| 1 | 1 | | 2009S0621-1 03/09/09 |
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| 2 | 2 | | By: Ritter H.B. No. 4375 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to methods and procedures of ad valorem tax valuation of |
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| 8 | 8 | | inventory of persons engaged in the business of leasing or renting |
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| 9 | 9 | | certain vehicles, machinery, or equipment, and to any collection by |
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| 10 | 10 | | those persons of tax escrow payments. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. It is the intent of the legislature that the |
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| 13 | 13 | | changes in law made by this Act be construed and implemented as an |
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| 14 | 14 | | alternative method for valuation and collection of an existing ad |
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| 15 | 15 | | valorem tax on property to which the changes apply and not as the |
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| 16 | 16 | | imposition of a new tax on the affected property. The legislature |
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| 17 | 17 | | further intends that the implementation of the changes in law made |
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| 18 | 18 | | by this Act not result in any increase in tax revenue by virtue of |
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| 19 | 19 | | the changes or an increase in the tax burden per unit of taxable |
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| 20 | 20 | | property of affected parties by virtue of the changes. |
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| 21 | 21 | | SECTION 2. Section 23.1241, Tax Code, is amended by adding |
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| 22 | 22 | | Subsection (k) to read as follows: |
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| 23 | 23 | | (k) This section does not apply to a person who has elected |
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| 24 | 24 | | to instead be subject to Sections 23.12 and 23.1243. |
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| 25 | 25 | | SECTION 3. Subchapter B, Chapter 23, Tax Code, is amended by |
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| 26 | 26 | | adding Section 23.1243 to read as follows: |
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| 27 | 27 | | Sec. 23.1243. LEASE OR RENTAL OF CERTAIN VEHICLES, |
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| 28 | 28 | | MACHINERY, OR EQUIPMENT. (a) A person who is otherwise subject to |
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| 29 | 29 | | Section 23.1241 may elect to instead be subject to this section and |
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| 30 | 30 | | Section 23.12 if the person meets the applicability requirements |
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| 31 | 31 | | described by this section. |
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| 32 | 32 | | (b) In this section, "qualified property" means |
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| 33 | 33 | | self-propelled, self-powered, or pull-type equipment, including |
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| 34 | 34 | | attachments, farm equipment, or a diesel engine, that weighs at |
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| 35 | 35 | | least 1,500 pounds and is intended to be used for agricultural, |
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| 36 | 36 | | construction, industrial, maritime, mining, or forestry uses. |
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| 37 | 37 | | Other than a vehicle that meets the definition of qualified |
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| 38 | 38 | | property under this subsection, the term does not include a motor |
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| 39 | 39 | | vehicle that is required to be: |
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| 40 | 40 | | (1) titled under Chapter 501, Transportation Code; or |
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| 41 | 41 | | (2) registered under Chapter 502, Transportation |
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| 42 | 42 | | Code. |
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| 43 | 43 | | (c) This section applies only to: |
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| 44 | 44 | | (1) a person primarily engaged in the business of |
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| 45 | 45 | | leasing or renting qualified property in this state to others; and |
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| 46 | 46 | | (2) qualified property owned by the person that: |
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| 47 | 47 | | (A) has taxable situs in this state for ad |
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| 48 | 48 | | valorem tax purposes; and |
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| 49 | 49 | | (B) is subject to a lease or rental agreement |
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| 50 | 50 | | having a term of less than one year or to an at-will contract that |
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| 51 | 51 | | does not contain a defined term. |
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| 52 | 52 | | (d) This section does not apply to an item of qualified |
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| 53 | 53 | | property that is operated during the term of the lease or rental |
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| 54 | 54 | | agreement solely by the owner of the qualified property or by an |
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| 55 | 55 | | employee or agent of the owner. |
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| 56 | 56 | | (e) A person who leases or rents qualified property to |
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| 57 | 57 | | another person and includes an amount for escrow of ad valorem tax |
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| 58 | 58 | | as part of the agreement with the lessee or renter shall clearly |
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| 59 | 59 | | state in the lease or rental agreement or invoice covering the |
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| 60 | 60 | | transaction the amount and rate of the tax and the amount being |
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| 61 | 61 | | escrowed. |
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| 62 | 62 | | (f) If an amount remains of any escrow collections in excess |
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| 63 | 63 | | of the amount of annual property taxes due on the qualified |
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| 64 | 64 | | property, the assessor-collector of taxes for the county in which |
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| 65 | 65 | | ad valorem taxes on the property were imposed during the applicable |
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| 66 | 66 | | ad valorem tax year shall retain the excess escrow. If the amount |
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| 67 | 67 | | of any escrow collections is less than the amount of annual property |
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| 68 | 68 | | taxes due on the qualified property, the person who collected the |
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| 69 | 69 | | escrow amounts shall pay the additional amount due directly to the |
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| 70 | 70 | | tax office not later than February 15 of the tax year following the |
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| 71 | 71 | | tax year in which the taxes were imposed. |
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| 72 | 72 | | (g) As soon as practicable following receipt of any amount |
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| 73 | 73 | | under Subsection (f), the assessor-collector of taxes for the |
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| 74 | 74 | | county shall distribute those proceeds to the taxing units that |
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| 75 | 75 | | imposed ad valorem taxes on the qualified property in the preceding |
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| 76 | 76 | | tax year in proportion to the amount of taxes each taxing unit |
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| 77 | 77 | | imposed in that year on the property. |
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| 78 | 78 | | SECTION 4. This Act takes effect September 1, 2009. |
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