Texas 2017 - 85th Regular

Texas House Bill HB1228 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R7172 CJC/JXC-D
2	2	By: King of Parker H.B. No. 1228
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the phaseout and repeal of the miscellaneous gross
8	8	receipts tax on utility companies; decreasing the rates of the tax.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	ARTICLE 1. CHANGES EFFECTIVE DURING PHASEOUT OF TAX
11	11	SECTION 1.01. Effective September 1, 2020, Sections
12	12	447.013(d) and (e), Government Code, are amended to read as
13	13	follows:
14	14	(d) The account consists of:
15	15	(1) [a sub-account in the account that consists of the
16	16	proceeds of bonds issued under Subsection (j);
17	17	[(2)] revenues allocated to the account under former
18	18	Section 182.122(b) [182.122], Tax Code, before September 1, 2020;
19	19	(2) [(3)] any amount appropriated by the legislature
20	20	for the account;
21	21	(3) [(4)] gifts, grants, and other donations received
22	22	for the account; and
23	23	(4) [(5)] interest earned on the investment of money
24	24	in the account.
25	25	(e) Money in the account may be appropriated only to the
26	26	State Energy Conservation Office to award grants or to make or
27	27	guarantee loans under this section. The total amount of grants that
28	28	may be awarded under this section in any state fiscal biennium from
29	29	revenues described by Subsection (d)(1) [(d)(2)] may not exceed $20
30	30	million. The total amount of loans that may be made or guaranteed
31	31	under this section in any state fiscal biennium from revenues
32	32	described by Subsection (d)(1) [(d)(2)] may not exceed $10 million.
33	33	SECTION 1.02. (a) Section 182.022(b), Tax Code, is amended
34	34	to read as follows:
35	35	(b) The tax rates are:
36	36	(1) .465 [.581] percent of the gross receipts from
37	37	business done in an incorporated city or town having a population of
38	38	more than 1,000 but less than 2,500[, according to the last federal
39	39	census next preceding the filing of the report];
40	40	(2) .856 [1.07] percent of the gross receipts from
41	41	business done in an incorporated city or town having a population of
42	42	2,500 or more but less than 10,000[, according to the last federal
43	43	census next preceding the filing of the report]; and
44	44	(3) 1.598 [1.997] percent of the gross receipts from
45	45	business done in an incorporated city or town having a population of
46	46	10,000 or more[, according to the last federal census next
47	47	preceding the filing of the report].
48	48	(b) This section applies only to a gross receipts tax report
49	49	due on or after January 31, 2018.
50	50	SECTION 1.03. (a) Effective October 1, 2018, Section
51	51	182.022(b), Tax Code, is amended to read as follows:
52	52	(b) The tax rates are:
53	53	(1) .349 [.581] percent of the gross receipts from
54	54	business done in an incorporated city or town having a population of
55	55	more than 1,000 but less than 2,500[, according to the last federal
56	56	census next preceding the filing of the report];
57	57	(2) .642 [1.07] percent of the gross receipts from
58	58	business done in an incorporated city or town having a population of
59	59	2,500 or more but less than 10,000[, according to the last federal
60	60	census next preceding the filing of the report]; and
61	61	(3) 1.198 [1.997] percent of the gross receipts from
62	62	business done in an incorporated city or town having a population of
63	63	10,000 or more[, according to the last federal census next
64	64	preceding the filing of the report].
65	65	(b) This section applies only to a gross receipts tax report
66	66	due on or after January 31, 2019.
67	67	SECTION 1.04. (a) Effective October 1, 2019, Section
68	68	182.022(b), Tax Code, is amended to read as follows:
69	69	(b) The tax rates are:
70	70	(1) .232 [.581] percent of the gross receipts from
71	71	business done in an incorporated city or town having a population of
72	72	more than 1,000 but less than 2,500[, according to the last federal
73	73	census next preceding the filing of the report];
74	74	(2) .428 [1.07] percent of the gross receipts from
75	75	business done in an incorporated city or town having a population of
76	76	2,500 or more but less than 10,000[, according to the last federal
77	77	census next preceding the filing of the report]; and
78	78	(3) .799 [1.997] percent of the gross receipts from
79	79	business done in an incorporated city or town having a population of
80	80	10,000 or more[, according to the last federal census next
81	81	preceding the filing of the report].
82	82	(b) This section applies only to a gross receipts tax report
83	83	due on or after January 31, 2020.
84	84	SECTION 1.05. (a) Effective October 1, 2020, Section
85	85	182.022(b), Tax Code, is amended to read as follows:
86	86	(b) The tax rates are:
87	87	(1) .116 [.581] percent of the gross receipts from
88	88	business done in an incorporated city or town having a population of
89	89	more than 1,000 but less than 2,500[, according to the last federal
90	90	census next preceding the filing of the report];
91	91	(2) .214 [1.07] percent of the gross receipts from
92	92	business done in an incorporated city or town having a population of
93	93	2,500 or more but less than 10,000[, according to the last federal
94	94	census next preceding the filing of the report]; and
95	95	(3) .399 [1.997] percent of the gross receipts from
96	96	business done in an incorporated city or town having a population of
97	97	10,000 or more[, according to the last federal census next
98	98	preceding the filing of the report].
99	99	(b) This section applies only to a gross receipts tax report
100	100	due on or after January 31, 2021.
101	101	SECTION 1.06. Section 182.122, Tax Code, as effective until
102	102	September 1, 2020, is amended by adding Subsection (c) to read as
103	103	follows:
104	104	(c) In each state fiscal biennium at the time the
105	105	comptroller makes the allocation required under this section, the
106	106	comptroller shall determine the difference between the amount of
107	107	revenue that would be allocated to the foundation school fund under
108	108	Subsection (a)(1) during that state fiscal biennium if the tax
109	109	imposed under Section 182.022 were imposed at the rates in effect on
110	110	September 30, 2017, and the amount of revenue actually allocated to
111	111	the foundation school fund under Subsection (a)(1) during that
112	112	biennium. The comptroller shall transfer from the general revenue
113	113	fund an amount equal to that difference and credit that amount to
114	114	the foundation school fund. The transfer required by this
115	115	subsection is in addition to the allocation of revenue to the
116	116	foundation school fund under Subsection (a).
117	117	SECTION 1.07. Section 182.122, Tax Code, as effective
118	118	September 1, 2020, is amended to read as follows:
119	119	Sec. 182.122. ALLOCATION OF TAX. (a) Revenues collected
120	120	under this chapter are allocated:
121	121	(1) one-fourth to the foundation school fund; and
122	122	(2) three-fourths to the general revenue fund.
123	123	(b) In each state fiscal biennium at the time the
124	124	comptroller makes the allocation required under this section, the
125	125	comptroller shall determine the difference between the amount of
126	126	revenue that would be allocated to the foundation school fund under
127	127	Subsection (a)(1) during that state fiscal biennium if the tax
128	128	imposed under Section 182.022 were imposed at the rates in effect on
129	129	September 30, 2017, and the amount of revenue actually allocated to
130	130	the foundation school fund under Subsection (a)(1) during that
131	131	biennium. The comptroller shall transfer from the general revenue
132	132	fund an amount equal to that difference and credit that amount to
133	133	the foundation school fund. The transfer required by this
134	134	subsection is in addition to the allocation of revenue to the
135	135	foundation school fund under Subsection (a).
136	136	SECTION 1.08. Subchapter E, Chapter 36, Utilities Code, is
137	137	amended by adding Section 36.2025 to read as follows:
138	138	Sec. 36.2025. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
139	139	LIABILITY. (a) The commission shall provide in a rate case under
140	140	Subchapter C or D for the prospective adjustment of an electric
141	141	utility's billing to reflect a decrease in the utility's tax
142	142	liability to this state if the decrease results from a reduction in
143	143	a rate of the miscellaneous gross receipts tax imposed under
144	144	Chapter 182, Tax Code, before October 1, 2021, or from the repeal of
145	145	that chapter.
146	146	(b) The commission shall make an adjustment described by
147	147	Subsection (a) in the first rate case that begins after a decrease
148	148	in tax liability occurs. The adjustment remains effective only
149	149	until a subsequent adjustment under this section.
150	150	SECTION 1.09. Subchapter G, Chapter 104, Utilities Code, is
151	151	amended by adding Section 104.302 to read as follows:
152	152	Sec. 104.302. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
153	153	LIABILITY. (a) The regulatory authority shall provide for the
154	154	adjustment of a gas utility's billing to reflect a decrease in the
155	155	utility's tax liability to this state if the decrease results from a
156	156	reduction in a rate of the miscellaneous gross receipts tax imposed
157	157	under Chapter 182, Tax Code, before October 1, 2021, or from the
158	158	repeal of that chapter.
159	159	(b) Each adjustment described by Subsection (a):
160	160	(1) shall be made effective at the same time as the
161	161	decrease of tax liability or as soon after that decrease occurs as
162	162	is reasonably practicable; and
163	163	(2) remains effective only until a subsequent
164	164	adjustment under this section.
165	165	(c) This section does not apply to a gas utility if the
166	166	regulatory authority enters an order for the utility under
167	167	Subchapter C or D that accounts for the reduction or repeal of tax
168	168	liability described by Subsection (a).
169	169	(d) An adjustment under this section is not a rate case
170	170	under Subchapter C or D.
171	171	SECTION 1.10. Subchapter F, Chapter 13, Water Code, is
172	172	amended by adding Section 13.1885 to read as follows:
173	173	Sec. 13.1885. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
174	174	LIABILITY. (a) The regulatory authority shall provide for the
175	175	adjustment of a utility's billing to reflect a decrease in the
176	176	utility's tax liability to this state if the decrease results from a
177	177	reduction in a rate of the miscellaneous gross receipts tax imposed
178	178	under Chapter 182, Tax Code, before October 1, 2021, or from the
179	179	repeal of that chapter.
180	180	(b) Each adjustment described by Subsection (a):
181	181	(1) shall be made effective at the same time as the
182	182	decrease of tax liability or as soon after that decrease occurs as
183	183	is reasonably practicable; and
184	184	(2) remains effective only until a subsequent
185	185	adjustment under this section.
186	186	(c) This section does not apply to a utility if the
187	187	regulatory authority determines the utility's rates by an order
188	188	issued under this subchapter for the utility that accounts for the
189	189	reduction or repeal of tax liability described by Subsection (a).
190	190	(d) An adjustment under this section is an uncontested
191	191	matter not subject to a contested case hearing. An adjustment under
192	192	this section is not a rate case.
193	193	ARTICLE 2. REPEAL OF TAX ON OCTOBER 1, 2021, AND CHANGES EFFECTIVE
194	194	ON REPEAL OF TAX
195	195	SECTION 2.01. (a) The following provisions of the Tax Code
196	196	are repealed:
197	197	(1) the heading to Chapter 182;
198	198	(2) the headings to Subchapters B and C, Chapter 182;
199	199	(3) Sections 182.021, 182.022, 182.023, and 182.027;
200	200	(4) Subchapters E, F, and G, Chapter 182; and
201	201	(5) Section 191.089.
202	202	(b) The repeal by this section of the provisions of Chapter
203	203	182, Tax Code, listed in Subsection (a) of this section does not
204	204	affect the taxes imposed under that chapter before the effective
205	205	date of this article. The provisions of Chapter 182 in effect
206	206	immediately before the effective date of this article that relate
207	207	to the collection and enforcement of the taxes accruing before the
208	208	effective date of this article and to the allocation of revenue from
209	209	those taxes are continued in effect for purposes of collecting and
210	210	enforcing those taxes, including enforcing the requirements to file
211	211	tax reports and make tax payments on or before October 31, 2021, and
212	212	allocating revenue from those taxes.
213	213	(c) The repeal by this section of the provisions of Chapter
214	214	182, Tax Code, listed in Subsection (a) and Section 191.089, Tax
215	215	Code, does not affect the imposition of a penalty under Chapter 182,
216	216	Tax Code, for conduct occurring before the effective date of this
217	217	article. For purposes of this subsection, conduct occurs before
218	218	the effective date of this article if any element of the conduct
219	219	subject to the imposition of the penalty occurs before that date.
220	220	Conduct occurring before the effective date of this article is
221	221	governed by the law in effect when the conduct occurred, and the
222	222	former law is continued in effect for that purpose.
223	223	SECTION 2.02. Section 91.904, Natural Resources Code, is
224	224	amended to read as follows:
225	225	Sec. 91.904. CONSTRUCTION OF SUBCHAPTER. This subchapter
226	226	may not be construed to:
227	227	(1) limit the authority of a saltwater pipeline
228	228	facility to use a public right-of-way under any other law;
229	229	(2) affect the authority of a municipality to:
230	230	(A) regulate the use of a public right-of-way by
231	231	a saltwater pipeline operator under any other law; or
232	232	(B) require payment of any applicable charge
233	233	under Section 253.003, Utilities [182.025, Tax] Code; or
234	234	(3) require a county or municipality to:
235	235	(A) grant a right to a saltwater pipeline
236	236	operator that applies to a public road or right-of-way and that is
237	237	broader than the county's or municipality's legal interest in the
238	238	public road or right-of-way; or
239	239	(B) grant more than a surface right to a
240	240	saltwater pipeline operator in a right-of-way acquired by
241	241	prescription.
242	242	SECTION 2.03. Section 37.101(d), Utilities Code, is amended
243	243	to read as follows:
244	244	(d) This section does not:
245	245	(1) limit the power of a city, town, or village to
246	246	incorporate or of a municipality to extend its boundaries by
247	247	annexation; or
248	248	(2) prohibit a municipality from levying a tax or
249	249	other special charge for the use of the streets as authorized by
250	250	Section 253.003 [182.025, Tax Code].
251	251	SECTION 2.04. Section 41.005, Utilities Code, is amended to
252	252	read as follows:
253	253	Sec. 41.005. LIMITATION ON MUNICIPAL AUTHORITY.
254	254	Notwithstanding any other provision of this title, a municipality
255	255	may not directly or indirectly regulate the rates, operations, and
256	256	services of an electric cooperative, except, with respect to
257	257	operations, to the extent necessary to protect the public health,
258	258	safety, or welfare. This section does not prohibit a municipality
259	259	from making a lawful charge for the use of public rights-of-way
260	260	within the municipality as provided by Sections [Section 182.025,
261	261	Tax Code, and Section] 33.008 and 253.003. An electric cooperative
262	262	shall be an electric utility for purposes of Sections [Section
263	263	182.025, Tax Code, and Section] 33.008 and 253.003.
264	264	SECTION 2.05. Section 121.2025(a), Utilities Code, is
265	265	amended to read as follows:
266	266	(a) Except as otherwise provided by this section or Section
267	267	253.003 [182.025, Tax Code], a municipality may not assess a charge
268	268	for the placement, construction, maintenance, repair, replacement,
269	269	operation, use, relocation, or removal of a gas pipeline facility
270	270	on, along, under, or across a public road, highway, street, alley,
271	271	stream, canal, or other public way.
272	272	SECTION 2.06. Section 121.211(g), Utilities Code, is
273	273	amended to read as follows:
274	274	(g) Each operator of a natural gas distribution system and
275	275	each natural gas master meter operator shall recover as a surcharge
276	276	to its existing rates the amounts paid to the commission under this
277	277	section. Amounts collected under this subsection by an
278	278	investor-owned natural gas distribution system or a cooperatively
279	279	owned natural gas distribution system shall not be included in the
280	280	revenue or gross receipts of the company for the purpose of
281	281	calculating municipal franchise fees or any tax imposed under
282	282	[Subchapter B, Chapter 182, Tax Code, or under] Chapter 122 or
283	283	Section 253.003. Those amounts are not subject to a sales and use
284	284	tax imposed by Chapter 151, Tax Code, or Subtitle C, Title 3, Tax
285	285	Code.
286	286	SECTION 2.07. Section 181.005(b), Utilities Code, is
287	287	amended to read as follows:
288	288	(b) The right granted by Subsection (a) relating to the use
289	289	of a municipal street or alley is subject to the payment of charges
290	290	in accordance with Sections [Section] 121.2025 and 253.003 [of this
291	291	code and Sections 182.025 and 182.026, Tax Code].
292	292	SECTION 2.08. Section 181.047(d), Utilities Code, is
293	293	amended to read as follows:
294	294	(d) This section does not prohibit a municipality from
295	295	imposing a tax or special charge for the use of a street as
296	296	authorized by [Subchapter B,] Chapter 253 [182, Tax Code].
297	297	SECTION 2.09. (a) Title 5, Utilities Code, is amended by
298	298	adding Chapter 253 to read as follows:
299	299	CHAPTER 253. TAXES AND CHARGES IMPOSED ON OR PROHIBITED FROM BEING
300	300	IMPOSED ON CERTAIN UTILITIES LOCATED IN INCORPORATED AREAS
301	301	Sec. 253.001. DEFINITIONS. (a) In this chapter:
302	302	(1) "Business" means the provision of gas,
303	303	electricity, or water.
304	304	(2) "Distribution service" has the meaning assigned by
305	305	Section 33.008.
306	306	(3) "Electric utility" has the meaning assigned by
307	307	Section 31.002.
308	308	(4) "Public utility" means:
309	309	(A) a person who owns or operates a gas or water
310	310	works or water plant used for local sale and distribution located in
311	311	an incorporated city or town in this state; or
312	312	(B) an electric utility or transmission and
313	313	distribution utility providing distribution service in an
314	314	incorporated city or town in this state.
315	315	(5) "Transmission and distribution utility" has the
316	316	meaning assigned by Section 31.002.
317	317	(6) "Utility company" means, except as provided by
318	318	Subsection (b), a person:
319	319	(A) who owns or operates a gas or water works or
320	320	water plant used for local sale and distribution located in an
321	321	incorporated city or town in this state; or
322	322	(B) who owns or operates an electric light or
323	323	electric power works or light plant used for local sale and
324	324	distribution located in an incorporated city or town in this state,
325	325	or who is a retail electric provider, as that term is defined in
326	326	Section 31.002, including a retail electric provider owned,
327	327	operated, or controlled by an electric cooperative, that makes
328	328	local sales in an incorporated city or town in this state.
329	329	(b) For purposes of this chapter, "utility company" does not
330	330	include a person who owns an electric light or electric power or gas
331	331	plant used for distribution but who does not make retail sales to
332	332	the ultimate consumer in an incorporated city or town in this state.
333	333	(b) Sections 182.024, 182.025, and 182.026, Tax Code, are
334	334	transferred to Chapter 253, Utilities Code, as added by this
335	335	section, redesignated as Sections 253.002, 253.003, and 253.004,
336	336	Utilities Code, respectively, and amended to read as follows:
337	337	Sec. 253.002 [182.024]. TAX OR CHARGE BY CERTAIN POLITICAL
338	338	SUBDIVISIONS. No city or other political subdivision of this state
339	339	may impose an occupation tax or charge of any sort on a utility
340	340	company located in an incorporated city or town with a population of
341	341	more than 1,000 [taxed under this subchapter].
342	342	Sec. 253.003 [182.025]. CHARGES BY A CITY. (a) An
343	343	incorporated city or town may make a reasonable lawful charge for
344	344	the use of a city street, alley, or public way by a public utility in
345	345	the course of its business.
346	346	(b) The total charges, however designated or measured, may
347	347	not exceed two percent of the gross receipts of the public utility
348	348	for the sale of gas or water within the city.
349	349	(c) The total charges, however designated or measured,
350	350	relating to distribution service of an electric utility or
351	351	transmission and distribution utility within the city may not
352	352	exceed the amount or amounts prescribed by Section 33.008[,
353	353	Utilities Code]. The charges paid by an electric utility or
354	354	transmission and distribution utility under this subsection may be
355	355	only for distribution service.
356	356	(d) If a public utility located in an incorporated city or
357	357	town with a population of more than 1,000 [taxed under this
358	358	subchapter] pays a special tax, rental, contribution, or charge
359	359	under a contract or franchise executed before May 1, 1941, the city
360	360	shall credit the payment against the amount owed by the public
361	361	utility on any charge allowable under Subsection (a) [of this
362	362	section].
363	363	[(e) In this section:
364	364	[(1) "Distribution service" has the meaning assigned
365	365	by Section 33.008, Utilities Code.
366	366	[(2) "Electric utility" has the meaning assigned by
367	367	Section 31.002, Utilities Code.
368	368	[(3) "Public utility" means:
369	369	[(A) a person who owns or operates a gas or water
370	370	works or water plant used for local sale and distribution located
371	371	within an incorporated city or town in this state; or
372	372	[(B) an electric utility or transmission and
373	373	distribution utility providing distribution service within an
374	374	incorporated city or town in this state.
375	375	[(4) "Transmission and distribution utility" has the
376	376	meaning assigned by Section 31.002, Utilities Code.]
377	377	Sec. 253.004 [182.026]. APPLICABILITY AND EFFECT OF
378	378	CHAPTER [SUBCHAPTER NOT APPLICABLE]. (a) This chapter
379	379	[subchapter] does not apply to a utility company owned and operated
380	380	by a city, town, county, water improvement district, or
381	381	conservation district.
382	382	(b) This chapter [subchapter] does not:
383	383	(1) affect collection of ad valorem taxes; or
384	384	(2) impair or alter a provision of a contract,
385	385	agreement, or franchise made between a city and a public utility
386	386	company relating to a payment made to the city.
387	387	SECTION 2.10. Section 13.247(c), Water Code, is amended to
388	388	read as follows:
389	389	(c) This section may not be construed as limiting the power
390	390	of municipalities to incorporate or extend their boundaries by
391	391	annexation, or as prohibiting any municipality from levying taxes
392	392	and other special charges for the use of the streets as are
393	393	authorized by Section 253.003, Utilities [182.025, Tax] Code.
394	394	ARTICLE 3. EFFECTIVE DATE
395	395	SECTION 3.01. (a) Except as provided by Subsection (b) of
396	396	this section, this Act takes effect October 1, 2017.
397	397	(b) Article 2 of this Act takes effect October 1, 2021.