By Wilson                                       H.B. No. 3004

      75R6265 PAM-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to transferring certain responsibilities relating to the

 1-3     tax on mixed beverages from the comptroller, to the Texas Alcoholic

 1-4     Beverage Commission; providing penalties.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Title 5, Alcoholic Beverage Code, is amended by

 1-7     adding Chapter 202 to read as follows:

 1-8                      CHAPTER 202.  MIXED BEVERAGE TAX

 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS

1-10           Sec. 202.01.  DEFINITIONS.  In this chapter:

1-11                 (1)  "Permit holder" means a holder of a mixed beverage

1-12     permit, a private club registration permit, a private club

1-13     exemption certificate permit, a private club late hours permit, a

1-14     daily temporary private club permit, a private club registration

1-15     permit who also holds a food and beverage certificate, a daily

1-16     temporary mixed beverage permit, a mixed beverage late hours

1-17     permit, a mixed beverage permit who also holds a food and beverage

1-18     certificate, or a caterer permit.

1-19                 (2)  "Business day" means the period beginning at 3

1-20     a.m. one day and ending at 3 a.m. the next day.

1-21               (Sections 202.02-202.20 reserved for expansion

1-22                      SUBCHAPTER B.  MIXED BEVERAGE TAX

1-23           Sec. 202.21.  TAX IMPOSED ON MIXED BEVERAGES.  A tax at the

1-24     rate of 14 percent is imposed on a permit holder's gross receipts

 2-1     received from the sale, preparation, or service of mixed beverages

 2-2     or from the sale, preparation, or service of ice or nonalcoholic

 2-3     beverages that are sold, prepared, or served for the purpose of

 2-4     being mixed with an alcoholic beverage and consumed on the premises

 2-5     of the permit holder.

 2-6           Sec. 202.22.  TAX RETURN DUE DATE.  (a)  A permit holder

 2-7     shall file a tax return with the commission not later than the 20th

 2-8     day of each month.

 2-9           (b)  The return under this section must be in a form

2-10     prescribed by the commission and must include a statement of the

2-11     total gross taxable receipts during the preceding month and any

2-12     other information required by the commission.

2-13           (c)  A tax due for a business day that falls in two different

2-14     months is allocated to the month in which the business day begins.

2-15           Sec. 202.23.  PAYMENT.  The tax due for the preceding month

2-16     shall accompany the return and shall be payable to the state.  The

2-17     commission shall deposit the revenue in the mixed beverage tax

2-18     clearance fund.

2-19               (Sections 202.24-202.40 reserved for expansion

2-20                      SUBCHAPTER C.  RECORDS RETENTION

2-21           Sec. 202.41.  RECORDS OF TAX RECEIPTS.  (a)  Each permit

2-22     holder shall make and keep a record, in a form prescribed by the

2-23     commission, of all tax receipts, including the total tax receipts

2-24     for each business day.

2-25           (b)  Permit holders, excluding daily temporary mixed beverage

2-26     permit holders, shall keep a copy of the record required by this

2-27     section and other records of receipts and disbursements by the

 3-1     permit holder on file on the holder's premises for a period of two

 3-2     years.  The record is open to inspection by any agent of the

 3-3     commission or by any peace officer at any time.

 3-4           Sec. 202.42.  RECORDS AT SINGLE LOCATION.  (a)  If two or

 3-5     more establishments operated under a permit referenced in Section

 3-6     202.01(1) are located in the same county and are under the same or

 3-7     substantially the same ownership, the holder of the permit may

 3-8     apply to the commission, on a form furnished by the commission, for

 3-9     permission to keep all required records for the establishments at a

3-10     single location in the county.  The single location does not need

3-11     to be the licensed premises of one of the establishments.

3-12           (b)  If the commission approves the application, the

3-13     commission must provide written approval and may impose any

3-14     conditions regarding the keeping of the records that the commission

3-15     finds appropriate.

3-16           (c)  If records are kept at a single location under this

3-17     section, the records for each establishment must be kept

3-18     separately.

3-19           Sec. 202.43.  COMMISSION RECORD OF TAX RECEIPTS.  The

3-20     commission shall keep a record indicating the name of the permit

3-21     holder from whom each return is received, the municipality, if any,

3-22     and county in which the permit holder's  premises are located, and

3-23     the amount of the tax received.

3-24               (Sections 202.44-202.60 reserved for expansion

3-25              SUBCHAPTER D.  MIXED BEVERAGE TAX CLEARANCE FUND

3-26           Sec. 202.61.  MIXED BEVERAGE TAX CLEARANCE FUND.  (a)  Not

3-27     later than the last day of the month after a calendar quarter, the

 4-1     commission shall compute the total amount of taxes received during

 4-2     the preceding quarter from permit holders outside of any

 4-3     municipality within each county and the total amount received from

 4-4     permit holders within each municipality in each county.  The

 4-5     commission shall forward the computations to the comptroller not

 4-6     later than the first day of the month after the month the

 4-7     commission performs the computations required by this subsection.

 4-8           (b)  The comptroller shall issue to each county a warrant

 4-9     drawn on the mixed beverage tax clearance fund in the amount of

4-10     10.7143 percent of receipts from permit holders that are outside of

4-11     any municipality within the county during the preceding quarter and

4-12     shall issue to each municipality a warrant drawn on that fund in

4-13     the amount of 10.7143 percent of receipts from permit holders

4-14     within the municipality during the preceding quarter.  The

4-15     comptroller shall transfer the remainder of the receipts for that

4-16     quarter and all interest earned on money in the fund to the general

4-17     revenue fund.

4-18           Sec. 202.62.  CONFLICT OF RULES.  If a rule or policy adopted

4-19     by the commission conflicts with a rule adopted by the comptroller

4-20     for the application, enforcement, or collection of the tax imposed

4-21     by this chapter, the comptroller's rule prevails.  A conflicting

4-22     rule or policy adopted by the commission is invalid to the extent

4-23     of the inconsistency.  If the comptroller determines that a rule or

4-24     policy adopted by the commission conflicts with one adopted by the

4-25     comptroller relating to the application, enforcement, or collection

4-26     of the tax imposed by this chapter, the comptroller shall notify

4-27     the commission in writing of the determination.  After receipt of

 5-1     the notification, the commission shall amend or repeal the

 5-2     conflicting rule or policy not later than the 90th day after the

 5-3     date of notification.

 5-4           Sec. 202.63.  SECURITY REQUIREMENT.  (a)  A permit holder

 5-5     subject to the tax imposed by this chapter must comply with the

 5-6     security requirements imposed by Chapter 151, Tax Code, except that

 5-7     a permit holder is not required to comply with Section 151.253(b),

 5-8     Tax Code.

 5-9           (b)  The total of bonds, certificates of deposit, letters of

5-10     credit, or other security required of a permit holder subject to

5-11     the tax imposed by this chapter must be in an amount that the

5-12     commission determines to be sufficient to protect the fiscal

5-13     interests of the state, except the commission may not set the

5-14     amount of security at less than $1,000 or more than $25,000.

5-15           Sec. 202.64.  AUDIT FREQUENCY.  (a)  The commission shall

5-16     have the discretion to determine the frequency of mixed beverage

5-17     tax audits.  In determining the frequency of audits the commission

5-18     may consider the following factors:

5-19                 (1)  reasonable and prudent accounting standards;

5-20                 (2)  the audit history of the permit holder;

5-21                 (3)  the effect on state revenues; and

5-22                 (4)  other factors the commission considers

5-23     appropriate.

5-24           (b)  When additional taxes are established as due based on an

5-25     audit by the commission, a penalty equal to 10 percent of the

5-26     additional taxes due shall be collected with the additional taxes

5-27     due.

 6-1           Sec. 202.65.  CREDITS AND REFUNDS FOR BAD DEBTS.  (a)  A

 6-2     permit holder may withhold the payment of the tax on a portion of

 6-3     the gross receipts that remains unpaid by a purchaser if:

 6-4                 (1)  during the reporting period in which the mixed

 6-5     beverage is sold, the permit holder determines that the unpaid

 6-6     portion will remain unpaid;

 6-7                 (2)  the permit holder enters the unpaid portion of the

 6-8     sales gross receipts in the permit holder's books as a bad debt;

 6-9     and

6-10                 (3)  the bad debt is claimed as a deduction for federal

6-11     tax purposes during the same or a subsequent reporting period.

6-12           (b)  If the portion of a debt determined to be bad under

6-13     Subsection (a)  is paid, the permit holder shall report and pay the

6-14     tax on the portion during the reporting period in which payment is

6-15     made.

6-16           (c)  A permit holder is entitled to credit or reimbursement

6-17     for taxes paid on the portion of the gross receipts determined to

6-18     be worthless and actually charged off for federal income tax

6-19     purposes.

6-20               (Sections 202.66-202.80 reserved for expansion

6-21                      SUBCHAPTER E.  PENALTY PROVISIONS

6-22           Sec. 202.81.  CIVIL PENALTY FOR FAILURE TO FILE OR PAY.  If a

6-23     permit holder fails to file a return or to pay to the commission

6-24     the tax as required by this chapter when the return or payment is

6-25     due, the permit holder shall forfeit an amount equal to five

6-26     percent of the amount due as a penalty, and after 30 days the

6-27     penalty is increased to 10 percent of the amount due.

 7-1           Sec. 202.82.  CRIMINAL PENALTY FOR VIOLATIONS.  (a)  A person

 7-2     commits an offense if the person:

 7-3                 (1)  fails to keep a record as required by this

 7-4     chapter;

 7-5                 (2)  fails to file a return as required by this

 7-6     chapter;

 7-7                 (3)  keeps a false record; or

 7-8                 (4)  files a false return.

 7-9           (b)  An offense under this section is punishable by:

7-10                 (1)  a fine of not more than $1,000;

7-11                 (2)  by confinement in the county jail for not more

7-12     than 30 days; or

7-13                 (3)  by both a fine and confinement.

7-14           Sec. 202.83.  CRIMINAL PENALTY FOR AGGRAVATED VIOLATIONS.

7-15     (a)  A person commits an offense if the person knowingly:

7-16                 (1)  fails to keep any record as required by this

7-17     chapter;

7-18                 (2)  fails to file a return as required by this

7-19     chapter;

7-20                 (3)  keeps a false record; or

7-21                 (4)  files a false return.

7-22           (b)  An offense under this section is punishable by:

7-23                 (1)  a fine of not less than $500 or more than $1,000;

7-24     and

7-25                 (2)  confinement in the county jail for not less than

7-26     30 days or more than two years.

7-27           (c)  The commission shall cancel the permit of a permit

 8-1     holder found by the commission, after notice and hearing, to have

 8-2     violated or have been convicted of violating this section.

 8-3           Sec. 202.84.  SUMMARY SUSPENSION.  (a)  If a permit holder

 8-4     fails to file a return or make a tax payment as required by this

 8-5     chapter, the commission may summarily suspend the permit without a

 8-6     hearing. Chapter 2001, Government Code, does not apply to the

 8-7     commission in the enforcement and administration of this section.

 8-8           (b)  A suspension under this section takes effect on the

 8-9     third day after the date the notice of suspension is given.  The

8-10     notice shall be given to the permit holder or the holder's agent,

8-11     servant, or employee by registered or certified mail if not given

8-12     in person.

8-13           (c)  The commission shall terminate a suspension made under

8-14     this section when the permit holder files the required returns and

8-15     makes the required tax payments, including payment of any penalties

8-16     that are due.

8-17           Sec. 202.85.  VIOLATORS INELIGIBLE FOR PERMIT.  (a)  The

8-18     commission may not issue a mixed beverage, daily temporary mixed

8-19     beverage, or private club registration permit to:

8-20                 (1)  a person whose permit was canceled for a violation

8-21     of Section 28.06(c) or 202.83;

8-22                 (2)  a person who held an interest of any kind in a

8-23     permit that was canceled for a violation of Section 28.06(c) or

8-24     202.83;

8-25                 (3)  a person who held 50 percent or more of the stock,

8-26     either in the person's own name or by any other means, of a

8-27     corporation whose permit was canceled because of a violation of

 9-1     Section 28.06(c) or 202.83;

 9-2                 (4)  a corporation if any person holding more than 50

 9-3     percent or more of the stock, either in the person's own name or by

 9-4     any other means, is disqualified from obtaining a permit in the

 9-5     person's individual capacity because of a violation of Section

 9-6     28.06(c) or 202.83; or

 9-7                 (5)  a person residentially domiciled with a person who

 9-8     is barred from obtaining a permit because of a violation of Section

 9-9     28.06(c) or 202.83.

9-10           (b)  For the purposes of this section, a person holds 50

9-11     percent or more of the stock in a corporation if the person and the

9-12     person's parents, children, and siblings, and all persons with whom

9-13     the person is residentially domiciled, together own 50 percent or

9-14     more of the stock in the corporation.

9-15           SECTION 2.  Chapter 183, Tax Code, is repealed.

9-16           SECTION 3.  (a)  This Act takes effect January 1, 1998.

9-17           (b)  To prepare for the transfer of the administration of the

9-18     mixed beverage tax from the comptroller of public accounts to the

9-19     Texas Alcoholic Beverage Commission on the effective date of this

9-20     Act, the commission and the comptroller may enter into any

9-21     agreement they consider advisable for the use or transfer of funds,

9-22     appropriations, personnel, furniture, equipment, office space, or

9-23     other items or services between the commission and the comptroller.

9-24           (c)  On January 1, 1998, all employees, records, and property

9-25     of the comptroller relating to the mixed beverage tax shall be

9-26     transferred to the Texas Alcoholic Beverage Commission.  Before

9-27     that date, the comptroller may transfer any records, employees, or

 10-1    property of the comptroller to the Texas Alcoholic Beverage

 10-2    Commission in preparation for the transfer of the administration of

 10-3    the mixed beverage tax to the commission.

 10-4          (d)  A change in law made by this Act does not affect the

 10-5    validity of any action or proceeding initiated before the effective

 10-6    date of this Act.

 10-7          SECTION 4.  The importance of this legislation and the

 10-8    crowded condition of the calendars in both houses create an

 10-9    emergency and an imperative public necessity that the

10-10    constitutional rule requiring bills to be read on three several

10-11    days in each house be suspended, and this rule is hereby suspended.