85R7172 CJC/JXC-D
By: King of Parker H.B. No. 1228
A BILL TO BE ENTITLED
AN ACT
relating to the phaseout and repeal of the miscellaneous gross
receipts tax on utility companies; decreasing the rates of the tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. CHANGES EFFECTIVE DURING PHASEOUT OF TAX
SECTION 1.01. Effective September 1, 2020, Sections
447.013(d) and (e), Government Code, are amended to read as
follows:
(d) The account consists of:
(1) [a sub-account in the account that consists of the
proceeds of bonds issued under Subsection (j);
[(2)] revenues allocated to the account under former
Section 182.122(b) [182.122], Tax Code, before September 1, 2020;
(2) [(3)] any amount appropriated by the legislature
for the account;
(3) [(4)] gifts, grants, and other donations received
for the account; and
(4) [(5)] interest earned on the investment of money
in the account.
(e) Money in the account may be appropriated only to the
State Energy Conservation Office to award grants or to make or
guarantee loans under this section. The total amount of grants that
may be awarded under this section in any state fiscal biennium from
revenues described by Subsection (d)(1) [(d)(2)] may not exceed $20
million. The total amount of loans that may be made or guaranteed
under this section in any state fiscal biennium from revenues
described by Subsection (d)(1) [(d)(2)] may not exceed $10 million.
SECTION 1.02. (a) Section 182.022(b), Tax Code, is amended
to read as follows:
(b) The tax rates are:
(1) .465 [.581] percent of the gross receipts from
business done in an incorporated city or town having a population of
more than 1,000 but less than 2,500[, according to the last federal
census next preceding the filing of the report];
(2) .856 [1.07] percent of the gross receipts from
business done in an incorporated city or town having a population of
2,500 or more but less than 10,000[, according to the last federal
census next preceding the filing of the report]; and
(3) 1.598 [1.997] percent of the gross receipts from
business done in an incorporated city or town having a population of
10,000 or more[, according to the last federal census next
preceding the filing of the report].
(b) This section applies only to a gross receipts tax report
due on or after January 31, 2018.
SECTION 1.03. (a) Effective October 1, 2018, Section
182.022(b), Tax Code, is amended to read as follows:
(b) The tax rates are:
(1) .349 [.581] percent of the gross receipts from
business done in an incorporated city or town having a population of
more than 1,000 but less than 2,500[, according to the last federal
census next preceding the filing of the report];
(2) .642 [1.07] percent of the gross receipts from
business done in an incorporated city or town having a population of
2,500 or more but less than 10,000[, according to the last federal
census next preceding the filing of the report]; and
(3) 1.198 [1.997] percent of the gross receipts from
business done in an incorporated city or town having a population of
10,000 or more[, according to the last federal census next
preceding the filing of the report].
(b) This section applies only to a gross receipts tax report
due on or after January 31, 2019.
SECTION 1.04. (a) Effective October 1, 2019, Section
182.022(b), Tax Code, is amended to read as follows:
(b) The tax rates are:
(1) .232 [.581] percent of the gross receipts from
business done in an incorporated city or town having a population of
more than 1,000 but less than 2,500[, according to the last federal
census next preceding the filing of the report];
(2) .428 [1.07] percent of the gross receipts from
business done in an incorporated city or town having a population of
2,500 or more but less than 10,000[, according to the last federal
census next preceding the filing of the report]; and
(3) .799 [1.997] percent of the gross receipts from
business done in an incorporated city or town having a population of
10,000 or more[, according to the last federal census next
preceding the filing of the report].
(b) This section applies only to a gross receipts tax report
due on or after January 31, 2020.
SECTION 1.05. (a) Effective October 1, 2020, Section
182.022(b), Tax Code, is amended to read as follows:
(b) The tax rates are:
(1) .116 [.581] percent of the gross receipts from
business done in an incorporated city or town having a population of
more than 1,000 but less than 2,500[, according to the last federal
census next preceding the filing of the report];
(2) .214 [1.07] percent of the gross receipts from
business done in an incorporated city or town having a population of
2,500 or more but less than 10,000[, according to the last federal
census next preceding the filing of the report]; and
(3) .399 [1.997] percent of the gross receipts from
business done in an incorporated city or town having a population of
10,000 or more[, according to the last federal census next
preceding the filing of the report].
(b) This section applies only to a gross receipts tax report
due on or after January 31, 2021.
SECTION 1.06. Section 182.122, Tax Code, as effective until
September 1, 2020, is amended by adding Subsection (c) to read as
follows:
(c) In each state fiscal biennium at the time the
comptroller makes the allocation required under this section, the
comptroller shall determine the difference between the amount of
revenue that would be allocated to the foundation school fund under
Subsection (a)(1) during that state fiscal biennium if the tax
imposed under Section 182.022 were imposed at the rates in effect on
September 30, 2017, and the amount of revenue actually allocated to
the foundation school fund under Subsection (a)(1) during that
biennium. The comptroller shall transfer from the general revenue
fund an amount equal to that difference and credit that amount to
the foundation school fund. The transfer required by this
subsection is in addition to the allocation of revenue to the
foundation school fund under Subsection (a).
SECTION 1.07. Section 182.122, Tax Code, as effective
September 1, 2020, is amended to read as follows:
Sec. 182.122. ALLOCATION OF TAX. (a) Revenues collected
under this chapter are allocated:
(1) one-fourth to the foundation school fund; and
(2) three-fourths to the general revenue fund.
(b) In each state fiscal biennium at the time the
comptroller makes the allocation required under this section, the
comptroller shall determine the difference between the amount of
revenue that would be allocated to the foundation school fund under
Subsection (a)(1) during that state fiscal biennium if the tax
imposed under Section 182.022 were imposed at the rates in effect on
September 30, 2017, and the amount of revenue actually allocated to
the foundation school fund under Subsection (a)(1) during that
biennium. The comptroller shall transfer from the general revenue
fund an amount equal to that difference and credit that amount to
the foundation school fund. The transfer required by this
subsection is in addition to the allocation of revenue to the
foundation school fund under Subsection (a).
SECTION 1.08. Subchapter E, Chapter 36, Utilities Code, is
amended by adding Section 36.2025 to read as follows:
Sec. 36.2025. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
LIABILITY. (a) The commission shall provide in a rate case under
Subchapter C or D for the prospective adjustment of an electric
utility's billing to reflect a decrease in the utility's tax
liability to this state if the decrease results from a reduction in
a rate of the miscellaneous gross receipts tax imposed under
Chapter 182, Tax Code, before October 1, 2021, or from the repeal of
that chapter.
(b) The commission shall make an adjustment described by
Subsection (a) in the first rate case that begins after a decrease
in tax liability occurs. The adjustment remains effective only
until a subsequent adjustment under this section.
SECTION 1.09. Subchapter G, Chapter 104, Utilities Code, is
amended by adding Section 104.302 to read as follows:
Sec. 104.302. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
LIABILITY. (a) The regulatory authority shall provide for the
adjustment of a gas utility's billing to reflect a decrease in the
utility's tax liability to this state if the decrease results from a
reduction in a rate of the miscellaneous gross receipts tax imposed
under Chapter 182, Tax Code, before October 1, 2021, or from the
repeal of that chapter.
(b) Each adjustment described by Subsection (a):
(1) shall be made effective at the same time as the
decrease of tax liability or as soon after that decrease occurs as
is reasonably practicable; and
(2) remains effective only until a subsequent
adjustment under this section.
(c) This section does not apply to a gas utility if the
regulatory authority enters an order for the utility under
Subchapter C or D that accounts for the reduction or repeal of tax
liability described by Subsection (a).
(d) An adjustment under this section is not a rate case
under Subchapter C or D.
SECTION 1.10. Subchapter F, Chapter 13, Water Code, is
amended by adding Section 13.1885 to read as follows:
Sec. 13.1885. ADJUSTMENT FOR CHANGES IN GROSS RECEIPTS TAX
LIABILITY. (a) The regulatory authority shall provide for the
adjustment of a utility's billing to reflect a decrease in the
utility's tax liability to this state if the decrease results from a
reduction in a rate of the miscellaneous gross receipts tax imposed
under Chapter 182, Tax Code, before October 1, 2021, or from the
repeal of that chapter.
(b) Each adjustment described by Subsection (a):
(1) shall be made effective at the same time as the
decrease of tax liability or as soon after that decrease occurs as
is reasonably practicable; and
(2) remains effective only until a subsequent
adjustment under this section.
(c) This section does not apply to a utility if the
regulatory authority determines the utility's rates by an order
issued under this subchapter for the utility that accounts for the
reduction or repeal of tax liability described by Subsection (a).
(d) An adjustment under this section is an uncontested
matter not subject to a contested case hearing. An adjustment under
this section is not a rate case.
ARTICLE 2. REPEAL OF TAX ON OCTOBER 1, 2021, AND CHANGES EFFECTIVE
ON REPEAL OF TAX
SECTION 2.01. (a) The following provisions of the Tax Code
are repealed:
(1) the heading to Chapter 182;
(2) the headings to Subchapters B and C, Chapter 182;
(3) Sections 182.021, 182.022, 182.023, and 182.027;
(4) Subchapters E, F, and G, Chapter 182; and
(5) Section 191.089.
(b) The repeal by this section of the provisions of Chapter
182, Tax Code, listed in Subsection (a) of this section does not
affect the taxes imposed under that chapter before the effective
date of this article. The provisions of Chapter 182 in effect
immediately before the effective date of this article that relate
to the collection and enforcement of the taxes accruing before the
effective date of this article and to the allocation of revenue from
those taxes are continued in effect for purposes of collecting and
enforcing those taxes, including enforcing the requirements to file
tax reports and make tax payments on or before October 31, 2021, and
allocating revenue from those taxes.
(c) The repeal by this section of the provisions of Chapter
182, Tax Code, listed in Subsection (a) and Section 191.089, Tax
Code, does not affect the imposition of a penalty under Chapter 182,
Tax Code, for conduct occurring before the effective date of this
article. For purposes of this subsection, conduct occurs before
the effective date of this article if any element of the conduct
subject to the imposition of the penalty occurs before that date.
Conduct occurring before the effective date of this article is
governed by the law in effect when the conduct occurred, and the
former law is continued in effect for that purpose.
SECTION 2.02. Section 91.904, Natural Resources Code, is
amended to read as follows:
Sec. 91.904. CONSTRUCTION OF SUBCHAPTER. This subchapter
may not be construed to:
(1) limit the authority of a saltwater pipeline
facility to use a public right-of-way under any other law;
(2) affect the authority of a municipality to:
(A) regulate the use of a public right-of-way by
a saltwater pipeline operator under any other law; or
(B) require payment of any applicable charge
under Section 253.003, Utilities [182.025, Tax] Code; or
(3) require a county or municipality to:
(A) grant a right to a saltwater pipeline
operator that applies to a public road or right-of-way and that is
broader than the county's or municipality's legal interest in the
public road or right-of-way; or
(B) grant more than a surface right to a
saltwater pipeline operator in a right-of-way acquired by
prescription.
SECTION 2.03. Section 37.101(d), Utilities Code, is amended
to read as follows:
(d) This section does not:
(1) limit the power of a city, town, or village to
incorporate or of a municipality to extend its boundaries by
annexation; or
(2) prohibit a municipality from levying a tax or
other special charge for the use of the streets as authorized by
Section 253.003 [182.025, Tax Code].
SECTION 2.04. Section 41.005, Utilities Code, is amended to
read as follows:
Sec. 41.005. LIMITATION ON MUNICIPAL AUTHORITY.
Notwithstanding any other provision of this title, a municipality
may not directly or indirectly regulate the rates, operations, and
services of an electric cooperative, except, with respect to
operations, to the extent necessary to protect the public health,
safety, or welfare. This section does not prohibit a municipality
from making a lawful charge for the use of public rights-of-way
within the municipality as provided by Sections [Section 182.025,
Tax Code, and Section] 33.008 and 253.003. An electric cooperative
shall be an electric utility for purposes of Sections [Section
182.025, Tax Code, and Section] 33.008 and 253.003.
SECTION 2.05. Section 121.2025(a), Utilities Code, is
amended to read as follows:
(a) Except as otherwise provided by this section or Section
253.003 [182.025, Tax Code], a municipality may not assess a charge
for the placement, construction, maintenance, repair, replacement,
operation, use, relocation, or removal of a gas pipeline facility
on, along, under, or across a public road, highway, street, alley,
stream, canal, or other public way.
SECTION 2.06. Section 121.211(g), Utilities Code, is
amended to read as follows:
(g) Each operator of a natural gas distribution system and
each natural gas master meter operator shall recover as a surcharge
to its existing rates the amounts paid to the commission under this
section. Amounts collected under this subsection by an
investor-owned natural gas distribution system or a cooperatively
owned natural gas distribution system shall not be included in the
revenue or gross receipts of the company for the purpose of
calculating municipal franchise fees or any tax imposed under
[Subchapter B, Chapter 182, Tax Code, or under] Chapter 122 or
Section 253.003. Those amounts are not subject to a sales and use
tax imposed by Chapter 151, Tax Code, or Subtitle C, Title 3, Tax
Code.
SECTION 2.07. Section 181.005(b), Utilities Code, is
amended to read as follows:
(b) The right granted by Subsection (a) relating to the use
of a municipal street or alley is subject to the payment of charges
in accordance with Sections [Section] 121.2025 and 253.003 [of this
code and Sections 182.025 and 182.026, Tax Code].
SECTION 2.08. Section 181.047(d), Utilities Code, is
amended to read as follows:
(d) This section does not prohibit a municipality from
imposing a tax or special charge for the use of a street as
authorized by [Subchapter B,] Chapter 253 [182, Tax Code].
SECTION 2.09. (a) Title 5, Utilities Code, is amended by
adding Chapter 253 to read as follows:
CHAPTER 253. TAXES AND CHARGES IMPOSED ON OR PROHIBITED FROM BEING
IMPOSED ON CERTAIN UTILITIES LOCATED IN INCORPORATED AREAS
Sec. 253.001. DEFINITIONS. (a) In this chapter:
(1) "Business" means the provision of gas,
electricity, or water.
(2) "Distribution service" has the meaning assigned by
Section 33.008.
(3) "Electric utility" has the meaning assigned by
Section 31.002.
(4) "Public utility" means:
(A) a person who owns or operates a gas or water
works or water plant used for local sale and distribution located in
an incorporated city or town in this state; or
(B) an electric utility or transmission and
distribution utility providing distribution service in an
incorporated city or town in this state.
(5) "Transmission and distribution utility" has the
meaning assigned by Section 31.002.
(6) "Utility company" means, except as provided by
Subsection (b), a person:
(A) who owns or operates a gas or water works or
water plant used for local sale and distribution located in an
incorporated city or town in this state; or
(B) who owns or operates an electric light or
electric power works or light plant used for local sale and
distribution located in an incorporated city or town in this state,
or who is a retail electric provider, as that term is defined in
Section 31.002, including a retail electric provider owned,
operated, or controlled by an electric cooperative, that makes
local sales in an incorporated city or town in this state.
(b) For purposes of this chapter, "utility company" does not
include a person who owns an electric light or electric power or gas
plant used for distribution but who does not make retail sales to
the ultimate consumer in an incorporated city or town in this state.
(b) Sections 182.024, 182.025, and 182.026, Tax Code, are
transferred to Chapter 253, Utilities Code, as added by this
section, redesignated as Sections 253.002, 253.003, and 253.004,
Utilities Code, respectively, and amended to read as follows:
Sec. 253.002 [182.024]. TAX OR CHARGE BY CERTAIN POLITICAL
SUBDIVISIONS. No city or other political subdivision of this state
may impose an occupation tax or charge of any sort on a utility
company located in an incorporated city or town with a population of
more than 1,000 [taxed under this subchapter].
Sec. 253.003 [182.025]. CHARGES BY A CITY. (a) An
incorporated city or town may make a reasonable lawful charge for
the use of a city street, alley, or public way by a public utility in
the course of its business.
(b) The total charges, however designated or measured, may
not exceed two percent of the gross receipts of the public utility
for the sale of gas or water within the city.
(c) The total charges, however designated or measured,
relating to distribution service of an electric utility or
transmission and distribution utility within the city may not
exceed the amount or amounts prescribed by Section 33.008[,
Utilities Code]. The charges paid by an electric utility or
transmission and distribution utility under this subsection may be
only for distribution service.
(d) If a public utility located in an incorporated city or
town with a population of more than 1,000 [taxed under this
subchapter] pays a special tax, rental, contribution, or charge
under a contract or franchise executed before May 1, 1941, the city
shall credit the payment against the amount owed by the public
utility on any charge allowable under Subsection (a) [of this
section].
[(e) In this section:
[(1) "Distribution service" has the meaning assigned
by Section 33.008, Utilities Code.
[(2) "Electric utility" has the meaning assigned by
Section 31.002, Utilities Code.
[(3) "Public utility" means:
[(A) a person who owns or operates a gas or water
works or water plant used for local sale and distribution located
within an incorporated city or town in this state; or
[(B) an electric utility or transmission and
distribution utility providing distribution service within an
incorporated city or town in this state.
[(4) "Transmission and distribution utility" has the
meaning assigned by Section 31.002, Utilities Code.]
Sec. 253.004 [182.026]. APPLICABILITY AND EFFECT OF
CHAPTER [SUBCHAPTER NOT APPLICABLE]. (a) This chapter
[subchapter] does not apply to a utility company owned and operated
by a city, town, county, water improvement district, or
conservation district.
(b) This chapter [subchapter] does not:
(1) affect collection of ad valorem taxes; or
(2) impair or alter a provision of a contract,
agreement, or franchise made between a city and a public utility
company relating to a payment made to the city.
SECTION 2.10. Section 13.247(c), Water Code, is amended to
read as follows:
(c) This section may not be construed as limiting the power
of municipalities to incorporate or extend their boundaries by
annexation, or as prohibiting any municipality from levying taxes
and other special charges for the use of the streets as are
authorized by Section 253.003, Utilities [182.025, Tax] Code.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. (a) Except as provided by Subsection (b) of
this section, this Act takes effect October 1, 2017.
(b) Article 2 of this Act takes effect October 1, 2021.