H.B. No. 2080

	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 by
	amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(a)  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.
	(d)  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.
	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 a [an
	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 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 [or 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 [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 112.058(d) and (e), Tax Code; and
	(3)  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.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2080 was passed by the House on April
	15, 2021, by the following vote:  Yeas 144, Nays 0, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 2080 on May 24, 2021, by the following vote:  Yeas 141, Nays 5,
	1 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2080 was passed by the Senate, with
	amendments, on May 19, 2021, by the following vote:  Yeas 31, Nays
	0.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor