BILL ANALYSIS

 

 

 

C.S.H.B. 2070

By: Cohen

Ways & Means

Committee Report (Substituted)

 

 

 

BACKGROUND AND PURPOSE

 

It is estimated that there are nearly two million sexual assault victims living in Texas.  Research indicates that fewer than 20 percent of sexual assaults are reported to the appropriate authorities.  Less than 10 percent of sexual assault victims seek medical care after the assault because of shame, fear, hurt, or anger.  H.B. 1751, 80th Legislature, Regular Session, 2007, strengthened Texas' commitment to combating cases of sexual assault by providing a $5 per patron fee on sexually oriented business that allow for on-premises alcohol consumption.  A portion of the $5 fee is dedicated to the sexual assault program fund, to cover the costs of programs that relate to sexual assault prevention, intervention, and research done by the state, local governments, and nonprofit agencies. 

 

As of February 1, 2009, the comptroller of public accounts reported that since H.B. 1751 took effect on January 1, 2008, she has collected a total of $11.2 million.  None of these funds, however, have been directed to sexual assault programs because the constitutionality of H.B. 1751 has been challenged in Texas courts. 

 

Last year, a state district judge in Travis County concluded that the State of Texas presented "persuasive trial evidence supporting a link between the business activity subject to the tax and the secondary effects addressed by the sexual assault program fund."  The constitutionality of H.B. 1751 is now pending before the Texas Third Court of Appeals, and the case may someday be adjudicated by the Texas Supreme Court or the U.S. Supreme Court. 

 

In efforts to address the constitutional concerns of the district court, C.S.H.B. 2070 repeals provisions that direct a portion of the funds to the Texas health opportunity pool or the premium payment assistance account. The bill decreases the per patron fee from $5 to $3 and directs all revenue to the funding of sexual assault programs.  The bill also requires the comptroller to submit quarterly reports regarding the collection of the fee, adds duties the Sexual Assault Advisory Council is required to perform, adds studies the attorney general is required to conduct, and adds requirements regarding the comptroller's collection of the fee.    

 

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

 

C.S.H.B. 2070 amends the Business & Commerce Code to decrease from $5 to $3 the fee that is imposed on a sexually oriented business for each entry by each customer admitted to the business.  The bill establishes that the fee amount is not considered part of the sales price of the service for which the sales tax is imposed and is not part of the receipts of a sexually oriented business. 

 

C.S.H.B. 2070 requires the comptroller of public accounts to deposit the total amount of fee revenue, rather than just the first $25 million in a state fiscal biennium, to the credit of the sexual assault program, and repeals provisions that direct other fee revenue to the Texas health opportunity pool or the premium payment assistance account.  The bill requires the comptroller to collect the fee until a court, in a final judgment upheld on appeal or no longer subject to appeal, finds the collection of the fee to be unconstitutional.  The bill requires the comptroller--if a court, in a final judgment upheld on appeal or no longer subject to appeal finds the collection of such fees to be unconstitutional--to develop procedures for equitable and timely distributions of refunds of amounts collected by the comptroller to persons who paid the imposed fee.  The bill establishes that a rule of the comptroller relating to the maximum amount of refund that may be paid to a person during a fiscal biennium does not apply. The bill requires the attorney general to promptly notify the comptroller of a court finding as described above. 

 

C.S.H.B. 2070 requires the comptroller to submit quarterly reports to the chairs of the senate finance and the house of representatives appropriations committees regarding the fee collected by the comptroller.  The bill requires the report to include the amounts collected during the preceding quarter and any other information the comptroller considers appropriate.  The bill authorizes the comptroller to require a sexually oriented business to provide information as necessary for the comptroller's compliance with the reporting requirement. 

 

C.S.H.B. 2070 amends session law from 2007 creating the Sexual Assault Advisory Council to add to the list of the council's functions reporting biennially to the legislature on the cost of sexual assault to the State of Texas and major local jurisdictions, developing a statewide multiyear strategy for eradication of sexual assault in Texas, and making recommendations regarding the improvement of public safety in and around adult cabarets, particularly regarding drug and sex infractions.  The bill enlarges the council to consist not only of representation as designated by the attorney general from state agencies that receive sexual assault-related appropriations in the General Appropriations Act but also representation from the Texas Alcoholic Beverage Commission. The bill requires the attorney general, through the council, to conduct specified studies for inclusion in a comprehensive strategic report to be submitted by the attorney general to the 82nd Legislature. The bill requires the studies to include research relating to the perpetrators of sexual assault, research relating to women entertainers and the incidence of underage dancing, a special study on sexually oriented businesses, and a study regarding revenue for and costs of sexual assault in Texas. 

 

C.S.H.B. 2070 repeals the following sections in the Business & Commerce Code:

·         Section 47.055

·         Section 47.0551

EFFECTIVE DATE

 

On passage, or, if the act does not receive the necessary vote, the act takes effect September 1, 2009.

COMPARISON OF ORIGINAL AND SUBSTITUTE

 

C.S.H.B. 2070 differs from the original by adding a provision establishing that the amount of a fee imposed on a sexually oriented business is not considered part of the sales price of the service or part of the receipts of a sexually oriented business. 

 

C.S.H.B. 2070 adds provisions not in the original requiring the comptroller of public accounts to collect the fee until a court finds that the collection of the fee is unconstitutional, requiring the comptroller to develop procedures for distribution of refunds to persons who paid the imposed fee if a court finds the collection of the fee unconstitutional, requiring the attorney general to notify the comptroller of a court finding on the collection of the fee, and establishing that a rule of the comptroller relating to the maximum amount of refund that may be paid to a person during a fiscal biennium does not apply.

 

C.S.H.B. 2070 differs from the original by adding a provision requiring the comptroller to submit quarterly reports on the amounts collected from the imposed fees from the preceding quarter, and other information the comptroller considers appropriate, to the chairs of the senate finance and the house of representatives appropriations committees. The substitute adds a provision not in the original authorizing the comptroller to require a sexually oriented business to provide information as necessary for the comptroller's compliance with the reporting requirement. 

 

C.S.H.B. 2070 differs from the original by providing for representation of the Texas Alcoholic Beverage Commission on the Sexual Assault Advisory Council and adding three new advisory council functions. The substitute differs from the original by adding a requirement that the attorney general, through the advisory council, conduct specified studies for a comprehensive report to the 82nd Legislature.