Part 1.
COMPTROLLER OF PUBLIC ACCOUNTS
Chapter 3.
TAX ADMINISTRATION
Subchapter A. GENERAL RULES
34 TAC §3.3
The Comptroller of Public Accounts adopts the repeal of §3.3,
concerning unjust enrichment, without changes to the proposal as published
in the November 23, 2001, issue of the
Texas Register
(26 TexReg 9530).
The substance of this rule will be added to §3.2 of this title (relating
to Application of Payments).
No comments were received regarding adoption of the repeal.
This repeal is adopted under Tax Code, §111.002, which provides
the comptroller with the authority to prescribe, adopt, and enforce rules
relating to the administration and enforcement of the provisions of Tax Code,
Title 2.
The repeal implements Tax Code, Chapter 111.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 8, 2002.
TRD-200200845
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Effective date: February 28, 2002
Proposal publication date: November 23, 2001
For further information, please call: (512) 463-3699
34 TAC §3.3
The Comptroller of Public Accounts adopts a new §3.3,
concerning the Contract Audit Program, without changes to the proposed text
as published in the November 23, 2001, issue of the
Texas Register
(26 TexReg 9530).
This section is adopted to implement Senate Bill 1458, 77th Legislature,
2001, and establishes administrative and procedural guidelines for a new audit
program in which the comptroller may contract with persons or accounting firms
to perform tax audits to determine a taxpayer's tax liability.
No comments were received regarding adoption of the new rule.
This new rule is adopted under Tax Code, §111.002, which
provides the comptroller with the authority to prescribe, adopt, and enforce
rules relating to the administration and enforcement of the provisions of
Tax Code, Title 2.
The new rule implements Tax Code, §111.0045.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 8, 2002.
TRD-200200846
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Effective date: February 28, 2002
Proposal publication date: November 23, 2001
For further information, please call: (512) 463-3699
34 TAC §3.310
The Comptroller of Public Accounts adopts an amendment to §3.310,
concerning laundry, cleaning, and garment services, without changes to the
proposed text as published in the December 7, 2001, issue of the
Texas Register
(26 TexReg 10041).
This rule is amended to implement Senate Bill 1125, 77th Legislature, 2001,
which enacted Tax Code, §151.3021. That provision allows an exemption
for wrapping, packing, and packaging supplies used by a laundry or dry cleaner
to wrap, pack, or package laundered or dry cleaned items. This change is explained
in subsections (d) and (j) of the amended rule. Additional changes are made
for the purpose of clarity.
No comments were received regarding adoption of the amendment.
This amendment is adopted under Tax Code, §111.002, which
provides the comptroller with the authority to prescribe, adopt, and enforce
rules relating to the administration and enforcement of the provisions of
Tax Code, Title 2.
The amendment implements Tax Code, §151.3021.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 11, 2002.
TRD-200200850
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Effective date: March 3, 2002
Proposal publication date: December 7, 2001
For further information, please call: (512) 463-3699
34 TAC §3.314
The Comptroller of Public Accounts adopts an amendment to §3.314,
concerning wrapping, packing, packaging supplies, containers, labels, tags,
export packers, and stevedoring materials and supplies, without changes to
the proposed text as published in the December 7, 2001, issue of the
This section is amended to implement Senate Bill 1125, 77th Legislature,
2001, which added Tax Code, §151.3021. That provision allows an exemption
for wrapping, packing, and packaging supplies used by a laundry or dry cleaner
to wrap, pack, or packaged the laundered or dry cleaned items. The change
is explained in subsections (c), (h), and (k) of the proposed rule. Amendments
are made to subsections (a)(1), (b)(3), (d)(2), (f), and (g) for the purpose
of clarity.
No comments were received regarding adoption of the amendment.
This amendment is adopted under Tax Code, §111.002, which
provides the comptroller with the authority to prescribe, adopt, and enforce
rules relating to the administration and enforcement of the provisions of
Tax Code, Title 2.
The amendment implements Tax Code, §151.3021.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 11, 2002.
TRD-200200851
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Effective date: March 3, 2002
Proposal publication date: December 7, 2001
For further information, please call: (512) 463-3699
Chapter 181.
BOND REVIEW BOARD
Subchapter A. BOND REVIEW RULES
34 TAC §§181.1 - 181.7, 181.10 - 181.12
The Texas Bond Review Board adopts amendments to Title 34
TAC, Chapter 181, §§181.1 - 181.7, 181.10 - 181.12, concerning policies
and procedures, with changes to the proposed text as published in the August
31, 2001, issue of the
Texas Register
(26
TexReg 6622). Each section has had stylistic changes, primarily regarding
legal citations and minor technical change to standardize language throughout
the document. Section 181.3 has changed language to clarify requirements for
prior approval by other state boards or state agencies, with exceptions for
applications for issuance of tuition revenue bonds, and application requirements
for issuance of commercial paper notes.
The amendments clarify procedures and comply with changes in Chapter 1231,
Government Code, as amended.
Comments were received from the University of North Texas, McCall, Parkhurst &
Horton L.L.P., Texas Low Income Housing Information Service, and from the
Office of the Attorney General. The agency agreed with suggestions to standardize
language, clarify approval requirements from other state boards or state agencies,
and to clarify application procedures for issuance of commercial paper. Other
suggestions included: exempting any issues rated at least Aa2; exempting commercial
paper programs; and requiring any applications for 501c(3) financings to comply
with Section 8 admissions standards set by the Texas Department of Housing
and Community Affairs.
The amended sections are adopted with changes under Chapter 1231,
Government Code, which gives the Texas Bond Review Board the authority to
adopt rules governing application for review, the review process, and reporting
requirements involved in the issuance of state bonds.
Chapter 1231, Government Code is affected by these adopted amendments.
§181.1.Definitions.
The following words and terms, when used in this chapter, shall have
the following meanings, unless the context clearly indicates otherwise:
(1)
Board--The Bond Review Board, created under Chapter 1078,
Acts of the 70th Legislature, Regular Session, 1987 codified as Chapter 1231,
Government Code.
(2)
State security--
(A)
an obligation, including a bond, issued by:
(i)
a state agency;
(ii)
an entity expressly created by statute and having statewide
jurisdiction; or
(iii)
any other entity issuing a bond or other obligation on
behalf of the state or on behalf of any entity listed in clause (i) or (ii)
of this subparagraph; or
(B)
an installment sale or lease-purchase obligation issued
by or on behalf of an entity listed in clauses (i), (ii), or (iii) of this
subparagraph that has a stated term of longer than five years or has an initial
principal amount of greater than $250,000.
(C)
References in these rules to a board member include the
person designated to act on their behalf, except as noted in §181.4(b)
of this title (relating to Meetings).
§181.2.Notice of Intention to Issue.
(a)
An issuer intending to issue state securities shall submit
a written or electronic notice to the bond finance office no later than three
weeks prior to the date requested for board consideration. The director of
the bond finance office shall forward one copy of the notice to each member
of the board. Prospective issuers are encouraged to file the notice of intention
as early in the issuance planning stage as possible. The notice is for information
purposes only, to facilitate the scheduling of board review activities.
(b)
A notice of intention to issue under this section shall
include:
(1)
a brief description of the proposed issuance, including,
but not limited to, the purpose, the tentative amount, and a brief outline
of the proposed terms;
(2)
the proposed timing of the issuance with a tentative date
of sale and a tentative date for closing;
(3)
a request to have the issue of state securities scheduled
for consideration by the board during a specified monthly meeting; and
(4)
an agreement to submit the required application described
in §181.3 of this title (relating to Application for Board Approval of
State Security Issuance) no later than the first Tuesday of the month in which
the applicant requests board consideration.
(c)
An issuer may reschedule the date requested for board consideration
of the state securities by submitting an amended notice of intention at any
time prior to the application date in the same manner as provided in this
section.
(d)
The requested date for board consideration shall be granted
whenever possible; however, if it becomes necessary in the board's discretion
to change the date of the board meeting for consideration of the proposed
issuance of state securities, written notice of such change shall be sent
to the issuer as soon as possible. Priority scheduling for consideration at
board meetings shall be given to refunding issues and to those state securities
which also require a submission to the Bond Review Board to obtain a private
activity bond allocation.
§181.3.Application for Board Approval of State Bond Issuance.
(a)
An officer or entity may not issue state securities unless
the issuance has been approved or exempted from review by the Board. An officer
or entity that has not been granted an exemption from review by the board
and that proposes to issue state bonds shall apply for board approval by filing
one application with original signatures and nine copies with the Executive
Director of the bond finance office. The Executive Director of the bond finance
office shall forward one copy of the application to each member of the board
and one copy to the Office of the Attorney General.
(b)
Applications must be filed with the bond finance office
no later than the first Tuesday of the month in which the applicant requests
board consideration. Applications filed after that date will be considered
at the regular meeting only with the approval of the Chair or two or more
members of the board.
(c)
An application for approval of a lease-purchase agreement
must include:
(1)
a description of, and statement of need for, the facilities
or equipment being considered for lease purchase;
(2)
the statutory authorization for the lease-purchase proposal;
(3)
evidence of all necessary approvals from any state boards,
state agencies, etc.; and
(4)
a detailed explanation of the terms of the lease-purchase
agreement, including, but not limited to, amount of purchase, trade-in allowances,
interest charges, service contracts, etc.
(d)
An application for all state securities other than lease-purchase
agreements must include:
(1)
evidence that all necessary approvals of the issuance of
the state securities or the project to be financed with the proceeds of the
state securities have been obtained from the appropriate state boards or state
agencies except
(A)
the approval of the state securities by the Attorney General;
(B)
the approval of or review of the projects by the Texas
Higher Education Coordinating Board to be financed with the proceeds of the
state securities issued by the board of regents of an institution of higher
education pursuant to a system wide revenue financing system; and
(C)
environmental approvals and permits;
(2)
a substantially complete draft or summary of the proposed
resolution, order, or ordinance providing for the issuance of state bonds;
(3)
where applicable, evidence of review of proposed issuance
by local entities;
(4)
a brief description of the program under which the state
securities are proposed to be issued, which may include a reference to a legislative
enactment or to existing rules if the program is established in accordance
with an existing statute or existing rules;
(5)
the applicant's plans for use of state security proceeds,
including a description of, statement of the need for, and cost of each specific
project for which security proceeds are proposed to be used;
(6)
the applicant's plans for the administration and servicing
of the state securities to be issued, including, when applicable, a disbursement
schedule of state security proceeds, the proposed flow of funds, the sources
and methods of repayment, and an estimated debt-service schedule;
(7)
a description of the applicant's investment provisions
for state security proceeds, including any specific provisions for safety
and security and a description of the duties and obligations of the trustee
and paying agent/registrar as applicable;
(8)
a timetable for financing that contains dates of all major
steps in the issuance process, including all necessary approvals;
(9)
if the applicant has authority to issue both general obligation
and revenue bonds and the proposed issuance is of one of these, a statement
of the applicant's reasons for its choice of type of state securities;
(10)
a statement of the applicant's estimated costs of issuance,
listed on an item by item basis, including, as applicable, the estimated costs
for:
(A)
bond counsel
(B)
financial advisor
(C)
paying agent/registrar
(D)
rating agencies
(E)
official statement printing
(F)
bond printing
(G)
trustee
(H)
credit enhancement
(I)
liquidity facility
(J)
miscellaneous issuance costs;
(11)
an estimate, if state security sale is negotiated, of
underwriter's spread, specified in the following components and accompanied
by a list of underwriters' spreads from recent comparable bond issues:
(A)
management fee
(B)
underwriter's fees
(C)
selling concessions
(D)
underwriter's counsel
(E)
other costs;
(12)
a list of the firms providing the services reported in
paragraphs (10) and (11) of this subsection and a statement of prior representation
of the issuer by each firm;
(13)
a justification of the decision of whether or not to apply
for municipal bond insurance or other credit enhancement, including a comparison
of expected bond ratings and borrowing costs for the issue with and without
the particular enhancement(s) considered;
(14)
copy of preliminary official statement, if available;
(15)
a statement of any potential liability of the general
revenue fund or any other state funds resulting from the issuance;
(16)
a copy of any preliminary written review of the issuance
that has been made by the attorney general;
(17)
a statement addressing the participation of women and
minorities. The purpose of this section is to promote economic opportunity
by affording equal access to the procurement of contracts for professional
services for the financing of bonds by state issuers. Therefore, the following
information about each participant (including, but not limited to, bond counsel,
underwriters, underwriter's counsel, and financial advisor) must be included:
(A)
the degree of ownership and control of each participant
firm by minorities and women;
(B)
the number and percentage of professionally employed women
and minorities in each participant's firm; and
(C)
a brief description of the effort made by each participant
to encourage and develop participation of women and minorities. This description
can include internal firm recruitment efforts, any offers tendered for apportioning
responsibilities by subcontract or joint venture, and the equal opportunity
goals and policies of each participant's firm.
(18)
The notification procedures used by or on behalf of the
issuer to select the participants referenced in paragraph (17) of this subsection.
(19)
Applications for the approval of proceedings authorizing
the issuance of state securities in the form of commercial paper notes shall
contain the information required by paragraphs (1) - (18) of this subsection
to the extent it is available or capable of being determined.
(e)
In addition to the information required by subsection (c)
or (d) of this section, an application under this section may include any
other relevant information the applicant wants to submit to the board.
(f)
At any time before the date for consideration of an application
by the board, an applicant may withdraw the application. Revisions to an application
must be submitted in writing not less than 72 hours prior to the board meeting.
§181.4.Meetings.
(a)
The regular meeting of the board shall be held the Thursday
following the third Tuesday of each month, with the exception of the months
of January, July and September. No meetings will be held in those months unless
called by the Chair.
(b)
The Chair may call additional meetings of the board and
is responsible for filing notice of meetings as required by Chapter 551, Government
Code, and giving timely notice of meetings to members of the board. On the
petition of two or more members of the board, the governor shall call an additional
meeting of the board or cancel a meeting.
(c)
A planning session will be held regarding applications
pending before the board on or before the second Tuesday of each month, with
the exception of the months of January, July, and September. Planning sessions
regarding applications to be heard at additional meetings of the board will
be held as far in advance of the additional board meeting as is practicable.
At a planning session, board members, their designated representatives, or
their staff representatives may discuss pending applications. Applicants may
be required to attend a planning session and may be asked to make a presentation
and answer questions regarding their application. Applicants may be asked
to submit written answers to questions regarding their application in lieu
of, or in addition to, their attendance at a planning session.
(d)
At a meeting of the board, the board may allow an applicant
to make an oral presentation to the board.
(e)
At a meeting, the board may, by order, resolution, or other
process adopted by the board, approve an issuance of state bonds as proposed
in the application; may approve an issuance of state securities on conditions
stated by the board; or may fail to act on a proposed issuance. If the board
does not act on a proposed issuance during the meeting at which the application
is scheduled to be considered, the application is no longer valid on the occurrence
of the earlier of the expiration of 45 days from the date of the meeting at
which the application was scheduled to be considered or immediately following
the board's next meeting, if the board fails to act on the proposed issuance
at that meeting. If an application becomes invalid under this subsection,
the applicant may file a new application for the proposed issuance.
(f)
The Executive Director of the bond finance office shall
notify applicants in writing of any action taken regarding their application.
A letter of approval shall contain the terms and conditions of the issue as
approved by the board. Issuers must inform the Executive Director of the bond
finance office of changes to the aspects of their application that are specified
in the approval letter. Such changes may prompt reconsideration of the application
by the Bond Review Board. A copy of the approval letter shall be forwarded
to the Office of the Attorney General.
(g)
If applicable law requires the approval by the Attorney
General of an issuance of state securities that are not exempt from review
by the board, Attorney General approval must be obtained after approval by
the board.
(h)
If there is a dispute among members regarding the conduct
of board meetings, standard parliamentary rules shall apply.
§181.5.Submission of Final Report.
(a)
Within 60 days after the signing of a lease-purchase agreement
or delivery of the state securities and receipt of the state security proceeds,
the issuer or purchaser, as applicable, shall submit one original of a final
report to the bond finance office and a single copy of the final report to
the Texas Comptroller of Public Accounts.
(b)
A final report for lease purchases must include a detailed
explanation of the terms of the lease-purchase agreement, including, but not
limited to, amount of purchase, trade-in allowance, interest charges, service
contracts, etc.
(c)
A final report for all state bonds other than lease-purchase
agreements must include:
(1)
all actual costs of issuance, including, as applicable,
the specific items listed in §181.3(d)(8) and (9) of this title (relating
to Application for Board Approval of State Bond Issuance), as well as the
underwriting spread for competitive financings and the private placement fee
for private placements, all closing costs, and any other costs incurred during
the issuance process; and
(2)
a complete bond transcript, including the preliminary official
statement and the final official statement, private placement memorandum,
if applicable, or any other offering documents as well as all other executed
documents pertaining to the issuance of the state bonds. The issuer also must
submit a copy of the bid form or a listing of orders and allotments and a
final debt-service schedule (if applicable).
(d)
Submission of this final report is for the purpose of compiling
data and disseminating information to all interested parties. The cost of
reproduction of any and all portions of the final documents shall be borne
by each requesting party.
(e)
The bond finance office shall prepare and make available
to the members of the bond review board a summary of each final report within
30 days after the final report has been submitted by the issuer. This summary
shall compare the estimated costs of issuance for the items listed in §181.3(d)(8)
and (9) of this title contained in the application for approval with the actual
costs of issuance listed in subsection (c)(1) of this section submitted in
the final report. This summary must also include other information that in
the opinion of the bond finance office represents a material addition to or
a substantial deviation from the application for approval.
§181.6.Official Statement.
(a)
The official statement or any other offering documents
prepared in connection with issuance of securities approved by the board must
conform, to the extent feasible, to the most recent Disclosure Guidelines
for State and Local Government Securities published by the Government Finance
Officers Association. The preliminary official statement or other offering
documents may be submitted to and reviewed by the Executive Director of the
bond finance office prior to mailing. Review of the preliminary official statement
by the Executive Director of the bond finance office is not to be interpreted
as a certification as to the accuracy, timeliness, and completeness of the
specific data in the document. These standards remain the responsibility of
the provider(s) of the data.
(b)
The comptroller shall certify the accuracy and completeness
of statewide economic and demographic data, as well as revenues, expenditures,
current fund balances, and debt-service requirements of bonded indebtedness
of the state contained in the preliminary official statement. This data shall
be used unchanged in the final official statement unless changes are approved
in writing by the comptroller. The comptroller may execute a waiver of any
part of this subsection.
§181.7.Designation of Representation.
A member of the board may designate another person to represent the
member on the board by filing a designation to that effect with the Executive
Director of the bond finance office. A designation of representation filed
under this section is effective until revoked by a subsequent filing by the
member with the bond finance office. During the time a designation of representation
is in effect, the person designated has all powers and duties as a member
of the board, except the authority to make a designation under this section.
§181.10.Annual Issuer Report.
All state security issuers whose bonds are subject to review by the
board must file a report with the bond finance office no later than September
15 of each year, to include:
(1)
the investment status of all unspent state security proceeds
(i.e., the amount of proceeds, name of institution, type of investment program
or instrument, maturity, and interest rate);
(2)
an explanation of any change during the fiscal year previous
to the deadline for this report, in the debt-retirement schedule for any outstanding
state security issue (e.g. exercise of redemption provision, conversion from
short-term to long-term securities, etc.);
(3)
a description of any state security issues expected during
the fiscal year, including type of issue, estimated amount, and expected month
of sale; and
(4)
a list of all state security issues outstanding and corresponding
debt service schedules for all bonds outstanding in a digital and hard copy
format.
§181.11.Filing of Requests for Proposal.
The Bond Review Board wishes to encourage use of the request for proposal
process to maximize participation in the state security issuance process.
Any state security issuer whose securities are subject to review by the board
is requested, for information purposes only, to submit to the Executive Director
at the time of distribution one copy of any request for proposal for consultants
prepared in connection with the planned issuance of state securities. The
bond finance office, upon request, will make the request for proposals available
to consultants, other state security issuers and the general public.
§181.12.Charges For Public Records.
The charge to any person requesting copies of any public records of
the Texas Bond Review Board will be the charge established by the General
Services Commission; however, the Texas Bond Review Board will charge the
following amounts necessary to recoup the costs of items as follows:
(1)
computer resources charges (mainframe and programming time),
as determined by the Department of Information Resources.
(2)
Copies of public records shall be furnished without charge
or at a reduced charge if the Executive Director determines that waiver or
reduction of the fee is in the public interest because furnishing the information
can be considered as primarily benefiting the general public.
(3)
Any additional reasonable cost will be added at actual
cost, with full disclosure to the requesting party as soon as it is known.
(4)
A reasonable deposit may be required for requests where
the total charges are over $200.
(5)
All requests will be treated equally. The Executive Director
may exercise discretion in waiving charges.
(6)
If records are requested to be inspected instead of receiving
copies, access will be by appointment only during regular business hours of
the agency and will be at the discretion of the Executive Director.
(7)
Confidential documents will not be made available for examination
or copying except under court order or other directive.
(8)
All open records requests will be referred to the Executive
Director or designee before the agency staff will release the information.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of
the Secretary of State on February 7, 2002.
TRD-200200802
James T. Buie
Executive Director
Texas Bond Review Board
Effective date: February 27, 2002
Proposal publication date: August 31, 2001
For further information, please call: (512) 463-1741
Subchapter A. PROGRAM RULES
Subchapter O. STATE SALES AND USE TAX
Part 9.
TEXAS BOND REVIEW BOARD
Chapter 190.
ALLOCATION OF STATE'S LIMIT ON CERTAIN PRIVATE ACTIVITY BONDS