H.B. 3154 78(R)    BILL ANALYSIS


H.B. 3154
By: Bonnen
Local Government Ways and Means
Committee Report (Amended)


BACKGROUND AND PURPOSE 

Under current law, there are few avenues for cities to oversee local sales
tax collections and reporting and it is difficult to impossible to
determine whether those efforts are successful.  The information the
comptroller may provide to cities regarding sales tax collections is
limited.  A city may determine that a particular sales tax outlet is not
reporting or collecting properly, but might not know what impact a
correction has had on its collections.  Thus, cities might not be able to
project sales tax revenues as precisely as they need in order to set their
budgets and perform long term planning or determine whether their efforts
to assist with tax law compliance are effective. 

H.B. 3154, as amended, would allow the comptroller only to provide
confidential information to a city when a taxpayer is not reporting or
collecting the tax as required by law.  Even then, the information is not
a public record and there are strict penalties for violating the
confidentiality of the taxpayer. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

H.B. 3154, as amended, sets up a system to assist cities in determining
whether the sales tax they impose is being reported and collected as
required by law.  If a city believes in good faith that a taxpayer is not
reporting or collecting the tax as required by law, the city is authorized
to notify the comptroller and the comptroller is authorized to investigate
the matter. 

If the comptroller determines the taxpayer is not reporting or collecting
as required by law, the comptroller may provide the city with the
taxpayer's name, tax identification number and the amount the comptroller
finds was not reported or collected.  Information provided by the city is
confidential and there is a Class A misdemeanor penalty for unauthorized
disclosure. 

To receive information, a city must pass a resolution certifying the
specific officers, employees, or agents of the city who may have access to
the information.  The bill strictly limits access to the information and
imposes conflict-of-interest requirements on city agents to prevent misuse
of confidential taxpayer information.  If these controls are violated, the
comptroller may deny a city further access and strict criminal penalties
apply. 

EFFECTIVE DATE

Immediately, if it receives a vote of two-thirds of all the members of
each house or September 1, 2003. 

EXPLANATION OF AMENDMENTS

Committee Amendment 1 amends proposed Section 151.027(d), Tax Code, to
clarify exactly what information relating to a taxpayer under Section
321.3023, Tax Code, is considered sensitive under this Act.