to the rate of and the period for which interest is paid on 
certain tax refunds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 111.064, Tax Code, is amended by 
amending Subsections (a), (c), and (f) and adding Subsection (c-1) 
to read as follows:
	(a)  Except as otherwise provided by this section 
[Subsections (b) and (c)], in a comptroller's final decision on a 
claim for refund or in an audit, interest is at the rate set in 
Section 111.060 on the amount found to be erroneously paid for a 
period:
		(1)  beginning on the later of:                                        
			(A)  60 days after the date of payment; [or]  
			(B)  the due date of the tax report; or                        
			(C)  the date the claim for the refund is filed; 
and                
		(2)  ending on, as determined by the comptroller, 
either the date of allowance of credit on account of the 
comptroller's final decision or audit or a date not more than 10 
days before the date of the refund warrant.
	(c)  For a refund claimed before September 1, 2005, and 
granted for a report period due on or after January 1, 2000, the 
rate of interest is the rate set in Section 111.060.  For a refund 
claimed on or after September 1, 2005, and granted for a report 
period due on or after January 1, 2000, the rate of interest is the 
lesser of:
		(1)  the average rate of interest earned on deposits in 
the state treasury during the period for which interest is paid on 
the refund, as determined by the comptroller; or
		(2)  the rate set in Section 111.060.                                  
	(c-1)  A refund, without regard to the date claimed, for a 
report period due before January 1, 2000, does not accrue interest.
	(f)  A local revenue fund is not subject to Subsections 
(a)-(c-1) [(c)].  In this subsection, "local revenue fund" includes 
a court cost, a fee, a fine, or a similar charge collected by a 
municipality, a county, or a court of this state and remitted to the 
comptroller.
	SECTION 2.  This Act takes effect September 1, 2005.