87R16068 BEF-F
 
  By: Leman, Meyer, Thierry, Jetton, Hefner H.B. No. 2080
 
  Substitute the following for H.B. No. 2080:
 
  By:  Button C.S.H.B. No. 2080
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to taxpayers' suits.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 403.202(a), Government Code, is amended
  to read as follows:
         (a)  If a person who is required to pay to any department of
  the state government an occupation, excise, gross receipts,
  franchise, license, or privilege tax or fee, [other than a tax or
  fee to which Subchapter B, Chapter 112, Tax Code, applies] or
  another [a] tax or [other] amount imposed under Subtitle A, Title 4,
  Labor Code, contends that the tax or fee is unlawful or that the
  department may not legally demand or collect the tax or fee, the
  person shall pay the amount claimed by the state, and if the person
  intends to bring suit under this subchapter, the person must submit
  with the payment a protest.
         SECTION 2.  Subchapter J, Chapter 403, Government Code, is
  amended by adding Section 403.222 to read as follows:
         Sec. 403.222.  APPLICABILITY. This subchapter does not
  apply to a suit under Chapter 112, Tax Code.
         SECTION 3.  Subchapter A, Chapter 112, Tax Code, is amended
  by adding Section 112.003 to read as follows:
         Sec. 112.003.  ATTORNEY'S FEES. Except for a sanction under
  Chapter 10, Civil Practice and Remedies Code, or the Texas Rules of
  Civil Procedure, attorney's fees may not be awarded in a suit
  seeking legal or equitable relief against the state, a state
  agency, or an officer of the state relating to the applicability,
  assessment, collection, constitutionality, or amount of a tax, fee,
  or penalty imposed by this title or Title 3 or collected by the
  comptroller under any other law.
         SECTION 4.  Section 112.051, Tax Code, is amended to read as
  follows:
         Sec. 112.051.  PROTEST PAYMENT REQUIRED. (a) A person may
  bring a suit as authorized by Section 112.052 to dispute an amount
  of tax, penalty, or interest assessed in a deficiency determination
  under Chapter 111 only if the person has:
               (1)  paid the amount assessed in the deficiency
  determination; and
               (2)  submitted with the payment a written protest
  stating fully and in detail each reason for recovering the amount
  paid [If a person who is required to pay a tax or fee imposed by this
  title or collected by the comptroller under any law, including a
  local tax collected by the comptroller, contends that the tax or fee
  is unlawful or that the public official charged with the duty of
  collecting the tax or fee may not legally demand or collect the tax
  or fee, the person shall pay the amount claimed by the state, and if
  the person intends to bring suit under this subchapter, the person
  must submit with the payment a protest].
         (b)  The written protest must be submitted and [in writing
  and must state fully and in detail each reason for recovering] the
  payment must be made not later than six months after the date the
  deficiency determination becomes final.
         (c)  This section and Section 112.052 are not severable from
  the other provisions of this subchapter. If this section or Section
  112.052 is held invalid for any reason, the entire subchapter is
  invalid [The protest payment must be made within the period of time
  set out in Subdivision (3) of Subsection (c) of Section 111.104 of
  this code for the filing of refund claims].
         SECTION 5.  Section 112.052, Tax Code, is amended to read as
  follows:
         Sec. 112.052.  TAXPAYER SUIT AFTER PAYMENT UNDER PROTEST.
  (a) A person may bring suit against the state to recover an amount
  of tax, penalty, or interest assessed in a deficiency determination
  under Chapter 111 [occupation, excise, gross receipts, franchise,
  license, or privilege tax or fee required to be paid to the state]
  if the person has first paid the amount assessed [tax] under protest
  as required by Section 112.051 [of this code].
         (b)  A suit under this section must be brought before the
  91st day after the date the protest payment was made, or the suit is
  barred[, except that for the tax imposed by Chapter 171 for a
  regular annual period, if an extension is granted to the taxpayer
  under Section 171.202(c) for filing the report and the taxpayer
  files the report on or before the last date of the extension period,
  the protest required by Section 112.051 may be filed with the report
  to cover the entire amount of tax paid for the period, and suit for
  the recovery of the entire amount of tax paid for the period may be
  filed before the 91st day after the date the report is filed. If the
  report is not filed on or before the last date of the extension
  period, a protest filed with the report applies only to the amount
  of tax, if any, paid when the report is filed].
         (c)  The state may bring a counterclaim in a suit brought
  under this section if the counterclaim relates to taxes [or fees]
  imposed under the same statute and during the same period as the
  taxes [or fees] that are the subject of the suit and if the
  counterclaim is filed not later than the 30th day before the date
  set for trial on the merits of the suit. The state is not required to
  make an assessment of the taxes [or fees] subject to the
  counterclaim under any other statute, and the period of limitation
  applicable to an assessment of the taxes [or fees] does not apply to
  a counterclaim brought under this subsection.
         (d)  A taxpayer shall produce contemporaneous records and
  supporting documentation appropriate to the tax [or fee] for the
  transactions in question to substantiate and enable verification of
  a taxpayer's claim relating to the amount of the tax, penalty, or
  interest that has been assessed or collected or will be refunded, as
  required by Section 111.0041.
         SECTION 6.  Section 112.053, Tax Code, is amended by
  amending Subsections (a) and (c) and adding Subsections (d) and (e)
  to read as follows:
         (a)  A suit authorized by this subchapter must be brought
  against the public official charged with the duty of collecting the
  tax [or fee], the comptroller, and the attorney general.
         (c)  A copy of the written protest as originally filed must
  be attached to the original petition filed by the person paying the
  tax, penalty, or interest [fee] with the court and to the copies of
  the original petition served on the comptroller, the attorney
  general, and the public official charged with the duty of
  collecting the tax [or fee].
         (d)  The attorney general shall represent the comptroller in
  a suit under this subchapter.
         (e)  A person may not intervene in a suit under this
  subchapter.
         SECTION 7.  Section 112.058, Tax Code, is amended by
  amending Subsection (a) and adding Subsections (b) and (c) to read
  as follows:
         (a)  [Payments made under protest are to be handled as
  follows:
               [(1)  An officer who receives payments made under
  protest as required by Section 112.051 shall each day send to the
  comptroller the payments, a list of the persons making the
  payments, and a written statement that the payments were made under
  protest.
               [(2)]  The comptroller shall, immediately on receipt of
  a payment made under protest under Section 112.051, deposit each
  portion of the payment to the credit of the account or fund
  [payments to each fund] to which the tax, penalty, or interest [or
  fee] paid under protest is allocated by law.
         (b) [(3)]  The comptroller shall maintain detailed records
  of payments made under protest under Section 112.051.
         (c)  An amount paid [(4) A payment] under protest under
  Section 112.051 bears pro rata interest. The pro rata interest is
  the amount of interest earned by the amount paid under protest
  [protested funds].
         SECTION 8.  Section 112.059, Tax Code, is amended to read as
  follows:
         Sec. 112.059.  DISPOSITION OF PROTEST PAYMENTS BELONGING TO
  THE STATE. If a suit authorized by this subchapter is not brought
  in the manner or within the time required or if the suit is properly
  filed and results in a final determination that an amount paid under
  protest [a tax payment or a portion of a tax payment made under
  protest], including the pro rata amount of interest earned on the
  amount [payment], belongs to the state, the comptroller shall
  ensure that the proper amount is [has been] deposited to the credit
  of the appropriate state account or fund.
         SECTION 9.  Sections 112.060(c) and (d), Tax Code, are
  amended to read as follows:
         (c)  Each [tax] refund warrant shall be drawn against the
  accounts or funds [each fund] to which the amounts [taxes] paid
  under protest are allocated by law. If there are not sufficient
  funds in an account or fund [each fund to which the taxes paid under
  protest are allocated by law] to pay a refund required to be paid
  under Subsection (a) [of this section], [then] the comptroller
  shall draw the warrant against the General Revenue Fund or other
  account or fund [funds] from which refunds [refund appropriations]
  may be made, as the comptroller determines appropriate.
         (d)  The comptroller shall issue each [tax] refund warrant
  and shall deliver it to the person entitled to receive it.
         SECTION 10.  Chapter 112, Tax Code, is amended by adding
  Subchapter E to read as follows:
  SUBCHAPTER E. SUIT AFTER REDETERMINATION
         Sec. 112.201.  SUIT AFTER REDETERMINATION. (a) A person may
  sue the comptroller to dispute an amount of tax, penalty, or
  interest assessed in a deficiency redetermination or jeopardy
  redetermination under Chapter 111 if the person has:
               (1)  filed a request for redetermination under Chapter
  111;
               (2)  obtained a redetermination under Chapter 111 that
  includes a finding by the comptroller of the disputed and
  undisputed amounts; and
               (3)  filed a motion for rehearing of the
  redetermination that complies with Chapter 2001, Government Code,
  and that states the specific grounds of error and the disputed
  amounts associated with the grounds of error.
         (b)  A person bringing a suit under this subchapter shall
  pay, as provided by Chapter 111, the redetermination amounts that
  are not disputed in the motion for rehearing. The failure to pay an
  undisputed amount does not affect the jurisdiction of a court to
  consider a suit that complies with Subsection (a).
         (c)  A person bringing a suit under this subchapter may pay
  the disputed amounts as provided by Chapter 111. A disputed amount
  that is not paid as provided by Chapter 111 and that is determined
  to be due in a final judgment accrues penalties and interest as
  provided by Chapter 111. After the comptroller has been timely
  served in a suit that complies with this subchapter, the
  comptroller and the attorney general are enjoined from collecting
  disputed amounts from the person bringing the suit during the
  pendency of the suit but are not enjoined from asserting tax liens.
  Damages may be awarded under Chapter 65, Civil Practice and
  Remedies Code, if the court determines that all or part of the
  enjoined collection amounts were disputed solely for delay.
         (d)  A suit under this subchapter must be brought against
  both the comptroller and the attorney general.
         (e)  A suit under this subchapter must be filed before the
  expiration of 90 days after the issue date of the denial of the
  motion for rehearing or it is barred.
         (f)  The disputed and undisputed amounts of the
  redetermination must be set out in the original petition. A copy of
  the motion for rehearing must be attached to the original petition
  filed with the court and to the copies of the original petition
  served on the comptroller and the attorney general.
         (g)  A person may not intervene in a suit under this
  subchapter.
         Sec. 112.202.  RECORDS. A person shall produce, in
  connection with a suit under this subchapter, contemporaneous
  records and supporting documentation appropriate to the tax for the
  transactions in question to substantiate and enable verification of
  the person's claim relating to the amount of the tax, penalty, or
  interest that has been assessed or collected, as required by
  Section 111.0041.
         Sec. 112.203.  COUNTERCLAIM. (a) The state may bring a
  counterclaim in a suit under this subchapter if:
               (1)  the counterclaim relates to taxes imposed under
  the same statute and during the same period as the taxes that are
  the subject of the suit; and
               (2)  the counterclaim is filed not later than the 30th
  day before the date set for trial on the merits of the suit.
         (b)  The state is not required to make an assessment of the
  taxes subject to the counterclaim under any other statute, and the
  period of limitation applicable to an assessment of the taxes does
  not apply to a counterclaim brought under this section.
         Sec. 112.204.  ISSUES IN SUIT. (a) The grounds of error
  contained in the motion for rehearing are the only issues that may
  be raised in a suit under this subchapter.
         (b)  A suit under this subchapter applies only to a tax
  liability period considered in the comptroller's redetermination.
         Sec. 112.205.  ATTORNEY GENERAL TO REPRESENT COMPTROLLER.
  The attorney general shall represent the comptroller in a suit
  under this subchapter.
         Sec. 112.206.  TRIAL DE NOVO. In a suit under this
  subchapter, the issues shall be tried de novo as are other civil
  cases.
         Sec. 112.207.  JUDGMENT. (a) The amount of a judgment
  refunding disputed taxes, penalties, or interest paid to the
  comptroller shall be credited against any tax, penalty, or interest
  imposed by this title and due from the plaintiff.
         (b)  The remainder of the amount of a judgment not credited
  against a tax, penalty, or interest shall be refunded to the
  plaintiff.
         (c)  The plaintiff is entitled to interest on the amount of
  tax refunded in a judgment for the plaintiff equal to the amount of
  interest that would be due if the tax had been deposited in the
  suspense account of the comptroller. The interest accrues beginning
  from the date that the tax was paid until:
               (1)  the date that the amount is credited against the
  plaintiff's tax liability; or
               (2)  a date determined by the comptroller that is not
  sooner than 10 days before the actual date on which a refund warrant
  is issued.
         Sec. 112.208.  RES JUDICATA. The rule of res judicata
  applies in a suit under this subchapter only if the issues and the
  tax liability periods in controversy are the same as were decided in
  a previous final judgment entered in a Texas court of record in a
  suit between the same parties.
         SECTION 11.  The following provisions are repealed:
               (1)  Section 403.212(e), Government Code;
               (2)  Sections 112.056 and 112.057, Tax Code;
               (3)  Sections 112.058(d) and (e), Tax Code; and
               (4)  Subchapter C, Chapter 112, Tax Code.
         SECTION 12.  The changes in law made by this Act apply only
  to a suit to dispute an amount of tax, penalty, or interest that
  becomes due and payable on or after the effective date of this Act.
  A suit to dispute an amount of tax, penalty, or interest that became
  due and payable before the effective date of this Act is governed by
  the law as it existed immediately before the effective date of this
  Act, and the former law is continued in effect for that purpose.
         SECTION 13.  This Act takes effect September 1, 2021.