BILL ANALYSIS



C.S.H.B. 624
By: Romo
April 13, 1995
Committee Report (Substituted)


BACKGROUND

The Texas Comptroller of Public Accounts administers and collects
most of the taxes levied by the State of Texas.  As part of this
responsibility, the Comptroller audits taxpayers and enforces
existing tax laws to insure taxpayer compliance.  In this way, the
agency ensures that the state receives all of the tax money that is
legitimately due, and prevents taxpayers from withholding tax money
due the state.

To keep up with advances in technology, changes in the structure of
business operations and a changing business climate, it is
important to periodically examine the agency's enforcement
authority.

PURPOSE

This bill enhances the comptroller's authority to collect
delinquent taxes owed to the state.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 111.016, Tax Code, by adding subsections
           (b-d).

           (b) Subjects an individual who controls or supervises
           the collection of tax or money from another person, or
           an individual who controls or supervises the accounting
           for and paying over of the tax or money, and who
           wilfully fails to pay or cause to be paid the tax or
           money is liable as a responsible individual for an
           amount equal to the tax or money not paid or caused to
           be paid.  The liability imposed by this subsection is
           in addition to any other penalty provided by law.  
           Also, provides that the dissolution of a corporation,
           association, limited liability company, or partnership
           does not affect the responsible individual's liability
           under this subsection.

           (c) Provides for the district courts of Travis County
           to maintain jurisdiction of suits arising under this
           section.

           (d) Defines "Responsible Individual" and "Tax" for this
           section.

SECTION 2. Amends Subchapter B, Chapter 111, Tax Code, by adding
           Section 111.063 PENALTY FOR FAILURE TO USE ELECTRONIC
           FUNDS TRANSFER.

           Authorizes the comptroller to impose a penalty of five
           percent of the tax due on a person who is required by
           statute to pay tax by electronic funds transfer, and
           does not.  The penalty in this section is in addition
           to any other penalty provided by law.


SECTION 3. Amends Section 111.206, Tax Code, by adding Subsection
           (f), including the United States Internal Revenue
           Service in the definition of "federal regulatory
           agency."

SECTION 4. (a) Effective Date:  September 1, 1995;

           (b) The change in Sections 1 and 2 of this Act does not
           affect taxes imposed before the effective date.

           (c) The change in Section 3 of this Act may extend the
           limitations period in which the comptroller can collect
           the tax, regardless of due date.

SECTION 5. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 624 amends Section 111.016, Tax Code, requiring that
individuals that control or supervise the collection, accounting,
or payment of tax monies on behalf of another, and who wilfully
fail to pay those taxes are liable as "responsible individuals." 
H.B. 624 requires that "persons" who are required to collect,
truthfully account for, or pay over the tax, or who knowingly
attempt to evade or defeat the tax are liable for a penalty equal
to the total of the tax evaded, not collected, not accounted for,
or not paid over.

C.S.H.B. 624 adds limited liability companies to the types of
businesses that are not relieved of liability (under this
subsection) by the dissolution of the business.  The original bill
does not include limited liability companies in this list.

C.S.H.B. 624 adds the definition of "responsible individual" and
adds to the definition of "tax."  The original bill defines
"person" and "tax."

H.B. 624 adds Section 111.0515 (APPLICATION OF PAYMENTS), Tax Code. 
It is omitted in the substitute.

H.B. 624 also adds Subsection (i) to Section 171.202 (Annual
Report), Tax Code.  It is omitted in the substitute.

C.S.H.B. 624 omits the Section of the bill containing the addition
of §111.0515 (Application of Payments), therefore, its reference in
Section 4 (Effective Date) of the substitute is omitted as well.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on February 28, 1995.  Without objection, H.B. 624
was left pending before the committee.

On March 28, 1995, the committee met in a public hearing, and H.B.
624 was laid out on pending business.  Representative Romo
explained the bill.  The committee considered a complete substitute
by Representative Romo.  Without objection, the committee adopted
C.S.H.B. 624.  By a record vote of 8 ayes, 0 nays, 0 present not
voting and 3 absent, the committee voted to report H.B. 624 to the
House as substituted with the recommendation that it be sent to the
Local & Consent Calendar, and that it do pass.

     Testimony received in favor of the bill (3/28/95):
           Bill Allaway, representing the Texas Assn. of Taxpayers

     Neutral testimony received on the bill (3/28/95):
           David Randell, representing the Office of the Attorney
           General
           John Heleman, representing the Comptroller of Public
           Accounts