1-1 By: Ratliff, Ogden S.B. No. 977
1-2 (In the Senate - Filed March 8, 1999; March 9, 1999, read
1-3 first time and referred to Committee on Natural Resources;
1-4 April 23, 1999, reported favorably, as amended, by the following
1-5 vote: Yeas 6, Nays 0; April 23, 1999, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Armbrister
1-7 Amend S.B. No. 977 as follows:
1-8 (1) Strike SECTION 14 of the bill (Introduced version, page
1-9 9, line 29 through page 10, line 54) and substitute the following:
1-10 SECTION 14. Subchapter H, Chapter 151, Tax Code, is amended
1-11 by adding Section 151.3162 to read as follows:
1-12 Sec. 151.3162. TIMBER ITEMS. (a) In this section,
1-13 "original producer" means a person who:
1-14 (1) harvests timber that the person owns and continues
1-15 to own until the timber is processed, packed, or marketed; or
1-16 (2) grows timber, exercises predominant operational
1-17 control over the growth of the timber, and bears the risk of loss
1-18 of investment in the timber.
1-19 (b) The following items are exempted from the tax imposed by
1-20 this chapter:
1-21 (1) seedlings of trees commonly grown for commercial
1-22 timber;
1-23 (2) defoliants, desiccants, equipment, fertilizers,
1-24 fungicides, herbicides, insecticides, and machinery exclusively
1-25 used in the production of timber to be sold in the regular course
1-26 of business;
1-27 (3) machinery and equipment used in, and pollution
1-28 control equipment required as a result of, the processing, packing,
1-29 or marketing of timber products by an original producer if:
1-30 (A) the processing, packing, or marketing occurs
1-31 at or from a location operated by the original producer;
1-32 (B) at least 50 percent of the value of the
1-33 timber products processed, packed, or marketed at or from the
1-34 location is attributable to products produced by the original
1-35 producer and not purchased or acquired from others; and
1-36 (C) the original producer does not process,
1-37 pack, or market for consideration timber products that belong to
1-38 another person with a value greater than five percent of the total
1-39 value of the timber products processed, packed, or marketed by the
1-40 producer; and
1-41 (4) tangible personal property sold or used to be
1-42 installed as a component of an underground irrigation system
1-43 exclusively used in the production of timber to be sold in the
1-44 regular course of business.
1-45 (c) Two or more corporations that operate timber activities
1-46 on the same or adjacent tracts of land and that are entirely owned
1-47 by the same individual or a combination of the individual and the
1-48 individual's spouse or children are considered to be a single
1-49 original producer for the purposes of Subsection (b)(3).
1-50 (d) The exemption provided by Subsection (b) takes effect
1-51 January 1, 2008. Until that date, a person is entitled to a credit
1-52 or refund of a portion of the taxes paid under this chapter on an
1-53 item that after January 1, 2008, will be exempted from the taxes
1-54 imposed by this chapter under Subsection (b). The amount of the
1-55 credit or refund is determined as follows:
1-56 (1) for an item for which the taxable event occurs on
1-57 or after October 1, 2001, and before January 1, 2004, the taxpayer
1-58 is entitled to a refund or credit in an amount equal to 33 percent
1-59 of the tax paid on the item;
1-60 (2) for an item for which the taxable event occurs on
1-61 or after January 1, 2004, and before January 1, 2006, the taxpayer
1-62 is entitled to a refund or credit in an amount equal to 50 percent
1-63 of the tax paid on the item; and
1-64 (3) for an item for which the taxable event occurs on
1-65 or after January 1, 2006, and before January 1, 2008, the taxpayer
2-1 is entitled to a refund or credit in an amount equal to 75 percent
2-2 of the tax paid on the item.
2-3 (e) A taxpayer entitled to a credit or refund under
2-4 Subsection (d) may elect to receive either a credit or a refund. A
2-5 taxpayer who elects to receive a credit must claim the credit on
2-6 the return for a period that ends not later than the first
2-7 anniversary of the date on which the taxable event occurred. A
2-8 taxpayer who elects to receive a refund must apply to the
2-9 comptroller for the refund before or during the calendar year
2-10 following the year in which the tax on the item was paid.
2-11 (2) Strike SECTION 18(c) of the bill (Introduced version,
2-12 page 11, line 69 through page 12, line 3) and substitute the
2-13 following:
2-14 (c) The following sections of this Act take effect October
2-15 1, 2001:
2-16 (1) Sections 13, 15, and 16 of this Act, amending
2-17 Subsection (b), Section 151.3111, Subdivision (2), Subsection (c),
2-18 Section 151.317, and Section 152.091, Tax Code;
2-19 (2) Section 14 of this Act, adding Section 151.3162,
2-20 Tax Code; and
2-21 (3) Section 17 of this Act, repealing Section
2-22 151.3161, Tax Code.
2-23 A BILL TO BE ENTITLED
2-24 AN ACT
2-25 relating to exemptions from ad valorem and sales and use taxation
2-26 of certain timber and certain items used in timber operations and
2-27 the valuation of certain timber land for ad valorem tax purposes.
2-28 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
2-29 SECTION 1. Subsection (b), Section 6.12, Tax Code, is
2-30 amended to read as follows:
2-31 (b) One of the agricultural advisory board members must be a
2-32 representative of the county agricultural stabilization and
2-33 conservation service, and the remainder of the members must be
2-34 landowners of the district whose land qualifies for appraisal under
2-35 Subchapter C, D, [or] E, or H, [of] Chapter 23, and who have been
2-36 residents of the district for at least five years.
2-37 SECTION 2. Subsection (c), Section 11.16, Tax Code, is
2-38 amended to read as follows:
2-39 (c) For purposes of this exemption, the following
2-40 definitions apply:
2-41 (1) "Farm products" include [includes] livestock,
2-42 [and] poultry, and timber.
2-43 (2) "In the hands of the producer," for livestock and
2-44 poultry, means under the ownership of the person who is financially
2-45 providing for the physical requirements of such livestock and
2-46 poultry on January 1 of the tax year and, for timber, means
2-47 standing timber or timber that has been harvested and, on January 1
2-48 of the tax year, is located on the real property on which it was
2-49 produced and is under the ownership of the person who owned the
2-50 timber when it was standing.
2-51 SECTION 3. Section 11.161, Tax Code, is amended to read as
2-52 follows:
2-53 Sec. 11.161. IMPLEMENTS OF HUSBANDRY [FARMING OR RANCHING].
2-54 Implements of husbandry that are used in the production of farm or
2-55 ranch products or of timber are exempt from ad valorem taxation.
2-56 SECTION 4. Subsection (g), Section 23.76, Tax Code, is
2-57 amended to read as follows:
2-58 (g) If the use of the land changes to a use that qualifies
2-59 under Subchapter C, [or] D, or H of this chapter, the sanctions
2-60 provided by Subsection (a) of this section do not apply.
2-61 SECTION 5. Chapter 23, Tax Code, is amended by adding
2-62 Subchapter H to read as follows:
2-63 SUBCHAPTER H. APPRAISAL OF RESTRICTED-USE TIMBER LAND
2-64 Sec. 23.9801. DEFINITIONS. In this subchapter:
2-65 (1) "Aesthetic management zone" means timber land on
2-66 which timber harvesting is restricted for aesthetic or conservation
2-67 purposes, including:
3-1 (A) maintaining standing timber adjacent to
3-2 public rights-of-way, including highways and roads; and
3-3 (B) preserving an area in a forest, as defined
3-4 by Section 152.003, Natural Resources Code, that is designated by
3-5 the director of the Texas Forest Service as special or unique
3-6 because of the area's natural beauty, topography, or historical
3-7 significance.
3-8 (2) "Critical wildlife habitat zone" means timber land
3-9 on which the timber harvesting is restricted so as to provide at
3-10 least three of the following benefits for the protection of an
3-11 animal or plant that is listed as endangered or threatened under
3-12 the Endangered Species Act of 1973 (16 U.S.C. Section 1531 et seq.)
3-13 and its subsequent amendments or as endangered under Section
3-14 68.002, Parks and Wildlife Code:
3-15 (A) habitat control;
3-16 (B) erosion control;
3-17 (C) predator control;
3-18 (D) providing supplemental supplies of water;
3-19 (E) providing supplemental supplies of food;
3-20 (F) providing shelters; and
3-21 (G) making of census counts to determine
3-22 population.
3-23 (3) "Management plan" means a plan that uses forestry
3-24 best management practices consistent with the agricultural and
3-25 silvicultural nonpoint source pollution management program
3-26 administered by the State Soil and Water Conservation Board under
3-27 Section 201.026, Agriculture Code.
3-28 (4) "Regenerate" means to replant or manage natural
3-29 regeneration.
3-30 (5) "Streamside management zone" means timber land on
3-31 which timber harvesting is restricted in accordance with a
3-32 management plan to:
3-33 (A) protect water quality; or
3-34 (B) preserve a waterway, including a lake,
3-35 river, stream, or creek.
3-36 (6) "Qualified restricted-use timber land" means land
3-37 that qualifies for appraisal as provided by this subchapter.
3-38 Sec. 23.9802. QUALIFICATION FOR APPRAISAL AS RESTRICTED-USE
3-39 TIMBER LAND. (a) Land qualifies for appraisal as provided by this
3-40 subchapter if the land is in an aesthetic management zone, critical
3-41 wildlife habitat zone, or streamside management zone.
3-42 (b) Land qualifies for appraisal as provided by this
3-43 subchapter if:
3-44 (1) timber was harvested from the land in a year in
3-45 which the land was appraised under Subchapter E; and
3-46 (2) the land has been regenerated for timber
3-47 production to the degree of intensity generally accepted in the
3-48 area for commercial timber land and with intent to produce income.
3-49 (c) Land ceases to qualify for appraisal under Subsection
3-50 (b) on the 10th anniversary of the date the timber was harvested
3-51 under Subsection (b)(1). This subsection does not disqualify the
3-52 land from qualifying for appraisal under this section in a tax year
3-53 following that anniversary based on the circumstances existing in
3-54 that subsequent tax year.
3-55 Sec. 23.9803. APPRAISAL OF QUALIFIED RESTRICTED-USE TIMBER
3-56 LAND. (a) Except as provided by Subsection (b), the appraised
3-57 value of qualified restricted-use timber land is one-half of the
3-58 appraised value of the land as determined under Section 23.73(a).
3-59 (b) The appraised value determined under Subsection (a) may
3-60 not exceed the lesser of:
3-61 (1) the market value of the land as determined by
3-62 other appraisal methods; or
3-63 (2) the appraised value of the land for the year
3-64 preceding the first year of appraisal under this subchapter.
3-65 (c) The chief appraiser shall determine the market value of
3-66 qualified restricted-use timber land and shall record both the
3-67 market value and the appraised value in the appraisal records.
3-68 Sec. 23.9804. APPLICATION. (a) A person claiming that the
3-69 person's land is eligible for appraisal as provided by this
4-1 subchapter must file a valid application with the chief appraiser.
4-2 (b) To be valid, an application for appraisal under Section
4-3 23.9802(a) must:
4-4 (1) be on a form provided by the appraisal office and
4-5 prescribed by the comptroller;
4-6 (2) provide evidence that the land qualifies for
4-7 designation as an aesthetic management zone, critical wildlife
4-8 habitat zone, or streamside management zone;
4-9 (3) specify the location of the proposed zone and the
4-10 quantity of land, in acres, in the proposed zone; and
4-11 (4) contain other information necessary to determine
4-12 the validity of the claim.
4-13 (c) To be valid, an application for appraisal under Section
4-14 23.9802(b) must:
4-15 (1) be on a form provided by the appraisal office and
4-16 prescribed by the comptroller;
4-17 (2) provide evidence that the land on which the timber
4-18 was harvested was appraised under Subchapter E in the year in which
4-19 the timber was harvested;
4-20 (3) provide evidence that all of the land has been
4-21 regenerated in compliance with Section 23.9802(b)(2); and
4-22 (4) contain other information necessary to determine
4-23 the validity of the claim.
4-24 (d) The comptroller shall include on the form a notice of
4-25 the penalties prescribed by Section 37.10, Penal Code, for making
4-26 or filing an application containing a false statement. The
4-27 comptroller, in prescribing the contents of the application form,
4-28 shall require that the form permit a claimant who has previously
4-29 been allowed appraisal under this subchapter to indicate that the
4-30 previously reported information has not changed and to supply only
4-31 the eligibility information not previously reported.
4-32 (e) The form must be filed before May 1. However, for good
4-33 cause shown, the chief appraiser may extend the filing deadline for
4-34 not more than 15 days.
4-35 (f) If a person fails to file a valid application on time,
4-36 the land is ineligible for appraisal as provided by this subchapter
4-37 for that year. Once an application is filed and appraisal under
4-38 this subchapter is allowed, the land is eligible for appraisal
4-39 under the applicable provision of this subchapter in subsequent
4-40 years without a new application unless the ownership of the land
4-41 changes, the standing timber is harvested, or the land's
4-42 eligibility under this subchapter ends. However, if the chief
4-43 appraiser has good cause to believe the land's eligibility under
4-44 this subchapter has ended, the chief appraiser may require a person
4-45 allowed appraisal under this subchapter in a previous year to file
4-46 a new application to confirm that the land is currently eligible
4-47 under this subchapter by delivering a written notice that a new
4-48 application is required, accompanied by the application form, to
4-49 the person who filed the application that was previously allowed.
4-50 (g) The appraisal office shall make a sufficient number of
4-51 printed application forms readily available at no charge.
4-52 (h) Each year the chief appraiser for each appraisal
4-53 district shall publicize, in a manner reasonably designed to notify
4-54 all residents of the district, the requirements of this section and
4-55 the availability of application forms.
4-56 (i) A person whose land is allowed appraisal under this
4-57 subchapter shall notify the appraisal office in writing before May
4-58 1 after eligibility of the land under this subchapter ends. If a
4-59 person fails to notify the appraisal office as required by this
4-60 subsection, a penalty is imposed on the property equal to 10
4-61 percent of the difference between the taxes imposed on the property
4-62 in each year it is erroneously allowed appraisal under this
4-63 subchapter and the taxes that would otherwise have been imposed.
4-64 (j) The chief appraiser shall make an entry in the appraisal
4-65 records for the property against which the penalty is imposed
4-66 indicating liability for the penalty and shall deliver a written
4-67 notice of imposition of the penalty to the person who owns the
4-68 property. The notice shall include a brief explanation of the
4-69 procedures for protesting the imposition of the penalty. The
5-1 assessor for each taxing unit that imposed taxes on the property on
5-2 the basis of appraisal under this subchapter shall add the amount
5-3 of the penalty to the unit's tax bill for taxes on the property
5-4 against which the penalty is imposed. The penalty shall be
5-5 collected at the same time and in the same manner as the taxes on
5-6 the property against which the penalty is imposed. The amount of
5-7 the penalty constitutes a lien on the property against which the
5-8 penalty is imposed and on delinquency accrues penalty and interest
5-9 in the same manner as a delinquent tax.
5-10 (k) If the chief appraiser discovers that appraisal under
5-11 this subchapter has been erroneously allowed in any of the 10
5-12 preceding years because of failure of the person whose land was
5-13 allowed appraisal under this subchapter to give notice that the
5-14 land's eligibility had ended, the chief appraiser shall add the
5-15 difference between the appraised value of the land under this
5-16 subchapter and the market value of the land for any year in which
5-17 the land was ineligible for appraisal under this subchapter to the
5-18 appraisal records as provided by Section 25.21 for other property
5-19 that escapes taxation.
5-20 Sec. 23.9805. ACTION ON APPLICATION. (a) The chief
5-21 appraiser shall determine separately each applicant's right to have
5-22 the applicant's land appraised under this subchapter. After
5-23 considering the application and all relevant information, the chief
5-24 appraiser shall, based on the law and facts:
5-25 (1) approve the application and allow appraisal under
5-26 this subchapter;
5-27 (2) disapprove the application and request additional
5-28 information from the applicant in support of the claim; or
5-29 (3) deny the application.
5-30 (b) If the chief appraiser requests additional information
5-31 from an applicant, the applicant must furnish it not later than the
5-32 30th day after the date of the request or the chief appraiser shall
5-33 deny the application. However, for good cause shown, the chief
5-34 appraiser may extend the deadline for furnishing the information by
5-35 written order for a single period not to exceed 15 days.
5-36 (c) The chief appraiser shall determine the validity of each
5-37 application for appraisal under this subchapter filed with the
5-38 chief appraiser before the chief appraiser submits the appraisal
5-39 records for review and determination of protests as provided by
5-40 Chapter 41.
5-41 (d) If the chief appraiser denies an application, the chief
5-42 appraiser shall deliver a written notice of the denial to the
5-43 applicant not later than the fifth day after the date the chief
5-44 appraiser makes the determination. The chief appraiser shall
5-45 include with the notice a brief explanation of the procedures for
5-46 protesting the denial.
5-47 Sec. 23.9806. APPLICATION DENIAL BASED ON ZONE LOCATION.
5-48 (a) Before a chief appraiser may deny an application under Section
5-49 23.9805 on the ground that the land is not located in an aesthetic
5-50 management zone, critical wildlife habitat zone, or streamside
5-51 management zone, the chief appraiser must first request a
5-52 determination letter from the director of the Texas Forest Service
5-53 as to the type, location, and size of the zone, if any, in which
5-54 the land is located.
5-55 (b) The chief appraiser shall notify the landowner and each
5-56 taxing unit in which the land is located that a determination
5-57 letter has been requested.
5-58 (c) The director's letter is conclusive as to the type,
5-59 size, and location of the zone for purposes of appraisal of the
5-60 land under this subchapter.
5-61 (d) If the land is located in a zone described in the
5-62 determination letter, the chief appraiser shall approve the
5-63 application and allow appraisal under this subchapter if the
5-64 applicant is otherwise entitled to have the applicant's land
5-65 appraised under this subchapter.
5-66 (e) The director of the Texas Forest Service by rule shall
5-67 adopt procedures under this section. The procedures must allow the
5-68 chief appraiser, the landowner, and a representative of each taxing
5-69 unit in which the land is located to present information to the
6-1 director before the director issues the determination letter.
6-2 (f) Chapters 41 and 42 do not apply to a determination under
6-3 this section by the director of the Texas Forest Service of the
6-4 type, size, and location of a zone.
6-5 Sec. 23.9807. CHANGE OF USE OF LAND. (a) If the use of
6-6 land that has been appraised as provided by this subchapter changes
6-7 to a use that qualifies the land for appraisal under Subchapter E,
6-8 an additional tax is imposed on the land equal to the sum of:
6-9 (1) the difference between:
6-10 (A) the taxes imposed on the land for each of
6-11 the five years preceding the year in which the change of use occurs
6-12 that the land was appraised as provided by this subchapter; and
6-13 (B) the taxes that would have been imposed had
6-14 the land been appraised under Subchapter E in each of those years;
6-15 and
6-16 (2) interest at an annual rate of seven percent
6-17 calculated from the dates on which the differences would have
6-18 become due.
6-19 (b) If the use of land that has been appraised as provided
6-20 by this subchapter changes to a use that does not qualify the land
6-21 for appraisal under Subchapter E or under this subchapter, an
6-22 additional tax is imposed on the land equal to the sum of:
6-23 (1) the difference between:
6-24 (A) the taxes imposed on the land for each of
6-25 the five years preceding the year in which the change of use occurs
6-26 that the land was appraised as provided by this subchapter; and
6-27 (B) the taxes that would have been imposed had
6-28 the land been taxed on the basis of market value in each of those
6-29 years; and
6-30 (2) interest at an annual rate of seven percent
6-31 calculated from the dates on which the differences would have
6-32 become due.
6-33 (c) A tax lien attaches to the land on the date the change
6-34 of use occurs to secure payment of the additional tax and interest
6-35 imposed by this section and any penalties incurred. The lien
6-36 exists in favor of all taxing units for which the additional tax is
6-37 imposed.
6-38 (d) The additional tax imposed by this section does not
6-39 apply to a year for which the tax has already been imposed.
6-40 (e) If the change of use applies to only part of a parcel
6-41 that has been appraised as provided by this subchapter, the
6-42 additional tax applies only to that part of the parcel.
6-43 (f) A determination that a change in use of the land has
6-44 occurred is made by the chief appraiser. The chief appraiser shall
6-45 deliver a notice of the determination to the owner of the land as
6-46 soon as possible after making the determination and shall include
6-47 in the notice an explanation of the owner's right to protest the
6-48 determination. If the owner does not file a timely protest or if
6-49 the final determination of the protest is that the additional taxes
6-50 are due, the assessor for each taxing unit shall prepare and
6-51 deliver a bill for the additional taxes and interest as soon as
6-52 practicable after the change of use occurs. The taxes and interest
6-53 are due and become delinquent and incur penalties and interest as
6-54 provided by law for ad valorem taxes imposed by the taxing unit if
6-55 not paid before the next February 1 that is at least 20 days after
6-56 the date the bill is delivered to the owner of the land.
6-57 (g) The harvesting of timber from the land before the
6-58 expiration of the period provided by Section 23.9802(c) constitutes
6-59 a change of use of the land for purposes of this section.
6-60 (h) The sanction provided by Subsection (a) or (b) does not
6-61 apply if the change of use occurs as a result of a:
6-62 (1) sale for right-of-way;
6-63 (2) condemnation; or
6-64 (3) change in law.
6-65 SECTION 6. Subsection (a), Section 25.02, Tax Code, is
6-66 amended to read as follows:
6-67 (a) The appraisal records shall be in the form prescribed by
6-68 the comptroller and shall include:
6-69 (1) the name and address of the owner or, if the name
7-1 or address is unknown, a statement that it is unknown;
7-2 (2) real property;
7-3 (3) separately taxable estates or interests in real
7-4 property, including taxable possessory interests in exempt real
7-5 property;
7-6 (4) personal property;
7-7 (5) the appraised value of land and, if the land is
7-8 appraised as provided by Subchapter C, D, [or] E, or H, Chapter 23
7-9 [of this code], the market value of the land;
7-10 (6) the appraised value of improvements to land;
7-11 (7) the appraised value of a separately taxable estate
7-12 or interest in land;
7-13 (8) the appraised value of personal property;
7-14 (9) the kind of any partial exemption the owner is
7-15 entitled to receive, whether the exemption applies to appraised or
7-16 assessed value, and, in the case of an exemption authorized by
7-17 Section 11.23 [of this code], the amount of the exemption;
7-18 (10) the tax year to which the appraisal applies; and
7-19 (11) an identification of each taxing unit in which
7-20 the property is taxable.
7-21 SECTION 7. Subsection (a), Section 25.22, Tax Code, is
7-22 amended to read as follows:
7-23 (a) By May 15 or as soon thereafter as practicable, the
7-24 chief appraiser shall submit the completed appraisal records to the
7-25 appraisal review board for review and determination of protests.
7-26 However, the chief appraiser may not submit the records until the
7-27 chief appraiser has delivered the notices required by Subsection
7-28 (d) of Section 11.45, Subsection (d) of Section 23.44, Subsection
7-29 (d) of Section 23.57, Subsection (d) of Section 23.79, Subsection
7-30 (d) of Section 23.85, Subsection (d) of Section 23.95, Subsection
7-31 (d) of Section 23.9805, and Section 25.19.
7-32 SECTION 8. Subsections (c) and (d), Section 31.01, Tax Code,
7-33 are amended to read as follows:
7-34 (c) The tax bill or a separate statement accompanying the
7-35 tax bill shall:
7-36 (1) identify the property subject to the tax;
7-37 (2) state the appraised value, assessed value, and
7-38 taxable value of the property;
7-39 (3) if the property is land appraised as provided by
7-40 Subchapter C, D, [or] E, or H, Chapter 23 [of this code], state the
7-41 market value and the taxable value for purposes of deferred or
7-42 additional taxation as provided by Section 23.46, 23.55, [or]
7-43 23.76, or 23.9807, as applicable[, of this code];
7-44 (4) state the assessment ratio for the unit;
7-45 (5) state the type and amount of any partial exemption
7-46 applicable to the property, indicating whether it applies to
7-47 appraised or assessed value;
7-48 (6) state the total tax rate for the unit;
7-49 (7) state the amount of tax due, the due date, and the
7-50 delinquency date;
7-51 (8) explain the payment option and discounts provided
7-52 by Sections 31.03 and 31.05 [of this code], if available to the
7-53 unit's taxpayers, and state the date on which each of the discount
7-54 periods provided by Section 31.05 concludes, if the discounts are
7-55 available;
7-56 (9) state the rates of penalty and interest imposed
7-57 for delinquent payment of the tax;
7-58 (10) include the name and telephone number of the
7-59 assessor for the unit and, if different, of the collector for the
7-60 unit; and
7-61 (11) include any other information required by the
7-62 comptroller.
7-63 (d) Each tax bill shall also state the amount of penalty, if
7-64 any, imposed pursuant to Sections 23.431, 23.54, 23.541, 23.75,
7-65 23.751, 23.87, [and] 23.97, and 23.9804 [of this code].
7-66 SECTION 9. Subsection (a), Section 41.01, Tax Code, is
7-67 amended to read as follows:
7-68 (a) The appraisal review board shall:
7-69 (1) determine protests initiated by property owners;
8-1 (2) determine challenges initiated by taxing units;
8-2 (3) correct clerical errors in the appraisal records
8-3 and the appraisal rolls;
8-4 (4) act on motions to correct appraisal rolls under
8-5 Section 25.25;
8-6 (5) determine whether an exemption or a partial
8-7 exemption is improperly granted and whether land is improperly
8-8 granted appraisal as provided by Subchapter C, D, [or] E, or H,
8-9 Chapter 23; and
8-10 (6) take any other action or make any other
8-11 determination that this title specifically authorizes or requires.
8-12 SECTION 10. Section 41.03, Tax Code, is amended to read as
8-13 follows:
8-14 Sec. 41.03. CHALLENGE BY TAXING UNIT. (a) A taxing unit is
8-15 entitled to challenge before the appraisal review board:
8-16 (1) the level of appraisals of any category of
8-17 property in the district or in any territory in the district, but
8-18 not the appraised value of a single taxpayer's property;
8-19 (2) an exclusion of property from the appraisal
8-20 records;
8-21 (3) a grant in whole or in part of a partial
8-22 exemption;
8-23 (4) a determination that land qualifies for appraisal
8-24 as provided by Subchapter C, D, [or] E, or H, Chapter 23 [of this
8-25 code]; or
8-26 (5) failure to identify the taxing unit as one in
8-27 which a particular property is taxable.
8-28 (b) If a taxing unit challenges a determination that land
8-29 qualifies for appraisal under Subchapter H, Chapter 23, on the
8-30 ground that the land is not located in an aesthetic management
8-31 zone, critical wildlife habitat zone, or streamside management
8-32 zone, the taxing unit must first seek a determination letter from
8-33 the director of the Texas Forest Service. The appraisal review
8-34 board shall accept the letter as conclusive proof of the type,
8-35 size, and location of the zone.
8-36 SECTION 11. Subsection (a), Section 41.41, Tax Code, is
8-37 amended to read as follows:
8-38 (a) A property owner is entitled to protest before the
8-39 appraisal review board the following actions:
8-40 (1) determination of the appraised value of the
8-41 owner's property or, in the case of land appraised as provided by
8-42 Subchapter C, D, [or] E, or H, Chapter 23, determination of its
8-43 appraised or market value;
8-44 (2) unequal appraisal of the owner's property;
8-45 (3) inclusion of the owner's property on the appraisal
8-46 records;
8-47 (4) denial to the property owner in whole or in part
8-48 of a partial exemption;
8-49 (5) determination that the owner's land does not
8-50 qualify for appraisal as provided by Subchapter C, D, [or] E, or H,
8-51 Chapter 23;
8-52 (6) identification of the taxing units in which the
8-53 owner's property is taxable in the case of the appraisal district's
8-54 appraisal roll;
8-55 (7) determination that the property owner is the owner
8-56 of property;
8-57 (8) a determination that a change in use of land
8-58 appraised under Subchapter C, D, [or] E, or H, Chapter 23, has
8-59 occurred; or
8-60 (9) any other action of the chief appraiser, appraisal
8-61 district, or appraisal review board that applies to and adversely
8-62 affects the property owner.
8-63 SECTION 12. Subsection (a), Section 41.44, Tax Code, is
8-64 amended to read as follows:
8-65 (a) Except as provided by Subsections (b) and (c), to be
8-66 entitled to a hearing and determination of a protest, the property
8-67 owner initiating the protest must file a written notice of the
8-68 protest with the appraisal review board having authority to hear
8-69 the matter protested:
9-1 (1) before June 1 or not later than the 30th day after
9-2 the date that notice was delivered to the property owner as
9-3 provided by Section 25.19, whichever is later;
9-4 (2) in the case of a protest of a change in the
9-5 appraisal records ordered as provided by Subchapter A of this
9-6 chapter or by Chapter 25, not later than the 30th day after the
9-7 date notice of the change is delivered to the property owner; or
9-8 (3) in the case of a determination that a change in
9-9 the use of land appraised under Subchapter C, D, [or] E, or H,
9-10 Chapter 23, has occurred, not later than the 30th day after the
9-11 date the notice of the determination is delivered to the property
9-12 owner.
9-13 SECTION 13. Subsection (b), Section 151.3111, Tax Code, is
9-14 amended to read as follows:
9-15 (b) Subsection (a) [of this section] does not apply to the
9-16 performance of a service on:
9-17 (1) tangible personal property that would be exempted
9-18 solely because of the exempt status of the seller of the property;
9-19 (2) tangible personal property that is exempted solely
9-20 because of the application of Section 151.303, 151.304, or 151.306
9-21 [of this code];
9-22 (3) motor vehicles, trailers, or semitrailers as
9-23 defined, taxed, or exempted by Chapter 152 [of this code]; or
9-24 (4) a taxable boat or motor as defined by Section
9-25 160.001[; or]
9-26 [(5) machinery and equipment with a purchase price
9-27 greater than $50,000 used exclusively in a commercial timber
9-28 operation as described by Section 151.3161(a)].
9-29 SECTION 14. Section 151.316, Tax Code, is amended to read as
9-30 follows:
9-31 Sec. 151.316. AGRICULTURAL AND TIMBER ITEMS. (a) The
9-32 following items are exempted from the taxes imposed by this
9-33 chapter:
9-34 (1) horses, mules, and work animals;
9-35 (2) animal life the products of which ordinarily
9-36 constitute food for human consumption;
9-37 (3) feed for farm and ranch animals;
9-38 (4) feed for animals that are held for sale in the
9-39 regular course of business;
9-40 (5) seeds, seedlings of trees commonly grown for
9-41 commercial timber, and annual plants the products of which:
9-42 (A) ordinarily constitute food for human
9-43 consumption;
9-44 (B) are to be sold in the regular course of
9-45 business; or
9-46 (C) are used to produce feed for animals
9-47 exempted by this section;
9-48 (6) fertilizers, fungicides, insecticides, herbicides,
9-49 defoliants, and desiccants exclusively used or employed on a farm
9-50 or ranch in the production of:
9-51 (A) food for human consumption;
9-52 (B) feed for animal life; [or]
9-53 (C) other agricultural products to be sold in
9-54 the regular course of business; or
9-55 (D) timber to be sold in the regular course of
9-56 business;
9-57 (7) machinery and equipment exclusively used or
9-58 employed on a farm or ranch in the building or maintaining of roads
9-59 or water facilities or in the production of:
9-60 (A) food for human consumption;
9-61 (B) grass;
9-62 (C) feed for animal life; [or]
9-63 (D) other agricultural products to be sold in
9-64 the regular course of business; or
9-65 (E) timber to be sold in the regular course of
9-66 business;
9-67 (8) machinery and equipment exclusively used in, and
9-68 pollution control equipment required as a result of, the
9-69 processing, packing, or marketing of agricultural or timber
10-1 products by an original producer at a location operated by the
10-2 original producer for processing, packing, or marketing the
10-3 producer's own products if:
10-4 (A) 50 percent or more of the products
10-5 processed, packed, or marketed at or from the location are produced
10-6 by the original producer and not purchased or acquired from others;
10-7 and
10-8 (B) the producer does not process, pack, or
10-9 market for consideration any agricultural or timber products that
10-10 belong to other persons in an amount greater than five percent of
10-11 the total agricultural or timber products processed, packed, or
10-12 marketed by the producer; and
10-13 (9) ice exclusively used by commercial fishing boats
10-14 in the storing of aquatic species including but not limited to
10-15 shrimp, other crustaceans, finfish, mollusks, and other similar
10-16 creatures.
10-17 (b) Tangible personal property sold or used to be installed
10-18 as a component of an underground irrigation system is exempt from
10-19 the taxes imposed by this chapter if the system is exclusively used
10-20 or employed on a farm or ranch in the production of:
10-21 (1) food for human consumption;
10-22 (2) grass;
10-23 (3) feed or forage for:
10-24 (A) animal life the products of which ordinarily
10-25 constitute food for human consumption; or
10-26 (B) horses, mules, and work animals; [or]
10-27 (4) other agricultural products to be sold in the
10-28 regular course of business; or
10-29 (5) timber to be sold in the regular course of
10-30 business.
10-31 (c) In this section:
10-32 (1) "Farm or ranch" includes one or more tracts of
10-33 land used, in whole or in part, in the production of agricultural
10-34 products, including crops and[,] livestock, or timber [other
10-35 agricultural products] held for sale in the regular course of
10-36 business. The term includes feedlots, dairy farms, poultry farms,
10-37 commercial orchards, commercial nurseries, and similar commercial
10-38 agricultural operations and timber operations. The term does not
10-39 include a home garden [or a timber operation].
10-40 (2) "Original producer" means a person who:
10-41 (A) brings an agricultural product into being or
10-42 who harvests timber and is the owner of the agricultural product
10-43 from the time it is brought into being or of the timber from the
10-44 time it is harvested until it is processed, packed, or marketed; or
10-45 (B) is the grower of an agricultural product or
10-46 timber, exercises predominant operational control over the raising
10-47 of the agricultural product or timber, and bears a risk of loss of
10-48 investment in the agricultural product or timber.
10-49 (d) Two or more corporations that operate agricultural or
10-50 timber activities on the same tract or adjacent tracts of land and
10-51 that are entirely owned by an individual or a combination of the
10-52 individual, the individual's spouse, and the individual's children
10-53 may qualify as an original producer for the purposes of Subsection
10-54 (a)(8).
10-55 SECTION 15. Subdivision (2), Subsection (c), Section
10-56 151.317, Tax Code, is amended to read as follows:
10-57 (2) "Commercial use" means use by a person engaged in
10-58 selling, warehousing, or distributing a commodity or a professional
10-59 or personal service, but does not include:
10-60 (A) use by a person engaged in:
10-61 (i) processing tangible personal property
10-62 for sale as tangible personal property, other than preparation or
10-63 storage of food for immediate consumption;
10-64 (ii) exploring for, producing, or
10-65 transporting, a material extracted from the earth;
10-66 (iii) agriculture, including dairy or
10-67 poultry operations and pumping for farm or ranch irrigation;
10-68 (iv) timber operations, including pumping
10-69 for irrigation of timber land;
11-1 (v) electrical processes such as
11-2 electroplating, electrolysis, and cathodic protection;
11-3 (vi) [(v)] the off-wing processing,
11-4 overhaul, or repair of a jet turbine engine or its parts for a
11-5 certificated or licensed carrier of persons or property; or
11-6 (vii) [(vi)] providing, under contracts
11-7 with or on behalf of the United States government or foreign
11-8 governments, defense or national security-related electronics,
11-9 classified intelligence data processing and handling systems, or
11-10 defense-related platform modifications or upgrades; or
11-11 (B) a direct or indirect use, consumption, or
11-12 loss of electricity by an electric utility engaged in the purchase
11-13 of electricity for resale.
11-14 SECTION 16. Section 152.091, Tax Code, is amended to read as
11-15 follows:
11-16 Sec. 152.091. FARM OR TIMBER USE. (a) The taxes imposed by
11-17 this chapter do not apply to the sale or use of a:
11-18 (1) farm machine, trailer, or semitrailer for use
11-19 primarily for farming and ranching, including the rearing of
11-20 poultry, and use in feedlots; or
11-21 (2) machine, trailer, or semitrailer for use primarily
11-22 for timber operations.
11-23 (b)(1) The taxes imposed by this chapter do not apply to the
11-24 purchase of a:
11-25 (A) farm machine, trailer, or semitrailer that
11-26 is to be leased for use primarily for farming and ranching,
11-27 including the rearing of poultry, and use in feedlots; or
11-28 (B) machine, trailer, or semitrailer that is to
11-29 be leased for use primarily for timber operations.
11-30 (2) The exemption provided by this subsection applies
11-31 only if the person purchasing the [farm] machine, trailer, or
11-32 semitrailer to be leased presents the tax assessor-collector a form
11-33 prescribed and provided by the comptroller showing:
11-34 (A) the identification of the motor vehicle;
11-35 (B) the name and address of the lessor and the
11-36 lessee; and
11-37 (C) verification by the lessee that the [farm]
11-38 machine, trailer, or semitrailer will be used primarily for:
11-39 (i) farming and ranching, including the
11-40 rearing of poultry, and use in feedlots; or
11-41 (ii) timber operations.
11-42 (3) If a motor vehicle for which the tax has not been
11-43 paid ceases to be leased for use primarily for farming and
11-44 ranching, including the rearing of poultry, and use in feedlots or
11-45 timber operations, the owner shall notify the comptroller on a form
11-46 provided by the comptroller and shall pay the sales or use tax on
11-47 the motor vehicle based on the owner's book value of the motor
11-48 vehicle. The tax is imposed at the same percentage rate that is
11-49 provided by [Subsection (b) of] Section 152.021(b) [152.021 of this
11-50 code].
11-51 (c) The taxes imposed by this chapter do not apply to the
11-52 rental of a farm machine, a trailer, or a semitrailer for use
11-53 primarily for farming and ranching, including the rearing of
11-54 poultry, and use in feedlots, or a machine, a trailer, or a
11-55 semitrailer for use primarily for timber operations. The tax that
11-56 would have been remitted on gross rental receipts without this
11-57 exemption shall be deemed to have been remitted for the purpose of
11-58 calculating the minimum gross rental receipts imposed by Section
11-59 152.026 [of this code]. The exemption provided by this subsection
11-60 applies only if the owner of the motor vehicle obtains in good
11-61 faith an exemption certificate from the person to whom the vehicle
11-62 is being rented.
11-63 SECTION 17. Section 151.3161, Tax Code, is repealed.
11-64 SECTION 18. (a) Except as provided by Subsections (b) and
11-65 (c) of this section, this Act takes effect September 1, 1999.
11-66 (b) Subsection (c), Section 11.16, and Section 11.161, Tax
11-67 Code, as amended by this Act, and Subchapter H, Chapter 23, Tax
11-68 Code, as added by this Act, take effect January 1, 2000.
11-69 (c) Sections 13, 14, and 15 of this Act, amending Subsection
12-1 (b), Section 151.3111, Section 151.316, and Subdivision (2),
12-2 Subsection (c), Section 151.317, Tax Code, take effect October 1,
12-3 1999.
12-4 SECTION 19. The importance of this legislation and the
12-5 crowded condition of the calendars in both houses create an
12-6 emergency and an imperative public necessity that the
12-7 constitutional rule requiring bills to be read on three several
12-8 days in each house be suspended, and this rule is hereby suspended.
12-9 * * * * *