HB 4648

relating to the repeal of ad valorem taxes and certain state and
local taxes, the enactment of a uniform state sales tax, and related
school and local government finance reform; increasing the rate of
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1.  AD VALOREM TAXES PROHIBITED
SECTION 1.01.  PROHIBITION ON IMPOSITION OF AD VALOREM TAXES
GENERALLY.  Except as otherwise provided by Section 1.02(b) of this
article, this state or a political subdivision of this state may not
impose an ad valorem tax on or after January 1, 2026.
SECTION 1.02.  PROHIBITION ON IMPOSITION OF SCHOOL DISTRICT
AD VALOREM TAXES.  (a)  A school district may not impose an ad
valorem tax for maintenance or operations purposes on or after
(b)  A school district may not impose an ad valorem tax for
debt service purposes on or after January 1, 2033. Each school
district shall provide to the Texas Education Agency:
(2)  a balance sheet with proper notes of the district's
(3)  a list of the sources and uses of funding provided
(c)  To restore an efficient education system for the benefit
of public school students, the attorney general shall file a suit
for involuntary bankruptcy against a school district that does not
comply with Subsection (b) of this section.
(d)  A reference in the Education Code, the Tax Code, or any
other law to a school district's authority to impose an ad valorem
tax may not be construed in a manner inconsistent with this article.
SECTION 1.03.  EFFECT OF OTHER LAW.  To the extent of a
conflict, this article controls over a conflicting provision in a
ARTICLE 2.  UNIFORM STATE SALES TAX
SECTION 2.01.  The heading to Chapter 151, Tax Code, is
CHAPTER 151.  UNIFORM STATE SALES TAX [LIMITED SALES, EXCISE, AND
SECTION 2.02.  Section 151.001, Tax Code, is amended to read
Sec. 151.001.  SHORT TITLE.  This chapter may be cited as the
Uniform State Sales Tax Act [Limited Sales, Excise, and Use Tax
SECTION 2.03.  Section 151.0101, Tax Code, is amended to
Sec. 151.0101.  "TAXABLE SERVICES".  [(a)]  "Taxable
services" means all services [:
[(2)  cable television services;
[(4)  motor vehicle parking and storage services;
[(5)  the repair, remodeling, maintenance, and
restoration of tangible personal property, except:
[(B)  a ship, boat, or other vessel, other than:
[(i)  a taxable boat or motor as defined by
[(ii)  a sports fishing boat; or
[(iii)  any other vessel used for pleasure;
[(C)  the repair, maintenance, and restoration of
[(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;
[(12)  data processing services;
[(13)  real property repair and remodeling;
[(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
[(b)  The comptroller shall have exclusive jurisdiction to
interpret Subsection (a) of this section].
SECTION 2.04.  Section 151.051(b), Tax Code, is amended to
(b)  The sales tax rate is 15 [6-1/4] percent of the sales
price of the taxable item sold.
SECTION 2.05.  Section 151.308(a), Tax Code, is amended to
(a)  The following are exempted from the taxes imposed by
(1)  oil as taxed by Chapter 202;
(2)  motor fuels and special fuels as defined, taxed,
or exempted by Chapter 162; and
(3)  [cement as taxed by Chapter 181;
[(4)  motor vehicles, trailers, and semitrailers as
defined, taxed, or exempted by Chapter 152, other than a mobile
office or an oilfield portable unit, as those terms are defined by
[(5)  mixed beverages, ice, or nonalcoholic beverages
and the preparation or service of these items if the receipts are
taxable by Subchapter B, Chapter 183, or the items are taxable by
[(6)  alcoholic beverages when sold to the holder of a
private club registration permit or to the agent or employee of the
holder of a private club registration permit if the holder or agent
or employee is acting as the agent of the members of the club and if
the beverages are to be served on the premises of the club;
[(7)  oil well service as taxed by Subchapter E,
[(8)]  insurance premiums subject to gross premiums
SECTION 2.06.  LOCAL SALES AND USE TAXES PROHIBITED.
Notwithstanding any other law, a political subdivision of this
state may not impose or collect a sales or use tax on or after the
SECTION 2.07.  EFFECT OF OTHER LAW.  To the extent of a
conflict, this article controls over a conflicting provision in a
SECTION 3.01.  FUNDING.  (a)  Beginning with the 2026-2027
school year, the Foundation School Program shall be funded using
revenue from the uniform state sales tax under Chapter 151, Tax
(b)  Each school district shall establish a private citizens
board composed of property owners in that school district.
(c)  The comptroller of public accounts and the private
citizens board for a school district shall administer and
distribute funding for that district.
SECTION 3.02.  REPORT BY COMMISSIONER OF EDUCATION.  The
commissioner of education shall annually prepare and provide to the
legislature a report for each school district regarding funding for
that district, which must be approved by the comptroller of public
accounts and the private citizens board established for that school
SECTION 3.03.  EFFECT OF OTHER LAW.  To the extent of a
conflict, this article controls over a conflicting provision in a
ARTICLE 4.  LOCAL GOVERNMENT FINANCE
SECTION 4.01.  APPROPRIATIONS BY LEGISLATURE.  The
legislature shall appropriate money to political subdivisions of
this state that previously imposed an ad valorem tax or a sales and
use tax in amounts determined by the legislature.
SECTION 4.02.  PUBLIC PURPOSE.  The legislature finds that
the appropriation of state money to political subdivisions of this
state to replace local ad valorem taxes and local sales and use tax
revenue serves a public purpose of this state.
SECTION 5.01.  EDUCATION CODE PROVISIONS REPEALED.  The
following provisions of the Education Code are repealed:
(1)  Subchapters A, B, C, D, and E, Chapter 45;
(2)  Sections 48.255, 48.2551, 48.2552, 48.2553,
48.256, 48.257, and 48.275; and
SECTION 5.02.  GOVERNMENT CODE PROVISION REPEALED.
Subchapter T, Chapter 403, Government Code, as added by Chapter 377
(H.B. 5), Acts of the 88th Legislature, Regular Session, 2023, is
SECTION 5.03.  TAX CODE PROVISIONS REPEALED.  The following
provisions of the Tax Code are repealed:
(3)  Sections 151.002 through 151.00394;
(4)  Sections 151.0045 through 151.0048;
(6)  Sections 151.0102 through 151.0104;
(8)  Sections 151.304 through 151.3051;
(9)  Sections 151.3101 through 151.3171;
(10)  Sections 151.3182 through 151.3595;
(11)  Sections 151.429 through 151.432;
(12)  Sections 151.801(c-2), (c-3), (e)(3), (e)(4),
(13)  Chapters 152, 154, 155, 158, 160, 163, 181, 183,
(14)  Subtitles B, C, and D, Title 3.
ARTICLE 6.  TRANSITION AND EFFECTIVE DATE
SECTION 6.01.  PREEXISTING TAX LIABILITY.  The changes in
law made by this Act 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 6.02.  EFFECTIVE DATE.  This Act takes effect