74R10797 T
By Heflin H.B. No. 2940
Substitute the following for H.B. No. 2940:
By Heflin C.S.H.B. No. 2940
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the appraisal and ad valorem taxation of certain types
1-3 of personal property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 23.12(a), Property Tax Code, is amended
1-6 to read as follows:
1-7 (a) Except as provided by Sections 23.12A and 23.12D of this
1-8 code, the market value of an inventory is the price for which it
1-9 would sell as a unit to a purchaser who would continue the
1-10 business. An inventory shall include residential real property
1-11 which has never been occupied as a residence and is held for sale
1-12 in the ordinary course of a trade or business, provided that the
1-13 residential real property remains unoccupied, is not leased or
1-14 rented, and produces no income.
1-15 SECTION 2. Section 23.12(f), Property Tax Code, is amended
1-16 to read as follows:
1-17 (f) The owner of an inventory other than an applicable
1-18 inventory as that term is defined in Section 23.12A of this code or
1-19 a dealer's vessel and outboard motor inventory as that term is
1-20 defined in Section 23.12D of this code may elect to have the
1-21 inventory appraised at its market value as of September 1 of the
1-22 year preceding the tax year to which the appraisal applies by
1-23 filing an application with the chief appraiser requesting that the
2-1 inventory be appraised as of September 1. The application must
2-2 clearly describe the inventory to which it applies and be signed by
2-3 the owner of the inventory. The application applies to the
2-4 appraisal of the inventory in each tax year that begins after the
2-5 next August 1 following the date the application is filed with the
2-6 chief appraiser unless the owner of the inventory by written notice
2-7 filed with the chief appraiser revokes the application or the
2-8 ownership of the inventory changes. A notice revoking the
2-9 application is effective for each tax year that begins after the
2-10 next September following the date the notice of revocation is filed
2-11 with the chief appraiser.
2-12 SECTION 3. Chapter 23, Subchapter B, Property Tax Code, is
2-13 amended by adding Section 23.12D to read as follows:
2-14 Sec. 23.12D. DEALER'S VESSEL AND OUTBOARD MOTOR INVENTORY;
2-15 VALUE. (a) In this section:
2-16 (1) "Chief appraiser" means the chief appraiser for
2-17 the appraisal district in which a dealer's vessel and outboard
2-18 motor inventory is located.
2-19 (2) "Collector" means the county tax
2-20 assessor-collector in the county in which a dealer's vessel and
2-21 outboard motor inventory is located.
2-22 (3) "Dealer" means a person who holds a dealer's and
2-23 manufacturer's number issued by the Texas Parks and Wildlife
2-24 Department under the authority of Section 31.041, Parks and
2-25 Wildlife Code, or is authorized by law or interstate reciprocity
3-1 agreement to purchase vessels or outboard motors in Texas without
3-2 paying the sales tax. The term does not include a person who is
3-3 principally engaged in manufacturing vessels or outboard motors or
3-4 an entity that is owned or controlled by such a person.
3-5 (4) "Dealer's vessel and outboard motor inventory"
3-6 means all vessels and outboard motors held for sale by a dealer.
3-7 (5) "Dealer-financed sale" means the sale of a vessel
3-8 or outboard motor in which the seller finances the purchase of the
3-9 vessel or outboard motor, is the sole lender in the transaction,
3-10 and retains exclusively the right to enforce the terms of the
3-11 agreement evidencing the sale.
3-12 (6) "Declaration" means the dealer's vessel and
3-13 outboard motor inventory declaration form promulgated by the
3-14 comptroller as required by this section.
3-15 (7) "Fleet transaction" means the sale of five or more
3-16 vessels or outboard motors from a dealer's vessel and outboard
3-17 motor inventory to the same business entity within one calendar
3-18 year.
3-19 (8) "Outboard motor" has the meaning given it by
3-20 Section 31.003, Parks and Wildlife Code.
3-21 (9) "Owner" means a dealer who owes current year
3-22 vessel and outboard motor inventory taxes levied against a dealer's
3-23 vessel and outboard motor inventory.
3-24 (10) "Person" means a natural person, corporation,
3-25 partnership, or other legal entity.
4-1 (11) "Sales price" means the total amount of money
4-2 paid or to be paid for the purchase of:
4-3 (A) a vessel as set forth as "sales price" in
4-4 the form entitled "Application for Texas Certificate of
4-5 Number/Title for Boat/Seller, Donor or Trader's Affidavit"
4-6 promulgated by the Texas Parks and Wildlife Department; or
4-7 (B) an outboard motor as set forth as "sales
4-8 price" in the form entitled "Application for Texas Certificate of
4-9 Title for an Outboard Motor/Seller, Donor or Trader's Affidavit"
4-10 promulgated by the Texas Parks and Wildlife Department.
4-11 In a transaction involving a vessel or an outboard motor that
4-12 does not involve the use of either form, the term means an amount
4-13 of money that is equivalent, or substantially equivalent, to the
4-14 amount that would appear as "sales price" on either the Application
4-15 for Texas Certificate of Number/Title for Boat/Seller, Donor or
4-16 Trader's Affidavit or the Application for Texas Certificate of
4-17 Title for an Outboard Motor/Seller, Donor or Trader's Affidavit if
4-18 either form were involved.
4-19 (12) "Subsequent sale" means a dealer-financed sale of
4-20 a vessel or outboard motor that, at the time of the sale, has been
4-21 the subject of a dealer-financed sale from the same dealer's vessel
4-22 and outboard motor inventory in the same calendar year.
4-23 (13) "Total annual sales" means the total of the sales
4-24 price from every sale from a dealer's vessel and outboard motor
4-25 inventory for a 12-month period.
5-1 (14) "Vessel" has the meaning given it by Section
5-2 31.003, Parks and Wildlife Code, except such term shall not
5-3 include:
5-4 (A) vessels of more than 65 feet in length,
5-5 measured from end to end over the deck, excluding sheer; and
5-6 (B) canoes, kayaks, punts, rowboats, rubber
5-7 rafts, or other vessels under 14 feet in length when paddled,
5-8 poled, oared, or windblown.
5-9 (b) For the purpose of the computation of property tax, the
5-10 market value of a dealer's vessel and outboard motor inventory on
5-11 January 1 is the total annual sales from the dealer's vessel and
5-12 outboard motor inventory, less sales to dealers, fleet
5-13 transactions, and subsequent sales, for the 12-month period
5-14 corresponding to the prior tax year, divided by 12.
5-15 (c) For the purpose of the computation of property tax, the
5-16 market value of the dealer's vessel and outboard motor inventory of
5-17 an owner who was not a dealer on January 1 of the prior tax year,
5-18 the chief appraiser shall estimate the market value of the dealer's
5-19 vessel and outboard motor inventory. In making the estimate
5-20 required by this subsection the chief appraiser shall extrapolate
5-21 using sales data, if any, generated by sales from the dealer's
5-22 vessel and outboard motor inventory in the prior tax year.
5-23 (d) Except for dealer's vessel and outboard motor inventory,
5-24 personal property held by a dealer is appraised as provided by
5-25 other sections of this code. In the case of a dealer whose sales
6-1 from dealer's vessel and outboard motor inventory are made
6-2 predominantly to dealers, the chief appraiser shall appraise the
6-3 dealer's vessel and outboard motor inventory as provided by Section
6-4 23.12 of this code.
6-5 (e) A dealer is presumed to be an owner of a dealer's vessel
6-6 and outboard motor inventory on January 1 if, in the 12-month
6-7 period ending on December 31 of the immediately preceding year, the
6-8 dealer sold a vessel or outboard motor to a person other than a
6-9 dealer. The presumption created by this subsection is not rebutted
6-10 by the fact that a dealer has no vessels or outboard motors
6-11 physically on hand for sale from dealer's vessel and outboard motor
6-12 inventory on January 1.
6-13 (f) The comptroller shall promulgate a form entitled
6-14 Dealer's Vessel and Outboard Motor Inventory Declaration. Except
6-15 as provided by Section 23.12E(l) of this code, not later than
6-16 February 1 of each year, or, in the case of a dealer who was not in
6-17 business on January 1, not later than 30 days after commencement of
6-18 business, each dealer shall file a declaration with the chief
6-19 appraiser and file a copy with the collector. The declaration is
6-20 sufficient to comply with this subsection if it sets forth the
6-21 following information:
6-22 (1) the name and business address of each location at
6-23 which the dealer owner conducts business;
6-24 (2) each of the dealer's and manufacturer's numbers,
6-25 issued by the Texas Parks and Wildlife Department;
7-1 (3) a statement that the dealer owner is the owner of
7-2 a dealer's vessel and outboard motor inventory; and
7-3 (4) the market value of the dealer's vessel and
7-4 outboard motor inventory for the current tax year as computed under
7-5 Section 23.12D(b) of this code.
7-6 (g) Under the terms provided by this subsection, the chief
7-7 appraiser may examine the books and records of the holder of a
7-8 dealer's and manufacturer's number issued by the Texas Parks and
7-9 Wildlife Department. A request made under this subsection must be
7-10 made in writing, delivered personally to the custodian of the
7-11 records, must provide a period not less than 15 days for the person
7-12 to respond to the request, and must state that the person to whom
7-13 it is addressed has the right to seek judicial relief from
7-14 compliance with the request. In a request made under this section
7-15 the chief appraiser may examine:
7-16 (1) the document issued by the Texas Parks and
7-17 Wildlife Department showing the person's dealer's and
7-18 manufacturer's number;
7-19 (2) documentation appropriate to allow the chief
7-20 appraiser to ascertain the applicability of this section and
7-21 Section 23.12E of this code to the person;
7-22 (3) sales records to substantiate information set
7-23 forth in the dealer's declaration filed by the person.
7-24 (h) If a dealer fails to file a declaration required by this
7-25 section, or if, on the declaration required by this section, a
8-1 dealer reports the sale of fewer than five vessels or outboard
8-2 motors in the prior year, the chief appraiser shall report that
8-3 fact to the Texas Parks and Wildlife Department.
8-4 (i) A dealer who fails to file a declaration required by
8-5 this section commits an offense. An offense under this subsection
8-6 is a misdemeanor punishable by a fine not to exceed $500. Each day
8-7 during which a dealer fails to comply with the terms of this
8-8 subsection is a separate violation.
8-9 (j) A person who violates Subsection (h) of this section
8-10 commits an offense. An offense under this subsection is a
8-11 misdemeanor punishable by a fine not to exceed $500. Each day
8-12 during which a person fails to comply with the terms of Subsection
8-13 (h) of this section is a separate violation.
8-14 (k) In addition to other penalties provided by law, a dealer
8-15 who fails to file a declaration required by this section shall
8-16 forfeit a penalty. A tax lien attaches to the dealer's business
8-17 personal property to secure payment of the penalty. The
8-18 appropriate district attorney, criminal district attorney, or
8-19 county attorney shall collect the penalty established by this
8-20 section in the name of the chief appraiser or collector. Venue of
8-21 an action brought under this subsection is in the county in which
8-22 the violation occurred or in the county in which the owner
8-23 maintains his principal place of business or residence. A penalty
8-24 forfeited under this subsection is $1000 for each month or part of
8-25 a month in which a declaration is not filed after it is due.
9-1 SECTION 4. Chapter 23, Subchapter B, Property Tax Code, is
9-2 amended by adding Section 23.12E to read as follows:
9-3 Sec. 23.12E. PREPAYMENT OF TAXES BY CERTAIN TAXPAYERS. (a)
9-4 In this section:
9-5 (1) "Aggregate tax rate" means the combined tax rates
9-6 of all relevant taxing units authorized by law to levy property
9-7 taxes against a dealer's vessel and outboard motor inventory.
9-8 (2) "Chief appraiser" has the meaning given it in
9-9 Section 23.12D of this code.
9-10 (3) "Collector" has the meaning given it in Section
9-11 23.12D of this code.
9-12 (4) "Dealer's vessel and outboard motor inventory" has
9-13 the meaning given it in Section 23.12D of this code.
9-14 (5) "Declaration" has the meaning given it in Section
9-15 23.12D of this code.
9-16 (6) "Owner" has the meaning given it in Section 23.12D
9-17 of this code.
9-18 (7) "Relevant taxing unit" means a taxing unit,
9-19 including the county, authorized by law to levy property taxes
9-20 against a dealer's vessel and outboard motor inventory.
9-21 (8) "Sales price" has the meaning given it in Section
9-22 23.12D of this code.
9-23 (9) "Statement" means the dealer's vessel and outboard
9-24 motor inventory tax statement filed on a form promulgated by the
9-25 comptroller as required by this section.
10-1 (10) "Subsequent sale" has the meaning given it in
10-2 Section 23.12D of this code.
10-3 (11) "Total annual sales" has the meaning given it in
10-4 Section 23.12D of this code.
10-5 (12) "Unit property tax factor" means a number equal
10-6 to one-twelfth of the prior year aggregate tax rate at the location
10-7 where a dealer's vessel and outboard motor inventory is located on
10-8 January 1 of the current year.
10-9 (b) Except for a vessel or outboard motor sold to a dealer,
10-10 a vessel or outboard motor included in a fleet transaction, or a
10-11 vessel or outboard motor that is the subject of a subsequent sale,
10-12 an owner or a person who has agreed by contract to pay the owner's
10-13 current year property taxes levied against the owner's vessel and
10-14 outboard motor inventory, shall assign a unit property tax to each
10-15 vessel and outboard motor sold from a dealer's vessel and outboard
10-16 motor inventory. The unit property tax of each vessel or outboard
10-17 motor is determined by multiplying the sales price of the vessel or
10-18 outboard motor by the unit property tax factor. On or before the
10-19 10th day of each month the owner shall, together with the statement
10-20 filed by the owner as provided by this section, deposit with the
10-21 collector a sum equal to the total of unit property tax assigned to
10-22 all vessels and outboard motors sold from the dealer's vessel and
10-23 outboard motor inventory in the prior month to which a unit
10-24 property tax was assigned. The money shall be deposited by the
10-25 collector in or otherwise credited by the collector to the owner's
11-1 escrow account for prepayment of property taxes as provided by this
11-2 section. An escrow account required by this section is used to pay
11-3 property taxes levied against the dealer's vessel and outboard
11-4 motor inventory, and the owner shall fund the escrow account as
11-5 provided by this subsection.
11-6 (c) The collector shall maintain the escrow account for each
11-7 owner in the county depository. The collector is not required to
11-8 maintain a separate account in the depository for each escrow
11-9 account created as provided by this section but shall maintain
11-10 separate records for each owner. The collector shall retain any
11-11 interest generated by the escrow account to defray the cost of
11-12 administration of the prepayment procedure established by this
11-13 section. Interest generated by an escrow account created as
11-14 provided by this section is the sole property of the collector, and
11-15 that interest may be used by no entity other than the collector.
11-16 Interest generated by an escrow account may not be used to reduce
11-17 or otherwise affect the annual appropriation to the collector that
11-18 would otherwise be made.
11-19 (d) The owner may not withdraw funds in an escrow account
11-20 created pursuant to this section.
11-21 (e) The comptroller shall promulgate a form entitled a
11-22 Dealer's Vessel and Outboard Motor Inventory Tax Statement. A
11-23 dealer shall complete the form with respect to each vessel and
11-24 outboard motor sold. A dealer may use no other form for that
11-25 purpose. The statement may include the information the comptroller
12-1 deems appropriate but shall include at least the following:
12-2 (1) a description of the vessel or outboard motor
12-3 sold;
12-4 (2) the sales price of the vessel or outboard motor;
12-5 (3) the unit property tax of the vessel or outboard
12-6 motor if any; and
12-7 (4) the reason no unit property tax is assigned if no
12-8 unit property tax is assigned.
12-9 (f) On or before the 10th day of each month a dealer shall
12-10 file with the collector the statement covering the sale of each
12-11 vessel or outboard motor sold by the dealer in the prior month. A
12-12 dealer shall file a copy of the statement with the chief appraiser
12-13 and retain documentation relating to the disposition of each vessel
12-14 and outboard motor sold. A chief appraiser or collector may
12-15 examine documents held by a dealer as provided by this subsection
12-16 in the same manner, and subject to the same provisions, as are set
12-17 forth in Section 23.12D(g) of this code.
12-18 (g) Except as provided by this subsection, the requirements
12-19 of Subsection (f) of this section apply to all dealers, without
12-20 regard to whether or not the dealer owes vessel and outboard motor
12-21 inventory tax for the current year. A dealer who owes no vessel
12-22 and outboard motor inventory tax for the current year because he
12-23 was not in business on January 1:
12-24 (1) shall file the statement required by this section
12-25 showing the information required by this section for each month
13-1 during which the dealer is in business; and
13-2 (2) may neither assign a unit property tax to a vessel
13-3 or outboard motor sold by the dealer nor remit money with the
13-4 statement unless pursuant to the terms of a contract as provided by
13-5 Subsection (l) of this section.
13-6 (h) A collector may establish a procedure, voluntary or
13-7 mandatory, by which the unit property tax of a vessel or outboard
13-8 motor is paid and deposited into an owner's escrow account at the
13-9 time of processing the transfer of title to the vessel or outboard
13-10 motor.
13-11 (i) A relevant taxing unit shall, on its tax bill prepared
13-12 for the owner of a dealer's vessel and outboard motor inventory,
13-13 separately itemize the taxes levied against the dealer's vessel and
13-14 outboard motor inventory. When the tax bill is prepared by a
13-15 relevant taxing unit for a dealer's vessel and outboard motor
13-16 inventory, the assessor for the relevant taxing unit, or an entity,
13-17 if any, other than the collector, that collects taxes on behalf of
13-18 the taxing unit, shall provide the collector a true and correct
13-19 copy of the tax bill sent to the owner, including taxes levied
13-20 against a dealer's vessel and outboard motor inventory. The
13-21 collector shall apply the money in the owner's escrow account to
13-22 the taxes imposed and deliver a tax receipt to the owner. The
13-23 collector shall apply the amount to each relevant taxing unit in
13-24 proportion to the amount of taxes levied, and the assessor of each
13-25 relevant taxing unit shall apply the funds received from the
14-1 collector to the taxes owed by the owner.
14-2 (j) If the amount in the escrow account is not sufficient to
14-3 pay the taxes in full, the collector shall apply the money to the
14-4 taxes and deliver to the owner a tax receipt for the partial
14-5 payment and a tax bill for the amount of the deficiency together
14-6 with a statement that the owner must remit to the collector the
14-7 balance of the total tax due.
14-8 (k) The collector shall remit to each relevant taxing unit
14-9 the total amount collected by the collector in deficiency payments.
14-10 The assessor of each relevant taxing unit shall apply those funds
14-11 to the taxes owed by the owner. Taxes that are due but not
14-12 received by the collector on or before January 31 are delinquent.
14-13 Not later than February 15 the collector shall distribute to
14-14 relevant taxing units in the manner set forth in this section all
14-15 funds collected pursuant to the authority of this section and held
14-16 in escrow by the collector as provided by this section. This
14-17 section does not impose a duty on a collector to collect delinquent
14-18 taxes that the collector is not otherwise obligated by law or
14-19 contract to collect.
14-20 (l) A person who acquires the business or assets of an owner
14-21 may, by contract, agree to pay the current year vessel and outboard
14-22 motor inventory taxes owed by the owner. The owner who owes the
14-23 current year tax and the person who acquires the business or assets
14-24 of the owner shall jointly notify the chief appraiser and the
14-25 collector of the terms of the agreement and of the fact that the
15-1 other person has agreed to pay the current year vessel and outboard
15-2 motor inventory taxes owed by the dealer. The chief appraiser and
15-3 the collector shall adjust their records accordingly.
15-4 Notwithstanding the terms of Section 23.12D of this code, a person
15-5 who agrees to pay current year vessel and outboard motor inventory
15-6 taxes as provided by this subsection is not required to file a
15-7 declaration until the year following the acquisition. This
15-8 subsection does not relieve the selling owner of the tax liability.
15-9 (m) A dealer who fails to file a statement as required by
15-10 this section commits an offense. An offense under this subsection
15-11 is a misdemeanor punishable by a fine not to exceed $100. Each day
15-12 during which a dealer fails to comply with the terms of this
15-13 subsection is a separate violation.
15-14 (n) In addition to other penalties provided by law, a dealer
15-15 who fails to file a statement as required by this section shall
15-16 forfeit a penalty. A tax lien attaches to the owner's business
15-17 personal property to secure payment of the penalty. The
15-18 appropriate district attorney, criminal district attorney, or
15-19 county attorney shall collect the penalty established by this
15-20 section in the name of the chief appraiser or collector. Venue of
15-21 an action brought under this subsection is in the county in which
15-22 the violation occurred or in the county in which the owner
15-23 maintains his principal place of business or residence. A penalty
15-24 forfeited under this subsection is $500 for each month or part of a
15-25 month in which a statement is not filed after it is due.
16-1 (o) An owner who fails to remit unit property taxes due as
16-2 required by this section shall pay a penalty of five percent of the
16-3 amount due. If the amount is not paid within 10 days after the due
16-4 date, the owner shall pay an additional penalty of five percent of
16-5 the amount due. Notwithstanding the terms of this section, unit
16-6 property taxes paid on or before January 31 of the year following
16-7 the date on which they are due are not delinquent. The collector,
16-8 the collector's designated agent, or the county or district
16-9 attorney shall enforce the terms of this subsection. A penalty
16-10 under this subsection is in addition to any other penalty provided
16-11 by law if the owner's taxes are delinquent.
16-12 (p) Fines and penalties collected pursuant to the authority
16-13 of this section shall be deposited in the county depository to the
16-14 credit of the general fund.
16-15 SECTION 5. Chapter 23, Subchapter B, Property Tax Code, is
16-16 amended by adding Section 23.12F to read as follows:
16-17 Sec. 23.12F. DECLARATIONS AND STATEMENTS CONFIDENTIAL. (a)
16-18 In this section:
16-19 (1) "Collector" has the meaning given it in Section
16-20 23.12D of this code.
16-21 (2) "Chief appraiser" has the meaning given it in
16-22 Section 23.12D of this code.
16-23 (3) "Dealer" has the meaning given it in Section
16-24 23.12D of this code.
16-25 (4) "Declaration" has the meaning given it in Section
17-1 23.12D of this code.
17-2 (5) "Owner" has the meaning given it in Section 23.12D
17-3 of this code.
17-4 (6) "Statement" has the meaning given it in Section
17-5 23.12D of this code.
17-6 (b) Except as provided by this section, a declaration or
17-7 statement filed with a chief appraiser or collector as required by
17-8 Section 23.12D or Section 23.12E of this code is confidential and
17-9 not open to public inspection. A declaration or statement and the
17-10 information contained in either may not be disclosed to anyone
17-11 except an employee of the appraisal office who appraises the
17-12 property or to an employee of the county tax assessor-collector
17-13 involved in the maintenance of the owner's escrow account.
17-14 (c) Information made confidential by this section may be
17-15 disclosed:
17-16 (1) in a judicial or administrative proceeding
17-17 pursuant to a lawful subpoena;
17-18 (2) to the person who filed the declaration or
17-19 statement or to that person's representative authorized by the
17-20 person in writing to receive the information;
17-21 (3) to the comptroller or an employee of the
17-22 comptroller authorized by the comptroller to receive the
17-23 information;
17-24 (4) to a collector or chief appraiser;
17-25 (5) to a district attorney, criminal district attorney
18-1 or county attorney involved in the enforcement of a penalty imposed
18-2 pursuant to Section 23.12D or Section 23.12E of this code;
18-3 (6) for statistical purposes if in a form that does
18-4 not identify specific property or a specific property owner; or
18-5 (7) if and to the extent that the information is
18-6 required for inclusion in a document or record that the appraisal
18-7 or collection office is required by law to prepare or maintain.
18-8 (d) A person who knowingly permits inspection of a
18-9 declaration or statement by a person not authorized to inspect the
18-10 declaration or statement or who discloses confidential information
18-11 contained in the declaration or statement to a person not
18-12 authorized to receive the information commits an offense. An
18-13 offense under this subsection is a Class B misdemeanor.
18-14 SECTION 6. This Act takes effect January 1, 1996.
18-15 SECTION 7. The importance of this legislation and the
18-16 crowded condition of the calendars in both houses create an
18-17 emergency and an imperative public necessity that the
18-18 constitutional rule requiring bills to be read on three several
18-19 days in each house be suspended, and this rule is hereby suspended.