� |
� |
� |
�
|
AN ACT
|
�
|
relating to the transfer to the State Office of Administrative |
�
|
Hearings of contested cases involving the collection, receipt, |
�
|
administration, and enforcement of state taxes and fees by the |
�
|
comptroller of public accounts. |
�
|
�������BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
�
|
�������SECTION�1.��Subchapter A, Chapter 111, Tax Code, is amended |
�
|
by adding Section 111.00455 to read as follows: |
�
|
�������Sec.�111.00455.��CONTESTED CASES CONDUCTED BY TAX DIVISION |
�
|
OF STATE OFFICE OF ADMINISTRATIVE HEARINGS. (a)��The tax division |
�
|
of the State Office of Administrative Hearings shall conduct any |
�
|
contested case hearing as provided by Section 2003.101, Government |
�
|
Code, in relation to the collection, receipt, administration, and |
�
|
enforcement of: |
�
|
�������������(1)��a tax imposed under this title; and |
�
|
�������������(2)��any other tax, fee, or other amount that the |
�
|
comptroller is required to collect, receive, administer, or enforce |
�
|
under a law not included in this title. |
�
|
�������(b)��The following are not contested cases under Subsection |
�
|
(a) and Section 2003.101, Government Code: |
�
|
�������������(1)��a show cause hearing or any hearing not related to |
�
|
the collection, receipt, administration, or enforcement of the |
�
|
amount of a tax or fee imposed, or the penalty or interest |
�
|
associated with that amount, except for a hearing under Section |
�
|
151.157(f), 151.1575(c), 151.712(g), 154.1142, or 155.0592; |
�
|
�������������(2)��a property value study hearing under Subchapter M, |
�
|
Chapter 403, Government Code; |
�
|
�������������(3)��a hearing in which the issue relates to: |
�
|
�������������������(A)��Chapters 72-75, Property Code; |
�
|
�������������������(B)��forfeiture of a right to do business; |
�
|
�������������������(C)��a certificate of authority; |
�
|
�������������������(D)��articles of incorporation; |
�
|
�������������������(E)��a penalty imposed under Section 151.7031; |
�
|
�������������������(F)��the refusal or failure to settle under |
�
|
Section 111.101; or |
�
|
�������������������(G)��a request for or revocation of an exemption |
�
|
from taxation; and |
�
|
�������������(4)��any other hearing not related to the collection, |
�
|
receipt, administration, or enforcement of the amount of a tax or |
�
|
fee imposed, or the penalty or interest associated with that |
�
|
amount. |
�
|
�������(c)��A reference in law to the comptroller that relates to |
�
|
the performance of a contested case hearing described by Subsection |
�
|
(a) means the tax division of the State Office of Administrative |
�
|
Hearings. |
�
|
�������SECTION�2.��Subsection (c), Section 2003.0411, Government |
�
|
Code, is amended to read as follows: |
�
|
�������(c)��Except as provided by Section 2003.101, to [To] be |
�
|
appointed a master administrative law judge, a person must have at |
�
|
least 10 years of general legal experience, must have at least six |
�
|
years of experience presiding over administrative hearings or |
�
|
presiding over hearings as a judge or master of a court, and must |
�
|
meet other requirements as prescribed by the chief administrative |
�
|
law judge. |
�
|
�������SECTION�3.��Chapter 2003, Government Code, is amended by |
�
|
adding Subchapter D to read as follows: |
�
|
SUBCHAPTER D. �TAX DIVISION |
�
|
�������Sec.�2003.101.��TAX DIVISION. (a)��The office shall |
�
|
establish a tax division to conduct hearings relating to contested |
�
|
cases involving the collection, receipt, administration, and |
�
|
enforcement of taxes, fees, and other amounts as prescribed by |
�
|
Section 111.00455, Tax Code. |
�
|
�������(b)��An administrative law judge in the tax division is |
�
|
classified as a "master administrative law judge II."��Section |
�
|
2003.0411 does not apply to this section. |
�
|
�������(c)��If there are no cases in the tax division, and subject to |
�
|
the prior approval of the comptroller, an administrative law judge |
�
|
in the tax division may conduct hearings for other state agencies. � |
�
|
Before conducting a hearing for another state agency under this |
�
|
subsection, the tax division must notify the comptroller in |
�
|
writing. The notification must describe the case that will be heard |
�
|
and the administrative law judge who will conduct the hearing and |
�
|
must estimate the amount of time that the judge will spend on the |
�
|
case. The office shall reimburse the comptroller at an appropriate |
�
|
hourly rate for the time spent by the administrative law judge on |
�
|
the case. �The comptroller may revoke approval to conduct hearings |
�
|
for other state agencies under this subsection at any time. |
�
|
�������(d)��To be eligible to preside at a tax division hearing, an |
�
|
administrative law judge, including a temporary administrative law |
�
|
judge contracted with under Section 2003.043, must: |
�
|
�������������(1)��be a United States citizen; |
�
|
�������������(2)��be an attorney in good standing with the State Bar |
�
|
of Texas; |
�
|
�������������(3)��have been licensed in this state to practice law |
�
|
for at least seven years; |
�
|
�������������(4)��have substantial experience in tax cases in making |
�
|
the record suitable for administrative review or otherwise;�and |
�
|
�������������(5)��have devoted at least 75 percent of the person's |
�
|
legal practice to Texas state tax law in at least five of the past 10 |
�
|
years before the date on which the person begins employment in the |
�
|
tax division. |
�
|
�������(e)��Notwithstanding Section 2001.058, the comptroller may |
�
|
change a finding of fact or conclusion of law made by the |
�
|
administrative law judge or vacate or modify an order issued by the |
�
|
administrative law judge only if the comptroller: |
�
|
�������������(1)��determines that the administrative law judge: |
�
|
�������������������(A)��did not properly apply or interpret |
�
|
applicable law, then existing comptroller rules or policies, or |
�
|
prior administrative decisions; or |
�
|
�������������������(B)��issued a finding of fact that is not |
�
|
supported by a preponderance of the evidence; or |
�
|
�������������(2)��determines that a comptroller policy or a prior |
�
|
administrative decision on which the administrative law judge |
�
|
relied is incorrect. |
�
|
�������(f)��The comptroller shall state in writing the specific |
�
|
reason and legal basis for a determination under Subsection (e). |
�
|
�������(g)��An administrative law judge, on the judge's own motion |
�
|
or on motion of a party and after notice and an opportunity for a |
�
|
hearing, may impose appropriate sanctions as provided by Subsection |
�
|
(h) against a party or its representative for: |
�
|
�������������(1)��filing of a motion or pleading that is groundless |
�
|
and brought: |
�
|
�������������������(A)��in bad faith; |
�
|
�������������������(B)��for the purpose of harassment; or |
�
|
�������������������(C)��for any other improper purpose, such as to |
�
|
cause unnecessary delay or needless increase in the cost of the |
�
|
proceeding; |
�
|
�������������(2)��abuse of the discovery process in seeking, making, |
�
|
or resisting discovery; or |
�
|
�������������(3)��failure to obey an order of the administrative law |
�
|
judge or the comptroller. |
�
|
�������(h)��A sanction imposed under Subsection (g) may include, as |
�
|
appropriate and justified, issuance of an order: |
�
|
�������������(1)��disallowing further discovery of any kind or of a |
�
|
particular kind by the offending party; |
�
|
�������������(2)��holding that designated facts be deemed admitted |
�
|
for purposes of the proceeding; |
�
|
�������������(3)��refusing to allow the offending party to support |
�
|
or oppose a designated claim or defense or prohibiting the party |
�
|
from introducing designated matters in evidence; |
�
|
�������������(4)��disallowing in whole or in part requests for |
�
|
relief by the offending party and excluding evidence in support of |
�
|
such requests; and |
�
|
�������������(5)��striking pleadings or testimony, or both, wholly |
�
|
or partly, or staying further proceedings until the order is |
�
|
obeyed. |
�
|
�������(i)��For each hearing conducted under this section, an |
�
|
administrative law judge in the tax division shall issue a proposal |
�
|
for decision that includes findings of fact and conclusions of law. � |
�
|
In addition, the proposal for decision must include the legal |
�
|
reasoning and other analysis considered by the judge in reaching |
�
|
the decision. �Each finding of fact or conclusion of law made by the |
�
|
judge must be: |
�
|
�������������(1)��independent and impartial; and |
�
|
�������������(2)��based on state law and the evidence presented at |
�
|
the hearing. |
�
|
�������(j)��The comptroller may not attempt to influence the |
�
|
findings of fact or the administrative law judge's application of |
�
|
the law except by evidence and legal argument. �An administrative |
�
|
law judge conducting a hearing under this subchapter may not |
�
|
directly or indirectly communicate in connection with an issue of |
�
|
fact or law with a party or its representative, except: |
�
|
�������������(1)��on notice and opportunity for each party to |
�
|
participate; or |
�
|
�������������(2)��to ask questions that involve ministerial, |
�
|
administrative, or procedural matters that do not address the |
�
|
substance of the issues or positions taken in the case. |
�
|
�������(k)��Appearances in hearings conducted for the comptroller |
�
|
by the office may be by: |
�
|
�������������(1)��the taxpayer; |
�
|
�������������(2)��an attorney licensed to practice law in this |
�
|
state; |
�
|
�������������(3)��a certified public accountant; or |
�
|
�������������(4)��any other person designated by the taxpayer who is |
�
|
not otherwise prohibited from appearing in the hearing. |
�
|
�������(l)��The comptroller is represented by an authorized |
�
|
representative in all hearings conducted for the comptroller by the |
�
|
office. |
�
|
�������Sec.�2003.102.��SUNSET PROVISION. �(a)��The tax division is |
�
|
subject to Chapter 325 (Texas Sunset Act). |
�
|
�������(b)��The Sunset Advisory Commission shall evaluate the tax |
�
|
division and present to the 82nd Legislature a report on that |
�
|
evaluation and the commission's recommendations in relation to the |
�
|
tax division. |
�
|
�������(c)��During the regular legislative session at which the |
�
|
commission presents its report and recommendations, the |
�
|
legislature by law may continue the tax division as provided by that |
�
|
chapter. �If the tax division is not continued in existence as |
�
|
provided by that chapter, the tax division is abolished and this |
�
|
subchapter and Section 111.00455, Tax Code, expire on September 1 |
�
|
of the odd-numbered year in which the regular legislative session |
�
|
occurred. |
�
|
�������Sec.�2003.103.��TIMELINESS OF HEARINGS. (a)��The tax |
�
|
division shall conduct all hearings under this subchapter in a |
�
|
timely manner. |
�
|
�������(b)��The tax division shall use every reasonable means to |
�
|
expedite a case under this subchapter when the comptroller requests |
�
|
that the division expedite the case. |
�
|
�������(c)��This section is not intended to impair the independence |
�
|
of the office in conducting a hearing under this subchapter. |
�
|
�������Sec.�2003.104.��CONFIDENTIALITY OF TAX DIVISION |
�
|
INFORMATION. �(a)��The office shall keep information that |
�
|
identifies a taxpayer who participates in a case under this |
�
|
subchapter confidential, including the taxpayer's name and social |
�
|
security number. |
�
|
�������(b)��The provision of information to the office that is |
�
|
confidential under any law, including Section 111.006, 151.027, or |
�
|
171.206, Tax Code, does not affect the confidentiality of the |
�
|
information, and the office shall maintain that confidentiality. |
�
|
�������(c)��A hearing conducted under this subchapter is |
�
|
confidential and not open to the public. |
�
|
�������Sec.�2003.105.��TAX DIVISION HEARINGS FEE. �The office shall |
�
|
charge the comptroller a fixed annual fee rather than an hourly rate |
�
|
for services rendered by the office to the comptroller. The office |
�
|
and the comptroller shall negotiate the amount of the fixed fee |
�
|
biennially to coincide with the comptroller's legislative |
�
|
appropriations request. |
�
|
�������Sec.�2003.106.��COMPTROLLER'S PRIORITIES AND PUBLIC POLICY |
�
|
NEEDS. (a)��The comptroller shall provide input to the office to |
�
|
assist the office regarding the comptroller's priorities and public |
�
|
policy needs. |
�
|
�������(b)��This section is intended to assist the office in |
�
|
providing efficient service under this subchapter and is not |
�
|
intended to impair the independence of the office in conducting a |
�
|
hearing under this subchapter. |
�
|
�������Sec.�2003.107.��TAX DIVISION REVIEW. �On request of the |
�
|
comptroller, the office shall provide the comptroller the following |
�
|
regarding the tax division: |
�
|
�������������(1)��a list of the administrative law judges, including |
�
|
temporary administrative law judges, who have heard cases in the |
�
|
division in the past year; |
�
|
�������������(2)��the qualifications of the judges; and |
�
|
�������������(3)��any other information considered necessary by the |
�
|
comptroller in evaluating the performance of the judges hearing |
�
|
cases in the tax division. |
�
|
�������Sec.�2003.108.��REPORTS. (a)��The office shall provide the |
�
|
comptroller a monthly status report that lists pending cases and |
�
|
provides information on any case that exceeds the comptroller's |
�
|
time lines for issuing a proposal for decision or an agreed order. |
�
|
�������(b)��At least quarterly, the office shall review with the |
�
|
comptroller and appropriate staff of the office the status of |
�
|
pending cases under this subchapter. |
�
|
�������(c)��The office shall provide a quarterly report to the |
�
|
comptroller on services performed by the office for the comptroller |
�
|
under this subchapter. |
�
|
�������Sec.�2003.109.��RULES; EARLY REFERRAL. �(a)��The comptroller |
�
|
may adopt rules to provide for the referral to the tax division of |
�
|
issues related to a case described by Section 111.00455, Tax Code, |
�
|
to resolve a procedural or other preliminary dispute between the |
�
|
comptroller and a party. |
�
|
�������(b)��After a referral under this section, the tax division |
�
|
shall docket the case and assign an administrative law judge under |
�
|
Section 2003.101. �If additional proceedings are required after the |
�
|
consideration of the procedural or other preliminary dispute, the |
�
|
tax division shall appoint the same administrative law judge to |
�
|
hear the case. |
�
|
�������SECTION�4.��The changes in law made by this Act that relate |
�
|
to the procedures governing a hearing before the tax division of the |
�
|
State Office of Administrative Hearings apply only to a case that is |
�
|
filed with the State Office of Administrative Hearings on or after |
�
|
the effective date of this Act. Procedures relating to a case filed |
�
|
with the State Office of Administrative Hearings before the |
�
|
effective date of this Act shall continue to be used in a hearing as |
�
|
those procedures existed immediately before the effective date of |
�
|
this Act, or as provided by an interagency cooperation contract |
�
|
entered into between the comptroller and the office in effect |
�
|
immediately before the effective date of this Act, and are |
�
|
continued in effect only for that purpose. |
�
|
�������SECTION�5.��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, 2007. |
�
|
|
�
|
|
� |
� |
� |
� |
______________________________ |
______________________________ |
� |
���President of the Senate |
Speaker of the House����� |
� |
�
|
�������I hereby certify that S.B.�No.�242 passed the Senate on |
�
|
April�19,�2007, by the following vote: Yeas�31, Nays�0; and that |
�
|
the Senate concurred in House amendments on May�15,�2007, by the |
�
|
following vote: Yeas�31, Nays�0. |
�
|
|
� |
� |
______________________________ |
� |
Secretary of the Senate���� |
� |
�
|
�������I hereby certify that S.B.�No.�242 passed the House, with |
�
|
amendments, on May�9,�2007, by the following vote: Yeas�141, |
�
|
Nays�0, one present not voting. |
�
|
|
� |
� |
______________________________ |
� |
Chief Clerk of the House��� |
� |
�
|
|
� |
�
|
Approved: |
�
|
|
�
|
______________________________� |
�
|
������������Date |
�
|
|
�
|
|
�
|
______________________________� |
�
|
����������Governor |