1-1 By: Gutierrez (Senate Sponsor - Truan) H.B. No. 2413
1-2 (In the Senate - Received from the House May 10, 1993;
1-3 May 12, 1993, read first time and referred to Committee on
1-4 International Relations, Trade, and Technology; May 19, 1993,
1-5 reported favorably, as amended, by the following vote: Yeas 6,
1-6 Nays 0; May 19, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Truan x
1-10 Barrientos x
1-11 Bivins x
1-12 Brown x
1-13 Carriker x
1-14 Harris of Tarrant x
1-15 Lucio x
1-16 Rosson x
1-17 Wentworth x
1-18 COMMITTEE AMENDMENT NO. 1 By: Truan
1-19 Amend HB 2413 as follows:
1-20 On page 1, Line 37, strike the word "and" and between
1-21 "151.159" and "to" insert ", and 151.160".
1-22 On page 3, between lines 33 and 39 add the following:
1-23 Sec. 151.160. DEPOSITS. Penalties collected by the
1-24 comptroller shall be deposited into general revenue. Fees and
1-25 charges collected by the comptroller under this Act shall be
1-26 considered reimbursements for expenses of administration and shall
1-27 be available for use by the comptroller in accordance with
1-28 provisions in the General Appropriations Act appropriating such
1-29 revenues for use by agencies.
1-30 A BILL TO BE ENTITLED
1-31 AN ACT
1-32 relating to tangible personal property exported outside of the
1-33 United States and the persons who may provide documentation to
1-34 prove the tax exemption for the property; providing penalties.
1-35 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-36 SECTION 1. Subchapter E, Chapter 151, Tax Code, is amended
1-37 by adding Sections 151.157, 151.158, and 151.159 to read as
1-38 follows:
1-39 Sec. 151.157. CUSTOMS BROKERS. (a) A customs broker, or an
1-40 authorized employee of a customs broker, licensed by the
1-41 comptroller under this section may issue documentation for the
1-42 purpose of showing the exemption of tangible personal property
1-43 under Section 151.307(b)(2) only under procedures established by
1-44 the comptroller by rule.
1-45 (b) The comptroller may issue a license to a customs broker
1-46 for the purpose described by Subsection (a) for each place of
1-47 business of the broker if the broker:
1-48 (1) applies to the comptroller for the license;
1-49 (2) pays the fee set by the comptroller;
1-50 (3) posts the bond or security in the amount required
1-51 by Subsection (d); and
1-52 (4) complies with any rules of the comptroller to
1-53 administer this section and to prevent the evasion of the tax under
1-54 this chapter and local sales and use taxes.
1-55 (c) The comptroller shall set the fee for a license in an
1-56 amount that does not exceed $100 for each customs broker, without
1-57 regard to whether the broker has more than one place of business.
1-58 The fee may be imposed only once for each broker. The comptroller
1-59 shall use the fees only for the administration of this section,
1-60 including costs of materials, labor, and overhead.
1-61 (d) The amount of the bond or security required by
1-62 Subsection (b)(3) is $500, except that the comptroller may require
1-63 a customs broker to post additional bond or security in an amount
1-64 the comptroller considers necessary to ensure the payment of the
1-65 tax under this chapter and local sales and use taxes. The
1-66 comptroller may not require a bond or security in an amount greater
1-67 than $2,500. The comptroller may not require the customs broker to
1-68 post more than one bond or security solely because the broker has
2-1 more than one place of business. The security may be in the form
2-2 of cash, a certificate of deposit, a letter of credit, or another
2-3 instrument of value.
2-4 (e) A customs broker licensed under this section shall make
2-5 available to the comptroller, on or after the 15th day after the
2-6 date the broker receives written notice from the comptroller, the
2-7 customs broker's books and records relating to the business of
2-8 issuing documentation certifying the export of tangible personal
2-9 property beyond the territorial limits of the United States for
2-10 purposes of exempting the property from the taxes imposed by this
2-11 chapter. The customs broker shall make available to the
2-12 comptroller, without notice from the comptroller, the customs
2-13 broker's book and records if the comptroller determines that the
2-14 comptroller's ability to administer and enforce effectively the
2-15 provisions of this chapter relating to documentation for the
2-16 purpose of showing the exemption of tangible personal property
2-17 under Section 151.307(b)(2) is jeopardized by providing notice.
2-18 The customs broker shall keep the books and records described by
2-19 this subsection for at least two years after the date of the last
2-20 entry that they contain.
2-21 (f) The comptroller may suspend or revoke a license issued
2-22 under this section for good cause. The comptroller may determine
2-23 the length of suspension or revocation necessary for the
2-24 enforcement of this chapter and the comptroller's rules. A
2-25 proceeding to suspend or revoke a license under this subsection is
2-26 a contested case under the Administrative Procedure and Texas
2-27 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).
2-28 Judicial review is by trial de novo. The district courts of Travis
2-29 County have exclusive original jurisdiction of a suit under this
2-30 section.
2-31 (g) A customs broker may authorize a person to act as an
2-32 independent contractor to certify that tangible personal property
2-33 has been exported outside of the United States only if the
2-34 authorization is part of the written contract and the comptroller
2-35 in writing approves the authorization. A customs broker may not
2-36 authorize a person under this subsection to prepare documentation
2-37 for the purpose of showing the exemption for tangible personal
2-38 property under Section 151.307(b)(2).
2-39 (h) In this section:
2-40 (1) "Customs broker" means a person licensed by the
2-41 United States Customs Service to act as a customs house broker.
2-42 (2) "Authorized employee" means an employee of a
2-43 customs broker:
2-44 (A) who is authorized by the broker to perform
2-45 customs transactions on behalf of the broker;
2-46 (B) who is compensated by the broker with a
2-47 regular salary or wages;
2-48 (C) who is under the direct control and
2-49 supervision of the broker; and
2-50 (D) from whose salary or wages the broker is
2-51 required to and actually does deduct and withhold a tax under
2-52 federal law.
2-53 Sec. 151.158. EXPORT STAMPS. (a) The comptroller shall
2-54 have printed or manufactured stamps in the design, size, and
2-55 quantity the comptroller determines is necessary for the purpose of
2-56 this section.
2-57 (b) The comptroller may designate the method of
2-58 identification for the stamps.
2-59 (c) The comptroller shall require that the stamps be
2-60 manufactured so that a stamp may be easily and securely attached to
2-61 export documentation.
2-62 (d) The comptroller shall change the design of the stamps at
2-63 least once each calendar quarter, or more frequently if the
2-64 comptroller determines it is necessary for the enforcement of this
2-65 section and the comptroller's rules.
2-66 (e) The comptroller may provide stamps only to a customs
2-67 broker licensed under Section 151.157.
2-68 (f) A stamp is invalid if transferred to a person other than
2-69 the customs broker to whom the comptroller issued the stamp, to an
2-70 authorized employee of that customs broker, or to an authorized
3-1 independent contractor.
3-2 (g) The comptroller shall charge an amount not to exceed
3-3 five cents for each stamp. The comptroller shall use the money
3-4 from the sale of the stamps only for costs related to producing the
3-5 stamps, including costs of materials, labor, and overhead.
3-6 (h) The comptroller may require stamps to be purchased in
3-7 minimum quantities if the comptroller considers it necessary for
3-8 the efficient administration of this section.
3-9 Sec. 151.159. REFUNDS; IDENTIFICATION CARDS. (a) The
3-10 comptroller in writing may authorize a customs broker to refund
3-11 taxes collected under this chapter at export locations specified by
3-12 the comptroller.
3-13 (b) The comptroller may issue an export identification card
3-14 to a wholesaler or retailer. The card must contain the picture of
3-15 the person to whom the card is issued. The comptroller may issue
3-16 the card only if the wholesaler or retailer shows by clear and
3-17 convincing evidence that the wholesaler or retailer is a citizen
3-18 and resident of a foreign country and that any tangible personal
3-19 property purchased in this state by the wholesaler or retailer is
3-20 for export purposes only and is to be used or consumed outside the
3-21 territorial limits of the United States. A wholesaler or retailer
3-22 issued an export identification card may use the card only to
3-23 facilitate the preparation of documentation by a customs broker
3-24 under Section 151.307(b). The comptroller may require a wholesaler
3-25 or retailer applying for an export identification card to submit
3-26 any information in any form the comptroller determines is necessary
3-27 and to pay a fee in an amount the comptroller determines is
3-28 necessary to pay for the cost of issuing the card.
3-29 SECTION 2. Section 151.307, Tax Code, is amended by amending
3-30 Subsection (b) and adding Subsections (c) and (d) to read as
3-31 follows:
3-32 (b) When an exemption is claimed because tangible personal
3-33 property is exported beyond the territorial limits of the United
3-34 States, proof of export may be shown only by:
3-35 (1) a bill of lading issued by a licensed and
3-36 certificated carrier of persons or property showing the seller as
3-37 consignor, the buyer as consignee, and a delivery point outside the
3-38 territorial limits of the United States;
3-39 (2) documentation:
3-40 (A) provided by a <licensed> United States
3-41 Customs Broker licensed by the comptroller under Section 151.157;
3-42 (B) certifying that delivery was made to a point
3-43 outside the territorial limits of the United States; and
3-44 (C) to which a stamp issued under Section
3-45 151.158 is affixed in the manner required by that section or
3-46 Section 151.157;
3-47 (3) import documents from the country of destination
3-48 showing that the property was imported into a country other than
3-49 the United States;
3-50 (4) an original airway, ocean, or railroad bill of
3-51 lading and a forwarder's receipt if an air, ocean, or rail freight
3-52 forwarder takes possession of the property; or
3-53 (5) any other manner provided by the comptroller for
3-54 an enterprise authorized to make tax-free purchases under Section
3-55 151.156.
3-56 (c) Documentation, including the stamp affixed to the
3-57 documentation, that is provided by a customs broker licensed by the
3-58 comptroller under Section 151.157 is presumed valid in the absence
3-59 of clear and convincing evidence that the tangible personal
3-60 property covered by the documentation was not exported outside the
3-61 territorial limits of the United States.
3-62 (d) In this section:
3-63 (1) "Air forwarder" means a licensed International Air
3-64 Transportation Association freight forwarder.
3-65 (2) "Ocean forwarder" means a licensed Federal
3-66 Maritime Commission freight forwarder.
3-67 SECTION 3. Subchapter H, Chapter 151, Tax Code, is amended
3-68 by adding Section 151.3071 to read as follows:
3-69 Sec. 151.3071. INSTALLATION OF CERTAIN EQUIPMENT FOR EXPORT.
3-70 Electronic audio equipment that is exempted from the taxes imposed
4-1 by this chapter because it is purchased for use beyond the
4-2 territorial limits of the United States does not become subject to
4-3 the taxes imposed by this chapter solely because the equipment is
4-4 installed in this state.
4-5 SECTION 4. Subchapter L, Chapter 151, Tax Code, is amended
4-6 by adding Sections 151.712 and 151.713 to read as follows:
4-7 Sec. 151.712. CIVIL PENALTY FOR PERSONS CERTIFYING EXPORTS.
4-8 (a) A person may not sign or certify proof of export documentation
4-9 for the purpose of showing an exemption under Section 151.307(b)(2)
4-10 unless:
4-11 (1) the person is:
4-12 (A) a customs broker licensed by the comptroller
4-13 under Section 151.157; or
4-14 (B) an authorized employee of a customs broker
4-15 licensed by the comptroller under Section 151.157; and
4-16 (2) the tangible personal property the export of which
4-17 the person certifies is exported on the date and to the place shown
4-18 on the export documentation signed by the person.
4-19 (b) A person who provides proof of documentation that
4-20 tangible personal property has been exported outside of the United
4-21 States or a person who may benefit from the provision of the proof
4-22 of documentation, including a customs broker, authorized employee,
4-23 authorized independent contractor, seller of the property or agent
4-24 or employee of the seller, or a consumer of the property or agent
4-25 or employee of the consumer, may not sell or buy the proof of
4-26 documentation, including stamps required for the documentation.
4-27 This subsection does not apply to a customs broker who accepts a
4-28 fee for providing documentation under Section 151.307(b).
4-29 (c) Except as provided by Subsection (e), a person who
4-30 violates this section is subject to a monetary penalty that may not
4-31 exceed:
4-32 (1) $500 for the first violation;
4-33 (2) $1,000 for the second violation; and
4-34 (3) $3,000 for each subsequent violation.
4-35 (d) Except as provided by Subsection (e), each violation of
4-36 this section is subject to a separate monetary penalty.
4-37 (e) The aggregate of monetary penalties imposed under this
4-38 section against any person for all violations that occur in a
4-39 calendar year may not exceed $30,000.
4-40 (f) In addition to any monetary penalty under this section,
4-41 the comptroller may suspend or revoke under Section 151.157 the
4-42 license of a customs broker who violates this section.
4-43 (g) A proceeding to impose a civil penalty or suspend or
4-44 revoke a license because of a violation of this section is a
4-45 contested case under the Administrative Procedure and Texas
4-46 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).
4-47 Judicial review is by trial de novo. The district courts of Travis
4-48 County have exclusive original jurisdiction of a suit under this
4-49 section.
4-50 (h) The comptroller must give notice of the comptroller's
4-51 intent to impose a monetary or other penalty under this section not
4-52 later than two years after the date of the alleged commission of a
4-53 violation of this section or the comptroller may not impose a
4-54 monetary or other penalty.
4-55 (i) In this section, "customs broker" and "authorized
4-56 employee" have the meanings assigned by Section 151.157.
4-57 Sec. 151.713. FURNISHING FALSE INFORMATION TO CUSTOMS
4-58 BROKER; CIVIL PENALTY. (a) A person may not obtain or attempt to
4-59 obtain export documentation for the purpose of showing an exemption
4-60 under Section 151.307(b)(2) from a customs broker or an authorized
4-61 employee of a customs broker if the person knows, at the time the
4-62 documentation is sought, that the information provided to the
4-63 broker or employee is materially false, in whole or in part, and
4-64 the documentation is sought for the purpose of evading the tax
4-65 imposed by this chapter.
4-66 (b) After notice as provided by this section, a person who
4-67 violates this section is subject to a monetary penalty that may not
4-68 exceed:
4-69 (1) $500 for the first violation;
4-70 (2) $1,000 for the second violation; and
5-1 (3) $3,000 for each subsequent violation.
5-2 (c) Each violation of this section is subject to a separate
5-3 monetary penalty.
5-4 (d) If the comptroller believes that a person has violated
5-5 this section, the comptroller shall give written notice to the
5-6 person to show cause why the person should not be subject to a
5-7 monetary penalty for the violation. The notice must advise the
5-8 person of the allegations and explain that the person has a right
5-9 to respond to the allegations in writing and request an oral
5-10 hearing before the 31st day after the date that the notice is
5-11 issued.
5-12 (e) The comptroller may not impose a monetary penalty under
5-13 this section until the comptroller or a person designated by the
5-14 comptroller:
5-15 (1) considers the allegations against the person;
5-16 (2) considers any timely written response made by the
5-17 person;
5-18 (3) considers any evidence properly admitted at any
5-19 oral hearing held on the allegations; and
5-20 (4) issues a written decision.
5-21 (f) The comptroller must give notice of the comptroller's
5-22 intent to impose a monetary penalty under this section not later
5-23 than four years after the date of the alleged commission of a
5-24 violation of this section or the comptroller may not impose a
5-25 monetary penalty.
5-26 (g) The penalty imposed by this section is in addition to
5-27 any tax, penalty, and interest that may be assessed against a
5-28 person who violates this section.
5-29 (h) In this section, "customs broker" and "authorized
5-30 employee" have the meanings assigned by Section 151.157.
5-31 SECTION 5. This Act applies only to an exemption to the tax
5-32 imposed under Chapter 151, Tax Code, claimed on or after the
5-33 effective date of this Act.
5-34 SECTION 6. The importance of this legislation and the
5-35 crowded condition of the calendars in both houses create an
5-36 emergency and an imperative public necessity that the
5-37 constitutional rule requiring bills to be read on three several
5-38 days in each house be suspended, and this rule is hereby suspended,
5-39 and that this Act take effect and be in force from and after its
5-40 passage, and it is so enacted.
5-41 * * * * *
5-42 Austin,
5-43 Texas
5-44 May 19, 1993
5-45 Hon. Bob Bullock
5-46 President of the Senate
5-47 Sir:
5-48 We, your Committee on International Relations, Trade, and
5-49 Technology to which was referred H.B. No. 2413, have had the same
5-50 under consideration, and I am instructed to report it back to the
5-51 Senate with the recommendation that it do pass, as amended, and be
5-52 printed.
5-53 Truan,
5-54 Chairman
5-55 * * * * *
5-56 WITNESSES
5-57 FOR AGAINST ON
5-58 ___________________________________________________________________
5-59 Name: Mr. John Christian x
5-60 Representing: Comptroller of Public Accounts
5-61 City: Austin
5-62 -------------------------------------------------------------------
5-63 Name: Mr. Mickey Moore x
5-64 Representing: Texas Retailers Association
5-65 City: Austin
5-66 -------------------------------------------------------------------
5-67 Name: Mr. Ralph Wright x
5-68 Representing: Self
5-69 City: Laredo
5-70 -------------------------------------------------------------------
6-1 Name: Ms. Maria Sotelo, President x
6-2 Representing: Hidalgo Custom Brokers Assn
6-3 City: Hidalgo
6-4 -------------------------------------------------------------------