HBA-SEP H.B. 3146 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3146 By: Hartnett Ways & Means 4/5/2001 Introduced BACKGROUND AND PURPOSE Each year there are people who intentionally and knowingly fail to remit taxes owed to the state. Periodically updating statutes relating to the administration of tax requirements may allow for better enforcement. House Bill 3146 amends law relating to the enforcement and collection of taxes, fees, and other revenue. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 3146 amends the Code of Criminal Procedure, and the Government and Tax codes relating to the enforcement and collection of taxes, fees, and other revenue. The bill amends the Code of Criminal Procedure to provide that investigators commissioned as peace officers by the office of the comptroller of public accounts (comptroller) are peace officers (Sec. 2.12). The bill amends the Government Code to entitle the comptroller to obtain from the Department of Public Safety (DPS) criminal history record information maintained by DPS that the comptroller believes is necessary for the enforcement or administration of limited sales, excise, and use taxes; taxes on the sale, rental, and use of motor vehicles; the motor fuels tax; and the controlled substances tax. DPS is prohibited from releasing or disclosing the information to any person who is not the subject of the criminal history record information except on court order (Sec. 411.109). The bill amends the Tax Code to require the attorney general to bring suit to recover taxes, tax penalties, and interest in the name of any local governmental entities that have imposed sales and use taxes (Sec. 111.010). The comptroller is authorized to provide notice to holders of assets belonging to a person who is delinquent in paying taxes by mail, facsimile, or electronic transmission rather than only by registered mail (Sec. 111.021). The bill specifies that in a jeopardy determination, the amount required to be paid to the state or due for a tax period, rather than the amount determined, is due and payable immediately (Sec. 111.022). The bill provides that a person who acquires a business or business assets from a taxpayer through a fraudulent transfer or a sham transaction is liable for any tax, penalty, and interest owed a tax payer regardless of whether the person withholds an amount of the purchase price to pay the business termination tax if it is insufficient to satisfy the liability of the seller and the purchase price paid to the seller is not reasonably equivalent to the value of the business or stock of goods (Secs. 110.020 and 111.024). A state tax lien is prohibited from being fully released before the taxpayer has paid any other tax, penalty, interest, fee, or sum that the taxpayer owes the state and that is administered or collected by the comptroller (Sec. 113.009). The bill specifies that a state tax lien on personal property and real estate attaches to personal property and real estate owned by the taxpayer beginning on the first day of the period for which the lien is filed by the state rather than on or after the date the lien is filed by the state (Sec. 113.105). The bill authorizes the comptroller to copy and photograph the books, returns, records, papers, and equipment of a person liable for the use tax. The comptroller is authorized to perform, during business hours, an inspection of premises where a taxable event has occurred and to require tax payers to produce records for inspection not later than the 10th working day after the receipt of written notice (Sec. 151.025). The bill specifies the types of records to be kept by all sellers and all other persons storing, using, or consuming in this state a taxable item purchased from a retailer (Sec. 151.025). The bill increases the maximum amount of security that is allowed for the payment of taxes by a retailer (Sec. 151.253). The bill provides that a person commits an offense if the person, intentionally or knowingly, fails to pay the sales tax collected by that person and sets forth penalties based on the amount of tax collected and not paid (Sec. 151.7032). The bill specifies penalties for the offenses of selling without a permit, and for failure to furnish a required report (Secs. 151.708 and 151.709). The bill provides that it is a third degree felony for a person to intentionally or knowingly conceal, destroy, make a false entry in, or fail to make an entry in required records (Sec. 151.7102). The bill also provides that it is a Class C misdemeanor for a person to fail to produce or allow inspection of requested records (Sec. 151.1703). The bill modifies the penalties for the offense of signing a false statement or certificate, the offense of operating a motor vehicle without payment of tax, and the offense of failure to keep records (Secs. 152.101--152.103). The bill provides that a person commits an offense if the person, intentionally or knowingly, fails to pay to the tax assessor-collector the motor vehicle sales tax collected by that person and correlates the penalty with the amount of tax collected and not paid (Sec. 152.104). Venue for prosecution for offenses relating to the limited sales, excise, and use tax and to taxes on the sale, rental, and use of motor vehicles is required to be in Travis County or the county in which any element of the offense occurs (Secs. 151.714 and 152.106). The bill specifies that a person forfeits to the state a civil penalty of not less than $25 or more than $200 if the person furnishes to a supplier a signed statement for purchasing diesel fuel tax free and then uses that fuel to operate a diesel powered motor vehicle on the public highway (Sec. 153.402). The bill also specifies that a person commits an offense if the person refuses to permit an employee of either the comptroller, the attorney general, the Texas Natural Resource Conservation Commission, or the Department of Agriculture to measure or gauge the contents of or take samples from a storage tank or container on premises where motor fuel is produced, processed, stored, sold, delivered, or used or furnishes to a supplier a signed statement for purchasing diesel fuel tax free and then uses the fuel to operate a diesel powered motor vehicle on the public highway (Sec. 153.403). The bill prohibits the comptroller from setting the amount of security of a permittee subject to the mixed beverage tax imposed at more than $50,000, rather than $25,000 (Sec. 183.053). The bill amends the Texas Business Corporation Act and the Texas Limited Liability Company Act to provide that the original and copy of an application for withdrawal and dissolution delivered to the secretary of state are to be accompanied by a certificate from the comptroller that all state taxes, penalties, and interest have been paid (SECTIONS 30--32). The bill repeals provisions regarding the general criminal penalty for offenses relating to the limited sales, excise, and use tax; suit for tax collection, disapproval of a municipal suit, and judgments in a municipal suit relating to local sales and use taxes; suits for tax collection, disapproval of a suit, and judgments in a suit relating to sales and use taxes for special purpose taxing authorities; and suit for tax collection, disapproval of a county suit, and judgments in a county suit relating to county sales and use tax (SECTION 33). EFFECTIVE DATE September 1, 2001.