CS H.B. 2116 75(R)BILL ANALYSIS WAYS & MEANS H.B. 2116 By: Craddick 3-26-97 Committee Report (Amended) BACKGROUND In the 74th Legislature H.B. 2624 (Craddick) was passed that amended various aspects of the appraisal and taxation of a dealer's motor vehicle inventories for property tax purposes. Certain aspects of the law still need minor changes to conform with current practices and changes in other laws. PURPOSE This bill would amend Sections 23.121 (Dealer's Motor Vehicle Inventory; Value) and 23.122 (Prepayment of Taxes by Certain Taxpayers), Tax Code relating to the ad valorem appraisal and taxation of a dealer's motor vehicle inventory. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1.Amends Section 23.121(a), Tax Code (Dealer's Motor Vehicle Inventory; Value), to change several definitions as follows: (a)(3) Amends "Dealer" to reflect codification of the Transportation Code. Also replaces references to interstate reciprocity agreements with language requiring out of state dealers to be legally recognized as motor vehicle dealers in their state and comply with Section 152.063(f), Tax Code. (a)(8) Amends "Motor Vehicle" by excluding from the definition equipment or machinery designed and intended to be used for a specific work-related purposes other than the transporting of a person or property (ie. farm implements and forklifts). (a)(14), Amends "Towable Recreational Vehicle" by changing the reference from "county tax assessor collector" to "office of the collector" which conforms with the other statutory references to that office. SECTION 2.Amends Section 23.121(k), Tax Code (Dealer's Motor Vehicle Inventory; Value), to by adding chief appraisers and persons designated by the chief appraiser to the list of persons that can collect a penalty established by this section. Also deletes references to the collector in reference to the penalty. SECTION 3. Amends Section 23.122(f), Tax Code (Prepayment of Taxes by Certain Taxpayers), by clarifying that chief appraisers may examine documents held by a dealer as required by this subsection. Current language specifies documents that are provided by this subsection. SECTION 4.Amends Section 23.122(g), Tax Code, by deleting the requirement that a dealer must file the monthly statement required by the section. SECTION 5.Amends Section 23.122(l), Tax Code (Prepayment of Taxes by Certain Taxpayers), by making nonsubstantive language changes relating to the notification provided to the chief appraiser regarding the vehicle inventory tax. SECTION 6.Amends Section 23.122(n) (Prepayment of Taxes by Certain Taxpayers), Tax Code, by adding collectors and persons designated by the collector to the list of persons that can collect a penalty established by this section. Also deletes references to the chief appraiser in reference to the penalty. SECTION 7.Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1 by Oliveira would make two changes in the bill: 1.)In Section 1 of the bill, the amendment makes a language change in Section 23.121(a)(7), Tax Code. The phrase "business entity" is replaced with "person," which is defined elsewhere in the Section. 2.)The amendment replaces Section 2 of the bill with a new Section 2 that would amend Section 23.121(h), Tax Code. The amendment would require the Texas Department of Transportation to initiate termination proceedings if an auto dealer fails to file a declaration as required by the Section. Also requires the chief appraiser to include with the report (of an auto dealer's failure to file a report), a copy of a declaration, if any, indicating the sale by a dealer of fewer than five motor vehicles in the prior year. Provides that such a report (by the chief appraiser) is prima facie grounds for cancellation of the dealer's general distinguishing number under Section 503.038(a)(10), Transportation Code or for refusal by the Texas Department of Transportation to renew the dealer's general distinguishing number.