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H.B. No. 109
AN ACT
relating to businesses related to international transactions;
providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 151.157, Tax Code, is amended by
amending Subsections (a)-(g) and adding Subsections (a-1), (f-1),
(h), and (i) to read as follows:
(a) A customs broker, or an authorized employee of a customs
broker, licensed by the comptroller under this section may issue
documentation for the purpose of showing the exemption of tangible
personal property under Section 151.307(b)(2) only under
procedures established by this section, Section 151.1575, and by
the comptroller by rule.
(a-1) The comptroller shall maintain a password-protected
website that a customs broker, or an authorized employee of a
customs broker, licensed under this section must use to prepare
documentation to show the exemption of tangible personal property
under Section 151.307(b)(2). The comptroller shall require a
customs broker or authorized employee to use the website to
actually produce the documentation after providing all necessary
information. The comptroller shall use the information provided by
a customs broker or authorized employee under this subsection as
necessary to enforce this section and Section 151.307. The
comptroller shall provide an alternate method to prepare
documentation to show the exemption of tangible personal property
under Section 151.307(b)(2) in those instances when the
password-protected website is unavailable due to technical or
communication problems.
(b) The comptroller may issue a license to a customs broker
for the purpose described by Subsection (a) for each place of
business of the broker if the broker:
(1) applies to the comptroller for the license;
(2) pays the license fee to [set by] the comptroller in
the amount required by Subsection (c);
(3) posts the bond or security in the amount required
by Subsection (d); and
(4) complies with any rules of the comptroller to
administer this section and to prevent the evasion of the tax under
this chapter and local sales and use taxes.
(c) A customs broker must pay to the comptroller an annual
license fee of $300 for each place of business from which the
customs broker intends to issue a certificate of export. [The
comptroller shall set the fee for a license in an amount that does
not exceed $100 for each customs broker, without regard to whether
the broker has more than one place of business. The fee may be
imposed only once for each broker.] The comptroller shall use the
fees only for the administration of this section, including costs
of materials, labor, and overhead.
(d) The amount of the bond or security required by
Subsection (b)(3) is $5,000, plus an additional $1,000 for each
place of business from which the customs broker intends to issue
exemption certificates [$500, except that the comptroller may
require a customs broker to post additional bond or security in an
amount the comptroller considers necessary to ensure the payment of
the tax under this chapter and local sales and use taxes. The
comptroller may not require a bond or security in an amount greater
than $2,500. The comptroller may not require the customs broker to
post more than one bond or security solely because the broker has
more than one place of business]. The security may be in the form of
cash, a certificate of deposit, a letter of credit, or another
instrument of value.
(e) A customs broker licensed under this section shall make
available to the comptroller, on or after the 15th day after the
date the broker receives written notice from the comptroller, the
customs broker's books and records relating to the business of
issuing documentation certifying the export of tangible personal
property beyond the territorial limits of the United States for
purposes of exempting the property from the taxes imposed by this
chapter. The customs broker shall make available to the
comptroller, without notice from the comptroller, the customs
broker's books and records if the comptroller determines that the
comptroller's ability to administer and enforce effectively the
provisions of this chapter relating to documentation for the
purpose of showing the exemption of tangible personal property
under Section 151.307(b)(2) is jeopardized by providing notice.
The customs broker shall keep the books and records described by
this subsection for at least two years after the date of the last
entry that they contain. The customs broker shall report quarterly
to the comptroller:
(1) the total value of the tangible personal property
and the total amount of the corresponding tax for which the customs
broker issued certificates of export; and
(2) the total amount of tax refunded in accordance
with certificates of export.
(f) The comptroller may suspend or revoke a license issued
under this section if the customs broker does not comply with
Section 151.1575(c) or issues documentation that is false to obtain
a refund of taxes paid on tangible personal property not exported or
to assist another person in obtaining such a refund [for good
cause]. The comptroller may determine the length of suspension or
revocation necessary for the enforcement of this chapter and the
comptroller's rules. A proceeding to suspend or revoke a license
under this subsection is a contested case under Chapter 2001,
Government Code. Judicial review is by trial de novo. The district
courts of Travis County have exclusive original jurisdiction of a
suit under this section.
(f-1) In addition to any other penalty provided by law, the
comptroller may require a customs broker to pay to the comptroller
the amount of any tax refunded if the customs broker did not comply
with this section or the rules adopted by the comptroller under this
section in relation to the refunded tax.
(g) A customs broker may authorize a person to act as an
independent contractor to certify in accordance with Section
151.1575(a)(1) that tangible personal property has been exported
outside of the United States only if the authorization is part of
the written contract and the comptroller in writing approves the
authorization. A customs broker may not authorize a person under
this subsection to prepare documentation for the purpose of showing
the exemption for tangible personal property under Section
151.307(b)(2).
(h) Notwithstanding any other law, the filing of a petition
to initiate judicial review does not vacate the comptroller
decision that is the subject of review and does not affect the
enforceability of that decision.
(i) The comptroller shall impose a penalty of $500 for each
occurrence on a customs broker who fails to file the report required
by this section.
SECTION 2. Subchapter E, Chapter 151, Tax Code, is amended
by adding Section 151.1575 to read as follows:
Sec. 151.1575. REQUIREMENTS RELATING TO ISSUING
DOCUMENTATION SHOWING EXPORTATION OF PROPERTY. (a) A customs
broker licensed by the comptroller or an authorized employee of the
customs broker may issue documentation certifying that delivery of
tangible personal property was made to a point outside the
territorial limits of the United States as required by Section
151.307(b)(2)(B) only if the customs broker or authorized employee:
(1) watches the property cross the border of the
United States;
(2) watches the property being placed on a common
carrier for delivery outside the territorial limits of the United
States; or
(3) verifies that the purchaser is transporting the
property to a destination outside of the territorial limits of the
United States by:
(A) examining a passport, laser visa
identification card, or foreign voter registration picture
identification indicating that the purchaser of the property
resides in a foreign country;
(B) requiring the purchaser to produce the
property and the original receipt for the property;
(C) requiring the purchaser to state the foreign
country destination of the property which must be the foreign
country in which the purchaser resides;
(D) requiring the purchaser to state the date and
time the property is expected to arrive in the foreign country
destination;
(E) requiring the purchaser to state the date and
time the property was purchased, the name and address of the place
at which the property was purchased, the sales price and quantity of
the property, and a description of the property;
(F) requiring the purchaser to sign a form:
(i) stating that the purchaser has provided
the information and documentation required by this subdivision; and
(ii) that contains a notice to the
purchaser that tangible personal property not exported is subject
to taxation under this chapter and the purchaser is liable, in
addition to other possible civil liabilities and criminal
penalties, for payment of an amount equal to the value of the
merchandise if the purchaser improperly obtained a refund of taxes
relating to the property; and
(G) requiring the purchaser to produce the
purchaser's:
(i) Form I-94, Arrival/Departure record, or
its successor, as issued by the United States Immigration and
Naturalization Service, for those purchasers in a county not
bordering the United Mexican States; or
(ii) air, land, or water travel
documentation if the customs broker is located in a county that does
not border the United Mexican States.
(b) A customs broker licensed by the comptroller or an
authorized employee of the customs broker may issue and deliver
documentation under Subsection (a) at any time after the tangible
personal property is purchased and the broker or employee completes
the process required by Subsection (a). The documentation must
include:
(1) the name and address of the customs broker;
(2) the license number of the customs broker;
(3) the name and address of the purchaser;
(4) the name and address of the place at which the
property was purchased;
(5) the date and time of the sale;
(6) a description and the quantity of the property;
(7) the sales price of the property;
(8) the foreign country destination of the property,
which may not be the place of export;
(9) the date and time:
(A) at which the customs broker or authorized
employee watched the property cross the border of the United
States;
(B) at which the customs broker or authorized
employee watched the property being placed on a common carrier for
delivery outside the territorial limits of the United States; or
(C) the property is expected to arrive in the
foreign country destination, as stated by the purchaser;
(10) a declaration signed by the customs broker or an
authorized employee of the customs broker stating that the customs
broker is a licensed Texas customs broker; and
(11) an export certification stamp issued by the
comptroller.
(c) The comptroller may require a customs broker to pay the
comptroller the amount of any tax refunded if the customs broker
does not comply with this section, Section 151.157, or the rules
adopted by the comptroller under this section or Section 151.157.
In addition to the amount of the refunded tax, the comptroller may
require the customs broker to pay a penalty in an amount equal to
the amount of the refunded tax, but not less than $500 nor more than
$5,000. The comptroller and the state may deduct any penalties to
be paid by a customs broker from the broker's posted bond.
(d) A proceeding to require a customs broker to pay an
amount under Subsection (c) is a contested case in the same manner
as a proceeding to revoke or suspend a customs broker's license
under Section 151.157(f).
(e) In this section, "customs broker" and "authorized
employee" have the meanings assigned by Section 151.157.
SECTION 3. Section 151.158(g), Tax Code, is amended to read
as follows:
(g) The comptroller shall charge $1.60 [an amount not to
exceed five cents] for each stamp. The comptroller shall use the
money from the sale of the stamps only for costs related to
producing the stamps, including costs of materials, labor, and
overhead. Any unspent money shall be deposited to the credit of the
general revenue fund. Customs brokers who return unused stamps to
the comptroller's office on a quarterly basis shall get credit
towards the purchase of new stamps.
SECTION 4. Section 151.307(b), Tax Code, is amended to read
as follows:
(b) When an exemption is claimed because tangible personal
property is exported beyond the territorial limits of the United
States, proof of export may be shown only by:
(1) a bill of lading issued by a licensed and
certificated carrier of persons or property showing the seller as
consignor, the buyer as consignee, and a delivery point outside the
territorial limits of the United States;
(2) documentation:
(A) provided by a United States Customs Broker
licensed by the comptroller under Section 151.157;
(B) certifying that delivery was made to a point
outside the territorial limits of the United States; [and]
(C) that includes, in addition to any other
information required by the comptroller, a statement signed by the
person claiming the exemption that states that "Providing false
information to a customs broker is a Class B misdemeanor."; and
(D) to which a stamp issued under Section 151.158
is affixed in the manner required by that section or Section
151.157;
(3) import documents from the country of destination
showing that the property was imported into a country other than the
United States;
(4) an original airway, ocean, or railroad bill of
lading and a forwarder's receipt if an air, ocean, or rail freight
forwarder takes possession of the property; or
(5) any other manner provided by the comptroller for
an enterprise authorized to make tax-free purchases under Section
151.156.
SECTION 5. Section 151.406(a), Tax Code, is amended to read
as follows:
(a) Except as provided by Section 151.407 [of this code], a
tax report required by this chapter must:
(1) for sales tax purposes, show the amount of the
total receipts of a seller for the reporting period;
(2) for use tax purposes, show the amount of the total
receipts from sales by a retailer of taxable items during the
reporting period for storage, use, or consumption in this state;
(3) show the amount of the total sales prices of
taxable items that are subject to the use tax during the reporting
period and that were acquired for storage, use, or consumption in
this state by a purchaser who did not pay the tax to a retailer;
(4) show the amount of the taxes due for the reporting
period; [and]
(5) show the amount of sales tax refunded for items
exported beyond the territorial limits of the United States after
receiving documentation under Section 151.307(b)(2); and
(6) include other information that the comptroller
determines to be necessary for the proper administration of this
chapter.
SECTION 6. Sections 151.712(b) and (f), Tax Code, are
amended to read as follows:
(b) A person who provides proof of documentation that
tangible personal property has been exported outside of the United
States or a person who may benefit from the provision of the proof
of documentation, including a customs broker, authorized employee,
authorized independent contractor, seller of the property or agent
or employee of the seller, or a consumer of the property or agent or
employee of the consumer, may not sell or buy the proof of
documentation, including stamps required for the documentation.
This subsection does not apply to a customs broker who accepts a fee
for providing documentation under Section 151.307(b) if the customs
broker provides the documentation in accordance with Section
151.157 and rules adopted by the comptroller.
(f) In addition to any monetary penalty under this section,
the comptroller shall [may suspend or] revoke under Section 151.157
the license of a customs broker who violates this section. A person
whose license is revoked under this subsection may not apply for a
new license under Section 151.157 before the first anniversary of
the date on which the previous license was revoked.
SECTION 7. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 278 to read as follows:
CHAPTER 278. REGULATION OF CURRENCY TRANSMISSIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 278.001. DEFINITIONS. In this chapter:
(1) "Currency" has the meaning assigned by Section
153.001.
(2) "Currency transmission business" means engaging
in or offering currency transmission as a service or for profit.
The term does not include:
(A) a federally insured financial institution,
as defined by Section 201.101, that is organized under the laws of
this state, another state, or the United States; or
(B) a title insurance company or title insurance
agent, as defined by Article 9.02, Insurance Code.
(3) "Currency transmission" means receiving currency
or an instrument payable in currency in order to transmit the
currency or its equivalent by wire, computer modem, facsimile,
physical transport, or any other means or through the use of a
financial intermediary, the Federal Reserve System, or another
funds transfer network.
(4) "Fee" does not include revenue that a currency
transmission business generates in connection with a currency
transmission in the conversion of a currency of one government into
the currency of another government.
[Sections 278.002-278.050 reserved for expansion]
SUBCHAPTER B. CURRENCY TRANSMISSION DISCLOSURES
Sec. 278.051. DISCLOSURES WITH TRANSACTION. (a) Other
than in a telephonic transaction conducted on a telephone that is
not designated for use in currency transmission transactions by a
currency transmission business, at the time of a currency
transmission transaction to another country the currency
transmission business shall provide a receipt to the customer. The
receipt must:
(1) clearly state the amount of currency presented for
transmission and any fees charged by the currency transmission
business; and
(2) provide a toll-free telephone number or a local
number that a customer can access at no charge to receive
information about a currency transmission.
(b) If the rate of exchange for a currency transmission to
be paid in the currency of another country is fixed by the currency
transmission business for a transaction at the time the currency
transmission is initiated, the receipt must also disclose:
(1) the rate of exchange for that transaction;
(2) the amount to be paid in the foreign currency; and
(3) the period, if any, in which the payment must be
made in order to qualify for the fixed rate of exchange.
(c) If the rate of exchange for a currency transmission to
be paid in the currency of another country is not fixed at the time
the currency transmission is initiated, the receipt must also
disclose that the rate of exchange for the transaction will be set
at the time the recipient of the currency transmission receives the
funds in the foreign country.
(d) If the customer requests, the currency transmission
business must provide the required disclosures before completing
the transaction.
Sec. 278.052. CANCELLATION AND REFUND OF TRANSACTION. (a)
Except as provided by Subsection (c), on receiving the transaction
receipt required under Section 278.051, a customer may cancel the
currency transaction:
(1) before leaving the premises of the currency
transmission business; and
(2) not later than 30 minutes after the time at which
the currency transmission was initiated.
(b) If the customer cancels the transaction, the currency
transmission business shall immediately refund to the customer the
fees paid and currency to be transmitted.
(c) A customer may not cancel a transaction after the
recipient of the currency transmission has received the currency or
its equivalent.
Sec. 278.053. LANGUAGE OF DISCLOSURE. A currency
transmission business shall make the disclosures required by this
chapter in English and, if the currency transmission is to a country
where Spanish is widely spoken, in Spanish.
[Sections 278.054-278.100 reserved for expansion]
SUBCHAPTER C. ENFORCEMENT
Sec. 278.101. CIVIL PENALTY. (a) A person who knowingly
violates this chapter is liable to the state for a civil penalty in
an amount not to exceed $1,000 for each violation. The attorney
general or the prosecuting attorney in the county in which the
violation occurs may bring:
(1) a suit to recover the civil penalty imposed under
this section; and
(2) an action in the name of the state to restrain or
enjoin a person from violating this chapter.
(b) The attorney general or the prosecuting attorney in the
county in which the violation occurs, as appropriate, is entitled
to recover reasonable expenses incurred in obtaining injunctive
relief, civil penalties, or both, under this section, including
reasonable attorney's fees, court costs, and investigatory costs.
SECTION 8. Chapter 278, Finance Code, as added by this Act,
takes effect September 1, 2003.
SECTION 9. (a) Except as otherwise provided by this Act,
this Act takes effect January 1, 2004.
(b) The change in law made by this Act does not affect taxes
imposed before the effective date of this Act, and the former law is
continued in effect for purposes of the liability for and
collection of those taxes.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 109 was passed by the House on May 10,
2003, by a non-record vote; and that the House concurred in Senate
amendments to H.B. No. 109 on May 31, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 109 was passed by the Senate, with
amendments, on May 28, 2003, by a viva-voce vote.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor