LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 18, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3571  by Raymond (Relating to customs brokers.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Chapter 151 of the Tax Code, relating to the refund
of sales and use tax paid for certain personal property exported out of
the country.

The bill would require a customs broker to work through or with an export
verification center to verify that tangible personal property was
exported beyond the territorial limits of the United States for the
purpose of providing documentation for the refund of sales taxes.  A
customs broker could not issue documentation for the purposes of
indicating the exemption of tangible personal property unless the broker
had received, from an export verification center, a stamped export
voucher verifying exportation of property.

An "export verification center" would be defined as a facility operated
by a person licensed by the Comptroller at an approved location for the
purpose of verifying that tangible personal property was exported beyond
the territorial limits of the United States.  "Export voucher" would be
defined as a document provided by customs broker for the purpose of
identifying tangible personal property intended for export.  On receipt
of an export voucher, an export verification center would have to verify
that the tangible personal property listed on the export voucher was
exported outside the territorial limits of the United States.  The export
verification center would attach an export stamp to the voucher and
return the stamped voucher to the customs broker.  The Comptroller would
provide export stamps only to a person licensed to operate an export
verification center or to an authorized representative of that person.
Export verification centers would be required to verify that tangible
personal property was exported beyond the territorial limits of the
United States.  Such centers would have to attach an export stamp to an
export voucher before a customs broker could issue documentation showing
the states sales tax exemption for the property to be exported.

A customs broker would be required to pay for the monthly cost of the
export verification center in accordance with the ratio that the number
of export vouchers submitted to the location by the broker during the
month bears to the total number of export vouchers submitted to that
location by all customs brokers during that month.  Export verification
centers would have to file a report identifying tangible personal
property that was exported and the amount of tax associated with such
items. 

The Comptroller would require a person who improperly certified the
export of property or who furnished false information to a customs broker
to pay the state any tax revenue that was lost by the state due to that
person's actions, with interest.  The Comptroller could suspend or revoke
the license of a person licensed to operate an export verification
center.

The proposed system of verification could limit the number of
non-legitimate refunds.  It is assumed that an insignificant portion of
these sales for export would be affected.   Note:  It is estimated that
approximately $60 million in state and local sales and use taxes is
refunded annually to consumers for tangible personal property
legitimately exported from Texas to Mexico.

The bill would take effect January 1, 2002.
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, WP, SM