By: Shapleigh S.B. No. 856
97S0390/2
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the authority of certain municipalities to impose a
1-2 local tax on the gross rental receipts from the rental of a motor
1-3 vehicle.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle C, Title 3, Tax Code, is amended by
1-6 adding Chapter 326 to read as follows:
1-7 CHAPTER 326. MUNICIPAL TAX ON RENTAL OF MOTOR VEHICLE
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Sec. 326.001. DEFINITIONS. In this chapter:
1-10 (1) "Athletic event" means a postseason
1-11 intercollegiate athletic football bowl game for which a fee for
1-12 admission to one or more sports or athletic events is charged.
1-13 (2) "Auto rental tax fund" means the fund established
1-14 by a municipality by resolution for the deposit of the tax revenue
1-15 collected under this chapter.
1-16 (3) "Gross rental receipts" means value received or
1-17 promised as consideration to the owner or lessor of a motor vehicle
1-18 for rental of the vehicle, but the term does not include:
1-19 (A) separately stated charges for insurance;
1-20 (B) charges for damages to the motor vehicle
1-21 occurring during the rental agreement period;
1-22 (C) separately stated charges for motor fuel
1-23 sold by the owner of the motor vehicle; or
2-1 (D) discounts.
2-2 (4) "Motor vehicle" includes:
2-3 (A) a self-propelled vehicle designed to
2-4 transport persons or property on a public street and highway;
2-5 (B) a trailer and semitrailer, including a van,
2-6 flatbed, tank, dumpster, dolly, jeep, stinger, auxiliary axle, or
2-7 converter gear; and
2-8 (C) a house trailer as defined by Section
2-9 501.002, Transportation Code.
2-10 (5) "Rental of a motor vehicle" means an agreement by
2-11 the owner or lessor of a motor vehicle registered as a retailer
2-12 under Section 152.065 to authorize the exclusive use of the vehicle
2-13 to another for consideration.
2-14 Sec. 326.002. OTHER PORTIONS OF TAX APPLICABLE. Subtitles A
2-15 and B, Title 2, and Chapter 152 apply to the taxes and to the
2-16 administration and enforcement of the taxes imposed by this chapter
2-17 in the same manner that those laws apply to state taxes, unless
2-18 modified by this chapter.
2-19 Sec. 326.003. APPLICATION OF CHAPTER. This chapter applies
2-20 only to a municipality with a population of more than 500,000 that
2-21 is situated in a county bordering the Republic of Mexico and which
2-22 has an athletic event located within the municipality's boundaries.
2-23 SUBCHAPTER B. IMPOSITION OF GROSS RENTAL RECEIPTS TAX BY
2-24 MUNICIPALITY
2-25 Sec. 326.101. TAX AUTHORIZED. (a) A municipality by
3-1 ordinance may impose a tax on the gross rental receipts from the
3-2 rental of a motor vehicle.
3-3 (b) A municipality by ordinance may repeal or increase or
3-4 decrease the rate of a tax imposed under Subsection (a).
3-5 (c) A municipality may impose or increase a tax under this
3-6 chapter only if the tax is approved by a majority of the qualified
3-7 voters of the municipality voting at an election called and held
3-8 for that purpose under Section 326.102.
3-9 Sec. 326.102. ELECTION. (a) An election under this chapter
3-10 is called by the adoption of a resolution by the governing body of
3-11 a municipality.
3-12 (b) The governing body may call the election by a majority
3-13 vote of its members.
3-14 (c) The ballot at the election held under this section must
3-15 be printed to permit voting for or against the proposition:
3-16 "Authorizing (insert name of municipality) to establish
3-17 an auto rental tax fund and to impose a tax on the gross rental
3-18 receipts from the rental of a motor vehicle at the rate of
3-19 (insert the maximum rate of the tax) for the purpose of
3-20 financing athletic events."
3-21 (d) The Election Code governs an election held under this
3-22 chapter, except that the uniform election date provisions of
3-23 Section 41.001(a), Election Code, do not apply to an election
3-24 ordered under this section.
3-25 Sec. 326.103. EFFECTIVE DATE OF NEW TAX, TAX REPEAL, OR RATE
4-1 CHANGE; BOUNDARY CHANGE. (a) The imposition of a tax under this
4-2 chapter, the repeal of a tax imposed under this chapter, or a
4-3 change in the tax rate under this chapter shall in each case take
4-4 effect on the first day of the first calendar quarter occurring
4-5 after the expiration of the first complete calendar quarter
4-6 occurring after the date on which the comptroller receives notice
4-7 of the action, sent by United States registered or certified mail,
4-8 that includes a certified copy of the ordinance and if the action
4-9 is the initial imposition of the tax, a map of the municipality
4-10 clearly showing its boundaries and the location of the venue for
4-11 the athletic event.
4-12 (b) If a municipality which has in effect the tax authorized
4-13 under this chapter changes its boundaries, the municipal secretary
4-14 shall send by United States registered or certified mail to the
4-15 comptroller a certified copy of the ordinance that adds or detaches
4-16 municipal territory and that shows the effective date of the
4-17 boundary change. The ordinance must be accompanied by a map
4-18 clearly showing the added or detached territory. Except as
4-19 provided by Subsection (c), the tax takes effect in the added
4-20 territory or is inapplicable to the detached territory on the first
4-21 day of the first calendar quarter after the comptroller receives
4-22 the ordinance and map.
4-23 (c) If, within 10 days after the receipt of an ordinance and
4-24 map sent under Subsection (b), the comptroller notifies the
4-25 secretary of the municipality that more time is required, the
5-1 effective date of the application of the tax in the added or
5-2 detached territory is the first day of the first calendar quarter
5-3 after the expiration of the first complete calendar quarter
5-4 occurring after the date on which the comptroller receives the
5-5 ordinance and map.
5-6 Sec. 326.104. RENTAL TAX. The tax authorized by this
5-7 chapter may be imposed at a rate in increments of one-eighth of one
5-8 percent, not to exceed five percent, on the gross rental receipts
5-9 from the rental of a motor vehicle within the municipality.
5-10 SUBCHAPTER C. USE OF TAX REVENUE
5-11 Sec. 326.201. AUTO RENTAL TAX FUND. (a) A municipality
5-12 shall establish by resolution a fund known as the auto rental tax
5-13 fund.
5-14 (b) The municipality shall deposit into the auto rental tax
5-15 fund the proceeds of any tax imposed by the municipality under this
5-16 chapter.
5-17 (c) The municipality may use money in the auto rental tax
5-18 fund only to operate one or more athletic events, including but not
5-19 limited to paying the costs of planning, acquiring, establishing,
5-20 developing, advertising, promoting, conducting, sponsoring, or
5-21 otherwise supporting such an event.
5-22 SUBCHAPTER D. COMPUTATION OF TAX
5-23 Sec. 326.301. COMPUTATION OF GROSS RENTAL RECEIPTS TAX.
5-24 (a) Each motor vehicle owner or lessor in a municipality that has
5-25 adopted a tax authorized by this chapter shall add the gross rental
6-1 receipts tax imposed by the municipality under this chapter and by
6-2 Chapter 152 to the rental charge. The sum of the taxes shall be
6-3 part of the rental charge, a debt owed to the motor vehicle owner
6-4 or lessor by the person renting the vehicle, and recoverable at law
6-5 in the same manner as the rental charge.
6-6 (b) The amount of the total tax is computed by multiplying
6-7 the combined applicable tax rates by the amount of the rental
6-8 charge. If the product results in a fraction of a cent less than
6-9 one-half of one cent, the fraction of a cent is not collected. If
6-10 the fraction of a cent is one-half of one cent or more, the
6-11 fraction shall be collected as one cent.
6-12 (c) All gross rental receipts of an owner or lessor of a
6-13 motor vehicle registered as a retailer under Section 152.065 from
6-14 the rental of the motor vehicle are presumed to be subject to the
6-15 tax imposed under this chapter, except for gross rental receipts
6-16 for which the owner or lessor has accepted in good faith a properly
6-17 completed exemption certificate.
6-18 Sec. 326.302. CONSUMMATION OF RENTAL. (a) A rental of a
6-19 motor vehicle occurs within the municipality in which the rental is
6-20 consummated.
6-21 (b) The rental is consummated in the municipality:
6-22 (1) where the owner or lessor delivers the motor
6-23 vehicle, if the owner or lessor delivers the motor vehicle to a
6-24 point designated by the renter; or
6-25 (2) where the renter takes possession of and removes
7-1 the motor vehicle from the possession of the vehicle owner or
7-2 lessor.
7-3 (c) If neither the place at which possession of the motor
7-4 vehicle is taken nor the place to which delivery of the motor
7-5 vehicle is made from the owner's or lessor's place of business is
7-6 in this state, the rental is consummated:
7-7 (1) at the owner's or lessor's place of business in
7-8 this state where the order is received; or
7-9 (2) if the order is not received at a place of
7-10 business of the owner or lessor, at the place of business from
7-11 which the owner's or lessor's agent who took the order operates.
7-12 Sec. 326.303. LOCAL TAX INAPPLICABLE WHEN NO STATE TAX. The
7-13 tax authorized by this chapter does not apply to the gross rental
7-14 receipts from the rental of a motor vehicle unless the tax imposed
7-15 by Chapter 152 also applies to the rental.
7-16 Sec. 326.304. STATE EXEMPTIONS APPLICABLE. The exemptions
7-17 provided by Subchapter E, Chapter 152, apply to the taxes
7-18 authorized by this chapter.
7-19 Sec. 326.305. TRANSITION EXEMPTION. (a) Before September
7-20 1, 2000, the gross rental receipts from the rental of a motor
7-21 vehicle are exempt from the imposition of the tax if the notice
7-22 required by Subsection (b) is given and if:
7-23 (1) the rental of the motor vehicle is used for the
7-24 performance of a written contract entered into before the effective
7-25 date of the imposition, if the contract may be affected and the
8-1 contract may not be modified because of the tax; or
8-2 (2) the rental of the motor vehicle is used under the
8-3 obligation of a bid submitted before the effective date of the
8-4 imposition of or increase in the tax if the contract may be
8-5 affected and the bid may not be withdrawn or modified because of
8-6 the tax.
8-7 (b) The taxpayer must give the comptroller notice of the
8-8 contract or bid on which an exemption is to be claimed within 30
8-9 days after the effective date of the imposition or increase of the
8-10 tax under this chapter in the municipality. The taxpayer shall
8-11 provide to the comptroller a copy of the contract or bid.
8-12 SUBCHAPTER E. ADMINISTRATION OF TAX
8-13 Sec. 326.401. COMPTROLLER TO COLLECT AND ADMINISTER TAX.
8-14 The comptroller shall administer, collect, and enforce the tax
8-15 imposed by a municipality under this chapter. The tax imposed
8-16 under this chapter and the tax imposed under Chapter 152 shall be
8-17 collected together.
8-18 Sec. 326.402. COMPTROLLER'S REPORTING DUTIES. (a) The
8-19 comptroller quarterly shall make a report to a municipality that
8-20 has adopted the tax authorized by this chapter. The report must
8-21 include the name, address, and account number of each person in the
8-22 municipality that has remitted to the comptroller a tax payment
8-23 during the quarter covered by the report.
8-24 (b) If a municipality requests an additional report, the
8-25 comptroller shall make an additional quarterly report to the
9-1 municipality including the name, address, and account number, if
9-2 any, of and the amount of tax due from each person doing business
9-3 in the municipality who has failed to pay the tax under this
9-4 chapter or under Chapter 152. The additional report must also
9-5 include statements:
9-6 (1) showing whether there has been a partial tax
9-7 payment by the delinquent taxpayer;
9-8 (2) showing whether the taxpayer is delinquent in the
9-9 payment of gross rental receipts taxes to the state; and
9-10 (3) describing the steps taken by the comptroller to
9-11 collect the delinquent taxes.
9-12 (c) If a municipality determines that a person doing
9-13 business in the municipality is not included in a report from the
9-14 comptroller, the municipality shall report to the comptroller the
9-15 name and address of the person. Within 90 days after receiving the
9-16 report from a municipality, the comptroller shall send to the
9-17 municipality:
9-18 (1) an explanation as to why the person is not
9-19 obligated for the municipal tax;
9-20 (2) a statement that the person is obligated for the
9-21 municipal tax and the tax is delinquent; or
9-22 (3) a certification that the person is obligated for
9-23 the municipal tax and that the full amount of the tax due has been
9-24 credited to the municipality's account.
9-25 (d) The comptroller shall send by United States certified or
10-1 registered mail to the municipal tax collector a notice of each
10-2 person who is delinquent in the payment to the municipality of the
10-3 taxes authorized by this chapter and shall send a copy of the
10-4 notice to the attorney general. A notice sent under this
10-5 subsection is a certification of the amount of tax owed and is
10-6 prima facie evidence of a determination of that amount and of its
10-7 delinquency.
10-8 Sec. 326.403. DISPOSITION OF AMOUNT ERRONEOUSLY COLLECTED.
10-9 (a) If, in territory added to a municipality, an owner or lessor
10-10 erroneously collects an amount as a tax imposed under this chapter
10-11 before the date the tax imposed under this chapter by the
10-12 municipality takes effect in the added territory under Section
10-13 326.103, the amount collected is treated as if it were revenue from
10-14 the tax imposed by the municipality under this chapter, and the
10-15 comptroller shall collect and administer the amount in the same
10-16 manner as tax revenue.
10-17 (b) This section does not affect the right of a person who
10-18 paid an amount erroneously collected by an owner or lessor to claim
10-19 a refund or the authority of the comptroller to make a refund of
10-20 that amount.
10-21 Sec. 326.404. PERMITS. (a) A motor vehicle owner or lessor
10-22 required to collect, report, and pay a tax on gross rental receipts
10-23 under this chapter shall comply with Section 152.065 and applicable
10-24 provisions of Chapter 151.
10-25 (b) An additional permit, exemption, or certificate is not
11-1 required except that the comptroller may prescribe a separate
11-2 exemption certificate form for the transition exemption for prior
11-3 contracts and bids under Section 326.305.
11-4 Sec. 326.405. DISCOUNTS. A discount allowed an owner or
11-5 lessor under Chapter 152 and applicable provisions of Chapter 151
11-6 for the collection and prepayment of the taxes under that chapter
11-7 are allowed and applicable to the taxes collected under this
11-8 chapter.
11-9 Sec. 326.406. RECORDS. The owner or lessor of a motor
11-10 vehicle used for rental purposes shall keep for four years after
11-11 the rental of a motor vehicle all records and supporting documents
11-12 containing information on the amount of:
11-13 (1) the gross rental receipts received from the rental
11-14 of the motor vehicle; and
11-15 (2) the tax imposed under this chapter and paid to the
11-16 municipality on each motor vehicle used for rental purposes by the
11-17 owner.
11-18 Sec. 326.407. FAILURE TO KEEP RECORDS. (a) An owner or
11-19 lessor of a motor vehicle commits an offense if the owner or lessor
11-20 fails to make and retain complete records as required under Section
11-21 326.406.
11-22 (b) An offense under this section is a misdemeanor
11-23 punishable by a fine of not less than $25 or more than $500.
11-24 Sec. 326.408. COMPTROLLER'S RULES. The comptroller may
11-25 adopt reasonable rules and prescribe forms that are consistent with
12-1 this chapter for implementing the administration, collection,
12-2 reporting, and enforcement provisions of this chapter.
12-3 Sec. 326.409. DELINQUENT TAXES: LIMITATIONS. The
12-4 limitations for the bringing of a suit for the collection of a tax
12-5 imposed or a penalty due under this chapter after the tax and
12-6 penalty are delinquent or after a determination against the
12-7 taxpayer are the same as limitations provided by Chapter 152 and
12-8 applicable provisions of Chapter 151.
12-9 Sec. 326.410. SEIZURE AND SALE OF PROPERTY. If the
12-10 comptroller lawfully seizes property for the payment of the taxes
12-11 imposed under Chapter 152 and the property owner is delinquent in
12-12 the payment of taxes under this chapter, the comptroller shall sell
12-13 sufficient property to pay the delinquent taxes and penalties of
12-14 both taxes. The proceeds of a sale of seized property shall first
12-15 be applied to the payment of amounts due the state, and the
12-16 remainder, if any, shall be applied to the amounts due to the
12-17 municipality to which the taxes are due.
12-18 Sec. 326.411. SUIT FOR TAX COLLECTION. (a) A municipality
12-19 acting through its attorney may join as a plaintiff in any suit
12-20 brought by the attorney general to seek a judgment for delinquent
12-21 taxes and penalties due to the municipality under this chapter.
12-22 (b) A municipality may bring suit for the collection of
12-23 taxes owed to the municipality under this chapter if:
12-24 (1) a written notice of the tax delinquency and the
12-25 municipality's intention to bring suit is sent by certified mail to
13-1 the taxpayer, the attorney general, and the comptroller at least 60
13-2 days before the suit is filed; and
13-3 (2) neither the comptroller nor the attorney general
13-4 disapproves of the suit pursuant to Section 326.412.
13-5 Sec. 326.412. DISAPPROVAL OF MUNICIPAL SUIT. (a) The
13-6 comptroller or the attorney general may disapprove of the
13-7 institution of a suit by a municipality under Section 326.411 if:
13-8 (1) negotiations between the state and the taxpayer
13-9 are being conducted for the purpose of the collection of delinquent
13-10 taxes owed to the state and the municipality seeking to bring suit;
13-11 (2) the taxpayer owes substantial taxes to the state
13-12 and there is a reasonable possibility that the taxpayer may be
13-13 unable to pay the total amount owed;
13-14 (3) the state will bring suit against the taxpayer for
13-15 all taxes due under this chapter and under Chapter 151; or
13-16 (4) the suit involves a critical legal question
13-17 relating to the interpretation of state law or a provision of the
13-18 Texas Constitution or the United States Constitution in which the
13-19 state has an overriding interest.
13-20 (b) A notice of disapproval to a municipality must be in
13-21 writing and must give the reason for the determination by the
13-22 comptroller or attorney general.
13-23 (c) Not earlier than the first anniversary of the date of
13-24 disapproval of the institution of a municipal collection suit, the
13-25 municipality may again proceed as provided by Section 326.411 even
14-1 though the liability of the taxpayer includes taxes for which the
14-2 municipality has previously given notice and the comptroller or
14-3 attorney general has disapproved of the suit.
14-4 Sec. 326.413. JUDGMENTS IN MUNICIPAL SUIT. (a) A judgment
14-5 in a suit under Section 326.411 for or against a taxpayer does not
14-6 affect a claim against the taxpayer by another municipality or the
14-7 state unless the state is party to the suit.
14-8 (b) A municipality shall abstract a copy of each final
14-9 judgment for taxes imposed in the municipality's favor under this
14-10 chapter in a case in which the state is not a party and shall send
14-11 to the comptroller a copy of the judgment and the abstract.
14-12 (c) A municipality shall by execution collect the taxes
14-13 awarded to it in each judgment received by the municipality and is
14-14 responsible for the renewal of the judgment before its expiration.
14-15 (d) The municipality shall notify the comptroller by
14-16 certified mail of the amount of any taxes collected on the
14-17 judgment.
14-18 SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
14-19 Sec. 326.501. TRUST ACCOUNT. (a) The comptroller shall
14-20 deposit the taxes collected by the comptroller under this chapter
14-21 in the state treasury. The comptroller shall keep the deposits in
14-22 trust in the separate suspense account of the municipality from
14-23 which the taxes were collected.
14-24 (b) The comptroller and each employee of the comptroller who
14-25 has any duty or responsibility in connection with the collection,
15-1 deposit, transfer, transmittal, disbursement, safekeeping,
15-2 accounting, or recording of the funds that are acquired by the
15-3 comptroller under this chapter shall enter into one or more surety
15-4 bonds in the amount of $100,000 payable to any and all
15-5 municipalities from which the funds are collected. The comptroller
15-6 may enter into a blanket bond or bonds covering the comptroller and
15-7 the comptroller's employees.
15-8 (c) The premiums for the bonds required by this section
15-9 shall be paid when due from the state's share of money collected
15-10 and held by the comptroller under this chapter before its deposit
15-11 in the general revenue fund.
15-12 Sec. 326.502. DISTRIBUTION OF TRUST FUNDS. At least twice
15-13 during each state fiscal year and at other times as often as
15-14 feasible, the comptroller shall send to the municipal treasurer or
15-15 to the person who performs the office of the municipal treasurer,
15-16 payable to the municipality, the municipality's share of the taxes
15-17 collected by the comptroller under this chapter.
15-18 Sec. 326.503. STATE'S SHARE. Before sending any money to a
15-19 municipality under this subchapter, the comptroller shall deduct
15-20 two percent of the amount of the taxes collected within the
15-21 municipality during the period for which a distribution is made as
15-22 the state's charge for its services under this chapter and shall,
15-23 subject to premium payments under Section 326.501(c), credit the
15-24 money deducted to the general revenue fund.
15-25 Sec. 326.504. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
16-1 comptroller may retain in the suspense account of a municipality a
16-2 portion of the municipality's share of the tax collected for the
16-3 municipality under this chapter, not to exceed five percent of the
16-4 amount remitted to the municipality. If the municipality has
16-5 abolished the tax, the amount that may be retained may not exceed
16-6 five percent of the final remittance to the municipality at the
16-7 time of the termination of the collection of the tax.
16-8 (b) From the amounts retained in a municipality's suspense
16-9 account, the comptroller may make refunds for overpayments to the
16-10 account and to redeem dishonored checks and drafts deposited to the
16-11 credit of the account.
16-12 (c) Not later than the first anniversary of the effective
16-13 date of the abolition of a municipality's tax under this chapter,
16-14 the comptroller shall send to the municipality the remainder of the
16-15 money in the municipality's suspense account and shall close the
16-16 account.
16-17 Sec. 326.505. INTEREST ON TRUST ACCOUNT. Interest earned on
16-18 all deposits made in the state treasury under Section 326.501,
16-19 including interest earned from retained suspense accounts, shall be
16-20 credited to the general revenue fund.
16-21 Sec. 326.506. TAX POWERS OF MUNICIPALITY NOT LIMITED. This
16-22 chapter does not abolish or limit the tax powers of a municipality.
16-23 SECTION 2. The importance of this legislation and the
16-24 crowded condition of the calendars in both houses create an
16-25 emergency and an imperative public necessity that the
17-1 constitutional rule requiring bills to be read on three several
17-2 days in each house be suspended, and this rule is hereby suspended,
17-3 and that this Act take effect and be in force from and after its
17-4 passage, and it is so enacted.