87R11926 SMT/CJC/GCB/MP-D
	By: Springer	S.B. No. 1711

	A BILL TO BE ENTITLED
	AN ACT
	relating to state and local taxes and fees; imposing a tax; imposing
	fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1. PROVISIONS RELATED TO DECREASING PROPERTY TAX LIABILITY
	SECTION 1.01.  Section 48.255(b), Education Code, is amended
	to read as follows:
	(b)  The state compression percentage is the lower of:
	(1)  the following compression percentages, based on
	the district's maintenance and operations tax for the 2020 tax
	year:
	(A)  if a district's maintenance and operations
	tax is equal to or greater than $1.00 per hundred dollars of
	valuation, 60 percent;
	(B)  if a district's maintenance and operations
	tax is equal to or greater than $0.90 but less than $1.00 per
	hundred dollars of valuation, a compression percentage determined
	by the commissioner for that district that will compress the
	district's maintenance and operations tax to $0.90 per hundred
	dollars of valuation; or
	(C)  if a district's maintenance and operations
	tax is $0.90 or less per hundred dollars of valuation, 66.67
	percent; or
	(2)  a compression percentage established by
	appropriation for a school year [93 percent, or a lower percentage
	set by appropriation for a school year;
	[(2)  the percentage determined by the following
	formula:
	[SCP = PYCP X 1.025/(1 + ECPV); or
	[(3)  the percentage determined under this section for
	the preceding school year].
	SECTION 1.02.  Section 403.302(d), Government Code, is
	amended to read as follows:
	(d)  For the purposes of this section, "taxable value" means
	the market value of all taxable property less:
	(1)  the total dollar amount of any residence homestead
	exemptions lawfully granted under Section 11.13(b), [or] (c), or
	(s), Tax Code, in the year that is the subject of the study for each
	school district;
	(2)  one-half of the total dollar amount of any
	residence homestead exemptions granted under Section 11.13(n), Tax
	Code, in the year that is the subject of the study for each school
	district;
	(3)  the total dollar amount of any exemptions granted
	before May 31, 1993, within a reinvestment zone under agreements
	authorized by Chapter 312, Tax Code;
	(4)  subject to Subsection (e), the total dollar amount
	of any captured appraised value of property that:
	(A)  is within a reinvestment zone created on or
	before May 31, 1999, or is proposed to be included within the
	boundaries of a reinvestment zone as the boundaries of the zone and
	the proposed portion of tax increment paid into the tax increment
	fund by a school district are described in a written notification
	provided by the municipality or the board of directors of the zone
	to the governing bodies of the other taxing units in the manner
	provided by former Section 311.003(e), Tax Code, before May 31,
	1999, and within the boundaries of the zone as those boundaries
	existed on September 1, 1999, including subsequent improvements to
	the property regardless of when made;
	(B)  generates taxes paid into a tax increment
	fund created under Chapter 311, Tax Code, under a reinvestment zone
	financing plan approved under Section 311.011(d), Tax Code, on or
	before September 1, 1999; and
	(C)  is eligible for tax increment financing under
	Chapter 311, Tax Code;
	(5)  the total dollar amount of any captured appraised
	value of property that:
	(A)  is within a reinvestment zone:
	(i)  created on or before December 31, 2008,
	by a municipality with a population of less than 18,000; and
	(ii)  the project plan for which includes
	the alteration, remodeling, repair, or reconstruction of a
	structure that is included on the National Register of Historic
	Places and requires that a portion of the tax increment of the zone
	be used for the improvement or construction of related facilities
	or for affordable housing;
	(B)  generates school district taxes that are paid
	into a tax increment fund created under Chapter 311, Tax Code; and
	(C)  is eligible for tax increment financing under
	Chapter 311, Tax Code;
	(6)  the total dollar amount of any exemptions granted
	under Section 11.251 or 11.253, Tax Code;
	(7)  the difference between the comptroller's estimate
	of the market value and the productivity value of land that
	qualifies for appraisal on the basis of its productive capacity,
	except that the productivity value estimated by the comptroller may
	not exceed the fair market value of the land;
	(8)  the portion of the appraised value of residence
	homesteads of individuals who receive a tax limitation under
	Section 11.26, Tax Code, on which school district taxes are not
	imposed in the year that is the subject of the study, calculated as
	if the residence homesteads were appraised at the full value
	required by law;
	(9)  a portion of the market value of property not
	otherwise fully taxable by the district at market value because of
	action required by statute or the constitution of this state, other
	than Section 11.311, Tax Code, that, if the tax rate adopted by the
	district is applied to it, produces an amount equal to the
	difference between the tax that the district would have imposed on
	the property if the property were fully taxable at market value and
	the tax that the district is actually authorized to impose on the
	property, if this subsection does not otherwise require that
	portion to be deducted;
	(10)  the market value of all tangible personal
	property, other than manufactured homes, owned by a family or
	individual and not held or used for the production of income;
	(11)  the appraised value of property the collection of
	delinquent taxes on which is deferred under Section 33.06, Tax
	Code;
	(12)  the portion of the appraised value of property
	the collection of delinquent taxes on which is deferred under
	Section 33.065, Tax Code;
	(13)  the amount by which the market value of a
	residence homestead to which Section 23.23, Tax Code, applies
	exceeds the appraised value of that property as calculated under
	that section; and
	(14)  the total dollar amount of any exemptions granted
	under Section 11.35, Tax Code.
	SECTION 1.03.  Section 11.13, Tax Code, is amended by
	amending Subsection (i) and adding Subsections (s) and (t) to read
	as follows:
	(i)  The assessor and collector for a taxing unit may
	disregard the exemptions authorized by Subsection (b), (c), (d),
	[or] (n), or (s) [of this section] and assess and collect a tax
	pledged for payment of debt without deducting the amount of the
	exemption if:
	(1)  prior to adoption of the exemption, the unit
	pledged the taxes for the payment of a debt; and
	(2)  granting the exemption would impair the obligation
	of the contract creating the debt.
	(s)  In addition to any other exemptions provided by this
	section, an individual is entitled to an exemption from taxation by
	a school district of a portion of the appraised value of the
	individual's residence homestead in an amount equal to 150 percent
	of the median appraised value of all single family residences in
	this state in the preceding year as determined by the comptroller
	under Subsection (t).
	(t)  Not later than January 1 of each year, the comptroller
	shall determine the median appraised value of all single-family
	residences in this state in the preceding year and publish that
	value in the Texas Register.
	SECTION 1.04.  Section 48.255(c), Education Code, is
	repealed.
	SECTION 1.05.  This article applies only to an ad valorem tax
	year that begins on or after the effective date of this Act.
	ARTICLE 2. PROVISIONS RELATED TO OTHER FEE AND TAX REVENUE
	SECTION 2.01.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Section 151.0025 to read as follows:
	Sec. 151.0025.  "ADVERTISING SERVICES". "Advertising
	services" means:
	(1)  the provision of advertising space and time,
	including television and radio time, magazine space, newspaper
	space, and billboard space; or
	(2)  the development of an advertising campaign or the
	content of an advertisement, including a television, radio, print,
	or Internet advertisement.
	SECTION 2.02.  Sections 151.0028(a) and (b), Tax Code, are
	amended to read as follows:
	(a)  "Amusement services" means the provision of amusement,
	entertainment, tanning, or recreation, but does not include the
	provision of educational or health services if prescribed by a
	licensed practitioner of the healing arts for the primary purpose
	of education or health maintenance or improvement.
	(b)  "Amusement services" includes membership in a private
	club or organization that provides entertainment, tanning,
	recreational, sports, dining, or social facilities to its members.
	SECTION 2.03.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Sections 151.0029, 151.00295, 151.00352,
	151.00375, and 151.00378 to read as follows:
	Sec. 151.0029.  "AUTOMOTIVE SERVICES".  "Automotive
	services" means services performed on or to a motor vehicle,
	including washing, waxing, painting, lubrication, rustproofing,
	and undercoating.
	Sec. 151.00295.  "BARBERING OR COSMETOLOGY SERVICES".
	"Barbering or cosmetology services" means acts or activities that
	constitute "barbering," as that term is defined by Section
	1601.002, Occupations Code, or "cosmetology," as that term is
	defined by Section 1602.002, Occupations Code, and any other act or
	activity provided to a client of a person who holds a license,
	certificate, permit, or other credential issued under Chapter 1601,
	1602, or 1603, Occupations Code, authorizing the person to practice
	or perform the activity.
	Sec. 151.00352.  "DATING SERVICES".  "Dating services" means
	services to arrange romantic or social dates between individuals,
	to offer potential romantic or social dates to individuals, or to
	allow individuals to contact other individuals for the purpose of
	arranging romantic or social dates.
	Sec. 151.00375.  "FUNERAL SERVICES".  "Funeral services"
	means acts or activities that constitute "funeral directing," as
	that term is defined by Section 651.001, Occupations Code, and
	services provided by a funeral director, embalmer, or funeral
	establishment, as those terms are defined by that section, or by an
	employee of one of those persons.
	Sec. 151.00378.  "HUNTING OR FISHING GUIDE SERVICES".
	"Hunting or fishing guide services" means guiding a person who is
	hunting or fishing.
	SECTION 2.04.  The heading to Section 151.0038, Tax Code, is
	amended to read as follows:
	Sec. 151.0038.  "INFORMATION SERVICES" [SERVICE"].
	SECTION 2.05.  Section 151.0038(b), Tax Code, is amended to
	read as follows:
	(b)  In this section, "newspaper" means a publication that is
	printed on newsprint, the average sales price of which for each copy
	over a 30-day period does not exceed $3, and that is printed and
	distributed at a daily, weekly, or other short interval for the
	dissemination of news of a general character and of a general
	interest.  "Newspaper" does not include a magazine, handbill,
	circular, flyer, sales catalog, or similar printed item unless the
	printed item is printed for distribution as a part of a newspaper
	and is actually distributed as a part of a newspaper.  For the
	purposes of this section, an advertisement is news of a general
	character and of a general interest.  Notwithstanding any other
	provision of this subsection, "newspaper" includes:
	(1)  a publication containing articles and essays of
	general interest by various writers and advertisements that is
	produced for the operator of a licensed and certified carrier of
	persons and distributed by the operator to its customers during
	their travel on the carrier; and
	(2)  a publication for the dissemination of news of a
	general character and of a general interest that is printed on
	newsprint and distributed to the general public free of charge at a
	daily, weekly, or other short interval [has the meaning assigned by
	Section 151.319(f)].
	SECTION 2.06.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Sections 151.00391, 151.00425, 151.0044, and
	151.00442 to read as follows:
	Sec. 151.00391.  "INTERIOR DESIGN OR INTERIOR DECORATING
	SERVICES". "Interior design or interior decorating services" means
	an act or activity provided by a person who represents that the
	person is a "registered interior designer" under Section 1053.151,
	Occupations Code, in connection with the act or activity or the
	selection or provision of advice regarding the selection of
	furnishings, materials, or finishing for a residential or
	commercial space.
	Sec. 151.00425.  "MASSAGE THERAPY SERVICES". "Massage
	therapy services" means acts or activities that constitute "massage
	therapy," as that term is defined by Section 455.001, Occupations
	Code, and any other acts or activities performed for a massage
	therapist's client in relation to massage therapy.
	Sec. 151.0044.  "PACKING SERVICES". "Packing services"
	means packing, crating, or wrapping. The term includes gift and
	package wrapping.
	Sec. 151.00442.  "PERSONAL INSTRUCTION SERVICES". "Personal
	instruction services" means coaching or instruction in an
	individual skill, including dance, golf, or tennis.
	SECTION 2.07.  Section 151.0045, Tax Code, is amended to
	read as follows:
	Sec. 151.0045.  "PERSONAL SERVICES".  "Personal services"
	means those personal services listed as personal services under
	Group 721, Major Group 72 of the Standard Industrial Classification
	Manual, 1972, and includes massage parlors, escort services, and
	Turkish baths under Group 729 of said manual but does not include
	any other services listed under Group 729 unless otherwise covered
	under this chapter, prepared by the statistical policy division of
	the office on management and budget, office of the president of the
	United States.  [The term does not include services provided
	through coin-operated machines that are operated by the consumer.]
	SECTION 2.08.  Section 151.0047, Tax Code, is amended to
	read as follows:
	Sec. 151.0047.  "REAL PROPERTY CONSTRUCTION SERVICES"
	[REPAIR AND REMODELING"]. [(a)] "Real property construction
	services [repair and remodeling]" means the construction, repair,
	restoration, remodeling, or modification of an improvement to real
	property [other than:
	[(1)  a structure or separate part of a structure used
	as a residence;
	[(2)  an improvement immediately adjacent to a
	structure described by Subdivision (1) of this section and used in
	the residential occupancy of the structure or separate part of the
	structure by the person using the structure or part as a residence;
	or
	[(3)  an improvement to a manufacturing or processing
	production unit in a petrochemical refinery or chemical plant that
	provides increased capacity in the production unit].
	[(b)  In this section:
	[(1)  "Increased capacity" means the capability to
	produce:
	[(A)  additional products or services as measured
	by units per hour or units per year; or
	[(B)  a new product or service.
	[(2)  "Production unit" means a group of manufacturing
	and processing machines and ancillary equipment that together are
	necessary to create or produce a physical or chemical change
	beginning with the first processing of the raw material and ending
	with the finished product.
	[(3)  "New product" means a product that:
	[(A)  has different product properties and a
	different commercial application than the product previously
	manufactured or processed by the production unit that produced the
	previous product; and
	[(B)  is not created by straining or purifying an
	existing product or by making cosmetic changes, such as adding or
	removing color or odor, to or from an existing product.]
	SECTION 2.09.  Section 151.006(a), Tax Code, is amended to
	read as follows:
	(a)  "Sale for resale" means a sale of:
	(1)  tangible personal property or a taxable service to
	a purchaser who acquires the property or service for the purpose of
	reselling it as a taxable item as defined by Section 151.010 in the
	United States of America or a possession or territory of the United
	States of America or in the United Mexican States in the normal
	course of business in the form or condition in which it is acquired
	or as an attachment to or integral part of other tangible personal
	property or taxable service;
	(2)  tangible personal property to a purchaser for the
	sole purpose of the purchaser's leasing or renting it in the United
	States of America or a possession or territory of the United States
	of America or in the United Mexican States in the normal course of
	business to another person, but not if incidental to the leasing or
	renting of real estate;
	(3)  tangible personal property to a purchaser who
	acquires the property for the purpose of transferring it in the
	United States of America or a possession or territory of the United
	States of America or in the United Mexican States as an integral
	part of a taxable service;
	(4)  a taxable service, other than a transport service,
	performed on tangible personal property that is held for sale by the
	purchaser of the taxable service; or
	(5)  tangible personal property or a taxable service to
	a purchaser who acquires the property or service for the purpose of
	transferring it as an integral part of performing a contract, or a
	subcontract of a contract, for the sale, other than the lease or
	rental, of tangible personal property with an entity or
	organization exempted from the taxes imposed by this chapter under
	Section 151.309 or 151.310 only if the purchaser:
	(A)  allocates and bills to the contract the cost
	of the property or service as a direct or indirect cost; and
	(B)  transfers title to the property to the exempt
	entity or organization under the contract and any applicable
	acquisition regulations.
	SECTION 2.10.  Section 151.0101(a), Tax Code, is amended to
	read as follows:
	(a)  "Taxable services" means:
	(1)  amusement services;
	(2)  cable television services;
	(3)  personal services;
	(4)  motor vehicle parking and storage services;
	(5)  the repair, remodeling, maintenance, and
	restoration of tangible personal property, except:
	(A)  aircraft;
	(B)  a ship, boat, or other vessel, other than:
	(i)  a taxable boat or motor as defined by
	Section 160.001;
	(ii)  a sports fishing boat; or
	(iii)  any other vessel used for pleasure;
	and
	(C)  [the repair, maintenance, and restoration of
	a motor vehicle; and
	[(D)]  the repair, maintenance, creation, and
	restoration of a computer program, including its development and
	modification, not sold by the person performing the repair,
	maintenance, creation, or restoration service;
	(6)  telecommunications services;
	(7)  credit reporting services;
	(8)  debt collection services;
	(9)  insurance services;
	(10)  information services;
	(11)  real property services;
	(12)  data processing services;
	(13)  real property construction services, except to
	the extent prohibited by Section 29, Article VIII, Texas
	Constitution [repair and remodeling];
	(14)  security services;
	(15)  telephone answering services;
	(16)  Internet access service; [and]
	(17)  a sale by a transmission and distribution
	utility, as defined in Section 31.002, Utilities Code, of
	transmission or delivery of service directly to an electricity
	end-use customer whose consumption of electricity is subject to
	taxation under this chapter;
	(18)  advertising services;
	(19)  automotive services;
	(20)  barbering or cosmetology services;
	(21)  dating services;
	(22)  funeral services;
	(23)  hunting or fishing guide services;
	(24)  interior design or interior decorating services;
	(25)  massage therapy services;
	(26)  packing services;
	(27)  personal instruction services;
	(28)  transport services; and
	(29)  veterinary services.
	SECTION 2.11.  Subchapter A, Chapter 151, Tax Code, is
	amended by adding Sections 151.0108 and 151.013 to read as follows:
	Sec. 151.0108.  "TRANSPORT SERVICES". "Transport services"
	means private mail or package delivery or courier service sold to a
	person in this state.
	Sec. 151.013.  "VETERINARY SERVICES". "Veterinary
	services" means an act or activity constituting the "practice of
	veterinary medicine," as that term is defined by Section 801.002,
	Occupations Code, and any other act or activity provided to a
	veterinarian's client in relation to the practice of veterinary
	medicine. The term also includes:
	(1)  prescribed medications, artificial insemination,
	breeding services, boarding, and training provided by a
	veterinarian or a person employed by a veterinarian; and
	(2)  medical tests performed on an animal or on tissue,
	fluids, or other substances removed from an animal in connection
	with diagnosis or treatment.
	SECTION 2.12.  Section 151.1551(a), Tax Code, is amended to
	read as follows:
	(a)  This section applies to an exemption provided by:
	(1)  Section 151.316(a)(6), (7), (8), (10), (11), (12),
	or (14);
	(2)  Section 151.316(b) for tangible personal property
	used in the production of agricultural products for sale;
	(3)  Section 151.3162(b) for tangible personal
	property used in the production of timber for sale;
	(4)  Sections 151.317(a)(4) and (10) [151.317(a)(5)
	and (11)] for electricity used in agriculture or timber operations;
	and
	(5)  Section 151.3111 for services performed on
	tangible personal property exempted under Section 151.316(a)(6),
	(7), (8), (10), (11), or (12), 151.316(b), or 151.3162(b).
	SECTION 2.13.  Section 151.313(a), Tax Code, is amended to
	read as follows:
	(a)  The following items are exempted from the taxes imposed
	by this chapter:
	(1)  a drug or medicine, other than insulin, if
	prescribed or dispensed for a human or animal by a licensed
	practitioner of the healing arts;
	(2)  insulin;
	(3)  [a drug or medicine that is required to be labeled
	with a "Drug Facts" panel in accordance with regulations of the
	federal Food and Drug Administration, without regard to whether it
	is prescribed or dispensed by a licensed practitioner of the
	healing arts;
	[(4)]  a hypodermic syringe or needle;
	(4) [(5)]  a brace; hearing aid or audio loop;
	orthopedic, dental, or prosthetic device; ileostomy, colostomy, or
	ileal bladder appliance; or supplies or replacement parts for the
	listed items;
	(5) [(6)]  a therapeutic appliance, device, and any
	related supplies specifically designed for those products, if
	dispensed or prescribed by a licensed practitioner of the healing
	arts, when those items are purchased and used by an individual for
	whom the items listed in this subdivision were dispensed or
	prescribed;
	(6) [(7)]  corrective lens and necessary and related
	supplies, if dispensed or prescribed by an ophthalmologist or
	optometrist;
	(7) [(8)]  specialized printing or signalling
	equipment used by the deaf for the purpose of enabling the deaf to
	communicate through the use of an ordinary telephone and all
	materials, paper, and printing ribbons used in that equipment;
	(8) [(9)]  a braille wristwatch, braille writer,
	braille paper and braille electronic equipment that connects to
	computer equipment, and the necessary adaptive devices and adaptive
	computer software;
	(9) [(10)]  each of the following items if purchased
	for use by the blind to enable them to function more independently:
	a slate and stylus, print enlarger, light probe, magnifier, white
	cane, talking clock, large print terminal, talking terminal, or
	harness for guide dog;
	(10) [(11)]  hospital beds;
	(11) [(12)]  blood glucose monitoring test strips;
	(12) [(13)]  an adjustable eating utensil used to
	facilitate independent eating if purchased for use by a person,
	including a person who is elderly or physically disabled, has had a
	stroke, or is a burn victim, who does not have full use or control of
	the person's hands or arms;
	(13) [(14)]  subject to Subsection (d), a dietary
	supplement; and
	(14) [(15)]  intravenous systems, supplies, and
	replacement parts designed or intended to be used in the diagnosis
	or treatment of humans.
	SECTION 2.14.  Sections 151.314(b), (c), (c-2), (c-3), and
	(d), Tax Code, are amended to read as follows:
	(b)  "Food products" shall include, except as otherwise
	provided herein, but shall not be limited to cereals and cereal
	products; milk and milk products[, including ice cream];
	oleomargarine; meat and meat products; poultry and poultry
	products; fish and fish products; eggs and egg products; vegetables
	and vegetable products; fruit and fruit products; spices,
	condiments, and salt; sugar and sugar products; coffee and coffee
	substitutes; tea; cocoa products; [snack items;] or any combination
	of the above.
	(c)  "Food products" shall not include:
	(1)  drugs, medicines, tonics, vitamins, dietary
	supplements, and medicinal preparations in any form;
	(2)  carbonated and noncarbonated packaged soft
	drinks, which are nonalcoholic beverages that contain natural or
	artificial sweeteners;
	(3)  ice; [or]
	(4)  candy;
	(5)  bakery items; or
	(6)  snack items.
	(c-2)  The exemption provided by Subsection (a) does not
	include the following prepared food:
	(1)  [except as provided by Subsection (c-3)(1),] food,
	food products, and drinks, including meals, milk and milk products,
	fruit and fruit products, sandwiches, salads, processed meats and
	seafoods, and vegetable juice[, and ice cream in cones or small
	cups,] served, prepared, or sold ready for immediate consumption by
	restaurants, lunch counters, cafeterias, delis, vending machines,
	hotels, or like places of business or sold ready for immediate
	consumption from pushcarts, motor vehicles, or any other form of
	vehicle;
	(2)  [except as provided by Subsection (c-3)(1),] food
	sold in a heated state or heated by the seller; or
	(3)  two or more food ingredients mixed or combined by
	the seller for sale as a single item, including items that are sold
	in an unheated state by weight or volume as a single item, but not
	including food that is only cut, repackaged, or pasteurized by the
	seller.
	(c-3)  The exemption provided by Subsection (a) includes[:
	[(1)  bakery items sold by a bakery, regardless of
	whether the items are:
	[(A)  heated by the consumer or seller; or
	[(B)  served with plates or other eating utensils;
	[(2)  bakery items sold at a retail location other than
	a bakery without plates or other eating utensils; and
	[(3)]  eggs, fish, meat, and poultry, and foods
	containing these raw animal foods, that require cooking by the
	consumer as recommended by the Food and Drug Administration in
	Chapter 3, Section 401.11 of its Food Code to prevent food-borne
	illness and any other food that requires cooking by the consumer
	before the food is edible.
	(d)  Food products, meals, soft drinks, bakery items, snack
	items, and candy for human consumption are exempted from the taxes
	imposed by this chapter if:
	(1)  served by a public or private school, school
	district, student organization, booster club or other school
	support organization, or parent-teacher association under an
	agreement with the proper school authorities in an elementary or
	secondary school during the regular school day or by a
	parent-teacher association during a fund-raising sale the proceeds
	of which do not benefit an individual;
	(2)  sold by a church or at a function of a church;
	(3)  served to a patient or inmate of a hospital or
	other institution licensed by the state for the care of humans;
	(4)  served to a permanent resident of a retirement
	facility which provides permanent housing and residence to
	individuals, a majority of whom are 60 years or older; or
	(5)  sold during an event sponsored or sanctioned by an
	elementary or secondary school or school district at a concession
	stand operated by a booster club or other school support
	organization formed to support the school or school district, but
	only if the proceeds from the sales benefit the school or school
	district.
	SECTION 2.15.  Section 151.314(e), Tax Code, as amended by
	Chapters 209 (H.B. 2424) and 1310 (H.B. 2425), Acts of the 78th
	Legislature, 2003, is reenacted and amended to read as follows:
	(e)  Food products, candy, snack items, bakery items, and
	soft drinks are exempted from the taxes imposed by this chapter if
	sold at an exempt sale qualifying under this subsection or if stored
	or used by the purchaser of the item at the exempt sale. A sale is
	exempted under this subsection if[:
	[(1)]  the sale is made by a member of or volunteer for
	a nonprofit organization devoted to the exclusive purpose of
	education or religious or physical training or by a group
	associated with a public or private elementary or secondary school
	and:
	(1)  [;
	[(2)]  the sale is made as a part of a fund-raising
	drive sponsored by the organization or group; and
	(2) [(3)]  all net proceeds from the sale go to the
	organization or group for its exclusive use.
	SECTION 2.16.  Sections 151.317(a) and (d), Tax Code, are
	amended to read as follows:
	(a)  Subject to Sections 151.1551, 151.359, and 151.3595 and
	Subsection (d) of this section, gas and electricity are exempted
	from the taxes imposed by this chapter when sold for:
	(1)  [residential use;
	[(2)]  use in powering equipment exempt under Section
	151.318 or 151.3185 by a person processing tangible personal
	property for sale as tangible personal property, other than
	preparation or storage of prepared food described by Section
	151.314(c-2);
	(2) [(3)]  use in lighting, cooling, and heating in the
	manufacturing area during the actual manufacturing or processing of
	tangible personal property for sale as tangible personal property,
	other than preparation or storage of prepared food described by
	Section 151.314(c-2);
	(3) [(4)]  use directly in exploring for, producing, or
	transporting, a material extracted from the earth;
	(4) [(5)]  use in agriculture, including dairy or
	poultry operations and pumping for farm or ranch irrigation;
	(5) [(6)]  use directly in electrical processes, such
	as electroplating, electrolysis, and cathodic protection;
	(6) [(7)]  use directly in the off-wing processing,
	overhaul, or repair of a jet turbine engine or its parts for a
	certificated or licensed carrier of persons or property;
	(7) [(8)]  use directly in providing, under contracts
	with or on behalf of the United States government or foreign
	governments, defense or national security-related electronics,
	classified intelligence data processing and handling systems, or
	defense-related platform modifications or upgrades;
	(8) [(9)]  use directly by a data center or large data
	center project that is certified by the comptroller as a qualifying
	data center under Section 151.359 or a qualifying large data center
	project under Section 151.3595 in the processing, storage, and
	distribution of data;
	(9) [(10)]  a direct or indirect use, consumption, or
	loss of electricity by an electric utility engaged in the purchase
	of electricity for resale; or
	(10) [(11)]  use in timber operations, including
	pumping for irrigation of timberland.
	(d)  To qualify for the exemptions in Subsections (a)(1)-(8)
	[(a)(2)-(9)], the gas or electricity must be sold to the person
	using the gas or electricity in the exempt manner.  For purposes of
	this subsection, the use of gas or electricity in an exempt manner
	by an independent contractor engaged by the purchaser of the gas or
	electricity to perform one or more of the exempt activities
	identified in Subsections (a)(1)-(8) [(a)(2)-(9)] is considered
	use by the purchaser of the gas or electricity.
	SECTION 2.17.  Section 151.350(d), Tax Code, is amended to
	read as follows:
	(d)  In this section, "restore" means:
	(1)  launder, clean, repair, treat, or apply protective
	chemicals to an item, to the extent the service is a personal
	service as defined in Section 151.0045; and
	(2)  repair, restore, or remodel, to the extent the
	service is:
	(A)  considered to be the [a real property]
	repair, restoration, [or] remodeling, or modification of an
	improvement to real property under [service as defined in] Section
	151.0047; or
	(B)  defined as a taxable service in Section
	151.0101(a)(5).
	SECTION 2.18.  Section 151.401(a), Tax Code, is amended to
	read as follows:
	(a)  The taxes imposed by this chapter are due and payable to
	the comptroller on or before the 20th day of the month following the
	end of each calendar month unless a taxpayer qualifies as a
	quarterly filer under Subsection (b) [of this section or unless the
	taxpayer prepays the tax on a quarterly basis as permitted by
	Section 151.424 of this code].
	SECTION 2.19.  Section 151.425, Tax Code, is amended to read
	as follows:
	Sec. 151.425.  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 151.423 [or Section
	151.424 of this code].
	SECTION 2.20.  Section 151.428(c), Tax Code, is amended to
	read as follows:
	(c)  The reporting, collection, refund, and penalty
	provisions of this chapter and Subtitle B of this title apply to the
	payments required by this section, except that Section [Sections]
	151.423 does [and 151.424 of this code do] not apply to this
	section.
	SECTION 2.21.  Section 152.047(a), Tax Code, is amended to
	read as follows:
	(a)  Except as inconsistent with this chapter and rules
	adopted under this chapter, the seller of a motor vehicle shall
	report and pay the tax imposed on a seller-financed sale to the
	comptroller on the seller's receipts from seller-financed sales in
	the same manner as the sales tax is reported and paid by a retailer
	under Sections 151.401, 151.402, 151.405, 151.406, 151.409,
	151.423, [151.424,] and 151.425.
	SECTION 2.22.  Subtitle E, Title 2, Tax Code, is amended by
	adding Chapter 165 to read as follows:
	CHAPTER 165. TAX ON E-CIGARETTE VAPOR PRODUCTS
	Sec. 165.0001.  DEFINITIONS. In this chapter:
	(1)  "E-cigarette" has the meaning assigned by Section
	161.081, Health and Safety Code.
	(2)  "Vapor product" means a consumable nicotine liquid
	solution or other material containing nicotine suitable for use in
	an e-cigarette.
	Sec. 165.0002.  E-CIGARETTE VAPOR PRODUCT SALES TAX. (a) A
	tax is imposed on each sale of a vapor product in this state.
	(b)  The tax rate is 10 cents for each milliliter or
	fractional part of a milliliter of vapor product sold.
	(c)  The tax imposed under this section is in addition to the
	tax imposed under Subchapter C, Chapter 151. The tax imposed under
	this section does not apply to a sale unless the tax imposed under
	Subchapter C, Chapter 151, applies to the sale.
	Sec. 165.0003.  E-CIGARETTE VAPOR PRODUCT USE TAX. (a)  A
	tax is imposed on the storage, use, or other consumption in this
	state of a vapor product purchased from a retailer for storage, use,
	or other consumption in this state.
	(b)  The tax rate is 10 cents for each milliliter or
	fractional part of a milliliter of vapor product stored, used, or
	otherwise consumed in this state.
	(c)  The tax imposed under this section is in addition to the
	tax imposed under Subchapter D, Chapter 151. The tax imposed under
	this section does not apply to the storage, use, or other
	consumption of a vapor product unless the tax imposed under
	Subchapter D, Chapter 151, applies to the storage, use, or other
	consumption.
	Sec. 165.0004.  APPLICATION OF OTHER PROVISIONS OF CODE.
	(a) Except as provided by this chapter:
	(1)  the taxes imposed under this chapter are
	administered, imposed, collected, and enforced in the same manner
	as the taxes under Chapter 151 are administered, imposed,
	collected, and enforced; and
	(2)  the provisions of Chapter 151 applicable to the
	sales tax imposed under Subchapter C, Chapter 151, and the use tax
	imposed under Subchapter D, Chapter 151, apply to the sales and use
	taxes imposed under this chapter.
	(b)  A change in the law relating to the taxation of the sale
	or use of a vapor product under Chapter 151 also applies to the
	sales or use tax imposed under this chapter.
	Sec. 165.0005.  REPORTS. (a) A person required to file a
	report under Section 151.403 who is also required to collect or pay
	a tax under this chapter shall file with the comptroller a report
	stating:
	(1)  for sales tax purposes, the volume of vapor
	products sold by the seller during the reporting period;
	(2)  for use tax purposes, the volume of vapor products
	sold by the retailer during the reporting period for storage, use,
	or other consumption in this state;
	(3)  the volume of vapor products subject to the use tax
	that were acquired during the reporting period for storage, use, or
	other consumption in this state by a purchaser who did not pay the
	tax to a retailer;
	(4)  the amount of the taxes due under this chapter for
	the reporting period; and
	(5)  any other information required by the comptroller.
	(b)  The report required by this section for a reporting
	period is due on the same date that the tax payment for the period is
	due.
	Sec. 165.0006.  RECORDS. A person required to file a report
	under Section 151.403 who is also required to collect or pay a tax
	under this chapter shall keep a complete record of:
	(1)  the volume of vapor products sold in this state
	during each reporting period;
	(2)  the volume of vapor products, including the
	constituent parts of vapor products, purchased from every source
	during each reporting period;
	(3)  all sales and use taxes, and any money represented
	to be sales or use tax, collected during each reporting period; and
	(4)  any other information required by the comptroller.
	Sec. 165.0007.  DISPOSITION OF PROCEEDS. The comptroller
	shall deposit the proceeds from taxes imposed under this chapter to
	the credit of the general revenue fund.
	SECTION 2.23.  Section 171.1012, Tax Code, is amended by
	adding Subsection (u) to read as follows:
	(u)  Notwithstanding any other provision of this section, a
	taxable entity that employs a professional athlete and that elects
	to subtract costs of goods sold may not include the cost to employ
	the professional athlete as labor costs when calculating the
	entity's costs of goods sold to the extent the amount paid to the
	athlete exceeds the limit on wage and cash compensation under
	Section 171.1013(c) as applied to the athlete. In this subsection,
	"professional athlete" has the meaning assigned by Section 406.095,
	Labor Code.
	SECTION 2.24.  Section 183.043(b), Tax Code, is amended to
	read as follows:
	(b)  Sections 151.027(a) and [,] 151.423[, and 151.424] do
	not apply to the tax imposed by this subchapter.
	SECTION 2.25.  Section 313.021(2), Tax Code, is amended to
	read as follows:
	(2)  "Qualified property" means:
	(A)  land:
	(i)  that is located in an area designated as
	a reinvestment zone under Chapter 311 or 312 or as an enterprise
	zone under Chapter 2303, Government Code;
	(ii)  on which a person proposes to
	construct a new building or erect or affix a new improvement that
	does not exist before the date the person submits a complete
	application for a limitation on appraised value under this
	subchapter;
	(iii)  that is not subject to a tax abatement
	agreement entered into by a school district under Chapter 312; and
	(iv)  on which, in connection with the new
	building or new improvement described by Subparagraph (ii), the
	owner or lessee of, or the holder of another possessory interest in,
	the land proposes to:
	(a)  make a qualified investment in an
	amount equal to at least the minimum amount required by Section
	313.023; and
	(b)  create at least 25 new qualifying
	jobs;
	(B)  the new building or other new improvement
	described by Paragraph (A)(ii); and
	(C)  tangible personal property:
	(i)  that is not subject to a tax abatement
	agreement entered into by a school district under Chapter 312; and
	(ii)  [for which a sales and use tax refund
	is not claimed under Section 151.3186; and
	[(iii)]  except for new equipment described
	in Section 151.318(q) or (q-1), that is first placed in service in
	the new building, in the newly expanded building, or in or on the
	new improvement described by Paragraph (A)(ii), or on the land on
	which that new building or new improvement is located, if the
	personal property is ancillary and necessary to the business
	conducted in that new building or in or on that new improvement.
	SECTION 2.26.  Section 321.203(n), Tax Code, is amended to
	read as follows:
	(n)  A sale of a service described by Section 151.0047 to
	construct, repair, restore, remodel, [repair,] or modify an
	improvement to [restore nonresidential] real property is
	consummated at the location of the job site.
	SECTION 2.27.  Section 323.203(m), Tax Code, is amended to
	read as follows:
	(m)  A sale of a service described by Section 151.0047 to
	construct, repair, restore, remodel, [repair,] or modify an
	improvement to [restore nonresidential] real property is
	consummated at the location of the job site.
	SECTION 2.28.  Subchapter F, Chapter 502, Transportation
	Code, is amended by adding Sections 502.257 and 502.258 to read as
	follows:
	Sec. 502.257.  FEE; ELECTRIC MOTOR VEHICLE. Notwithstanding
	any other provision of this subchapter, the fee for a registration
	year for registration of a motor vehicle that uses electricity as
	its only source of motor power is the greater of:
	(1)  $225; or
	(2)  the applicable fee under Section 502.253.
	Sec. 502.258.  FEE; HYBRID MOTOR VEHICLE.  (a)  In this
	section, "hybrid motor vehicle" means a motor vehicle that draws
	propulsion energy from both gasoline or conventional diesel fuel
	and a rechargeable energy storage system.
	(b)  Notwithstanding any other provision of this subchapter,
	the fee for a registration year for registration of a hybrid motor
	vehicle is the greater of:
	(1)  $125; or
	(2)  the applicable fee under Section 502.253.
	SECTION 2.29.  The following provisions of the Tax Code are
	repealed:
	(1)  Section 151.0028(c);
	(2)  Section 151.314(h);
	(3)  Section 151.315;
	(4)  Section 151.317(c);
	(5)  Section 151.3186;
	(6)  Section 151.319;
	(7)  Section 151.320; and
	(8)  Section 151.424.
	SECTION 2.30.  The changes in law made by this article do not
	affect tax liability accruing before the effective date of this
	Act. That liability continues in effect as if this Act had not been
	enacted, and the former law is continued in effect for the
	collection of taxes due and for civil and criminal enforcement of
	the liability for those taxes.
	SECTION 2.31.  Section 171.1012(u), Tax Code, as added by
	this article, applies only to a report originally due on or after
	the effective date of this Act.
	ARTICLE 3. EFFECTIVE DATE
	SECTION 3.01.  This Act takes effect January 1, 2022, but
	only if the constitutional amendment proposed by the 87th
	Legislature, Regular Session, 2021, authorizing the legislature to
	exempt from ad valorem taxation by a school district a portion of
	the appraised value of an individual's residence homestead in an
	amount equal to 150 percent of the median appraised value of all
	single-family residences in the state is approved by the voters. If
	that constitutional amendment is not approved by the voters, this
	Act has no effect.