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.