1-1 By: Duncan, Ratliff S.B. No. 1435
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Finance; April 19, 1999,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 8, Nays 0; April 19, 1999, sent to printer.)
1-6 COMMITTEE SUBSTITUTE FOR S.B. No. 1435 By: Duncan
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the appraisal and ad valorem taxation of heavy
1-10 equipment.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subdivisions (2) and (6), Subsection (a), Section
1-13 23.1241, Tax Code, are amended to read as follows:
1-14 (2) "Dealer's heavy equipment inventory" means all
1-15 items of heavy equipment that a dealer holds for sale at retail.
1-16 The term includes items of heavy equipment that are leased but
1-17 subject to a purchase option by the lessee.
1-18 (6) "Heavy equipment" means self-propelled,
1-19 self-powered, or pull-type equipment, including farm equipment or a
1-20 diesel engine or gasoline-powered or natural gas-powered engine,
1-21 that weighs at least 3,000 pounds and is intended to be used for
1-22 agricultural, construction, industrial, maritime, mining, or
1-23 forestry uses. The term does not include a motor vehicle that is
1-24 required by:
1-25 (A) Chapter 501, Transportation Code, to be
1-26 titled; or
1-27 (B) Chapter 502, Transportation Code, to be
1-28 registered.
1-29 SECTION 2. Subsections (b) and (f), Section 23.1241, Tax
1-30 Code, are amended to read as follows:
1-31 (b) For the purpose of the computation of property tax:
1-32 (1) [,] the market value of a dealer's heavy equipment
1-33 inventory on January 1 is the lesser of:
1-34 (A) the total annual sales, less sales to
1-35 dealers, fleet transactions, and subsequent sales, for the 12-month
1-36 period corresponding to the preceding tax year, divided by 12; or
1-37 (B) the total annual sales, less sales to
1-38 dealers, fleet transactions, and subsequent sales, for the 12-month
1-39 period corresponding to the current tax year, divided by 12; and
1-40 (2) a sale is considered to occur when ownership of an
1-41 item of heavy equipment is transferred from the dealer to the
1-42 purchaser.
1-43 (f) The comptroller by rule shall adopt a dealer's heavy
1-44 equipment inventory declaration form. Except as provided by
1-45 Section 23.1242(k), not later than February 1 of each year, or, in
1-46 the case of a dealer who was not in business on January 1, not
1-47 later than 30 days after commencement of business, each dealer
1-48 shall file a declaration with the chief appraiser and file a copy
1-49 with the collector. The declaration is sufficient to comply with
1-50 this subsection if it sets forth:
1-51 (1) the name and business address of each location at
1-52 which the declarant conducts business;
1-53 (2) a statement that the declarant is the owner of a
1-54 dealer's heavy equipment inventory; and
1-55 (3) the market value of the declarant's heavy
1-56 equipment inventory for the current tax year as computed under
1-57 Subsection (b)(1)(A).
1-58 SECTION 3. Subsection (h), Section 23.1242, Tax Code, is
1-59 amended to read as follows:
1-60 (h) A taxing unit shall, on its tax bill prepared for the
1-61 owner of a dealer's heavy equipment inventory, separately itemize
1-62 the taxes levied against the dealer's heavy equipment inventory.
1-63 When the tax bill is prepared for a dealer's heavy equipment
1-64 inventory, the assessor for the taxing unit, or an entity, if any,
2-1 other than the collector, that collects taxes on behalf of the
2-2 taxing unit, shall provide the collector a true and correct copy of
2-3 the tax bill sent to the owner, including taxes levied against the
2-4 dealer's heavy equipment inventory. Immediately on receiving the
2-5 notice required by Section 25.25(n), the [The] collector shall
2-6 apply the money in the owner's escrow account to the taxes imposed
2-7 and deliver a tax receipt to the owner. The collector shall apply
2-8 the amount to each appropriate taxing unit in proportion to the
2-9 amount of taxes levied, and the assessor of each taxing unit shall
2-10 apply the funds received from the collector to the taxes owed by
2-11 the owner.
2-12 SECTION 4. Section 25.25, Tax Code, is amended by adding
2-13 Subsections (n) and (o) to read as follows:
2-14 (n) Before January 20, the chief appraiser shall change the
2-15 appraisal roll to correct the market value of a heavy equipment
2-16 dealer who has filed heavy equipment inventory tax statements for
2-17 the 12-month period corresponding to the current tax year and whose
2-18 market value is determined under Section 23.1241(b)(1)(B). Before
2-19 January 20, the chief appraiser shall notify the collector required
2-20 to administer the provisions of Section 23.1242 and affected taxing
2-21 units of the corrected accounts. Before the 10th day after the end
2-22 of each calendar quarter, the chief appraiser shall submit to the
2-23 appraisal review board and to the board of directors of the
2-24 appraisal district a written report of each change made under this
2-25 subsection. The report must include:
2-26 (1) a description of each property; and
2-27 (2) the name of the owner of that property.
2-28 (o) If the chief appraiser has examined the books and
2-29 records of a heavy equipment dealer whose appraised value is
2-30 determined under Section 23.1241(b)(1)(B) and, on conclusion of the
2-31 examination, has determined that the dealer's market value should
2-32 be corrected, the chief appraiser shall change the appraisal roll
2-33 to reflect the corrected market value.
2-34 SECTION 5. This Act takes effect September 1, 1999, and
2-35 applies to the appraisal of heavy equipment for ad valorem tax
2-36 purposes for each tax year that begins on or after January 1, 1999.
2-37 SECTION 6. The importance of this legislation and the
2-38 crowded condition of the calendars in both houses create an
2-39 emergency and an imperative public necessity that the
2-40 constitutional rule requiring bills to be read on three several
2-41 days in each house be suspended, and this rule is hereby suspended.
2-42 * * * * *