H.B. No. 2413
    1-1                                AN ACT
    1-2  relating to tangible personal property exported outside of the
    1-3  United States and the persons who may provide documentation to
    1-4  prove the tax exemption for the property; providing penalties.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Subchapter E, Chapter 151, Tax Code, is amended
    1-7  by adding Sections 151.157, 151.158, 151.159, and 151.160 to read
    1-8  as follows:
    1-9        Sec. 151.157.  CUSTOMS BROKERS.  (a)  A customs broker, or an
   1-10  authorized employee of a customs broker, licensed by the
   1-11  comptroller under this section may issue documentation for the
   1-12  purpose of showing the exemption of tangible personal property
   1-13  under Section 151.307(b)(2) only under procedures established by
   1-14  the comptroller by rule.
   1-15        (b)  The comptroller may issue a license to a customs broker
   1-16  for the purpose described by Subsection (a) for each place of
   1-17  business of the broker if the broker:
   1-18              (1)  applies to the comptroller for the license;
   1-19              (2)  pays the fee set by the comptroller;
   1-20              (3)  posts the bond or security in the amount required
   1-21  by Subsection (d); and
   1-22              (4)  complies with any rules of the comptroller to
   1-23  administer this section and to prevent the evasion of the tax under
   1-24  this chapter and local sales and use taxes.
    2-1        (c)  The comptroller shall set the fee for a license in an
    2-2  amount that does not exceed $100 for each customs broker, without
    2-3  regard to whether the broker has more than one place of business.
    2-4  The fee may be imposed only once for each broker.  The comptroller
    2-5  shall use the fees only for the administration of this section,
    2-6  including costs of materials, labor, and overhead.
    2-7        (d)  The amount of the bond or security required by
    2-8  Subsection (b)(3) is $500, except that the comptroller may require
    2-9  a customs broker to post additional bond or security in an amount
   2-10  the comptroller considers necessary to ensure the payment of the
   2-11  tax under this chapter and local sales and use taxes.  The
   2-12  comptroller may not require a bond or security in an amount greater
   2-13  than $2,500.  The comptroller may not require the customs broker to
   2-14  post more than one bond or security solely because the broker has
   2-15  more than one place of business.  The security may be in the form
   2-16  of cash, a certificate of deposit, a letter of credit, or another
   2-17  instrument of value.
   2-18        (e)  A customs broker licensed under this section shall make
   2-19  available to the comptroller, on or after the 15th day after the
   2-20  date the broker receives written notice from the comptroller, the
   2-21  customs broker's books and records relating to the business of
   2-22  issuing documentation certifying the export of tangible personal
   2-23  property beyond the territorial limits of the United States for
   2-24  purposes of exempting the property from the taxes imposed by this
   2-25  chapter.  The customs broker shall make available to the
   2-26  comptroller, without notice from the comptroller, the customs
   2-27  broker's books and records if the comptroller determines that the
    3-1  comptroller's ability to administer and enforce effectively the
    3-2  provisions of this chapter relating to documentation for the
    3-3  purpose of showing the exemption of tangible personal property
    3-4  under Section 151.307(b)(2) is jeopardized by providing notice.
    3-5  The customs broker shall keep the books and records described by
    3-6  this subsection for at least two years after the date of the last
    3-7  entry that they contain.
    3-8        (f)  The comptroller may suspend or revoke a license issued
    3-9  under this section for good cause.  The comptroller may determine
   3-10  the length of suspension or revocation necessary for the
   3-11  enforcement of this chapter and the comptroller's rules.  A
   3-12  proceeding to suspend or revoke a license under this subsection is
   3-13  a contested case under the Administrative Procedure and Texas
   3-14  Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).
   3-15  Judicial review is by trial de novo.  The district courts of Travis
   3-16  County have exclusive original jurisdiction of a suit under this
   3-17  section.
   3-18        (g)  A customs broker may authorize a person to act as an
   3-19  independent contractor to certify that tangible personal property
   3-20  has been exported outside of the United States only if the
   3-21  authorization is part of the written contract and the comptroller
   3-22  in writing approves the authorization.  A customs broker may not
   3-23  authorize a person under this subsection to prepare documentation
   3-24  for the purpose of showing the exemption for tangible personal
   3-25  property under Section 151.307(b)(2).
   3-26        (h)  In this section:
   3-27              (1)  "Customs broker" means a person licensed by the
    4-1  United States Customs Service to act as a customs house broker.
    4-2              (2)  "Authorized employee" means an employee of a
    4-3  customs broker:
    4-4                    (A)  who is authorized by the broker to perform
    4-5  customs transactions on behalf of the broker;
    4-6                    (B)  who is compensated by the broker with a
    4-7  regular salary or wages;
    4-8                    (C)  who is under the direct control and
    4-9  supervision of the broker; and
   4-10                    (D)  from whose salary or wages the broker is
   4-11  required to and actually does deduct and withhold a tax under
   4-12  federal law.
   4-13        Sec. 151.158.  EXPORT STAMPS.  (a)  The comptroller shall
   4-14  have printed or manufactured stamps in the design, size, and
   4-15  quantity the comptroller determines is necessary for the purpose of
   4-16  this section.
   4-17        (b)  The comptroller may designate the method of
   4-18  identification for the stamps.
   4-19        (c)  The comptroller shall require that the stamps be
   4-20  manufactured so that a stamp may be easily and securely attached to
   4-21  export documentation.
   4-22        (d)  The comptroller shall change the design of the stamps at
   4-23  least once each calendar quarter, or more frequently if the
   4-24  comptroller determines it is necessary for the enforcement of this
   4-25  section and the comptroller's rules.
   4-26        (e)  The comptroller may provide stamps only to a customs
   4-27  broker licensed under Section 151.157.
    5-1        (f)  A stamp is invalid if transferred to a person other than
    5-2  the customs broker to whom the comptroller issued the stamp, to an
    5-3  authorized employee of that customs broker, or to an authorized
    5-4  independent contractor.
    5-5        (g)  The comptroller shall charge an amount not to exceed
    5-6  five cents for each stamp.  The comptroller shall use the money
    5-7  from the sale of the stamps only for costs related to producing the
    5-8  stamps, including costs of materials, labor, and overhead.
    5-9        (h)  The comptroller may require stamps to be purchased in
   5-10  minimum quantities if the comptroller considers it necessary for
   5-11  the efficient administration of this section.
   5-12        Sec. 151.159.  REFUNDS; IDENTIFICATION CARDS.  (a)  The
   5-13  comptroller in writing may authorize a customs broker to refund
   5-14  taxes collected under this chapter at export locations specified by
   5-15  the comptroller.
   5-16        (b)  The comptroller may issue an export identification card
   5-17  to a wholesaler or retailer.  The card must contain the picture of
   5-18  the person to whom the card is issued.  The comptroller may issue
   5-19  the card only if the wholesaler or retailer shows by clear and
   5-20  convincing evidence that the wholesaler or retailer is a citizen
   5-21  and resident of a foreign country and that any tangible personal
   5-22  property purchased in this state by the wholesaler or retailer is
   5-23  for export purposes only and is to be used or consumed outside the
   5-24  territorial limits of the United States.  A wholesaler or retailer
   5-25  issued an export identification card may use the card only to
   5-26  facilitate the preparation of documentation by a customs broker
   5-27  under Section 151.307(b).  The comptroller may require a wholesaler
    6-1  or retailer applying for an export identification card to submit
    6-2  any information in any form the comptroller determines is necessary
    6-3  and to pay a fee in an amount the comptroller determines is
    6-4  necessary to pay for the cost of issuing the card.
    6-5        Sec. 151.160.  DEPOSITS.  Penalties collected by the
    6-6  comptroller shall be deposited into general revenue.  Fees and
    6-7  charges collected by the comptroller under this Act shall be
    6-8  considered reimbursements for expenses of administration and shall
    6-9  be available for use by the comptroller in accordance with
   6-10  provisions in the General Appropriations Act appropriating such
   6-11  revenues for use by agencies.
   6-12        SECTION 2.  Section 151.307, Tax Code, is amended by amending
   6-13  Subsection (b) and adding Subsections (c) and (d) to read as
   6-14  follows:
   6-15        (b)  When an exemption is claimed because tangible personal
   6-16  property is exported beyond the territorial limits of the United
   6-17  States, proof of export may be shown only by:
   6-18              (1)  a bill of lading issued by a licensed and
   6-19  certificated carrier of persons or property showing the seller as
   6-20  consignor, the buyer as consignee, and a delivery point outside the
   6-21  territorial limits of the United States;
   6-22              (2)  documentation:
   6-23                    (A)  provided by a <licensed> United States
   6-24  Customs Broker licensed by the comptroller under Section 151.157;
   6-25                    (B)  certifying that delivery was made to a point
   6-26  outside the territorial limits of the United States; and
   6-27                    (C)  to which a stamp issued under Section
    7-1  151.158 is affixed in the manner required by that section or
    7-2  Section 151.157;
    7-3              (3)  import documents from the country of destination
    7-4  showing that the property was imported into a country other than
    7-5  the United States;
    7-6              (4)  an original airway, ocean, or railroad bill of
    7-7  lading and a forwarder's receipt if an air, ocean, or rail freight
    7-8  forwarder takes possession of the property; or
    7-9              (5)  any other manner provided by the comptroller for
   7-10  an enterprise authorized to make tax-free purchases under Section
   7-11  151.156.
   7-12        (c)  Documentation, including the stamp affixed to the
   7-13  documentation, that is provided by a customs broker licensed by the
   7-14  comptroller under Section 151.157 is presumed valid in the absence
   7-15  of clear and convincing evidence that the tangible personal
   7-16  property covered by the documentation was not exported outside the
   7-17  territorial limits of the United States.
   7-18        (d)  In this section:
   7-19              (1)  "Air forwarder" means a licensed International Air
   7-20  Transportation Association freight forwarder.
   7-21              (2)  "Ocean forwarder" means a licensed Federal
   7-22  Maritime Commission freight forwarder.
   7-23        SECTION 3.  Subchapter H, Chapter 151, Tax Code, is amended
   7-24  by adding Section 151.3071 to read as follows:
   7-25        Sec. 151.3071.  INSTALLATION OF CERTAIN EQUIPMENT FOR EXPORT.
   7-26  Electronic audio equipment that is exempted from the taxes imposed
   7-27  by this chapter because it is purchased for use beyond the
    8-1  territorial limits of the United States does not become subject to
    8-2  the taxes imposed by this chapter solely because the equipment is
    8-3  installed in this state.
    8-4        SECTION 4.  Subchapter L, Chapter 151, Tax Code, is amended
    8-5  by adding Sections 151.712 and 151.713 to read as follows:
    8-6        Sec. 151.712.  CIVIL PENALTY FOR PERSONS CERTIFYING EXPORTS.
    8-7  (a)  A person may not sign or certify proof of export documentation
    8-8  for the purpose of showing an exemption under Section 151.307(b)(2)
    8-9  unless:
   8-10              (1)  the person is:
   8-11                    (A)  a customs broker licensed by the comptroller
   8-12  under Section 151.157; or
   8-13                    (B)  an authorized employee of a customs broker
   8-14  licensed by the comptroller under Section 151.157; and
   8-15              (2)  the tangible personal property the export of which
   8-16  the person certifies is exported on the date and to the place shown
   8-17  on the export documentation signed by the person.
   8-18        (b)  A person who provides proof of documentation that
   8-19  tangible personal property has been exported outside of the United
   8-20  States or a person who may benefit from the provision of the proof
   8-21  of documentation, including a customs broker, authorized employee,
   8-22  authorized independent contractor, seller of the property or agent
   8-23  or employee of the seller, or a consumer of the property or agent
   8-24  or employee of the consumer, may not sell or buy the proof of
   8-25  documentation, including stamps required for the documentation.
   8-26  This subsection does not apply to a customs broker who accepts a
   8-27  fee for providing documentation under Section 151.307(b).
    9-1        (c)  Except as provided by Subsection (e), a person who
    9-2  violates this section is subject to a monetary penalty that may not
    9-3  exceed:
    9-4              (1)  $500 for the first violation;
    9-5              (2)  $1,000 for the second violation; and
    9-6              (3)  $3,000 for each subsequent violation.
    9-7        (d)  Except as provided by Subsection (e), each violation of
    9-8  this section is subject to a separate monetary penalty.
    9-9        (e)  The aggregate of monetary penalties imposed under this
   9-10  section against any person for all violations that occur in a
   9-11  calendar year may not exceed $30,000.
   9-12        (f)  In addition to any monetary penalty under this section,
   9-13  the comptroller may suspend or revoke under Section 151.157 the
   9-14  license of a customs broker who violates this section.
   9-15        (g)  A proceeding to impose a civil penalty or suspend or
   9-16  revoke a license because of a violation of this section is a
   9-17  contested case under the Administrative Procedure and Texas
   9-18  Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).
   9-19  Judicial review is by trial de novo.  The district courts of Travis
   9-20  County have exclusive original jurisdiction of a suit under this
   9-21  section.
   9-22        (h)  The comptroller must give notice of the comptroller's
   9-23  intent to impose a monetary or other penalty under this section not
   9-24  later than two years after the date of the alleged commission of a
   9-25  violation of this section or the comptroller may not impose a
   9-26  monetary or other penalty.
   9-27        (i)  In this section, "customs broker" and "authorized
   10-1  employee" have the meanings assigned by Section 151.157.
   10-2        Sec. 151.713.  FURNISHING FALSE INFORMATION TO CUSTOMS
   10-3  BROKER; CIVIL PENALTY.  (a)  A person may not obtain or attempt to
   10-4  obtain export documentation for the purpose of showing an exemption
   10-5  under Section 151.307(b)(2) from a customs broker or an authorized
   10-6  employee of a customs broker if the person knows, at the time the
   10-7  documentation is sought, that the information provided to the
   10-8  broker or employee is materially false, in whole or in part, and
   10-9  the documentation is sought for the purpose of evading the tax
  10-10  imposed by this chapter.
  10-11        (b)  After notice as provided by this section, a person who
  10-12  violates this section is subject to a monetary penalty that may not
  10-13  exceed:
  10-14              (1)  $500 for the first violation;
  10-15              (2)  $1,000 for the second violation; and
  10-16              (3)  $3,000 for each subsequent violation.
  10-17        (c)  Each violation of this section is subject to a separate
  10-18  monetary penalty.
  10-19        (d)  If the comptroller believes that a person has violated
  10-20  this section, the comptroller shall give written notice to the
  10-21  person to show cause why the person should not be subject to a
  10-22  monetary penalty for the violation.  The notice must advise the
  10-23  person of the allegations and explain that the person has a right
  10-24  to respond to the allegations in writing and request an oral
  10-25  hearing before the 31st day after the date that the notice is
  10-26  issued.
  10-27        (e)  The comptroller may not impose a monetary penalty under
   11-1  this section until the comptroller or a person designated by the
   11-2  comptroller:
   11-3              (1)  considers the allegations against the person;
   11-4              (2)  considers any timely written response made by the
   11-5  person;
   11-6              (3)  considers any evidence properly admitted at any
   11-7  oral hearing held on the allegations; and
   11-8              (4)  issues a written decision.
   11-9        (f)  The comptroller must give notice of the comptroller's
  11-10  intent to impose a monetary penalty under this section not later
  11-11  than four years after the date of the alleged commission of a
  11-12  violation of this section or the comptroller may not impose a
  11-13  monetary penalty.
  11-14        (g)  The penalty imposed by this section is in addition to
  11-15  any tax, penalty, and interest that may be assessed against a
  11-16  person who violates this section.
  11-17        (h)  In this section, "customs broker" and "authorized
  11-18  employee" have the meanings assigned by Section 151.157.
  11-19        SECTION 5.  This Act applies only to an exemption to the tax
  11-20  imposed under Chapter 151, Tax Code, claimed on or after the
  11-21  effective date of this Act.
  11-22        SECTION 6.  The importance of this legislation and the
  11-23  crowded condition of the calendars in both houses create an
  11-24  emergency and an imperative public necessity that the
  11-25  constitutional rule requiring bills to be read on three several
  11-26  days in each house be suspended, and this rule is hereby suspended,
  11-27  and that this Act take effect and be in force from and after its
   12-1  passage, and it is so enacted.