HBA-GUM H.B. 3421 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3421 By: Davis, Yvonne Ways & Means 4/14/1999 Introduced BACKGROUND AND PURPOSE 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 they convert. The tax authorities then collect a tax again on the same 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 that the term "dealer's motor vehicle inventory" does not include a motor vehicle that is held for conversion for a dealer by a licensed converter. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 23.121(a)(4), Tax Code, to provide that the term "dealer's motor vehicle inventory" does not include a motor vehicle that is held for conversion for a dealer by a licensed converter. SECTION 2. Effective date: January 1, 2000. Makes application of this Act prospective. SECTION 3. Emergency clause.