By: Duncan S.B. No. 1435
99S0803/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the appraisal and ad valorem taxation of heavy
1-2 equipment.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivisions (2) and (7), Subsection (a), Section
1-5 23.1241, Tax Code, are amended to read as follows:
1-6 (2) "Dealer's heavy equipment inventory" means all
1-7 items of heavy equipment that a dealer holds for sale at retail.
1-8 The term includes items of heavy equipment that are held for sale
1-9 subject to a lease purchase agreement, rental option, or lease
1-10 purchase option.
1-11 (7) "Sales price" means the greater of:
1-12 (A) the total amount of money paid or to be paid
1-13 to a dealer for the purchase, including a lease purchase agreement,
1-14 rental option, or lease purchase option, of an item of heavy
1-15 equipment; or
1-16 (B) if the dealer rents the item of heavy
1-17 equipment before its sale, the amount the dealer paid for the item.
1-18 SECTION 2. Subsections (b), (d), and (f), Section 23.1241,
1-19 Tax Code, are amended to read as follows:
1-20 (b) For the purpose of the computation of property tax, the
1-21 market value of a dealer's heavy equipment inventory on January 1
1-22 is the lesser of:
1-23 (1) the total annual sales, less sales to dealers,
1-24 fleet transactions, and subsequent sales, for the 12-month period
2-1 corresponding to the preceding tax year, divided by 12; or
2-2 (2) the total annual sales, less sales to dealers,
2-3 fleet transactions, and subsequent sales, for the 12-month period
2-4 corresponding to the current tax year, divided by 12.
2-5 (d) Except for dealer's heavy equipment inventory, including
2-6 items of heavy equipment that are held for sale subject to a
2-7 lease-purchase agreement, rental option, or lease purchase option,
2-8 personal property held by a dealer is appraised as provided by the
2-9 other sections of this code. In the case of a dealer whose sales
2-10 from the dealer's heavy equipment inventory are made predominately
2-11 to other dealers, the chief appraiser shall appraise the dealer's
2-12 heavy equipment inventory as provided by Section 23.12.
2-13 (f) The comptroller by rule shall adopt a dealer's heavy
2-14 equipment inventory declaration form. Except as provided by
2-15 Section 23.1242(k), not later than February 1 of each year, or, in
2-16 the case of a dealer who was not in business on January 1, not
2-17 later than 30 days after commencement of business, each dealer
2-18 shall file a declaration with the chief appraiser and file a copy
2-19 with the collector. The declaration is sufficient to comply with
2-20 this subsection if it sets forth:
2-21 (1) the name and business address of each location at
2-22 which the declarant conducts business;
2-23 (2) a statement that the declarant is the owner of a
2-24 dealer's heavy equipment inventory; and
2-25 (3) the market value of the declarant's heavy
2-26 equipment inventory for the current tax year as computed under
3-1 Subsection (b)(1).
3-2 SECTION 3. Subsection (h), Section 23.1242, Tax Code, is
3-3 amended to read as follows:
3-4 (h) A taxing unit shall, on its tax bill prepared for the
3-5 owner of a dealer's heavy equipment inventory, separately itemize
3-6 the taxes levied against the dealer's heavy equipment inventory.
3-7 When the tax bill is prepared for a dealer's heavy equipment
3-8 inventory, the assessor for the taxing unit, or an entity, if any,
3-9 other than the collector, that collects taxes on behalf of the
3-10 taxing unit, shall provide the collector a true and correct copy of
3-11 the tax bill sent to the owner, including taxes levied against the
3-12 dealer's heavy equipment inventory. Immediately on receiving the
3-13 notice required by Section 25.25(n), the [The] collector shall
3-14 apply the money in the owner's escrow account to the taxes imposed
3-15 and deliver a tax receipt to the owner. The collector shall apply
3-16 the amount to each appropriate taxing unit in proportion to the
3-17 amount of taxes levied, and the assessor of each taxing unit shall
3-18 apply the funds received from the collector to the taxes owed by
3-19 the owner.
3-20 SECTION 4. Section 25.25, Tax Code, is amended by adding
3-21 Subsections (n) and (o) to read as follows:
3-22 (n) Before January 20, the chief appraiser shall change the
3-23 appraisal roll to correct the market value of a heavy equipment
3-24 dealer who has filed heavy equipment inventory tax statements for
3-25 the 12-month period corresponding to the current tax year and whose
3-26 market value is determined under Section 23.1241(b)(2). Before
4-1 January 20, the chief appraiser shall notify the collector required
4-2 to administer the provisions of Section 23.1242 and affected taxing
4-3 units of the corrected accounts. Before the 10th day after the end
4-4 of each calendar quarter, the chief appraiser shall submit to the
4-5 appraisal review board and to the board of directors of the
4-6 appraisal district a written report of each change made under this
4-7 subsection. The report must include:
4-8 (1) a description of each property; and
4-9 (2) the name of the owner of that property.
4-10 (o) If the chief appraiser has examined the books and
4-11 records of a heavy equipment dealer whose appraised value is
4-12 determined under Section 23.1241(b)(2) and, on conclusion of the
4-13 examination, has determined that the dealer's market value should
4-14 be corrected, the chief appraiser shall change the appraisal roll
4-15 to reflect the corrected market value.
4-16 SECTION 5. This Act takes effect September 1, 1999, and
4-17 applies to the appraisal of heavy equipment for ad valorem tax
4-18 purposes for each tax year that begins on or after January 1, 1999.
4-19 SECTION 6. The importance of this legislation and the
4-20 crowded condition of the calendars in both houses create an
4-21 emergency and an imperative public necessity that the
4-22 constitutional rule requiring bills to be read on three several
4-23 days in each house be suspended, and this rule is hereby suspended.