SRC-ARR H.B. 3421 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 3421
76R8789 JD-DBy: Davis, Yvonne (Cain)
Finance
5/11/1999
Engrossed


DIGEST 

Tax authorities are currently treating van converters as manufacturers and
collecting a tax on a converter's inventory even though the converters do
not, at any time, own the vehicles when they are retailed by a Texas
dealer. Exempting van converters' inventory from the ad valorem tax and
collecting the tax only at the retail sale would avoid double taxation.
H.B. 3421 provides for the appraisal of certain motor vehicles for ad
valorem tax purposes.  

PURPOSE

As proposed, H.B. 3421 provides for the appraisal of certain motor vehicles
for ad valorem tax purposes.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 23.121(a)(4), Tax Code, to provide that the
"dealer's motor vehicle inventory" does not include a motor vehicle that is
held for conversion for a dealer by a person who holds a converter's
license issued by the Motor Vehicle Board of the Texas Department of
Transportation under the Texas Motor Vehicle Commission Code.  

SECTION 2. Effective date: January 1, 2000.
           Makes application of this Act prospective.

SECTION 3. Emergency clause.