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A BILL TO BE ENTITLED
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AN ACT
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relating to the phaseout and repeal of the miscellaneous gross |
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receipts tax on utility companies; decreasing the rates of the tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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ARTICLE 1. CHANGES EFFECTIVE DURING PHASEOUT OF TAX |
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SECTION 1.01. Effective September 1, 2020, Sections |
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447.013(d) and (e), Government Code, are amended to read as |
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follows: |
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(d) The account consists of: |
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(1) [a sub-account in the account that consists of the
|
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proceeds of bonds issued under Subsection (j);
|
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[(2)] revenues allocated to the account under former |
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Section 182.122(b) [182.122], Tax Code, before September 1, 2020; |
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(2) [(3)] any amount appropriated by the legislature |
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for the account; |
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(3) [(4)] gifts, grants, and other donations received |
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for the account; and |
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(4) [(5)] interest earned on the investment of money |
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in the account. |
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(e) Money in the account may be appropriated only to the |
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State Energy Conservation Office to award grants or to make or |
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guarantee loans under this section. The total amount of grants that |
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may be awarded under this section in any state fiscal biennium from |
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revenues described by Subsection (d)(1) [(d)(2)] may not exceed $20 |
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million. The total amount of loans that may be made or guaranteed |
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under this section in any state fiscal biennium from revenues |
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described by Subsection (d)(1) [(d)(2)] may not exceed $10 million. |
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SECTION 1.02. (a) Section 182.022(b), Tax Code, is amended |
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to read as follows: |
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(b) The tax rates are: |
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(1) .465 [.581] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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more than 1,000 but less than 2,500[, according to the last federal
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census next preceding the filing of the report]; |
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(2) .856 [1.07] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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2,500 or more but less than 10,000[, according to the last federal
|
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census next preceding the filing of the report]; and |
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(3) 1.598 [1.997] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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10,000 or more[, according to the last federal census next
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preceding the filing of the report]. |
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(b) This section applies only to a gross receipts tax report |
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due on or after January 31, 2018. |
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SECTION 1.03. (a) Effective October 1, 2018, Section |
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182.022(b), Tax Code, is amended to read as follows: |
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(b) The tax rates are: |
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(1) .349 [.581] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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more than 1,000 but less than 2,500[, according to the last federal
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census next preceding the filing of the report]; |
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(2) .642 [1.07] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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2,500 or more but less than 10,000[, according to the last federal
|
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census next preceding the filing of the report]; and |
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(3) 1.198 [1.997] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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10,000 or more[, according to the last federal census next
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preceding the filing of the report]. |
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(b) This section applies only to a gross receipts tax report |
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due on or after January 31, 2019. |
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SECTION 1.04. (a) Effective October 1, 2019, Section |
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182.022(b), Tax Code, is amended to read as follows: |
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(b) The tax rates are: |
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(1) .232 [.581] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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more than 1,000 but less than 2,500[, according to the last federal
|
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census next preceding the filing of the report]; |
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(2) .428 [1.07] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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2,500 or more but less than 10,000[, according to the last federal
|
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census next preceding the filing of the report]; and |
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(3) .799 [1.997] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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10,000 or more[, according to the last federal census next
|
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preceding the filing of the report]. |
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(b) This section applies only to a gross receipts tax report |
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due on or after January 31, 2020. |
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SECTION 1.05. (a) Effective October 1, 2020, Section |
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182.022(b), Tax Code, is amended to read as follows: |
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(b) The tax rates are: |
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(1) .116 [.581] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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more than 1,000 but less than 2,500[, according to the last federal
|
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census next preceding the filing of the report]; |
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(2) .214 [1.07] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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2,500 or more but less than 10,000[, according to the last federal
|
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census next preceding the filing of the report]; and |
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(3) .399 [1.997] percent of the gross receipts from |
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business done in an incorporated city or town having a population of |
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10,000 or more[, according to the last federal census next
|
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preceding the filing of the report]. |
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(b) This section applies only to a gross receipts tax report |
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due on or after January 31, 2021. |
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SECTION 1.06. Section 182.122, Tax Code, as effective until |
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September 1, 2020, is amended by adding Subsection (c) to read as |
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follows: |
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(c) In each state fiscal biennium at the time the |
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comptroller makes the allocation required under this section, the |
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comptroller shall determine the difference between the amount of |
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revenue that would be allocated to the foundation school fund under |
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Subsection (a)(1) during that state fiscal biennium if the tax |
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imposed under Section 182.022 were imposed at the rates in effect on |
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September 30, 2017, and the amount of revenue actually allocated to |
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the foundation school fund under Subsection (a)(1) during that |
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biennium. The comptroller shall transfer from the general revenue |
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fund an amount equal to that difference and credit that amount to |
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the foundation school fund. The transfer required by this |
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subsection is in addition to the allocation of revenue to the |
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foundation school fund under Subsection (a). |
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SECTION 1.07. Section 182.122, Tax Code, as effective |
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September 1, 2020, is amended to read as follows: |
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Sec. 182.122. ALLOCATION OF TAX. (a) Revenues collected |
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under this chapter are allocated: |
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(1) one-fourth to the foundation school fund; and |
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(2) three-fourths to the general revenue fund. |
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(b) In each state fiscal biennium at the time the |
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comptroller makes the allocation required under this section, the |
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comptroller shall determine the difference between the amount of |
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revenue that would be allocated to the foundation school fund under |
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Subsection (a)(1) during that state fiscal biennium if the tax |
|
imposed under Section 182.022 were imposed at the rates in effect on |
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September 30, 2017, and the amount of revenue actually allocated to |
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the foundation school fund under Subsection (a)(1) during that |
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biennium. The comptroller shall transfer from the general revenue |
|
fund an amount equal to that difference and credit that amount to |
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the foundation school fund. The transfer required by this |
|
subsection is in addition to the allocation of revenue to the |
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foundation school fund under Subsection (a). |
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SECTION 1.08. Subchapter E, Chapter 36, Utilities Code, is |
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amended by adding Section 36.2025 to read as follows: |
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Sec. 36.2025. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX |
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LIABILITY. (a) The commission shall provide in a rate case under |
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Subchapter C or D for the prospective adjustment of an electric |
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utility's billing to reflect a decrease in the utility's tax |
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liability to this state if the decrease results from a reduction in |
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a rate of the miscellaneous gross receipts tax imposed under |
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Chapter 182, Tax Code, before October 1, 2021, or from the repeal of |
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that chapter. |
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(b) The commission shall make an adjustment described by |
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Subsection (a) in the first rate case that begins after a decrease |
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in tax liability occurs. The adjustment remains effective only |
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until a subsequent adjustment under this section. |
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SECTION 1.09. Subchapter G, Chapter 104, Utilities Code, is |
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amended by adding Section 104.302 to read as follows: |
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Sec. 104.302. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX |
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LIABILITY. (a) The regulatory authority shall provide for the |
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adjustment of a gas utility's billing to reflect a decrease in the |
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utility's tax liability to this state if the decrease results from a |
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reduction in a rate of the miscellaneous gross receipts tax imposed |
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under Chapter 182, Tax Code, before October 1, 2021, or from the |
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repeal of that chapter. |
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(b) Each adjustment described by Subsection (a): |
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(1) shall be made effective at the same time as the |
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decrease of tax liability or as soon after that decrease occurs as |
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is reasonably practicable; and |
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(2) remains effective only until a subsequent |
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adjustment under this section. |
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(c) This section does not apply to a gas utility if the |
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regulatory authority enters an order for the utility under |
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Subchapter C or D that accounts for the reduction or repeal of tax |
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liability described by Subsection (a). |
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(d) An adjustment under this section is not a rate case |
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under Subchapter C or D. |
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SECTION 1.10. Subchapter F, Chapter 13, Water Code, is |
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amended by adding Section 13.1885 to read as follows: |
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Sec. 13.1885. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX |
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LIABILITY. (a) The regulatory authority shall provide for the |
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adjustment of a utility's billing to reflect a decrease in the |
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utility's tax liability to this state if the decrease results from a |
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reduction in a rate of the miscellaneous gross receipts tax imposed |
|
under Chapter 182, Tax Code, before October 1, 2021, or from the |
|
repeal of that chapter. |
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(b) Each adjustment described by Subsection (a): |
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(1) shall be made effective at the same time as the |
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decrease of tax liability or as soon after that decrease occurs as |
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is reasonably practicable; and |
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(2) remains effective only until a subsequent |
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adjustment under this section. |
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(c) This section does not apply to a utility if the |
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regulatory authority determines the utility's rates by an order |
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issued under this subchapter for the utility that accounts for the |
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reduction or repeal of tax liability described by Subsection (a). |
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(d) An adjustment under this section is an uncontested |
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matter not subject to a contested case hearing. An adjustment under |
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this section is not a rate case. |
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ARTICLE 2. REPEAL OF TAX ON OCTOBER 1, 2021, AND CHANGES EFFECTIVE |
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ON REPEAL OF TAX |
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SECTION 2.01. (a) The following provisions of the Tax Code |
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are repealed: |
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(1) the heading to Chapter 182; |
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(2) the headings to Subchapters B and C, Chapter 182; |
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(3) Sections 182.021, 182.022, 182.023, and 182.027; |
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(4) Subchapters E, F, and G, Chapter 182; and |
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(5) Section 191.089. |
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(b) The repeal by this section of the provisions of Chapter |
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182, Tax Code, listed in Subsection (a) of this section does not |
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affect the taxes imposed under that chapter before the effective |
|
date of this article. The provisions of Chapter 182 in effect |
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immediately before the effective date of this article that relate |
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to the collection and enforcement of the taxes accruing before the |
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effective date of this article and to the allocation of revenue from |
|
those taxes are continued in effect for purposes of collecting and |
|
enforcing those taxes, including enforcing the requirements to file |
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tax reports and make tax payments on or before October 31, 2021, and |
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allocating revenue from those taxes. |
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(c) The repeal by this section of the provisions of Chapter |
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182, Tax Code, listed in Subsection (a) and Section 191.089, Tax |
|
Code, does not affect the imposition of a penalty under Chapter 182, |
|
Tax Code, for conduct occurring before the effective date of this |
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article. For purposes of this subsection, conduct occurs before |
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the effective date of this article if any element of the conduct |
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subject to the imposition of the penalty occurs before that date. |
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Conduct occurring before the effective date of this article is |
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governed by the law in effect when the conduct occurred, and the |
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former law is continued in effect for that purpose. |
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SECTION 2.02. Section 91.904, Natural Resources Code, is |
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amended to read as follows: |
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Sec. 91.904. CONSTRUCTION OF SUBCHAPTER. This subchapter |
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may not be construed to: |
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(1) limit the authority of a saltwater pipeline |
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facility to use a public right-of-way under any other law; |
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(2) affect the authority of a municipality to: |
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(A) regulate the use of a public right-of-way by |
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a saltwater pipeline operator under any other law; or |
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(B) require payment of any applicable charge |
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under Section 253.003, Utilities [182.025, Tax] Code; or |
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(3) require a county or municipality to: |
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(A) grant a right to a saltwater pipeline |
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operator that applies to a public road or right-of-way and that is |
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broader than the county's or municipality's legal interest in the |
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public road or right-of-way; or |
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(B) grant more than a surface right to a |
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saltwater pipeline operator in a right-of-way acquired by |
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prescription. |
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SECTION 2.03. Section 37.101(d), Utilities Code, is amended |
|
to read as follows: |
|
(d) This section does not: |
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(1) limit the power of a city, town, or village to |
|
incorporate or of a municipality to extend its boundaries by |
|
annexation; or |
|
(2) prohibit a municipality from levying a tax or |
|
other special charge for the use of the streets as authorized by |
|
Section 253.003 [182.025, Tax Code]. |
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SECTION 2.04. Section 41.005, Utilities Code, is amended to |
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read as follows: |
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Sec. 41.005. LIMITATION ON MUNICIPAL AUTHORITY. |
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Notwithstanding any other provision of this title, a municipality |
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may not directly or indirectly regulate the rates, operations, and |
|
services of an electric cooperative, except, with respect to |
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operations, to the extent necessary to protect the public health, |
|
safety, or welfare. This section does not prohibit a municipality |
|
from making a lawful charge for the use of public rights-of-way |
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within the municipality as provided by Sections [Section 182.025,
|
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Tax Code, and Section] 33.008 and 253.003. An electric cooperative |
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shall be an electric utility for purposes of Sections [Section
|
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182.025, Tax Code, and Section] 33.008 and 253.003. |
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SECTION 2.05. Section 121.2025(a), Utilities Code, is |
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amended to read as follows: |
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(a) Except as otherwise provided by this section or Section |
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253.003 [182.025, Tax Code], a municipality may not assess a charge |
|
for the placement, construction, maintenance, repair, replacement, |
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operation, use, relocation, or removal of a gas pipeline facility |
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on, along, under, or across a public road, highway, street, alley, |
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stream, canal, or other public way. |
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SECTION 2.06. Section 121.211(g), Utilities Code, is |
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amended to read as follows: |
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(g) Each operator of a natural gas distribution system and |
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each natural gas master meter operator shall recover as a surcharge |
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to its existing rates the amounts paid to the commission under this |
|
section. Amounts collected under this subsection by an |
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investor-owned natural gas distribution system or a cooperatively |
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owned natural gas distribution system shall not be included in the |
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revenue or gross receipts of the company for the purpose of |
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calculating municipal franchise fees or any tax imposed under |
|
[Subchapter B, Chapter 182, Tax Code, or under] Chapter 122 or |
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Section 253.003. Those amounts are not subject to a sales and use |
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tax imposed by Chapter 151, Tax Code, or Subtitle C, Title 3, Tax |
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Code. |
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SECTION 2.07. Section 181.005(b), Utilities Code, is |
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amended to read as follows: |
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(b) The right granted by Subsection (a) relating to the use |
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of a municipal street or alley is subject to the payment of charges |
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in accordance with Sections [Section] 121.2025 and 253.003 [of this
|
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code and Sections 182.025 and 182.026, Tax Code]. |
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SECTION 2.08. Section 181.047(d), Utilities Code, is |
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amended to read as follows: |
|
(d) This section does not prohibit a municipality from |
|
imposing a tax or special charge for the use of a street as |
|
authorized by [Subchapter B,] Chapter 253 [182, Tax Code]. |
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SECTION 2.09. (a) Title 5, Utilities Code, is amended by |
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adding Chapter 253 to read as follows: |
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CHAPTER 253. TAXES AND CHARGES IMPOSED ON OR PROHIBITED FROM BEING |
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IMPOSED ON CERTAIN UTILITIES LOCATED IN INCORPORATED AREAS |
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Sec. 253.001. DEFINITIONS. (a) In this chapter: |
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(1) "Business" means the provision of gas, |
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electricity, or water. |
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(2) "Distribution service" has the meaning assigned by |
|
Section 33.008. |
|
(3) "Electric utility" has the meaning assigned by |
|
Section 31.002. |
|
(4) "Public utility" means: |
|
(A) a person who owns or operates a gas or water |
|
works or water plant used for local sale and distribution located in |
|
an incorporated city or town in this state; or |
|
(B) an electric utility or transmission and |
|
distribution utility providing distribution service in an |
|
incorporated city or town in this state. |
|
(5) "Transmission and distribution utility" has the |
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meaning assigned by Section 31.002. |
|
(6) "Utility company" means, except as provided by |
|
Subsection (b), a person: |
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(A) who owns or operates a gas or water works or |
|
water plant used for local sale and distribution located in an |
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incorporated city or town in this state; or |
|
(B) who owns or operates an electric light or |
|
electric power works or light plant used for local sale and |
|
distribution located in an incorporated city or town in this state, |
|
or who is a retail electric provider, as that term is defined in |
|
Section 31.002, including a retail electric provider owned, |
|
operated, or controlled by an electric cooperative, that makes |
|
local sales in an incorporated city or town in this state. |
|
(b) For purposes of this chapter, "utility company" does not |
|
include a person who owns an electric light or electric power or gas |
|
plant used for distribution but who does not make retail sales to |
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the ultimate consumer in an incorporated city or town in this state. |
|
(b) Sections 182.024, 182.025, and 182.026, Tax Code, are |
|
transferred to Chapter 253, Utilities Code, as added by this |
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section, redesignated as Sections 253.002, 253.003, and 253.004, |
|
Utilities Code, respectively, and amended to read as follows: |
|
Sec. 253.002 [182.024]. TAX OR CHARGE BY CERTAIN POLITICAL |
|
SUBDIVISIONS. No city or other political subdivision of this state |
|
may impose an occupation tax or charge of any sort on a utility |
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company located in an incorporated city or town with a population of |
|
more than 1,000 [taxed under this subchapter]. |
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Sec. 253.003 [182.025]. CHARGES BY A CITY. (a) An |
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incorporated city or town may make a reasonable lawful charge for |
|
the use of a city street, alley, or public way by a public utility in |
|
the course of its business. |
|
(b) The total charges, however designated or measured, may |
|
not exceed two percent of the gross receipts of the public utility |
|
for the sale of gas or water within the city. |
|
(c) The total charges, however designated or measured, |
|
relating to distribution service of an electric utility or |
|
transmission and distribution utility within the city may not |
|
exceed the amount or amounts prescribed by Section 33.008[,
|
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Utilities Code]. The charges paid by an electric utility or |
|
transmission and distribution utility under this subsection may be |
|
only for distribution service. |
|
(d) If a public utility located in an incorporated city or |
|
town with a population of more than 1,000 [taxed under this
|
|
subchapter] pays a special tax, rental, contribution, or charge |
|
under a contract or franchise executed before May 1, 1941, the city |
|
shall credit the payment against the amount owed by the public |
|
utility on any charge allowable under Subsection (a) [of this
|
|
section]. |
|
[(e) In this section:
|
|
[(1)
"Distribution service" has the meaning assigned
|
|
by Section 33.008, Utilities Code.
|
|
[(2)
"Electric utility" has the meaning assigned by
|
|
Section 31.002, Utilities Code.
|
|
[(3) "Public utility" means:
|
|
[(A)
a person who owns or operates a gas or water
|
|
works or water plant used for local sale and distribution located
|
|
within an incorporated city or town in this state; or
|
|
[(B)
an electric utility or transmission and
|
|
distribution utility providing distribution service within an
|
|
incorporated city or town in this state.
|
|
[(4)
"Transmission and distribution utility" has the
|
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meaning assigned by Section 31.002, Utilities Code.] |
|
Sec. 253.004 [182.026]. APPLICABILITY AND EFFECT OF |
|
CHAPTER [SUBCHAPTER NOT APPLICABLE]. (a) This chapter |
|
[subchapter] does not apply to a utility company owned and operated |
|
by a city, town, county, water improvement district, or |
|
conservation district. |
|
(b) This chapter [subchapter] does not: |
|
(1) affect collection of ad valorem taxes; or |
|
(2) impair or alter a provision of a contract, |
|
agreement, or franchise made between a city and a public utility |
|
company relating to a payment made to the city. |
|
SECTION 2.10. Section 13.247(c), Water Code, is amended to |
|
read as follows: |
|
(c) This section may not be construed as limiting the power |
|
of municipalities to incorporate or extend their boundaries by |
|
annexation, or as prohibiting any municipality from levying taxes |
|
and other special charges for the use of the streets as are |
|
authorized by Section 253.003, Utilities [182.025, Tax] Code. |
|
ARTICLE 3. EFFECTIVE DATE |
|
SECTION 3.01. (a) Except as provided by Subsection (b) of |
|
this section, this Act takes effect October 1, 2017. |
|
(b) Article 2 of this Act takes effect October 1, 2021. |