1-1 By: Montford S.B. No. 640
1-2 (In the Senate - Filed February 17, 1995; February 20, 1995,
1-3 read first time and referred to Committee on Finance;
1-4 April 3, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; April 3, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 640 By: Montford
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the imposition, collection, and enforcement of taxes;
1-11 providing penalties.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subsection (c), Section 111.010, Tax Code, is
1-14 amended to read as follows:
1-15 (c) Venue for and jurisdiction of a suit arising under this
1-16 section is exclusively conferred upon the district courts of Travis
1-17 County.
1-18 SECTION 2. Subsection (c), Section 111.060, Tax Code, is
1-19 amended to read as follows:
1-20 (c) Subsection (b) of this section does not apply to the
1-21 taxes imposed by Chapters 152 and 211 of this code or under an
1-22 agreement made under Section 153.017 of this code.
1-23 SECTION 3. Section 111.101, Tax Code, is amended to read as
1-24 follows:
1-25 Sec. 111.101. Settlement Before Redetermination.
1-26 <(a)> After the comptroller examines a taxpayer's records and
1-27 before a petition for redetermination of the tax is filed, the
1-28 comptroller may settle a claim for a tax, penalty, or interest
1-29 imposed by this title if the cost of collection of the amount due
1-30 would exceed the amount of tax due and if the amount due is not
1-31 more than $300.
1-32 <(b) A settlement under this section is not effective unless
1-33 it is approved by the assistant comptroller for legal services.>
1-34 SECTION 4. Section 111.201, Tax Code, is amended to read as
1-35 follows:
1-36 Sec. 111.201. ASSESSMENT <AND REFUND> LIMITATION. <(a)> No
1-37 tax imposed by this title may be assessed after four years from the
1-38 date that the tax becomes due and payable.
1-39 <(b) No refund of any tax imposed by this title may be made
1-40 by the comptroller after four years after the date that the tax was
1-41 paid, except on tolling of the statute of limitations for refunds
1-42 as provided in this title.>
1-43 SECTION 5. Section 151.0036, Tax Code, is amended by adding
1-44 Subsection (c) to read as follows:
1-45 (c) "Debt collection service" includes the service performed
1-46 for which a fee is collected under Chapter 617, Acts of the 68th
1-47 Legislature, Regular Session, 1983 (Article 9022, Vernon's Texas
1-48 Civil Statutes). The person collecting the check shall add the
1-49 amount of the tax to the fee in accordance with Section 151.052 and
1-50 shall collect the fee from the drawer or endorser of the check.
1-51 SECTION 6. Section 151.0048, Tax Code, is amended to read as
1-52 follows:
1-53 Sec. 151.0048. Real Property Service. (a) Except as
1-54 provided by Subsection (b), "real <"Real> property service" means:
1-55 (1) landscaping;
1-56 (2) the care and maintenance of lawns, yards, or
1-57 ornamental trees or other plants;
1-58 (3) the removal or collection of garbage, rubbish, or
1-59 other solid waste other than:
1-60 (A) hazardous waste;
1-61 (B) industrial solid waste;
1-62 (C) waste material that results from an activity
1-63 associated with the exploration, development, or production of oil,
1-64 gas, geothermal resources, or any other substance or material
1-65 regulated by the Railroad Commission of Texas under Section 91.101,
1-66 Natural Resources Code;
1-67 (D) domestic sewage or an irrigation return
1-68 flow, to the extent the sewage or return flow does not constitute
2-1 garbage or rubbish; and
2-2 (E) industrial discharges subject to regulation
2-3 by permit issued pursuant to Chapter 26, Water Code;
2-4 (4) building or grounds cleaning, janitorial, or
2-5 custodial services;
2-6 (5) a structural pest control service covered by
2-7 Section 2, Texas Structural Pest Control Act (Article 135b-6,
2-8 Vernon's Texas Civil Statutes); or
2-9 (6) the surveying of real property.
2-10 (b) "Real property service" does not include a service
2-11 listed under Subsection (a) if the service is purchased by a
2-12 contractor as part of the improvement of real property with a new
2-13 structure to be used as a residence or other improvement
2-14 immediately adjacent to the new structure and used in the
2-15 residential occupancy of the structure.
2-16 (c) In this section, "contractor" means a person who makes
2-17 an improvement on real estate and who, as a necessary or incidental
2-18 part of the service, incorporates tangible personal property into
2-19 the property improved.
2-20 SECTION 7. Section 151.154, Tax Code, is amended to read as
2-21 follows:
2-22 Sec. 151.154. Resale Certificate: Liability of Purchaser.
2-23 (a) If a purchaser who gives a resale certificate makes any use of
2-24 the taxable item <tangible personal property> other than retention,
2-25 demonstration, or display while holding it for sale, lease, or
2-26 rental in the regular course of business or for transfer as an
2-27 integral part of a taxable service in the regular course of
2-28 business, the purchaser shall be liable for payment of the sales
2-29 tax on the <fair market rental> value of the taxable item for any
2-30 period during which the taxable item <tangible personal property>
2-31 is used other than for retention, demonstration, or display.
2-32 (b) The value of an item of tangible personal property is
2-33 the <The> fair market rental value of the tangible personal
2-34 property, which is the amount that a purchaser would pay on the
2-35 open market to rent or lease the tangible personal property for his
2-36 use. The value of a taxable service is the fair market value of
2-37 the taxable service, which is the amount that a purchaser would pay
2-38 on the open market to obtain the service for the use of the
2-39 purchaser.
2-40 (c) If an <the> item of tangible personal property has no
2-41 fair market rental value or if a taxable service has no fair market
2-42 value, the original purchase price shall be the measure of the tax.
2-43 (d) At any time, the person making the divergent use may
2-44 cease paying tax on the fair market rental value or fair market
2-45 value and may pay sales tax on the original purchase price without
2-46 credit for taxes previously paid <on the fair market rental value>.
2-47 (e) <(b)> A purchaser of a taxable item <tangible personal
2-48 property> who gives a resale certificate is not liable for the tax
2-49 imposed by this chapter if he donates the item <property> to an
2-50 organization exempted under Section 151.309 or 151.310(a)(1) or (2)
2-51 of this code; except that any use by the purchaser of the taxable
2-52 item <property> other than retention, demonstration, or display
2-53 shall be subject to taxes imposed by <Subsection (a) of> this
2-54 section.
2-55 SECTION 8. Section 151.155, Tax Code, is amended to read as
2-56 follows:
2-57 Sec. 151.155. Exemption Certificate. (a) If a purchaser
2-58 certifies in writing to a seller that a taxable item sold, leased,
2-59 or rented to the purchaser will be used in a manner or for a
2-60 purpose that qualifies the sale of the item for an exemption from
2-61 the taxes imposed by this chapter, and if the purchaser then uses
2-62 the item in some other manner or for some other purpose, the
2-63 purchaser is liable for the payment of the sales tax on the <fair
2-64 market rental> value of the taxable item for any period during
2-65 which the item is used in the divergent manner or for the divergent
2-66 purpose.
2-67 (b) The value of an item of tangible personal property is
2-68 the fair market rental value of tangible personal property, which
2-69 is the amount that a purchaser would pay on the open market to rent
2-70 or lease the property for his use. The value of a taxable service
3-1 is the fair market value of the taxable service, which is the
3-2 amount that a purchaser would pay on the open market to obtain the
3-3 service for the use of the purchaser.
3-4 (c) If an <the> item of tangible personal property has no
3-5 fair market rental value or if a taxable service has no fair market
3-6 value, the original purchase price shall be the measure of tax.
3-7 (d) At any time, the person making the divergent use may
3-8 cease paying tax on the fair market rental value or fair market
3-9 value and may pay sales tax on the original purchase price without
3-10 credit for taxes previously paid <on the fair market rental value>.
3-11 (e) <(b)> A purchaser of a taxable item <tangible personal
3-12 property> who gives an exemption certificate is not liable for the
3-13 tax imposed by this chapter if he donates the taxable item
3-14 <property> to an organization exempted under Section 151.309 or
3-15 151.310(a)(1) or (2) of this code; except that any use by the
3-16 purchaser of the taxable item <property> other than retention,
3-17 demonstration, or display shall be subject to taxes imposed by
3-18 <Subsection (a) of> this section.
3-19 SECTION 9. Subsection (f), Section 151.157, Tax Code, is
3-20 amended to read as follows:
3-21 (f) The comptroller may suspend or revoke a license issued
3-22 under this section for good cause. The comptroller may determine
3-23 the length of suspension or revocation necessary for the
3-24 enforcement of this chapter and the comptroller's rules. A
3-25 proceeding to suspend or revoke a license under this subsection is
3-26 a contested case under Chapter 2001, Government Code <the
3-27 Administrative Procedure and Texas Register Act (Article 6252-13a,
3-28 Vernon's Texas Civil Statutes)>. Judicial review is by trial de
3-29 novo. The district courts of Travis County have exclusive original
3-30 jurisdiction of a suit under this section.
3-31 SECTION 10. Subsection (a), Section 151.313, Tax Code, is
3-32 amended to read as follows:
3-33 (a) The following items are exempted from the taxes imposed
3-34 by this chapter:
3-35 (1) a drug or medicine, other than insulin, if
3-36 prescribed or dispensed for a human or animal by a licensed
3-37 practitioner of the healing arts;
3-38 (2) insulin;
3-39 (3) a hypodermic syringe or needle;
3-40 (4) a brace; hearing aid or audio loop; orthopedic,
3-41 dental, or prosthetic device; ileostomy, colostomy, or ileal
3-42 bladder appliance; or supplies or replacement parts for the listed
3-43 items;
3-44 (5) a therapeutic appliance, device, and any related
3-45 supplies specifically designed for those products, if dispensed or
3-46 prescribed by a licensed practitioner of the healing arts, when
3-47 those items are purchased and used by an individual for whom the
3-48 items listed in this subdivision were dispensed or prescribed;
3-49 (6) corrective lens and necessary and related
3-50 supplies, if dispensed or prescribed by an ophthalmologist or
3-51 optometrist;
3-52 (7) specialized printing or signalling equipment used
3-53 by the deaf for the purpose of enabling the deaf to communicate
3-54 through the use of an ordinary telephone and all materials, paper,
3-55 and printing ribbons used in that equipment;
3-56 (8) a braille wristwatch, braille writer, braille
3-57 paper and braille electronic equipment that connects to computer
3-58 equipment, and the necessary adaptive devices and adaptive computer
3-59 software; <and>
3-60 (9) each of the following items if purchased for use
3-61 by the blind to enable them to function more independently: a
3-62 slate and stylus, print enlarger, light probe, magnifier, white
3-63 cane, talking clock, large print terminal, talking terminal, or
3-64 harness for guide dog; and
3-65 (10) hospital beds.
3-66 SECTION 11. Subsection (e), Section 151.314, Tax Code, is
3-67 amended to read as follows:
3-68 (e) Food products, candy, carbonated beverages, and diluted
3-69 juices are exempted from the taxes imposed by this chapter if sold
3-70 at an exempt sale qualifying under this subsection or if stored or
4-1 used by the purchaser of the item at the exempt sale. A sale is
4-2 exempted under this subsection if:
4-3 (1) the sale is made by a person under 19 <18> years
4-4 old who is a member of a nonprofit organization devoted to the
4-5 exclusive purpose of education or religious or physical training or
4-6 by a group associated with a public or private elementary or
4-7 secondary school;
4-8 (2) the sale is made as a part of a fund-raising drive
4-9 sponsored by the organization or group; and
4-10 (3) all net proceeds from the sale go to the
4-11 organization or group for its exclusive use.
4-12 SECTION 12. Section 151.316, Tax Code, is amended by
4-13 amending Subsection (a) and by adding Subsections (c) and (d) to
4-14 read as follows:
4-15 (a) The following items are exempted from the taxes imposed
4-16 by this chapter:
4-17 (1) horses, mules, and work animals;
4-18 (2) animal life the products of which ordinarily
4-19 constitute food for human consumption;
4-20 (3) feed for farm and ranch animals;
4-21 (4) feed for animals that are held for sale in the
4-22 regular course of business;
4-23 (5) seeds and annual plants the products of which:
4-24 (A) ordinarily constitute food for human
4-25 consumption;
4-26 (B) are to be sold in the regular course of
4-27 business; or
4-28 (C) are used to produce feed for animals
4-29 exempted by this section;
4-30 (6) fertilizers, fungicides, insecticides, herbicides,
4-31 defoliants, and desiccants exclusively used or employed on a farm
4-32 or ranch in the production of:
4-33 (A) food for human consumption;
4-34 (B) feed for animal life; or
4-35 (C) other agricultural products to be sold in
4-36 the regular course of business;
4-37 (7) machinery and equipment exclusively used or
4-38 employed on a farm or ranch in the building or maintaining of roads
4-39 or water facilities or in the production of:
4-40 (A) food for human consumption;
4-41 (B) grass;
4-42 (C) feed for animal life; or
4-43 (D) other agricultural products to be sold in
4-44 the regular course of business;
4-45 (8) machinery and equipment exclusively used in the
4-46 processing, packing, or marketing of agricultural products by an
4-47 <the> original producer at a location operated by the original
4-48 producer <exclusively> for processing, packing, or marketing the
4-49 producer's own products if:
4-50 (A) 50 percent or more of the products
4-51 processed, packed, or marketed at or from the location are produced
4-52 by the original producer and not purchased or acquired from others;
4-53 and
4-54 (B) the producer does not process, pack, or
4-55 market for consideration any agricultural product that belongs to
4-56 another person; <and>
4-57 (9) ice exclusively used by commercial fishing boats
4-58 in the storing of aquatic species including but not limited to
4-59 shrimp, other crustaceans, finfish, mollusks, and other similar
4-60 creatures; and
4-61 (10) the first $50,000 of the cost of each unit of
4-62 machinery or equipment purchased to be used exclusively in site
4-63 preparation, planting, cultivation, or harvesting of timber.
4-64 (c) For purposes of this section, two or more corporations
4-65 that operate agricultural activities on the same tract or adjacent
4-66 tracts of land and that are entirely owned by an individual or a
4-67 combination of the individual, the individual's spouse, and the
4-68 individual's children may qualify as an "original producer" for the
4-69 purposes of Subsection (a)(8).
4-70 (d) For purposes of this section, "farm or ranch" includes
5-1 one or more tracts of land used, in whole or in part, in the
5-2 production of crops, livestock, or other agricultural products held
5-3 for sale in the regular course of business. This includes
5-4 feedlots, dairy farms, commercial orchards, commercial nurseries,
5-5 and similar commercial agricultural operations. "Farm or ranch"
5-6 does not include a home garden or a timber operation.
5-7 SECTION 13. Subsection (c), Section 151.317, Tax Code, is
5-8 amended to read as follows:
5-9 (c) In this section:
5-10 (1) "Residential use" means use:
5-11 (A) in a family dwelling or in a multifamily
5-12 apartment or housing complex or building or in a part of a building
5-13 occupied as a home or residence when the use is by the owner of the
5-14 dwelling, apartment, complex, or building or part of the building
5-15 occupied; or
5-16 (B) in a dwelling, apartment, house, or building
5-17 or part of a building occupied as a home or residence when the use
5-18 is by a tenant who occupies the dwelling, apartment, house, or
5-19 building or part of a building under a contract for an express
5-20 initial term for longer than 29 consecutive days.
5-21 (2) "Commercial use" means use by a person engaged in
5-22 selling, warehousing, or distributing a commodity or a professional
5-23 or personal service, but does not include:
5-24 (A) use by a person engaged in:
5-25 (i) processing tangible personal property
5-26 for sale as tangible personal property, other than preparation or
5-27 storage of food for immediate consumption;
5-28 (ii) exploring for, <or> producing, or
5-29 <and> transporting, a material extracted from the earth;
5-30 (iii) agriculture, including dairy or
5-31 poultry operations and pumping for farm or ranch irrigation; <or>
5-32 (iv) electrical processes such as
5-33 electroplating, electrolysis, and cathodic protection; or
5-34 (v) the off-wing processing, overhaul, or
5-35 repair of a jet turbine engine or its parts for a certificated or
5-36 licensed carrier of persons or property; or
5-37 (B) a direct or indirect use, consumption, or
5-38 loss of electricity by an electric utility engaged in the purchase
5-39 of electricity for resale.
5-40 SECTION 14. Section 151.318, Tax Code, is amended by
5-41 amending Subsections (b), (e), (m), and (n) and by adding
5-42 Subsection (q) to read as follows:
5-43 (b) The exemption includes:
5-44 (1) chemicals, catalysts, and other materials that are
5-45 used during a manufacturing, processing, or fabrication operation
5-46 to produce or induce a chemical or physical change, to remove
5-47 impurities, or to make the product more marketable; and
5-48 (2) semiconductor fabrication cleanrooms and
5-49 equipment.
5-50 (e) This section does not apply to any taxable item rented
5-51 or leased for less than one year to a person engaged in
5-52 manufacturing.
5-53 (m) The refund of a portion of the taxes imposed by this
5-54 chapter provided by Subsection (h)(1) and Subsection (n) for
5-55 property purchased during 1990 or 1991 and the reduction in the
5-56 amount of the tax imposed by this chapter provided by Subsections
5-57 (h)(2), (3), <and> (4), and (5) and Subsection (n) for property
5-58 purchased during 1992, 1993, or 1994 do not affect the application
5-59 of <a> sales and use taxes <tax> imposed on the property by a
5-60 political subdivision of this state under Chapter 321, 322, or 323,
5-61 or under any other law.
5-62 (n) A person engaged in overhauling, retrofitting, or
5-63 repairing jet turbine aircraft engines and their component parts is
5-64 entitled to a refund or a reduction in the amount of tax imposed by
5-65 this chapter for the purchase of machinery, equipment, <or>
5-66 replacement parts or accessories with a useful life in excess of
5-67 six months, or supplies, including aluminum oxide, nitric acid, and
5-68 sodium cyanide, used in electrochemical plating or a similar
5-69 process that are used or consumed in the overhauling, retrofitting,
5-70 or repairing. The amount of the refund or reduced amount of tax
6-1 due is the same as provided by Subsection (h) for property covered
6-2 by Subsection (g).
6-3 (q) For purposes of Subsection (b), "semiconductor
6-4 fabrication cleanrooms and equipment" means all tangible personal
6-5 property, without regard to whether the property is affixed to or
6-6 incorporated into realty, used in connection with the
6-7 manufacturing, processing, or fabrication in a cleanroom
6-8 environment of a semiconductor product, without regard to whether
6-9 the property is actually contained in the cleanroom environment.
6-10 The term includes integrated systems, fixtures, and piping, all
6-11 property necessary or adapted to reduce contamination or to control
6-12 airflow, temperature, humidity, chemical purity, or other
6-13 environmental conditions or manufacturing tolerances, and
6-14 production equipment and machinery. The term does not include the
6-15 building or a permanent, nonremovable component of the building,
6-16 that houses the cleanroom environment. The term includes moveable
6-17 cleanroom partitions and cleanroom lighting. "Semiconductor
6-18 fabrication cleanrooms and equipment" are not "intraplant
6-19 transportation equipment" or "used incidentally in a manufacturing,
6-20 processing, or fabrication operation" as those terms are used in
6-21 Subsection (c)(2).
6-22 SECTION 15. Subsection (e), Section 151.319, Tax Code, is
6-23 amended to read as follows:
6-24 (e) The following items are not exempted by Subsection (d)
6-25 of this section:
6-26 (1) machinery or equipment or their accessories or
6-27 replacement parts having a useful life when new in excess of six
6-28 months;
6-29 (2) intraplant transportation equipment, maintenance
6-30 or janitorial supplies or equipment, or other machinery, equipment,
6-31 materials, or supplies that are used incidentally to printing or
6-32 processing;
6-33 (3) hand tools; or
6-34 (4) office equipment or supplies; equipment or
6-35 supplies used in sales, distribution, or transportation activities,
6-36 or in gathering information; or other tangible personal property
6-37 used by a newspaper printer in an activity other than the actual
6-38 printing and processing operation<; or>
6-39 <(5) internal or external wrapping, packing, and
6-40 packaging supplies, as defined by Section 151.302(d), purchased for
6-41 a person's own use, stored for use, or used in wrapping, packing,
6-42 or packaging tangible personal property>.
6-43 SECTION 16. Section 151.350, Tax Code, is amended to read as
6-44 follows:
6-45 Sec. 151.350. LABOR TO RESTORE <REPAIR> CERTAIN PROPERTY.
6-46 (a) Labor to restore <repair> real or tangible personal property
6-47 is exempted from the taxes imposed by this chapter if:
6-48 (1) the amount of the charge for labor is separately
6-49 itemized; and
6-50 (2) the restoration is performed on <repair is to>
6-51 property damaged within a disaster area by the condition that
6-52 caused the area to be declared a disaster area.
6-53 (b) The exemption under this section does not apply to
6-54 tangible personal property transferred by the service provider to
6-55 the purchaser as part of the service <repair>.
6-56 (c) In this section, "disaster area" means:
6-57 (1) an area declared a disaster area by the governor
6-58 under Chapter 418, Government Code; or
6-59 (2) an area declared a disaster area by the president
6-60 of the United States under 42 U.S.C. Section 5141.
6-61 (d) In this section, "restore" means:
6-62 (1) launder or clean, to the extent the service is a
6-63 personal service as defined in Section 151.0045; and
6-64 (2) repair, restore, or remodel, to the extent the
6-65 service is:
6-66 (A) a real property repair or remodeling service
6-67 as defined in Section 151.0047; or
6-68 (B) defined as a taxable service in Section
6-69 151.0101(5).
6-70 SECTION 17. Section 151.509, Tax Code, is amended to read as
7-1 follows:
7-2 Sec. 151.509. Petition for Redetermination. <(b)> A person
7-3 petitioning for a redetermination of a determination made under
7-4 Section 111.022 <151.506 of this code> must file, before the
7-5 determination becomes final, security as the comptroller requires
7-6 to ensure compliance with this chapter. The security may be sold
7-7 by the comptroller in the manner provided by Subchapter A, Chapter
7-8 111 <Section 151.611 of this code>.
7-9 SECTION 18. Subsection (g), Section 151.712, Tax Code, is
7-10 amended to read as follows:
7-11 (g) A proceeding to impose a civil penalty or suspend or
7-12 revoke a license because of a violation of this section is a
7-13 contested case under Chapter 2001, Government Code <the
7-14 Administrative Procedure and Texas Register Act (Article 6252-13a,
7-15 Vernon's Texas Civil Statutes)>. Judicial review is by trial de
7-16 novo. The district courts of Travis County have exclusive original
7-17 jurisdiction of a suit under this section.
7-18 SECTION 19. Subsections (b) and (d), Section 153.002, Tax
7-19 Code, are amended to read as follows:
7-20 (b) A lessor who is engaged regularly in the business of
7-21 leasing for compensation motor vehicles and equipment he owns to
7-22 carriers or other lessees for interstate operation may be deemed to
7-23 be the user or interstate trucker when he supplies or pays for the
7-24 motor fuel consumed in those vehicles, and the lessor may be issued
7-25 a permit as an interstate trucker when an application has <and bond
7-26 have> been properly filed with and approved by the comptroller.
7-27 (d) A lessor described in Subsection (b) of this section may
7-28 <must> file with his application for an interstate trucker permit
7-29 one copy of the form-lease or service contract he enters into with
7-30 the various lessees of his motor vehicles. When the interstate
7-31 trucker permit has been secured, the lessor may <shall> make and
7-32 assign to each motor vehicle he leases for interstate operation a
7-33 photocopy of the permit to be carried in the cab compartment of the
7-34 motor vehicle. The photocopy of the permit must have typed or
7-35 printed on the back the unit or motor number of the motor vehicle
7-36 to which it is assigned and the name of the lessee. The lessor is
7-37 responsible for the proper use of the photocopy of the permit
7-38 issued and for its return to him with the motor vehicle to which it
7-39 is assigned.
7-40 SECTION 20. Section 153.017, Tax Code, is amended by
7-41 amending Subsections (b) and (f) and by adding Subsections (g) and
7-42 (h) to read as follows:
7-43 (b) An agreement may provide for:
7-44 (1) determining the base state for motor fuel users;
7-45 (2) <,> user records requirements;
7-46 (3) <,> audit procedures;
7-47 (4) <,> exchange of information;
7-48 (5) <,> persons eligible for tax licensing;
7-49 (6) licensing and license revocation procedures,
7-50 permits, penalties, and fees;
7-51 (7) <,> defining qualified motor vehicles;
7-52 (8) <,> determining <if> bonding procedures, types,
7-53 and amounts;
7-54 (9) <is required,> specifying reporting requirements
7-55 and periods;
7-56 (10) defining refund procedures and limitations,
7-57 including the payment of interest;
7-58 (11) <, including> defining uniform penalties, fees,
7-59 <penalty> and interest rates;
7-60 (12) <for late reporting,> determining methods for
7-61 collecting and forwarding of motor fuel taxes, <and> penalties, and
7-62 interest due to another jurisdiction;
7-63 (13) the temporary remittal of funds equal to the
7-64 amount of the taxes, penalties, and interest due to another
7-65 jurisdiction but not otherwise collected, subject to appropriation
7-66 of funds for that purpose; and
7-67 (14) <, and> other provisions to facilitate the
7-68 administration of the agreement.
7-69 (f) An agreement entered into under this section prevails
7-70 over an inconsistent rule of the comptroller. Except as otherwise
8-1 provided by this section, a <A> statute of this state prevails over
8-2 an inconsistent provision of an agreement entered into under this
8-3 section.
8-4 (g) The comptroller may segregate in a separate fund or
8-5 account the amount of motor fuel taxes estimated to be due to other
8-6 jurisdictions or otherwise subject to refund during the fiscal
8-7 year, penalties and interest on those taxes due other
8-8 jurisdictions, licensing fees, and other costs collected under the
8-9 agreement. On a determination of an amount held that is due to be
8-10 remitted to another jurisdiction, the comptroller may issue a
8-11 warrant or make an electronic transfer of the amount as necessary
8-12 to carry out the purposes of the agreement. An auditing cost,
8-13 membership fee, and other cost associated with the agreement may be
8-14 paid from interest earned on funds segregated under this
8-15 subsection. Any interest earnings in excess of the costs
8-16 associated with the agreement shall be credited to general revenue.
8-17 (h) The legislature finds that it is in the public interest
8-18 to enter into motor fuel tax agreements with other jurisdictions
8-19 that may provide for the temporary remittal of amounts due other
8-20 jurisdictions that exceed the amounts collected. The comptroller
8-21 shall ensure that reasonable measures are developed to recover
8-22 motor fuel taxes and other amounts due this state during each
8-23 biennium.
8-24 SECTION 21. Subsection (e), Section 153.116, Tax Code, is
8-25 amended to read as follows:
8-26 (e) In lieu of filing a surety bond, an applicant for a
8-27 permit may substitute the following security:
8-28 (1) cash in the form of U.S. currency in an amount
8-29 equal to the required bond to be deposited in the suspense account
8-30 of the state treasury;
8-31 (2) an assignment to the comptroller of a certificate
8-32 of deposit in any bank or savings and loan association in Texas
8-33 that is a member of the FDIC <or the FSLIC> in an amount at least
8-34 equal to the bond amount required; or
8-35 (3) an irrevocable letter of credit to the comptroller
8-36 from any bank or savings and loan association in Texas that is a
8-37 member of the FDIC <or FSLIC> in an amount of credit at least equal
8-38 to the bond amount required.
8-39 SECTION 22. Section 153.205, Tax Code, is amended by adding
8-40 Subsection (i) to read as follows:
8-41 (i) A permitted supplier may not make a tax-free sale to a
8-42 purchaser using a signed statement:
8-43 (1) for the sale of more than 3,000 gallons of diesel
8-44 fuel in a single transaction; or
8-45 (2) in a calendar month in which the supplier has
8-46 previously sold more than 10,000 gallons of diesel fuel to the
8-47 purchaser.
8-48 SECTION 23. Subsection (f), Section 153.206, Tax Code, is
8-49 amended to read as follows:
8-50 (f) If diesel fuel is purchased, in a single delivery of
8-51 5,000 gallons or more, or in lesser quantities where required by
8-52 city ordinance, by any person for the purpose of resale, the
8-53 seller, distributor, or broker shall sell the product to the
8-54 retailer or any other person purchasing the product on the basis of
8-55 temperature-corrected gallonage to 60 degrees Fahrenheit and the
8-56 tax shall be computed and paid over to the state on the
8-57 temperature-corrected basis. All other sales shall be reported to
8-58 the comptroller on the basis of gross or volumetric gallons of
8-59 taxable diesel fuel <gasoline> sold.
8-60 SECTION 24. Subsection (e), Section 153.218, Tax Code, is
8-61 amended to read as follows:
8-62 (e) In lieu of filing a surety bond, an applicant for a
8-63 permit may substitute the following security:
8-64 (1) cash in the form of U.S. currency in an amount
8-65 equal to the required bond to be deposited in the suspense account
8-66 of the state treasury;
8-67 (2) an assignment to the comptroller of a certificate
8-68 of deposit in any bank or savings and loan association in the state
8-69 that is a member of the FDIC <or the FSLIC> in an amount at least
8-70 equal to the bond amount required; or
9-1 (3) an irrevocable letter of credit to the comptroller
9-2 from any bank or savings and loan association in Texas that is a
9-3 member of the FDIC <or FSLIC> in an amount of credit at least equal
9-4 to the bond amount required.
9-5 SECTION 25. Subsection (a), Section 153.220, Tax Code, is
9-6 amended to read as follows:
9-7 (a) A delivery of diesel fuel into the fuel supply tanks of
9-8 a motor vehicle operated for commercial purposes and described by
9-9 Section 153.001(12) <having an aggregate capacity of 60 or more
9-10 gallons> shall be evidenced by an invoice issued in duplicate by a
9-11 dealer or an invoice or a distribution log issued by a bonded user
9-12 or other user.
9-13 SECTION 26. Section 153.304, Tax Code, is amended to read as
9-14 follows:
9-15 Sec. 153.304. Dealer's Permit. A dealer's permit authorizes
9-16 a dealer to collect and remit taxes on liquefied gas delivered into
9-17 the fuel supply tanks of motor vehicles displaying an out-of-state
9-18 license plate, the motor vehicle of an interstate trucker licensed
9-19 under an agreement entered into under Section 153.017, or a motor
9-20 vehicle displaying a motor vehicle dealer's liquefied gas tax
9-21 decal.
9-22 SECTION 27. Section 153.305, Tax Code, is amended by adding
9-23 Subsection (e) to read as follows:
9-24 (e) An interstate trucker is not required to prepay the tax
9-25 under Subsection (a) for a motor vehicle operated for commercial
9-26 purposes and described by Section 153.001(12).
9-27 SECTION 28. Section 153.306, Tax Code, is amended to read as
9-28 follows:
9-29 Sec. 153.306. Interstate Trucker's Permit. An interstate
9-30 trucker's permit authorizes a person who imports <an interstate
9-31 trucker operating a motor vehicle with a base license plate issued
9-32 by a state other than Texas to import> liquefied gas into this
9-33 state in the fuel supply tanks of a motor vehicle <vehicles> owned
9-34 or operated <by him> for commercial purposes and described by
9-35 Section 153.001(12), to report and pay the tax due, and to make
9-36 sales or distributions in Texas from the vehicle's <his> cargo
9-37 tanks, but no delivery may be made in Texas into the fuel supply
9-38 tanks of motor vehicles not bearing a current liquefied gas tax
9-39 decal without first obtaining the required dealer's permit to make
9-40 taxable sales. <The interstate trucker's permit for users
9-41 operating a motor vehicle with a base license plate issued by a
9-42 state other than Texas is in lieu of the liquefied gas tax decal
9-43 permit required to operate motor vehicles on the highways of the
9-44 state.>
9-45 SECTION 29. Section 153.402, Tax Code, is amended to read as
9-46 follows:
9-47 Sec. 153.402. Prohibited Acts; Civil Penalties. A person
9-48 forfeits to the state a civil penalty of not less than $25 nor more
9-49 than $200 if the person:
9-50 (1) refuses to stop and permit the inspection and
9-51 examination of a motor vehicle transporting or using motor fuel on
9-52 demand of a peace officer or the comptroller;
9-53 (2) operates a motor vehicle in this state without a
9-54 valid interstate trucker's or a trip permit when the person is
9-55 required to hold one of those permits;
9-56 (3) operates a liquefied gas-propelled motor vehicle
9-57 that is required to be licensed in Texas, including motor vehicles
9-58 equipped with dual carburetion, and does not display a current
9-59 liquefied gas tax decal or multistate fuels tax agreement decal;
9-60 (4) makes a tax-free sale or delivery of liquefied gas
9-61 into the fuel supply tank of a motor vehicle that does not display
9-62 a current Texas liquefied gas tax decal;
9-63 (5) makes a taxable sale or delivery of liquefied gas
9-64 without holding a valid dealer's permit;
9-65 (6) makes a tax-free sale or delivery of liquefied gas
9-66 into the fuel supply tank of a motor vehicle bearing out-of-state
9-67 license plates;
9-68 (7) makes a <tax-free or taxable sale or> delivery of
9-69 liquefied gas into the fuel supply tank of a motor vehicle bearing
9-70 Texas license plates and no Texas liquefied gas tax decal, unless
10-1 licensed under a multistate fuels tax agreement;
10-2 (8) transports gasoline or diesel fuel in any cargo
10-3 tank that has a connection by pipe, tube, valve, or otherwise with
10-4 the fuel injector or carburetor or with the fuel supply tank
10-5 feeding the fuel injector or carburetor of the motor vehicle
10-6 transporting the product;
10-7 (9) sells or delivers gasoline or diesel fuel from any
10-8 fuel supply tank connected with the fuel injector or carburetor of
10-9 a motor vehicle;
10-10 (10) owns or operates a motor vehicle for which
10-11 reports or mileage records are required by this chapter without an
10-12 operating odometer or other device in good working condition to
10-13 record accurately the miles traveled;
10-14 (11) furnishes a signed statement to a supplier for
10-15 purchasing diesel fuel tax free when he owns, operates, or acquires
10-16 a diesel-powered motor vehicle;
10-17 (12) fails or refuses to comply with or violates a
10-18 provision of this chapter; or
10-19 (13) fails or refuses to comply with or violates a
10-20 comptroller's rule for administering or enforcing this chapter.
10-21 SECTION 30. Section 153.403, Tax Code, is amended to read as
10-22 follows:
10-23 Sec. 153.403. Criminal Offenses. Except as provided by
10-24 Section 153.404 of this code, a person commits an offense if the
10-25 person:
10-26 (1) refuses to stop and permit the inspection and
10-27 examination of a motor vehicle transporting or using motor fuel on
10-28 the demand of a peace officer or the comptroller;
10-29 (2) is required to hold a valid trip permit or
10-30 interstate trucker's permit, but operates a motor vehicle in this
10-31 state without a valid trip permit or interstate trucker's permit;
10-32 (3) operates a liquefied gas-propelled motor vehicle
10-33 that is required to be licensed in Texas, including a motor vehicle
10-34 equipped with dual carburetion, and does not display a current
10-35 liquefied gas tax decal or multistate fuels tax agreement decal;
10-36 (4) transports gasoline or diesel fuel in any cargo
10-37 tank that has a connection by pipe, tube, valve, or otherwise with
10-38 the fuel injector or carburetor or with the fuel supply tank
10-39 feeding the fuel injector or carburetor of the motor vehicle
10-40 transporting the product;
10-41 (5) sells or delivers gasoline or diesel fuel from a
10-42 fuel supply tank that is connected with the fuel injector or
10-43 carburetor of a motor vehicle;
10-44 (6) owns or operates a motor vehicle for which reports
10-45 or mileage records are required by this chapter without an
10-46 operating odometer or other device in good working condition to
10-47 record accurately the miles traveled;
10-48 (7) as a diesel tax prepaid user fails to prepay the
10-49 tax on every diesel-powered motor vehicle owned or operated by him;
10-50 (8) makes a tax-free sale or delivery of liquefied gas
10-51 into the fuel supply tank of a motor vehicle that does not display
10-52 a current Texas liquefied gas tax decal;
10-53 (9) makes a sale or delivery of liquefied gas on which
10-54 the person knows the tax is required to be collected, if at the
10-55 time the sale is made the person does not hold a valid dealer's
10-56 permit;
10-57 (10) makes a tax-free sale or delivery of liquefied
10-58 gas into the fuel supply tank of a motor vehicle bearing
10-59 out-of-state license plates;
10-60 (11) makes a <tax-free or taxable sale or> delivery of
10-61 liquefied gas into the fuel supply tank of a motor vehicle bearing
10-62 Texas license plates and no Texas liquefied gas tax decal, unless
10-63 licensed under a multistate fuels tax agreement;
10-64 (12) refuses to permit the comptroller or the attorney
10-65 general to inspect, examine, or audit a book or record required to
10-66 be kept by a distributor, supplier, user, dealer, interstate
10-67 trucker, aviation fuel dealer, jobber, common or contract carrier,
10-68 or any person required to hold a permit under this chapter;
10-69 (13) refuses to permit the comptroller or the attorney
10-70 general to inspect or examine any plant, equipment, materials, or
11-1 premises where motor fuel is produced, processed, stored, sold,
11-2 delivered, or used;
11-3 (14) refuses to permit the comptroller or the attorney
11-4 general to measure or gauge the contents of or take samples from a
11-5 storage tank or container on premises where motor fuel is produced,
11-6 processed, stored, sold, delivered, or used;
11-7 (15) is a distributor, bonded user, interstate
11-8 trucker, or supplier and fails or refuses to make or deliver to the
11-9 comptroller a report required by this chapter to be made and
11-10 delivered to the comptroller;
11-11 (16) conceals motor fuel with the intent of engaging
11-12 in any conduct proscribed by this chapter or refuses to make sales
11-13 of motor fuel on the volume-corrected basis prescribed by this
11-14 chapter;
11-15 (17) refuses, while transporting motor fuel, to stop
11-16 the motor vehicle he is operating when called on to do so by a
11-17 person authorized to stop the motor vehicle;
11-18 (18) refuses to surrender a motor vehicle and cargo
11-19 for impoundment after being ordered to do so by a person authorized
11-20 to impound the motor vehicle and cargo;
11-21 (19) transports motor fuel for which a cargo manifest
11-22 is required to be carried without possessing or exhibiting on
11-23 demand by an officer authorized to make the demand a cargo manifest
11-24 containing the information required to be shown on the manifest;
11-25 (20) mutilates, destroys, or secretes a book or record
11-26 required by this chapter to be kept by a distributor, supplier,
11-27 user, dealer, interstate trucker, aviation fuel dealer, jobber, or
11-28 person required to hold a permit under this chapter;
11-29 (21) is a distributor, supplier, user, dealer,
11-30 interstate trucker, aviation fuel dealer, jobber, or other person
11-31 required to hold a permit under this chapter, or the agent or
11-32 employee of one of those persons and makes a false entry or fails
11-33 to make an entry in the books and records required under this
11-34 chapter to be made by the person;
11-35 (22) transports in any manner motor fuel under a false
11-36 cargo manifest;
11-37 (23) engages in a motor fuel transaction that requires
11-38 that the person have a permit under this chapter without then and
11-39 there holding the required permit;
11-40 (24) makes and delivers to the comptroller a report
11-41 required under this chapter to be made and delivered to the
11-42 comptroller, if the report contains false information;
11-43 (25) forges, falsifies, or alters an invoice
11-44 prescribed by law;
11-45 (26) makes any statement, knowing said statement to be
11-46 false, in a claim for a tax refund filed with the comptroller;
11-47 (27) furnishes to a supplier a signed statement for
11-48 purchasing diesel fuel tax free when he owns, operates, or acquires
11-49 a diesel-powered motor vehicle;
11-50 (28) holds an aviation fuel dealer's permit and makes
11-51 a taxable sale or use of any gasoline or diesel fuel;
11-52 (29) fails to remit any tax funds collected by a
11-53 distributor, supplier, user, dealer, interstate trucker, jobber, or
11-54 any other person required to hold a permit under this chapter;
11-55 (30) makes a sale of diesel fuel tax free into a
11-56 storage facility of a person who:
11-57 (A) is not permitted as a supplier, as an
11-58 aviation fuel dealer, as a bonded user, or as a diesel tax prepaid
11-59 user of diesel fuel; or
11-60 (B) does not furnish to the permitted supplier a
11-61 signed statement prescribed in Section 153.205 of this code;
11-62 (31) makes a sale of gasoline tax free to any person
11-63 who is not permitted as either a distributor or an aviation fuel
11-64 dealer;
11-65 (32) is a dealer who purchases any motor fuel tax free
11-66 when not authorized to make a tax-free purchase under this chapter;
11-67 or
11-68 (33) is a dealer who purchases motor fuel with the
11-69 intent to evade any tax imposed by this chapter.
11-70 SECTION 31. Subsection (d), Section 154.042, Tax Code, is
12-1 amended to read as follows:
12-2 (d) A plan for achieving compliance that is submitted to the
12-3 treasurer under Subsection (c) is confidential and not subject to
12-4 the open records law, Chapter 552, Government Code <424, Acts of
12-5 the 63rd Legislature, Regular Session, 1973 (Article 6252-17a,
12-6 Vernon's Texas Civil Statutes)>.
12-7 SECTION 32. Subsection (m), Section 154.051, Tax Code, is
12-8 amended to read as follows:
12-9 (m) Information provided under Subsection (f) is
12-10 confidential and not subject to the open records law, Chapter 552,
12-11 Government Code <424, Acts of the 63rd Legislature, Regular
12-12 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)>.
12-13 SECTION 33. Subsection (g), Section 154.101, Tax Code, is
12-14 amended to read as follows:
12-15 (g) All financial information provided under this section is
12-16 confidential and not subject to the open records law, Chapter 552,
12-17 Government Code <424, Acts of the 63rd Legislature, Regular
12-18 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)>.
12-19 SECTION 34. Section 154.114, Tax Code, is amended to read as
12-20 follows:
12-21 Sec. 154.114. FINAL Suspension or Revocation of a Permit.
12-22 (a) The treasurer may suspend or revoke a person's <distributor's,
12-23 wholesaler's, bonded agent's, or retailer's> permit if the
12-24 treasurer finds, after notice and hearing as provided by this
12-25 section, that the permit holder violated this chapter or an
12-26 administrative rule made under this chapter.
12-27 (b) If the treasurer intends to suspend or revoke a permit,
12-28 the treasurer shall provide the permit holder with written notice
12-29 that includes a statement:
12-30 (1) of the reason for the intended revocation or
12-31 suspension;
12-32 (2) that the permit holder is entitled to a hearing by
12-33 the treasurer on the proposed suspension or revocation of the
12-34 permit; and
12-35 (3) of the date, time, and place of the hearing.
12-36 (c) The treasurer shall mail the written notice by certified
12-37 mail, return receipt requested, to the permit holder's mailing
12-38 address as it appears on the treasurer's records <place designated
12-39 on the application for a permit as the place of business>. Service
12-40 by mail is complete when the notice is received, as evidenced by
12-41 return receipt from the U. S. Postal Service.
12-42 (d) The treasurer shall give the permit holder not less than
12-43 10 days' notice of a final <may not schedule the> hearing <before
12-44 the 10th working day after the date the permit holder received the
12-45 notice>.
12-46 (e) A permit holder may appeal the decision of the treasurer
12-47 to a district court in Travis County not later than the 30th day
12-48 after the date the treasurer's decision becomes final.
12-49 (f) A person whose permit is suspended or revoked may not
12-50 sell, offer for sale, or distribute cigarettes from the place of
12-51 business to which the permit applied until a new permit is granted
12-52 or the suspension is removed.
12-53 (g) If the treasurer suspends or revokes a permit, the
12-54 treasurer shall provide written notice of the suspension or
12-55 revocation, within a reasonable time, to each permit holder in the
12-56 state. A permit holder violates Section 154.1015(a) by selling or
12-57 distributing cigarettes to a person whose permit has been suspended
12-58 or revoked only after the permit holder receives written notice of
12-59 the suspension or revocation from the treasurer.
12-60 SECTION 35. Subchapter D, Chapter 154, Tax Code, is amended
12-61 by adding Section 154.1141 to read as follows:
12-62 Sec. 154.1141. Summary Suspension of a Permit. (a) The
12-63 treasurer may suspend a person's permit without notice or a hearing
12-64 for the person's failure to comply with this chapter or a rule
12-65 adopted under this chapter if the person's continued operation
12-66 constitutes an immediate and substantial threat to the collection
12-67 of taxes imposed by this chapter and attributable to the person's
12-68 operation.
12-69 (b) If the treasurer summarily suspends a person's permit,
12-70 proceedings for a preliminary hearing before the treasurer or the
13-1 treasurer's representative must be initiated simultaneously with
13-2 the summary suspension. The preliminary hearing shall be set for a
13-3 date not later than 10 days after the date of the summary
13-4 suspension, unless the parties agree to a later date.
13-5 (c) At the preliminary hearing, the permit holder must show
13-6 cause why the permit should not remain suspended pending a final
13-7 hearing on suspension or revocation.
13-8 (d) Chapter 2001, Government Code, does not apply to a
13-9 summary suspension under this section.
13-10 (e) To initiate a proceeding to suspend summarily a person's
13-11 permit, the treasurer shall serve notice on the permit holder
13-12 informing the permit holder of the right to a preliminary hearing
13-13 before the treasurer or the treasurer's representative and of the
13-14 time and place of the preliminary hearing. The notice must be
13-15 personally served on the permit holder or an officer, employee, or
13-16 agent of the permit holder or sent by certified or registered mail,
13-17 return receipt requested, to the permit holder's mailing address as
13-18 it appears in the treasurer's records. The notice must state the
13-19 alleged violations that constitute the grounds for summary
13-20 suspension. The suspension is effective at the time the notice is
13-21 served. If the notice is served in person, the permit holder shall
13-22 immediately surrender the permit to the treasurer or the
13-23 treasurer's representative. If notice is served by mail, the
13-24 permit holder shall immediately return the permit to the treasurer.
13-25 (f) Section 154.114, governing hearings for final suspension
13-26 or revocation of a permit under this chapter, governs a final
13-27 administrative hearing under this section.
13-28 SECTION 36. Section 154.1145, Tax Code, is amended to read
13-29 as follows:
13-30 Sec. 154.1145. Hearings. Unless otherwise provided by this
13-31 chapter, the <The> treasurer shall conduct all hearings required by
13-32 this chapter in accordance with Chapter 2001, Government Code <the
13-33 Administrative Procedure and Texas Register Act (Article 6252-13a,
13-34 Vernon's Texas Civil Statutes)>. The treasurer may designate one or
13-35 more representatives to conduct the hearings and may prescribe the
13-36 rules of procedure governing the hearings.
13-37 SECTION 37. Section 154.201, Tax Code, is amended to read as
13-38 follows:
13-39 Sec. 154.201. Record of Purchase or Receipt. Each
13-40 distributor, wholesaler, <and> bonded agent, and export warehouse
13-41 shall keep records at each place of business of all cigarettes
13-42 purchased or <and> received, including records of those cigarettes
13-43 for which no tax is due under federal law. Each retailer shall
13-44 keep records at a single location, which the retailer shall
13-45 designate as its principal place of business in this state, of all
13-46 cigarettes purchased and received. These records must include:
13-47 (1) the name and address of the shipper or carrier and
13-48 the mode of transportation;
13-49 (2) all shipping records or copies of records,
13-50 including invoices, bills of lading, waybills, freight bills, and
13-51 express receipts;
13-52 (3) the date and the name of the place of origin of
13-53 the cigarette shipment;
13-54 (4) the date and the name of the place of arrival of
13-55 the cigarette shipment;
13-56 (5) a statement of the number, kind, and price paid
13-57 for cigarettes, including cigarettes in stamped and unstamped
13-58 packages;
13-59 (6) the name, address, permit number, and tax
13-60 identification number of the seller; and
13-61 (7) any other information required by rules of the
13-62 treasurer.
13-63 SECTION 38. Section 154.301, Tax Code, is amended to read as
13-64 follows:
13-65 Sec. 154.301. COMPLIANCE INVESTIGATION AND RECOVERY OF
13-66 <AUDIT> COSTS. (a) If the treasurer has reason to believe that a
13-67 person has failed to pay a tax or penalty in the proper manner when
13-68 due, as required by this chapter, or otherwise failed to comply
13-69 with this chapter, the treasurer may employ auditors and
13-70 investigators to determine compliance and any <the> amount due. If
14-1 the treasurer determines that the person has not paid the tax or
14-2 penalty or has failed to comply with this chapter, the treasurer
14-3 may require the person to <shall> pay the reasonable expenses
14-4 incurred for the compliance investigation and audit as an
14-5 additional penalty.
14-6 (b) The treasurer shall deposit funds paid under this
14-7 section to the credit of the general revenue <a special> fund in
14-8 the treasury to be used for making audits, conducting
14-9 investigations, or as otherwise appropriated. The treasurer may
14-10 use other funds available for audits as appropriated by the
14-11 legislature <when the special fund is exhausted>.
14-12 SECTION 39. Subsection (a), Section 154.304, Tax Code, is
14-13 amended to read as follows:
14-14 (a) To determine the tax liability of a person dealing in
14-15 cigarettes or compliance by the person with this chapter, the
14-16 treasurer may:
14-17 (1) inspect any premises, including a vending machine
14-18 and its contents, where cigarettes are manufactured, produced,
14-19 stored, transported, sold, or offered for sale or exchange;
14-20 (2) remain on the premises as long as necessary to
14-21 determine the tax liability or compliance with this chapter;
14-22 (3) examine the records required by this chapter or
14-23 other records, books, documents, papers, accounts, and objects that
14-24 the treasurer determines are necessary for conducting a complete
14-25 examination; and
14-26 (4) examine stocks of cigarettes and cigarette stamps.
14-27 SECTION 40. Section 154.308, Tax Code, is amended to read as
14-28 follows:
14-29 Sec. 154.308. DEFICIENCY DETERMINATION, PENALTIES, AND
14-30 INTEREST. (a) If the treasurer has reasonable cause to believe
14-31 that a tax report or the amount of tax paid is inaccurate, the
14-32 treasurer may compute and determine the amount of tax, penalty, and
14-33 interest to be paid from information contained in the report or
14-34 from any other information available to the treasurer.
14-35 (b) On making a deficiency determination, the treasurer
14-36 shall notify the person by certified mail, return receipt
14-37 requested. Service by mail is complete when the notice is
14-38 received, as evidenced by return receipt from the U.S. Postal
14-39 Service.
14-40 SECTION 41. Subsection (g), Section 155.041, Tax Code, is
14-41 amended to read as follows:
14-42 (g) All financial information provided under this section is
14-43 confidential and not subject to the open records law, Chapter 552,
14-44 Government Code <424, Acts of the 63rd Legislature, Regular
14-45 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)>.
14-46 SECTION 42. Section 155.059, Tax Code, is amended to read as
14-47 follows:
14-48 Sec. 155.059. FINAL SUSPENSION OR REVOCATION OF PERMIT.
14-49 (a) The treasurer may revoke or suspend a person's <distributor's,
14-50 wholesaler's, bonded agent's, or retailer's> permit if the
14-51 treasurer finds, after notice and hearing as provided by this
14-52 section, that the permit holder violated this chapter or an
14-53 administrative rule made under this chapter.
14-54 (b) If the treasurer intends to suspend or revoke a permit,
14-55 the treasurer shall provide the permit holder with written notice
14-56 that includes a statement:
14-57 (1) of the reason for the intended revocation or
14-58 suspension;
14-59 (2) that the permit holder is entitled to a hearing by
14-60 the treasurer on the proposed suspension or revocation; and
14-61 (3) of the date, time, and place of the hearing.
14-62 (c) The treasurer shall mail the written notice by certified
14-63 mail, return receipt requested, to the permit holder's mailing
14-64 address as it appears in the treasurer's records <place designated
14-65 on the application for a permit as the place of business>. Service
14-66 by mail is complete when the notice is received, as evidenced by
14-67 the return receipt from the United States Postal Service.
14-68 (d) The treasurer shall give the permit holder not less than
14-69 10 days' notice of a final <may not schedule the> hearing <before
14-70 the 10th working day after the date the permit holder received the
15-1 notice>.
15-2 (e) A permit holder may appeal the decision of the treasurer
15-3 to a district court in Travis County not later than the 30th day
15-4 after the date the treasurer's decision becomes final.
15-5 (f) A person whose permit is suspended or revoked may not
15-6 sell, offer for sale, or distribute tobacco products from the place
15-7 of business to which the permit applied until a new permit is
15-8 granted or the suspension is removed.
15-9 (g) If the treasurer suspends or revokes a permit, the
15-10 treasurer shall provide written notice of the suspension or
15-11 revocation, within a reasonable time, to each permit holder in the
15-12 state. A permit holder violates Section 155.0415(a) by selling or
15-13 distributing tobacco products to a person whose permit has been
15-14 suspended or revoked only after the permit holder receives written
15-15 notice of the suspension or revocation from the treasurer.
15-16 SECTION 43. Subchapter C, Chapter 155, Tax Code, is amended
15-17 by adding Section 155.0591 to read as follows:
15-18 Sec. 155.0591. SUMMARY SUSPENSION OF A PERMIT. (a) The
15-19 treasurer may suspend a person's permit without notice or a hearing
15-20 for the person's failure to comply with this chapter or a rule
15-21 adopted under this chapter if the person's continued operation
15-22 constitutes an immediate and substantial threat to the collection
15-23 of taxes imposed by this chapter and attributable to the person's
15-24 operation.
15-25 (b) If the treasurer summarily suspends a person's permit,
15-26 proceedings for a preliminary hearing before the treasurer or the
15-27 treasurer's representative must be initiated simultaneously with
15-28 the summary suspension. The preliminary hearing shall be set for a
15-29 date not later than 10 days after the date of the summary
15-30 suspension, unless the parties agree to a later date.
15-31 (c) At the preliminary hearing, the permit holder must show
15-32 cause why the permit should not remain suspended pending a final
15-33 hearing on suspension or revocation.
15-34 (d) Chapter 2001, Government Code, does not apply to a
15-35 summary suspension under this section.
15-36 (e) To initiate a proceeding to suspend summarily a person's
15-37 permit, the treasurer shall serve notice on the permit holder
15-38 informing the permit holder of the right to a preliminary hearing
15-39 before the treasurer or the treasurer's representative and of the
15-40 time and place of the preliminary hearing. The notice must be
15-41 personally served on the permit holder or an officer, employee, or
15-42 agent of the permit holder or sent by certified or registered mail,
15-43 return receipt requested, to the permit holder's mailing address as
15-44 it appears in the treasurer's records. The notice must state the
15-45 alleged violations that constitute the grounds for summary
15-46 suspension. The suspension is effective at the time the notice is
15-47 served. If notice is served in person, the permit holder shall
15-48 immediately surrender the permit to the treasurer. If notice is
15-49 served by mail, the permit holder shall immediately return the
15-50 permit to the treasurer.
15-51 (f) Section 155.059, governing hearings for final suspension
15-52 or revocation of a permit under this chapter, governs a final
15-53 administrative hearing.
15-54 SECTION 44. Section 155.0595, Tax Code, is amended to read
15-55 as follows:
15-56 Sec. 155.0595. Hearings. Unless otherwise provided by this
15-57 chapter, the <The> treasurer shall conduct all hearings required by
15-58 this chapter in accordance with Chapter 2001, Government Code <the
15-59 Administrative Procedure and Texas Register Act (Article 6252-13a,
15-60 Vernon's Texas Civil Statutes)>. The treasurer may designate one or
15-61 more representatives to conduct the hearings and may prescribe the
15-62 rules of procedure governing the hearings.
15-63 SECTION 45. Section 155.101, Tax Code, is amended to read as
15-64 follows:
15-65 Sec. 155.101. Record of Purchase or Receipt. Each
15-66 distributor, wholesaler, <and> bonded agent, and export warehouse
15-67 shall keep records at each place of business of all tobacco
15-68 products purchased or <and> received. Each retailer shall keep
15-69 records at a single location, which the retailer shall designate as
15-70 its principal place of business in the state, of all tobacco
16-1 products purchased and received. These records must include:
16-2 (1) the name and address of the shipper or carrier and
16-3 the mode of transportation;
16-4 (2) all shipping records or copies of records,
16-5 including invoices, bills of lading, waybills, freight bills, and
16-6 express receipts;
16-7 (3) the date and the name of the place of origin of
16-8 the tobacco product shipment;
16-9 (4) the date and the name of the place of arrival of
16-10 the tobacco product shipment;
16-11 (5) a statement of the number, kind, and price paid
16-12 for the tobacco products;
16-13 (6) the name, address, permit number, and tax
16-14 identification number of the seller; and
16-15 (7) any other information required by rules of the
16-16 treasurer.
16-17 SECTION 46. Section 155.181, Tax Code, is amended to read as
16-18 follows:
16-19 Sec. 155.181. COMPLIANCE INVESTIGATION AND RECOVERY OF
16-20 <AUDIT> COSTS. (a) If the treasurer has reason to believe that a
16-21 person has failed to pay a tax or penalty in the proper manner when
16-22 due or otherwise failed to comply with<, as required by> this
16-23 chapter, the treasurer may employ auditors and investigators to
16-24 determine compliance and any <the> amount due. If the treasurer
16-25 determines that the person has not paid the tax or penalty or has
16-26 failed to comply with this chapter, the treasurer may require the
16-27 person to <shall> pay the reasonable expenses incurred in the
16-28 compliance investigation and audit as an additional penalty.
16-29 (b) The treasurer shall deposit funds paid under this
16-30 section to the credit of the general revenue <a special> fund in
16-31 the treasury to be used for making audits, conducting
16-32 investigations, or as otherwise appropriated. The comptroller
16-33 <treasurer> may use other funds available for audits as
16-34 appropriated by the legislature <when the special fund is
16-35 exhausted>.
16-36 SECTION 47. Subsection (a), Section 155.183, Tax Code, is
16-37 amended to read as follows:
16-38 (a) To determine the tax liability of a person dealing in
16-39 tobacco products or compliance by the person with this chapter, the
16-40 treasurer may:
16-41 (1) inspect any premises, including a vending machine
16-42 and its contents, where tobacco products are manufactured,
16-43 produced, stored, transported, sold, or offered for sale or
16-44 exchange;
16-45 (2) remain on the premises as long as necessary to
16-46 determine the tax liability or compliance with this chapter;
16-47 (3) examine the records required by this chapter or
16-48 other records, books, documents, papers, accounts, and objects that
16-49 the treasurer determines are necessary for conducting a complete
16-50 examination; and
16-51 (4) examine stocks of tobacco products.
16-52 SECTION 48. Section 155.185, Tax Code, is amended to read as
16-53 follows:
16-54 Sec. 155.185. DEFICIENCY DETERMINATION, PENALTIES, AND
16-55 INTEREST. (a) If the treasurer has reasonable cause to believe
16-56 that a tax report or the amount of tax is inaccurate, the treasurer
16-57 may compute and determine the amount of tax, penalty, and interest
16-58 to be paid from information contained in the report or from any
16-59 other information available to the treasurer.
16-60 (b) On making a deficiency determination, the treasurer
16-61 shall notify the person by certified mail, return receipt
16-62 requested. Service by mail is complete when the notice is
16-63 received, as evidenced by return receipt from the U.S. Postal
16-64 Service.
16-65 SECTION 49. Section 155.212, Tax Code, is amended to read as
16-66 follows:
16-67 Sec. 155.212. Books and Records. A person commits an
16-68 offense if the person:
16-69 (1) knowingly makes, delivers to, and files with the
16-70 treasurer a false return or an incomplete return or report;
17-1 (2) knowingly fails to make and deliver to the
17-2 treasurer a return or report as required by this chapter;
17-3 (3) destroys, mutilates, or conceals a book or record
17-4 required by this chapter;
17-5 (4) refuses to permit the attorney general or the
17-6 treasurer to inspect and audit books and records that are required
17-7 by this chapter or that are incidental to the conduct of the
17-8 tobacco products business;
17-9 (5) knowingly makes a false entry or fails to make
17-10 entries in the books and records required by this chapter; or
17-11 (6) fails to keep books and records for four years as
17-12 required by this chapter.
17-13 SECTION 50. Section 156.001, Tax Code, is amended to read as
17-14 follows:
17-15 Sec. 156.001. Definition. In this chapter, "hotel" means a
17-16 building in which members of the public obtain sleeping
17-17 accommodations for consideration. The term includes a hotel,
17-18 motel, tourist home, tourist house, tourist court, lodging house,
17-19 inn, or rooming house. The term<, but> does not include:
17-20 (1) a hospital, sanitarium, or nursing home; or
17-21 (2) a dormitory or other housing facility owned and
17-22 operated by an institution of higher education or a private or
17-23 independent institution of higher education as those terms are
17-24 defined by Section 61.003, Education Code, used for the purpose of
17-25 providing sleeping accommodations for persons engaged in an
17-26 educational program or activity at the institution.
17-27 SECTION 51. Subsections (f), (g), (h), and (i), Section
17-28 159.101, Tax Code, are amended to read as follows:
17-29 (f) <When the comptroller makes an assessment under this
17-30 chapter, the comptroller shall issue a determination stating the
17-31 amount and that the tax collection is in jeopardy. The amount
17-32 determined is due and payable immediately. A determination made
17-33 under this chapter becomes final on the expiration of 20 days after
17-34 the day on which the notice of the determination was served by
17-35 personal service or by mail unless a petition for a redetermination
17-36 is filed before the determination becomes final.>
17-37 <(g)> If a determination made under this chapter becomes
17-38 final without payment of the amount of the determination being
17-39 made, the comptroller shall add to the amount a penalty of 10
17-40 percent of the amount of the tax and interest.
17-41 (g) <(h)> In a redetermination proceeding held or a judicial
17-42 proceeding brought under this chapter, a certificate from the
17-43 comptroller that shows the issued determination is prima facie
17-44 evidence of:
17-45 (1) the determination of the stated tax or amount of
17-46 the tax;
17-47 (2) the stated amount of the penalties and interest;
17-48 and
17-49 (3) the compliance of the comptroller with this
17-50 chapter in computing and determining the amount due.
17-51 (h) <(i)> The suppression of evidence on any ground in a
17-52 criminal case that arises out of facts on which a determination is
17-53 made under this chapter or the dismissal of criminal charges in
17-54 such a case does not affect a determination made under this
17-55 chapter.
17-56 SECTION 52. Section 159.103, Tax Code, is amended to read as
17-57 follows:
17-58 Sec. 159.103. Exemption. The possession, purchase,
17-59 acquisition, importation, manufacture, or production of a taxable
17-60 substance is exempt from the tax imposed by this chapter if the
17-61 activity is authorized by law.
17-62 SECTION 53. The heading to Subchapter C, Chapter 159, Tax
17-63 Code, is amended to read as follows:
17-64 SUBCHAPTER C. CRIMINAL PROVISIONS<; SEIZURE AND FORFEITURE>
17-65 SECTION 54. Section 159.203, Tax Code, is amended to read as
17-66 follows:
17-67 Sec. 159.203. PREVIOUSLY USED CERTIFICATES. (a) A person
17-68 commits an offense if the person:
17-69 (1) uses, sells, offers for sale, or possesses for use
17-70 or sale previously used tax payment certificates; or
18-1 (2) attaches or causes to be attached a previously
18-2 used tax payment certificate to a taxable substance.
18-3 (b) An offense under this section is a felony of the third
18-4 degree.
18-5 (c) Venue of a prosecution under this section is in Travis
18-6 County.
18-7 SECTION 55. Section 159.205, Tax Code, is amended to read as
18-8 follows:
18-9 Sec. 159.205. RIGHT TO COLLECT SUBORDINATE TO OTHER LAWS
18-10 <FORFEITURE>. (a) <Property seized under Section 159.204 of this
18-11 code is subject to forfeiture to the state in the same manner as
18-12 provided for forfeiture of seized property under Chapter 103,
18-13 Alcoholic Beverage Code. Property forfeited to the state that is
18-14 not ordered destroyed may be used by the seizing agency for
18-15 official purposes or sold at public auction in the manner provided
18-16 by law for sheriff's sales. The proceeds from the sale of property
18-17 forfeited under this section, after satisfaction of all costs,
18-18 shall be disposed of in the manner provided for by Article 59.06,
18-19 Code of Criminal Procedure.>
18-20 <(b)> The right of the comptroller to collect the tax
18-21 imposed by this chapter, including applicable penalty and interest,
18-22 is subordinate to the right of a federal, state, or local law
18-23 enforcement authority to seize, forfeit, and retain property under
18-24 Chapter 481, Health and Safety Code; Chapter 59, Code of Criminal
18-25 Procedure; or any other criminal forfeiture law of this state or of
18-26 the United States. A lien filed by the comptroller as a result of
18-27 the failure of a dealer to pay the tax, penalty, or interest due
18-28 under this chapter is also subordinate to those rights.
18-29 (b) This section does not affect the validity of a lien or a
18-30 collection action relating to the tax imposed by this chapter under
18-31 any other circumstance.
18-32 SECTION 56. Section 159.206, Tax Code, is amended to read as
18-33 follows:
18-34 Sec. 159.206. Settlement or Compromise of Tax. <(a)> The
18-35 comptroller may settle or compromise a tax, penalty, or interest
18-36 imposed under this chapter only if:
18-37 (1) the prosecutor of a criminal offense under this
18-38 chapter or of another offense arising out of the same incident or
18-39 transaction requests in writing that the comptroller settle or
18-40 compromise and specifies the reasons for the request; and
18-41 (2) the comptroller determines that the settlement or
18-42 compromise is in the best interest of the state.
18-43 <(b) The prosecutor of a criminal offense under this chapter
18-44 or of another criminal offense arising out of the same incident or
18-45 transaction or the taxpayer or the taxpayer's representative may
18-46 request in writing that the comptroller defer an administrative
18-47 hearing on a determination made on this chapter until a trial has
18-48 been completed in the criminal case involving the same incident or
18-49 transaction or another disposition has been made of the case. The
18-50 comptroller may comply with a request to defer an administrative
18-51 hearing if the comptroller determines that the deferral would be in
18-52 the best interest of the state. This subsection does not prohibit
18-53 the comptroller from filing a lien or taking any other action to
18-54 collect the tax in the manner permitted under this code before the
18-55 conclusion of an administrative hearing.>
18-56 SECTION 57. Section 201.201, Tax Code, is amended to read as
18-57 follows:
18-58 Sec. 201.201. Tax Due. The tax imposed by this chapter for
18-59 gas produced and saved is due at the office of the comptroller in
18-60 Austin on the 20th <last> day of the second <each calendar> month
18-61 following the month of production <for gas produced and saved
18-62 during the preceding calendar month>.
18-63 SECTION 58. Section 361.138, Health and Safety Code, is
18-64 amended by amending Subsection (a) and by adding Subsections (l),
18-65 (m), and (n) to read as follows:
18-66 (a) In this section:
18-67 (1) "Engaged in business in this state" has the
18-68 meaning provided under Sections 151.107(a) and (b), Tax Code.
18-69 (2) "Lead-acid <, "lead-acid> battery" means any
18-70 battery which contains lead and sulfuric acid.
19-1 (3) "Purchased for resale" means acquired by means of
19-2 a sale for resale as defined in Section 151.006, Tax Code.
19-3 (4) "Storage" and "use" have the meanings assigned
19-4 those terms by Section 151.011, Tax Code.
19-5 (l) A fee is imposed on the storage, use, or other
19-6 consumption in this state of a lead-acid battery, unless purchased
19-7 for resale, at the same rate as provided by Subsection (b).
19-8 (m) A person storing, using, or consuming a lead-acid
19-9 battery in this state is liable for the fee imposed by Subsection
19-10 (l) and is responsible for reporting and paying it to the
19-11 comptroller in the same manner as a person required to collect the
19-12 fee provided for in Subsections (c)(2) and (d).
19-13 (n) A person storing, using, or consuming a lead-acid
19-14 battery in this state is not liable for the fee if the person pays
19-15 the fee to a wholesaler or retailer engaged in business in this
19-16 state or other person authorized by the comptroller to collect the
19-17 fee and receives from the person a receipt showing that the fee has
19-18 been paid.
19-19 SECTION 59. Section 361.472, Health and Safety Code, is
19-20 amended by adding Subsection (k) to read as follows:
19-21 (k) In this section:
19-22 (1) "Engaged in business in this state" has the
19-23 meaning provided under Sections 151.107(a) and (b), Tax Code.
19-24 (2) "Purchased for resale" means acquired by means of
19-25 a sale for resale as defined in Section 151.006, Tax Code.
19-26 (3) "Storage" and "use" have the meanings assigned
19-27 those terms by Section 151.011, Tax Code.
19-28 SECTION 60. Subsection (c), Section 361.472, Health and
19-29 Safety Code, is amended to read as follows:
19-30 (c) A fee may not be assessed for a bicycle tire or a solid
19-31 industrial tire.
19-32 SECTION 61. Subsection (e), Section 4A, Development
19-33 Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil
19-34 Statutes), is amended to read as follows:
19-35 (e) The Municipal Sales and Use Tax Act (Chapter 321, Tax
19-36 Code) governs an election to authorize the imposition of the sales
19-37 and use tax under this section and governs the imposition,
19-38 computation, administration, governance, abolition, and use of the
19-39 tax except as inconsistent with this section. The tax imposed
19-40 under this section <If an election is held under Subsection (f) of
19-41 this section at the same time as another election under this
19-42 section and an additional sales and use tax under Section
19-43 321.101(b), Tax Code, is adopted or repealed or its rate is
19-44 increased or reduced, each tax under this section and the
19-45 imposition or change in the rate of the additional sales and use
19-46 tax> takes effect as provided by Section 321.102(a) <321.102(b)>,
19-47 Tax Code.
19-48 SECTION 62. Subsections (3) and (6), Section 12, Article
19-49 8817, Revised Statutes, are amended to read as follows:
19-50 (3) The application shall be accompanied by a <sworn>
19-51 written statement executed by the individual designated to maintain
19-52 the records and make reports that he is aware of and accepts this
19-53 responsibility.
19-54 (6) The application must contain a statement that the
19-55 information contained in it is true and correct<, and this
19-56 statement shall be made under oath>.
19-57 SECTION 63. Subsection (1), Section 19, Article 8817,
19-58 Revised Statutes, is amended to read as follows:
19-59 (1) The Comptroller may not issue a general business <or
19-60 import> license for a business under this Article if the
19-61 Comptroller finds that the applicant:
19-62 (a) has been finally convicted of a felony in a court
19-63 of competent jurisdiction during the five years preceding the
19-64 filing of the application; or
19-65 (b) has been on probation or parole as a result of a
19-66 felony conviction during the two years preceding the filing of the
19-67 application.
19-68 SECTION 64. Section 159.204, Tax Code, is repealed.
19-69 SECTION 65. (a) The change in law made by this Act does not
19-70 affect the collection or the enforcement of the payment of taxes
20-1 imposed before the effective date of this Act, and the law in
20-2 effect before the effective date of this Act is continued in effect
20-3 for purposes of the liability for and collection of those taxes.
20-4 This subsection does not apply to the change to Section 201.201,
20-5 Tax Code, as amended by this Act, for taxes made due by that
20-6 section in the second month after the effective date of that
20-7 section.
20-8 (b) The change in law made to Chapter 159, Tax Code, by this
20-9 Act applies only to a violation of the penal law of this state that
20-10 occurs on or after the effective date of this Act. A violation of
20-11 the penal law of this state occurs on or after the effective date
20-12 of this Act if any element of the violation occurs on or after that
20-13 date.
20-14 (c) A violation of the penal law of this state that occurs
20-15 before the effective date of this Act is governed by the law in
20-16 effect at the time the violation occurred, and that law is
20-17 continued in effect for that purpose.
20-18 SECTION 66. If legislation is enacted transferring the
20-19 responsibilities of the treasurer to the comptroller, the
20-20 comptroller shall administer this Act consistent with that
20-21 legislation.
20-22 SECTION 67. This Act takes effect October 1, 1995.
20-23 SECTION 68. The importance of this legislation and the
20-24 crowded condition of the calendars in both houses create an
20-25 emergency and an imperative public necessity that the
20-26 constitutional rule requiring bills to be read on three several
20-27 days in each house be suspended, and this rule is hereby suspended.
20-28 * * * * *