1-1 By: Montford S.B. No. 878
1-2 (In the Senate - Filed March 11, 1993; March 15, 1993, read
1-3 first time and referred to Committee on Finance; April 15, 1993,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 11, Nays 0; April 15, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 COMMITTEE SUBSTITUTE FOR S.B. No. 878 By: Montford
1-22 A BILL TO BE ENTITLED
1-23 AN ACT
1-24 relating to the value of certain types of property for purposes of
1-25 property taxation and to the prepayment of property taxes by
1-26 certain taxpayers.
1-27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-28 SECTION 1. Subsection (a), Section 23.12, Tax Code, is
1-29 amended to read as follows:
1-30 (a) Except as provided by Section 23.12A of this code, the
1-31 <The> market value of an inventory is the price for which it would
1-32 sell as a unit to a purchaser who would continue the business. An
1-33 inventory shall include residential real property which has never
1-34 been occupied as a residence and is held for sale in the ordinary
1-35 course of a trade or business, provided that the residential real
1-36 property remains unoccupied, is not leased or rented, and produces
1-37 no income.
1-38 SECTION 2. Subsection (f), Section 23.12, Tax Code, is
1-39 amended to read as follows:
1-40 (f) The owner of an inventory other than an applicable
1-41 inventory as that term is defined in Section 23.12A of this code
1-42 may elect to have the inventory appraised at its market value as of
1-43 September 1 of the year preceding the tax year to which the
1-44 appraisal applies by filing an application with the chief appraiser
1-45 requesting that the inventory be appraised as of September 1. The
1-46 application must clearly describe the inventory to which it applies
1-47 and be signed by the owner of the inventory. The application
1-48 applies to the appraisal of the inventory in each tax year that
1-49 begins after the next August 1 following the date the application
1-50 is filed with the chief appraiser unless the owner of the inventory
1-51 by written notice filed with the chief appraiser revokes the
1-52 application or the ownership of the inventory changes. A notice
1-53 revoking the application is effective for each tax year that begins
1-54 after the next September 1 following the date the notice of
1-55 revocation is filed with the chief appraiser.
1-56 SECTION 3. Subchapter B, Chapter 23, is amended by adding
1-57 Section 23.12A to read as follows:
1-58 Sec. 23.12A. SPECIAL INVENTORY; VALUE. (a) In this
1-59 section:
1-60 (1) "Applicable inventory" means an inventory that is
1-61 held for resale and that consists of individual units of personal
1-62 property, each unit of which must, as a matter of law, be titled in
1-63 the name of the retail purchaser and be registered with the Texas
1-64 Department of Transportation through the office of the county tax
1-65 assessor-collector.
1-66 (2) "Dealer" means a person who holds a dealer's
1-67 general distinguishing number issued by the Texas Department of
1-68 Transportation under the authority of Article 6686, Revised
2-1 Statutes.
2-2 (3) "Excluded inventory" means that part of an
2-3 applicable inventory that:
2-4 (A) is included in a transaction consisting of
2-5 five or more units sold to a single business entity that has a
2-6 manufacturer's or distributor's fleet identification number
2-7 authorizing the entity to make fleet purchases;
2-8 (B) is included in a transaction between
2-9 dealers; or
2-10 (C) consists of vehicles classified as medium or
2-11 heavy duty trucks of 16,000 pounds gross vehicular weight or more.
2-12 (4) "Owner" means the person responsible for the
2-13 payment of property taxes levied against a special inventory.
2-14 (5) "Sales price" means the total amount of money paid
2-15 or to be paid for the purchase of a motor vehicle as set forth in
2-16 the form entitled "Application for Texas Certificate of Title"
2-17 promulgated by the Texas Department of Transportation.
2-18 (6) "Special inventory" means that part of an
2-19 applicable inventory that remains after subtracting units included
2-20 in excluded inventory.
2-21 (7) "Total annual sales" means the total of the sales
2-22 price from every sale of units from a special inventory for a
2-23 12-month period or for that portion of a 12-month period for which
2-24 the owner of a special inventory is responsible for the payment of
2-25 property taxes levied against the special inventory.
2-26 (b) Except as provided by Subsection (c) of this section,
2-27 for the purpose of the computation of property tax, the market
2-28 value of a special inventory on January 1 is the total annual sales
2-29 from the special inventory for the 12-month period corresponding to
2-30 the prior tax year, divided by 12.
2-31 (c) For the purpose of the computation of property tax, the
2-32 chief appraiser may estimate the market value of a special
2-33 inventory with respect to which sales were not made for the entire
2-34 12-month period corresponding to the prior tax year. In making the
2-35 estimate allowed by this subsection the chief appraiser shall
2-36 extrapolate using sales data, if any, generated from the special
2-37 inventory in the prior tax year.
2-38 (d) Excluded inventory described in Subsection (a)(3)(C) of
2-39 this section is appraised as provided by Section 23.12(a) of this
2-40 code.
2-41 SECTION 4. Subchapter B, Chapter 23, Tax Code, is amended by
2-42 adding Section 23.12B to read as follows:
2-43 Sec. 23.12B. PREPAYMENT OF TAXES BY CERTAIN TAXPAYERS.
2-44 (a) In this section:
2-45 (1) "Chief appraiser" means the chief appraiser for
2-46 the appraisal district in which is located an applicable inventory.
2-47 (2) "Collector" means the county tax
2-48 assessor-collector in the county in which is located a special
2-49 inventory.
2-50 (3) "County aggregate tax rate" means the combined tax
2-51 rate of all relevant taxing units in a county.
2-52 (4) "Owner" has the meaning given it in Section 23.12A
2-53 of this code.
2-54 (5) "Relevant taxing unit" means a taxing unit,
2-55 including the county, authorized by law to levy property taxes
2-56 against a special inventory.
2-57 (6) "Sales price" has the meaning given it in Section
2-58 23.12A of this code.
2-59 (7) "Special inventory" has the meaning given it in
2-60 Section 23.12A of this code.
2-61 (8) "Special inventory tax statement" means the form
2-62 promulgated by the comptroller of public accounts as required by
2-63 this section.
2-64 (9) "Total annual sales" has the meaning given it in
2-65 Section 23.12A of this code.
2-66 (10) "Unit property tax value factor" is one-twelfth
2-67 of the most recent county aggregate tax rate for the county in
2-68 which a special inventory is located.
2-69 (b) An owner shall assign a unit property tax value to each
2-70 unit sold from a special inventory. The unit property tax value of
3-1 each unit is determined by multiplying the sales price of the unit
3-2 by the unit property tax value factor. On or before the 10th day
3-3 of each month the owner shall deposit with the collector a sum
3-4 equal to the total of unit property tax value assigned to all units
3-5 sold from the special inventory in the prior month. The money
3-6 shall be deposited by the collector in or otherwise credited by the
3-7 collector to the owner's escrow account for prepayment of property
3-8 taxes as provided by this section. An escrow account required by
3-9 this section is used to pay property taxes levied against the
3-10 special inventory and the owner shall fund the escrow account as
3-11 provided by this subsection.
3-12 (c) The collector shall maintain the escrow account for each
3-13 owner in the county depository. The collector is not required to
3-14 maintain a separate account in the depository for each escrow
3-15 account created as provided by this section but shall maintain
3-16 separate records for each owner. The collector shall retain any
3-17 interest generated by the escrow account to defray the cost of
3-18 administration of the prepayment procedure established by this
3-19 section. Interest generated by an escrow account created as
3-20 provided by this section is the sole property of the collector, and
3-21 that interest may be used by no entity other than the collector.
3-22 (d) The owner may not withdraw the money in the escrow
3-23 account.
3-24 (e) The comptroller of public accounts shall promulgate a
3-25 form entitled a Special Inventory Tax Statement. The owner of a
3-26 special inventory shall complete the form with respect to each unit
3-27 sold from the owner's applicable inventory and may use no other
3-28 form for that purpose. The form may include the information the
3-29 comptroller deems appropriate but shall include at least the
3-30 following:
3-31 (1) a description of the unit sold;
3-32 (2) a statement as to whether or not the unit was sold
3-33 from the owner's special inventory;
3-34 (3) the sales price of the unit;
3-35 (4) the unit property tax value of the unit if the
3-36 unit was sold from the owner's special inventory; and
3-37 (5) the reason the unit was excluded from the owner's
3-38 special inventory, if no unit property tax value is assigned.
3-39 (f) On or before the 10th day of each month the owner of a
3-40 special inventory shall file with the chief appraiser the Special
3-41 Inventory Tax Statement for each unit sold by the owner from the
3-42 owner's applicable inventory in the prior month. An owner shall
3-43 retain documentation relating to the disposition of each unit sold
3-44 from an applicable inventory, including documentation relating to
3-45 the exclusion of a unit from special inventory and shall make that
3-46 documentation available to the chief appraiser upon request.
3-47 (g) A relevant taxing unit shall, on its tax bill prepared
3-48 for the owner of a special inventory, separately itemize the taxes
3-49 levied against the special inventory. When the tax bill is
3-50 prepared by a relevant taxing unit for a special inventory, the
3-51 assessor for the taxing unit, or an entity, if any, other than the
3-52 collector, that collects taxes on behalf of the taxing unit, shall
3-53 provide the collector a true and correct copy of the tax bill sent
3-54 to the owner, including taxes levied against the owner's special
3-55 inventory. The collector shall apply the money in the owner's
3-56 escrow account to the taxes imposed and deliver a tax receipt to
3-57 the owner. The collector shall apply the amount to each relevant
3-58 taxing unit in proportion to the amount of taxes levied, and the
3-59 assessor of each relevant taxing unit shall apply the funds
3-60 received from the collector to the taxes owed by the owner.
3-61 (h) If the amount in the escrow account is not sufficient to
3-62 pay the taxes in full, the collector shall apply the money to the
3-63 taxes and deliver to the owner a tax receipt for the partial
3-64 payment and a tax bill for the unpaid amount together with a
3-65 statement that the owner must remit to the collector the balance of
3-66 the total tax due.
3-67 (i) The collector shall remit to each relevant taxing unit
3-68 the total amount collected by the collector in deficiency payments.
3-69 The assessor of each relevant taxing unit shall apply those funds
3-70 to the taxes owed by the the owner. Taxes that are due but not
4-1 received by the collector and remitted by the collector to each
4-2 relevant taxing unit on or before January 31 are delinquent.
4-3 (j) The collector shall annually distribute among the
4-4 relevant taxing units, in proportion to the taxes levied by each
4-5 against the special inventory, funds, if any, that remain in the
4-6 escrow account after the payment of all property taxes due.
4-7 SECTION 5. This Act is effective January 1, 1994. The
4-8 market value of a special inventory on January 1, 1994, is
4-9 one-twelfth of total annual sales from the special inventory for
4-10 tax year 1993.
4-11 SECTION 6. The importance of this legislation and the
4-12 crowded condition of the calendars in both houses create an
4-13 emergency and an imperative public necessity that the
4-14 constitutional rule requiring bills to be read on three several
4-15 days in each house be suspended, and this rule is hereby suspended,
4-16 and that this Act take effect and be in force according to its
4-17 terms, and it is so enacted.
4-18 * * * * *
4-19 Austin,
4-20 Texas
4-21 April 15, 1993
4-22 Hon. Bob Bullock
4-23 President of the Senate
4-24 Sir:
4-25 We, your Committee on Finance to which was referred S.B. No. 878,
4-26 have had the same under consideration, and I am instructed to
4-27 report it back to the Senate with the recommendation that it do not
4-28 pass, but that the Committee Substitute adopted in lieu thereof do
4-29 pass and be printed.
4-30 Montford,
4-31 Chairman
4-32 * * * * *
4-33 WITNESSES
4-34 FOR AGAINST ON
4-35 ___________________________________________________________________
4-36 Name: Ray M. Cornett x
4-37 Representing: Tax Assr Collectors Assn
4-38 City: Angleton
4-39 -------------------------------------------------------------------
4-40 Name: Buddy Winn x
4-41 Representing: TACA & Self
4-42 City:
4-43 -------------------------------------------------------------------
4-44 Name: George H. Moff x
4-45 Representing: Nueces County Appraisal Dist.
4-46 City: Corpus Christi
4-47 -------------------------------------------------------------------
4-48 Name: Gene Fondren x
4-49 Representing: Tx Automobile Dealers Assn
4-50 City: Austin
4-51 -------------------------------------------------------------------