Texas House Bill HB3742 Latest Draft

                            By: Lavender H.B. No. 3742


 A BILL TO BE ENTITLED
 AN ACT
 to repeal certain state sales, use, excise, franchise, severance,
 production, occupations, gross receipts and inheritance taxes, to
 repeal or limit certain local sales, use, excise and ad valorem
 property taxes, to enact a statewide and local value added tax, and
 to reform school finance and administration; providing penalties.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 ARTICLE 1.  REPEAL OF CERTAIN STATE TAXES
 SECTION 1.01.  Subject to Sections 1.02 and 1.03 of this
 Article, and effective on and after September 1, 2013 (as used in
 this Article 1, the "Effective Date"), TAX CODE, TITLE 2, STATE
 TAXATION, is amended as set forth below.
 (A)  SUBTITLE E, SALES, EXCISE AND USE TAXES, is amended as
 set forth below.
 (1)  Chapter 151, LIMITED SALES, EXCISE AND USE TAX, is
 repealed in its entirety.
 (2)  Chapter 152, TAXES ON SALE, RENTAL AND USE OF MOTOR
 VEHICLES, is repealed in its entirety.
 (3)  Chapter 154, CIGARETTE TAX, is repealed in its
 entirety.
 (4)  Chapter 155, CIGARS AND TOBACCO PRODUCTS TAX, is
 repealed in its entirety.
 (5)  Chapter 156, HOTEL OCCUPANCY TAX, is repealed in
 its entirety.
 (6)  Chapter 158, MANUFACTURED HOUSING SALES AND USE
 TAX, is repealed in its entirety.
 (7)  Chapter 159, CONTROLLED SUBSTANCES TAX, is
 repealed in its entirety.
 (8)  Chapter 160, TAXES ON SALES AND USE OF BOATS AND
 BOAT MOTORS, is repealed in its entirety.
 (9)  Chapter 161, FIREWORKS TAX, is repealed in its
 entirety.
 (10)  Chapter 162, MOTOR FUEL TAXES, is repealed in its
 entirety.
 (B)  SUBTITLE F, Chapter 171, FRANCHISE TAX, is repealed in
 its entirety.
 (C)  SUBTITLE G, GROSS RECEIPTS TAXES, is amended as set
 forth below.
 (1)  Chapter 181, CEMENT PRODUCTION TAX, is repealed in
 its entirety.
 (2)  Chapter 182, MISCELLANEOUS GROSS RECEIPTS TAXES,
 is repealed in its entirety.
 (3)  Chapter 183, MIXED BEVERAGE TAX, is repealed in
 its entirety.
 (D)  SUBTITLE H, BUSINESS PERMIT TAXES, is amended as set
 forth below.
 (1)  Chapter 191, SUBCHAPTERS E, F, G AND H are repealed
 in their entirety.
 (E)  SUBTITLE I, SEVERANCE TAXES, is amended as set forth
 below.
 (1)  Chapter 201, GAS PRODUCTION TAX, is repealed in
 its entirety.
 (2)  Chapter 202, OIL PRODUCTION TAX, is repealed in
 its entirety.
 (3)  Chapter 203, SULPHUR PRODUCTION TAX, is repealed
 in its entirety.
 (4)  Chapter 204, TAX CREDIT FOR NEW FIELD DISCOVERIES,
 is repealed in its entirety.
 (F)  SUBTITLE J, INHERITANCE TAX, is amended as s3et forth
 below.
 (1)  Chapter 211, INHERITANCE TAXES, is repealed in its
 entirety.
 SECTION 1.02.
 (A)  Subject to the provisions of Section 1.02(B) of this
 Article, the repeal of the various Tax Code chapters and sections
 referenced in this Article shall be prospective in application only
 and without prejudice to any rights and obligations of taxpayers,
 or the amounts owed to and the authorities of the comptroller or of
 this state, accruing or arising with respect to periods prior to the
 Effective Date, including but not limited to refunds, adjustments
 and similar items that would otherwise have been payable by or on
 behalf of the comptroller on or after the Effective Date.
 (B)  Notwithstanding the foregoing, but without prejudice to
 any other applicable limitation of actions, expiration or "sunset"
 provision, no judicial or administrative enforcement action shall
 be commenced by any authority of this state or any of its political
 subdivisions under the provisions so repealed on or after the fifth
 anniversary of the Effective Date.
 SECTION 1.03.
 (A)  Except as otherwise expressly provided in Section
 1.03(B) of this Article, the comptroller shall make a determination
 as to the amounts of revenues that, in the fiscal year of enactment,
 were allocated to funds and accounts, or to municipalities,
 counties or other bodies, for which special allocation had been
 made under the provisions repealed by this Article 1, and shall,
 with such frequency as would otherwise have been applicable under
 the provisions so repealed, cause like amounts to be deposited out
 of the general revenue fund to the credit of such specially
 allocated funds and accounts, or issue a warrant drawn on the
 general revenue fund to such municipalities, counties or other
 bodies, as applicable, during subsequent fiscal periods until entry
 into effect in each case of any contrary provision by act of the
 legislature. Any limitations on use by the recipients of such funds
 under the provisions so repealed shall continue in effect under
 this section until entry into effect in each case of any contrary
 provision by act of the legislature.
 (B)  Notwithstanding the foregoing, the comptroller shall
 not continue to allocate or pay any amounts allocated under the
 repealed provisions for the purpose of administration, collection
 and/or enforcement of any taxes so repealed.
 ARTICLE 2.
 STATE VALUE ADDED TAX
 SECTION 2.01.  Subject to Section 2.02 of this Article, and
 effective on and after September 1, 2013 (as used in this Article 1,
 the "Effective Date"),TAX CODE, TITLE 2, STATE TAXATION, is amended
 by adding new Subchapter K to read as follows:
 TAX CODE
 TITLE 2.  STATE TAXATION
 SUBTITLE K.  STATE VALUE ADDED TAX
 CHAPTER 220.  VALUE ADDED TAX
 SUBCHAPTER A.  GENERAL PROVISIONS
 Sec. 220.001.  SHORT TITLE. This chapter may be cited as the
 Texas State Value Added Tax Act.
 Sec. 220.002.  DEFINITIONS. In this chapter:
 (1)  "Comptroller" means the Comptroller of Public
 Accounts of the State of Texas.
 (2)  "In this state" means within the exterior limits
 of Texas and includes all territory within these limits ceded to or
 owned by the United States.
 (3)  "Local taxing unit" means any county,
 municipality, school district, special district or authority
 (including but not limited to a junior college district, a hospital
 district, a district created by or pursuant to the Water Code, a
 mosquito control district, a fire prevention district, a crime
 control district, a noxious weed control district, a transportation
 district or authority) or any other political unit of this state,
 whether created by or pursuant to the constitution or a local,
 special, or general law, that is authorized to impose and is
 imposing value added taxes even if the governing body of another
 political unit determines the tax rate for the unit or otherwise
 governs its affairs.
 (4)  "Municipality" means any incorporated city, town
 or village, including but not limited to a home-rule city.
 (5)  "Person" means any individual natural person or
 any partnership, corporation, limited liability company, trust, or
 other legal entity.
 (6)  "Place of business of the taxpayer" means an
 established outlet, office, or location operated by the taxpayer or
 the taxpayer's agent or employee for the purpose of receiving
 orders for supply of services or property and includes any location
 at which three or more orders are received by the taxpayer during a
 calendar year. A warehouse, storage yard, or manufacturing plant
 is not a "place of business of the taxpayer" unless at least three
 orders are received by the taxpayer during the calendar year at the
 warehouse, storage yard, or manufacturing plant. An outlet, office,
 facility, or any location that contracts with a commercial business
 to process for that business invoices, purchase orders, bills of
 lading, or other equivalent records onto which value added tax is
 added, including an office operated for the purpose of buying and
 selling taxable services or property to the commercial business, is
 not a "place of business of the taxpayer" if the comptroller
 determines that the outlet, office, facility, or location functions
 or exists to avoid the tax imposed by this chapter or to rebate a
 portion of the tax imposed by this chapter to the contracting
 business. Notwithstanding any other provision of this subdivision,
 a kiosk is not a "place of business of the taxpayer." In this
 subdivision, "kiosk" means a small stand-alone area or structure
 that:
 (A)  is used solely to display merchandise or to
 submit orders for taxable services or property from a data entry
 device, or both;
 (B)  is located entirely within a location that is
 a place of business of another taxpayer, such as a department store
 or shopping mall; and
 (C)  at which taxable goods or services are not
 available for immediate delivery to a customer.
 (7)  "Place of supply" means:
 (A)  in the case of goods and other tangible
 personal property, the location in this state at which the customer
 or its agent acquires actual custody and control of such goods or
 other tangible personal property,
 (B)  in the case of services or intangible
 personal property, the taxpayer's place of business in this state
 or, if more than one, (i) the place of business in this state where
 the order is first placed by the customer, provided that the order
 is placed in person or, if (i) does not apply, (ii) the place of
 business in this state most involved in consummating the supply in
 question or, if neither (i) nor (ii) apply, the location in this
 state at which the service or intangible personal property is
 performed or otherwise delivered, and
 (C)  in the case of real property, including but
 not limited to all property in the nature of fixtures thereto, the
 situs of such property in this state.
 (8)  "Service" includes, without limitation of its more
 general meaning, any service received by the customer either
 directly or indirectly through any electronic, digital or
 telephonic medium or other means of remote access, and, for the
 avoidance of doubt, includes electronic delivery or transmission of
 data, software, music, video, photographs, writings or other
 informational content or interactive service.
 (9)  "Supply" means to sell, transfer, barter,
 exchange, license, let, lease, loan, rent or render to any other
 person any service or property in consideration for payment or
 other receipt of value.
 (10)  "Tangible personal property" means personal
 property that can be seen, weighed, measured, felt, or touched or
 that is perceptible to the senses in any other manner.
 (11)  (A) "Taxable receipts" means the aggregate value
 of payments or other consideration received by a taxpayer on
 account of its supply in this state of services and property on
 which the value added tax is imposed under this chapter, without a
 deduction for the cost of:
 (i)  the service or property supplied;
 (ii)  the materials used, labor or service
 employed, interest, losses, or other expenses; or
 (iii)  transportation or installation
 incident to the supply of the service or property.
 (B)  "Taxable receipts" does not include:
 (i)  discounts and refunds given by the
 taxpayer if separately identified to the customer by such means as
 an invoice, billing, sales slip or ticket, or contract,
 (ii)  the face value of United States coin or
 currency in a sale of that coin or currency in which the total
 consideration given by the customer exceeds the face value of the
 coin or currency, or
 (iii)  a voluntary gratuity or a reasonable
 mandatory charge for the service of a meal or food products,
 including soft drinks and candy, for immediate human consumption
 when the service charge is separated from the sales price of the
 meal or food product and identified as a gratuity or tip and when
 the total amount of the service charge is disbursed by the employer
 to employees who customarily and regularly provide the service.
 (C)  The "taxable receipts" arising from
 membership in a private club or organization consist of the dues,
 fees, and other charges and assessments, including initiation fees,
 required for membership or a special privilege, status, or
 membership classification in the club or organization.
 (10)  "Taxpayer" means any person who, but for an
 exemption established for such person under Subchapter D of this
 chapter, would be subject to the value added tax under the terms of
 Section 220.101 or, for purposes of reporting, collections and
 enforcement, under the terms of the provisions permitting direct
 payment by direct payment permit holders.
 (11)  "Value added tax" means any tax so called and
 imposed by this state, any local taxing unit in this state, and any
 transit authority in this state having the power to impose such a
 tax under applicable provisions of the laws of this state.
 [Sections 220.008-220.050 reserved for expansion]
 SUBCHAPTER B.  ADMINISTRATION AND RECORDS
 Sec. 220.051.  RULES. The comptroller shall adopt and
 prescribe reasonable rules and forms that are consistent with this
 chapter for the administration, collection, reporting and
 enforcement of its provisions, including but not limited to rules
 related to reporting requirements under this chapter and
 apportioning supplies of services and property to this state and
 its political subdivisions.
 Sec. 220.052.  EMPLOYEES. The comptroller may employ
 accountants, auditors, investigators, assistants, and clerks for
 the administration of this chapter and may delegate to employees
 the authority to conduct hearings, prescribe rules, and perform
 other duties required by this chapter.
 Sec. 220.053.  RETROACTIVE EFFECT OF RULES. The comptroller
 may prescribe the extent to which a rule or ruling shall be applied
 without retroactive effect.
 Sec. 220.054  INVESTIGATIONS AND AUDITS. (a) The
 comptroller, or another person authorized by the comptroller in
 writing, may examine, copy, and photograph the books, records,
 papers, and equipment of a person who engages in a taxable supply of
 services or property and may investigate the character of the
 business of the person to verify the accuracy of the person's report
 or to determine the amount of tax that may be required to be paid if
 no report has been filed.
 (b)  For the purpose of determining the amount of tax
 collected and payable to the state, the amount of tax accruing and
 due, and whether a tax liability has been incurred under this
 chapter, the comptroller or a person authorized by the comptroller
 may:
 (1)  inspect at any time during business hours any
 business premises where a taxable event has occurred and examine,
 copy, and photograph the books, returns, records, papers, and
 equipment relating to the conduct in question; and
 (2)  require by delivery of written notice to the
 taxpayer or to an employee, representative, or agent of the
 taxpayer that, not later than the 10th working day after the date
 the notice is delivered, the taxpayer produce to an agent or
 designated representative of the comptroller for inspection the
 books, records, papers, and returns relating to the taxable
 activity stated in the notice.
 Sec. 220.055.  MANAGED AUDITS. (a) In this section,
 "managed audit" means a review and analysis of invoices, checks,
 accounting records, or other documents or information to determine
 a taxpayer's liability for tax under this chapter.
 (b)  A managed audit may be limited to certain categories of
 liability under this chapter, including tax on:
 (1)  supplies made by the taxpayer of one or more types
 of services or property;
 (2)  supplies made to the taxpayer of one or more types
 of services or property;
 (3)  supplies made to the taxpayer under a direct
 payment permit; or
 (4)  any other category specified in an agreement
 authorized by this section.
 (c)  The comptroller may, in a written agreement, authorize a
 taxpayer to conduct a managed audit under this section. The
 agreement must:
 (1)  be signed by an authorized representative of the
 comptroller and the taxpayer; and
 (2)  specify the period to be audited and the procedure
 to be followed.
 (d)  In determining whether to authorize a managed audit, the
 comptroller may consider, in addition to other factors the
 comptroller considers relevant:
 (1)  the taxpayer's history of tax compliance;
 (2)  the amount of time and resources the taxpayer has
 available to dedicate to the audit;
 (3)  the extent and availability of the taxpayer's
 records; and
 (4)  the taxpayer's ability to pay any expected
 liability.
 (e)  The decision to authorize or not authorize a managed
 audit rests solely with the comptroller.
 (f)  The comptroller may examine records and perform reviews
 that the comptroller determines are necessary before the audit is
 finalized to verify the results of the audit.
 (g)  Unless the audit or information reviewed by the
 comptroller under Subsection (f) discloses fraud or willful evasion
 of the tax, the comptroller may not assess a penalty and may waive
 all or part of the interest that would otherwise accrue on any
 amount identified to be due in a managed audit. This subsection
 does not apply to any amount collected by the taxpayer that was a
 tax or represented to be a tax but that was not reported as such to
 this state.
 (h)  Except as provided by Section 111.104(f), the taxpayer
 is entitled to a refund of any tax overpayment disclosed by a
 managed audit under this section.
 Sec. 220.056.  PERSONS WHO MAY BE REGARDED AS SUPPLIERS. If
 the comptroller determines that it is necessary for the efficient
 administration of this chapter to regard a salesman,
 representative, peddler, or canvasser as the agent of a dealer,
 distributor, supervisor, or employer under whom he operates or from
 whom he obtains the tangible personal property that he supplies to
 others, whether or not the supply is made in his own behalf or for
 the dealer, distributor, supervisor, or employer, the comptroller
 may so regard the salesman, representative, peddler, or canvasser,
 and may regard the dealer, distributor, supervisor, or employer as
 the supplier for the purpose of this chapter.
 Sec. 220.057.  RECORDS REQUIRED TO BE KEPT. (a) All
 taxpayers shall keep the following records in the form the
 comptroller requires:
 (1)  records of all gross receipts, including
 documentation in the form of receipts, shipping manifests,
 invoices, and other pertinent papers, from each taxable supply of
 services or property made by such taxpayer during each reporting
 period;
 (2)  records in the form of receipts, shipping
 manifests, invoices, and other pertinent papers from each taxable
 supply of services or property made to such taxpayer from every
 source during each reporting period;
 (3)  records in the form of receipts, shipping
 manifests, invoices, and other pertinent papers that substantiate
 each claimed deduction, credit, refund or exclusion authorized by
 law; and
 (4)  records in the form of sales receipts, invoices,
 or other equivalent records showing all value added tax, and any
 money represented to be value added tax, received or collected on
 each taxable supply of services or property made by such supplier
 during each reporting period.
 (b)  A record required by Subsection (a) shall be kept for
 not less than four years from the date that it is made unless:
 (1)  the comptroller authorizes in writing its
 destruction at an earlier date; or
 (2)  other applicable provisions of law require that
 the record be kept for a longer period.
 Sec. 220.058.  OUT-OF-STATE RECORDS. A taxpayer is entitled
 to keep or store the taxpayer's records outside this state. If the
 comptroller requests to examine a record kept or stored outside
 this state, the taxpayer shall bring the record into this state for
 the examination or permit the comptroller to examine the record at
 the out-of-state location.
 Sec. 220.059.  CONFIDENTIALITY OF TAX INFORMATION. (a)
 Information in or derived from a record, report, or other
 instrument required to be furnished under this chapter is
 confidential and not open to public inspection, except for
 information set forth in a lien filed under this title or a permit
 issued under this chapter to a supplier and except as provided by
 Subsection (c) of this section.
 (b)  Information secured, derived, or obtained during the
 course of an examination of a taxpayer's books, records, papers,
 officers, or employees, including the business affairs,
 operations, profits, losses, and expenditures of the taxpayer, is
 confidential and not open to public inspection except as provided
 by Subsection (c) of this section.
 (c)  This section does not prohibit:
 (1)  the examination of information, if authorized by
 the comptroller, by another state officer or law enforcement
 officer, by a tax official of another state, by a tax official of
 the United Mexican States, or by an official of the United States if
 a reciprocal agreement exists;
 (2)  the delivery to a taxpayer, or a taxpayer's
 authorized representative, of a copy of a report or other paper
 filed by the taxpayer under this chapter;
 (3)  the publication of statistics classified to
 prevent the identification of a particular report or items in a
 particular report;
 (4)  the use of records, reports, or information
 secured, derived, or obtained by the attorney general or the
 comptroller in an action under this chapter against the same
 taxpayer who furnished the information;
 (5)  the delivery to a successor, receiver, executor,
 administrator, assignee, or guarantor of a taxpayer of information
 about items included in the measure and amounts of any unpaid tax or
 amounts of tax, penalties, and interest required to be collected;
 (6)  the delivery of information to a municipality,
 county, or other local governmental entity in accordance with
 Section 321.3022, 322.2022, or 323.3022; or
 (7)  the release of information in or derived from a
 record, report, or other instrument required to be furnished under
 this chapter by a governmental body, as that term is defined in
 Section 552.003, Government Code.
 Sec. 220.060.  REMEDIES NOT EXCLUSIVE. An action taken by
 the comptroller or the attorney general under this chapter is not an
 election to pursue one remedy to the exclusion of any other remedy
 authorized by this chapter.
 Sec. 220.061.  TAXPAYER'S COLLECTION OF TAX AND ISSUANCE OF
 RECEIPTS AND RECORDS. (a) Each taxpayer shall collect the value
 added tax due on each taxable supply of services and property and,
 upon receiving payment or other value in consideration for such
 supply, issue a written or printed receipt to the customer clearly
 and separately stating both the taxable value of the service or
 property supplied and the percent and amount of each value added tax
 (state and local) imposed with respect to such transaction.
 (b)  When the amount of value added tax is added, it becomes a
 part of the price of the supply, thereby becoming a debt of the
 customer to the taxpayer until paid and, if unpaid, it is
 recoverable at law in the same manner as the original supply price.
 (c)  To the extent so provided by regulations issued by the
 comptroller, such receipts shall also bear the appropriate code(s)
 assigned by the comptroller to the place of supply and local taxing
 unit or units applicable to the transaction in question.
 (d)  Subject to any requirements as to form and manner
 prescribed by the comptroller, receipts may be issued in any medium
 customarily utilized by the taxpayer for this purpose in compliance
 with applicable laws and regulations, including but not limited to
 paper, electronic, optical or other storage or display media,
 provided that they are (i) amenable to retention of copies in the
 taxpayer's records, as well as the permanent storage and ready
 access and review of such copies for purposes of audit, and (ii)
 amenable to being furnished to and retained by the customer.
 (e)  Taxpayers shall maintain adequate records of all such
 taxable transactions in the manner, and for the time periods,
 established by applicable regulations issued by the comptroller,
 which shall be in such form and detail as shall be sufficient for
 audit as necessary at all times during the periods over which the
 comptroller has the right to require audits of the taxpayer's
 taxable receipts and related transactions.
 [Sections 220.062-220.100 reserved for expansion]
 SUBCHAPTER C. IMPOSITION OF VALUE ADDED TAX
 20.101. VALUE ADDED TAX IMPOSED. A value added tax is imposed
 on any person who in this state supplies any service or property by
 in the ordinary course of a trade or business in which the person
 engages for the purpose of profit.
 Sec. 220.102.  LIABILITY FOR VALUE ADDED TAX. Value added
 tax imposed under this chapter is a liability of the taxpayer, which
 accrues at the time of supply and thereupon becomes payable in
 accordance with the accounting, reporting, remittance, collection
 and enforcement provisions of this chapter and regulations issued
 by the comptroller pursuant to this chapter.
 Sec. 220.104.  RATE OF TAX. Except in cases where a
 different rate is deemed to apply by the express provisions of this
 chapter, the rate of value added tax imposed under this chapter
 equals seven percent (7%) of the taxpayer's taxable receipts
 attributable to any applicable tax period.
 [Sections 220.105-220.150 reserved for expansion]
 SUBCHAPTER D.  EXEMPTIONS
 Sec. 220.151.  EXEMPTION -- SMALL BUSINESSES. A person is
 exempted from the tax imposed by this chapter for any calendar
 quarter in which:
 (1)  the amount of value added tax computed for the
 person during that calendar quarter is less than $1000; or
 (2)  the amount of the person's total taxable receipts
 during the 12-month period preceding the end of the calendar
 quarter is less than or equal to $100,000.
 Sec. 220.152.  EXEMPTION -- GOVERNMENTAL ENTITIES. Each of
 the following governmental entities is exempted from the tax
 imposed by this chapter on services or property supplied by such
 entities to other persons:
 (1)  the United States;
 (2)  an unincorporated instrumentality of the United
 States;
 (3)  a corporation that is an agency or instrumentality
 of the United States and is wholly owned by the United States or by
 another corporation wholly owned by the United States;
 (4)  this state;
 (5)  a county, municipality, school district, special
 district, or other political subdivision of this state;
 (6)  another state, district or territory of the United
 States, or a governmental unit of such state, district or
 territory.
 Sec. 220.153.  EXEMPTION -- RELIGIOUS, EDUCATIONAL, AND
 PUBLIC SERVICE ORGANIZATIONS. (a) Each of the following types of
 entities is exempted from the tax imposed by this chapter on
 services or property supplied by such entities to other persons:
 (1)  an organization created for religious,
 educational, or charitable purposes if no part of the net earnings
 of the organization benefits a private shareholder or individual;
 (2)  an organization qualifying for an exemption from
 federal income taxes under Section 501(c)(3), (4), (8), (10) or
 (19), Internal Revenue Code, if the service or property supplied by
 the organization relates to its exempt purpose and no part of the
 proceeds go to benefit a private individual except as a part of the
 services of a purely public charity;
 (3)  a nonprofit corporation organized under the laws
 of this state for the purpose of encouraging agriculture by the
 maintenance of public fairs and exhibitions of livestock if no
 individual receives a private benefit; or
 (4)  a nonprofit organization engaged exclusively in
 providing athletic competition among persons under 19 years old if
 no financial benefit goes to an individual or shareholder;
 (5)  a company, department, or association organized
 for the purpose of answering fire alarms and extinguishing fires or
 for the purpose of answering fire alarms, extinguishing fires, and
 providing emergency medical services, the members of which receive
 no compensation or only nominal compensation for their services
 rendered; or
 (6)  a chamber of commerce or a convention and tourist
 promotional agency representing at least one Texas city or county
 if the chamber of commerce or the agency is not organized for profit
 and no part of its net earnings inures to a private shareholder or
 other individual.
 (b)  The sale of, or contracting for the sale of, concessions
 at an event conducted by an organization exempted under Subsection
 (a)(4) of this section does not prevent the application of the
 exemption to that organization.
 (c)  A nonprofit hospital or hospital system that qualifies
 for an exemption under Subsection (a)(2) shall provide community
 benefits that include charity care and government-sponsored
 indigent health care as set forth in Subchapter D, Chapter 311,
 Health and Safety Code.
 (d)  For purposes of obtaining a refund of or claiming a
 credit for taxes paid under this chapter on the basis of an
 exemption under this section, an organization is not considered
 exempted from the taxes imposed by this chapter before the earlier
 of:
 (1)  the date the organization applied for the
 exemption with the comptroller; or
 (2)  the date of assessment of the organization's tax
 liability by the comptroller as a result of an audit, as applicable.
 [Sections 220.154-220.200 reserved for expansion]
 SUBCHAPTER E. EXCLUSIONS
 Sec. 220.201.  SERVICES AND/OR PROPERTY EXCLUDED FROM THE
 VALUE ADDED TAX.  The services and property specified in this
 subchapter E are excluded from the application of the tax imposed by
 this chapter:
 Sec. 220.202.  MONETARY INSTRUMENTS, FINANCIAL ASSETS AND
 INVESTMENTS.
 (a)  The issuance, transfer, assignment or exchange of
 property in the nature of monetary instruments or financial assets
 and investments are excluded from the application of the value
 added tax.
 (b)  As used in this section, the term "monetary instruments"
 means currency, coin, checks, drafts and other negotiable
 instruments, money orders, cash cards or other instruments used
 generally as an equivalent substitute for cash, as well as wire
 transfers, money transmissions and similar transactions effected
 via electronic communication networks.
 (c)  As used in this section, the term "financial assets and
 investments" includes:
 (1)  insurance coverage for which a premium is paid or
 commissions paid to insurance agents for the sale of insurance or
 annuities;
 (2)  corporate shares, partnership interests,
 beneficial interest in a trust, or other ownership interests in a
 legal entity, whether certificated or uncertificated;
 (3)  bonds, debentures, notes, or other evidence of
 indebtedness or promises to pay value;
 (4)  investments in any open-end investment company, as
 defined by the Investment Company Act of 1940 (15 U.S.C. Section
 80a-1 et seq.), that is subject to that Act and that is registered
 under The Texas Securities Act; and
 (5)  the account value of interests in pension funds,
 brokerage funds, deposit accounts and distributions therefrom;
 provided, that the constituent materials and services utilized to
 produce physical representations of such instruments are not so
 excluded when sold in bulk or customized for subsequent use.
 (d)  The exclusion of services and property by this section
 does not operate to exclude any related service or property,
 whether or not such related service or property is supplied at the
 time of, or in connection with, or in the supply of the excluded
 service or property. For the avoidance of doubt, fees, charges,
 commissions, premiums, interest or other payments to which the
 taxpayer is entitled above and beyond the principal or investment
 value of the financial asset or investment to which payments relate
 are not excluded from the application of the value added tax.
 Sec. 220.203.  INTERCOMPANY SERVICES.
 (a)  Service or property transactions among affiliated
 entities, at least one of which is a corporation, that report their
 income to the Internal Revenue Service on a single consolidated
 return for the tax year in which the transaction occurs, are
 excluded from the application of the value added tax. For this
 purpose, "affiliated entity" includes an entity that would be
 classified as a member of an affiliated group under 26 U.S.C.
 Section 1504 but for the exclusions provided by that section.
 (b)  Service or property transactions between a legal entity
 disregarded by the Internal Revenue Service and any person
 controlling, controlled by, or under common control with such
 entity are excluded from the application of the value added tax.
 (c)  Services rendered to a legal entity by one or more of its
 directors, officers, managers or other principals in the ordinary
 course of fulfilling their responsibilities in those roles but
 outside of an employment relationship are excluded from the
 application of the value added tax.
 Sec. 220.204.  EMPLOYMENT SERVICES. The following services
 are excluded from the application of the value added tax:
 (1)  services rendered by an employee to his or her
 employer in the ordinary course of the employment relationship for
 which the employee is paid his or her regular wages or salary;
 (2)  a service performed by an employee of a temporary
 employment service as defined by Section 93.001, Labor Code, for an
 employer to supplement the employer's existing work force on a
 temporary basis, when the service is normally performed by the
 employer's own employees, the employer provides all supplies and
 equipment necessary, and the help is under the direct or general
 supervision of the employer to whom the help is furnished; or
 (3)  a service performed by assigned employees of a
 staff leasing company, either licensed under Chapter 91, Labor
 Code, or exempt from the licensing requirements of that chapter,
 for a client company under a written contract that provides for
 shared employment responsibilities between the staff leasing
 company and the client company for the assigned employees, most of
 whom must have been previously employed by the client company.
 The comptroller shall prescribe by rule the minimum percentage of
 assigned employees that must have been previously employed by the
 client company, the minimum time period the assigned employees must
 have been employed by the client company prior to the commencement
 of its contract, and such other criteria as the comptroller may deem
 necessary to properly implement this section.
 Sec. 220.205.  INCIDENTAL TRANSACTIONS. The following
 transactions are excluded from the application of the value added
 tax:
 (1)  less than five incidents of supplying services or
 property during a 12-month period by a person who does not
 habitually engage, or hold himself out as engaging, in the business
 of supplying such services or property;
 (2)  the sale of all or substantially all of the entire
 operating assets of a business or of a separate division, branch, or
 identifiable segment of a business;
 (3)  a transfer of all or substantially all the
 property used by a person in the course of an activity if after the
 transfer the real or ultimate ownership of the property is
 substantially similar to that which existed before the transfer;
 (4)  the supply of tangible personal property by an
 individual if:
 (A)  the property was originally acquired by the
 individual or a member of the individual's family for the personal
 use of the individual or the individual's family;
 (B)  the person who does not habitually engage, or
 hold himself out as engaging, in the business of supplying such
 property;
 (C)  the individual does not employ an auctioneer,
 broker, or factor, other than an online auction, to supply the
 property; and
 (D)  the total receipts from supplying the
 individual's tangible personal property in a calendar year do not
 exceed $3,000;
 (5)  soliciting orders of the services or property in
 question to be sent outside this state for approval or rejection by
 the vendor and, if approved, to be filled by the vendor from a point
 outside this state, although the act of soliciting such orders may
 itself be considered to constitute a service rendered to the
 vendor.
 Sec. 220.206.  TRANSFERS OF COMMON INTERESTS IN PROPERTY.
 If an interest in property is sold, under the terms of a good faith,
 bona fide contractual relationship, to another person who either
 before or after the sale owned or owns a joint or undivided interest
 in the property with the seller, and if the taxes imposed by this
 chapter have previously been paid on the property, the sale of such
 interest in property is excluded from the taxes imposed by this
 chapter.
 Sec. 220.207.  EXCLUSIONS REQUIRED BY PREVAILING LAW. Any
 supply of service or property that this state is prohibited from
 taxing by the law of the United States, the United States
 Constitution, or the Constitution of Texas is excluded from the
 taxes imposed by this chapter.
 [Sections 220.208-220.250 reserved for expansion]
 SUBCHAPTER F. INPUT TAX AND OUTPUT TAX
 Sec. 220.251.  "INPUT TAX". "Input tax" means, in relation
 to a taxpayer, the aggregate value added tax accrued in respect of
 the services and property supplied to such taxpayer during a given
 calendar quarter, but only to the extent that such services and
 property are used or held for use in the first instance by such
 taxpayer in the ordinary course of its trade or business. The input
 taxes attributable to any such service or property that is diverted
 to personal use of an owner, director, officer or other principal of
 the taxpayer shall be deducted from the input taxes calculated for
 the calendar quarter during which such diversion took place.
 Sec. 220.252.  "OUTPUT TAX". "Ouput tax" means, in relation
 to a taxpayer, the aggregate value added tax accrued in respect of
 the services and property supplied by such taxpayer during a given
 calendar quarter.
 [Sections 220.253-220.300 reserved for expansion]
 SUBCHAPTER G. REPORTS AND PAYMENTS
 Sec. 220.301.  REPORTS. (a) A person required to pay a tax
 under this chapter shall report to the comptroller on the last day
 of January, April, July, and October of each year.
 (b)  The comptroller may require a taxpayer to file a return
 or pay the taxes imposed by this chapter for a period other than a
 monthly period if necessary to ensure the payment or to facilitate
 the collection of the taxes due.
 (c)  A requirement under subsection (b) of this section may
 by rule be made generally applicable to suppliers providing
 amusement services at locations other than the regular business
 establishment of the supplier or to suppliers who provide amusement
 services and who have no regular business establishment in this
 state.
 Sec. 220.302.  CONTENTS AND FORM OF REPORT. (a) A tax
 report required by this chapter must include a statement of:
 (1)  the taxpayer's aggregate taxable receipts;
 (2)  the aggregate value of all taxable supplies of
 services and property made by the taxpayer to its customers,
 (3)  the aggregate value of taxable supplies of
 services and property made to the taxpayer by its suppliers, and
 (4)  the aggregate output taxes and input taxes that
 accrued during the preceding quarterly period;
 together with any other information that the comptroller reasonably
 determines to be necessary for the proper administration of this
 chapter.
 (b)  A report must also itemize the individual taxable
 transaction values and, by reference to the appropriate code(s)
 assigned by the comptroller, the place of supply and local taxing
 unit or units applicable to each of the transactions comprising the
 input and output taxes being reported.
 (c)  A report must also reflect adjustments to previously
 reported amounts made as a result of subsequent review or changes in
 circumstance
 (d)  The comptroller by rule may determine the manner of
 reporting taxable proceeds from rentals and leases of tangible
 personal property.
 (e)  The report must be in the form as prescribed by the
 comptroller.
 (f)  A tax report must be signed by the person required to
 file it or by the person's authorized agent.
 Sec. 220.303.  ACCOUNTING BASIS FOR REPORTS. A taxpayer
 whose regular books are kept on a cash basis, accrual basis, or some
 other generally recognized accounting basis that accurately
 reflects the operation of the business may file the tax reports
 required by this chapter on the same basis that is used for the
 taxpayer's regular books.
 Sec. 220.304.  REPORTS AND PAYMENTS: WHERE MADE. A tax
 report or tax payment shall be delivered to the office of the
 comptroller.
 Sec. 220.305.  METHOD OF REPORTING VALUE ADDED TAX: GENERAL
 RULE. A taxpayer shall compute the value added tax imposed by this
 chapter by multiplying the cumulative percentage value added tax
 rates of all applicable taxing entities (i.e., the state and all
 applicable local taxing units) with respect to each transaction
 times the taxable receipts attributable to each such transaction.
 Sec. 220.306.  METHOD OF REPORTING: SUPPLIERS HAVING SALES
 BELOW TAXABLE AMOUNT. (a) If not less than 50 percent of the total
 receipts of a person from the supply of non-excluded services and
 property comes from separate transactions in which the supply price
 is an amount on which no tax is produced, the supplier may exclude
 the receipts from those transactions when reporting and paying the
 value added tax.
 (b)  A supplier may not exclude any receipts from supplies as
 permitted under aubsection (a) of this section unless the supplier
 has received from the comptroller before the filing of the tax
 report written approval allowing the exclusion, and all receipts
 from otherwise taxable supplies of services and property are
 subject to the tax until the approval is granted.
 (c)  The comptroller shall approve the reporting and
 computation of the value added tax as permitted under Subsection
 (a) of this section by a supplier if the supplier qualifies for the
 exclusion and submits to the comptroller satisfactory evidence that
 the supplier can and will maintain records adequate to substantiate
 the authorized exclusion.
 Sec. 220.307.  DIRECT PAYMENT OF TAX BY CUSTOMER. (a) The
 holder of a direct payment permit issued by the comptroller may give
 a blanket exemption certificate to taxpayers who supply services or
 property to the holder of the direct payment permit. The blanket
 exemption certificate covers all future taxable supplies of
 services or property to the permit holder and relieves the supplier
 of the obligation of collecting the taxes imposed by this chapter
 from the permit holder.
 (b)  A blanket exemption certificate given under this
 section must contain the direct payment permit number and the
 statement that the direct payment permit holder agrees to accrue
 and pay to this state all taxes that are or may become due on the
 taxable items sold under the exemption certificate to the permit
 holder.
 Sec. 220.308.  ISSUANCE OF DIRECT PAYMENT PERMIT. (a) The
 comptroller shall issue a direct payment permit to an applicant for
 the permit who qualifies as provided by Section 220.309 of this
 chapter.
 (b)  The comptroller is the sole judge of an applicant's
 qualifications, and the comptroller's refusal to issue a permit to
 an applicant is not appealable.
 (c)  An applicant for a direct payment permit who has been
 denied the issuance of a permit may:
 (1)  request permission from the comptroller to submit
 an amended application; or
 (2)  submit a new application for a direct payment
 permit after a reasonable period after the denial of the original
 application.
 Sec. 220.309.  APPLICATION FOR DIRECT PAYMENT PERMITS:
 QUALIFICATIONS. (a) A person desiring a direct payment permit must
 file with the comptroller a written application for the permit.
 (b)  The application must be accompanied with:
 (1)  an agreement that is signed by the applicant or a
 responsible officer of an applicant corporation, that is in a form
 prescribed by the comptroller, and that provides that the applicant
 agrees to:
 (A)  accrue and pay all taxes imposed by this
 chapter on the supply of services and property to the permit holder,
 excluding those supplies that are are excluded from the taxes
 imposed by this chapter;
 (B)  pay the imposed taxes monthly on or before
 the 20th day of the month following the end of each calendar month;
 and
 (C)  waive the discount permitted by Section
 220.313 of this code on the payment of all taxes under the direct
 payment permit only;
 (2)  a description, in the amount of detail that the
 comptroller requires, of the accounting method by which the
 applicant proposes to differentiate between taxable and excluded
 transactions; and
 (3)  records establishing that the applicant is a
 responsible person who annually acquires services and/or property
 in taxable supply transactions aggregating $1,800,000 or more.
 Sec. 220.310.  REVOCATION OF DIRECT PAYMENT PERMIT. (a) A
 person to whom a direct payment permit has been issued holds the
 permit as a matter of revocable privilege and not as a matter of
 right. The comptroller on his own initiative may cancel a direct
 payment permit, and the cancellation is not appealable.
 (b)  A person whose direct payment permit is canceled by the
 comptroller is entitled to written notice of the cancellation,
 which shall be sent by the comptroller by registered mail.
 Sec. 220.311.  VOLUNTARY RELINQUISHMENT OF DIRECT PAYMENT
 PERMIT. (a) The holder of a direct payment permit may notify the
 comptroller that the direct payment permit is to be voluntarily
 relinquished.
 (b)  A direct payment permit and the direct payment agreement
 remain valid and enforceable until the comptroller issues a
 termination notice.
 Sec. 220.312.  CANCELLATION OR TERMINATION OF DIRECT PAYMENT
 PERMIT: DUTY OF PERMIT HOLDER. (a) On the receipt of a notice
 issued under Section 220.310 of this chapter canceling a direct
 payment permit or of a notice issued under Section 220.311 of this
 chapter terminating a direct payment permit, the person who held
 the permit shall immediately notify each supplier to whom a blanket
 exemption certificate has been given that the exemption certificate
 is no longer valid.
 (b)  The failure of a person to notify a supplier as required
 by subsection (a) of this section is a failure and refusal to pay
 the taxes imposed by this chapter by the person required to make the
 notification.
 Sec. 220.313.  REIMBURSEMENT TO TAXPAYER FOR TAX
 COLLECTIONS. A taxpayer may deduct and withhold one-half of one
 percent of the amount of taxes due from the taxpayer or direct
 permit holder on a timely return as reimbursement for the cost of
 collecting the taxes imposed by this chapter. The comptroller
 shall provide a card with each form distributed for the collection
 of taxes under this chapter. The card may be inserted by the
 taxpayer with the tax payment to provide for contribution of all or
 part of the reimbursement provided by this section for use as grants
 under Subchapter M, Chapter 56, Education Code. If the taxpayer
 chooses to contribute the reimbursement for the grants, the
 taxpayer shall include the amount of the reimbursement contribution
 with the tax payment. The comptroller shall transfer money
 contributed under this section for grants under Subchapter M,
 Chapter 56, Education Code, to the appropriate fund.
 Sec. 220.314.  DISCOUNT FOR PREPAYMENTS. (a) A taxpayer who
 prepays the taxpayer's tax liability on the basis of a reasonable
 estimate of the tax liability for a quarter in which a prepayment is
 made or for a month in which a prepayment is made may deduct and
 withhold 1.25 percent of the amount of the prepayment in addition to
 the amount permitted to be deducted and withheld under Section
 220.313 of this chapter. A reasonable estimate of the tax liability
 must be at least 90 percent of the tax ultimately due or the amount
 of tax paid in the same quarter, or month, if a monthly prepayer, in
 the last preceding year. Failure to prepay a reasonable estimate of
 the tax will result in the loss of the entire prepayment discount.
 (b)  In order to qualify for the deduction permitted by
 subsection (a) of this section, the taxpayer must make the tax
 prepayment:
 (1)  on or before the 15th day of the second month of
 the calendar quarter for which the prepayment is made if the
 taxpayer pays the tax quarterly; or
 (2)  on or before the 15th day of the month for which
 the prepayment is made if the taxpayer pays the tax monthly.
 (c)  A taxpayer who prepays the tax liability as permitted by
 this section must file a report when due as provided by this
 chapter. The amount of a prepayment made by a taxpayer under this
 section shall be credited against the amount of actual tax
 liability of the taxpayer as shown on the tax report of the
 taxpayer. If there is a tax liability owed by the taxpayer in
 excess of the prepayment credit, the taxpayer shall send to the
 comptroller the remaining tax liability at the time of filing the
 quarterly or monthly report. The taxpayer is entitled to the
 deduction permitted under Section 220.313 of this chapter on the
 amount of the remaining tax liability.
 (d)  If the amount of a prepayment exceeds the actual tax
 liability, the excess of the prepayment shall be credited against
 future tax liability of the taxpayer or refunded to the taxpayer as
 provided by Subchapter C of Chapter 111 of this code.
 Sec. 220.315.  FORFEITURE OF DISCOUNT OR REIMBURSEMENT. If
 a taxpayer fails to file a report required by this chapter when due
 or to pay the tax when due, the taxpayer forfeits any claim to a
 deduction or discount allowed under Section 220.313 or Section
 220.314 of this code.
 Sec. 220.316.  CREDITS AND REFUNDS FOR BAD DEBTS, RETURNED
 MERCHANDISE, AND REPOSSESSIONS. (a) A taxpayer may withhold the
 payment of the tax on a portion of the taxable receipts associated
 with the taxpayer's of a service or property that remains unpaid by
 the customer if:
 (1)  during the reporting period in which the supply
 occurred the taxpayer determines that the unpaid portion will
 remain unpaid;
 (2)  the taxpayer enters the unpaid portion of the
 supply price in the taxpayer's books as a bad debt; and
 (3)  the bad debt is claimed as a deduction for federal
 tax purposes during the same or a subsequent reporting period.
 (b)  If the portion of a debt determined to be bad under
 subsection (a) of this section is paid, the taxpayer shall report
 and pay the tax on the portion during the reporting period in which
 the payment is made.
 (c)  Subject to subsection (e), a supplier or any person who
 extends credit to a purchaser under a supplier's private label
 credit agreement, or an assignee or affiliate of either, is
 entitled to credit or reimbursement for taxes paid on the portion
 of:
 (1)  an account determined to be worthless and actually
 charged off for federal income tax purposes; or
 (2)  the remaining unpaid sales price of a taxable item
 when the item is repossessed under a conditional sales contract.
 (d)  A supplier is entitled to credit for the amount of taxes
 paid on the amount of a refund or credit made to a customer under a
 bona fide agreement in which the price of a taxable supply
 transaction is renegotiated. This credit applies to a refund or
 credit made under an agreement in settlement of a claim for an
 alleged breach of warranty on the taxable supply of tangible
 personal property by the supplier to the person with whom the
 agreement is made.
 (e)  A person is entitled to a credit or reimbursement
 provided by subsection (c) only if:
 (1)  the supplier remits the tax for which the credit or
 reimbursement is sought;
 (2)  all payments on an account are prorated between
 taxable and nontaxable charges; and
 (3)  the supplier or person claiming the credit or
 reimbursement provides detailed records outlining:
 (A)  the amount the customer contracted to pay;
 (B)  taxable and nontaxable charges;
 (C)  the tax collected and remitted;
 (D)  the unpaid portion of the supply price
 assigned; and
 (E)  the taxpayer number of the supplier who
 collected and remitted the tax.
 (f)  A person whose volume and character of uncollectible
 accounts warrants an alternative method of substantiating the
 reimbursement or credit may:
 (1)  maintain records other than the records specified
 in subsection (e) if:
 (A)  the records fairly and equitably apportion
 taxable and nontaxable elements of a bad debt and compute the amount
 of sales tax imposed and remitted with respect to the taxable
 charges remaining unpaid on the debt; and
 (B)  the comptroller approves the procedures
 used; or
 (2)  implement a system to report its future tax
 responsibilities based on a historical percentage calculated from a
 sample of transactions if:
 (A)  the system utilizes records provided by the
 person claiming the credit or reimbursement; and
 (B)  the comptroller approves the procedures
 used.
 (g)  The comptroller may revoke the authorization to report
 under subsection (f)(2) if the comptroller determines that the
 percentage being used is no longer representative because of:
 (1)  a change in law, including a change in the
 interpretation of an existing law or rule; or
 (2)  a change in the taxpayer's business operations.
 (h)  A person claiming a credit or reimbursement under this
 section shall remit tax on any payments received on an account that
 has been written off and claimed as a bad debt.
 (i)  For purposes of this section, "affiliate" means any
 entity or entities that would be classified as a member of an
 affiliated group under 26 U.S.C. Section 1504.
 Sec. 220.316.  CREDIT OR REIMBURSEMENT IN RETURN
 TRANSACTIONS. A supplier is entitled to a credit or reimbursement
 equal to the amount of sales tax refunded to a customer when the
 customer receives a full or partial refund of the sales price of a
 returned taxable item.
 Sec. 220.317.  DETERMINATION OF OVERPAID AMOUNTS. (a) This
 section applies to the value added tax paid in error by a person
 holding a permit under this chapter (1) on supplies of services or
 property made to such person that are excluded from the value added
 tax under the terms of this chapter, or (2) to a supplier exempt
 from the value added tax under the provisions of this chapter.
 (b)  A person to whom this section applies may compute the
 amount of overpayment by use of a projection based on a sampling of
 transactions. The sampling method used must comply with generally
 accepted sampling methods as approved by the comptroller.
 (c)  The person may obtain reimbursement for amounts
 determined to have been overpaid by taking a credit on one or more
 value added tax returns or by filing a claim for refund with the
 comptroller within the limitation period specified by Subchapter D,
 Chapter 111.
 (d)  The person must record the method by which the
 projection and computation were performed and must make available
 on request by the comptroller the records on which the projection
 and computation were based.
 (e)  The comptroller may adopt rules specifying additional
 procedures that must be followed in connection with claiming a
 credit under this section.
 Sec. 220.318.  DETERMINATION OF TAX PAYABLE. (a) The amount
 of value added tax imposed under this chapter and payable by a
 taxpayer shall equal the excess, if any, of the aggregate state and
 local output taxes reported by the taxpayer over the aggregate
 state and local input taxes reported by the taxpayer.
 Sec. 220.319.  TAX PAYMENTS: DUE DATE. Except as provided in
 Section 220.321 of this code, the taxes imposed by this chapter are
 due and payable to the comptroller on the last day of January,
 April, July, and October of each year, except that a tax due for a
 business day that falls in two different calendar quarters is
 allocated to the calendar quarter in which the business day begins.
 Sec. 220.320.  PAYMENT. The tax due for the preceding
 calendar quarter shall accompany the return and is payable to the
 state.
 Sec. 220.321.  PAYMENT OF TAX FOLLOWING BUSINESS
 REORGANIZATION. (a) If a person that begins business on or after
 the first day of the quarter is an incorporation, reincorporation,
 or survivor of a merger of a person or persons that were previously
 subject to a tax under this chapter, its report required under this
 subchapter must show the combined taxable receipts, output tax and
 input tax, respectively, during the preceding quarterly period of
 the person or persons that were incorporated, reincorporated, or
 merged to form the new entity. The value added tax provided for in
 this chapter must be paid on the reported combined value added
 required under this subsection.
 Sec. 220.322.  ADDITIONAL REPORTS. The comptroller may
 require a person required to report under this chapter to supply
 additional or supplemental reports containing information
 necessary to compute the tax due.
 Sec. 220.323.  DETERMINATION AFTER THE FILING OF A REPORT.
 If a person has filed a tax report, the comptroller may issue a
 deficiency determination under Section 111.008 of this code.
 Sec. 220.324.  DETERMINATION IF NO REPORT FILED. (a) If a
 person fails to file a report, the comptroller shall estimate the
 amounts that would have been required to be included in a report
 filed under this chapter for each period or the total period for
 which the person failed to report as required by this chapter.
 (b)  The estimate required by subsection (a) of this section
 may be made on any information available to the comptroller.
 (c)  On the basis of the estimate, the comptroller shall
 compute and determine the amount required to be paid to the state
 for each period.
 (d)  The comptroller shall add to the determination an amount
 equal to 10 percent of the amount computed under subsection (c) of
 this section as a penalty.
 (e)  A determination under this section may be issued for one
 or more periods, and more than one determination may be issued for a
 single period.
 Sec. 220.325.  DETERMINATION WHEN A BUSINESS IS
 DISCONTINUED. If a business is discontinued, the comptroller may
 make a determination of tax liability under this chapter before the
 date a report or tax payment is due with respect to the discontinued
 business.
 Sec. 220.326.  WHEN DETERMINATION BECOMES FINAL. A
 determination made under Section 220.324 or Section 220.325 of this
 chapter becomes final on the expiration of 30 days after the day on
 which the determination was served by personal service or by mail,
 unless a petition for a redetermination is filed before the
 determination becomes final.
 Sec. 220.327.  LIMITATIONS ON DETERMINATION. (a) A notice
 of a deficiency determination must be personally served or mailed
 within the period provided by Subchapter D, Chapter 111 of this code
 after the last day of the calendar month following the close of the
 regular reporting period of the taxpayer for which the amount is
 proposed to be determined or within the period provided by
 Subchapter D, Chapter 111 of this code after the report is filed,
 whichever period expires the later.
 (b)  The limitations provided by subsection (a) of this
 section do not apply to a determination proposed to be made for the
 collection of an amount of value added tax on the taxable supply of
 services or property if a deficiency notice has been given or is
 given for the collection of the use tax on the same taxable supply.
 Sec. 220.328.  OFFSETS. In making a determination, the
 comptroller may offset an overpayment for one or more periods
 against an underpayment, penalty, and interest accrued on the
 underpayment for the same period or one or more other periods. Any
 interest accrued on the overpayment shall be included in the
 offset.
 Sec. 220.329.  PETITION FOR REDETERMINATION. A person
 petitioning for a redetermination of a determination made under
 Section 111.022 must file, before the determination becomes final,
 security as the comptroller requires to ensure compliance with this
 chapter. The security may be sold by the comptroller in the manner
 provided by Subchapter A, Chapter 111.
 Sec. 220.330.  HEARING ON REDETERMINATION. (a) If a
 petition for a redetermination is filed before the determination
 becomes final, the petitioner is entitled on a request stated in the
 petition to an oral hearing on the redetermination and to at least
 20 days' notice of the time and place of the hearing.
 (b)  The comptroller may continue the hearing from time to
 time as is necessary.
 Sec. 220.331.  REDETERMINATION. (a) The comptroller may
 decrease the amount of a determination at any time before the
 determination becomes final.
 (b)  The comptroller may increase the amount of a
 determination that is not final if the additional claim is asserted
 by the comptroller at or before a hearing on a redetermination.
 (c)  If an additional claim is asserted, the petitioner is
 entitled to a 30-day continuance of the hearing to permit the
 petitioner to obtain and present evidence applicable to the items
 on which the additional claim is based.
 Sec. 220.332.  INTEREST. Unpaid taxes imposed by this
 chapter draw interest beginning 60 days after the date on which the
 tax or the amount of the tax required to be collected became due and
 payable to the state.
 Sec. 220.333.  NOTICES. The comptroller shall give notice
 of a determination made under this subchapter promptly as provided
 by Sections 111.008(b) and (c) of this code. Any other notice
 required by this subchapter shall be given in the same manner.
 Notices under this subchapter are effective as provided by Section
 111.008(c) of this code.
 [Sections 220.334-220.350 reserved for expansion]
 SUBCHAPTER H.  REFUNDS AND RELIEF
 Sec. 220.351.  REFUNDS TO EXEMPT ORGANIZATIONS. Any person
 meeting the criteria of an organization exempt under subchapter D
 from the tax imposed under this chapter during any calendar quarter
 shall be entitled to claim a refund from the comptroller of input
 taxes accrued by that organization with respect to the calendar
 quarter in question in accordance with the provisions of this
 subchapter and regulations issued by the comptroller for this
 purpose.
 Sec. 220.352.  FILING OF CLAIMS. (a) The person seeking to
 claim a refund shall file a report with the comptroller on the last
 day of the month following the end of the calendar quarter with
 respect to which such claim relates.
 (b)  The report must include a statement of the person's
 aggregate input taxes accrued during such calendar quarter, and a
 certification to the effect that (i) the services and property on
 the supply of which such input taxes accrued relate to the exempt
 purpose of the person and (ii) such services and/or property has not
 been, is not being and will not be used for the personal benefit of a
 private individual except as part of the services of a purely public
 charity.
 (c)  The report must also include an itemized apportionment
 of the input taxes reported among the various counties,
 municipalities, school districts, special districts and other
 political subdivisions of this state to which such taxes are
 allocable under the provisions of this chapter and regulations
 issued by the comptroller for this purpose. The person filing the
 report shall have discharged its responsibility in this respect if
 it accurately reports the local taxing unit code assigned to such
 supply transactions by the supplier(s) in question and reflected on
 the receipt issued as required by this chapter.
 (d)  A report shall also reflect adjustments to previously
 reported amounts made as a result of subsequent review or changes in
 circumstance, and any credits or deductions resulting from such
 adjustments shall be included in the determinations made under this
 subchapter, but separately identified as such.
 Sec. 220.353.  DETERMINATION AND PAYMENT OF REFUND. The
 comptroller shall determine the extent to which the person filing
 the report is entitled to the refund claim and shall issue payment
 in the amount so determined to the person as soon as practicable
 following such determination.
 [Sections 220.354-220.400 reserved for expansion]
 SUBCHAPTER I. APPORTIONMENT AND ALLOCATION OF VALUE ADDED TAX
 REVENUES
 Sec. 220.401.  ANALYSIS AND COMPILATIONS. (a) The
 comptroller shall conduct such analyses and compilations of reports
 received under this chapter as shall be necessary to properly
 apportion among all of the local taxing units the value added taxes
 collected hereunder on the basis of the place at which the supply of
 the service or property in question is deemed under this chapter to
 have taken place.
 (b)  In performing these calculations, the comptroller shall
 compute:
 (1)  the aggregate value added taxes for each local
 taxing unit that were included in reports of output taxes;
 (2)  the aggregate input taxes reported by each such
 taxpayer as having their place of supply in each local taxing unit;
 (3)  the proportionate attribution to various local
 taxing entities of each such taxpayer's reported aggregate input
 taxes, with such attribution being determined for each such
 taxpayer in proportion to the ratio that the amount determined
 under subdivision (3) for each local taxing unit bears to the amount
 determined under subdivision (2);
 (4)  the aggregate reported input taxes attributed to
 each local taxing unit for all taxpayers under subdivision (3); and
 (5)  the extent to which the amount determined under
 subdivision (1) for each local taxing unit exceeds or falls short of
 the amount determined under subdivision (5) for each same local
 taxing unit.
 The amount so determined under subdivision (5), if an excess, shall
 be credited as an apportionment to the local taxing unit for the
 period in question and, if a shortfall, shall be debited against
 apportionments to the local taxing unit for the period in question.
 Sec. 220.402.  LOCAL TAXING UNIT CODES. For this purpose,
 the comptroller shall establish and maintain a system whereby each
 local taxing unit is assigned a unique alphanumeric code to be
 utilized by all persons filing reports under this chapter in
 reporting the place of supply for all taxable receipts. The
 comptroller shall utilize this coding system in the preparation and
 distribution of reports concerning apportionment among taxing
 entities.
 Sec. 220.403.  AGGREGATION OF TAXES AND REFUNDS. In
 determining the apportionments appropriate for any given calendar
 period, the comptroller shall reduce the reported output taxes
 attributable to each local taxing unit by the amount of refunds,
 credits, deductions or offsets determined to be issuable to
 taxpayers or exempted persons with respect to those reported output
 taxes during that same calendar period on account of exemptions or
 exclusions provided under this chapter.
 Sec. 220.404.  COMPTROLLER TO COLLECT AND ADMINISTER LOCAL
 TAXING UNIT VALUE ADDED TAXES. The comptroller shall administer,
 collect, and enforce any value added tax imposed by a local taxing
 unit under Title 3, Local Taxes. The taxes imposed under this
 chapter and the taxes imposed under Title 3 shall be collected
 together, if both taxes are imposed.
 Sec. 220.405.  COMPTROLLER'S REPORTING DUTIES. (a) The
 comptroller shall make quarterly reports to a local taxing unit
 that has adopted the value added taxes authorized by Title 3, Local
 Taxes, if the local taxing unit requests the reports. A report must
 include the name, address, and account number of each person that
 has remitted to the comptroller a tax payment or claimed a refund
 that has been apportioned to the local taxing unit during the
 quarter covered by the report. The report must also show the results
 of the comptrollers determinations under Section 220.401 with
 respect to such local taxing unit.
 Sec. 220.406.  ALLOCATION OF LOCAL VALUE ADDED TAXES. The
 comptroller shall remit to each local taxing unit the net value
 added taxes apportioned to it under this chapter using such
 procedures and with such frequency as shall be established under
 applicable rules issued by the comptroller. To the extent that any
 local taxing unit's apportionment account shows a deficit for a
 given quarter, the comptroller shall make a reasonable estimate of
 the likelihood of recovery in future periods and, to the extent that
 a continuing deficit is projected for the third calendar quarter
 following the one in question, the local taxing unit shall be
 obligated to remit to the comptroller an amount equal to such
 projected continuing deficit within thirty (30) days following
 notice from the comptroller of such determination.
 [Sections 220.407-220.450 reserved for expansion]
 SUBCHAPTER J. ENFORCEMENT
 Sec. 220.451.  VENUE OF SUIT TO ENFORCE CHAPTER. Venue of a
 civil suit against a person to enforce this chapter is either in a
 county where the person's principal office is located according to
 its charter or certificate of authority or in Travis County.
 Sec. 220.452.  AUTHORITY TO RESTRAIN OR ENJOIN. To enforce
 this chapter, a court may restrain or enjoin a violation of this
 chapter.
 Sec. 220.453.  APPOINTMENT OF RECEIVER. If a court forfeits
 a person's charter or certificate of authority, the court may
 appoint a receiver for the person and may administer the
 receivership under the laws relating to receiverships.
 Sec. 220.454.  AGENT FOR SERVICE OF PROCESS. Each person on
 which a tax is imposed by this chapter shall designate a resident of
 this state as the person's agent for the service of process.
 Sec. 220.455.  SERVICE OF PROCESS ON SECRETARY OF STATE. (a)
 Legal process may be served on a domestic corporation by serving it
 on the secretary of state if the process relates to the forfeiture
 of the corporation 's charter or to the collection of a tax or
 penalty imposed by this chapter and:
 (1)  if the local agent of the corporation or if the
 officers named in the corporation 's charter or annual report on
 file with the secretary of state do not reside or cannot be located
 in the county in which the corporation 's principal office, as
 stated in the charter, is located; or
 (2)  if the principal office of the corporation is not
 maintained or cannot be located in the county in which the charter
 states that the office is located.
 (b)  Complete and valid service of process is made on a
 corporation through the secretary of state by delivering duplicate
 copies of the process to the secretary of state or the deputy
 secretary of state.
 (c)  On receipt of legal process under this section, the
 secretary of state promptly shall forward to the corporation by
 registered mail a copy of the process. The copy must be mailed to
 the address named in the corporation 's charter as its principal
 place of business or to another place of business of the corporation
 as shown by the records in the secretary of state 's office.
 (d)  The failure of the secretary of state to mail a copy of
 legal process to a corporation does not affect the validity of the
 service of process. It is competent and sufficient proof of the
 service of process that the secretary of state certifies under the
 state seal the receipt of the process.
 (e)  The secretary of state shall keep a record of each legal
 process served on the secretary under this section showing the date
 and time of the receipt of the process and the secretary 's action
 on the process.
 (f)  This section is cumulative of other laws relating to
 service of process.
 Sec. 220.456.  PENALTY FOR FAILURE TO PAY TAX OR FILE REPORT.
 (a)  If a person on which a tax is imposed by this chapter
 fails to pay the tax when it is due and payable or fails to file a
 report required by this chapter when it is due, the person is liable
 for a penalty of five percent of the amount of the tax due.
 (b)  If the tax is not paid or the report is not filed not
 later than the 30th day after the due date, a penalty of an
 additional five percent of the tax due is imposed.
 (c)  The minimum penalty under this section is $1.
 Sec. 220.457.  WILLFUL AND FRAUDULENT ACTS. (a) A person
 commits an offense if the person is subject to this chapter and the
 person willfully:
 (1)  fails to file a report;
 (2)  fails to keep books and records as required by this
 chapter;
 (3)  files a fraudulent report;
 (4)  violates any rule of the comptroller for the
 administration and enforcement of the provisions of this chapter;
 or
 (5)  attempts in any other manner to evade or defeat any
 tax imposed by this chapter or the payment of the tax.
 (d)  A person commits an offense if the person is an
 accountant or an agent for or an officer or employee of a person and
 the person knowingly enters or provides false information on any
 report, return, or other document filed by the person under this
 chapter.
 (e)  A person who commits an offense under this section may
 also, in addition to the punishment provided by this section, be
 liable for a penalty under this chapter.
 (f)  An offense under this section is:
 (1)  a Class C misdemeanor if the amount of the tax
 collected and not paid is less than $50;
 (2)  a Class B misdemeanor if the amount of the tax
 collected and not paid is $50 or more but less than $500;
 (3)  a Class A misdemeanor if the amount of the tax
 collected and not paid is $500 or more but less than $1,500;
 (4)  a state jail felony if the amount of the tax
 collected and not paid is $1,500 or more but less than $20,000;
 (5)  a felony of the third degree if the amount of the
 tax collected and not paid is $20,000 or more but less than
 $100,000;
 (6)  a felony of the second degree if the amount of the
 tax collected and not paid is $100,000 or more but less than
 $200,000; and
 (7)  a felony of the first degree if the amount of the
 tax collected and not paid is $200,000 or more.
 (g)  When tax is collected and not paid in violation of
 Subsection (a) pursuant to one scheme or continuous course of
 conduct, the conduct may be considered as one offense and the
 amounts aggregated in determining the grade of the offense.
 (e)  A person whose commercial domicile or whose residence is
 in this state may be prosecuted under this section only in the
 county in which the person's commercial domicile or residence is
 located unless the person asserts a right to be prosecuted in
 another county.
 (f)  A prosecution for a violation of this section must be
 commenced before the fifth anniversary of the date of the
 violation.
 Sec. 220.458.  VENUE FOR CRIMINAL PROSECUTION. Venue for
 prosecution for an offense under this chapter is in:
 (1)  the county in which any element of the offense
 occurs; or
 (2)  Travis County.
 [Sections 220.458-220.500 reserved for expansion]
 SUBCHAPTER K. DISPOSITION OF REVENUE
 Sec. 220.501.  GENERAL REVENUE FUND. Except as and to the
 extent otherwise expressly provided by the laws of this state, the
 revenue from a tax, interest, or penalty imposed by this chapter
 shall be deposited in the state treasury to the credit of the
 general revenue fund.
 [END OF SECTION 2.01]
 SECTION 2.02.
 (A)  Subject to the provisions of Section 2.02(B) of this
 Article, the amendments effected by this Article shall be
 prospective in application only and without prejudice to any rights
 and obligations of taxpayers, or the amounts owed to and the
 authorities of the comptroller or of this state, accruing or
 arising with respect to periods prior to the Effective Date,
 including but not limited to refunds, adjustments and similar items
 that would otherwise have been payable by or on behalf of the
 comptroller on or after the Effective Date.
 (B)  Notwithstanding the foregoing, but without prejudice to
 any other applicable limitation of actions, expiration or "sunset"
 provision, no judicial or administrative enforcement action shall
 be commenced by any authority of this state or any of its political
 subdivisions under the provisions so repealed on or after the fifth
 anniversary of the Effective Date.
 ARTICLE 3.
 CERTAIN CONFORMING REVISIONS
 SECTION 3.01.  TAX CODE, TITLE 2, STATE TAXATION, is amended
 by revising SUBTITLE A, GENERAL PROVISIONS, CHAPTER 101, GENERAL
 PROVISIONS, Sec. 101.009, ALLOCATION AND TRANSFER OF NET REVENUES,
 to delete subparagraph (b) thereof.
 SECTION 3.02.  TAX CODE, TITLE 2, STATE TAXATION, SUBTITLE
 D, COMPACTS AND UNIFORM LAWS, Chapter 142, SIMPLIFIED SALES AND USE
 ADMINISTRATION ACT, is repealed in its entirety.
 ARTICLE 4. REVISIONS TO CERTAIN LOCAL TAXES
 SECTION 4.01.  Subject to Section 4.03 of this Article 4, and
 effective on and after September 1, 2013 (as used in this Article,
 the "Effective Date"), TAX CODE, TITLE 3. LOCAL TAXATION, SUBTITLE
 C, LOCAL SALES AND USE TAXES, CHAPTERS 321, 322, 323, 324, 325 and
 327 are revised to read as follows, and new CHAPTER 328, SCHOOL
 DISTRICT ENRICHMENT VALUE ADDED TAX is added as set forth below:
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 321.001.  SHORT TITLE. This chapter may be cited as the
 Texas Municipal Sales and Use Value Added Tax Act.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.002. 321.002. DEFINITIONS. (a)  In this chapter:
 (1)     "Additional municipal sales and use tax" means
 only the additional tax authorized by Section 321.101(b).
 (2)     "Municipality" includes any incorporated city,
 town, or village.
 (3)     "Place of business of the retailer" means an
 established outlet, office, or location operated by the retailer or
 the retailer's agent or employee for the purpose of receiving
 orders for taxable items and includes any location at which three or
 more orders are received by the retailer during a calendar year.    A
 warehouse, storage yard, or manufacturing plant is not a "place of
 business of the retailer" unless at last three orders are received
 by the retailer during the calendar year at the warehouse, storage
 yard, or manufacturing plant.    An outlet, office, facility, or any
 location that contracts with a retail or commercial business to
 process for that business invoices, purchase orders, bills of
 lading, or other equivalent records onto which sales tax is added,
 including an office operated for the purpose of buying and selling
 taxable goods to be used or consumed by the retail or commercial
 business, is not a "place of business of the retailer" if the
 comptroller determines that the outlet, office, facility, or
 location functions or exists to avoid the tax imposed by this
 chapter or to rebate a portion of the tax imposed by this chapter to
 the contracting business.    Notwithstanding any other provision of
 this subdivision, a kiosk is not a "place of business of the
 retailer."    In this subdivision, "kiosk" means a small stand-alone
 area or structure that:
 (A)     is used solely to display merchandise or to
 submit orders for taxable items from a data entry device, or both;
 (B)     is located entirely within a location that is
 a place of business of another retailer, such as a department store
 or shopping mall; and
 (C)     at which taxable items are not available for
 immediate delivery to a customer.
 (b)  Words words used in this chapter and defined by Chapter
 151 220 have the meanings assigned by Chapter 151 220.
 Sec. 321.003.
 Sec. 321.003.  OTHER PORTIONS OF TAX APPLICABLE. Subtitles
 A and B, Title 2, and Chapters 142 and 151 Chapter 220 apply to the
 taxes and to the administration and enforcement of the taxes
 imposed by this chapter in the same manner that those laws apply to
 state taxes, unless modified by this chapter.
 Sec.   321.004.     REFERENCES TO SALES OR USE TAX. A reference
 to a sales tax or a use tax imposed or authorized by this chapter is
 a reference to both the taxes imposed under Sections 321.101(a) and
 (b) unless otherwise provided.
 SUBCHAPTER B.  IMPOSITION OF SALES AND USE VALUE ADDED TAXES BY
 MUNICIPALITIES
 Sec. 321.101.  TAX AUTHORIZED. (a) A municipality may adopt
 or repeal a sales and use value added tax authorized by this
 chapter, other than the additional municipal sales and use value
 added tax, at an election in which a majority of the qualified
 voters of the municipality approve the adoption or repeal of the
 tax.
 (b)     A municipality that is not disqualified may, by a
 majority vote of the qualified voters of the municipality voting at
 an election held for that purpose, adopt an additional sales and use
 tax for the benefit of the municipality in accordance with this
 chapter. A municipality is disqualified from adopting the
 additional sales and use tax if the municipality:
 (1)     is included within the boundaries of a rapid
 transit authority created under Chapter 451, Transportation Code;
 (2)     is included within the boundaries of a regional
 transportation authority created under Chapter 452, Transportation
 Code, by a principal municipality having a population of less than
 800,000, unless the municipality has a population of 400,000 or
 more and is located in more than one county;
 (3)     is wholly or partly located in a county that
 contains territory within the boundaries of a regional
 transportation authority created under Chapter 452, Transportation
 Code, by a principal municipality having a population in excess of
 800,000, unless:
 (A)     the municipality is a contiguous
 municipality; or
 (B)     the municipality is not included within the
 boundaries of the authority and is located wholly or partly in a
 county in which fewer than 250 persons are residents of both the
 county and the authority according to the most recent federal
 census; or
 (C)     the municipality is not and on January 1,
 1993, was not included within the boundaries of the authority; or
 (4)     imposes a tax authorized by Chapter 453,
 Transportation Code.
 (c)     For the purposes of Subsection (b), "principal
 municipality " and "contiguous municipality " have the meanings
 assigned by Section 452.001, Transportation Code.
 (d)     In any municipality in which an additional sales and use
 tax has been imposed, in the same manner and by the same procedure
 the municipality by majority vote of the qualified voters of the
 municipality voting at an election held for that purpose may
 reduce, increase, or abolish the additional sales and use tax.
 (e)     An authority created under Chapter 451 or 452,
 Transportation Code, is prohibited from imposing the tax provided
 for by those chapters if within the boundaries of the authority
 there is a municipality that has adopted the additional sales and
 use tax provided for by this section.
 (f)     A municipality may not adopt or increase a sales and use
 tax or an additional sales and use (b) - (e) RESERVED
 (f)  A municipality may not adopt or increase a value added
 tax under this section if as a result of the adoption or increase of
 the tax the combined rate of all sales and use value added taxes
 imposed by the municipality and other political subdivisions of
 this state having territory in the municipality would exceed two
 three percent at any location in the municipality.
 (g)  For the purposes of Subsection (f), "territory" in a
 municipality having a population of 5,000 or less and bordering on
 the Gulf of Mexico does not include any area covered by water and in
 which no person has a place of business to which a sales tax permit
 issued under Subchapter F of Chapter 151 applies that serves as a
 place of supply of services or property that otherwise would be
 taxable under this chapter.
 (h)  Expired.
 (i)     A municipality for which the adoption or increase of a
 sales and use tax approved by the voters in an election held after
 May 1, 1995, and before December 31, 1995, is invalid because the
 election combined into a single proposition proposal for adopting
 an economic development sales and use tax under Chapter 505, Local
 Government Code, and an additional sales and use tax under
 Subsection (b)     may adopt or increase the sales and use tax
 previously approved by the voters by ordinance or resolution of the
 governing body of the municipality. If the governing body of the
 municipality adopts or increases the sales and use tax under this
 subsection, the municipal secretary shall send to the comptroller
 by certified or registered mail a certified copy of the ordinance or
 resolution. The tax takes effect on the first day of the month
 following the expiration of the calendar quarter occurring after
 the date on which the comptroller receives the ordinance or
 resolution.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 54, Sec. 1, eff. Oct.
 20, 1987; Acts 1989, 71st Leg., ch. 2, Sec. 14.14(a), eff. Aug. 28,
 1989; Acts 1989, 71st Leg., ch. 489, Sec. 1, eff. Aug. 28, 1989;
 Acts 1991, 72nd Leg., ch. 184, Sec. 2, eff. May 24, 1991; Acts 1991,
 72nd Leg., ch. 223, Sec. 1, eff. May 29, 1991; Acts 1993, 73rd Leg.,
 ch. 320, Sec. 1, eff. May 28, 1993; Acts 1993, 73rd Leg., ch. 1031,
 Sec. 25, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 65, Sec. 1,
 eff. May 9, 1997; Acts 1997, 75th Leg., ch. 165, Sec. 30.264, eff.
 Sept. 1, 1997; Acts 1997, 75th Leg., ch. 705, Sec. 1, eff. Sept. 1,
 1997.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 3.73, eff. April 1,
 2009.
 Sec. 321.102.
 Sec. 321.102.  EFFECTIVE DATES: NEW TAX, TAX REPEAL,
 BOUNDARY CHANGE. (a) A tax imposed under this chapter or the
 repeal of a tax abolished under this chapter takes effect on the
 first day of the first calendar quarter occurring after the
 expiration of the first complete calendar quarter occurring after
 the date on which the comptroller receives a notice of the action as
 required by Section 321.405(b). This subsection does not apply to
 the additional municipal sales and use value added tax.
 (b)  The additional municipal sales and use value added tax
 takes effect or is increased, reduced, or repealed in the
 municipality on the October 1st after the expiration of the first
 complete calendar quarter after the date on which the comptroller
 receives notice from the municipality of the adoption, increase,
 reduction, or repeal of the additional municipal sales and use
 value added tax.
 (c)  If a municipality in which the tax imposed under this
 chapter is in effect changes its boundaries, the municipal
 secretary shall send by United States registered or certified mail
 to the comptroller a certified copy of the ordinance that adds or
 detaches municipal territory and that shows the effective date of
 the boundary change. The ordinance must be accompanied by a map
 clearly showing the added or detached territory. Except as
 provided by Subsection (d), the tax takes effect in the added
 territory or is inapplicable to the detached territory on the first
 day of the first calendar quarter after the comptroller receives
 the ordinance and map.
 (d)  If, within 10 days after the receipt of an ordinance and
 map sent under Subsection (c), the comptroller notifies the
 secretary of the municipality that more time is required, the
 effective date of the application of the tax in the added or
 detached area is the first day of the first calendar quarter after
 the expiration of the first complete calendar quarter occurring
 after the date on which the comptroller receives the ordinance and
 map.
 (e)  If as a result of the imposition or increase in a sales
 and use value added tax by a municipality in which there is located
 all or part of a local governmental entity (other than a county or
 school district) that has adopted a sales and use value added tax or
 as a result of the annexation by a municipality of all or part of the
 territory in a local governmental entity (other than a county or
 school district) that has adopted a sales and use value added tax
 the overlapping local sales and use value added taxes in the area
 will exceed two three percent, the entity's sales and use value
 added tax is automatically reduced in that area to a rate that when
 added to the combined rate of local sales and use value added taxes
 will equal two three percent.
 (f)  If an entity's rate is reduced in accordance with
 Subsection (e), the comptroller shall withhold from the
 municipality's monthly sales and use quarterly value added tax
 allocation an amount equal to the amount that would have been
 collected by the entity had the municipality not imposed or
 increased its sales and use value added tax or annexed the area in
 the entity less amounts that the entity collects following the
 municipality's levy of or increase in its sales and use value added
 tax or annexation of the area in the entity. The comptroller shall
 withhold and pay the amount withheld to the entity under policies or
 procedures that the comptroller considers reasonable.
 (g)  Subsections (e) and (f) do not apply if and during any
 period in which a local governmental entity has outstanding
 indebtedness or obligations that are payable wholly or partly from
 the sales and use value added tax revenue of the entity. A
 municipality may not implement the imposition or increase of the
 sales and use value added tax as a result of the circumstances
 described by Subsection (e) if, as a result of the implementation of
 that imposition or increase, the combined rate of all sales and use
 value added taxes imposed by the municipality, the local
 governmental entity, and any other political subdivisions having
 territory in the district would exceed two three percent at any
 location in the municipality.
 (h)  A transit authority is not a local governmental entity
 for the purposes of Subsections (e) and (f).
 (i)     Subsection (g) does not apply to a local governmental
 entity or political subdivision created under Chapter 326, Local
 Government Code.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 256, Sec. 1, eff. Sept. 1,
 1989; Acts 1991, 72nd Leg., ch. 184, Sec. 3, eff. May 24, 1991;
 Acts 1999, 76th Leg., ch. 1467, Sec. 2.67, eff. June 19, 1999; Acts
 2001, 77th Leg., ch. 1263, Sec. 74, eff. Sept. 1, 2001.
 Sec. 321.1025.
 Sec. 321.1025.  ANNEXATION TO CERTAIN REGIONAL
 TRANSPORTATION AUTHORITIES. (a) A municipality that is wholly or
 partly located in a county that contains territory within the
 boundaries of a regional transportation authority created under
 Chapter 452, Transportation Code, by a principal municipality
 having a population of more than 800,000 and that has adopted an
 additional sales and use municipal value added tax for the benefit
 of the municipality may hold an election on the question of whether
 the municipality shall be annexed to the authority.
 (b)  The election must be held in the manner required by
 Chapter 452, Transportation Code.
 (c)  If the annexation is approved by the voters, the
 election is to be treated for all purposes as an election to abolish
 the additional sales and use municipal value added tax in the
 municipality and the tax is repealed in the manner provided by this
 chapter.
 Added by Acts 1991, 72nd Leg., ch. 223, Sec. 2, eff. May 29, 1991.
 Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.265, eff. Sept. 1,
 1997.
 Sec. 321.103.  SALES 321.103. VALUE ADDED TAX. (a) In a
 municipality that has adopted the tax authorized by Section
 321.101(a), there is imposed a value added tax on the receipts from
 the sale at retail of taxable items within the supply in that
 municipality at the rate of any service or property by any person in
 the ordinary course of one percent and at the same rate on the
 receipts from the sale at retail within the municipality of gas and
 electricity a trade or business in which the person engages for
 residential use. the purpose of profit.
 (b)  In a municipality that has adopted the additional
 municipal sales and use value added tax, the tax is imposed at the
 rate approved by the voters. The rate, when the tax is adopted,
 must be equal to either any increment of one-eighth, one-fourth,
 three-eighths, or one-half of one percentage point from zero to one
 percent. The rate may be reduced in one or more increments of
 one-eighth of one percent to a minimum of one-eighth of one percent
 or increased in one or more increments of one-eighth of one percent
 to a maximum of one-half of one percent, or the tax may be
 abolished. The rate that the municipality adopts is on the receipts
 from the sale at retail of all taxable items within the municipality
 and at the same rate on the receipts from the sale at retail within
 the municipality of gas and electricity for residential use unless
 the residential use of gas and electricity is exempted from the tax
 imposed under Section 321.101(a), in which case the residential use
 of gas and electricity is exempted under this subsection also
 percent, or the tax may be abolished. This rate is then applied to
 the taxpayer's taxable receipts attributable to any applicable tax
 period to determine the applicable municipal value added tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 4, eff. May 24, 1991.
 Sec.   321.104.     USE TAX. (a) In a municipality that has
 adopted the tax authorized by this chapter, there is imposed an
 excise tax on the use, storage, or other consumption within the
 municipality of taxable items purchased, leased, or rented from a
 retailer during the period that the tax is effective within the
 municipality. The rate of the excise tax is the same as the rate of
 the sales tax portion of the tax and is applied to the sales price of
 the taxable items.
 (b)     In a municipality that has adopted the tax authorized by
 this chapter, there is imposed an excise tax on the use, storage, or
 other consumption of gas or electricity for residential purposes
 and purchased from any retailer during the period that the tax is
 effective within the municipality. The tax is imposed at the same
 rate as the tax provided by Subsection (a).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 25, eff. Sept. 1,
 1991.
 Sec.   321.1045.     IMPOSITION OF SALES AND USE TAX IN CERTAIN
 FEDERAL MILITARY INSTALLATIONS. (a)     This section applies only to
 a municipality with a population of more than 500,000 that borders
 the United Mexican States.
 (b)     For purposes of the sales and use tax imposed under this
 chapter, a reference in this chapter or other law to the
 municipality as the territory in which the tax or an incident of the
 tax applies includes the area within the boundaries of a federal
 military installation that is located in the municipality's
 extraterritorial jurisdiction.
 (c)  This section does not affect:
 (1)     the boundaries of an emergency services district
 that contains territory within the boundaries of a federal military
 installation on the effective date of this section;
 (2)     the authority of that emergency services district
 to continue to impose a sales and use tax in the entire territory of
 the district; or
 (3)     the duty of that emergency services district to
 provide services in the entire territory of the district.
 Added by Acts 2011, 82nd Leg., R.S., Ch. , Sec. 1, eff. July 1, 2011.
 Sec.   321.105.     RESIDENTIAL USE OF GAS AND ELECTRICITY. (a)
 There are exempted from the taxes imposed by a municipality under
 this chapter the sale, production, distribution, lease, or rental
 of, and the use, storage, or other consumption within the
 municipality of gas and electricity for residential use in any
 municipality that:
 (1)  adopted the tax on or after October 1, 1979; or
 (2)  adopted the tax before that time but:
 (A)     failed to exempt the residential use of gas
 and electricity before May 1, 1979; and
 (B)     has not reimposed the tax as provided by
 Subsection (c).
 (b)     A governing body of a municipality that adopted the
 taxes under this chapter before October 1, 1979, may, by ordinance
 adopted by a vote of a majority of the membership of the governing
 body and recorded in the municipal minutes, exempt from the taxes
 authorized by this chapter the receipts from the sale, production,
 distribution, lease, or rental of, and the use, storage, or other
 consumption of gas and electricity for residential use.
 (c)     A governing body of a municipality that has adopted the
 taxes authorized by this chapter before May 1, 1979, and in which
 residential use of gas and electricity is exempted within the
 municipality, may reimpose the taxes on gas and electricity for
 residential use by ordinance adopted by a vote of the majority of
 the membership of the governing body and entered in the municipal
 minutes.
 (d)     The municipal secretary shall send to the comptroller by
 United States certified or registered mail a copy of an ordinance
 exempting or imposing the taxes on residential use of gas and
 electricity.
 (e)     The exemption or reimposition of taxes on residential
 use of gas and electricity takes effect within the municipality as
 provided by Section 321.104(a) after receipt of a copy of the
 ordinance.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   321.1055.     IMPOSITION OF FIRE CONTROL OR CRIME CONTROL
 DISTRICT TAX ON THE RESIDENTIAL USE OF GAS AND ELECTRICITY. (a)
 This section applies to a fire control, prevention, and emergency
 medical services district or crime control and prevention district
 located in all or part of a municipality that imposes a tax on the
 residential use of gas and electricity under Section 321.105.
 (b)     The board of directors of a district to which this
 section applies may, by order or resolution adopted in a public
 hearing by a vote of a majority of the membership of the board and
 recorded in the district's minutes:
 (1)     impose a tax adopted under Section 321.106 or
 321.108, as applicable, on receipts from the sale, production,
 distribution, lease, or rental of, and the use, storage, or other
 consumption within the district of, gas and electricity for
 residential use;
 (2)     exempt from taxation the items described by
 Subdivision (1); or
 (3)  reimpose the tax under Subdivision (1).
 (c)     A district that adopts an order or resolution under
 Subsection (b) shall:
 (1)     send a copy of the order or resolution to the
 comptroller by United States certified or registered mail;
 (2)     send a copy of the order or resolution and a copy
 of the district's boundaries to each gas and electric company whose
 customers are subject to the tax by United States certified or
 registered mail; and
 (3)     publish notice of the order or resolution in a
 newspaper of general circulation in the district.
 (d)     If the residential use of gas and electricity ceases to
 be taxable in the municipality in which a district is located, then
 the residential use of gas and electricity is not taxable by the
 district.
 (e)     The provisions of Sections 321.201 and 321.204 that
 govern the computation of municipal taxes on gas and electricity
 for residential use apply to the computation of district taxes on
 gas and electricity for residential use under this section.
 Added by Acts 2009, 81st Leg., R.S., Ch. , Sec. 2, eff. January 1,
 2010.
 Sec. 321.106.  FIRE CONTROL DISTRICT TAX.  (c) The
 exemptions and exclusions of Chapter 220, Subchapters D and E apply
 equally to the determination of taxable receipts for purposes of
 any municipal value added tax.
 Sec. 321.106.  FIRE CONTROL DISTRICT TAX. (a) Subject to an
 election held in accordance with Chapter 344, Local Government
 Code, a municipality in which a fire control, prevention, and
 emergency medical services district is established shall adopt a
 sales and use value added tax in the area of the district for the
 purpose of financing the operation of the fire control, prevention,
 and emergency medical services district. The revenue from the tax
 may be used only for the purpose of financing the operation of the
 fire control, prevention, and emergency medical services district.
 The proposition for adopting a tax under this section and the
 proposition for creation of a fire control, prevention, and
 emergency medical services district shall be submitted at the same
 election. For purposes of Section 321.101, a tax under this section
 is not an additional sales and use tax.
 (b)  A tax adopted for a district under this section for
 financing the operation of the district may be decreased in
 increments of one-eighth of one percent by order of the board of
 directors of the district.
 (c)  The rate of a tax adopted for a district under this
 section may be increased in increments of one-eighth of one
 percent, not to exceed a total tax rate of one-half quarter percent,
 for financing the operation of the fire control, prevention, and
 emergency medical services district by order of the board of
 directors of the fire control, prevention, and emergency medical
 services district if approved by a majority of the qualified voters
 voting at an election called by the board and held in the district
 on the question of increasing the tax rate. At the election, the
 ballot shall be printed to provide for voting for or against the
 proposition: "The increase of the __________ (name of the
 municipality that created the district) Fire Control, Prevention,
 and Emergency Medical Services District sales and use value added
 tax rate to ______ percent." If there is an increase or decrease
 under this section in the rate of a tax imposed under this section,
 the new rate takes effect on the first day of the next calendar
 quarter after the expiration of one calendar quarter after the
 comptroller receives notice of the increase or decrease. However,
 if the comptroller notifies the president of the board of directors
 of the district in writing within 10 days after receipt of the
 notification that the comptroller requires more time to implement
 reporting and collection procedures, the comptroller may delay
 implementation of the rate change for one calendar quarter, and the
 new rate takes effect on the first day of the calendar quarter that
 follows the elapsed quarter.
 (d)  The comptroller shall remit to the municipality amounts
 collected at the rate imposed under this section as part of the
 regular allocation of other municipal tax revenue collected by the
 comptroller. The municipality shall remit that amount to the
 district. A retailer taxpayer may not be required to use allocation
 and reporting procedures in the collection of taxes under this
 section that are different from the procedures that retailers
 taxpayers use in the collection of other sales and use value added
 taxes under this chapter. An item, transaction, or  A service that
 or property the supply of which is taxable in a municipality under a
 sales or use value added tax authorized by another section of this
 chapter is taxable under this section. An item, transaction, or A
 service that or property the supply of which is not taxable in a
 municipality under a sales or use value added tax authorized by
 another section of this chapter is not taxable under this section.
 (e)  If, in a municipality where a fire control, prevention,
 and emergency medical services district is composed of the whole
 municipality, a municipal sales and use value added tax or a
 municipal sales and use value added tax rate increase for the
 purpose of financing a fire control, prevention, and emergency
 medical services district is approved, the municipality is
 responsible for distributing to the district that portion of the
 municipal sales and use value added tax revenue received from the
 comptroller that is to be used for the purposes of financing the
 fire control, prevention, and emergency medical services district.
 Not later than the 10th day after the date the municipality receives
 money under this section from the comptroller, the municipality
 shall make the distribution in the proportion that the fire
 control, prevention, and emergency medical services portion of the
 tax rate bears to the total sales and use value added tax rate of the
 municipality. The amounts distributed to a fire control,
 prevention, and emergency medical services district are not
 considered to be sales and use value added tax revenue for the
 purpose of property tax reduction and computation of the municipal
 tax rate under Section 26.041.
 (f)  For purposes of the tax imposed under this section, a
 reference in this chapter to the municipality as the territory in
 which the tax or an incident of the tax applies means only the
 territory located in the fire control, prevention, and emergency
 medical services district, if that district is composed of an area
 less than an entire municipality.
 (g)  The comptroller may adopt rules and the municipality's
 governing body may adopt orders to administer this section.
 Added by Acts 2001, 77th Leg., ch. 1295, Sec. 2, eff. June 1, 2001.
 Sec. 321.107. 321.107. ADMINISTRATION OF LOCAL SALES AND
 USE VALUE ADDED TAXES IMPOSED BY OTHER GOVERNMENTAL ENTITIES. The
 imposition, computation, administration, enforcement, and
 collection of any local sales and use value added tax imposed by any
 other local governmental entity is governed by this chapter, except
 as otherwise provided by law. In this section, "other local
 governmental entity" includes any governmental entity created by
 the legislature that has a limited purpose or function, that has a
 defined or restricted geographic territory, and that is authorized
 by law to impose a local sales and use value added tax. The term
 does not include a county, county health services district, county
 landfill and criminal detention center district, metropolitan
 transportation authority, coordinated county transportation
 authority, economic development district, crime control district,
 hospital district, emergency services district, or library
 district.
 Added by Acts 2003, 78th Leg., ch. 209, Sec. 54, eff. Oct. 1, 2003.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 21, eff. September 1,
 2007.
 Sec. 321.108.
 Sec. 321.108.  MUNICIPAL CRIME CONTROL AND PREVENTION
 DISTRICT TAX. (a) Subject to an election held in accordance with
 Chapter 363, Local Government Code, a municipality in which a crime
 control and prevention district is established shall adopt a sales
 and use value added tax in the area of the district for the purpose
 of financing the operation of the crime control and prevention
 district. The revenue from the tax may be used only for the purpose
 of financing the operation of the crime control and prevention
 district. The proposition for adopting a tax under this section and
 the proposition for creation of a crime control and prevention
 district shall be submitted at the same election.
 (b)  A tax adopted for a district under this section for
 financing the operation of the district may be decreased in
 increments of one-eighth of one percent by order of the board of
 directors of the district.
 (c)  The governing body of the municipality that proposed the
 creation of the crime control and prevention district may call an
 election in the district on the question of decreasing the tax rate
 in increments of one-eighth of one percent in the district. At the
 election, the ballot shall be printed to provide for voting for or
 against the following proposition: "The decrease of the
 ____________________ Crime Control and Prevention District sales
 and use value added tax rate to ____________ percent."
 (d)  The rate of a tax adopted for a district under this
 section may be increased in increments of one-eighth of one
 percent, not to exceed a total tax rate of one-quarter half percent
 for financing the operation of the crime control and prevention
 district, by order of the board of directors of the crime control
 and prevention district if approved by a majority of the voters
 voting at an election called by the board and held in the district
 on the question of increasing the tax rate. At the election, the
 ballot shall be printed to provide for voting for or against the
 following proposition: "The increase of the ______________ Crime
 Control and Prevention District sales and use value added tax rate
 to ____________ percent." If there is an increase or decrease under
 this subsection in the rate of a tax imposed under this section, the
 new rate takes effect on the first day of the next calendar quarter
 after the expiration of one calendar quarter after the comptroller
 receives notice of the increase or decrease. However, if the
 comptroller notifies the president of the board of directors of the
 district in writing within 10 days after receipt of the
 notification that the comptroller requires more time to implement
 reporting and collection procedures, the comptroller may delay
 implementation of the rate change for another calendar quarter, and
 the new rate takes effect on the first day of the next calendar
 quarter following the elapsed quarter.
 (e)  The comptroller shall remit to the municipality amounts
 collected at the rate imposed under this section as part of the
 regular allocation of municipal tax revenue collected by the
 comptroller if the district is composed of the entire municipality.
 The comptroller shall, if the district is composed of an area less
 than the entire municipality, remit that amount to the district.
 Retailers Taxpayers may not be required to use allocation and
 reporting procedures in the collection of taxes under this section
 that are different from the procedures that retailers taxpayers use
 in the collection of other sales and use value added taxes under
 this chapter.  An item, transaction, A supply of services or
 service property that is taxable in a municipality under a sales or
 use value added tax authorized by another section of this chapter is
 taxable under this section.  An item, transaction, or service A
 supply of services or property that is not taxable in a municipality
 under a sales or use value added tax authorized by another section
 of this chapter is not taxable under this section.
 (f)  If, in a municipality in which a crime control and
 prevention district is composed of the whole municipality, a
 municipal sales and use value added tax or a municipal sales and use
 value added tax rate increase for the purpose of financing a crime
 control and prevention district is approved, the municipality is
 responsible for distributing to the district that portion of the
 municipal sales and use value added tax revenue received from the
 comptroller that is to be used for the purposes of financing the
 crime control and prevention district. Not later than the 10th day
 after the date the municipality receives money under this section
 from the comptroller, the municipality shall make the distribution
 in the proportion that the crime control and prevention portion of
 the tax rate bears to the total sales and use value added tax rate of
 the municipality. The amounts distributed to a crime control and
 prevention district are not considered to be additional municipal
 sales and use value added tax revenue for the purpose of property
 tax reduction and computation of the municipal tax rate under
 Section 26.041.
 (g)  For purposes of the tax imposed under this section, a
 reference in this chapter to the municipality as the territory in
 which the tax or an incident of the tax applies means only the
 territory located in the crime control and prevention district, if
 that district is composed of an area less than an entire
 municipality.
 (h)  The comptroller may adopt rules and the governing body
 of the municipality may adopt orders to administer this section.
 Added by Acts 2007, 80th Leg., R.S., Ch. , Sec. 5, eff. June 15,
 2007.
 SUBCHAPTER C. COMPUTATION OF TAXES
 Sec. 321.201.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
 Each retailer taxpayer in a municipality that has adopted a tax
 authorized by this chapter shall add each sales value added tax
 imposed by the municipality under this chapter and by Chapter 151
 220 to the sales supply price, and the sum of the taxes is a part of
 the price, a debt of the purchaser customer to the retailer taxpayer
 until paid, and recoverable at law in the same manner as the
 purchase supply price. If the municipality imposes the tax on gas
 and electricity for residential use, only the municipal tax is
 added to the sales price of sales of gas and electricity for
 residential use.
 (b)  The amount of the total tax is computed by multiplying
 the combined applicable tax rates, or the rate of the municipal tax
 only for sales of gas and electricity for residential use in a
 municipality that imposes the tax on gas and electricity for
 residential use, by the amount of the sales supply price. If the
 product results in a fraction of a cent less than one-half of one
 cent, the fraction of a cent is not collected. If the fraction of a
 cent is one-half of one cent or more, the fraction shall be
 collected as one cent.
 (c)  The comptroller may publish schedules and brackets of
 amounts of taxes based on the formula provided by Subsection (b) for
 use in municipalities that have adopted the taxes authorized by
 this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   321.202.     METHOD OF REPORTING: RETAILERS HAVING SALES
 BELOW TAXABLE AMOUNT. The exclusion provided by Section 151.411
 applies to a retailer under this chapter 50 percent of whose
 receipts from the sales of taxable items comes from individual
 transactions in which the sales price is an amount on which no tax
 is produced from the combined state and local taxes.
 Added by Acts 1987, 70th Leg., ch. 191,
 Sec. 321.202.  REPEALED
 Sec. 321.203.  REPEALED
 Sec. 1, eff. Sept. 1, 1987.
 For expiration of Subsections (c-2) and (c-3), see Subsection
 (c-3).
 Sec.   321.203.     CONSUMMATION OF SALE. (a) A sale of a
 taxable item occurs within the municipality in which the sale is
 consummated. A sale is consummated as provided by this section
 regardless of the place where transfer of title or possession
 occurs.
 (b)     If a retailer has only one place of business in this
 state, all of the retailer's retail sales of taxable items are
 consummated at that place of business except as provided by
 Subsection (e).
 (c)     If a retailer has more than one place of business in this
 state, each sale of each taxable item by the retailer is consummated
 at the place of business of the retailer in this state where the
 retailer first receives the order, provided that the order is
 placed in person by the purchaser or lessee of the taxable item at
 the place of business of the retailer in this state where the
 retailer first receives the order.
 (c-1)     If the retailer has more than one place of business in
 this state and Subsection (c) does not apply, the sale is
 consummated at the place of business of the retailer in this state:
 (1)     from which the retailer ships or delivers the
 item, if the retailer ships or delivers the item to a point
 designated by the purchaser or lessee; or
 (2)     where the purchaser or lessee takes possession of
 and removes the item, if the purchaser or lessee takes possession of
 and removes the item from a place of business of the retailer.
 (c-2)  Subsection (c) does not apply if:
 (1)     the taxable item is shipped or delivered from a
 warehouse:
 (A)  that is a place of business of the retailer;
 (B)     in relation to which the retailer has an
 economic development agreement with:
 (i)     the municipality in which the warehouse
 is located that was entered into under Chapter 380, 504, or 505,
 Local Government Code, or a predecessor statute, before January 1,
 2009; or
 (ii)     the county in which the warehouse is
 located that was entered into under Chapter 381, Local Government
 Code, before January 1, 2009; and
 (C)     in relation to which the municipality
 provides information relating to the economic development
 agreement as required by Subsection (c-3) by the deadline
 prescribed by that subsection, or, if appropriate, the county
 complies with Section 323.203(c-3) by the deadline prescribed by
 that section; and
 (2)     the place of business of the retailer at which the
 retailer first receives the order in the manner described by
 Subsection (c) is a retail outlet identified in the information
 required by Subsection (c-3) or Section 323.203(c-3) as being
 served by the warehouse on January 1, 2009.
 (c-3)     Not later than September 1, 2009, a municipality that
 has entered into an economic development agreement described by
 Subsection (c-2) shall send to the comptroller information
 prescribed by the comptroller relating to the agreement that
 identifies each warehouse subject to the agreement and each retail
 outlet that, on January 1, 2009, was served by that warehouse.    The
 comptroller shall prescribe the manner in which the information
 must be provided.    The provision of information to the comptroller
 under this subsection does not affect whether information described
 by this subsection is confidential or excepted from required public
 disclosure.    This subsection and Subsection (c-2) expire September
 1, 2014.
 (d)     If the retailer has more than one place of business in
 this state and Subsections (c) and (c-1) do not apply, the sale is
 consummated at:
 (1)     the place of business of the retailer in this state
 where the order is received; or
 (2)     if the order is not received at a place of business
 of the retailer, the place of business from which the retailer's
 agent or employee who took the order operates.
 (e)     A sale of a taxable item is consummated at the location
 in this state to which the item is shipped or delivered or at which
 possession is taken by the customer if transfer of possession of the
 item occurs at, or shipment or delivery of the item originates from,
 a location in this state other than a place of business of the
 retailer and if:
 (1)     the retailer is an itinerant vendor who has no
 place of business in this state;
 (2)     the retailer's place of business where the
 purchase order is initially received or from which the retailer's
 agent or employee who took the order operates is outside this state;
 or
 (3)     the purchaser places the order directly with the
 retailer's supplier and the item is shipped or delivered directly
 to the purchaser by the supplier.
 (f)     The sale of natural gas and electricity is consummated
 at the point of delivery to the consumer.
 (g)     The sale of mobile telecommunications services is
 consummated in accordance with Section 151.061.
 (g-1)     The sale of telecommunications services sold based on
 a price that is measured by individual calls is consummated at the
 location where the call originates and terminates or the location
 where the call either originates or terminates and at which the
 service address is also located.
 (g-2)     Except as provided by Subsection (g-3), the sale of
 telecommunications services sold on a basis other than on a
 call-by-call basis is consummated at the location of the customer's
 place of primary use.
 (g-3)     A sale of post-paid calling services is consummated at
 the location of the origination point of the telecommunications
 signal as first identified by the seller's telecommunications
 system or by information received by the seller from the seller's
 service provider if the system used to transport the signal is not
 that of the seller.
 (h)     The sale of an amusement service is consummated in the
 municipality in which the performance or other delivery of the
 service takes place.
 (i)     If a purchaser who has given a resale certificate makes
 any use of a taxable item that subjects the taxable item to the
 sales tax under the provisions of Section 151.154, the use or other
 consumption of the taxable item that subjected the taxable item to
 the tax is consummated at the place where the taxable item is stored
 or kept at the time of or just before the use or consumption.
 (j)     The sale of services delivered through a cable system is
 consummated at the point of delivery to the consumer.
 (k)     The sale of garbage or other solid waste collection or
 removal service is consummated at the location at which the garbage
 or other solid waste is located when its collection or removal
 begins.
 (l)     Except as otherwise provided by this section, the sale
 of a taxable service, other than a service described by Section
 151.330(f), is consummated at the location at which the service is
 performed or otherwise delivered.
 (l)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 1266, Sec.
 15(4), eff. September 1, 2007.
 (m)     If there is no place of business of the retailer because
 the comptroller determines that an outlet, office, facility, or
 location contracts with a retail or commercial business to process
 for that business invoices or bills of lading and that the outlet,
 office, facility, or location functions or exists to avoid the tax
 imposed by this chapter or to rebate a portion of the tax imposed by
 this chapter to the contracting business, a sale is consummated at
 the place of business of the retailer from whom the outlet, office,
 facility, or location purchased the taxable item for resale to the
 contracting business.
 (n)     A sale of a service described by Section 151.0047 to
 remodel, repair, or restore nonresidential real property is
 consummated at the location of the job site.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.22(a), eff. Aug. 28,
 1989; Acts 1989, 71st Leg., ch. 810, Sec. 1, eff. Oct. 1, 1989;
 Acts 1991, 72nd Leg., ch. 705, Sec. 26, eff. Sept. 1, 1991; Acts
 2001, 77th Leg., ch. 370, Sec. 2, eff. Aug. 1, 2002; Acts 2003, 78th
 Leg., ch. 209, Sec. 55, eff. Oct. 1, 2003; Acts 2003, 78th Leg., ch.
 1155, Sec. 2, 3, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1310,
 Sec. 115, eff. July 1, 2004.
 Amended by:
 Acts 2005, 79th Leg., Ch. , Sec. 23.001(83), eff. September
 1, 2005.
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 11, eff. September 1,
 2007.
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 15(4), eff. September
 1, 2007.
 Acts 2009, 81st Leg., R.S., Ch. , Sec. 5, eff. June 19, 2009.
 Sec. 321.204.  321.204. COMPUTATION OF USE TAX. (a) In
 each municipality that has adopted the taxes authorized by this
 chapter, the taxes imposed by Section 321.104(a) and the tax
 imposed by Subchapter D, Chapter 151 220, are added together to form
 a single combined tax rate, except:.
 (1)     in a municipality that imposes the tax on gas and
 electricity for residential use only the rate of the municipal tax
 is used to determine the amount of tax on the use, storage, or other
 consumption of gas and electricity for residential use; and
 (2)     only the rate of the municipal tax is used in a
 situation described by Section 321.205(b).
 (b)     The formula prescribed by Section 321.201(b) applies to
 the computation of the amount of use taxes under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   321.205.     USE TAX: MUNICIPALITY IN WHICH USE OCCURS.
 (a) In determining the incidence of the use tax authorized by this
 chapter the name of the municipality adopting the tax is
 substituted in Subchapter D, Chapter 151, for "this state" where
 those words are used to designate the taxing entity or delimit the
 tax imposed. However, the excise tax authorized by this chapter on
 the use, storage, or consumption of a taxable item does not apply if
 the item is first used, stored, or consumed in a municipality or
 area that has not adopted the taxes authorized by this chapter.
 (b)     If a sale of a taxable item is consummated in this state
 but not within a municipality that has adopted the taxes authorized
 by this chapter and the item is shipped directly, or brought by the
 purchaser or lessee directly, into a municipality that has adopted
 the taxes authorized by this chapter, the item is subject to the
 municipality's use tax. The use is considered to be consummated at
 the location where the item is first stored, used, or consumed after
 the intrastate transit has ceased.
 (c)     If a taxable item is shipped from outside this state to a
 customer within this state and the use of the item is consummated
 within a municipality that has adopted the tax authorized by this
 chapter, the item is subject to the municipality's use tax and not
 its sales tax. A use is considered to be consummated at the first
 point in this state where the item is stored, used, or consumed
 after the interstate transit has ceased. A taxable item delivered
 to a point in this state is presumed to be for storage, use, or
 consumption at that point until the contrary is established.
 (d)     The holder of a direct payment permit issued under
 Chapter 151 who becomes liable for the use tax under this chapter by
 reason of the storage, use, or consumption of a taxable item
 purchased in this state under a direct payment exemption
 certificate shall allocate the tax to the municipality in which the
 item was first removed from the permit holder's storage, or if not
 stored, the place at which the item was first used or consumed by
 the permit holder after transportation. In this subsection an item
 is not considered to have been stored, used, or consumed because of
 a temporary delay or interruption necessary and incidental to its
 transportation or further fabrication, processing, or assembling
 within this state for delivery to the permit holder. A charge for
 fabrication, processing, or further assembly in a municipality that
 has adopted the tax under this chapter shall be subject to the
 municipal use tax.
 (e)     With respect to a taxable service, "use" means the
 derivation in the municipality of direct or indirect benefit from
 the service.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 27, eff. Sept. 1,
 1991.
 Sec. 321.206.
 Sec. 321.205.  REPEALED
 Sec. 321.206.  INCIDENCE OF ADDITIONAL MUNICIPAL SALES AND
 USE VALUE ADDED TAX. For the purpose of determining the proper
 sales value added tax under this chapter and the proper excise tax
 on the use, storage, or other consumption of taxable items under
 Section 321.101(b):
 (1)  , if a taxable item service or property is used,
 stored, or otherwise consumed supplied in a municipality that has
 adopted the additional municipal sales and use value added tax, the
 statutes listed in Section 322.108(a) apply; and
 (2)     if the sales tax applies in a municipality that has
 not adopted the municipal sales and use tax, the excise tax on the
 use, storage, or other consumption of the taxable item does not
 apply.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.15(a), eff. Aug. 28,
 1989.
 Sec. 321.207.
 Sec. 321.207.  LOCAL TAX INAPPLICABLE WHEN NO STATE TAX;
 EXCEPTIONS. (a) The sales value added tax authorized by this
 chapter does not apply to the sale supply of a taxable item services
 or property unless the sales value added tax imposed by Subchapter
 C, Chapter 151 220, also applies to the sale.
 (b)     The excise tax authorized by this chapter on the use,
 storage, or consumption of a taxable item does not apply to the use,
 storage, or consumption of a taxable item unless the tax imposed by
 Subchapter D, Chapter 151, also applies to the use, storage, or
 consumption.
 (c)     Subsections (a) and (b) do not apply to the taxes
 authorized by this chapter on the sale, production, distribution,
 lease, or rental of, and the use, storage, or consumption of gas and
 electricity for residential use.
 (d)     Subsection (b) does not apply to the application of the
 tax in a situation described by Section 321.205(b).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 28, eff. Sept. 1,
 1991.
 Sec. 321.208.
 Sec. 321.208.  STATE EXEMPTIONS APPLICABLE. The exemptions
 and exclusions provided by Subchapter H, Subchapters D and E of
 Chapter 151, 220 apply to the taxes authorized by this chapter,
 except as provided by Section 151.317(b)..
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.209.
 Sec. 321.209.  TRANSITION EXEMPTION: GENERAL PURPOSE SALES
 AND USE VALUE ADDED TAX. (a) For a period of three years only after
 the effective date of the tax authorized by Section 321.101(a) in a
 municipality, the otherwise taxable receipts from the sale supply
 of, and the use, storage, and consumption of, taxable items
 services or property are exempt from the tax imposed by the
 municipality under Section 321.101(a) if the notice required by
 Subsection (b) is given and if:
 (1)  the items services and/or property are used for
 suppliedfor the performance of a written contract entered into
 before the effective date of the tax imposed under Section
 321.101(a) in the municipality if the contract may be affected and
 the contract may not be modified because of the tax; or
 (2)  the items services and/or property are used
 supplied under the obligation of a bid submitted before the
 effective date of the tax imposed under Section 321.101(a) in the
 municipality if the contract may be affected and the bid may not be
 withdrawn or modified because of the tax.
 (b)  The taxpayer must give the comptroller notice of the
 contract or bid on which an exemption is to be claimed within 60
 days after the effective date of the tax imposed under Section
 321.101(a) in the municipality.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(d), eff. Aug. 28,
 1989.
 Sec. 321.2091. 321.2091. TRANSITION EXEMPTION: ADDITIONAL
 MUNICIPAL SALES AND USE VALUE ADDED TAX. (a) The otherwise taxable
 receipts from the sale, use, or rental supply of services and the
 storage, use, or consumption of taxable items in this state/or
 property are exempt from the adoption or increase of the additional
 municipal sales and use value added tax if the items services and/or
 property are used supplied:
 (1)  for the performance of a written contract entered
 into before the date the adoption or increase of the additional tax
 takes effect in the municipality, if the contract is not subject to
 change or modification by reason of the tax; or
 (2)  pursuant to an obligation of a bid or bids
 submitted prior to the date the adoption or increase of the
 additional tax takes effect in the municipality, if the bid or bids
 may not be withdrawn, modified, or changed by reason of the tax.
 (b)  The exemptions provided by this section have no effect
 after three years from the date the adoption or increase of the
 additional tax takes effect in the municipality.
 Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(c), eff. Aug. 28,
 1989. Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 5, eff. May 24,
 1991.
 Sec.   321.210.     TELECOMMUNICATIONS EXEMPTION. (a) There are
 exempted from the taxes imposed under this chapter the sales within
 the municipality of telecommunications services unless the
 application of the exemption is repealed under this section. A
 municipality may not repeal the application of this exemption as it
 applies to interstate long-distance telecommunications services,
 but if a municipality has repealed the exemption before the
 effective date of Part 4, Article 1, H.B. No. 61, Acts of the 70th
 Legislature, 2nd Called Session, 1987, interstate long-distance
 telecommunications services in that municipality are not subject to
 taxes imposed under this chapter.
 (b)     The governing body of a municipality by ordinance
 adopted by a majority vote of the governing body in the manner
 required for the adoption of other ordinances may repeal the
 application of the exemption provided by Subsection (a) for
 telecommunications services sold within the municipality.
 (c)     A municipality that has repealed the application of the
 exemption may in the same manner reinstate the exemption.
 (d)     A vote of the governing body of a municipality repealing
 the application of or reinstating the exemption must be entered in
 the minutes of the municipality. The municipal secretary shall
 send to the comptroller by United States certified or registered
 mail a copy of each ordinance adopted under this section. The
 repeal of the application of the exemption or a reinstated
 exemption takes effect within the municipality as provided by
 Section 321.102(a) after receipt of a copy of the ordinance.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
 33.
 SUBCHAPTER D. ADMINISTRATION OF TAXES
 Sec. 321.301.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
 The comptroller shall administer, collect, and enforce any tax
 imposed by a municipality under this chapter. The taxes imposed
 under this chapter and the tax taxes imposed under Chapter 151 220
 shall be collected together, if both taxes are imposed.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.302.
 Sec. 321.302.  COMPTROLLER'S REPORTING DUTIES. (a) The
 comptroller shall make quarterly reports to a municipality that has
 adopted the taxes authorized by this chapter if the municipality
 requests the reports. A report must include the name, address, and
 account number of each person in the municipality that has remitted
 to the comptroller a tax payment during the quarter covered by the
 report.
 (b)  If a municipality requests an additional report, the
 comptroller shall make an additional quarterly report to the
 municipality including the name, address, and account number, if
 any, of, and the amount of tax due from, each person doing business
 in the municipality who has failed to pay the tax under this chapter
 to the municipality or under Chapter 151 220. The additional report
 must also include statements:
 (1)  showing whether or not there has been a partial tax
 payment by the delinquent taxpayer;
 (2)  showing whether or not the taxpayer is delinquent
 in the payment of sales and use value added taxes to the state; and
 (3)  describing the steps taken by the comptroller to
 collect the delinquent taxes.
 (c)  If a municipality determines that a person doing
 business in the municipality is not included in a comptroller's
 report, the municipality shall report to the comptroller the name
 and address of the person. Within 90 days after receiving the
 report from a municipality, the comptroller shall send to the
 municipality:
 (1)  an explanation as to why the person is not
 obligated for the municipal tax;
 (2)  a statement that the person is obligated for the
 municipal tax and the tax is delinquent; or
 (3)  a certification that the person is obligated for
 the municipal tax and that the full amount of the tax due has been
 credited to the municipality's account.
 (d)  The comptroller shall send by United States certified or
 registered mail to the municipal tax collector a notice of each
 person who is delinquent in the payment to the municipality of the
 taxes authorized by this chapter and shall send a copy of the notice
 to the attorney general. A notice sent under this subsection is a
 certification of the amount of tax owed and is prima facie evidence
 of a determination of that amount and of its delinquency.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.3022.
 Sec. 321.3022.  TAX INFORMATION. (a) In this section,
 "other local governmental entity" has the meaning assigned by
 Section 321.107.
 (a-1)  Except as otherwise provided by this section, the
 comptroller on request shall provide to a municipality or other
 local governmental entity that has adopted a tax under this
 chapter:
 (1)  information relating to the amount of tax paid to
 the municipality or other local governmental entity under this
 chapter during the preceding or current calendar year by each
 person doing business in the municipality or other local
 governmental entity who annually remits to the comptroller state
 and local sales value added tax payments of more than $5,000; and
 (2)  any other information as provided by this section.
 (a-2)  The comptroller on request shall provide to a
 municipality or other local governmental entity that has adopted a
 tax under this chapter and that does not impose an ad valorem tax
 information relating to the amount of tax paid to the municipality
 or other local governmental entity under this chapter during the
 preceding or current calendar year by each person doing business in
 the municipality or other local governmental entity who annually
 remits to the comptroller state and local sales value added tax
 payments of more than $500.
 (b)  The comptroller on request shall provide to a
 municipality or other local governmental entity that has adopted a
 tax under this chapter information relating to the amount of tax
 paid to the municipality or other local governmental entity under
 this chapter during the preceding or current calendar year by each
 person doing business in an area, as defined by the municipality or
 other local governmental entity, that is part of:
 (1)  an interlocal agreement;
 (2)  a tax abatement agreement;
 (3)  a reinvestment zone;
 (4)  a tax increment financing district;
 (5)  a revenue sharing agreement;
 (6)  an enterprise zone;
 (7)  a neighborhood empowerment zone;
 (8)  a crime control and prevention district;
 (9)  a fire control, prevention, and emergency medical
 services district;
 (10)  any other agreement, zone, or district similar to
 those listed in Subdivisions (1)-(9); or
 (11)  any area defined by the municipality or other
 local governmental entity for the purpose of economic forecasting.
 (c)  The comptroller shall provide the information under
 Subsection (b) as an aggregate total for all persons doing business
 in the defined area without disclosing individual tax payments.
 (d)  If the request for information under Subsection (b)
 involves not more than three persons doing business in the defined
 area who remit taxes under this chapter, the comptroller shall
 refuse to provide the information to the municipality or other
 local governmental entity unless the comptroller receives
 permission from each of the persons allowing the comptroller to
 provide the information to the municipality or other local
 governmental entity as requested.
 (e)  A separate request for information under this section
 must be made in writing by the municipality's mayor or chief
 administrative officer or by the governing body of the other local
 governmental entity each year.
 (f)  Information received by a municipality or other local
 governmental entity under this section is confidential, is not open
 to public inspection, and may be used only for the purpose of
 economic forecasting, for internal auditing of a tax paid to the
 municipality or other local governmental entity under this chapter,
 or for the purpose described in Subsection (g).
 (g)  Information received by a municipality or other local
 governmental entity under Subsection (b) may be used by the
 municipality or other local governmental entity to assist in
 determining revenue sharing under a revenue sharing agreement or
 other similar agreement.
 (h)  The comptroller may set and collect from a municipality
 or other local governmental entity reasonable fees to cover the
 expense of compiling and providing information under this section.
 (i)  Notwithstanding Chapter 551, Government Code, the
 governing body of a municipality or other local governmental entity
 is not required to confer with one or more employees or a third
 party in an open meeting to receive information or question the
 employees or third party regarding the information received by the
 municipality or other local governmental entity under this section.
 Added by Acts 1995, 74th Leg., ch. 1000, Sec. 70, eff. Oct. 1, 1995.
 Amended by Acts 1999, 76th Leg., ch. 291, Sec. 1, eff. May 29, 1999;
 Acts 2001, 77th Leg., ch. 840, Sec. 1, eff. June 14, 2001; Acts
 2003, 78th Leg., ch. 1285, Sec. 1, 2.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 1, eff. April 5, 2007.
 Acts 2009, 81st Leg., R.S., Ch. , Sec. 6, eff. September 1,
 2009.
 Acts 2009, 81st Leg., R.S., Ch. , Sec. 3, eff. January 1,
 2010.
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 1, eff. September 1,
 2011.
 Sec. 321.3025.  321.3025. DISPOSITION OF AMOUNT ERRONEOUSLY
 COLLECTED. (a) If in a territory added to a municipality a
 retailer taxpayer erroneously collects an amount as a tax imposed
 under this chapter before the date the taxes imposed under this
 chapter by the municipality take effect in the added territory
 under Section 321.102, the amount collected is treated as if it were
 revenue from the taxes imposed by the municipality under this
 chapter, and the comptroller shall collect and administer the
 amount in the same manner as tax revenue.
 (b)  This section does not affect the right of a person who
 paid an amount erroneously collected by a retailer taxpayer to
 claim a refund or the authority of the comptroller to make a refund
 of that amount.
 Added by Acts 1989, 71st Leg., ch. 291, Sec. 1, eff. June 14, 1989.
 Sec.   321.303.     SALES TAX PERMITS AND EXEMPTION AND RESALE
 CERTIFICATES. (a) Each place of business of a retailer must have a
 permit issued by the comptroller under Subchapter F, Chapter 151.
 (b)     The same sales tax permit, exemption certificate, and
 resale certificate required by Chapter 151 for the administration
 and collection of the taxes imposed by that chapter satisfy the
 requirements of this chapter. No additional permit or exemption or
 resale certificate may be required except that the comptroller may
 prescribe a separate exemption certificate form for the transition
 exemption for prior contracts and bids under Section 321.209.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.304.  321.304. DISCOUNTS FOR PREPAYMENT AND TAX
 COLLECTION. All discounts allowed a retailer taxpayer under
 Chapter 151 220 for the collection and prepayment of the taxes under
 that chapter are allowed and applicable to the taxes collected
 under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.305.  321.305. PENALTIES. The penalties provided
 by Chapter 151 220 for violations of that chapter apply to
 violations of this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.306.
 Sec. 321.306.  COMPTROLLER'S RULES. The comptroller may
 adopt reasonable rules and prescribe forms that are consistent with
 this chapter for the administration, collection, reporting, and
 enforcement of this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.307.
 Sec. 321.307.  DELINQUENT TAXES: LIMITATIONS. The
 limitations for the bringing of a suit for the collection of a tax
 imposed or a penalty due under this chapter after the tax and
 penalty are delinquent or after a determination against the
 taxpayer are the same as limitations provided by Chapter 151 220.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.308.
 Sec. 321.308.  SEIZURE AND SALE OF PROPERTY. If the
 comptroller lawfully seizes property for the payment of the taxes
 imposed under Chapter 151 220 and the property owner is delinquent
 in the payment of taxes under this chapter, the comptroller shall
 sell sufficient property to pay the delinquent taxes and penalties
 of both taxes. The proceeds of a sale of seized property shall
 first be applied to the payment of amounts due the state and the
 remainder, if any, to the amounts due to the municipality to which
 the taxes are due.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.309.
 Sec. 321.309.  SUIT FOR TAX COLLECTION. (a) A municipality
 acting through its attorney may join as a plaintiff in any suit
 brought by the attorney general to seek a judgment for delinquent
 taxes and penalties due to the municipality under this chapter.
 (b)  A municipality may bring suit for the collection of
 taxes owed to the municipality under this chapter if:
 (1)  the taxes are certified by the comptroller in the
 notice required by Section 321.302(d);
 (2)  a written notice of the tax delinquency and the
 municipality's intention to bring suit is given by certified mail
 to the taxpayer, the attorney general, and the comptroller at least
 60 days before the suit is filed; and
 (3)  neither the comptroller nor the attorney general
 disapproves of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.310.
 Sec. 321.310.  DISAPPROVAL OF MUNICIPAL SUIT. (a) The
 comptroller or the attorney general may disapprove of the
 institution of a suit by a municipality under Section 321.309(b)
 if:
 (1)  negotiations between the state and the taxpayer
 are being conducted for the purpose of the collection of delinquent
 taxes owed to the state and the municipality seeking to bring suit;
 (2)  the taxpayer owes substantial taxes to the state
 and there is a reasonable possibility that the taxpayer may be
 unable to pay the total amount owed;
 (3)  the state will bring suit against the taxpayer for
 all taxes due under Chapter 151 220 and this chapter; or
 (4)  the suit involves a critical legal question
 relating to the interpretation of state law or a provision of the
 Texas or United States constitution in which the state has an
 overriding interest.
 (b)  A notice of disapproval to a municipality must be in
 writing and give the reason for the determination by the
 comptroller or attorney general.
 (c)  A disapproval is final and not subject to review.
 (d)  Not earlier than one year after the date of a
 disapproval of the institution of a municipal collection suit, the
 municipality may again proceed as provided by Section 321.309(b)
 even though the liability of the taxpayer includes taxes for which
 the municipality has previously given notice and the comptroller or
 attorney general has disapproved of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.311.
 Sec. 321.311.  JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
 in a suit under Section 321.309(b) for or against a taxpayer does
 not affect a claim against the taxpayer by another municipality or
 the state unless the state is party to the suit.
 (b)  A municipality shall abstract a copy of each final
 judgment for taxes imposed under this chapter in a case in which the
 state is not a party and shall send to the comptroller a copy of the
 judgment and the abstract.
 (c)  A municipality shall by execution collect the taxes
 awarded to it in each judgment received by the municipality and is
 responsible for the renewal of the judgment before its expiration.
 (d)  The municipality shall notify the comptroller by
 certified mail of the amount of any taxes collected on the judgment.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.312. 321.312. RETENTION OF CERTAIN MUNICIPAL SALES
 VALUE ADDED TAXES. A municipality that holds a sales and use value
 added tax permit issued by the comptroller and that imposes a sales
 and use value added tax may retain the portion of the tax that the
 municipality collects and that constitutes the municipality's own
 tax. The municipality shall remit to the comptroller all other
 applicable local sales and use value added taxes and the state sales
 and use value added tax.
 Added by Acts 2001, 77th Leg., ch. 1263, Sec. 75, eff. Oct. 1, 2001.
 SUBCHAPTER E. TAX ELECTION PROCEDURES
 Sec. 321.401.  CALLING OF ELECTION. (a) An election under
 this chapter is called by the adoption of an ordinance by the
 governing body of a municipality.
 (b)  The governing body may call the election by a vote of a
 majority of its members.
 (c)  The governing body shall call the election if a number
 of qualified voters of the municipality equal to at least 20 percent
 of the number of votes cast in the most recent regular municipal
 election petitions the governing body for a vote on the question.
 (d)  The governing body of any municipality that has not
 adopted the additional sales and use municipal value added tax
 shall, on petition of qualified voters of the municipality equal in
 number to at least five percent of the number of voters registered
 in the municipality, provide by ordinance for the calling and
 holding of an election on the question of adopting the additional
 sales and use municipal value added tax.
 (e)  The governing body of any municipality that has adopted
 the additional sales and use municipal value added tax shall, on
 petition of qualified voters of the municipality equal in number to
 at least five percent of the number of voters registered in the
 municipality, provide by ordinance for the calling and holding of
 an election on the question of increasing, reducing, or repealing
 the additional sales and use municipal value added tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 184, Sec. 6, eff. May 24, 1991.
 Sec. 321.402.
 Sec. 321.402.  DEADLINES AFTER PETITION. (a) After the
 receipt of a petition for an election under this chapter, the
 governing body of a municipality shall determine the sufficiency of
 the petition within 30 days.
 (b)  If the petition is sufficient, the governing body shall
 pass the ordinance calling the election within 60 days after
 receiving the petition.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.403.
 Sec. 321.403.  TIME OF ELECTION. (a) An election under this
 chapter to adopt the tax authorized under Section 321.101(a) must
 be held on the first succeeding uniform election date for which
 sufficient time elapses for the holding of an election.
 (b)  An election on the approval of the additional sales and
 use municipal value added tax must be held on the next succeeding
 uniform election date not less than 30 days after the passage of the
 ordinance calling the election.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.404.
 Sec. 321.404.  BALLOT WORDING. (a) In an election to adopt
 the tax, the ballot shall be printed to provide for voting for or
 against the applicable proposition: "A one percent sales and use
 value added tax is adopted within the city" or "The adoption of an
 additional sales and use municipal value added tax within the city
 at the rate of ________ of one percent to be used to reduce the
 property tax rate" (one-eighth, one-fourth, three-eighths, or
 one-half to be inserted as appropriate).
 (b)  In an election to repeal the tax, the ballot shall be
 printed to provide for voting for or against the applicable
 proposition: "The local sales and use value added tax within the
 city is abolished" or "The abolition of the additional sales and use
 municipal value added tax within the city."
 (c)  In a municipality that does not impose a property tax,
 the ballot at an election to adopt the additional municipal sales
 and use value added tax shall be printed to provide for voting for
 or against the following proposition: "The adoption of an
 additional sales and use municipal value added tax within the city
 at the rate of ________ of one percent" (one-eighth, one-fourth,
 three-eighths, or one-half to be inserted as appropriate).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.14(b), eff. Aug. 28,
 1989; Acts 1991, 72nd Leg., ch. 184, Sec. 7, eff. May 24, 1991.
 Sec. 321.405.
 Sec. 321.405.  OFFICIAL RESULTS OF ELECTION. (a) Within 10
 days after an election in which the voters approve of the adoption
 or abolition of a tax authorized by this chapter, the governing body
 of the municipality shall by resolution or ordinance entered in its
 minutes of proceedings, declare the results of the election. A
 resolution or ordinance under this section must include statements
 showing:
 (1)  the date of the election;
 (2)  the proposition on which the vote was held;
 (3)  the total number of votes cast for and against the
 proposition; and
 (4)  the number of votes by which the proposition was
 approved.
 (b)  If the application of the taxes that may be imposed
 under this chapter is changed by the results of the election, the
 municipal secretary shall send to the comptroller by United States
 certified or registered mail a certified copy of the resolution or
 the ordinance along with a map of the municipality clearly showing
 its boundaries.
 (c)  Not later than the 30th day after the date the
 comptroller receives a certified copy of an ordinance or resolution
 showing the adoption of the additional municipal sales and use
 value added tax, the comptroller shall notify the municipal
 secretary that he is prepared for the administration of the tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.406.
 Sec. 321.406.  FREQUENCY OF ELECTION. An election under
 this chapter in a municipality may not be held earlier than one year
 after the date of any previous election under this chapter in the
 municipality.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.407.
 Sec. 321.407.  ELECTION CONTEST: NOTICE. (a) If an
 election held under this chapter is contested, the contestant shall
 send to the comptroller by United States certified or registered
 mail within 10 days after the filing of the contest a notice of
 contest containing the style of the suit, the date it was filed, its
 case number, and the name of the court in which the contest is
 pending.
 (b)  A court may not hear an election contest of an election
 held under this chapter unless the comptroller is notified within
 the time and in the manner provided by this section.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.408.
 Sec. 321.408.  ELECTION CONTEST: DELAYED EFFECTIVE DATE.
 (a) When the comptroller receives a notice of contest of an
 election under this chapter, the effective date of the tax or the
 abolition of a tax is suspended.
 (b)  When a final judgment is entered in the election
 contest, the municipal secretary shall notify the comptroller by
 United States certified or registered mail and enclose a certified
 copy of the final judgment.
 (c)  If the final judgment in the election contest results in
 a change in the tax status of the municipality under this chapter,
 the tax or the abolition of the tax takes effect as provided by
 Section 321.102 except that the notice of the final judgment is
 substituted for the notice of election results prescribed by
 Section 321.405.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.409. 321.409. COMBINED MUNICIPAL SALES VALUE ADDED
 TAX BALLOT PROPOSITIONS. (a) Notwithstanding any provisions of
 this code or other state law, a municipality may by a combined
 ballot proposition lower or repeal any dedicated or special purpose
 municipal sales value added tax, including the additional sales
 value added tax for property tax relief, and by the same proposition
 raise or adopt any other dedicated or special purpose municipal
 sales value added tax, including the additional sales value added
 tax for property tax relief.
 (b)  A combined sales value added tax proposition under this
 section shall contain substantially the same language, if any,
 required by law for the lowering, repealing, raising, or adopting
 of each tax as appropriate.
 (c)  A negative vote on a combined sales value added tax
 proposition under this section shall have no effect on either the
 sales value added tax to be lowered or repealed by the proposition
 or the sales value added tax to be raised or adopted by the
 proposition.
 (d)  This section does not apply to sales value added tax
 elections called by any method other than by the governing body.
 (e)  This section shall not be construed to change the
 substantive law of any sales value added tax, including the allowed
 maximum rate or combined rate of local sales value added taxes.
 Added by Acts 2005, 79th Leg., Ch. , Sec. 1, eff. September 1, 2005.
 SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
 Sec. 321.501.  TRUST ACCOUNT. (a) The comptroller shall
 deposit the taxes collected by the comptroller under this chapter
 in trust in the separate suspense account of the municipality from
 which the taxes were collected.
 (b)  Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(44).
 (c)  Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(44).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.123, eff. Sept.
 1, 1997; Acts 2003, 78th Leg., ch. 285, Sec. 31(44), eff. Sept. 1,
 2003.
 Sec. 321.502.
 Sec. 321.502.  DISTRIBUTION OF TRUST FUNDS. At least twice
 during each state fiscal year and at other times as often as
 feasible, the comptroller shall send to the municipal treasurer or
 to the person who performs the office of the municipal treasurer
 payable to the municipality the municipality's share of the taxes
 collected by the comptroller under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.503.
 Sec. 321.503.  STATE'S SHARE. Before sending any money to a
 municipality under this subchapter the comptroller shall deduct two
 percent of the amount of the taxes collected within the
 municipality during the period for which a distribution is made as
 the state's charge for its services under this chapter and shall,
 subject to premiums payments under Section 321.501(c), credit the
 money deducted to the general revenue fund.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.504.
 Sec. 321.504.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
 comptroller may retain in the suspense account of a municipality a
 portion of the municipality's share of the tax collected for the
 municipality under this chapter, not to exceed five percent of the
 amount remitted to the municipality. If the municipality has
 abolished the tax, the amount that may be retained may not exceed
 five percent of the final remittance to the municipality at the time
 of the termination of the collection of the tax.
 (b)  From the amounts retained in a municipality's suspense
 account, the comptroller may make refunds for overpayments to the
 account and to redeem dishonored checks and drafts deposited to the
 credit of the account.
 (c)  Before the expiration of one year after the effective
 date of the abolition of a municipality's tax under this chapter the
 comptroller shall send to the municipality the remainder of the
 money in the municipality's account and shall close the account.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.505.
 Sec. 321.505.  INTEREST ON TRUST ACCOUNT. Interest earned
 on all deposits made with the comptroller under Section 321.501,
 including interest earned from retained suspense accounts, shall be
 credited to the general revenue fund.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.124, eff. Sept.
 1, 1997.
 Sec. 321.506.
 Sec. 321.506.  USE OF TAX REVENUE BY MUNICIPALITY. Except as
 provided by Section 321.507, the money received by a municipality
 under this chapter is for the use and benefit of the municipality
 and may be used for any purpose for which the general funds of the
 municipality may be used, except that a municipality may not pledge
 the revenue received under this chapter to the payment of bonds or
 other indebtedness.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.507. 321.507. USE OF ADDITIONAL MUNICIPAL SALES
 AND USE VALUE ADDED TAX. (a) In each year in which a municipality
 imposes an additional municipal sales and use value added tax, if
 the revenue from the collection of the additional tax exceeds the
 amount of taxes computed for the municipality under Section
 26.04(c), except for the amount required to be deposited in a
 special account under Subsection (b), the excess shall be deposited
 in an account to be called the municipal sales value added tax debt
 service fund. Revenue deposited in the municipal sales value added
 tax debt service fund may be spent only for the reduction of lawful
 debts of the municipality, except that deposits that exceed the
 amount of revenue needed to pay the debt service needs of the
 municipality in the current year may be used for any municipal
 purpose consistent with the municipal budget.
 (b)  Revenue from the collection of the additional municipal
 sales and use value added tax in each of the first three years in
 which the tax is imposed in the municipality in excess of the amount
 determined as provided by Section 26.041(d), for each year shall be
 deposited in an account to be called the excess sales value added
 tax revenue fund. During those three years, revenue deposited in
 the excess sales value added tax revenue fund may be spent only if
 and to the extent that taxes or other revenues of the municipality
 are collected in amounts less than anticipated. After that period,
 the revenue in the fund may be used for any municipal purpose
 consistent with the municipality's budget. The fund ceases to
 exist when all revenue deposited in the fund has been spent. This
 subsection does not apply to a municipality that does not impose a
 property tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.16(a), eff. Aug. 28,
 1989.
 Sec. 321.508.
 Sec. 321.508.  PLEDGE OF TAX REVENUE. (a) A municipality
 may call and hold an election on the issue of authorizing the
 municipality to pledge a percentage of the sales and use value added
 tax revenue received under Section 321.101(a) or (b), or both, to
 the payment of obligations issued to pay all or part of the costs of
 one or more sports needed infrastructure, development and community
 venue other capital projects located in within or otherwise
 supporting the municipality.
 (b)  The ballot at the election under this section must be
 printed to permit voting for or against the proposition:
 "Authorizing the City of ______ (insert name of municipality) to
 pledge not more than ______ percent (insert percentage not to
 exceed 25 percent) of the revenue received from the municipal the
 _________ (insert municipal sales and use value added tax,
 additional municipal sales and use tax, or both) previously adopted
 in the city to the payment of obligations issued to pay all or part
 of the costs of _________ (insert description of each sports and
 community venue project)."
 (c)  If a majority of the voters vote in favor of the
 proposition, the municipality may:
 (1)  issue bonds, notes, or other obligations that are
 payable from the pledged revenues to pay for all or part of the
 costs of the sports and community venue project or projects
 described in the proposition; and
 (2)  set aside the portion of the revenue approved at
 the election that the municipality actually receives and pledge
 that revenue as security for the payment of the bonds, notes, or
 other obligations.
 (d)  If the municipality pledges revenue under Subsection
 (c), the pledge and security interest shall continue while the
 bonds, notes, or obligations, including refunding obligations, are
 outstanding and unpaid.
 (e)  The municipality may direct the comptroller to deposit
 the pledged revenue to a trust or account as may be required to
 obtain the financing and to protect the related security interest.
 (f)  Sections 321.506 and 321.507 do not apply to taxes
 pledged under this section.
 (g)  In this section, "sports and community venue project"
 has the meaning assigned by Section 334.001, Local Government Code.
 Added by Acts 1997, 75th Leg., ch. 551, Sec. 4, eff. Sept. 1, 1997.
 Sec. 321.509.
 Sec. 321.509.  TAX POWERS OF MUNICIPALITY NOT LIMITED. This
 chapter does not abolish or limit the tax powers of a municipality.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 321.510. 321.510. REALLOCATION OF MUNICIPAL OR LOCAL
 GOVERNMENTAL ENTITY TAX REVENUE. (a) In this section, "local
 governmental entity" includes any governmental entity created by
 the legislature that has a limited purpose or function, that has a
 defined or restricted geographic territory, and that is authorized
 by law to impose a local sales and use value added tax the
 imposition, computation, administration, enforcement, and
 collection of which is governed by this chapter.
 (b)  This section applies only if:
 (1)  the comptroller:
 (A)  reallocates local tax revenue from a
 municipality or local governmental entity to another municipality
 or local governmental entity; or
 (B)  refunds local tax revenue that was previously
 allocated to a municipality or local governmental entity; and
 (2)  the amount the comptroller reallocates or refunds
 is at least equal to the lesser of:
 (A)  $200,000;
 (B)  an amount equal to 10 percent of the revenue
 received by the municipality or local governmental entity under
 this chapter during the calendar year preceding the calendar year
 in which the reallocation or refund is made; or
 (C)  an amount that increases or decreases the
 amount of revenue the municipality or local governmental entity
 receives under this chapter during a calendar month by more than 15
 percent as compared to revenue received by the municipality or
 local governmental entity during the same month in any previous
 year.
 (c)  Subject to the criteria provided by this section, a
 municipality or local governmental entity may request a review of
 all available sales value added tax returns and reports in the
 comptroller's possession filed by not more than five individual
 taxpayers doing business in the municipality or local governmental
 entity that are included and identified by the municipality or
 local governmental entity from the information received from the
 comptroller under Section 321.3022 and that relate to a
 reallocation or refund in an amount described by Subsection (b).
 (d)  The comptroller shall provide the returns and reports
 requested under Subsection (c) for review regardless of whether the
 information in the returns or reports is confidential under state
 law, including Sections 111.006 and 151.027.
 (e)  The provision of confidential information to a
 municipality or local governmental entity under this section does
 not affect the confidential nature of the information in the
 returns or reports. A municipality or local governmental entity
 shall use the information only in a manner that maintains the
 confidential nature of the information and may not disclose or
 release the information to the public.
 (f)  A municipality or local governmental entity must submit
 the request under Subsection (c) not later than the 90th day after
 the date the municipality or local governmental entity discovers a
 reallocation or refund described by Subsection (b).
 (g)  Not earlier than the 30th day or later than the 90th day
 after the date the comptroller receives a request under Subsection
 (c), the comptroller shall provide the requested returns and
 reports to the requesting municipality or local governmental entity
 for review.
 (h)  The comptroller may set and collect from a municipality
 or local governmental entity a reasonable fee to cover the expense
 of compiling and providing information under this section.
 Added by Acts 2011, 82nd Leg., R.S., Ch. , Sec. 2, eff. September 1,
 2011.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
 CHAPTER 322. SALES AND USE VALUE ADDED TAXES FOR SPECIAL PURPOSE
 TAXING AUTHORITIES
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 322.001.  APPLICATION OF CHAPTER. (a) This chapter
 applies to the imposition, assessment, collection, administration,
 and enforcement of a sales and use value added tax imposed under
 Chapter 451, 452, 453, or 460, Transportation Code.
 (b)  The effective dates and rates of the taxes imposed by a
 taxing entity are determined under the laws authorizing the
 adoption of the taxes.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.266, eff. Sept. 1,
 1997; Acts 2003, 78th Leg., ch. 209, Sec. 56, eff. Oct. 1, 2003.
 Sec. 322.002.  DEFINITIONS. In this chapter:
 (1)  "Taxing entity" means a rapid transit authority, a
 regional transit authority, including a subregional transportation
 authority, or a municipal mass transit department created under
 Chapter 451, 452, or 453, Transportation Code, or a coordinated
 county transportation authority created under Chapter 460,
 Transportation Code, that has adopted a sales and use value added
 tax under the law authorizing the creation of the entity.
 (2)  "Entity area" means the geographical limits of a
 taxing entity.
 (3)  "Municipal sales and use value added tax" means a
 sales and use value added tax imposed by a municipality under the
 Municipal Sales and Use Value added Tax Act (Chapter 321) within an
 entity area.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.267, eff. Sept. 1,
 1997; Acts 2003, 78th Leg., ch. 209, Sec. 57, eff. Oct. 1, 2003.
 SUBCHAPTER B. ASSESSMENT AND COMPUTATION OF TAXES
 Sec. 322.101.  SALES VALUE ADDED TAX. There A value added
 tax is imposed on the supply in a taxing entity of any service or
 property by any person in the ordinary course of a sales tax at the
 trade or business in which the person engages for the purpose of
 profit. The rate of value added tax imposed is authorized and set as
 provided by the law authorizing the creation of the taxing entity
 and applied to the taxable receipts from the sale all supplies
 within the entity area of all taxable items services and property
 that are subject to the sales value added tax under Chapter 151 220.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   322.102.     USE TAX. In a taxing entity, there is imposed
 an excise tax on the use, storage, and other consumption within the
 entity area of taxable items purchased, leased, or rented from a
 retailer during the period that the sales tax is effective within
 the entity area. The rate of the excise tax is the same rate as the
 rate of the sales tax imposed by the taxing entity and is applied to
 the sales price of the taxable item.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.103.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
 Each retailer taxpayer in an entity area shall add the sales value
 added tax imposed under this chapter, the sales value added taxes
 imposed under Chapter 151 220, and, if applicable, any sales value
 added taxes imposed under Chapter 321 or 323 to the sales supply
 price, and the sum of the taxes is shall be a part of the price, a
 debt of the purchaser customer to the retailer taxpayer until paid,
 and recoverable at law in the same manner as the purchase supply
 price.
 (b)  The amount of the total tax is computed by multiplying
 the combined applicable tax rates by the amount of the sales price.
 taxable receipts received in consideration for supplying the
 services or property. If the product results in a fraction of a
 cent less than one-half of one cent, the fraction of a cent is not
 collected. If the fraction is one-half of one cent or more, the
 fraction shall be collected as one cent.
 (c)     The exclusion provided by Section 151.411 applies to a
 retailer under this chapter 50 percent of whose receipts from the
 sales of taxable items comes from individual transactions in which
 the sales price is an amount on which no tax is produced from the
 combined applicable tax rates.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.104.  COMPUTATION OF USE TAX. (a) In each taxing
 entity the tax imposed by Subchapter D, Chapter 151 220, the tax
 imposed under Section 321.104(a), if applicable, and the tax
 imposed under Section 322.102 are added together to form a single
 combined tax rate, except in a situation described by Section
 322.105(b)..
 (b)  The formula prescribed by Section 322.103(b) applies to
 the computation of the amount of the tax under this section.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   322.105.     USE TAX: WHERE USE OCCURS. (a) In
 determining the incidence of the use tax of a taxing entity, the
 name of the taxing entity is substituted in Subchapter D, Chapter
 151, for "this state" where those words are used to designate the
 taxing entity or delimit the tax imposed. However, the excise tax
 of a taxing entity on the use, storage, or other consumption of a
 taxable item does not apply if the item is first used, stored, or
 consumed in an area other than an entity area.
 (b)     If a sale of a taxable item is consummated within this
 state but not within an entity area and the item is shipped directly
 or brought by the purchaser or lessee directly into an entity area,
 the item is subject to the entity's use tax. The use is considered
 to be consummated at the location where the item is first used,
 stored, or consumed after the intrastate transit has ceased.
 (c)     If a taxable item is shipped from outside this state to a
 customer within this state, the item is subject to the use tax of
 the taxing entity and not its sales tax. A use is considered to be
 consummated at the first point in this state where the item is
 stored, used, or consumed after the interstate transit has ceased.
 A taxable item delivered to a point in this state is presumed to be
 for storage, use, or consumption at that point until the contrary is
 established.
 (d)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 823, Sec.
 1(1), eff. September 1, 2007.
 (e)     With respect to a taxable service, "use" means the
 derivation in the taxing entity of direct or indirect benefit from
 the service.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.21(a), eff. Aug. 28,
 1989; Acts 1991, 72nd Leg., ch. 705, Sec. 29, eff. Sept. 1, 1991.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 1(1), eff. September 1,
 2007.
 Sec. 322.105.  REPEALED
 Sec. 322.106.  TAX INAPPLICABLE WHEN NO STATE TAX;
 EXCEPTIONS. (a). The sales value added tax of a taxing entity does
 not apply to the sale supply of a taxable item services or property
 unless the sales value added tax imposed under Subchapter C,
 Chapter 151, 220 also applies to the sale.
 (b)     The excise tax of a taxing entity on the use, storage, or
 consumption of a taxable item does not apply to the use, storage, or
 consumption of an item unless the tax imposed by Subchapter D,
 Chapter 151, also applies to the use, storage, or consumption of the
 item.
 (c)     Subsection (b) does not apply to the application of the
 tax in a situation described by Section 322.105(b).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 30, eff. Sept. 1,
 1991.
 Sec. 322.108.  CERTAIN PROVISIONS OF MUNICIPAL SALES AND USE
 VALUE ADDED TAX APPLICABLE. (a) Except as provided by Subsection
 (b), the following apply to the taxes imposed by this chapter in the
 same manner as applicable to a municipality under Chapter 321:
 (1)  Section 321.002(a)(3);
 (2)  Section 321.003;
 (3)  Section 321.203;
 (4)  Section 321.205(d);
 (5)  Section 321.208;
 (6)  Section 321.209;
 (7)  Section 321.303;
 (8)  Section 321.304;
 (9)  Section 321.305; and
 (10)  Section 321.510.
 (b)  The provisions of this chapter applicable to a taxing
 entity created under Chapter 453, Transportation Code, prevail over
 any inconsistent provision in a statute listed in Subsection (a).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.20(a), eff. Aug. 28,
 1989; Acts 1997, 75th Leg., ch. 165, Sec. 30.268, eff. Sept. 1,
 1997.
 Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 3, eff. September 1,
 2011.
 Sec.   322.109.     TELECOMMUNICATIONS EXEMPTION. (a) There are
 exempted from the taxes imposed by a taxing entity under this
 chapter the sales within the entity area of telecommunications
 services unless the application of the exemption is repealed under
 this section. A taxing entity may not repeal the application of
 this exemption as it applies to interstate long-distance
 telecommunications services, but if a taxing entity has repealed
 the exemption before the effective date of Part 4, Article 1, H.B.
 No. 61, Acts of the 70th Legislature, 2nd Called Session, 1987,
 interstate long-distance telecommunications services in that
 taxing entity are not subject to taxes imposed under this chapter.
 (b)     Except as provided by Subsection (d), the board of a
 taxing entity may, by a majority vote of the board in the manner
 required for the adoption of other orders, repeal the application
 of the exemption provided by Subsection (a) for telecommunications
 services sold within the city.
 (c)     A taxing entity board that has repealed the application
 of the exemption may in the same manner reinstate the exemption.
 (d)     The governing board of a taxing entity created under
 Chapter 451, Transportation Code, may not repeal the application of
 the exemption provided by Subsection (a) unless the repeal is first
 approved by a majority of the members of the governing body of each
 municipality that created the taxing entity. A reinstatement of
 the exemption must be approved in the same manner.
 (e)     A vote of a taxing entity board repealing the
 application of or reinstating the exemption must be entered in the
 minutes of the entity. The entity board chairman or secretary shall
 send to the comptroller by United States certified or registered
 mail a copy of each order adopted under this section. The repeal of
 the application of the exemption or a reinstated exemption takes
 effect within the entity on the first day of the first calendar
 quarter after the expiration of the first complete calendar quarter
 after the date on which the comptroller receives a copy of the
 order.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
 34; Acts 1999, 76th Leg., ch. 1008, Sec. 1, eff. June 18, 1999.
 Sec. 322.110.  TRANSITION EXEMPTION IN CERTAIN TAXING
 ENTITIES. (a) The taxable receipts from the sale, use, or rental
 supply of services and the storage, use, or consumption of taxable
 items/or property in this state are exempt from the tax imposed
 under this chapter by a taxing entity created under Chapter 453,
 Transportation Code, if the items are services and/or propertyare
 used:
 (1)  for the performance of a written contract entered
 into before the date the tax takes effect in the taxing entity, if
 the contract is not subject to change or modification by reason of
 the tax; or
 (2)  pursuant to an obligation of a bid or bids
 submitted before the date the tax takes effect in the taxing entity,
 if the bid or bids may not be withdrawn, modified, or changed by
 reason of the tax.
 (b)  The exemptions provided by this section have no effect
 after three years from the date the tax takes effect in the taxing
 entity.
 Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.19(a), eff. Aug. 28,
 1989. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.269, eff.
 Sept. 1, 1997.
 SUBCHAPTER C. ADMINISTRATION OF TAXES
 Sec. 322.201.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
 (a) The comptroller shall administer, collect, and enforce the
 sales and use value added tax of a taxing entity.
 (b)  The sales and use value added taxes imposed under this
 chapter, the taxes imposed under Chapters 321 and 323, and the taxes
 imposed under Chapter 151 220 shall be collected together to the
 extent that each is imposed in an entity area.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.202.  COMPTROLLER'S REPORTING DUTIES. (a) The
 comptroller shall report to a taxing entity on the entity's sales
 and use value added taxes by making substantially the same reports
 that are required to be made by the comptroller to a municipality
 under Sections 321.302(a), (b), and (c).
 (b)  The comptroller shall send to a taxing entity by United
 States certified or registered mail a notice of each person who is
 delinquent in the payment of the entity's sales and use value added
 taxes and shall send to the attorney general a copy of the notice. A
 notice sent under this subsection is a certification of the amount
 of tax owed and is prima facie evidence of a determination of that
 amount and of its delinquency.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.2022.  TAX INFORMATION. (a) Except as otherwise
 provided by this section, the comptroller on request shall provide
 to a taxing entity:
 (1)  information relating to the amount of tax paid to
 the entity under this chapter during the preceding or current
 calendar year by each person doing business in the area included in
 the entity who annually remits to the comptroller state and local
 sales value added tax payments of more than $5,000; and
 (2)  any other information as provided by this section.
 (b)  The comptroller on request shall provide to a taxing
 entity information relating to the amount of tax paid to the entity
 under this chapter during the preceding or current calendar year by
 each person doing business in an area included in the entity, as
 defined by the entity, that is part of:
 (1)  an interlocal agreement;
 (2)  a revenue sharing agreement;
 (3)  any other agreement similar to those listed in
 Subdivisions (1) and (2); or
 (4)  any area defined by the entity for the purpose of
 economic forecasting.
 (c)  The comptroller shall provide the information under
 Subsection (b) as an aggregate total for all persons doing business
 in the defined area without disclosing individual tax payments.
 (d)  If the request for information under Subsection (b)
 involves not more than three persons doing business in the defined
 area who remit taxes under this chapter, the comptroller shall
 refuse to provide the information to the taxing entity unless the
 comptroller receives permission from each of the persons allowing
 the comptroller to provide the information to the entity as
 requested.
 (e)  A separate request for information under this section
 must be made in writing by the governing body of the taxing entity
 each year.
 (f)  Information received by a taxing entity under this
 section is confidential, is not open to public inspection, and may
 be used only for the purpose of economic forecasting, for internal
 auditing of a tax paid to the entity under this chapter, or for the
 purpose described by Subsection (g).
 (g)  Information received by a taxing entity under
 Subsection (b) may be used by the entity to assist in determining
 revenue sharing under a revenue sharing agreement or other similar
 agreement.
 (h)  The comptroller may set and collect from a taxing entity
 reasonable fees to cover the expense of compiling and providing
 information under this section.
 (i)  Notwithstanding Chapter 551, Government Code, the
 governing body of a taxing entity is not required to confer with one
 or more employees or a third party in an open meeting to receive
 information or question the employees or third party regarding the
 information received by the entity under this section.
 Added by Acts 2009, 81st Leg., R.S., Ch. , Sec. 7, eff. September 1,
 2009.
 Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 2, eff. September 1,
 2011.
 Sec. 322.203.  COMPTROLLER'S RULES. The comptroller may
 adopt reasonable rules and prescribe forms that are consistent with
 this chapter for the administration, collection, and enforcement of
 this chapter and for the reporting of the taxes imposed under this
 chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.204.  DELINQUENT TAXES: LIMITATIONS. The
 limitations for the bringing of a suit for the collection of a sales
 and use value added tax imposed by a taxing entity or a penalty due
 on the tax after the tax and penalty are delinquent or after a
 determination against a taxpayer are the same as the limitations
 provided by Chapter 151 220.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.205.  SEIZURE AND SALE OF PROPERTY. (a) If the
 comptroller lawfully seizes property for the payment of the taxes
 imposed under Chapter 151 220 and the property owner is delinquent
 in the payment of taxes under this chapter, the comptroller shall
 sell sufficient property to pay the delinquent taxes and penalties
 under this chapter, Chapter 151 220, and Chapter 321.
 (b)  The proceeds of the sale of seized property shall first
 be applied to the payment of amounts due the state, then to the
 payments of amounts due a municipality under Chapter 321, and the
 remainder, if any, to the payment of amounts due to the taxing
 entity to which the taxes are due.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.206.  SUITS FOR TAX COLLECTION. (a) A taxing
 entity acting through its attorney may join as a plaintiff in any
 suit brought by the attorney general to seek a judgment for
 delinquent taxes and penalties due to the taxing entity under this
 chapter.
 (b)  A taxing entity may bring suit for the collection of
 taxes owed to the taxing entity under this chapter if:
 (1)  the taxes are certified by the comptroller in the
 notice required by Section 322.202(b);
 (2)  a written notice of the tax delinquency and the
 entity's intention to bring suit is given by certified mail to the
 taxpayer, the attorney general, and the comptroller at least 60
 days before the suit is filed; and
 (3)  neither the comptroller nor the attorney general
 disapproves of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.207.  DISAPPROVAL OF SUIT. (a) The comptroller or
 the attorney general may disapprove of the institution of a suit by
 a taxing entity under Section 322.206(b) if:
 (1)  negotiations between the state and the taxpayer
 are being conducted for the purpose of the collection of delinquent
 taxes owed to the state and the taxing entity seeking to bring suit;
 (2)  the taxpayer owes substantial taxes to the state
 and there is a reasonable possibility that the taxpayer may be
 unable to pay the total amount owed;
 (3)  the state will bring suit against the taxpayer for
 all taxes due under Chapter 151 220 and this chapter; or
 (4)  the suit involves a critical legal question
 relating to the interpretation of state law or a provision of the
 Texas or United States constitution in which the state has an
 overriding interest.
 (b)  A notice of disapproval to a taxing entity must be in
 writing and give the reason for the determination by the
 comptroller or attorney general.
 (c)  A disapproval is final and not subject to review.
 (d)  Not earlier than one year after the date of a
 disapproval of the institution of a taxing entity collection suit,
 the taxing entity may again proceed as provided by Section
 322.206(b) even though the liability of the taxpayer includes taxes
 for which the entity has previously given notice and the
 comptroller or attorney general has disapproved of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.208.  JUDGMENTS IN SUIT. (a) A judgment in a suit
 under Section 322.206(b) for or against a taxpayer does not affect a
 claim against the taxpayer by a municipality or the state unless the
 state is party to the suit.
 (b)  A taxing entity shall abstract a copy of each final
 judgment for taxes imposed under this chapter in a case in which the
 state is not a party and shall send to the comptroller a copy of the
 judgment and the abstract.
 (c)  A taxing entity shall by execution collect the taxes
 awarded to it in each judgment received by it and is responsible for
 the renewal of the judgment before its expiration.
 (d)  The taxing entity shall notify the comptroller by
 certified mail of the amount of any taxes collected on the judgment.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 SUBCHAPTER D. REVENUE DEPOSIT, DISTRIBUTION, AND USE
 Sec. 322.301.  COLLECTIONS HELD BY COMPTROLLER. The
 comptroller shall deposit, hold, account for, and transmit sales
 and use value added taxes collected under this chapter for each
 taxing entity in the same manner as required under Section 321.501
 for each municipality.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.302.  DISTRIBUTION OF TRUST FUNDS. At least
 quarterly during each state fiscal year and as often as feasible,
 the comptroller shall send to the person at each taxing entity who
 performs the function of entity treasurer, payable to the taxing
 entity, the entity's share of the taxes collected by the
 comptroller under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 16, Sec. 5, eff. Aug. 31, 1989;
 Acts 1997, 75th Leg., ch. 165, Sec. 30.270, eff. Sept. 1, 1997;
 Acts 1999, 76th Leg., ch. 1467, Sec. 2.68, eff. Oct. 1, 1999.
 Sec. 322.303.  STATE'S SHARE. Before sending any money to a
 taxing entity under this subchapter, the comptroller shall deduct
 two percent of the amount of the taxes collected within the entity
 area during the period for which a distribution is made as the
 state's charge for its services under this chapter and shall credit
 the money deducted to the general revenue fund.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 322.304.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
 comptroller may retain in the suspense account of a taxing entity a
 portion of the entity's share of the tax collected for the entity
 under this chapter, not to exceed five percent of the amount
 remitted to the entity. If the entity has abolished the tax, the
 amount that may be retained may not exceed five percent of the final
 remittance to the entity at the time of the termination of the
 collection of the tax.
 (b)  From the amounts retained in an entity's suspense
 account, the comptroller may make refunds for overpayments to the
 account and to redeem dishonored checks and drafts deposited to the
 credit of the account.
 (c)  Before the expiration of one year after the effective
 date of the abolition of an entity's tax under this chapter other
 than a department under Chapter 453, Transportation Code, the
 comptroller shall send to the entity the remainder of the money in
 the entity's account and shall close the account.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.271, eff. Sept. 1,
 1997.
 Sec. 322.305.  INTEREST ON TRUST ACCOUNTS. Interest earned
 on all deposits made with the comptroller under this chapter,
 including interest earned on retained accounts, shall be credited
 to the general revenue fund.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.125, eff. Sept.
 1, 1997.
 Sec. 322.306.  RETENTION OF CERTAIN SPECIAL PURPOSE DISTRICT
 SALES VALUE ADDED TAXES. A taxing entity that holds a sales and use
 value added tax permit issued by the comptroller and that imposes a
 sales and use value added tax may retain the portion of the tax that
 the taxing entity collects and that constitutes the entity's own
 tax. The taxing entity shall remit to the comptroller all other
 applicable local sales and use value added taxes and the state sales
 and use value added tax.
 Added by Acts 2001, 77th Leg., ch. 1263, Sec. 76, eff. Oct. 1, 2001.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
 CHAPTER 323. COUNTY SALES AND USE VALUE ADDED TAX ACT
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 323.001.  SHORT TITLE. This chapter may be cited as the
 County Sales and Use Value added Tax Act.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.002.  323.002. DEFINITIONS. The words used in this
 chapter and defined by Chapters 151 220 and 321 have the meanings
 assigned by Chapters 151 220 and 321.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.003.
 Sec. 323.003.  OTHER PORTIONS OF TAX APPLICABLE. Subtitles
 A and B, Title 2, and Chapters 142 and 151 Chapter 220 apply to the
 taxes and to the administration and enforcement of the taxes
 imposed by this chapter in the same manner that those laws apply to
 state taxes unless modified by this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.13, eff. Aug. 28,
 1989; Acts 2003, 78th Leg., ch. 1310, Sec. 117, eff. Oct. 1, 2003.
 SUBCHAPTER B. IMPOSITION OF SALES AND USE VALUE ADDED TAXES BY
 COUNTIES
 Sec. 323.101.  TAX AUTHORIZED. (a) A qualified county may
 adopt or repeal the county sales and use value added tax authorized
 by this chapter at an election in which a majority of the qualified
 voters of the county approve the adoption or repeal of the tax, as
 applicable.
 (b)  A county is qualified to adopt the tax only if no part of
 the county is located in a rapid transit authority created under
 Chapter 451, Transportation Code, or a regional transportation
 authority created under Chapter 452 of that code.
 (c)  An authority created under Chapter 451 or 452,
 Transportation Code, is prohibited from imposing the tax provided
 for by those chapters in a county in which the county sales and use
 value added tax provided for by this section is in effect or is
 scheduled to take effect. For the purposes of this section, an
 authority is not considered to be located in any county in which
 fewer than 250 persons are both residents of the authority and the
 county.
 (d)  A county may not adopt a sales and use value added tax
 under this section if as a result of the adoption of the tax the
 combined rate of all sales and use taxes imposed by the county and
 other political subdivisions of this state having territory in the
 county would exceed two percent at any location in the county.
 (e)     If the voters of a county approve the adoption of a sales
 and use tax at an election held on the same election date on which a
 municipality having territory in the county adopts a sales and use
 tax or an additional sales and use tax and as a result the combined
 rate of all sales and use value added taxes imposed by the county
 and other political subdivisions of this state having territory in
 the county would exceed two three percent at any location in the
 county, the election to adopt a county sales and use tax has no
 effect.
 (e)  If the voters of a county approve the adoption of a value
 added tax at an election held on the same election date on which a
 municipality having territory in the county adopts a value added
 tax or an additional municipal value added tax and as a result the
 combined rate of all value added taxes imposed by the county and
 other political subdivisions of this state having territory in the
 county would exceed three percent at any location in the county, the
 election to adopt a county value added tax has no effect.
 (f)  The provisions of this chapter govern the application,
 collection, and administration of a sales and use value added tax
 imposed under Chapter 285 or 775, Health and Safety Code, to the
 extent not inconsistent with the provisions of those chapters.
 Provided, however, that Subsection (b) shall not apply to a tax
 authorized under those chapters.
 (g)  Expired.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 54, Sec. 2, eff. Oct.
 20, 1987; Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 6, eff. Sept.
 1, 1989; Acts 1997, 75th Leg., ch. 65, Sec. 2, eff. May 9, 1997;
 Acts 1997, 75th Leg., ch. 165, Sec. 30.272, eff. Sept. 1, 1997.
 Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 15, eff. June 17, 2011.
 Sec. 323.102.
 Sec. 323.102.  EFFECTIVE DATES: NEW TAX, TAX REPEAL. (a)
 Except as provided by Subsection (c), a tax imposed under this
 chapter takes effect on the October 1st after the expiration of the
 first complete calendar quarter occurring after the date on which
 the comptroller receives a notice of the action as required by
 Section 323.405(b).
 (b)  The repeal of a tax abolished under this chapter takes
 effect on the October 1st after the expiration of the first complete
 calendar quarter occurring after the date on which the comptroller
 receives a notice of the action as required by Section 323.405(b).
 (c)  A tax imposed under Section 323.105 of this code or
 Chapter 326 or 383, Local Government Code, takes effect on the first
 day of the first calendar quarter after the expiration of the first
 complete calendar quarter occurring after the date on which the
 comptroller receives a notice of the action as required by Section
 323.405(b).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 256, Sec. 2, eff. Sept. 1,
 1989; Acts 1995, 74th Leg., ch. 342, Sec. 1, eff. Aug. 28, 1995;
 Acts 1999, 76th Leg., ch. 1467, Sec. 2.69, eff. June 19, 1999.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 12, eff. September 1, 2007.
 Sec. 323.103.  SALES 323.103. VALUE ADDED TAX. (a) In a
 county that has adopted the tax authorized by this chapter, there is
 imposed a value added tax on the taxable receipts from the sale at
 retail of taxable items within the supply in such county of any
 service or property by any person in the ordinary course of a trade
 or business in which the person engages for the purpose of profit.
 (b)  The tax is imposed at the rate approved by the voters.
 The rate, when the tax is adopted, must be equal to any increment
 any increment of one-half eighth percentage point from zero to a
 maximum of one percent, or in a unless the county that includes no
 territory within the limits of a municipality, one in which case the
 maximum rate shall be two percent.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.104.  USE TAX. In a , unless the county that has
 adopted the tax authorized by this chapter, there is imposed an
 excise tax on the use, storage, or includes no territory within the
 limits of a special district (i.e., any local taxing unit other
 consumption within the than a municipality, county of taxable items
 purchased, leased, or rented from a retailer during the period that
 the tax is effective within the county. The rate of the excise tax
 is the same as school district), in which case the rate of the sales
 tax portion maximum rate shall be two percent. The rate may be
 reduced in one or more increments of the tax and is one-eighth of
 one percent to a minimum of one-eighth of one percent or increased
 in one or more increments of one-eighth of one percent to a maximum
 of one percent, or the tax may be abolished. This rate is then
 applied to the sales price of the taxable item. With respect to a
 taxable service, "use" means the derivation in the county of direct
 or indirect benefit from the service taxpayer's taxable receipts
 attributable to any applicable tax period to determine the
 applicable municipal value added tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 32, eff. Sept. 1,
 1991.
 Sec.
 Sec. 323.104.  REPEALED
 Sec. 323.105.  CRIME CONTROL DISTRICT TAX. (a) Subject to
 an election held in accordance with the Crime Control and
 Prevention District Act, a county in which a crime control and
 prevention district is established shall adopt a sales and use
 value added tax in the area of the district for the purpose of
 financing the operation of the crime control and prevention
 district. The revenue from the tax may be used only for the purpose
 of financing the operation of the crime control and prevention
 district. The proposition for adopting a tax under this section and
 the proposition for creation of a crime control and prevention
 district shall be submitted at the same election. For purposes of
 Subsection (c) of Section 323.101 of this code, a tax under this
 section is not a county sales and use value added tax.
 (b)  A tax adopted for a district under this section for
 financing the operation of the district may be decreased in
 increments of one-eighth of one percent by order of the board of
 directors of the district.
 (c)  The board of directors or the governing body of the
 governmental entity that proposed the creation of the crime control
 and prevention district may call an election on the question of
 decreasing the tax rate in increments of one-eighth of one percent
 in the district if the district was created before January 1, 1996.
 The board of directors or governing body may dedicate a portion of
 the tax for the payment of bonds used in conjunction with the
 renovation or extension of a county-owned or municipally owned
 convention center facility, as defined in Section 351.001, that was
 constructed before 1969 if the dedication is approved by a majority
 of the qualified voters in an election held in the district on the
 question of decreasing the tax rate. At the election, the ballot
 shall be printed to provide for voting for or against the following
 proposition: "The decrease of the _______ Crime Control and
 Prevention District sales and use value added tax to _____ percent
 and authorizing the use of ______ of one percent for the payment of
 bonds issued for the renovation or extension of certain
 county-owned or municipally owned convention center facilities as
 that term is defined under Section 351.001, Tax Code, and
 authorizing that the tax expire on payment of the bonds."
 (d)  The rate of a tax adopted for a district under this
 section may be increased in increments of one-eighth of one
 percent, not to exceed a total tax rate of one-quarter half percent
 for financing the operation of the crime control and prevention
 district, by order of the board of directors of the crime control
 and prevention district if approved by a majority of the qualified
 voters voting at an election called by the board and held in the
 district on the question of increasing the tax rate. At the
 election, the ballot shall be printed to provide for voting for or
 against the following proposition: "The increase of the
 ____________ Crime Control and Prevention District sales and use
 value added tax rate to ____________ percent." If there is an
 increase or decrease under this subsection in the rate of a tax
 imposed under this section, the new rate takes effect on the first
 day of the next calendar quarter after the expiration of one
 calendar quarter after the comptroller receives notice of the
 increase or decrease. However, if the comptroller notifies the
 president of the board of directors of the district in writing
 within 10 days after receipt of the notification that the
 comptroller requires more time to implement reporting and
 collection procedures, the comptroller may delay implementation of
 the rate change for one whole calendar quarter. In that event, the
 new rate takes effect on the first day of the next calendar quarter
 following the elapsed quarter.
 (e)  The comptroller shall remit to the county amounts
 collected at the rate imposed under this section as part of the
 regular allocation of county tax revenue collected by the
 comptroller if the district is composed of the entire county. The
 comptroller shall, if the district is composed of an area less than
 the entire county, remit that amount to the district. Retailers
 Taxpayers may not be required to use the allocation and reporting
 procedures in the collection of taxes under this section different
 from the procedures that retailers taxpayers use in the collection
 of other sales and use value added taxes under this chapter. An
 item, transaction, A supply of services and/or service property
 that is taxable in a county under a sales or use value added tax
 authorized by another section of this chapter is taxable under this
 section. An item, transaction, or service A supply of services
 and/or property that is not taxable in a county under a sales or use
 value added tax authorized by another section of this chapter is not
 taxable under this section.
 (f)  If, in a county where a crime control and prevention
 district is composed of the whole county, a county sales and use
 value added tax or a county sales and use value added tax rate
 increase for the purpose of financing a crime control and
 prevention district is approved, the county is responsible for
 distributing to the district that portion of the county sales and
 use value added tax revenue received from the comptroller that is to
 be used for the purposes of financing the crime control and
 prevention district. Not later than the 10th day after the date the
 county receives funds under this section from the comptroller, the
 county shall make the distribution in the proportion that the crime
 control and prevention portion of the tax rate bears to the total
 sales and use value added tax rate of the county. The amounts
 distributed to a crime control and prevention district are not
 considered to be sales and use value added tax revenue for the
 purpose of property tax reduction and computation of the county tax
 rate under Section 26.041, Tax Code.
 (g)  For purposes of the tax imposed under this section, a
 reference in this chapter to the county as the territory in which
 the tax or an incident of the tax applies means only the territory
 located in the crime control and prevention district, if that
 district is composed of an area less than an entire county.
 (h)  The comptroller may adopt rules and the county
 commissioners court may adopt orders to administer this section.
 Added by Acts 1989, 71st Leg., ch. 664, Sec. 2, eff. June 14, 1989.
 Amended by Acts 1993, 73rd Leg., ch. 864, Sec. 15, eff. June 18,
 1993; Acts 1997, 75th Leg., ch. 1248, Sec. 6, eff. June 20, 1997;
 Acts 1999, 76th Leg., ch. 1467, Sec. 2.70, eff. Oct. 1, 1999.
 SUBCHAPTER C. COMPUTATION OF TAXES
 Sec. 323.201.  COMPUTATION OF SALES VALUE ADDED TAXES. (a)
 Each retailer taxpayer in a county that has adopted the tax
 authorized by this chapter shall add the sales value added tax
 imposed by this chapter and by Chapter 151 220, plus any other
 applicable sales value added tax, to the sales supply price, and the
 sum of the taxes is a part of the price, a debt of the purchaser
 customer to the retailer taxpayer until paid, and recoverable at
 law in the same manner as the purchase supply price.
 (b)  The amount of the total tax is computed by multiplying
 the combined applicable tax rates by the amount of the sales supply
 price. If the product results in a fraction of a cent less than
 one-half of one cent, the fraction of a cent is not collected. If
 the fraction of a cent is one-half of one cent or more, the fraction
 shall be collected as one cent.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.202.     METHOD OF REPORTING: RETAILERS HAVING SALES BELOW
 TAXABLE AMOUNT. The exclusion provided by Section 151.411 applies
 to a retailer under this chapter 50 percent of whose receipts from
 the sales of taxable items comes from individual transactions in
 which the sales price is an amount on which no tax is produced from
 the combined state and local taxes.
 Added by Acts 1987, 70th Leg., ch. 191,
 Sec. 323.202.  REPEALED.
 Sec. 323.203.  REPEALED
 Sec. 1, eff. Sept. 1, 1987.
 For expiration of Subsections (c-2) and (c-3), see Subsection
 (c-3).
 Sec.   323.203.     CONSUMMATION OF SALE. (a) A sale of a taxable item
 occurs within the county in which the sale is consummated. A sale
 is consummated as provided by this section regardless of the place
 where transfer of title or possession occurs.
 (b)     If a retailer has only one place of business in this state, all
 of the retailer's retail sales of taxable items are consummated at
 that place of business except as provided by Subsection (e).
 (c)     If a retailer has more than one place of business in this
 state, each sale of each taxable item by the retailer is consummated
 at the place of business of the retailer in this state where the
 retailer first receives the order, provided that the order is
 placed in person by the purchaser or lessee of the taxable item at
 the place of business of the retailer in this state where the
 retailer first receives the order.
 (c-1)     If the retailer has more than one place of business in this
 state and Subsection (c) does not apply, the sale is consummated at
 the place of business of the retailer in this state:
 (1)     from which the retailer ships or delivers the item, if the
 retailer ships or delivers the item to a point designated by the
 purchaser or lessee; or
 (2)     where the purchaser or lessee takes possession of and removes
 the item, if the purchaser or lessee takes possession of and removes
 the item from a place of business of the retailer.
 Text of subsection effective until September 01, 2014
 (c-2)     Subsection (c) does not apply if:
 (1)     the taxable item is shipped or delivered from a warehouse:
 (A)     that is a place of business of the retailer;
 (B)     in relation to which the retailer has an economic development
 agreement with:
 (i)     the county in which the warehouse is located that was entered
 into under Chapter 381, Local Government Code, before January 1,
 2009; or
 (ii)     the municipality in which the warehouse is located that was
 entered into under Chapter 380, 504, or 505, Local Government Code,
 or a predecessor statute, before January 1, 2009; and
 (C)     in relation to which the county provides information relating
 to the economic development agreement as required by Subsection
 (c-3) by the deadline prescribed by that subsection, or, if
 appropriate, the municipality complies with Section 321.203(c-3)
 by the deadline prescribed by that section; and
 (2)     the place of business of the retailer at which the retailer
 first receives the order in the manner described by Subsection (c)
 is a retail outlet identified in the information required by
 Subsection (c-3) or Section 321.203(c-3) as being served by the
 warehouse on January 1, 2009.
 (c-3)     Not later than September 1, 2009, a county that has entered
 into an economic development agreement described by Subsection
 (c-2) shall send to the comptroller information prescribed by the
 comptroller relating to the agreement that identifies each
 warehouse subject to the agreement and each retail outlet that, on
 January 1, 2009, was served by that warehouse.    The comptroller
 shall prescribe the manner in which the information must be
 provided.    The provision of information to the comptroller under
 this subsection does not affect whether information described by
 this subsection is confidential or excepted from required public
 disclosure.    This subsection and Subsection (c-2) expire September
 1, 2014.
 (d)     If the retailer has more than one place of business in this
 state and Subsections (c) and (c-1) do not apply, the sale is
 consummated at:
 (1)     the place of business of the retailer in this state where the
 order is received; or
 (2)     if the order is not received at a place of business of the
 retailer, the place of business from which the retailer's agent or
 employee who took the order operates.
 (e)     A sale of a taxable item is consummated at the location in this
 state to which the item is shipped or delivered or at which
 possession is taken by the customer if transfer of possession of the
 item occurs at, or shipment or delivery of the item originates from,
 a location in this state other than a place of business of the
 retailer and if:
 (1)     the retailer is an itinerant vendor who has no place of
 business in this state;
 (2)     the retailer's place of business where the purchase order is
 initially received or from which the retailer's agent or employee
 who took the order operates is outside this state; or
 (3)     the purchaser places the order directly with the retailer's
 supplier and the item is shipped or delivered directly to the
 purchaser by the supplier.
 (f)     The sale of natural gas and electricity is consummated at the
 point of delivery to the consumer.
 (g)     The sale of mobile telecommunications services is consummated
 in accordance with Section 151.061.
 (g-1)     The sale of telecommunications services sold based on a
 price that is measured by individual calls is consummated at the
 location where the call originates and terminates or the location
 where the call either originates or terminates and at which the
 service address is also located.
 (g-2)     Except as provided by Subsection (g-3), the sale of
 telecommunications services sold on a basis other than on a
 call-by-call basis is consummated at the location of the customer's
 place of primary use.
 (g-3)     A sale of post-paid calling services is consummated at the
 location of the origination point of the telecommunications signal
 as first identified by the seller's telecommunications system or by
 information received by the seller from the seller's service
 provider if the system used to transport the signal is not that of
 the seller.
 (h)     The sale of an amusement service is consummated in the county
 in which the performance or other delivery of the service takes
 place.
 (i)     If a purchaser who has given a resale certificate makes any use
 of a taxable item that subjects the taxable item to the sales tax
 under the provisions of Section 151.154, the use or other
 consumption of the taxable item that subjected the taxable item to
 the tax is consummated at the place where the taxable item is stored
 or kept at the time of or just before the use or consumption.
 (j)     The sale of services delivered through a cable system is
 consummated at the point of delivery to the consumer.
 (k)     The sale of garbage or other solid waste collection or removal
 service is consummated at the location at which the garbage or other
 solid waste is located when its collection or removal begins.
 (l)     Repealed by Acts 2007, 80th Leg., R.S., Ch. 1266, Sec. 15(5),
 eff. September 1, 2007.
 (m)     A sale of a service described by Section 151.0047 to remodel,
 repair, or restore nonresidential real property is consummated at
 the location of the job site.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.22(b), eff. Aug. 28,
 1989; Acts 1989, 71st Leg., ch. 810, Sec. 2, eff. Oct. 1, 1989;
 Acts 1991, 72nd Leg., ch. 705, Sec. 33, eff. Sept. 1, 1991; Acts
 2001, 77th Leg., ch. 370, Sec. 3, eff. Aug. 1, 2002; Acts 2003, 78th
 Leg., ch. 209, Sec. 58, eff. Oct. 1, 2003; Acts 2003, 78th Leg., ch.
 1310, Sec. 118, eff. July 1, 2004.
 Amended by:
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 13, eff. September 1, 2007.
 Acts 2007, 80th Leg., R.S., Ch. , Sec. 15(5), eff. September 1,
 2007.
 Acts 2009, 81st Leg., R.S., Ch. , Sec. 8, eff. June 19, 2009.
 Sec. 323.204.  323.204. COMPUTATION OF USE TAX. In each
 county that has adopted the taxes authorized by this chapter, the
 tax imposed by Section 323.104, by other applicable local taxes,
 and by Subchapter D, Chapter 151, 220, are added together to form a
 single combined tax rate, except only the rate of the county tax is
 used in a situation described by Section 323.205(b)..
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.205.  REPEALED.
 Sec. 323.205.  USE TAX: 206. COUNTY IN WHICH USE OCCURS. (a) In
 determining the incidence of the use TAX INAPPLICABLE WHEN NO STATE
 TAX. The value added tax authorized by this chapter, the name of
 the county adopting the tax is substituted in Subchapter D, Chapter
 151, for "this state" where those words are used to designate the
 taxing entity or delimit the tax imposed. However, the excise tax
 authorized by this chapter on the use, storage, or consumption does
 not apply to the supply of a taxable item does not apply if the
 taxable item is first used, stored, or consumed in a county that has
 not adopted the taxes authorized by this chapter.
 (b)     If a sale of a taxable item is consummated in this state but
 not within a county that has adopted the taxes authorized by this
 chapter and the taxable item is shipped directly, or brought by the
 purchaser or lessee directly, into a county that has adopted the
 taxes authorized by this chapter, the taxable item is subject to the
 county's use tax. The use is considered to be consummated at the
 location where the item is first stored, used, or consumed after the
 intrastate transit has ceased.
 (c)     If a taxable item is shipped from outside this state to a
 customer within this state and the use of the taxable item is
 consummated within a county that has adopted the tax authorized by
 this chapter, the taxable item is subject to a county's use tax and
 not its sales tax. A use is considered to be consummated at the
 first point in this state where the taxable item is stored, used, or
 consumed after the interstate transit has ceased. A taxable item
 delivered to a point in this state is presumed to be for storage,
 use, or consumption at that point until the contrary is
 established.
 (d)     The holder of a direct payment permit issued under Chapter 151
 who becomes liable for the use tax under this chapter by reason of
 the storage, use, or consumption of a taxable item purchased in this
 state under a direct payment exemption certificate shall allocate
 the tax to the county in which the item was first removed from the
 permit holder's storage, or if not stored, the place at which the
 item was first used or consumed by the permit holder after
 transportation. In this subsection an item is not considered to
 have been stored, used, or consumed because of a temporary delay or
 interruption necessary and incidental to its transportation or
 further fabrication, processing, or assembling within this state
 for delivery to the permit holder. A charge for fabrication,
 processing, or further assembly in a county that has adopted the tax
 under this chapter shall be subject to the county use tax.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 34, eff. Sept. 1,
 1991.
 Sec.   323.206.     COUNTY TAX INAPPLICABLE WHEN NO STATE TAX;
 EXCEPTIONS. (a) The sales tax authorized by this chapter does not
 apply to the sale of a taxable item service or supply unless the
 sales value added tax imposed by Subchapter C, Chapter 151 220, also
 applies to the sale.
 (b)     The excise tax authorized by this chapter on the use, storage,
 or consumption of a taxable item does not apply to the use, storage,
 or consumption of an item unless the tax imposed by Subchapter D,
 Chapter 151, also applies to the use, storage, or consumption.
 (c)     Subsections (a) and (b) do not apply to the taxes authorized by
 this chapter on the sale, production, distribution, lease, or
 rental of, and the use, storage, or consumption of gas and
 electricity for residential use.
 (d)     Subsection (b) does not apply to the application of the tax in
 a situation described by Section 323.205(b).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1991, 72nd Leg., ch. 705, Sec. 35, eff. Sept. 1,
 1991.
 Sec. 323.207.
 Sec. 323.207.  STATE EXEMPTIONS APPLICABLE. The exemptions
 and exclusions provided by Subchapter H, Subchapters D and E of
 Chapter 151 220, apply to the taxes authorized by this chapter,
 except as provided by Section 151.317(b)..
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.208.     TELECOMMUNICATIONS EXEMPTION. (a) There are
 exempted from the taxes imposed under this chapter the sale within
 the county of telecommunications services unless the application of
 the exemption is repealed under this section. A county may not
 repeal the application of this exemption as it applies to
 interstate long-distance telecommunications services, but if a
 county has repealed the exemption before the effective date of Part
 4, Article 1, H.B. No. 61, Acts of the 70th Legislature, 2nd Called
 Session, 1987, interstate long-distance telecommunications
 services in that county are not subject to taxes imposed under this
 chapter.
 (b)     The commissioners court of a county by a majority vote may
 repeal the application of the exemption provided by Subsection (a)
 for telecommunications services sold within the county.
 (c)     A county that has repealed the application of the exemption
 may in the same manner reinstate the exemption.
 (d)     A vote of the commissioners court repealing the application of
 or reinstating the exemption must be entered in the minutes of the
 court. The county judge shall send to the comptroller by United
 States certified or registered mail a copy of each order adopted
 under this section. The repeal of the application of the exemption
 or a reinstated exemption takes effect within the county on the
 first day of the first calendar quarter after the expiration of the
 first complete calendar quarter after the date on which the
 comptroller receives notification of the order.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, Sec.
 35.
 Sec.   323.209.     TRANSITION EXEMPTION. (a) The receipts from the
 sale, use, or rental of and the storage, use, or consumption of
 taxable items in this state are exempt from the tax imposed by a
 county under this chapter if the items are used:
 (1)     for the performance of a written contract entered into before
 the date the tax takes effect in the county, if the contract is not
 subject to change or modification by reason of the tax; or
 (2)     pursuant to an obligation of a bid or bids submitted before the
 date the tax takes effect in the county, if the bid or bids may not
 be withdrawn, modified, or changed by reason of the tax.
 (b)     The exemptions provided by this section have no effect after
 three years from the date the tax takes effect in the county.
 Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.17(a), eff. Aug. 28,
 1989.
 SUBCHAPTER D.  ADMINISTRATION OF TAXES
 Sec. 323.301.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
 The comptroller shall administer, collect, and enforce any tax
 imposed by a county under this chapter. The tax imposed under this
 chapter and the tax imposed under Chapter 151 220 shall be collected
 together, if both taxes are imposed.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.302.
 Sec. 323.302.  COMPTROLLER'S REPORTING DUTIES. (a) The
 comptroller shall make quarterly reports to a county that has
 adopted the taxes authorized by this chapter if the county requests
 the reports. A report must include the name, address, and account
 number of each person in the county that has remitted to the
 comptroller a tax payment during the quarter covered by the report.
 (b)  If a county requests an additional report, the
 comptroller shall make an additional quarterly report to the county
 including the name, address, and account number, if any, of, and the
 amount of tax due from, each person doing business in the county who
 has failed to pay the tax under this chapter to the county or under
 Chapter 151 220. The additional report must also include
 statements:
 (1)  showing whether or not there has been a partial tax
 payment by the delinquent taxpayer;
 (2)  showing whether or not the taxpayer is delinquent
 in the payment of sales and use value added taxes to the state; and
 (3)  describing the steps taken by the comptroller to
 collect the delinquent taxes.
 (c)  If a county determines that a person doing business in
 the county is not included in a comptroller's report, the county
 shall report to the comptroller the name and address of the person.
 Within 90 days after receiving the report from a county, the
 comptroller shall send to the county:
 (1)  an explanation as to why the person is not
 obligated for the county tax;
 (2)  a statement that the person is obligated for the
 county tax and the tax is delinquent; or
 (3)  a certification that the person is obligated for
 the county tax and that the full amount of the tax due has been
 credited to the county's account.
 (d)  The comptroller shall send by United States certified or
 registered mail to the county attorney a notice of each person who
 is delinquent in the payment to the county of the taxes authorized
 by this chapter and shall send a copy of the notice to the attorney
 general. A notice sent under this subsection is a certification of
 the amount of tax owed and is prima facie evidence of a
 determination of that amount and of its delinquency.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.3022.
 Sec. 323.3022.  TAX INFORMATION. (a) In this section,
 "other local governmental entity" includes any governmental entity
 created by the legislature that has a limited purpose or function,
 that has a defined or restricted geographic territory, and that is
 authorized by law to impose a local sales and use value added tax
 the imposition, computation, administration, enforcement, and
 collection of which is governed by this chapter.
 (b)  Except as otherwise provided by this section, the
 comptroller on request shall provide to a county or other local
 governmental entity that has adopted a tax under this chapter:
 (1)  information relating to the amount of tax paid to
 the county or other local governmental entity under this chapter
 during the preceding or current calendar year by each person doing
 business in the county or other local governmental entity who
 annually remits to the comptroller state and local sales value
 added tax payments of more than $5,000; and
 (2)  any other information as provided by this section.
 (c)  The comptroller on request shall provide to a county or
 other local governmental entity that has adopted a tax under this
 chapter information relating to the amount of tax paid to the county
 or other local governmental entity under this chapter during the
 preceding or current calendar year by each person doing business in
 an area, as defined by the county or other local governmental
 entity, that is part of:
 (1)  an interlocal agreement;
 (2)  a tax abatement agreement;
 (3)  a reinvestment zone;
 (4)  a tax increment financing district;
 (5)  a revenue sharing agreement;
 (6)  an enterprise zone;
 (7)  any other agreement, zone, or district similar to
 those listed in Subdivisions (1)-(6); or
 (8)  any area defined by the county or other local
 governmental entity for the purpose of economic forecasting.
 (d)  The comptroller shall provide the information under
 Subsection (c) as an aggregate total for all persons doing business
 in the defined area without disclosing individual tax payments.
 (e)  If the request for information under Subsection (c)
 involves not more than three persons doing business in the defined
 area who remit taxes under this chapter, the comptroller shall
 refuse to provide the information to the county or other local
 governmental entity unless the comptroller receives permission
 from each of the persons allowing the comptroller to provide the
 information to the county or other local governmental entity as
 requested.
 (f)  A separate request for information under this section
 must be made in writing each year by the county judge or the
 governing body of the other local governmental entity.
 (g)  Information received by a county or other local
 governmental entity under this section is confidential, is not open
 to public inspection, and may be used only for the purpose of
 economic forecasting, for internal auditing of a tax paid to the
 county or other local governmental entity under this chapter, or
 for the purpose described by Subsection (h).
 (h)  Information received by a county or other local
 governmental entity under Subsection (c) may be used by the county
 or other local governmental entity to assist in determining revenue
 sharing under a revenue sharing agreement or other similar
 agreement.
 (i)  The comptroller may set and collect from a county or
 other local governmental entity reasonable fees to cover the
 expense of compiling and providing information under this section.
 (j)  Notwithstanding Chapter 551, Government Code, the
 commissioners court of a county or the governing body of the other
 local governmental entity is not required to confer with one or more
 employees or a third party in an open meeting to receive information
 or question the employees or third party regarding the information
 received by the county or other local governmental entity under
 this section.
 Added by Acts 2009, 81st Leg., R.S., Ch. , Sec. 9, eff. September 1,
 2009.
 Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 3, eff. September 1, 2011.
 Sec.   323.303.     SALES TAX PERMITS AND EXEMPTION AND RESALE
 CERTIFICATES. (a) Each place of business of a retailer must have a
 permit issued by the comptroller under Subchapter F, Chapter 151.
 (b)     The same sales tax permit, exemption certificate, and resale
 certificate required by Chapter 151 for the administration and
 collection of the taxes imposed by that chapter satisfy the
 requirements of this chapter. No additional permit or exemption or
 resale certificate may be required.
 (c)     The comptroller may prescribe the form of an exemption
 certificate for a prior contract exemption under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.304. 323.304. DISCOUNTS FOR PREPAYMENT AND TAX
 COLLECTION. All discounts allowed a retailer taxpayer under
 Chapter 151 220 for the collection and prepayment of the taxes under
 that chapter are allowed and applicable to the taxes collected
 under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.305. 323.305. PENALTIES. The penalties provided
 by Chapter 151 220 for violations of that chapter apply to
 violations of this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.306.
 Sec. 323.306.  COMPTROLLER'S RULES. The comptroller may
 adopt reasonable rules and prescribe forms that are consistent with
 this chapter for the administration, collection, reporting, and
 enforcement of this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.307.
 Sec. 323.307.  DELINQUENT TAXES: LIMITATIONS. The
 limitations for the bringing of a suit for the collection of a tax
 imposed or a penalty due under this chapter after the tax and
 penalty are delinquent or after a determination against the
 taxpayer are the same as limitations provided by Chapter 151 220.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.308.
 Sec. 323.308.  SEIZURE AND SALE OF PROPERTY. If the
 comptroller lawfully seizes property for the payment of the taxes
 imposed under Chapter 151 220 and the property owner is delinquent
 in the payment of taxes under this chapter, the comptroller shall
 sell sufficient property to pay the delinquent taxes and penalties
 of both taxes. The proceeds of a sale of seized property shall
 first be applied to the payment of amounts due the state, any
 remainder to the amounts due to a municipality to which the taxes
 are due under Chapter 321, and any remainder to the amounts due to a
 county to which taxes are due.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.309.
 Sec. 323.309.  SUIT FOR TAX COLLECTION. (a) A county acting
 through its attorney may join as a plaintiff in any suit brought by
 the attorney general to seek a judgment for delinquent taxes and
 penalties due to the county under this chapter.
 (b)  A county may bring suit for the collection of taxes owed
 to the county under this chapter if:
 (1)  the taxes are certified by the comptroller in the
 notice required by Section 323.302(d);
 (2)  a written notice of the tax delinquency and the
 county's intention to bring suit is given by certified mail to the
 taxpayer, the attorney general, and the comptroller at least 60
 days before the suit is filed; and
 (3)  neither the comptroller nor the attorney general
 disapproves of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.310.
 Sec. 323.310.  DISAPPROVAL OF COUNTY SUIT. (a) The
 comptroller or the attorney general may disapprove of the
 institution of a suit by a county under Section 323.309(b) if:
 (1)  negotiations between the state and the taxpayer
 are being conducted for the purpose of the collection of delinquent
 taxes owed to the state and the county seeking to bring suit;
 (2)  the taxpayer owes substantial taxes to the state
 and there is a reasonable possibility that the taxpayer may be
 unable to pay the total amount owed;
 (3)  the state will bring suit against the taxpayer for
 all taxes due under Chapter 151 220 and this chapter; or
 (4)  the suit involves a critical legal question
 relating to the interpretation of state law or a provision of the
 Texas or United States constitution in which the state has an
 overriding interest.
 (b)  A notice of disapproval to a county must be in writing
 and give the reason for the determination by the comptroller or
 attorney general.
 (c)  A disapproval is final and not subject to review.
 (d)  Not earlier than one year after the date of a
 disapproval of the institution of a county collection suit, the
 county may again proceed as provided by Section 323.309(b) even
 though the liability of the taxpayer includes taxes for which the
 county has previously given notice and the comptroller or attorney
 general has disapproved of the suit.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.311.
 Sec. 323.311.  JUDGMENTS IN COUNTY SUIT. (a) A judgment in
 a suit under Section 323.309(b) for or against a taxpayer does not
 affect a claim against the taxpayer by another county, a
 municipality, or the state unless the state is party to the suit.
 (b)  A county shall abstract a copy of each final judgment
 for taxes imposed under this chapter in a case in which the state is
 not a party and shall send to the comptroller a copy of the judgment
 and the abstract.
 (c)  A county shall by execution collect the taxes awarded to
 it in each judgment received by the county and is responsible for
 the renewal of the judgment before its expiration.
 (d)  The county shall send to the comptroller for deposit in
 the county's suspense account the amount of any taxes collected on
 the judgment.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.312.     RETENTION OF CERTAIN COUNTY SALES TAXES. A county
 that holds a sales and use tax permit issued by the comptroller and
 that imposes a sales and use tax may retain the portion of the tax
 that the county collects and that constitutes the county's own tax.
 The county shall remit to the comptroller all other applicable
 local sales and use taxes and the state sales and use tax.
 Added by Acts 2001, 77th Leg., ch. 1263, Sec. 77, eff. Oct. 1, 2001.
 SUBCHAPTER E. TAX ELECTION PROCEDURES
 Sec. 323.401.  CALLING OF ELECTION. (a) An election under
 this chapter is called by the adoption of an order by the
 commissioners court of a county.
 (b)  The commissioners court may call the election by a vote
 of a majority of its members.
 (c)  The commissioners court shall call the election if a
 number of qualified voters of the county equal to at least five
 percent of the number of registered voters in the county petitions
 for a vote on the question.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.402.
 Sec. 323.402.  DEADLINES AFTER PETITION. (a) After the
 receipt of a petition for an election under this chapter, the
 commissioners court shall determine the sufficiency of the petition
 within 30 days.
 (b)  If the petition is sufficient, the commissioners court
 shall pass the ordinance calling the election within 60 days after
 receiving the petition.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.403.
 Sec. 323.403.  TIME OF ELECTION. An election under this
 chapter must be held on the next uniform election day not less than
 30 days after the day on which the order calling the election was
 passed.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.404.
 Sec. 323.404.  BALLOT WORDING. (a) Except as provided by
 Subsection (b), in an election to adopt the tax, the ballot shall be
 printed to provide for voting for or against the proposition:
 "Adoption of a ____one-half percent county sales and use value
 added tax within the county to be used to help eliminate property
 taxes reduce the county property tax rate."
 (b)  In an election in a county that includes no territory
 within the limits of a municipality, the ballot shall be printed to
 provide for voting for or against the proposition: "Adoption of a
 one percent county sales and use value added tax within the county
 to be used to reduce the county property tax rate."
 (c)  In an election to repeal the tax, the ballot shall be
 printed to provide for voting for or against the proposition:
 "Abolition of the county sales and use value added tax within the
 county."
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.405.
 Sec. 323.405.  OFFICIAL RESULTS OF ELECTION. (a) Within 10
 days after an election in which the voters of a county approve of
 the adoption or abolition of the tax authorized by this chapter, the
 commissioners court of the county shall, by resolution entered in
 its minutes of proceedings, declare the results of the election. A
 resolution or ordinance under this section must include statements
 showing:
 (1)  the date of the election;
 (2)  the proposition on which the vote was held;
 (3)  the total number of votes cast for and against the
 proposition; and
 (4)  the number of votes by which the proposition was
 approved.
 (b)  If the application of the taxes that may be imposed
 under this chapter is changed by the results of the election, the
 county judge shall send to the comptroller by United States
 certified or registered mail a certified copy of the resolution.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.406.
 Sec. 323.406.  FREQUENCY OF ELECTION. An election under
 this chapter in a county may not be held earlier than one year after
 the date of any previous election under this chapter in the county.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec.   323.407.
 Sec. 323.407.  ELECTION CONTEST: NOTICE. (a) If an
 election held under this chapter is contested, the contestant shall
 send to the comptroller by United States certified or registered
 mail within 10 days after the filing of the contest a notice of
 contest containing the style of the suit, the date it was filed, its
 case number, and the name of the court in which the contest is
 pending.
 (b)  A court may not hear an election contest of an election
 held under this chapter unless the comptroller is notified within
 the time and in the manner provided by this section.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.408.
 Sec. 323.408.  ELECTION CONTEST: DELAYED EFFECTIVE DATE.
 (a) When the comptroller receives a notice of contest of an
 election under this chapter, the effective date of the tax or the
 abolition of a tax is suspended.
 (b)  When a final judgment is entered in the election
 contest, the county judge shall notify the comptroller by United
 States certified or registered mail and enclose a certified copy of
 the final judgment.
 (c)  If the final judgment in the election contest results in
 a change in the tax status of the county under this chapter, the tax
 or the abolition of the tax takes effect as provided by Section
 323.102 except that the notice of the final judgment is substituted
 for the notice of election results prescribed by Section 323.405.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
 Sec. 323.501.  TRUST ACCOUNT. (a) The comptroller shall
 deposit the taxes collected by the comptroller under this chapter
 in trust in the separate suspense account of the county from which
 the taxes were collected.
 (b)     Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(45).
 (c)     Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(45).
 (d)     Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(45).
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.126, eff. Sept.
 1, 1997; Acts 2003, 78th Leg., ch. 285, Sec. 31(45), eff. Sept. 1,
 2003.
 Sec. 323.502.
 Sec. 323.502.  DISTRIBUTION OF TRUST FUNDS. At least twice
 during each state fiscal year and at other times as often as
 feasible, the comptroller shall send to the county treasurer
 payable to the county the county's share of the taxes collected by
 the comptroller under this chapter.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.503.
 Sec. 323.503.  STATE'S SHARE. Before sending any money to a
 county under this subchapter the comptroller shall deduct two
 percent of the amount of the taxes collected within the county
 during the period for which a distribution is made as the state's
 charge for its services under this chapter and shall, subject to
 premiums payments under Section 323.501(c), credit the money
 deducted to the general revenue fund.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.504.
 Sec. 323.504.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
 comptroller may retain in the suspense account of a county a portion
 of the county's share of the tax collected for the county under this
 chapter, not to exceed five percent of the amount remitted to the
 county. If the county has abolished the tax, the amount that may be
 retained may not exceed five percent of the final remittance to the
 county at the time of the termination of the collection of the tax.
 (b)  From the amounts retained in a county's suspense
 account, the comptroller may make refunds for overpayments to the
 account and to redeem dishonored checks and drafts deposited to the
 credit of the account.
 (c)  Before the expiration of one year after the effective
 date of the abolition of a county's tax under this chapter the
 comptroller shall send to the county the remainder of the money in
 the county's account and shall close the account.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Sec. 323.5041.
 Sec. 323.5041.  INTEREST ON TAX REVENUE. Interest earned on
 all deposits made with the comptroller under this chapter,
 including interest earned from the suspense accounts retained under
 Section 323.504, shall be credited to the general revenue fund.
 Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.18(a), eff. Aug. 28,
 1989. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.127, eff.
 Sept. 1, 1997.
 Sec. 323.505.  USE 323.508. PLEDGE OF TAX REVENUE. (a) The
 money received by a county under this chapter is for the use and
 benefit of the county and shall be used for the replacement of
 property tax revenue lost as a result of the adoption of the taxes
 authorized by this chapter. Except as provided by Subsection (b),
 the revenue in excess of the revenue used to replace those property
 taxes shall be used for the reduction of indebtedness of the county.
 After all indebtedness is paid, the excess may be used for any
 purpose for which county general revenue may be used. A county may
 not call and hold an election on the issue of authorizing the county
 to pledge anticipated a percentage of the value added tax revenue
 from this source received under Section 323.101 to secure the
 payment of bonds or other indebtedness for a period longer than one
 year obligations issued to fund needed infrastructure, development
 and other capital projects located within or otherwise supporting
 the county.
 (b)     Revenue collected from the tax imposed under this chapter in
 each of the first three years in which the tax is imposed in the
 county in excess of the amount determined as provided by Section
 26.041(d) for each year shall be deposited in an account to be
 called the excess sales tax revenue fund. During those three years,
 revenue deposited in the excess sales tax revenue fund may be used
 only if and to the extent that taxes or other revenues of the county
 are collected in amounts less than anticipated. After that period,
 the revenue in the fund may be used for any purpose for which county
 general revenue may be used. The fund ceases to exist when all
 revenue deposited in the fund has been spent.
 Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.
 Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.18(b), eff. Aug. 28,
 1989; Acts 1991, 72nd Leg., ch. 16, Sec. 17.07, eff. Aug. 26, 1991.
 Sec. 323.510.  (b)  The ballot at the election under this
 section must be printed to permit voting for or against the
 proposition: "Authorizing the County of ______ (insert name of
 county) to pledge not more than ______ percent (insert percentage
 not to exceed 25 percent) of the revenue received from the _________
 (insert county value added tax) previously adopted in the county to
 the payment of obligations issued to pay all or part of the costs of
 _________ (insert description of each project)."
 (c)  If a majority of the voters vote in favor of the
 proposition, the county may:
 (1)  issue bonds, notes, or other obligations that are
 payable from the pledged revenues to pay for all or part of the
 costs of the projects described in the proposition; and
 (2)  set aside the portion of the revenue approved at
 the election that the county actually receives and pledge that
 revenue as security for the payment of the bonds, notes, or other
 obligations.
 (d)  If the county pledges revenue under Subsection (c), the
 pledge and security interest shall continue while the bonds, notes,
 or obligations, including refunding obligations, are outstanding
 and unpaid.
 (e)  The county may direct the comptroller to deposit the
 pledged revenue to a trust or account as may be required to obtain
 the financing and to protect the related security interest.
 (f)  Sections 328.506 and 328.507 do not apply to taxes
 pledged under this section.
 Sec. 323.510.  REALLOCATION OF COUNTY OR LOCAL GOVERNMENTAL
 ENTITY TAX REVENUE. (a) In this section, "local governmental
 entity" includes any governmental entity created by the legislature
 that has a limited purpose or function, that has a defined or
 restricted geographic territory, and that is authorized by law to
 impose a local sales and use value added tax the imposition,
 computation, administration, enforcement, and collection of which
 is governed by this chapter.
 (b)  This section applies only if:
 (1)  the comptroller:
 (A)  reallocates local tax revenue from a county
 or local governmental entity to another county or local
 governmental entity; or
 (B)  refunds local tax revenue that was previously
 allocated to a county or local governmental entity; and
 (2)  the amount the comptroller reallocates or refunds
 is at least equal to the lesser of:
 (A)  $200,000;
 (B)  an amount equal to 10 percent of the revenue
 received by the county or local governmental entity under this
 chapter during the calendar year preceding the calendar year in
 which the reallocation or refund is made; or
 (C)  an amount that increases or decreases the
 amount of revenue the county or local governmental entity receives
 under this chapter during a calendar month by more than 15 percent
 as compared to revenue received by the county or local governmental
 entity during the same month in any previous year.
 (c)  Subject to the criteria provided by this section, a
 county or local governmental entity may request a review of all
 available sales value added tax returns and reports in the
 comptroller's possession filed by not more than five individual
 taxpayers doing business in the county or local governmental entity
 that are included and identified by the county or local
 governmental entity from the information received from the
 comptroller under Section 323.3022 and that relate to a
 reallocation or refund in an amount described by Subsection (b).
 (d)  The comptroller shall provide the returns and reports
 requested under Subsection (c) for review regardless of whether the
 information in the returns or reports is confidential under state
 law, including Sections 111.006 and 151.027.
 (e)  The provision of confidential information to a county or
 local governmental entity under this section does not affect the
 confidential nature of the information in the returns or reports. A
 county or local governmental entity shall use the information only
 in a manner that maintains the confidential nature of the
 information and may not disclose or release the information to the
 public.
 (f)  A county or local governmental entity must submit the
 request under Subsection (c) not later than the 90th day after the
 date the county or local governmental entity discovers a
 reallocation or refund described by Subsection (b).
 (g)  Not earlier than the 30th day or later than the 90th day
 after the date the comptroller receives a request under Subsection
 (c), the comptroller shall provide the requested returns and
 reports to the requesting county or local governmental entity for
 review.
 (h)  The comptroller may set and collect from a county or
 local governmental entity a reasonable fee to cover the expense of
 compiling and providing information under this section.
 Added by Acts 2011, 82nd Leg., R.S., Ch. , Sec. 4, eff. September 1,
 2011.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
 CHAPTER 324. COUNTY HEALTH SERVICES SALES AND USE VALUE ADDED TAX
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 324.001.  COUNTY SALES AND USE VALUE ADDED TAX ACT
 APPLICABLE. Except to the extent that a provision of this chapter
 applies, Chapter 323 applies to the tax authorized by this chapter
 in the same manner as that chapter applies to the tax authorized by
 that chapter.
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 SUBCHAPTER B. IMPOSITION OF TAX
 Sec. 324.021.  TAX AUTHORIZED. (a) A county having a
 population of 50,000 or less may adopt, increase, decrease, or
 abolish the sales and use value added tax authorized by this chapter
 at an election held in the county.
 (b)  A county may not adopt or increase a tax under this
 chapter if as a result of the adoption of or increase in the tax the
 combined rate of all sales and use value added taxes imposed by the
 county and other political subdivisions of this state having
 territory in the county would exceed two three percent at any
 location in the county.
 (c)  If the voters of a county approve the adoption of or the
 increase in the tax at an election held on the same election date on
 which another political subdivision adopts a sales and use value
 added tax or approves the increase in the rate of its sales and use
 value added tax and as a result the combined rate of all sales and
 use value added taxes imposed by the county and other political
 subdivisions of this state having territory in the county would
 exceed two three percent at any location in the county, the election
 to adopt a sales and use value added tax under this chapter or
 increase the tax has no effect.
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 Amended by:
 Acts 2005, 79th Leg., Ch. , Sec. 1, eff. June 17, 2005.
 Sec. 324.022.
 Sec. 324.022.  TAX RATE. (a) The tax authorized by this
 chapter may be imposed at the rate of one-half, five-eighths,
 three-fourths, seven-eighths, or one percent.
 (b)  The rate may be reduced in one or more increments of
 one-eighth of one percent to a minimum of one-half of one percent or
 increased in one or more increments of one-eighth of one percent to
 a maximum of one percent, or the tax may be abolished.
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 Amended by:
 Acts 2005, 79th Leg., Ch. , Sec. 2, eff. June 17, 2005.
 Sec. 324.023.  SALES AND USE
 Sec. 324.023.  VALUE ADDED TAX EFFECTIVE DATE. (a) The
 adoption, increase, decrease, or abolition of the tax takes effect
 on the first day of the first calendar quarter occurring after the
 expiration of the first complete calendar quarter occurring after
 the date on which the comptroller receives a notice of the results
 of the election.
 (b)  If the comptroller determines that an effective date
 provided by Subsection (a) will occur before the comptroller can
 reasonably take the action required to begin collecting the tax or
 to implement the increase, decrease, or abolition of the tax, the
 effective date may be extended by the comptroller until the first
 day of the next succeeding calendar quarter.
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 Amended by:
 Acts 2005, 79th Leg., Ch. , Sec. 3, eff. June 17, 2005.
 SUBCHAPTER C. TAX ELECTION PROCEDURES
 Sec. 324.061.  ELECTION PROCEDURE. (a) An election to
 adopt, increase, decrease, or abolish the tax authorized by this
 chapter is called by the adoption of an order by the commissioners
 court of the county. The commissioners court shall call an election
 if a number of qualified voters of the county equal to at least five
 percent of the number of registered voters in the county petitions
 the commissioners court to call the election.
 (b)  At an election to adopt the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 adoption of a local sales and use value added tax in (name of
 county) at the rate of _________ (one-half, five-eighths,
 three-fourths, seven-eighths, or one, to be inserted as
 appropriate) percent to provide revenue for health services in the
 county."
 (b-1)  At an election to increase or decrease the tax, the
 ballot shall be prepared to permit voting for or against the
 proposition: "The (increase or decrease) of the local sales and use
 value added tax in (name of county) to the rate of _________
 (one-half, five-eighths, three-fourths, seven-eighths, or one, to
 be inserted as appropriate) percent to provide revenue for health
 services in the county."
 (c)  At an election to abolish the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 abolition of the local health services sales and use value added tax
 in (name of county)."
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 Amended by:
 Acts 2005, 79th Leg., Ch. , Sec. 4, eff. June 17, 2005.
 SUBCHAPTER D. USE OF TAX REVENUE
 Sec. 324.081.  USE OF TAX REVENUE. Revenue from the tax
 imposed under this chapter may be used only to provide health
 services in the county. The county imposing the tax may allocate
 all or part of that revenue to:
 (1)  a county hospital authority or a hospital district
 having the same boundaries as the county; or
 (2)  a public health district in which the county
 participates.
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 7, eff. Sept.
 1, 1989.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
 CHAPTER 325. COUNTY SALES AND USE VALUE ADDED TAX FOR LANDFILL AND
 CRIMINAL DETENTION CENTER
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 325.001.  COUNTY SALES AND USE VALUE ADDED TAX ACT
 APPLICABLE. Except to the extent that a provision of this chapter
 applies, Chapter 323 applies to the tax authorized by this chapter
 in the same manner as that chapter applies to the tax authorized by
 that chapter.
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 SUBCHAPTER B. IMPOSITION OF TAX
 Sec. 325.021.  TAX AUTHORIZED. (a) A county having a
 population of 55,000 or less that borders the Rio Grande containing
 a municipality with a population of more than 22,000 may adopt or
 abolish the sales and use value added tax authorized by this chapter
 at an election held in the county.
 (b)  A county may not adopt a tax under this chapter if as a
 result of the adoption of the tax the combined rate of all sales and
 use value added taxes imposed by the county and other political
 subdivisions of this state having territory in the county would
 exceed two three percent at any location in the county.
 (c)  If the voters of a county approve the adoption of the tax
 at an election held on the same election date on which another
 political subdivision adopts a sales and use value added tax or
 approves the increase in the rate of its sales and use value added
 tax and as a result the combined rate of all sales and use value
 added taxes imposed by the county and other political subdivisions
 of this state having territory in the county would exceed two three
 percent at any location in the county, the election to adopt a sales
 and use value added tax under this chapter has no effect.
 (d)  That portion of the tax collected under this chapter
 necessary for the operation of the landfill is dedicated solely to
 that purpose.
 (e)  That portion of the tax collected under this chapter
 necessary for debt services for criminal detention center bonds is
 dedicated solely to that purpose.
 (f)     Any tax collected under this chapter not dedicated under
 Subsection (d) or (e) shall be used for ad valorem reduction.
 (f)  RESERVED
 (g)  The dedication established under Subsection (d) expires
 when the landfill is sold or closed. The dedication established
 under Subsection (e) expires when the criminal detention center
 bonds are retired.
 (h)  If the commissioners court adopts an order finding that
 the purposes for which the dedications made under Subsections (d)
 and (e) have been accomplished, the tax authorized by this chapter
 is abolished.
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 Amended by Acts 2001, 77th Leg., ch. 669, Sec. 121, eff. Sept. 1,
 2001.
 Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. , Sec. 119, eff. September 1, 2011.
 Sec. 325.022.  325.022. TAX RATE. The rate of the tax
 authorized by this chapter is one-quarter-half percent.
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 Sec. 325.023.  SALES AND USE
 Sec. 325.023.  VALUE ADDED TAX EFFECTIVE DATE. (a) The
 adoption or abolition of the tax takes effect on the first day of
 the first calendar quarter occurring after the expiration of the
 first complete calendar quarter occurring after the date on which
 the comptroller receives a notice of the results of the election.
 (b)  If the comptroller determines that an effective date
 provided by Subsection (a) will occur before the comptroller can
 reasonably take the action required to begin collecting the tax or
 to implement the abolition of the tax, the effective date may be
 extended by the comptroller until the first day of the next
 succeeding calendar quarter.
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 SUBCHAPTER C. TAX ELECTION PROCEDURES
 Sec. 325.061.  ELECTION PROCEDURE. (a) An election to adopt
 or abolish the tax authorized by this chapter is called by the
 adoption of an order by the commissioners court of the county. The
 commissioners court may call an election on its own motion or shall
 call an election if a number of qualified voters of the county equal
 to at least five percent of the number of registered voters in the
 county petition the commissioners court to call the election. An
 election under this chapter must be held on the next uniform
 election date not less than 10 days after the day on which the order
 calling the election was passed.
 (b)  At an election to adopt the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 adoption of a local sales and use value added tax in (name of
 county) at the rate of one-quarter half percent to provide revenue
 for the operation of a county landfill and a criminal detention
 center."
 (c)  At an election to abolish the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 abolition of the sales and use value added tax for the operation of
 a county landfill and a criminal detention center in (name of
 county)."
 (d)  The commissioners court shall modify regular election
 procedures as necessary to hold an election on a day permitted under
 Subsection (a).
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 SUBCHAPTER D. USE OF TAX REVENUE
 Sec. 325.081.  USE OF TAX REVENUE. Revenue from the tax
 imposed under this chapter may be used only to build, operate, or
 maintain a landfill and a criminal detention center in the county.
 Added by Acts 1995, 74th Leg., ch. 39, Sec. 1, eff. May 5, 1995.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL SALES AND USE VALUE ADDED TAXES
 CHAPTER 327. MUNICIPAL SALES AND USE VALUE ADDED TAX FOR STREET
 MAINTENANCE
 Sec. 327.001.  DEFINITION. In this chapter, "municipal
 street" means the entire width of a way held by a municipality in
 fee or by easement or dedication that has a part open for public use
 for vehicular travel. The term does not include a designated state
 or federal highway or road or a designated county road.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Sec. 327.002. 327.002. MUNICIPAL SALES AND USE VALUE ADDED
 TAX ACT APPLICABLE. Except to the extent that a provision of this
 chapter applies, Chapter 321 applies to the tax authorized by this
 chapter in the same manner as that chapter applies to the tax
 authorized by that chapter.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Sec. 327.003.
 Sec. 327.003.  TAX AUTHORIZED. (a) A municipality may adopt
 the sales and use value added tax authorized by this chapter at an
 election held in the municipality.
 (b)  A municipality may not adopt a tax under this chapter or
 increase the rate of the tax if as a result of the adoption of the
 tax or the increase in the rate of the tax the combined rate of all
 sales and use value added taxes imposed by the municipality and
 other political subdivisions of this state having territory in the
 municipality would exceed two three percent at any location in the
 municipality.
 (c)  If the voters of a municipality approve the adoption of
 the tax or the increase in the rate of the tax at an election held on
 the same election date on which another political subdivision
 adopts a sales and use value added tax or approves the increase in
 the rate of its sales and use value added tax and as a result the
 combined rate of all sales and use value added taxes imposed by the
 municipality and other political subdivisions of this state having
 territory in the municipality would exceed two three percent at any
 location in the municipality, the election to adopt a sales and use
 value added tax under this chapter has no effect.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Amended by Acts 2003, 78th Leg., ch. 403, Sec. 1, eff. June 20,
 2003.
 Sec. 327.004. 327.004. TAX RATE. The tax authorized by this
 chapter may be imposed at the rate of one-eighth of one percent or
 one-fourth of one percent.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11,
 2001. Amended by Acts 2003, 78th Leg., ch. 403, Sec. 2, eff. June
 20, 2003.
 Sec. 327.005.  SALES AND USE
 Sec. 327.005.  VALUE ADDED TAX EFFECTIVE DATE. (a) The
 adoption of the tax or the change in the rate of the tax takes effect
 on the first day of the first calendar quarter occurring after the
 expiration of the first complete calendar quarter occurring after
 the date on which the comptroller receives notice of the results of
 the election.
 (b)  If the comptroller determines that an effective date
 provided by Subsection (a) will occur before the comptroller can
 reasonably take the action required to begin collecting the tax,
 the effective date may be extended by the comptroller until the
 first day of the next succeeding calendar quarter.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Amended by Acts 2003, 78th Leg., ch. 403, Sec. 3, eff. June 20,
 2003.
 Sec. 327.006. 327.006. ELECTION PROCEDURE. (a) An election
 to adopt the tax authorized by this chapter is called by the
 adoption of an ordinance by the governing body of the municipality.
 (b)  At an election to adopt the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 adoption of a local sales and use value added tax in (name of
 municipality) at the rate of (insert one-eighth of one percent or
 one-fourth of one percent) to provide revenue for maintenance and
 repair of municipal streets."
 (c)  At an election to abolish the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 abolition of the value added tax in (name of municipality) for the
 maintenance and repair of municipal streets."
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Amended by Acts 2003, 78th Leg., ch. 403, Sec. 4, eff. June 20,
 2003.
 Sec.   327.0065.     RATE CHANGE. (a) A municipality that has
 adopted a sales and use tax under this chapter at a rate of
 one-fourth of one percent may by ordinance decrease the rate of the
 tax to one-eighth of one percent.
 (b)     A municipality that has adopted a sales and use tax
 under this chapter at a rate of one-eighth of one percent may by
 ordinance increase the rate of the tax to one-fourth of one percent
 if the increase is authorized at an election held in the
 municipality.
 (c)     The ballot for an election to increase the tax shall be
 printed to permit voting for or against the proposition: "The
 adoption of a local sales and use tax in (name of municipality) at
 the rate of one-fourth of one percent to provide revenue for
 maintenance and repair of municipal streets."
 Added by Acts 2003, 78th Leg., ch. 403, Sec. 5, eff. June 20, 2003.
 Sec. 327.007.  327.007. REAUTHORIZATION OF TAX. (a) Unless
 imposition of the sales and use value added tax authorized by this
 chapter is reauthorized as provided by this section, the tax
 expires on:
 (1)  the fourth anniversary of the date the tax originally
 took effect under Section 327.005; or
 (2)  the first day of the first calendar quarter occurring
 after the fourth anniversary of the date the tax was last
 reauthorized under this section.
 (b)  An election to reauthorize the tax is called and held in
 the same manner as an election to adopt the tax under Section
 327.006, except the ballot proposition shall be prepared to permit
 voting for or against the proposition: "The reauthorization of the
 local sales and use value added tax in (name of municipality) at the
 rate of (insert appropriate rate) to continue providing revenue for
 maintenance and repair of municipal streets."
 (c)  If an election to reauthorize the tax is not held before
 the tax expires as provided by Subsection (a), or if a majority of
 the votes cast in an election to reauthorize the tax do not favor
 reauthorization, the municipality may not call an election on the
 question of authorizing a new tax under this chapter before the
 first anniversary of the date on which the tax expired.
 (d)  Not later than the 10th day after the date the
 municipality determines that the tax will expire as provided by
 Subsection (a), the municipality shall notify the comptroller of
 the scheduled expiration. The comptroller may delay the scheduled
 expiration date if the comptroller notifies the municipality that
 more time is required. The comptroller must provide a new
 expiration date that is not later than the last day of the first
 calendar quarter occurring after the notification to the
 comptroller.
 Added by Acts 2001, 77th Leg., ch. 464, Sec. 1, eff. June 11, 2001.
 Amended by Acts 2003, 78th Leg., ch. 403, Sec. 6, eff. June 20,
 2003.
 Sec. 327.008.
 Sec. 327.008.  USE OF TAX REVENUE. Revenue from the tax
 imposed under this chapter may be used only to maintain and repair
 municipal streets existing on the date of the election to adopt the
 tax.
 TAX CODE
 TITLE 3. LOCAL TAXATION
 SUBTITLE C. LOCAL VALUE ADDED TAXES
 CHAPTER 328. SCHOOL DISTRICT ENRICHMENT VALUE ADDED TAX
 SUBCHAPTER A. GENERAL PROVISIONS
 Sec. 328.001.  SHORT TITLE. This chapter may be cited as the
 Texas School District Enrichment Value Added Tax Act.
 Sec. 328.002.  DEFINITIONS. Words used in this chapter and
 defined by Chapter 220 have the meanings assigned by Chapter 220.
 Sec. 328.003.  OTHER PORTIONS OF TAX APPLICABLE. Subtitles
 A and B, Title 2, and Chapter 220 apply to the taxes and to the
 administration and enforcement of the taxes imposed by this chapter
 in the same manner that those laws apply to state taxes, unless
 modified by this chapter.
 SUBCHAPTER B. IMPOSITION OF VALUE ADDED TAXES BY SCHOOL DISTRICTS
 Sec. 328.101.  TAX AUTHORIZED. A school district may adopt
 or repeal a value added tax authorized by this chapter at an
 election in which a majority of the qualified voters of the school
 district approve the adoption or repeal of the tax.
 Sec. 328.102.  EFFECTIVE DATES: NEW TAX, TAX REPEAL,
 BOUNDARY CHANGE. (a) A tax imposed under this chapter or the
 repeal of a tax abolished under this chapter takes effect on the
 first day of the first calendar quarter occurring after the
 expiration of the first complete calendar quarter occurring after
 the date on which the comptroller receives a notice of the action as
 required by Section 328.405(b).
 (b)  RESERVED
 (c)  If a school district in which the tax imposed under this
 chapter is in effect changes its boundaries, the school district
 secretary shall send by United States registered or certified mail
 to the comptroller a certified copy of the legal instrument that
 adds or detaches school district territory and that shows the
 effective date of the boundary change. The instrument must be
 accompanied by a map clearly showing the added or detached
 territory. Except as provided by Subsection (d), the tax takes
 effect in the added territory or is inapplicable to the detached
 territory on the first day of the first calendar quarter after the
 comptroller receives the ordinance and map.
 (d)  If, within 10 days after the receipt of the certified
 copy and map sent under Subsection (c), the comptroller notifies
 the secretary of the school district that more time is required, the
 effective date of the application of the tax in the added or
 detached area is the first day of the first calendar quarter after
 the expiration of the first complete calendar quarter occurring
 after the date on which the comptroller receives the ordinance and
 map.
 (e)  If as a result of the imposition or increase in a value
 added tax by a school district in which there is located all or part
 of a local governmental entity (other than a county or school
 district) that has adopted a value added tax or as a result of the
 annexation by a school district of all or part of the territory in a
 local governmental entity (other than a county or school district)
 that has adopted a value added tax the overlapping local value added
 taxes in the area will exceed three percent, the entity's value
 added tax is automatically reduced in that area to a rate that when
 added to the combined rate of local value added taxes will equal
 three percent.
 (f)  If an entity's rate is reduced in accordance with
 Subsection (e), the comptroller shall withhold from the school
 district's quarterly value added tax allocation an amount equal to
 the amount that would have been collected by the entity had the
 school district not imposed or increased its value added tax or
 annexed the area in the entity less amounts that the entity collects
 following the school district's levy of or increase in its value
 added tax or annexation of the area in the entity. The comptroller
 shall withhold and pay the amount withheld to the entity under
 policies or procedures that the comptroller considers reasonable.
 Sec. 328.103.  VALUE ADDED TAX. In a school district that
 has adopted the tax authorized by Section 328.101(a), there is
 imposed a value added tax on the supply in that school district of
 any service or property by any person in the ordinary course of a
 trade or business in which the person engages for the purpose of
 profit.
 (b)  The tax so adopted is imposed at the rate approved by the
 voters. The rate, when the tax is adopted, must be equal to a
 minimum of one-eighth of one percent, up to a maximum of one-half
 percent, or at any one-eighth percentage point increment
 in-between. The rate may be reduced in one or more increments of
 one-eighth of one percent to a minimum of one-eighth of one percent
 or increased in one or more increments of one-eighth of one percent
 to a maximum of one-half of one percent, or the tax may be
 abolished.
 (c)  The exemptions and exclusions of Chapter 220,
 Subchapters D and E apply equally to the determination of taxable
 receipts for purposes of any school district value added tax.
 (d)  The comptroller may adopt rules and the governing body
 of the school district may adopt orders to administer this section.
 SUBCHAPTER C. COMPUTATION OF TAXES
 Sec. 328.201.  COMPUTATION OF TAXES. (a) Each taxpayer in a
 school district that has adopted a tax authorized by this chapter
 shall add each value added tax imposed by a local taxing unit under
 this chapter and by Chapter 220 to the supply price, and the sum of
 the taxes is a part of the price, a debt of the customer to the
 taxpayer until paid, and recoverable at law in the same manner as
 the supply price.
 (b)  The amount of the total tax is computed by multiplying
 the combined applicable tax rates, by the amount of the supply
 price. If the product results in a fraction of a cent less than
 one-half of one cent, the fraction of a cent is not collected. If
 the fraction of a cent is one-half of one cent or more, the fraction
 shall be collected as one cent.
 (c)  The comptroller may publish schedules and brackets of
 amounts of taxes based on the formula provided by Subsection (b) for
 use in school districts that have adopted the taxes authorized by
 this chapter.
 Sec. 328.202.  RESERVED
 Sec. 328.203.  RESERVED
 Sec. 328.204.  COMPUTATION OF TAX. In each school district
 that has adopted the taxes authorized by this chapter, the taxes
 imposed by Section 328.104(a) and the tax imposed by Chapter 220,
 are added together to form a single combined tax rate.
 Sec. 328.205.  RESERVED
 Sec. 328.206.  RESERVED
 Sec. 328.207.  LOCAL TAX INAPPLICABLE WHEN NO STATE TAX;
 EXCEPTIONS. (a) The value added tax authorized by this chapter
 does not apply to the supply of services or property unless the
 value added tax imposed by Chapter 220, also applies to the sale.
 Sec. 328.208.  STATE EXEMPTIONS APPLICABLE. The exemptions
 and exclusions provided by Subchapters D and E of Chapter 220 apply
 to the taxes authorized by this chapter.
 Sec. 328.209.  TRANSITION EXEMPTION: GENERAL PURPOSE VALUE
 ADDED TAX. (a) For a period of three years only after the effective
 date of the tax authorized by Section 328.101(a) in a school
 district, otherwise taxable receipts from the supply of services or
 property are exempt from the tax imposed by the school district
 under Section 328.101(a) if the notice required by Subsection (b)
 is given and if:
 (1)  the services and/or property are supplied for the
 performance of a written contract entered into before the effective
 date of the tax imposed under Section 328.101(a) in the school
 district if the contract may be affected and the contract may not be
 modified because of the tax; or
 (2)  the services and/or property are supplied under
 the obligation of a bid submitted before the effective date of the
 tax imposed under Section 328.101(a) in the school district if the
 contract may be affected and the bid may not be withdrawn or
 modified because of the tax.
 (b)  The taxpayer must give the comptroller notice of the
 contract or bid on which an exemption is to be claimed within 60
 days after the effective date of the tax imposed under Section
 328.101(a) in the school district.
 SUBCHAPTER D. ADMINISTRATION OF TAXES
 Sec. 328.301.  COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
 The comptroller shall administer, collect, and enforce any tax
 imposed by a school district under this chapter. The taxes imposed
 under this chapter and the taxes imposed under Chapter 220 shall be
 collected together, if both taxes are imposed.
 Sec. 328.302.  COMPTROLLER'S REPORTING DUTIES. (a) The
 comptroller shall make quarterly reports to a school district that
 has adopted the taxes authorized by this chapter if the school
 district requests the reports. A report must include the name,
 address, and account number of each person in the school district
 that has remitted to the comptroller a tax payment during the
 quarter covered by the report.
 (b)  If a school district requests an additional report, the
 comptroller shall make an additional quarterly report to the school
 district including the name, address, and account number, if any,
 of, and the amount of tax due from, each person doing business in
 the school district who has failed to pay the tax under this chapter
 to the school district or under Chapter 220. The additional report
 must also include statements:
 (1)  showing whether or not there has been a partial tax
 payment by the delinquent taxpayer;
 (2)  showing whether or not the taxpayer is delinquent
 in the payment of value added taxes to the state; and
 (3)  describing the steps taken by the comptroller to
 collect the delinquent taxes.
 (c)  If a school district determines that a person doing
 business in the school district is not included in a comptroller's
 report, the school district shall report to the comptroller the
 name and address of the person. Within 90 days after receiving the
 report from a school district, the comptroller shall send to the
 school district:
 (1)  an explanation as to why the person is not
 obligated for the school district tax;
 (2)  a statement that the person is obligated for the
 school district tax and the tax is delinquent; or
 (3)  a certification that the person is obligated for
 the school district tax and that the full amount of the tax due has
 been credited to the school district's account.
 (d)  The comptroller shall send by United States certified or
 registered mail to the school district tax collector a notice of
 each person who is delinquent in the payment to the school district
 of the taxes authorized by this chapter and shall send a copy of the
 notice to the attorney general. A notice sent under this subsection
 is a certification of the amount of tax owed and is prima facie
 evidence of a determination of that amount and of its delinquency.
 Sec. 328.3025.  DISPOSITION OF AMOUNT ERRONEOUSLY
 COLLECTED. (a) If in a territory added to a school district a
 taxpayer erroneously collects an amount as a tax imposed under this
 chapter before the date the taxes imposed under this chapter by the
 school district take effect in the added territory under Section
 328.102, the amount collected is treated as if it were revenue from
 the taxes imposed by the school district under this chapter, and the
 comptroller shall collect and administer the amount in the same
 manner as tax revenue.
 (b)  This section does not affect the right of a person who
 paid an amount erroneously collected by a taxpayer to claim a refund
 or the authority of the comptroller to make a refund of that amount.
 Sec. 328.304.  DISCOUNTS FOR PREPAYMENT AND TAX COLLECTION.
 All discounts allowed a taxpayer under Chapter 220 for the
 collection and prepayment of the taxes under that chapter are
 allowed and applicable to the taxes collected under this chapter.
 Sec. 328.305.  PENALTIES. The penalties provided by Chapter
 220 for violations of that chapter apply to violations of this
 chapter.
 Sec. 328.306.  COMPTROLLER'S RULES. The comptroller may
 adopt reasonable rules and prescribe forms that are consistent with
 this chapter for the administration, collection, reporting, and
 enforcement of this chapter.
 Sec. 328.307.  DELINQUENT TAXES: LIMITATIONS. The
 limitations for the bringing of a suit for the collection of a tax
 imposed or a penalty due under this chapter after the tax and
 penalty are delinquent or after a determination against the
 taxpayer are the same as limitations provided by Chapter 220.
 Sec. 328.308.  SEIZURE AND SALE OF PROPERTY. If the
 comptroller lawfully seizes property for the payment of the taxes
 imposed under Chapter 220 and the property owner is delinquent in
 the payment of taxes under this chapter, the comptroller shall sell
 sufficient property to pay the delinquent taxes and penalties of
 both taxes. The proceeds of a sale of seized property shall first
 be applied to the payment of amounts due the state and the
 remainder, if any, to the amounts due to the school district to
 which the taxes are due.
 Sec. 328.309.  SUIT FOR TAX COLLECTION. (a) A school
 district acting through its attorney may join as a plaintiff in any
 suit brought by the attorney general to seek a judgment for
 delinquent taxes and penalties due to the school district under
 this chapter.
 (b)  A school district may bring suit for the collection of
 taxes owed to the school district under this chapter if:
 (1)  the taxes are certified by the comptroller in the
 notice required by Section 328.302(d);
 (2)  a written notice of the tax delinquency and the
 school district's intention to bring suit is given by certified
 mail to the taxpayer, the attorney general, and the comptroller at
 least 60 days before the suit is filed; and
 (3)  neither the comptroller nor the attorney general
 disapproves of the suit.
 Sec. 328.310.  DISAPPROVAL OF SCHOOL DISTRICT SUIT. (a) The
 comptroller or the attorney general may disapprove of the
 institution of a suit by a school district under Section 328.309(b)
 if:
 (1)  negotiations between the state and the taxpayer
 are being conducted for the purpose of the collection of delinquent
 taxes owed to the state and the school district seeking to bring
 suit;
 (2)  the taxpayer owes substantial taxes to the state
 and there is a reasonable possibility that the taxpayer may be
 unable to pay the total amount owed;
 (3)  the state will bring suit against the taxpayer for
 all taxes due under Chapter 220 and this chapter; or
 (4)  the suit involves a critical legal question
 relating to the interpretation of state law or a provision of the
 Texas or United States constitution in which the state has an
 overriding interest.
 (b)  A notice of disapproval to a school district must be in
 writing and give the reason for the determination by the
 comptroller or attorney general.
 (c)  A disapproval is final and not subject to review.
 (d)  Not earlier than one year after the date of a
 disapproval of the institution of a school district collection
 suit, the school district may again proceed as provided by Section
 328.309(b) even though the liability of the taxpayer includes taxes
 for which the school district has previously given notice and the
 comptroller or attorney general has disapproved of the suit.
 Sec. 328.311.  JUDGMENTS IN SCHOOL DISTRICT SUIT. (a) A
 judgment in a suit under Section 328.309(b) for or against a
 taxpayer does not affect a claim against the taxpayer by another
 school district or the state unless the state is party to the suit.
 (b)  A school district shall abstract a copy of each final
 judgment for taxes imposed under this chapter in a case in which the
 state is not a party and shall send to the comptroller a copy of the
 judgment and the abstract.
 (c)  A school district shall by execution collect the taxes
 awarded to it in each judgment received by the school district and
 is responsible for the renewal of the judgment before its
 expiration.
 (d)  The school district shall notify the comptroller by
 certified mail of the amount of any taxes collected on the judgment.
 Sec. 328.312.  RETENTION OF CERTAIN SCHOOL DISTRICT VALUE
 ADDED TAXES. A school district that holds a value added tax permit
 issued by the comptroller and that imposes a value added tax may
 retain the portion of the tax that the school district collects and
 that constitutes the school district's own tax. The school
 district shall remit to the comptroller all other applicable local
 value added taxes and the state value added tax.
 SUBCHAPTER E. TAX ELECTION PROCEDURES
 Sec. 328.401.  CALLING OF ELECTION. (a) An election under
 this chapter is called by the adoption of a resolution by the
 governing body of a school district.
 (b)  The governing body may call the election by a vote of a
 majority of its members.
 (c)  The governing body shall call the election if a number
 of qualified voters of the school district equal to at least 20
 percent of the number of votes cast in the most recent regular
 school district election petitions the governing body for a vote on
 the question.
 (d)  RESERVED
 (e)  RESERVED
 Sec. 328.402.  DEADLINES AFTER PETITION. (a) After the
 receipt of a petition for an election under this chapter, the
 governing body of a school district shall determine the sufficiency
 of the petition within 30 days.
 (b)  If the petition is sufficient, the governing body shall
 pass the ordinance calling the election within 60 days after
 receiving the petition.
 Sec. 328.403.  TIME OF ELECTION. (a) An election under this
 chapter to adopt the tax authorized under Section 328.101(a) must
 be held on the first succeeding uniform election date for which
 sufficient time elapses for the holding of an election.
 (b)  An election on the approval of the additional school
 district value added tax must be held on the next succeeding uniform
 election date not less than 30 days after the passage of the
 ordinance calling the election.
 Sec. 328.404.  BALLOT WORDING. (a) In an election to adopt
 the tax, the ballot shall be printed to provide for voting for or
 against the applicable proposition: "A one half percent value
 added tax is adopted within the [insert name of] district."
 (b)  In an election to repeal the tax, the ballot shall be
 printed to provide for voting for or against the applicable
 proposition: "The local school district value added tax within the
 district is abolished" or "The abolition of the additional school
 district value added tax within the district."
 Sec. 328.405.  OFFICIAL RESULTS OF ELECTION. (a) Within 10
 days after an election in which the voters approve of the adoption
 or abolition of a tax authorized by this chapter, the governing body
 of the school district shall by resolution or ordinance entered in
 its minutes of proceedings, declare the results of the election. A
 resolution or ordinance under this section must include statements
 showing:
 (1)  the date of the election;
 (2)  the proposition on which the vote was held;
 (3)  the total number of votes cast for and against the
 proposition; and
 (4)  the number of votes by which the proposition was
 approved.
 (b)  If the application of the taxes that may be imposed
 under this chapter is changed by the results of the election, the
 school district secretary shall send to the comptroller by United
 States certified or registered mail a certified copy of the
 resolution or the ordinance along with a map of the school district
 clearly showing its boundaries.
 Sec. 328.406.  FREQUENCY OF ELECTION. An election under
 this chapter in a school district may not be held earlier than one
 year after the date of any previous election under this chapter in
 the school district.
 Sec. 328.407.  ELECTION CONTEST: NOTICE. (a) If an
 election held under this chapter is contested, the contestant shall
 send to the comptroller by United States certified or registered
 mail within 10 days after the filing of the contest a notice of
 contest containing the style of the suit, the date it was filed, its
 case number, and the name of the court in which the contest is
 pending.
 (b)  A court may not hear an election contest of an election
 held under this chapter unless the comptroller is notified within
 the time and in the manner provided by this section.
 Sec. 328.408.  ELECTION CONTEST: DELAYED EFFECTIVE DATE.
 (a) When the comptroller receives a notice of contest of an
 election under this chapter, the effective date of the tax or the
 abolition of a tax is suspended.
 (b)  When a final judgment is entered in the election
 contest, the school district secretary shall notify the comptroller
 by United States certified or registered mail and enclose a
 certified copy of the final judgment.
 (c)  If the final judgment in the election contest results in
 a change in the tax status of the school district under this
 chapter, the tax or the abolition of the tax takes effect as
 provided by Section 328.102 except that the notice of the final
 judgment is substituted for the notice of election results
 prescribed by Section 328.405.
 Sec. 328.409.  COMBINED SCHOOL DISTRICT VALUE ADDED TAX
 BALLOT PROPOSITIONS. (a) Notwithstanding any provisions of this
 code or other state law, a school district may by a combined ballot
 proposition lower or repeal any dedicated or special purpose school
 district value added tax, including the additional value added tax
 for property tax relief, and by the same proposition raise or adopt
 any other dedicated or special purpose school district value added
 tax, including the additional value added tax for property tax
 relief.
 (b)  A combined value added tax proposition under this
 section shall contain substantially the same language, if any,
 required by law for the lowering, repealing, raising, or adopting
 of each tax as appropriate.
 (c)  A negative vote on a combined value added tax
 proposition under this section shall have no effect on either the
 value added tax to be lowered or repealed by the proposition or the
 value added tax to be raised or adopted by the proposition.
 (d)  This section does not apply to value added tax elections
 called by any method other than by the governing body.
 (e)  This section shall not be construed to change the
 substantive law of any value added tax, including the allowed
 maximum rate or combined rate of local value added taxes.
 SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
 Sec. 328.501.  TRUST ACCOUNT. (a) The comptroller shall
 deposit the taxes collected by the comptroller under this chapter
 in trust in the separate suspense account of the school district
 from which the taxes were collected.
 (b)  Repealed by Acts 2001, 77th 2003, 78th Leg., ch. 464
 285, Sec. 31(44).
 (c)  Repealed by Acts 2003, 78th Leg., ch. 285, Sec. 31(44).
 Sec. 328.502.  DISTRIBUTION OF TRUST FUNDS. At least twice
 during each state fiscal year and at other times as often as
 feasible, the comptroller shall send to the school district
 treasurer or to the person who performs the office of the school
 district treasurer payable to the school district the school
 district's share of the taxes collected by the comptroller under
 this chapter.
 Sec. 328.503.  STATE'S SHARE. Before sending any money to a
 school district under this subchapter the comptroller shall deduct
 two percent of the amount of the taxes collected within the school
 district during the period for which a distribution is made as the
 state's charge for its services under this chapter and shall,
 subject to premiums payments under Section 328.501(c), credit the
 money deducted to the general revenue fund.
 Sec. 328.504.  AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
 comptroller may retain in the suspense account of a school district
 a portion of the school district's share of the tax collected for
 the school district under this chapter, not to exceed five percent
 of the amount remitted to the school district. If the school
 district has abolished the tax, the amount that may be retained may
 not exceed five percent of the final remittance to the school
 district at the time of the termination of the collection of the
 tax.
 (b)  From the amounts retained in a school district's
 suspense account, the comptroller may make refunds for overpayments
 to the account and to redeem dishonored checks and drafts deposited
 to the credit of the account.
 (c)  Before the expiration of one year after the effective
 date of the abolition of a school district's tax under this chapter
 the comptroller shall send to the school district the remainder of
 the money in the school district's account and shall close the
 account.
 Sec. 328.505.  INTEREST ON TRUST ACCOUNT. Interest earned
 on all deposits made with the comptroller under Section 328.501,
 including interest earned from retained suspense accounts, shall be
 credited to the general revenue fund.
 Sec. 328.506.  USE OF TAX REVENUE BY SCHOOL DISTRICT. Except
 as provided by Section 328.507, the money received by a school
 district under this chapter is for the use and benefit of the school
 district and must be used exclusively for school enrichment
 facilities and activities and the service and repayment of debt
 incurred to fund school enrichment facilities and activities. For
 the avoidance of doubt, "school enrichment" for this purpose is
 understood to exclude all school-related expenditures and
 investments that are (i) properly classified as being appropriate
 and essential to the "general diffusion of knowledge" within the
 meaning of the Texas constitution and (2) eligible in principle for
 funding through the Texas Foundation School program.
 Sec. 328.508.  PLEDGE OF TAX REVENUE. (a) A school district
 may call and hold an election on the issue of authorizing the school
 district to pledge a percentage of the value added tax revenue
 received under Section 328.101 to the payment of obligations issued
 to pay all or part of the costs of one or more projects located in
 the school district.
 (b)  The ballot at the election under this section must be
 printed to permit voting for or against the proposition:
 "Authorizing the ________ School District (insert name of school
 district) to pledge not more than ______ percent (insert percentage
 not to exceed 25 percent) of the revenue received from the _________
 (insert school district value added tax) previously adopted in the
 district to the payment of obligations issued to pay all or part of
 the costs of _________ (insert description of each project)."
 (c)  If a majority of the voters vote in favor of the
 proposition, the school district may:
 (1, eff. June 11, 2001) issue bonds, notes, or other
 obligations that are payable from the pledged revenues to pay for
 all or part of the costs of the school-related enrichment project or
 projects described in the proposition (which may include, without
 limitation, sports, music, language, culture, technical,
 vocational, and similar projects); and
 (2)  set aside the portion of the revenue approved at
 the election that the school district actually receives and pledge
 that revenue as security for the payment of the bonds, notes, or
 other obligations.
 (d)  If the school district pledges revenue under Subsection
 (c), the pledge and security interest shall continue while the
 bonds, notes, or obligations, including refunding obligations, are
 outstanding and unpaid.
 (e)  The school district may direct the comptroller to
 deposit the pledged revenue to a trust or account as may be required
 to obtain the financing and to protect the related security
 interest.
 (f)  Sections 328.506 and 328.507 do not apply to taxes
 pledged under this section.
 Sec. 328.510.  REALLOCATION OF SCHOOL DISTRICT OR LOCAL
 GOVERNMENTAL ENTITY TAX REVENUE. (a) In this section, "local
 governmental entity" includes any governmental entity created by
 the legislature that has a limited purpose or function, that has a
 defined or restricted geographic territory, and that is authorized
 by law to impose a local value added tax the imposition,
 computation, administration, enforcement, and collection of which
 is governed by this chapter.
 (b)  This section applies only if:
 (1)  the comptroller:
 (A)  reallocates local tax revenue from a school
 district or local governmental entity to another school district or
 local governmental entity; or
 (B)  refunds local tax revenue that was previously
 allocated to a school district or local governmental entity; and
 (2)  the amount the comptroller reallocates or refunds
 is at least equal to the lesser of:
 (A)  $200,000;
 (B)  an amount equal to 10 percent of the revenue
 received by the school district or local governmental entity under
 this chapter during the calendar year preceding the calendar year
 in which the reallocation or refund is made; or
 (C)  an amount that increases or decreases the
 amount of revenue the school district or local governmental entity
 receives under this chapter during a calendar month by more than 15
 percent as compared to revenue received by the school district or
 local governmental entity during the same month in any previous
 year.
 (c)  Subject to the criteria provided by this section, a
 school district or local governmental entity may request a review
 of all available value added tax returns and reports in the
 comptroller's possession filed by not more than five individual
 taxpayers doing business in the school district or local
 governmental entity that are included and identified by the school
 district or local governmental entity from the information received
 from the comptroller under Section 328.3022 and that relate to a
 reallocation or refund in an amount described by Subsection (b).
 (d)  The comptroller shall provide the returns and reports
 requested under Subsection (c) for review regardless of whether the
 information in the returns or reports is confidential under state
 law.
 (e)  The provision of confidential information to a school
 district or local governmental entity under this section does not
 affect the confidential nature of the information in the returns or
 reports. A school district or local governmental entity shall use
 the information only in a manner that maintains the confidential
 nature of the information and may not disclose or release the
 information to the public.
 (f)  A school district or local governmental entity must
 submit the request under Subsection (c) not later than the 90th day
 after the date the school district or local governmental entity
 discovers a reallocation or refund described by Subsection (b).
 (g)  Not earlier than the 30th day or later than the 90th day
 after the date the comptroller receives a request under Subsection
 (c), the comptroller shall provide the requested returns and
 reports to the requesting school district or local governmental
 entity for review.
 (h)  The comptroller may set and collect from a school
 district or local governmental entity a reasonable fee to cover the
 expense of compiling and providing information under this section.
 [END OF ARTICLE 4, SECTION 4.01]
 SECTION 4.02.  (A) Subject to Section 4.03 of this Article 4,
 and effective on and after September 1, 2013 (as used in this
 Article, the "Effective Date"), HEALTH AND SAFETY CODE, TITLE 9,
 SAFETY, SUBTITLE B, EMERGENCIES, CHAPTER 775, EMERGENCY SERVICES
 DISTRICTS, is amended by replacing "sales and use" with "value
 added" in each place where the term appears in Sections 775.0241 and
 775.032, and by revising Sections 775.0751 - 775.0753 as follows:
 Sec. 775.0751.  SALES AND USE VALUE ADDED TAX. (a) A
 district may adopt a sales and use value added tax, change the rate
 of its sales and use value added tax, or abolish its sales and use
 value added tax at an election held as provided by Section 775.0752.
 The district may impose the tax at a rate from one-eighth of one
 percent to one two percent in increments of one-eighth of one
 percent. Revenue from the tax may be used for any purpose in for
 which ad valorem tax revenue of the district may lawfully engage be
 used.
 (b)  Chapter 323, Tax Code, applies to the application,
 collection, and administration of the tax imposed under this
 section. The comptroller may make rules for the collection and
 administration of this tax in the same manner as for a tax imposed
 under Chapter 323, Tax Code. Where a county and a hospital district
 both impose a sales and use value added tax, the comptroller may by
 rule provide for proportionate allocation of sales and use value
 added tax collections between a county and a hospital district on
 the basis of the period of time each tax is imposed and the relative
 tax rates.
 (c)  Except as provided by Subsection (c-1), a district may
 not adopt a tax under this section or increase the rate of the tax if
 as a result of the adoption of the tax or the tax increase the
 combined rate of all sales and use value added taxes imposed by the
 district and other political subdivisions of this state having
 territory in the district would exceed two percent three percent at
 any location in the district.
 (c-1)  A district that otherwise would be precluded from
 adopting a sales and use value added tax under Subsection (c) may
 adopt a sales and use value added tax, change the rate of its sales
 and use value added tax, or abolish its sales and use value added
 tax at an election held as provided by Section 775.0752, if the
 board:
 (1)  excludes from the election and the applicability
 of any proposed sales and use value added tax any territory in the
 district where the sales and use value added tax is then at two
 percent three percent; and
 (2)  not later than the 30th day after the date on which
 the board issues the election order, gives, for informational
 purposes, written or oral notice on the proposed imposition,
 increase, or abolition of the sales and use value added tax,
 including the reasons for the proposed change, to the commissioners
 court of each county in which the district is located.
 (d)  If the voters of a district approve the adoption of the
 tax or an increase in the tax rate at an election held on the same
 election date on which another political subdivision of this state
 adopts a sales and use value added tax or approves the increase in
 the rate of its sales and use value added tax and as a result the
 combined rate of all sales and use value added taxes imposed by the
 district and other political subdivisions of this state having
 territory in the portion of the district in which the district sales
 and use value added tax will apply would exceed two percent three
 percent at any location in that portion of the district, the
 election to adopt a sales and use value added tax or to increase the
 rate of the sales and use value added tax in the district under this
 subchapter has no effect.
 (e)  to (h) Expired.
 Sec. 775.0752.  SALES AND USE VALUE ADDED TAX ELECTION
 PROCEDURES. (a) Except as otherwise provided by this subchapter,
 an election to adopt or abolish a district's sales and use value
 added tax or to change the rate of the tax is governed by the
 provisions of Subchapter E, Chapter 323, Tax Code, applicable to an
 election to adopt or abolish a county sales and use value added tax.
 (b)  An election is called by the adoption of a resolution by
 the board. The board shall call an election if a number of
 qualified voters of the district equal to at least five percent of
 the number of registered voters in the district petitions the board
 to call the election.
 (c)  At an election to adopt the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 adoption of a local sales and use value added tax in (name of
 district) at the rate of (proposed tax rate) percent."
 (d)  At an election to abolish the tax, the ballot shall be
 prepared to permit voting for or against the proposition: "The
 abolition of the local sales and use value added tax in (name of
 district)."
 (e)  At an election to change the rate of the tax, the ballot
 shall be prepared to permit voting for or against the proposition:
 "The (increase or decrease, as applicable) in the rate of the local
 sales and use value added tax imposed by (name of district) from
 (tax rate on election date) percent to (proposed tax rate)
 percent."
 Added by Acts 1989, 71st Leg., 1st C.S., ch. 40, Sec. 3, eff. Sept.
 1, 1989.
 Sec. 775.0753.  SALES AND USE VALUE ADDED TAX EFFECTIVE
 DATE; BOUNDARY CHANGE. (a) The adoption or abolition of the tax or
 change in the tax rate takes effect on the first day of the first
 calendar quarter occurring after the expiration of the first
 complete calendar quarter occurring after the date on which the
 comptroller receives a notice of the results of the election.
 (b)  If the comptroller determines that an effective date
 provided by Subsection (a) will occur before the comptroller can
 reasonably take the action required to begin collecting the tax or
 to implement the abolition of the tax or the tax rate change, the
 effective date may be extended by the comptroller until the first
 day of the next succeeding calendar quarter.
 (c)  The provisions of Section 321.102, Tax Code, governing
 the application of a municipal sales and use value added tax in the
 event of a change in the boundaries of a municipality apply to the
 application of a tax imposed under this chapter in the event of a
 change in the district's boundaries.
 [END OF SECTION 4.02(A)]
 (B)  Subject to Section 4.03 of this Article 4, and effective
 on and after September 1, 2013 (as used in this Article, the
 "Effective Date"), HEALTH AND SAFETY CODE, TITLE 4, HEALTH
 FACILITIES, SUBTITLE D, HOSPITAL DISTRICTS, CHAPTER 285, SPECIAL
 PROVISIONS RELATING TO HOSPITAL DISTRICTS, is amended by replacing
 "sales and use" with "value added" in each place where the term
 appears in that chapter.
 SECTION 4.03.
 (A)  Subject to the provisions of Section 4.03(B) of this
 Article, the revisions to various chapters and sections referenced
 in this Article 4 shall be prospective in application only and
 without prejudice to any rights and obligations of taxpayers, or
 the amounts owed to and the authorities of the comptroller or of
 this state, accruing or arising with respect to periods prior to the
 Effective Date, including but not limited to refunds, adjustments
 and similar items that would otherwise have been payable by or on
 behalf of any authority of the state or any political subdivision
 thereof on or after the Effective Date.
 (B)  Notwithstanding the foregoing, but without prejudice to
 any other applicable limitation of actions, expiration or "sunset"
 provision, no judicial or administrative enforcement action shall
 be commenced by any authority of this state or any of its political
 subdivisions on or after the fifth anniversary of the Effective
 Date under the provisions of these chapters and sections as they
 were in effect prior to the Effective Date.
 ARTICLE 5.
 PROPERTY TAXES
 SECTION 5.01.  Subject to Section 5.04 of this Article, and
 effective on and after September 1, 2013 (as used in this Article,
 the "Effective Date"), the LOCAL GOVERNMENT CODE and the TAX CODE
 are amended as set forth in this Article.
 SECTION 5.02.  LOCAL GOVERNMENT CODE, TITLE 4, FINANCES,
 SUBTITLE C, FINANCIAL PROVISIONS APPLYING TO MORE THAN ONE TYPE OF
 LOCAL GOVERNMENT, is amended by adding Section 140.008 to read as
 follows:
 Sec. 140.008.  RESTRICTION OF AD VALOREM PROPERTY TAXES.
 (a)  Except as and to the extent authorized by any
 self-executing provision of the Texas Constitution or by Chapter
 302, Tax Code, and regulations promulgated by the comptroller in
 conformity therewith, and notwithstanding any other provision of
 law, neither this state nor any political subdivision of this
 state, nor any of its or their authorities, may impose, levy,
 assess, collect or otherwise administer ad valorem taxes on the
 ownership of property, wherever located or by whomever owned.
 (b)  This section does not bar the taxation of transactions
 involving the supply of property as provided in Chapter 220, Tax
 Code, whether the taxable value is measured by the value of the
 property supplied or payments or exchanges determined by reference
 to such value.
 (c)  Without limiting the foregoing, this section prevails
 over a provision of a municipal charter to the extent of a conflict.
 SECTION 5.02.  TAX CODE, TITLE 1, PROPERTY TAX CODE,
 SUBTITLE A, GENERAL PROVISIONS, is amended to revise Section 1.02,
 APPLICABILITY OF TITLE, as follows:
 Sec. 1.02.  APPLICABILITY OF TITLE. This title applies to a
 taxing unit that is created by or pursuant to any general, special,
 or local law enacted before or after the enactment of this title
 unless a law enacted after enactment of this title by or pursuant to
 which the taxing unit is created expressly provides that this title
 does not apply. This title supersedes any provision of a municipal
 charter or ordinance relating to property taxation. Nothing in this
 title invalidates or restricts the right of voters to utilize
 municipal-level initiative and referendum to set a tax rate, level
 of spending, or limitation on tax increase for that municipality.
 SECTION 5.03.  TAX CODE, TITLE 3, LOCAL TAXATION, is amended
 by revising SUBTITLE A, GENERAL TAXING AUTHORITY AND PROVISIONS, as
 follows:
 CHAPTER 302. TAXATION POWERS OF MUNICIPALITIES
 SUBCHAPTER A. PROPERTY TAXES
 Sec. 302.001.  EXEMPTED LOCAL TAXING UNITS PROPERTY TAXES
 AUTHORIZED; PURPOSES. (a) A local taxing unit shall be authorized
 to levy ad valorem property taxes only with respect to those fiscal
 periods as to which the comptroller has certified such unit for this
 purpose as an exempted local taxing unit, and then only to the
 extent of the projected shortfall specified for that period in such
 certification.
 (b)  During fiscal periods ending on or before August 31,
 2017, a A Type A general-law municipality exempted hereunder may
 levy property taxes only for the purpose of funding for current
 expenses, for the construction or purchase of public buildings,
 water works, sewers, and other permanent improvements in the
 municipality, including municipal schools and school sites, and for
 the construction and improvement of municipal roads, streets, and
 bridges in the municipality.
 (c b) During fiscal periods ending on or before August 31,
 2017, a A Type B general-law municipality exempted hereunder may
 levy property taxes at an annual rate not to exceed 25 cents for
 each $100 of property valuation.
 Sec. 302.002.  CERTIFICATION BY COMPTROLLER. (a) Upon
 application by a local taxing unit, the comptroller shall certify
 such unit as an "exempted local taxing unit" for purposes of this
 subchapter if, in the comptroller's determination:
 (i)  the revenues that could reasonably be expected to
 be realized by that unit for the fiscal period in question through
 collections under the authority of Tax Code Chapter 220 will be
 materially insufficient to replace the revenues to be lost by
 application of Texas Tax Reform Act of 2013, and
 (ii)  no other source or potential source of revenues
 reasonably available to the local taxing unit will be sufficient to
 alleviate the projected shortfall.
 Such certifications shall specify the shortfall projected for the
 fiscal period(s) in question, and any actual collections in excess
 of 115% of such certified amounts shall be refunded by the local
 taxing unit to property owners in proportion to their respective
 shares of taxes actually collected for that period.
 (b)  The comptroller shall review such determinations
 annually and, after notice to and reasonable opportunity to be
 heard by the local taxing unit(s) in question, discontinue such
 certifications upon determining that the unit no longer qualifies
 for such certification. However, no such exemption shall extend in
 effect beyond three years from the date of issuance, and no
 exemption may be issued for any local taxing unit with respect to
 fiscal periods beginning on or after September 1, 2017 except by
 pursuant to an act of the legislature specifying by individual
 unit, or by class of units, the fiscal periods affected and the
 limits, if any, on rates or levies to be authorized during such
 periods.
 (c)  The comptroller shall report to the legislature
 biannually on the applications for and certifications issued under
 this subchapter, as well as on any local taxing units determined to
 enjoy direct authorization by the Texas Constitution to levy ad
 valorem property taxes in spite of any contrary act by the
 legislature. Such reports shall include recommendations for
 legislative or policy changes to facilitate the discontinuation of
 ad valorem property taxation by the local taxing units affected at
 the earliest practicable opportunity, including recommendations
 for consolidation of financing for local taxing units in certain
 cases (such as between counties and the special districts situated
 therein, for example), as well as recommendations for such
 amendments to the Texas Constitution as may be necessary or
 appropriate for this purpose.
 Sec. 302.003.  TRANSITION OF LOCAL TAXING UNITS. To the
 extent that the Texas Constitution authorizes the levying of ad
 valorem property taxes by a local taxing unit without regard to any
 contrary act of the legislature, and to the extent that the
 comptroller certifies as exempt any local taxing units, the
 comptroller shall implement a program of communication and
 coordination to encourage the transition of such units away from
 reliance on ad valorem property taxes in favor of the taxes
 authorized in Tax Code, Chapter 220, or other sources or potential
 sources of revenues available or that could through, appropriate
 legislation or regulation, be made available to such units. Such
 coordination shall, where appropriate, include consideration of
 changes in defined boundaries, funding sources or other
 organizational changes at the level of such units. The status and
 prospects for such transitions and communications shall be
 addressed in the comptroller's biannual reports.
 Sec. 302.004.  WIND-DOWN OF APPRAISAL DISTRICT OPERATIONS.
 The comptroller shall supervise and assist with the reduction in
 size and scope of appraisal district operations in those
 jurisdictions where ad valorem property taxation is being reduced.
 In those counties where no local taxing unit continues to levy ad
 valorem property taxes, the appraisal district, assessment and
 collection operations shall be wound down and closed in an
 expeditious but orderly fashion, subject to such limited retention
 of facilities and capabilities as shall remain necessary for
 management of pending or potential proceedings arising out of
 assessments and/or collections with respect to previous periods.
 Section 302.005. RETENTION OF RECORDS. The comptroller shall
 make suitable arrangement for archiving and maintaining records of
 appraisal offices closed in accordance with this subchapter.
 Section 302.006. REGULATIONS. The comptroller shall issue
 regulations not inconsistent with the provisions of this subchapter
 prescribing such rules, forms and procedures as shall be necessary
 and appropriate to implement its provisions and policy.
 Sec. 302.00 2.     OTHER TAXES NOT CONSIDERED: CERTAIN
 HOME-RULE MUNICIPALITIES. In determining the power of certain
 home-rule municipalities to levy taxes, the taxes levied by a
 county, a political subdivision of a county, or a district under
 Article III, Section 52, of the Texas Constitution are not
 considered.
 (b)     This section prevails over a provision of a municipal
 charter to the extent of a conflict.
 (c)     This section applies only to a municipality that
 attempted to amend its charter before June 30, 1939, and at the time
 of the election to amend the charter did not own a water system,
 sanitary sewer system, electric light system, or natural gas system
 from which it could derive revenue.
 SECTION 302.007.  DEFINITIONS. As used in this subchapter:
 (a)  "Local taxing unit" means any county, municipality,
 school district, special district or authority (including a junior
 college district, a hospital district, a district created by or
 pursuant to the Water Code, a mosquito control district, a fire
 prevention district, a crime control district, a noxious weed
 control district) or any other political unit of this state,
 whether created by or pursuant to the constitution or a local,
 special, or general law, that is authorized to impose and is
 imposing ad valorem property taxes even if the governing body of
 another political unit determines the tax rate for the unit or
 otherwise governs its affairs.
 (b)  "Municipality" means any incorporated city, town or
 village, including but not limited to a home-rule city.
 SECTION 5.04.
 (A)  Subject to the provisions of Section 5.04(B) of this
 Article, the revisions to various chapters and sections referenced
 in this Article shall be prospective in application only and
 without prejudice to any rights and obligations of taxpayers, or
 the amounts owed to and the authorities of the comptroller or of
 this state, accruing or arising with respect to periods prior to the
 Effective Date, including but not limited to refunds, adjustments
 and similar items that would otherwise have been payable by or on
 behalf of any authority of the state or any political subdivision
 thereof on or after the Effective Date.
 (B)  Notwithstanding the foregoing, but without prejudice to
 any other applicable limitation of actions, expiration or "sunset"
 provision, no judicial or administrative enforcement action shall
 be commenced by any authority of this state or any of its political
 subdivisions on or after the fifth anniversary of the Effective
 Date under the provisions of these chapters and sections as they
 were in effect prior to the Effective Date.
 ARTICLE 6
 SCHOOL FINANCE REFORM
 SECTION 6.01.  Subject to Section 6.08 of this Article, and
 effective on and after September 1, 2013 (as used in this Article,
 the "Effective Date"), the EDUCATION CODE is amended as set forth in
 this Article.
 SECTION 6.02.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 41,
 EQUALIZED WEALTH LEVELS, is repealed in its entirety.
 SECTION 6.03.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 42,
 FOUNDATION SCHOOL PROGRAM, Sec. 42.001, STATE POLICY, is amended by
 adding a new paragraph (c) to Section 42.001 as follows:
 (c)  The state shall discharge its responsibility through
 the appropriation and/or dedication of state revenues sufficient to
 supply each school district out of state resources with funding
 necessary to meet the standards established under this title on an
 equitable basis that, at minimum, satisfies the Texas
 Constitution's requirements for a general diffusion of knowledge,
 while at the same time allowing school districts to select and fund
 out of locally available resources those additional enrichment
 opportunities deemed appropriate by the boards of such districts
 and their constituent voters.
 SECTION 6.04.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 42,
 FOUNDATION SCHOOL PROGRAM, Sec. 42.002, PURPOSES OF FOUNDATION
 SCHOOL PROGRAM, is amended by revising paragraph (b) thereof as
 follows:
 (b)  The Foundation School Program consists of:
 (1)  two tiers of funding from state revenues that in
 combination provide for:
 (A)  sufficient financing for all school
 districts to provide a basic program of education meeting
 constitutional standards that is rated acceptable or higher under
 Section 39.054 and meets other applicable legal standards,
 including but not limited to provision for instructional facilities
 such as real property, improvements to real property, and necessary
 fixtures of an improvement to real property that is used
 predominantly for teaching the curriculum required under Section
 28.002; and
 (B)  the minimum financing required to lay the
 foundation for all school districts to pursue to facilitate a
 locally funded enrichment program.; and
 (2)     a facilities component as provided by Chapter
 46.
 The second tier of such funding is not intended to sustain even a
 modest enrichment program by modern community standards; rather it
 is intended to serve in effect as "seed" funding to overcome the
 introductory barriers that would be faced by most districts in
 seeking to initiate and develop a modest enrichment program.
 SECTION 6.05.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 42,
 FOUNDATION SCHOOL PROGRAM, is further amended as set forth below:
 (A)  Section 42.101, BASIC ALLOTMENT, paragraph (a), is
 revised as set forth below:
 Text of subsection effective on September 01, 2015
 (a)  For each student in average daily attendance, not
 including the time students spend each day in special education
 programs in an instructional arrangement other than mainstream or
 career and technology education programs, for which an additional
 allotment is made under Subchapter C, a district is entitled to an
 allotment equal to the lesser of $4,765 or the amount that results
 from the following formula:
 A = $4,765 X (DCR/MCR)
 where:
 "A" is the allotment to which a district is entitled;
 "DCR" is the district's compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by the maintenance and operations tax
 rate adopted by the district for the 2005 tax year; and
 "MCR" is the state maximum compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by $1.50.
 Text of section effective until September 01, 2015
 Sec.   42.101.     BASIC AND REGULAR PROGRAM ALLOTMENTS. (a) The
 basic allotment is an amount equal to the lesser of $4,765 or the
 amount that results from the following formula:
 A = $4,765 X (DCR/MCR)
 where:
 "A" is the resulting amount for a district;
 "DCR" is the district's compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by the maintenance and operations tax
 rate adopted by the district for the 2005 tax year; and
 "MCR" is the state maximum compressed tax rate, which is the
 product of the state compression percentage, as determined under
 Section 42.2516, multiplied by $1.50.
 (a-1)     Repealed by Acts 2011, 82nd Leg., 1st C.S., Ch. 4,
 Sec. 57.31, effective September 28, 2011
 (a-2)     Repealed by Acts 2011, 82nd Leg., 1st C.S., Ch. 4,
 Sec. 57.31, effective September 28, 2011
 (b)     A greater amount for any school year for the basic
 allotment under Subsection (a) may be provided by appropriation.
 (c)     A school district is entitled to a regular program
 allotment equal to the amount that results from the following
 formula:
 RPA = ADA X AA X RPAF
 where:
 "RPA" is the regular program allotment to which the district
 is entitled;
 "ADA" is the number of students in average daily attendance
 in a district, not including the time students spend each day in
 special education programs in an instructional arrangement other
 than mainstream or career and technology education programs, for
 which an additional allotment is made under Subchapter C;
 "AA" is the district's adjusted basic allotment, as
 determined under Section 42.102 and, if applicable, as further
 adjusted under Section 42.103; and
 "RPAF" is the regular program adjustment factor.
 (c-1)     Except as provided by Subsection (c-2), the regular
 program adjustment factor ("RPAF") is 0.9239 for the 2011-2012
 school year and 0.98 for the 2012-2013 school year.
 (c-2)     For a school district that does not receive funding
 under Section 42.2516 for the 2011-2012 school year, the
 commissioner may set the regular program adjustment factor ("RPAF")
 at 0.95195 for the 2011-2012 and 2012-2013 school years if the
 district demonstrates that funding reductions as a result of
 adjustments to the regular program allotment made by S.B. No. 1,
 Acts of the 82nd Legislature, 1st Called Session, 2011, will result
 in a hardship to the district in the 2011-2012 school year.
 Notwithstanding any other provision of this subsection, the
 commissioner shall adjust the regular program adjustment factor
 ("RPAF") for the 2012-2013 school year for a school district whose
 regular program adjustment factor is set in accordance with this
 subsection to ensure that the total amount of state and local
 revenue in the combined 2011-2012 and 2012-2013 school years does
 not differ from the amount the district would have received if the
 district's regular program adjustment factor had not been set in
 accordance with this subsection. A determination by the
 commissioner under this subsection is final and may not be
 appealed.
 (c-3)     The regular program adjustment factor ("RPAF") is
 0.98 for the 2013-2014 and 2014-2015 school years or a greater
 amount established by appropriation, not to exceed 1.0. This
 subsection and Subsections (c), (c-1), and (c-2) expire September
 1, 2015.
 (B)  Section 42.151,  SPECIAL EDUCATION, paragraph (k), is
 amended by revising "$10 million" to "$XXX million,"
 (C)  Section 42.152,  COMPENSATORY EDUCATION ADJUSTMENT,
 paragraph (s) is amended by revising "$650" to "$XXXX," and
 paragraph (s-2) is amended by revision "$9.9 million" to "$XXX
 million".
 (D)  Section 42.154,  CAREER AND TECHNOLOGY EDUCATION
 ALLOTMENT, paragraph (a) is amended by revising "$50" to "$XXXX,"
 and paragraph (s-2) is amended by revising "$9.9 million" to "$XXX
 million".
 (E)  Section 42.156,  GIFTED AND TALENTED STUDENT
 ALLOTMENT, paragraph (f) is amended by revising "$500,000" to
 "$XXXX million."
 (F)  Section 42.158,  NEW INSTRUCTIONAL FACILITY ALLOTMENT,
 is amended by revising "$250" to "$XXXX" in each place where it
 appears, "$25 million" to "$XXX million" where it appears in
 paragraph (d), and "$1 million" to "$XXX million" where it appears
 in paragraph (d-1).
 (G)  Section 42.251, FINANCING; GENERAL RULE, paragraph (b)
 is amended to read as set forth below:
 (b)  The program shall be financed by:
 (1)  ad valorem tax revenue generated by an equalized
 uniform school district effort;
 (2)     ad valorem tax revenue generated by local school
 district effort in excess of the equalized uniform school district
 effort;
 (13)  state available school funds distributed in
 accordance with law; and
 (24)  state funds appropriated for the purposes of
 public school education and allocated to each district in an amount
 sufficient to finance the cost of each district's Foundation School
 Program not covered by other funds specified in this subsection.
 (H)  Section 42.2513, ADDITIONAL STATE AID FOR STAFF SALARY
 INCREASES, paragraph (a), is amended by revising "$250" and $500"
 to "$XXXX" and "$XXXX", respectively, in each of the places where
 they appear.
 (I)  Section 42.2516, ADDITIONAL STATE AID FOR TAX
 REDUCTION, is repealed in its entirety.
 (J)  Section 42.252, LOCAL SHARE OF PROGRAM COST (TIER ONE),
 is repealed in its entirety.
 (K)  Sections 42.2521, 42.2522, and 45.2523 are repealed in
 their entirety.
 (L)  Section 42.2531, ADJUSTMENT BY COMMISSIONER, amended by
 repealing paragraphs (b) and (c) thereof in their entirety.
 (M)  Section 42.254, ESTIMATES REQUIRED, is revised to read
 as set forth below:
 Sec. 42.254.  ESTIMATES REQUIRED. (a) Not later than
 October 1 of each even-numbered year:
 (1)  the agency shall submit to the legislature an
 estimate of the tax rate and student enrollment of each school
 district for the following biennium; and
 (2)  the comptroller shall submit to the legislature an
 estimate of the total dedicated and undedicated state value added
 tax revenues projected taxable value of all property in the state as
 determined under Subchapter M, Chapter 403, Government Code, for
 the following biennium.
 (b)  The agency and the comptroller shall update the
 information provided to the legislature under Subsection (a) not
 later than March 1 of each odd-numbered year.
 (N)  Section 42.257, EFFECT OF APPRAISAL APPEAL, is repealed
 in its entirety.
 (O)  Section 42.259, FOUNDATION SCHOOL FUND TRANSFERS, is
 revised as set forth below:
 Sec. 42.259.  FOUNDATION SCHOOL FUND TRANSFERS. (a) In this
 section:
 (1)     "Category 1 school district" means a school district
 having a wealth per student of less than one-half of the statewide
 average wealth per student.
 (2)     "Category 2 school district" means a school district
 having a wealth per student of at least one-half of the statewide
 average wealth per student but not more than the statewide average
 wealth per student.
 (3)     "Category 3 school district" means a school district
 having a wealth per student of more than the statewide average
 wealth per student.
 (4)     "Wealth per student" means the taxable property values
 reported by the comptroller to the commissioner under Section
 42.252 divided by the number of students in average daily
 attendance.
 (b)     Payments from the foundation school fund to each
 category 1 school district shall be made as follows:
 (1)     15 percent of the yearly entitlement of the district
 shall be paid in an installment to be made on or before the 25th day
 of September of a fiscal year;
 (2)     80 percent of the yearly entitlement of the district
 shall be paid in eight equal installments to be made on or before
 the 25th day of October, November, December, January, March, May,
 June, and July; and
 (3)     five percent of the yearly entitlement of the district
 shall be paid in an installment to be made on or before the 25th day
 of February.
 (c)  Payments from the foundation school fund to each
 category 2 school district shall be made as follows:
 (1)  22 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of September of a fiscal year;
 (2)  18 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of October;
 (3)  9.5 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of November;
 (4)  7.5 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of April;
 (5)  five percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of May;
 (6)  10 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of June;
 (7)  13 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of July; and
 (8)  15 percent of the yearly entitlement of the
 district shall be paid in an installment to be made after the 5th
 day of September and not later than the 10th day of September of the
 calendar year following the calendar year of the payment made under
 Subdivision (1).
 (d)     Payments from the foundation school fund to each
 category 3 school district shall be made as follows:
 (1)     45 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of September of a fiscal year;
 (2)     35 percent of the yearly entitlement of the
 district shall be paid in an installment to be made on or before the
 25th day of October; and
 (3)     20 percent of the yearly entitlement of the
 district shall be paid in an installment to be made after the 5th
 day of September and not later than the 10th day of September of the
 calendar year following the calendar year of the payment made under
 Subdivision (1).
 (b
 e) The amount of any installment required by this section
 may be modified to provide a school district with the proper amount
 to which the district may be entitled by law and to correct errors
 in the allocation or distribution of funds. If an installment under
 this section is required to be equal to other installments, the
 amount of other installments may be adjusted to provide for that
 equality. A payment under this section is not invalid because it is
 not equal to other installments.
 (cf) Except as provided by Subsection (ac)(8) or (d)(3), any
 previously unpaid additional funds from prior fiscal years owed to
 a district shall be paid to the district together with the September
 payment of the current fiscal year entitlement.
 (dg) The commissioner shall make all annual Foundation
 School Program payments under this section for purposes described
 by Sections 45.252(a)(1) and (2) before the deadline established
 under Section 45.263(b) for payment of debt service on bonds.
 Notwithstanding any other provision of this section, the
 commissioner may make Foundation School Program payments under this
 section after the deadline established under Section 45.263(b) only
 if the commissioner has not received notice under Section 45.258
 concerning a district's failure or inability to pay matured
 principal or interest on bonds.
 (P)  Section 42.260, USE OF CERTAIN FUNDS, is repealed in its
 entirety.
 (Q)  Section 42.261, CERTAIN FUNDS APPROPRIATED FOR PURPOSE
 OF TAX REDUCTION, is repealed in its entirety.
 (R)  CHAPTER 42, SUBCHAPTER F, GUARANTEED YIELD PROGRAM, is
 repealed in its entirety.
 SECTION 6.06.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 44,
 FISCAL MANAGEMENT, is amended by adding new Sections 44.012 and
 44.013 as set forth below:
 Sec. 44.012.  TRANSITION TO VALUE ADDED TAX FUNDING. (a) The
 commissioner shall supervise and assist the governing boards of
 independent school districts and rural high school districts and
 county commissioners courts, with respect to each common school
 district under their respective jurisdictions, in effectuating an
 orderly transition to the substitution of expanded Foundation
 School Program funding and supplemental local value added tax
 revenues for ad valorem property tax revenues in the districts'
 budgeting, funding and debt servicing.
 (b)  Not later than 180 days following the enactment of the
 Texas Tax Reform Act of 2013, each district, in coordination with
 the commissioner and the comptroller, shall prepare and submit to
 the commissioner, a report (the "Transition Report") estimating the
 budgets, sources of funds, debt service, operating and capital
 expenditures, and public bond offerings anticipated over the
 forthcoming one-, five- and ten- fiscal year periods. Estimates and
 financial statements contained in this report shall meet the
 standards of this subtitle for other statements, budgets, plans and
 reports presenting similar data. Such reports shall have been
 certified by the comptroller for confidence as to the projections
 of funds that could reasonably be expected to be received by the
 district through the expanded Foundation School Program set forth
 in Chapter 42, the local value added tax revenues to be realized
 under the school district enrichment value added tax authorized
 under TAX CODE, TITLE 3, LOCAL TAXATION, SUBTITLE C, LOCAL VALUE
 ADDED TAXES, CHAPTER 328, SCHOOL DISTRICT ENRICHMENT, and the funds
 from ad valorem property taxes to be lost by application of the
 Texas Tax Reform Act of 2013. This report shall classify each item
 of projected operating and capital expenditures as either basic
 educatiand foundational ("basic") or enrichment ("enrichment") in and foundational ("basic") or enrichment ("enrichment") in
 conformity to the standards set forth in Title 2, Chapter 42,
 Sections 42.001 and 42.002, and shall similarly classify all
 current and projected debts and debt service requirements in
 proportion to the uses to which the proceeds of such debt offerings
 have been, are being, and are projected to be put.
 (c)  The commissioner, in coordination and consultation with
 the comptroller and each district, shall prepare and present to the
 comptroller recommendations for refunding, redeeming or amending
 outstanding bonds to the payment of which the district has pledged
 ad valorem property taxes.
 (1)  To the extent that such bonds have been classified
 as "enrichment" bonds, such refundings, redemptions or amendments,
 and all future issuances of such bonds, shall be the responsibility
 of the district, and the requirements of Chapter 45 for approval by
 the attorney general may be met by reference to anticipated local
 value added tax revenues in lieu of property valuations and ad
 valorem tax levies.
 (2)  To the extent that such bonds have been classified
 as "basic" bonds, then such refundings, redemptions or amendments,
 and all future issuances of such bonds, shall be the responsibility
 of the state, and shall be addressed through such mechanisms and
 formulae as shall be available under the Foundation School Program
 under Chapter 42.
 (c)  The commissioner shall report to the comptroller and to
 the legislature annually on the status of and prospects for this
 transition. Such reports shall include recommendations for
 legislative or policy changes to facilitate the required financial
 changes while maintaining and improving upon the efficiency,
 quality and results of public school education.
 Sec. 44.013.  RESTORATION OF LOCAL CONTROL AND COMMUNITY
 ENGAGEMENT IN DISTRICTS. (a) It is the policy of this state to
 promote community engagement in and control of district affairs at
 the smallest geographic and demographic levels practicable. With
 the financial relief to be provided districts under the Texas Tax
 Reform Act of 2013 (the "Act"), district boundaries need no longer
 be established principally by reference to the extent of such
 districts' ad valorem property tax base.
 (b)  Commencing immediately upon enactment of the Act, the
 commissioner is directed to work with districts and the agency to
 develop recommendations to reorganize those school districts
 encompassing populations of more than 100,000 into districts of
 sufficient locality as to promote heightened familiarization of,
 and engagement by, parents and community leaders with district
 leaders, policies and practices. Accommodation should be made to
 preserve and promote charter or "magnet" schools that, by design,
 are intended to attract students and families from broadly
 dispersed geographic areas, but in all other cases district
 boundaries should be drawn on the basis of geographic proximity,
 shared community ties and interests, and transportation patterns
 and limitations for students and families. The commissioner shall
 report to the legislature no later than September 1, 2014 with
 recommendations and analysis.
 (c)  The commissioner shall issue regulations not
 inconsistent with the provisions of this section prescribing such
 rules, forms and procedures as shall be necessary and appropriate
 to implement its provisions and policy.
 SECTION 6.07.  EDUCATION CODE, TITLE 2, PUBLIC EDUCATION,
 SUBTITLE I, SCHOOL FINANCE AND FISCAL MANAGEMENT, CHAPTER 46,
 ASSISTANCE WITH INSTRUCTIONAL FACILITIES AND PAYMENT OF EXISTING
 DEBT, is repealed in its entirety.
 SECTION 6.08.
 (A)  Subject to the provisions of Section 6.08(B) of this
 Article, the revisions to various chapters and sections referenced
 in this Article shall be prospective in application only and
 without prejudice to any rights and obligations of taxpayers, or
 the amounts owed to and the authorities of the comptroller or of
 this state, accruing or arising with respect to periods prior to the
 Effective Date, including but not limited to refunds, adjustments
 and similar items that would otherwise have been payable by or on
 behalf of any authority of the state or any political subdivision
 thereof on or after the Effective Date.
 (B)  Notwithstanding the foregoing, but without prejudice to
 any other applicable limitation of actions, expiration or "sunset"
 provision, no judicial or administrative enforcement action shall
 be commenced by any authority of this state or any of its political
 subdivisions on or after the fifth anniversary of the Effective
 Date under the provisions of these chapters and sections as they
 were in effect prior to the Effective Date.
 ARTICLE 7
 TITLE OF ACT
 SECTION 7.01.  This Act may be cited as the "Texas Tax Reform
 Act of 2013," and references herein to "this Act" are to be read
 accordingly.