79R3272 DAK-D

By:  Isett                                                        H.B. No. 2636



A BILL TO BE ENTITLED

AN ACT

relating to the rate of interest 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 Subsections (c-1) 
and (c-2) 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 60 days after the date of 
payment or the due date of the tax report; 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 granted in connection with a protest 
payment submitted under Chapter 112 for a report period due on or 
after January 1, 2000, the rate of the interest is the rate set in 
Section 111.060.
	(c-1)  For a refund other than a refund described in 
Subsection (c) 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 other than a refund 
described in Subsection (c) 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-2)  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-2) [(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.