By Haggerty H.B. No. 1397
75R4311 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authority of certain municipalities to impose a
1-3 local tax on the gross rental receipts from the rental of a rented
1-4 motor vehicle; providing penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle C, Title 3, Tax Code, is amended by
1-7 adding Chapter 326 to read as follows:
1-8 CHAPTER 326. MUNICIPAL TAX ON RENTAL OF RENTED MOTOR VEHICLE
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 326.001. DEFINITIONS. (a) In this chapter, "athletic
1-11 event" means a postseason intercollegiate athletic football bowl
1-12 game.
1-13 (b) Words used in this chapter and defined by Chapter 152
1-14 have the meanings assigned by Chapter 152.
1-15 Sec. 326.002. OTHER PORTIONS OF TAX APPLICABLE. Subtitles A
1-16 and B, Title 2, and Chapter 152 apply to the taxes and to the
1-17 administration and enforcement of the taxes imposed by this chapter
1-18 in the same manner that those laws apply to state taxes, unless
1-19 modified by this chapter.
1-20 Sec. 326.003. APPLICATION OF CHAPTER. This chapter applies
1-21 only in a municipality in which an athletic event is held annually.
1-22 (Sections 326.004-326.100 reserved for expansion
2-1 SUBCHAPTER B. IMPOSITION OF GROSS RENTAL RECEIPTS
2-2 TAXES BY MUNICIPALITY
2-3 Sec. 326.101. TAX AUTHORIZED. (a) A municipality by
2-4 ordinance may impose a tax on the gross rental receipts from the
2-5 rental of a rented motor vehicle.
2-6 (b) A municipality by ordinance may repeal or increase or
2-7 decrease the rate of a tax imposed under Subsection (a).
2-8 Sec. 326.102. EFFECTIVE DATES: NEW TAX, TAX REPEAL,
2-9 BOUNDARY CHANGE. (a) The imposition of a tax under this chapter,
2-10 the repeal of a tax imposed under this chapter, or a change in the
2-11 tax rate takes effect on the first day of the first calendar
2-12 quarter occurring after the expiration of the first complete
2-13 calendar quarter occurring after the date on which the comptroller
2-14 receives a notice of the action sent by United States registered or
2-15 certified mail that includes a certified copy of the ordinance and,
2-16 if the action is the initial imposition of the tax, a map of the
2-17 municipality clearly showing its boundaries and the location of the
2-18 athletic event.
2-19 (b) If a municipality in which the tax imposed under this
2-20 chapter is in effect changes its boundaries, the municipal
2-21 secretary shall send by United States registered or certified mail
2-22 to the comptroller a certified copy of the ordinance that adds or
2-23 detaches municipal territory and that shows the effective date of
2-24 the boundary change. The ordinance must be accompanied by a map
2-25 clearly showing the added or detached territory. Except as
2-26 provided by Subsection (c), the tax takes effect in the added
2-27 territory or is inapplicable to the detached territory on the first
3-1 day of the first calendar quarter after the comptroller receives
3-2 the ordinance and map.
3-3 (c) If, within 10 days after the receipt of an ordinance and
3-4 map sent under Subsection (b), the comptroller notifies the
3-5 secretary of the municipality that more time is required, the
3-6 effective date of the application of the tax in the added or
3-7 detached area is the first day of the first calendar quarter after
3-8 the expiration of the first complete calendar quarter occurring
3-9 after the date on which the comptroller receives the ordinance and
3-10 map.
3-11 Sec. 326.103. RENTAL TAX. The tax authorized by this
3-12 chapter may be imposed at a rate in increments of one-eighth of one
3-13 percent, not to exceed five percent, on the gross rental receipts
3-14 from the rental of a rented motor vehicle within the municipality.
3-15 (Sections 326.104-326.150 reserved for expansion
3-16 SUBCHAPTER C. USE OF TAX REVENUE
3-17 Sec. 326.151. AUTO RENTAL TAX FUND. (a) A municipality
3-18 that adopts a tax under this chapter shall establish by resolution
3-19 a fund known as the auto rental tax fund.
3-20 (b) The municipality shall deposit into the auto rental tax
3-21 fund the proceeds of the tax imposed by the municipality under this
3-22 chapter.
3-23 (c) The municipality may use money in the auto rental tax
3-24 fund only to operate one or more athletic events and to pay costs
3-25 associated with the events, including:
3-26 (1) paying the costs of planning, acquiring,
3-27 establishing, developing, advertising, promoting, or administering
4-1 an athletic event;
4-2 (2) making payments to colleges and universities
4-3 participating in an athletic event;
4-4 (3) paying the costs of conducting, sponsoring, or
4-5 otherwise supporting an athletic event; and
4-6 (4) paying the contractual obligations associated with
4-7 an athletic event.
4-8 (Sections 326.152-326.200 reserved for expansion
4-9 SUBCHAPTER D. COMPUTATION OF TAXES
4-10 Sec. 326.201. COMPUTATION OF GROSS RENTAL RECEIPTS TAXES.
4-11 (a) Each motor vehicle owner registered as a retailer under
4-12 Section 152.065 in a municipality that has adopted a tax authorized
4-13 by this chapter shall add the gross rental receipts tax imposed by
4-14 the municipality under this chapter and by Chapter 152 to the
4-15 rental charge, and the sum of the taxes is a part of the rental
4-16 charge, a debt owed to the motor vehicle owner by the person
4-17 renting the vehicle, and recoverable at law in the same manner as
4-18 the rental charge.
4-19 (b) The amount of the total tax is computed by multiplying
4-20 the combined applicable tax rates by the amount of the rental
4-21 charge. If the product results in a fraction of a cent less than
4-22 one-half of one cent, the fraction of a cent is not collected. If
4-23 the fraction of a cent is one-half of one cent or more, the
4-24 fraction shall be collected as one cent.
4-25 (c) All gross receipts of an owner of a motor vehicle from
4-26 the rental of the motor vehicle are presumed to be subject to the
4-27 tax imposed by this chapter, except for gross receipts for which
5-1 the owner has accepted in good faith a properly completed exemption
5-2 certificate.
5-3 (d) The comptroller may publish schedules and brackets of
5-4 amounts of taxes based on the formula provided by Subsection (b)
5-5 for use in municipalities that have adopted the tax authorized by
5-6 this chapter.
5-7 Sec. 326.202. CONSUMMATION OF RENTAL. (a) A rental of a
5-8 rented motor vehicle occurs within the municipality in which the
5-9 rental is consummated. A rental is consummated as provided by this
5-10 section regardless of the place where transfer of possession
5-11 occurs. A rental of a rented motor vehicle by the owner is
5-12 consummated at the owner's place of business:
5-13 (1) where the owner delivers the motor vehicle, if the
5-14 owner delivers the motor vehicle to a point designated by the
5-15 renter; or
5-16 (2) where the renter takes possession of and removes
5-17 the motor vehicle, if the renter takes possession of and removes
5-18 the motor vehicle from the owner's place of business.
5-19 (b) If neither the possession of the motor vehicle is taken
5-20 at or delivery of the motor vehicle is made from the owner's place
5-21 of business in this state, the rental is consummated:
5-22 (1) at the owner's place of business in this state
5-23 where the order is received; or
5-24 (2) if the order is not received at a place of
5-25 business of the owner, at the place of business from which the
5-26 owner's agent who took the order operates.
5-27 Sec. 326.203. LOCAL TAX INAPPLICABLE WHEN NO STATE TAX. The
6-1 tax authorized by this chapter does not apply to the gross receipts
6-2 from the rental of a rented motor vehicle unless the tax imposed by
6-3 Chapter 152 also applies to the rental.
6-4 Sec. 326.204. STATE EXEMPTIONS APPLICABLE. The exemptions
6-5 provided by Subchapter E, Chapter 152, apply to the taxes
6-6 authorized by this chapter.
6-7 Sec. 326.205. TRANSITION EXEMPTION. (a) For a period of
6-8 three years only after the effective date of the imposition or
6-9 increase of the tax authorized by this chapter in a municipality,
6-10 the gross rental receipts from the rental of a rented motor vehicle
6-11 are exempt from that imposition or increase if the notice required
6-12 by Subsection (b) is given and if:
6-13 (1) the items are used for the performance of a
6-14 written contract entered into before the effective date of the
6-15 imposition or increase if the contract may be affected and the
6-16 contract may not be modified because of the tax; or
6-17 (2) the items are used under the obligation of a bid
6-18 submitted before the effective date of the imposition or increase
6-19 if the contract may be affected and the bid may not be withdrawn or
6-20 modified because of the tax.
6-21 (b) The taxpayer must give the comptroller notice of the
6-22 contract or bid on which an exemption is to be claimed within 30
6-23 days after the effective date of the imposition or increase of the
6-24 tax under this chapter in the municipality. The taxpayer must send
6-25 a copy of the contract or bid to the comptroller. The taxpayer
6-26 must attach an affidavit of the taxpayer stating that the contract
6-27 or bid is a true copy of the contract or bid on which the exemption
7-1 is claimed.
7-2 (Sections 326.206-326.300 reserved for expansion
7-3 SUBCHAPTER E. ADMINISTRATION OF TAXES
7-4 Sec. 326.301. COMPTROLLER TO COLLECT AND ADMINISTER TAXES.
7-5 The comptroller shall administer, collect, and enforce the tax
7-6 imposed by a municipality under this chapter. The tax imposed
7-7 under this chapter and the tax imposed under Chapter 152 shall be
7-8 collected together.
7-9 Sec. 326.302. COMPTROLLER'S REPORTING DUTIES. (a) The
7-10 comptroller shall make quarterly reports to a municipality that has
7-11 adopted the tax authorized by this chapter. A report must include
7-12 the name, address, and account number of each person in the
7-13 municipality that has remitted to the comptroller a tax payment
7-14 during the quarter covered by the report.
7-15 (b) If a municipality requests an additional report, the
7-16 comptroller shall make an additional quarterly report to the
7-17 municipality including the name, address, and account number, if
7-18 any, of, and the amount of tax due from, each person doing business
7-19 in the municipality who has failed to pay the tax under this
7-20 chapter to the municipality or under Chapter 152. The additional
7-21 report must also include statements:
7-22 (1) showing whether or not there has been a partial
7-23 tax payment by the delinquent taxpayer;
7-24 (2) showing whether or not the taxpayer is delinquent
7-25 in the payment of gross rental receipts taxes to the state; and
7-26 (3) describing the steps taken by the comptroller to
7-27 collect the delinquent taxes.
8-1 (c) If a municipality determines that a person doing
8-2 business in the municipality is not included in a comptroller's
8-3 report, the municipality shall report to the comptroller the name
8-4 and address of the person. Within 90 days after receiving the
8-5 report from a municipality, the comptroller shall send to the
8-6 municipality:
8-7 (1) an explanation as to why the person is not
8-8 obligated for the municipal tax;
8-9 (2) a statement that the person is obligated for the
8-10 municipal tax and the tax is delinquent; or
8-11 (3) a certification that the person is obligated for
8-12 the municipal tax and that the full amount of the tax due has been
8-13 credited to the municipality's account.
8-14 (d) The comptroller shall send by United States certified or
8-15 registered mail to the municipal tax collector a notice of each
8-16 person who is delinquent in the payment to the municipality of the
8-17 taxes authorized by this chapter and shall send a copy of the
8-18 notice to the attorney general. A notice sent under this
8-19 subsection is a certification of the amount of tax owed and is
8-20 prima facie evidence of a determination of that amount and of its
8-21 delinquency.
8-22 Sec. 326.303. DISPOSITION OF AMOUNT ERRONEOUSLY COLLECTED.
8-23 (a) If in a territory added to a municipality an owner erroneously
8-24 collects an amount as a tax imposed under this chapter before the
8-25 date the taxes imposed under this chapter by the municipality take
8-26 effect in the added territory under Section 326.102, the amount
8-27 collected is treated as if it were revenue from the tax imposed by
9-1 the municipality under this chapter, and the comptroller shall
9-2 collect and administer the amount in the same manner as tax
9-3 revenue.
9-4 (b) This section does not affect the right of a person who
9-5 paid an amount erroneously collected by an owner to claim a refund
9-6 or the authority of the comptroller to make a refund of that
9-7 amount.
9-8 Sec. 326.304. PERMITS. (a) A motor vehicle owner required
9-9 to collect, report, and pay a tax on gross rental receipts under
9-10 this chapter shall comply with Section 152.065 and applicable
9-11 provisions of Chapter 151.
9-12 (b) An additional permit, exemption, or certificate is not
9-13 required except that the comptroller may prescribe a separate
9-14 exemption certificate form for the transition exemption for prior
9-15 contracts and bids under Section 326.205.
9-16 Sec. 326.305. DISCOUNTS. A discount allowed an owner under
9-17 Chapter 152 and applicable provisions of Chapter 151 for the
9-18 collection and prepayment of the taxes under that chapter is
9-19 allowed and applicable to the taxes collected under this chapter.
9-20 Sec. 326.306. COMPTROLLER'S RULES. The comptroller may
9-21 adopt reasonable rules and prescribe forms that are consistent with
9-22 this chapter for the administration, collection, reporting, and
9-23 enforcement of this chapter.
9-24 Sec. 326.307. DELINQUENT TAXES: LIMITATIONS. The
9-25 limitations for the bringing of a suit for the collection of a tax
9-26 imposed or a penalty due under this chapter after the tax and
9-27 penalty are delinquent or after a determination against the
10-1 taxpayer are the same as limitations provided by Chapter 152 and
10-2 applicable provisions of Chapter 151.
10-3 Sec. 326.308. SEIZURE AND SALE OF PROPERTY. If the
10-4 comptroller lawfully seizes property for the payment of the taxes
10-5 imposed under Chapter 152 and the property owner is delinquent in
10-6 the payment of taxes under this chapter, the comptroller shall sell
10-7 sufficient property to pay the delinquent taxes and penalties of
10-8 both taxes. The proceeds of a sale of seized property shall first
10-9 be applied to the payment of amounts due the state and the
10-10 remainder, if any, to the amounts due to the municipality to which
10-11 the taxes are due.
10-12 Sec. 326.309. SUIT FOR TAX COLLECTION. (a) A municipality
10-13 acting through its attorney may join as a plaintiff in any suit
10-14 brought by the attorney general to seek a judgment for delinquent
10-15 taxes and penalties due to the municipality under this chapter.
10-16 (b) A municipality may bring suit for the collection of
10-17 taxes owed to the municipality under this chapter if:
10-18 (1) a written notice of the tax delinquency and the
10-19 municipality's intention to bring suit is given by certified mail
10-20 to the taxpayer, the attorney general, and the comptroller at least
10-21 60 days before the suit is filed; and
10-22 (2) neither the comptroller nor the attorney general
10-23 disapproves of the suit.
10-24 Sec. 326.310. DISAPPROVAL OF MUNICIPAL SUIT. (a) The
10-25 comptroller or the attorney general may disapprove of the
10-26 institution of a suit by a municipality under Section 326.309(b) if
10-27 negotiations between the state and the taxpayer are being conducted
11-1 for the purpose of the collection of delinquent taxes owed to the
11-2 state and the municipality seeking to bring suit.
11-3 (b) A notice of disapproval to a municipality must be in
11-4 writing and give the reason for the determination by the
11-5 comptroller or attorney general.
11-6 (c) A disapproval is final and not subject to review.
11-7 (d) Not earlier than the first anniversary of the date of a
11-8 disapproval of the institution of a municipal collection suit, the
11-9 municipality may again proceed as provided by Section 326.309(b)
11-10 even though the liability of the taxpayer includes taxes for which
11-11 the municipality has previously given notice and the comptroller or
11-12 attorney general has disapproved of the suit.
11-13 Sec. 326.311. JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
11-14 in a suit under Section 326.309(b) for or against a taxpayer does
11-15 not affect a claim against the taxpayer by another municipality or
11-16 the state unless the state is party to the suit.
11-17 (b) A municipality shall abstract a copy of each final
11-18 judgment for taxes imposed under this chapter in a case in which
11-19 the state is not a party and shall send to the comptroller a copy
11-20 of the judgment and the abstract.
11-21 (c) A municipality shall by execution collect the taxes
11-22 awarded to it in each judgment received by the municipality and is
11-23 responsible for the renewal of the judgment before its expiration.
11-24 (d) The municipality shall notify the comptroller by
11-25 certified mail of the amount of any taxes collected on the
11-26 judgment.
11-27 Sec. 326.312. RECORDS. The owner of a motor vehicle used
12-1 for rental purposes shall keep for four years records and
12-2 supporting documents containing the following information on the
12-3 amount of:
12-4 (1) gross rental receipts received from the rental of
12-5 the motor vehicle; and
12-6 (2) the tax imposed under this chapter and paid to the
12-7 comptroller on each motor vehicle used for rental purposes by the
12-8 owner.
12-9 Sec. 326.313. FAILURE TO KEEP RECORDS. (a) An owner of a
12-10 motor vehicle commits an offense if the owner fails to make and
12-11 retain complete records for the four-year period required by
12-12 Section 326.312.
12-13 (b) An offense under this section is a misdemeanor
12-14 punishable by a fine of not less than $25 or more than $500.
12-15 (c) The penalty provided by this section is in addition to
12-16 any penalty provided by Chapter 152.
12-17 Sec. 326.314. OTHER PENALTIES. (a) A person commits an
12-18 offense if the person signs an affidavit required by this chapter
12-19 and the person knows that it is false in any material fact.
12-20 (b) An offense under this section is a felony punishable by
12-21 imprisonment for not less than two nor more than five years or a
12-22 fine of not more than $1,000, or both.
12-23 (c) The penalty provided by this section is in addition to
12-24 any penalty provided by Chapter 152.
12-25 (Sections 326.315-326.400 reserved for expansion
12-26 SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
12-27 Sec. 326.401. TRUST ACCOUNT. (a) The comptroller shall
13-1 deposit the taxes collected under this chapter. The comptroller
13-2 shall keep the deposits in trust in the separate suspense account
13-3 of the municipality from which the taxes were collected.
13-4 (b) The comptroller and each employee of the comptroller who
13-5 has any duty or responsibility in connection with the collection,
13-6 deposit, transfer, transmittal, disbursement, safekeeping,
13-7 accounting, or recording of the funds that are acquired by the
13-8 comptroller under this chapter shall enter into one or more surety
13-9 bonds in the amount of $100,000 payable to any and all
13-10 municipalities from which the funds are collected. The comptroller
13-11 may enter into a blanket bond or bonds covering the comptroller and
13-12 the comptroller's employees.
13-13 (c) The premiums for the bonds required by this section
13-14 shall be paid when due from the state's share of money collected
13-15 and held by the comptroller under this chapter before its deposit
13-16 in the general revenue fund.
13-17 Sec. 326.402. DISTRIBUTION OF TRUST FUNDS. At least twice
13-18 during each state fiscal year and at other times as often as
13-19 feasible, the comptroller shall send to the municipal treasurer or
13-20 to the person who performs the office of the municipal treasurer
13-21 payable to the municipality the municipality's share of the taxes
13-22 collected by the comptroller under this chapter.
13-23 Sec. 326.403. STATE'S SHARE. Before sending any money to a
13-24 municipality under this subchapter the comptroller shall deduct two
13-25 percent of the amount of the taxes collected within the
13-26 municipality during the period for which a distribution is made as
13-27 the state's charge for its services under this chapter and shall
14-1 credit the money deducted to the general revenue fund.
14-2 Sec. 326.404. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
14-3 comptroller may retain in the suspense account of a municipality a
14-4 portion of the municipality's share of the tax collected for the
14-5 municipality under this chapter, not to exceed five percent of the
14-6 amount remitted to the municipality. If the municipality has
14-7 abolished the tax, the amount that may be retained may not exceed
14-8 five percent of the final remittance to the municipality at the
14-9 time of the termination of the collection of the tax.
14-10 (b) From the amounts retained in a municipality's suspense
14-11 account, the comptroller may make refunds for overpayments to the
14-12 account and to redeem dishonored checks and drafts deposited to the
14-13 credit of the account.
14-14 (c) Not later than the first anniversary of the effective
14-15 date of the abolition of a municipality's tax under this chapter
14-16 the comptroller shall send to the municipality the remainder of the
14-17 money in the municipality's account and shall close the account.
14-18 Sec. 326.405. INTEREST ON TRUST ACCOUNT. Interest earned on
14-19 all deposits made by the comptroller under Section 326.401,
14-20 including interest earned from retained suspense accounts, shall be
14-21 credited to the general revenue fund.
14-22 Sec. 326.406. TAX POWERS OF MUNICIPALITY NOT LIMITED. This
14-23 chapter does not abolish or limit the tax powers of a municipality.
14-24 SECTION 2. The importance of this legislation and the
14-25 crowded condition of the calendars in both houses create an
14-26 emergency and an imperative public necessity that the
14-27 constitutional rule requiring bills to be read on three several
15-1 days in each house be suspended, and this rule is hereby suspended,
15-2 and that this Act take effect and be in force from and after its
15-3 passage, and it is so enacted.