By: Huffman S.B. No. 769
 
 
 
   
 
 
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.  Section 111.207(a), Tax Code, is amended to read
  as follows:
         (a)  In determining the expiration date for a period when a
  tax imposed by this title may be assessed, collected, or refunded,
  the following periods are not considered:
               (1)  [the period following the date of a tax payment
  made under protest, but only if a lawsuit is timely filed in
  accordance with Chapter 112;
               [(2)]  the period during which a judicial proceeding is
  pending in a court of competent jurisdiction to determine the
  amount of the tax due;
               (2) [(3)]  the period during which an administrative
  redetermination or refund hearing is pending before the
  comptroller; and
               (3) [(4)]  the period during which an indictment or
  information is pending for a felony offense related to the
  administration of the Tax Code against any taxpayer or any person
  personally liable or potentially personally liable for the payment
  of the tax under Section 111.0611.
         SECTION 4.  Subchapter A, Chapter 112, Tax Code, is amended
  by adding Section 112.003 to read as follows:
         Sec. 112.003.  ATTORNEY 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 5.  The heading to Subchapter B, Chapter 112, Tax
  Code, is amended to read as follows:
  SUBCHAPTER B. SUIT AFTER REDETERMINATION [PROTEST PAYMENT]
         SECTION 6.  Subchapter B, Chapter 112, Tax Code, is amended
  by adding Sections 112.061, 112.062, 112.063, 112.064, 112.065,
  112.066, 112.067, and 112.068 to read as follows:
         Sec. 112.061.  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 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 60 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. 112.062.  RECORDS. A person shall produce, in
  connection with a suit under this subchapter, contemporaneous
  records and supporting documentation appropriate to the tax or fee
  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. 112.063.  COUNTERCLAIM. (a) The state may bring a
  counterclaim in a suit under this subchapter if:
               (1)  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
               (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 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
  section.
         Sec. 112.064.  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. 112.065.  ATTORNEY GENERAL TO REPRESENT COMPTROLLER.
  The attorney general shall represent the comptroller in a suit
  under this subchapter.
         Sec. 112.066.  TRIAL DE NOVO. In a suit under this
  subchapter, the issues shall be tried de novo as are other civil
  cases.
         Sec. 112.067.  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. 112.068.  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 7.  The following provisions are repealed:
               (1)  Section 403.212(e), Government Code;
               (2)  Sections 112.051, 112.052, 112.053, 112.054,
  112.055, 112.056, 112.057, 112.058, 112.059, and 112.060, Tax Code;
  and
               (3)  Subchapter C, Chapter 112, Tax Code.
         SECTION 8.  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 9.  This Act takes effect September 1, 2021.