TWT H.B. 1487 75(R)BILL ANALYSIS
TRANSPORTATION
H.B. 1487
By: Cuellar
4-11-97
Committee Report (Substituted)
BACKGROUND
Many freight forwarders in Texas are not registered because many of them
on the border are owned by Mexican nationals. Since they are not
registered, these businesses often come and go, changing their names
whenever it is convenient. The federal Drug Enforcement Agency has
expressed a concern that some freight forwarders may be involved in drug
smuggling, and would like to be able to track these businesses.
Similarly, the Internal Revenue Service has expressed an interest in
tracking these businesses to monitor alleged tax evasion.
PURPOSE
This bill proposes to require freight forwarders to register with, but not
be licensed by, the Commissioner of Licensing and Regulation.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill expressly grants additional
rulemaking authority to the commissioner of the Texas Department of
Licensing and Regulation in SECTION 8.
SECTION BY SECTION ANALYSIS
SECTION 1. The purpose of the Act is to protect the health, safety, and
welfare of all Texans through registering freight forwarders. The Act is
not intended to pre-empt federal law preventing states from regulating
freight forwarders' rates, routes, or services.
SECTION 2. Defines (1) Commissioner; (2) Department; (3) motor carrier;
(4) person; and (5) transportation service provider (TSP), also known as
freight forwarder.
SECTION 3. Requires a person operating as a freight forwarder to register
under this act; provides exceptions for customs brokers and for wholesale
distributors of alcoholic beverages.
SECTION 4. (a) Requires a TSP to submit: (1) an application form
prescribed by the commissioner; and (2) a non-refundable registration fee.
(b) Requires the application form to include:
(1) the current and former business name of the applicant, if it is not an
individual;
(2) the physical business address;
(3) the type of business organization and date the business started or
incorporated;
(4) the Federal Employer Identification number or Social Security Number
(SSN);
(5) if the business is a corporation, a list of related domestic or
foreign entities and the names and SSN of the corporation's officers and
shareholders.
(c) Registration is valid for two years after certificate is issued.
(d) To renew, the registration holder must submit to the department: (1)
an application renewal form prescribed by the commissioner; and (2) a
renewal fee.
(e) Prohibits transfers of certificates of registration.
SECTION 5. Requires the Texas Commission of Licensing and Regulation to
set reasonable and necessary registration and renewal fees to cover the
cost of administering this Act.
SECTION 6. Requires fees collected under this Act to be deposited to in
the TSP fund.
SECTION 7. (a) Permits the commissioner to deny, suspend, or revoke a
certificate of registration for a violation of this Act or a rule adopted
under this Act. (b) Denials, suspensions, and revocations, as well as
appeals from these actions, are governed by the procedures for contested
case hearings under Chapter 2001, Government Code.
SECTION 8. Requires the commissioner to adopt rules necessary to
implement this Act, including rules for issuance, renewal, denial,
suspension, and revocation.
SECTION 9. (a) Provides that a person is ineligible for a certificate if:
(1) during the period the individual holds the certificate or for 10-years
following the date of issue, the individual has been convicted of a crime
under Chapter 481 or 483, Health and Safety Code (drug crimes), or a
substantially similar crime in any state, or the United States, or another
country; or
(2) they owe delinquent taxes to any local, state, or federal taxing
entity.
(b) Provides that a corporation is ineligible for a certificate if:
(1) the Department determines that, during the period the corporation
holds the certificate or the 10-year period preceding the issue date, an
agent or owner of the corporation has been convicted of a crime under
Chapter 481 or 483, Health and Safety Code (drug crimes), or a
substantially similar crime in any state, or the United States, or another
country; or
(2) the person owes delinquent taxes to any local, state, or federal
taxing entity.
SECTION 10. (a) Requires a TSP to maintain a record of each property
shipment, including:
(1) the name of the shipper of the property;
(2) the type of property that is being transported;
(3) the destination point of the property that is being transported;
(4) the name of the person receiving the property; and
(5) the name of the person transporting the property.
(b) Requires the TSP to keep a copy of a record required under this
section until four years after the date the property is transported.
SECTION 11. (a) Permits Department to audit the business records of a
registered TSP.
(b) For the purpose of carrying out this Act, the Department may:
(1) examine a required record or another book, record, paper, or object
that the department determines is necessary for conducting a complete
examination; or
(2) question, under oath, any person associated with the service
provider's business, including an officer, director, or employee of the
service provider, or any person claiming to have been negatively affected
by an alleged violation of this Act by the transportation service
provider.
(c) Permits the commissioner to suspend the TSP's registration if a
person refuses to submit to examination required under this section.
SECTION 12. The commissioner, with the assistance of the DPS, may
investigate a violation of this Act or a rule adopted under this Act.
Permits the commissioner or any law enforcement agency to file a complaint
with the district attorney or with the prosecuting attorney of the county
in which a violation is alleged to have occurred.
SECTION 13. Requires the Department to cooperate with federal or state
agencies.
SECTION 14. (a) States that TSP commits a criminal offense if the person
knowingly violates this Act. (b) Provides that an offense under this
section is a class A misdemeanor.
SECTION 15. States that a TSP who knowingly violates this Act, or a rule
promulgated under it, is subject to a penalty of not less than $100 to
$500 for each violation.
SECTION 16. Requires registration holder to post the certificate of
registration issued under this Act in the person's place of business in a
visible location.
SECTION 17. Effective Date -September 1, 1997, except for Sections 3 and
14 of this Act, which take effect January 1, 1998.
SECTION 18. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
SECTION 1. The substitute adds a new Section 1 stating the legislative
intent of the Act.
SECTION 2. This Section of the substitute was in Section 1 of the original.
SECTION 3. This Section of the substitute was in Section 2 of the
original. The substitute also adds Subsections (b) and (c) providing
exemptions to registration, which were not contained in the original.
SECTION 4. This Section of the substitute was in Section 3 of the original.
SECTION 5. This Section of the substitute was in Section 4 of the original.
SECTION 6. This Section of the substitute was in Section 5 of the original.
SECTION 7. This Section of the substitute was in Section 6 of the original.
SECTION 8. This Section of the substitute was in Section 7 of the original.
SECTION 9. This Section of the substitute was in Section 8 of the
original. The original contained references to crimes of moral turpitude
for which a person or company would not be eligible for registration. The
substitute deletes this reference and adds references to Chapters 481 or
483, Health and Safety Code.
Section 9 of the original requiring a TSP to post a bond with the
department is deleted in the substitute.
SECTION 17. Sets effective date for Section 14 as January 1, 1998.