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.