AN ACT
1-1 relating to the authority of the comptroller of public accounts to
1-2 contract for certain tax collection services; making an
1-3 appropriation; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 111, Tax Code, is amended
1-6 by adding Sections 111.0035 and 111.0036 to read as follows:
1-7 Sec. 111.0035. ADVANCED DATABASE SYSTEM. (a) The
1-8 comptroller may contract with an appropriate vendor to develop and
1-9 implement an advanced database system to enhance tax collections.
1-10 (b) Subject to Subsection (c), the total amount of
1-11 compensation paid to the vendor that develops, implements, and
1-12 maintains the advanced database system is equal to the product of:
1-13 (1) the percentage stated in the contract; and
1-14 (2) the amount of revenue collected from taxpayers by
1-15 the comptroller, after all available administrative and judicial
1-16 appeals are exhausted, as a result of audit and enforcement actions
1-17 taken on cases identified from the system.
1-18 (c) The amount of compensation paid to a vendor under
1-19 Subsection (b) may not exceed the maximum amount, if any, stated
1-20 in the contract between the comptroller and the vendor.
1-21 (d) The comptroller may pay compensation to a vendor under
1-22 this section periodically at the times specified in the contract
1-23 between the comptroller and the vendor. The comptroller shall
2-1 determine the amount of a periodic payment in accordance with
2-2 Subsections (b) and (c). In computing the amount under Subsection
2-3 (b)(2), the comptroller may include a case only if the case:
2-4 (1) becomes administratively final during the period
2-5 covered by the payment; and
2-6 (2) is not the subject of litigation at the end of
2-7 that period.
2-8 (e) The comptroller may pay a vendor under this section only
2-9 through warrants issued or electronic funds transfers initiated by
2-10 the comptroller. The comptroller shall account for the
2-11 compensation as a subtraction from tax collections and not as a
2-12 general expense of the comptroller.
2-13 (f) Except as provided by Subsection (g), the comptroller
2-14 shall award a contract made under this section through a
2-15 competitive bidding process that complies with Section 2155.132,
2-16 Government Code, and the rules adopted by the General Services
2-17 Commission relating to delegated purchases. If the comptroller
2-18 receives not more than three bids through the competitive bidding
2-19 process, the comptroller shall report the number of bidders to the
2-20 Legislative Budget Board before awarding the contract.
2-21 (g) The comptroller may enter into separate contracts with
2-22 additional appropriate vendors willing and able to develop and
2-23 implement an advanced database system to enhance tax collections at
2-24 the same rate and under the same terms and conditions as the
2-25 contract awarded through competitive bidding.
3-1 (h) Except as specifically provided by this section, the
3-2 comptroller may include any term or condition in a contract made
3-3 under this section that the comptroller considers necessary or
3-4 advisable to maximize enhancement of tax collections while
3-5 otherwise protecting the state's interests.
3-6 (i) The comptroller shall report semiannually to the
3-7 Legislative Budget Board the:
3-8 (1) amount of revenue collected under this section;
3-9 and
3-10 (2) amount of compensation awarded to a vendor under
3-11 this section.
3-12 (j) A person acting on behalf of this state under a contract
3-13 authorized by this section does not exercise any of the sovereign
3-14 power of this state, except that the person is an agent of this
3-15 state for purposes of developing and implementing an advanced
3-16 database system to enhance tax collections.
3-17 (k) The comptroller may provide to a person acting on behalf
3-18 of this state under a contract authorized by this section any
3-19 confidential information in the custody of the comptroller that is
3-20 necessary to develop and implement an advanced database system to
3-21 enhance tax collections and that the comptroller is not prohibited
3-22 from sharing under an agreement with another state or the federal
3-23 government. A person who receives confidential information under
3-24 this subsection and each employee or agent of that person is
3-25 subject to each prohibition against disclosure of the information
4-1 that applies to the comptroller or an employee of the comptroller.
4-2 A person, employee, or agent who receives confidential information
4-3 under this subsection and improperly discloses that information is
4-4 subject to the same penalties and sanctions that would apply to the
4-5 comptroller or an employee of the comptroller for that disclosure.
4-6 Sec. 111.0036. OUT-OF-STATE AUDITS. (a) The comptroller
4-7 may contract with one or more appropriate persons to perform tax
4-8 audits in any state that is not covered by a comptroller field
4-9 office. A contract may provide for a person to perform tax audits
4-10 in more than one state.
4-11 (b) Subject to Subsection (c), the amount of compensation
4-12 paid to a person performing tax audits under this section is equal
4-13 to the product of:
4-14 (1) the percentage stated in the contract between the
4-15 comptroller and the person; and
4-16 (2) the amount of revenue collected from taxpayers by
4-17 the comptroller, after all available administrative and judicial
4-18 appeals are exhausted, as a result of those audits.
4-19 (c) The maximum percentage rate stated in a contract may not
4-20 exceed 12 percent. In addition, the amount of compensation paid to
4-21 a person under Subsection (b) may not exceed the maximum amount, if
4-22 any, stated in the contract between the comptroller and the person.
4-23 (d) The comptroller may pay compensation to a person under
4-24 this section periodically at the times specified in the contract
4-25 between the comptroller and the person. The comptroller shall
5-1 determine the amount of a periodic payment in accordance with
5-2 Subsections (b) and (c). In computing the amount under Subsection
5-3 (b)(2), the comptroller may include a case only if the case:
5-4 (1) becomes administratively final during the period
5-5 covered by the payment; and
5-6 (2) is not the subject of litigation at the end of
5-7 that period.
5-8 (e) The comptroller may pay a person under this section only
5-9 through warrants issued or electronic funds transfers initiated by
5-10 the comptroller. The comptroller shall account for the
5-11 compensation as a subtraction from tax collections and not as a
5-12 general expense of the comptroller.
5-13 (f) Except as provided by Subsection (g), the comptroller
5-14 shall award a contract made under this section through a
5-15 competitive bidding process that complies with Section 2155.132,
5-16 Government Code, and the rules adopted by the General Services
5-17 Commission relating to delegated purchases. If the comptroller
5-18 receives not more than three bids through the competitive bidding
5-19 process, the comptroller shall report the number of bidders to the
5-20 Legislative Budget Board before awarding the contract.
5-21 (g) The comptroller may enter into separate contracts with
5-22 additional appropriate persons willing and able to perform tax
5-23 audits in other states that are not covered by comptroller field
5-24 offices at the same rate and under the same terms and conditions as
5-25 the contract awarded through competitive bidding.
6-1 (h) The comptroller shall report semiannually to the
6-2 Legislative Budget Board the:
6-3 (1) amount of revenue collected under this section;
6-4 and
6-5 (2) amount of compensation awarded to a person with
6-6 whom the comptroller contracts under this section.
6-7 (i) A person acting on behalf of this state under a contract
6-8 authorized by this section does not exercise any of the sovereign
6-9 power of this state, except that the person is an agent of this
6-10 state for purposes of performing tax audits.
6-11 (j) The comptroller may provide to a person acting on behalf
6-12 of this state under a contract authorized by this section any
6-13 confidential information in the custody of the comptroller relating
6-14 to a taxpayer that is necessary to the audit of the taxpayer and
6-15 that the comptroller is not prohibited from sharing under an
6-16 agreement with another state or the federal government. A person
6-17 who receives confidential information under this subsection and
6-18 each employee or agent of that person are subject to each
6-19 prohibition against disclosure of confidential information obtained
6-20 from a taxpayer or this state in connection with a tax audit that
6-21 applies to the comptroller or an employee of the comptroller. A
6-22 person, employee, or agent who receives confidential information
6-23 under this subsection and improperly discloses that information is
6-24 subject to the same penalties and sanctions that would apply to the
6-25 comptroller or an employee of the comptroller for that disclosure.
7-1 SECTION 2. An initial contract made under Section 111.0035
7-2 or 111.0036, Tax Code, as added by this Act, shall terminate not
7-3 later than August 31, 1999. The comptroller of public accounts may
7-4 extend an initial contract for one or more additional terms beyond
7-5 that date.
7-6 SECTION 3. The revenue resulting from tax audits conducted
7-7 by any person with whom the comptroller of public accounts
7-8 contracts under Section 111.0036, Tax Code, as added by this Act,
7-9 is appropriated to the comptroller for the fiscal biennium ending
7-10 August 31, 1999. The comptroller may use this revenue only to pay
7-11 contract expenses and the comptroller's direct administrative costs
7-12 associated with those contracts. If the comptroller determines
7-13 that the revenue appropriated to the comptroller under this section
7-14 exceeds the amount necessary to pay those expenses and costs, the
7-15 comptroller shall transfer the amount of the excess to the general
7-16 revenue fund or any dedicated or special funds to which the excess
7-17 amount belongs.
7-18 SECTION 4. The importance of this legislation and the
7-19 crowded condition of the calendars in both houses create an
7-20 emergency and an imperative public necessity that the
7-21 constitutional rule requiring bills to be read on three several
7-22 days in each house be suspended, and this rule is hereby suspended.
S.B. No. 461
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 461 passed the Senate on
March 26, 1997, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 23, 1997, by a
viva-voce vote; passed subject to the provisions of Article III,
Section 49a, of the Constitution of Texas.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 461 passed the House, with
amendment, on May 21, 1997, by a non-record vote; passed subject to
the provisions of Article III, Section 49a, of the Constitution of
Texas.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
I, John Sharp, Comptroller of
Public Accounts, do hereby
_______________________________ certify that the amounts
Governor appropriated in the herein
S.B. No. 461, Regular Session,
75th Legislature, are within
the amount estimated to be
available in the affected fund.
Certified ______________, 1997.
_______________________________
Comptroller of Public Accounts