81R10197 CBH-F

By: Thompson H.B. No. 4574

A BILL TO BE ENTITLED

AN ACT

relating to administration of the municipal sales and use tax; providing a criminal penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 321, Tax Code, is amended by adding Sections 321.3055 and 321.3075 to read as follows:

Sec. 321.3055. ADDITIONAL PENALTY FOR FILING REPORT RELATING TO UNLAWFULLY OR ERRONEOUSLY COLLECTED MUNICIPAL TAX REVENUE. (a) A person commits an offense if the person files a report in relation to taxes imposed by a municipality under this chapter that the person knows have been unlawfully or erroneously collected and remitted to this state.

(b) Except as provided by Subsections (c) and (d), an offense under this section is a misdemeanor punishable by a fine of not more than $2,000.

(c) If it is shown on the trial of an offense under this section that the person has previously been finally convicted of one offense under this section, the offense is a misdemeanor punishable by a fine of not more than $4,000.

(d) If it is shown on the trial of an offense under this section that the person has previously been finally convicted of two or more offenses under this section, the offense is a felony of the third degree.

(e) This section does not apply to a report filed in relation to taxes imposed by a political subdivision, other than a municipality, whose imposition of the sales and use tax is governed by this chapter.

Sec. 321.3075. REFUNDS: LIMITATIONS. (a) Notwithstanding Section 111.104(c) or any other law, the comptroller may not grant a refund claim in relation to tax revenue previously allocated to a municipality unless the refund claim is filed with the comptroller not later than the first anniversary of the date the municipality originally received that revenue from the comptroller.

(b) Section 111.203 does not apply to the filing of a refund claim described by Subsection (a) and the comptroller may not extend the limitation period provided by Subsection (a).

(c) This section does not affect the limitation period for the filing of a refund claim relating to tax revenue allocated to a political subdivision, other than a municipality, whose imposition of the sales and use tax is governed by this chapter.

SECTION 2. Subchapter F, Chapter 321, Tax Code, is amended by adding Section 321.5026 to read as follows:

Sec. 321.5026. REFUND OR REALLOCATION OF MUNICIPAL TAX REVENUE. (a) If the comptroller determines that a tax refund claim should be granted that would result in the claimant receiving at least $100,000 in tax revenue collected by the comptroller that has been previously allocated to a municipality, the comptroller may grant the refund claim in relation to that revenue only if:

(1) the refund claim was filed before the expiration of the limitation period prescribed by Section 321.3075(a); and

(2) the refund of that revenue is made in accordance with this section.

(b) If the comptroller determines that tax revenue collected by the comptroller has been sent incorrectly to a municipality under Section 321.502, the comptroller may reallocate the tax revenue to the appropriate municipality only if the reallocation is made in accordance with this section not later than the first anniversary of the date the municipality originally received that revenue from the comptroller.

(c) If the comptroller determines that a tax refund claim described by Subsection (a) should be granted or that a reallocation described by Subsection (b) should be made, the comptroller shall send to that municipality written notice that the comptroller intends to grant the tax refund claim or reallocate the revenue. A municipality that receives a notice under this subsection may protest the comptroller's determination by submitting to the comptroller a written request for a hearing on the issue of whether the person who filed the tax refund claim is entitled to the refund or whether the original allocation of the revenue was incorrect. The municipality must submit the request not later than the 30th day after the date the municipality receives the notice under this subsection.

(d) Not later than the 15th day after the date the comptroller receives a request for a hearing under Subsection (c), the comptroller shall send to the requesting municipality a copy of all records, documents, and other information on which the comptroller relied in making its determination, regardless of whether the information is confidential under state law, including Sections 111.006 and 151.027. The provision of confidential information to a municipality under this subsection does not affect the confidential nature of the information. A municipality shall use the information only in a manner that maintains the confidential nature of the information and may not disclose or release the information to the public.

(e) Not earlier than the 30th day or later than the 90th day after the date the comptroller receives a request for a hearing under Subsection (c), the comptroller shall hold a hearing on whether the person who filed the tax refund claim is entitled to the refund or whether the original allocation of the revenue was incorrect. After the conclusion of the hearing, the comptroller shall issue to the municipality a written final decision regarding the protest. For purposes of Section 2001.171, Government Code, the comptroller's decision is final and appealable on the date the decision is issued under this subsection.

(f) If the municipality is not satisfied with the comptroller's written final decision, the municipality may appeal the decision by filing a petition in a Travis County district court not later than the 30th day after the date the municipality receives the decision. Judicial review of the decision is under the substantial evidence rule. The court shall hear the appeal without a jury.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.