PART 1. COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3. TAX ADMINISTRATION
SUBCHAPTER BB. BATTERY SALES FEE
The Comptroller of Public Accounts proposes amendments to rule §3.711, concerning battery sales fee collection and reporting requirements. The comptroller amends this section to implement Senate Bill 477, 87th Legislature, 2021, which requires marketplace providers to collect the applicable fees related to the sale of lead-acid batteries and to improve readability throughout the section.
The comptroller amends subsection (a) to add paragraphs (3), (4) and (5) to define the terms "marketplace," "marketplace provider," and "marketplace seller," respectively, as those terms are defined in Tax Code, §151.0242(a) but limits the terms to the sale of lead-acid batteries. The comptroller renumbers the subsequent paragraph.
The comptroller amends the title of subsection (b) to reflect that the subsection applies to the collection of the battery sales fee and not the remittance of the fee, which is addressed in subsection (e). The comptroller amends paragraph (1) by adding that, effective July 1, 2022, marketplace providers selling lead-acid batteries are required to collect the battery sales fee. The comptroller also amends paragraph (1) to require the collection of the battery sales fee only on the sale of batteries not for resale, as required under Health and Safety Code, §361.138. The comptroller reorganizes the fee information from paragraph (1) into subparagraphs (A), (B) and (C). The comptroller amends paragraph (2) to add marketplace provider to the provision that allows the comptroller to collect the fee directly from the purchaser in instances where a dealer fails to collect the fee. The comptroller amends paragraph (5) to prohibit a marketplace provider from advertising that a refund is available for any portion of the fee.
The comptroller adds the term marketplace provider to the provisions in subsection (c) (1) and (2), and in subsection (d) to require marketplace providers to follow the same reporting requirements that dealers must follow.
The comptroller amends subsection (e) regarding the remittance of the fee to remove the term "person" and instead use the term "dealer or marketplace provider" in paragraph (1) and to add the term "marketplace provider" in paragraph (2).
The comptroller amends subsection (f) to allow a "marketplace provider" who collects the battery sales fee to retain the applicable discount on each fee collected.
The comptroller amends subsection (g) to remove the term "person" and include the terms "dealer" and "marketplace provider" to allow the comptroller or an authorized representative to inspect the records or equipment of a dealer or marketplace provider.
The comptroller amends subsection (h)(7) to apply the battery sales fee exemptions to certain sales made by a marketplace provider.
The comptroller amends subsection (j) to remove the term "person" and instead use the terms "dealer" and "marketplace provider" to assess the applicable penalties to both for failure to file a battery sales fee report in a timely manner.
Brad Reynolds, Chief Revenue Estimator, has determined that during the first five years that the proposed amended rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rule's applicability; and will not positively or adversely affect this state's economy.
Mr. Reynolds also has determined that the proposed amended rule would benefit the public by conforming the rule to current statute. This rule is proposed under Tax Code, Title 2, and does not require a statement of fiscal implications for small businesses or rural communities. The proposed amended rule would have no significant fiscal impact on the state government, units of local government, or individuals. There would be no significant anticipated economic cost to the public.
You may submit comments on the proposal to Jenny Burleson, Director, Tax Policy Division, P.O. Box 13528 Austin, Texas 78711 or to the email address: tp.rule.comments@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.
The comptroller proposes the amendments under Tax Code, §111.002 (Comptroller's Rules; Compliance; Forfeiture) and §111.0022 (Application to Other Laws Administered by Comptroller), which provide the comptroller with authority to prescribe, adopt, and enforce rules relating to the administration and enforcement provisions of Tax Code, Title 2, and taxes, fees, or other charges which the comptroller administers under other law.
The amendments to this section implement Health & Safety Code, §361.138 (Fee on the sale of batteries).
§3.711.Battery Sales Fee Collection and Reporting Requirements.
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Dealer--A wholesaler, retailer, or any other person who sells or offers to sell lead-acid batteries.
(2) Lead-acid battery--Any battery, new or used, which contains lead and sulfuric acid, in liquid or gel form.
(3) Marketplace--A physical or electronic medium through which persons other than the owner or operator of the medium make sales of lead-acid batteries. The term includes a store, Internet website, software application, or catalog.
(4) Marketplace provider--A person who owns or operates a marketplace and directly or indirectly processes sales of or payments for lead-acid batteries for marketplace sellers.
(5) Marketplace seller--A seller, other than the marketplace provider, who makes a sale of a lead-acid battery through a marketplace.
(6) [(3)] Sale for resale--A
sale of a lead-acid battery to a purchaser for the purpose of reselling
the battery in the normal course of business in the form or condition
in which it is acquired (i.e., as a separate item). A sale of a battery
that is attached to or becomes an integral part of a vehicle, boat,
or other equipment that is being sold, rented, or leased is not a
sale for resale. The battery sales fee is due on the sale prior to
the battery becoming a part of this equipment.
(b) Collection [and remittance] of the fee.
(1) Except as provided in subsection (h) of this section, a dealer, and effective July 1, 2022, a marketplace provider, must collect the fee on each sale of a lead-acid battery that is not for resale.
(A) For each lead-acid battery with a capacity of less than 12 volts, the fee is $2.00.
(B) For each lead-acid battery with a capacity of 12 or more volts, the fee is $3.00.
(C) A fee shall not be charged, collected, or allowed as an offset on a battery taken as a trade-in.
(2) If a dealer or a marketplace provider fails to collect the fee required in paragraph (1) of this subsection, the comptroller may collect the fee from the purchaser.
(3) The fee is not due on the sale of a vehicle, boat, or other equipment that has a battery as an integral part of it.
(4) The amount of the fee due must be separately stated on the invoice, bill, or contract to the customer and shall be identified as the Texas battery sales fee.
(5) A dealer or a marketplace provider may not advertise, make public, indicate, or imply that the dealer or marketplace provider will absorb, assume, or refund any portion of the fee.
(c) Due date and reporting requirements.
(1) Monthly filing. The battery sales fee is due and payable on or before the 20th day of the month following the end of each calendar month. Returns must be filed on a monthly basis unless a dealer or a marketplace provider qualifies as a quarterly filer under paragraph (2) of this subsection.
(2) Quarterly filing. A dealer or a marketplace provider who owes an average, as computed for the year, of less than $50 for a calendar month or less than $150 for a calendar quarter is required to file a return and remit the collected fees on or before the 20th day of the month following the end of the calendar quarter. The comptroller will notify a dealer or marketplace provider when the report and payment may be submitted quarterly.
(d) Report forms. The battery sales fee is to be reported on the Texas battery sales fee report form as prescribed by the comptroller. The fact that the dealer or a marketplace provider does not receive the form or does not receive the correct form from the comptroller for the filing of the return does not relieve the dealer or marketplace provider of the responsibility of filing a return and remitting the fee.
(e) Remittance of the fee.
(1) On or before the 20th day of the month following
each reporting period, every dealer or marketplace provider [person] required to collect the fee shall file a consolidated
return for all businesses operating under the same taxpayer number
and remit the total fee due.
(2) The returns must be signed by the dealer or marketplace provider required to file the return or by the dealer's or marketplace provider's duly authorized agent.
(f) Discount. A dealer or marketplace provider who
is required to collect the battery sales fee may retain $.025 from
each fee collected [sale made].
(g) Records required.
(1) Invoices or other records must be kept for at least four years after the date on which the invoices or records are prepared.
(2) The comptroller or an authorized representative
has the right to examine any records or equipment of any dealer
or marketplace provider [person] liable for the fee
[in order] to verify the accuracy of any return made or
to determine the fee liability in the event no return is filed.
(h) Exemptions.
(1) Sales for resale are not subject to the fee.
(2) The sale of a battery that under the sales contract is shipped to a point outside Texas is not subject to the fee imposed by this section if the shipment is made by the seller by means of:
(A) the facilities of the seller;
(B) delivery by the seller to a carrier for shipment to a consignee at a point outside this state; or
(C) delivery by the seller to a forwarding agent for shipment to a location in another state of the United States or its territories or possessions.
(3) Exports beyond the territorial limits of the United States are not subject to the fee. Proof of export may be shown only by:
(A) a copy of a bill of lading issued by a licensed and certificated carrier showing the seller as consignor, the buyer or purchaser as consignee, and a delivery point outside the territorial limits of the United States;
(B) documentation provided by a licensed United States customs broker certifying that delivery was made to a point outside the territorial limits of the United States;
(C) formal entry documents from the country of destination showing that the battery was imported into a country other than the United States. For the country of Mexico, the formal entry document is the pedimento de importaciones document with a computerized, certified number issued by Mexican customs officials;
(D) a copy of the original airway, ocean, or railroad bill of lading issued by a licensed and certificated carrier which describes the items being exported and a copy of the freight forwarder's receipt if the freight forwarder takes possession of the property in Texas; or
(E) a purchaser's blanket maquiladora exemption certificate and a copy of the purchaser's maquiladora export permit provided to the seller as required under §3.358 of this title (relating to Maquiladoras).
(4) There is no exemption provided for any organization or governmental agency, except as provided in paragraph (5) of this subsection.
(5) The United States, its instrumentalities, and agencies are exempted from the battery sales fee.
(6) Sales for disposal or reclamation are not subject to the fee.
(7) The battery sales fee does not apply to a sale of a battery made by a dealer or a marketplace provider when it meets all of the following criteria:
(A) the ampere-hour rating of the battery is less than 10 ampere-hours;
(B) the sum of the dimensions of the battery (height, width, and length) is less than 15 inches; and
(C) the battery is sealed so that no access to the interior of the battery is possible without destroying the battery.
(i) Replacements covered by a warranty or service contract.
(1) The replacement of a battery under a manufacturer's warranty, without an additional charge to the purchaser, is not the sale of a battery to the purchaser. This replacement, therefore, is not subject to the fee. If there is a charge to the customer for the replacement (such as a pro rata warranty adjustment), then the customer must pay the battery sales fee.
(2) The replacement of a battery under an extended warranty or a service contract, for which the customer pays an extra charge, depends on the terms of the contract.
(A) If the replacement is free of charge to the customer, the dealer is responsible for paying the fee.
(B) If there is a charge to the customer for the replacement, the customer must pay the fee.
(j) Penalty. A dealer or marketplace provider [person] who does not file a report as provided by this section,
or who possesses a fee collected or payable under this section and
does not timely remit the fee to the comptroller, shall pay a penalty
of 5.0% of the amount of the fee due and payable. If the dealer or
marketplace provider [person] does not file the report
or pay the fee before the 30th day after the date on which the fee
or report is due, the dealer or marketplace provider [person]
shall pay a penalty of an additional 5.0% of the amount of the fee
due and payable.
(k) Interest. Interest accrues on the unpaid fee due beginning 60 days after the due date and ends the day on which the fee is paid.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 27, 2023.
TRD-202302676
Jenny Burleson
Director, Tax Policy
Comptroller of Public Accounts
Earliest possible date of adoption: September 10, 2023
For further information, please call: (512) 475-2220
CHAPTER 41. HEALTH CARE AND INSURANCE PROGRAMS
SUBCHAPTER C. TEXAS SCHOOL EMPLOYEES GROUP HEALTH (TRS-ACTIVECARE)
The Teacher Retirement System of Texas (TRS) proposes new §41.53, relating to Special Transitional Plan, under Subchapter C (relating to Texas School Employees Group Health (TRS-Activecare)) under Chapter 41 in Part 3 of Title 34 of the Texas Administrative Code.
BACKGROUND AND PURPOSE
TRS-ActiveCare's primary health plan operates on a plan year that begins on September 1 and ends on the following August 31. In order to elect to participate in that plan, a participating entity must provide notice by December 31 of the year immediately preceding the next September 1 as of which it intends to enter the plan. See Insurance Code §1579.155 and corresponding TRS Rule 41.30. This creates difficulties for eligible participating entities to transition into TRS-ActiveCare when those entities currently offer a health plan that operates on a plan year that is different. Such entities may find it difficult or too costly to terminate their own plans in the middle of their plan year to transition into TRS-ActiveCare.
Proposed new §41.53, relating to Special Transitional Plan, exercises the Board's authority to create new plans under TRS-ActiveCare by creating a "Special Transitional Plan" that will provide an option to facilitate these entities' transition into TRS-ActiveCare. It will also allow such participating entities to provide notice by December 31 to enter TRS-ActiveCare's traditional plan as of the following September 1. In the interim, the participating entity will participate in the Special Transitional Plan.
FISCAL NOTE
Don Green, TRS Chief Financial Officer, has determined that for each year of the first five years the proposed new rule will be in effect, there will be no foreseeable fiscal implications for state or local governments as a result of administering the proposed new rule.
PUBLIC COST/BENEFIT
For each year of the first five years the proposed new rule will be in effect, Mr. Green also has determined that the public benefit anticipated as a result of adopting the new rule will be to allow participating entities that would have otherwise found it difficult or impossible to transition to TRS-ActiveCare to potentially realize substantial savings on their employee health care costs by providing a transitional avenue to enter TRS-ActiveCare. Mr. Green has also determined that there is no probable economic cost to entities or persons who may take advantage of the proposed new rule.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS
TRS has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed new rule. Therefore, neither an economic impact statement nor a regulatory flexibility analysis is required under Government Code §2006.002.
LOCAL EMPLOYMENT IMPACT STATEMENT
TRS has determined that there will be no effect on local employment because of the proposed new rule. Therefore, no local employment impact statement is required under Government Code §2001.022.
GOVERNMENT GROWTH IMPACT STATEMENT
TRS has determined that for the first five years the proposed new rule is in effect, the proposed new rule will not create or eliminate any TRS programs; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to TRS; will not eliminate any fees currently paid to TRS; will not expand, limit or repeal an existing regulation; will not increase or decrease the number of individuals subject to the rule's applicability; and will not affect the state's economy.
This proposal creates a new regulation. Proposed §41.53 is a new rule through which TRS, as trustee of the Texas School Employees Uniform Group Health Coverage Program created under Chapter 1579 of the Insurance Code, will establish a new plan of group coverage under Section 1579.101.
TAKINGS IMPACT ASSESSMENT
TRS has determined that there are no private real property interests affected by the proposed new rule. Therefore, a takings impact assessment is not required under Government Code §2007.043.
COSTS TO REGULATED PERSONS
TRS has determined that Government Code §2001.0045 does not apply to the proposed new rule because it does not impose a cost on regulated persons.
COMMENTS
Comments may be submitted in writing to Brian Guthrie, TRS Executive Director, 1000 Red River Street, Austin, Texas 78701-2698. Written comments must be received by TRS no later than 30 days after publication of this notice in the Texas Register.
STATUTORY AUTHORITY
This new §41.53 is proposed under the authority of Chapter 1579, Insurance Code, which establishes the Texas School Employees Uniform Group Health Coverage (TRS-ActiveCare); Insurance Code §1579.052, which allows the trustee to adopt rules relating to, and to administer, TRS-ActiveCare as considered necessary by the trustee and to take the actions it considers necessary to devise, implement, and administer TRS-ActiveCare; Insurance Code §1579.101, which allows the trustee by rule to establish plans of group coverages for employees participating in TRS-ActiveCare and their dependents; Chapter 825, Texas Government Code, which governs the administration of TRS; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The proposed new rule affects Insurance Code §1579.155, concerning Program Participation: Election.
§41.53.Special Transitional Plan.
(a) Special Transitional Plan. In order to transition an entity into the TRS-ActiveCare plan year, TRS may establish a short duration Special Transitional Plan for an otherwise eligible entity that has an existing group health plan year that does not terminate the day preceding the beginning of the regular TRS-ActiveCare plan year. The purpose of the Special Transitional Plan is to assist an entity to transition into the TRS-ActiveCare plan year by covering the gap period between the end of the entity's existing coverage and the beginning of the regular TRS-ActiveCare plan year coverage.
(b) Notice of election and required information. An entity applying to a Special Transitional Plan ("applicant entity") must:
(1) Submit to TRS the information required under §41.45 of this title (relating to Required Information from School Districts, Other Educational Districts, Charter Schools, and Regional Education Service Centers Electing to Participate in TRS-ActiveCare) at least 180 days in advance of the first day of the month in which the Special Transitional Plan is to be effective; and
(2) Submit an application to the Special Transitional Plan and a notice of election to participate in the regular TRS-ActiveCare plan under §41.30 of this title (relating to Participation in the Health Benefits Program under the Texas School Employees Uniform Group Health Coverage Act by School Districts, Other Educational Districts, Charter Schools, and Regional Education Service Centers) at the same time. Such application and election to participate must be submitted no later than 90 days in advance of the first day of the month in which the Special Transitional Plan is to be effective and never later than December 31 of the year before the plan year in which the election to participate in TRS-ActiveCare is to be made effective.
(c) Manner, form, and effect of election.
(1) Application for the Special Transitional Plan. All applications for a Special Transitional Plan under this section shall be in writing, in a form prescribed by TRS.
(2) Incomplete or untimely applications. An incomplete or untimely filed application to a Special Transitional Plan will be denied.
(3) Duration. A Special Transitional Plan issued by TRS under this section shall have a duration of less than a year, shall begin on the TRS approved date, and shall end on the day before the regular TRS-ActiveCare plan year begins.
(d) Coverage. The Special Transitional Plan shall have the same benefits and coverage as one or more of the TRS-ActiveCare plan options being offered to similar participating entities in the applicant entity's region on the day that the applicant entity begins the Special Transitional Plan, except for any fully insured HMO plan options. Such terms shall include those of §41.33 of this title (relating to Definitions Applicable to the Texas School Employees Uniform Group Health Coverage Program) through §41.40 of this title (relating to Coverage Continuation While on Leave Without Pay), except as modified by TRS to adjust them to the limited-time nature and effective dates of the Special Transitional Plan.
(e) Eligibility. Individuals shall be eligible for the Special Transitional Plan under the same eligibility requirements as the TRS-ActiveCare Plan, as described in §41.34 of this title (relating to Eligibility for Coverage under the Texas School Employees Uniform Group Health Coverage Program).
(f) Rates and Premiums. The Special Transitional Plan may have rates that differ from the rates that apply to other similar entities participating in the TRS-ActiveCare Plan in the applicant entity's region. The applicant entity shall pay its premiums for the Special Transitional Plan in the same way that participating entities pay the premiums for the TRS-ActiveCare Plan under §41.41 of this title (relating to Premium Payments) and be subject to the same corrective actions.
(g) Enrollment periods. The applicant entity must participate in two different open enrollments after the date of their application: one enrollment period for the Special Transitional Plan, which will begin at least 31 days prior to the beginning of the Special Transitional Plan; and another enrollment period for the regular TRS-ActiveCare Plan, in accordance with §41.36 of this title (relating to Enrollment Periods for TRS-ActiveCare).
(h) Appeals. The appeals processes for claims, benefits, and eligibility under the Special Transitional Plan shall be the same as those that apply to the regular TRS-ActiveCare Plan.
(i) Expulsion. The Special Transitional Plan shall follow the same expulsion process as the regular TRS-ActiveCare Plan, as described in §41.52 of this title (relating to Expulsion from TRS-ActiveCare).
(j) Responsibility for notices, disclosures, and administrative adjustments. It is the applicant entity's responsibility to give to its employees, eligible dependents, agents, contractors, and administrators all necessary notices and disclosures about any short-term and long-term implications of joining TRS-ActiveCare on a different date than the applicant entity's plan year through the Special Transitional Plan, and to conduct any necessary administrative adjustments.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 28, 2023.
TRD-202302696
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Earliest possible date of adoption: September 10, 2023
For further information, please call: (512) 542-3528