2009S0621-1 03/09/09
By: Ritter H.B. No. 4375
A BILL TO BE ENTITLED
AN ACT
relating to methods and procedures of ad valorem tax valuation of
inventory of persons engaged in the business of leasing or renting
certain vehicles, machinery, or equipment, and to any collection by
those persons of tax escrow payments.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. It is the intent of the legislature that the
changes in law made by this Act be construed and implemented as an
alternative method for valuation and collection of an existing ad
valorem tax on property to which the changes apply and not as the
imposition of a new tax on the affected property. The legislature
further intends that the implementation of the changes in law made
by this Act not result in any increase in tax revenue by virtue of
the changes or an increase in the tax burden per unit of taxable
property of affected parties by virtue of the changes.
SECTION 2. Section 23.1241, Tax Code, is amended by adding
Subsection (k) to read as follows:
(k) This section does not apply to a person who has elected
to instead be subject to Sections 23.12 and 23.1243.
SECTION 3. Subchapter B, Chapter 23, Tax Code, is amended by
adding Section 23.1243 to read as follows:
Sec. 23.1243. LEASE OR RENTAL OF CERTAIN VEHICLES,
MACHINERY, OR EQUIPMENT. (a) A person who is otherwise subject to
Section 23.1241 may elect to instead be subject to this section and
Section 23.12 if the person meets the applicability requirements
described by this section.
(b) In this section, "qualified property" means
self-propelled, self-powered, or pull-type equipment, including
attachments, farm equipment, or a diesel engine, that weighs at
least 1,500 pounds and is intended to be used for agricultural,
construction, industrial, maritime, mining, or forestry uses.
Other than a vehicle that meets the definition of qualified
property under this subsection, the term does not include a motor
vehicle that is required to be:
(1) titled under Chapter 501, Transportation Code; or
(2) registered under Chapter 502, Transportation
Code.
(c) This section applies only to:
(1) a person primarily engaged in the business of
leasing or renting qualified property in this state to others; and
(2) qualified property owned by the person that:
(A) has taxable situs in this state for ad
valorem tax purposes; and
(B) is subject to a lease or rental agreement
having a term of less than one year or to an at-will contract that
does not contain a defined term.
(d) This section does not apply to an item of qualified
property that is operated during the term of the lease or rental
agreement solely by the owner of the qualified property or by an
employee or agent of the owner.
(e) A person who leases or rents qualified property to
another person and includes an amount for escrow of ad valorem tax
as part of the agreement with the lessee or renter shall clearly
state in the lease or rental agreement or invoice covering the
transaction the amount and rate of the tax and the amount being
escrowed.
(f) If an amount remains of any escrow collections in excess
of the amount of annual property taxes due on the qualified
property, the assessor-collector of taxes for the county in which
ad valorem taxes on the property were imposed during the applicable
ad valorem tax year shall retain the excess escrow. If the amount
of any escrow collections is less than the amount of annual property
taxes due on the qualified property, the person who collected the
escrow amounts shall pay the additional amount due directly to the
tax office not later than February 15 of the tax year following the
tax year in which the taxes were imposed.
(g) As soon as practicable following receipt of any amount
under Subsection (f), the assessor-collector of taxes for the
county shall distribute those proceeds to the taxing units that
imposed ad valorem taxes on the qualified property in the preceding
tax year in proportion to the amount of taxes each taxing unit
imposed in that year on the property.
SECTION 4. This Act takes effect September 1, 2009.