SRC-TBR C.S.S.B. 248 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 248
77R9649 JD-FBy: Carona
Finance
4/20/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, under the Texas Tax Code, all leased vehicles are subject to ad
valorem property taxes, originally intended to apply to businesses leasing
fleets of vehicles, while many such leases today are for individuals
interested in driving a new vehicle for a lower price.  C.S.S.B. 248
eliminates ad valorem taxes for vehicles leased primarily for personal use. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the comptroller of public
accounts in SECTION 1 (Section 11.252, Tax Code). 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 11B, Tax Code, by adding Section 11.252, as
follows: 

 Sec. 11.252. MOTOR VEHICLES LEASED FOR PERSONAL USE.  (a) Provides that
the owner of a motor vehicle that is subject to a lease is entitled to an
exemption from taxation of the vehicle if certain requirements are met. 

 (b)  Provides that, for the purposes of this section, a motor vehicle is
used primarily for activities that do not involve the production of income
if more than 50 percent of the use of the vehicle is for those activities. 

 (c)  Requires the comptroller by rule to establish exemption application
requirements and appropriate procedures to determine whether a motor
vehicle subject to a lease qualifies for an exemption under Subsection (a). 

 (d)  Requires the comptroller by rule, in connection with the requirements
and procedures under Subsection (c), to adopt a form to be completed by the
lessee of a motor vehicle for which the owner of the vehicle may apply for
an exemption under Subsection (a).  Requires the form to require the lessee
to provide the lessee's name, address, and driver's license number, and to
certify under oath that the lessee does not hold the vehicle for the
production of income and that the vehicle is used primarily for activities
that do not involve the production of income.  Requires the comptroller to
include on the form a notice of the penalties prescribed by Section 37.10
(Tampering with Governmental Record), Penal Code, for making a false
statement on the form. 

 (e)  Requires the owner of a motor vehicle that is subject to a lease to
maintain the form completed by the lessee of the vehicle and make the form
available for inspection and copying by the chief appraiser of the
applicable appraisal district at all reasonable times. Provides that if the
owner does not maintain a completed form relating to the vehicle, the owner
will be subject to certain provisions. 

(f)  Authorizes the governing body of a municipality by ordinance adopted
before  January 1, 2002, to provide for the taxation of leased motor
vehicles otherwise exempted under Subsection (a).  Provides that if the
governing body of a municipality provides for the taxation of leased motor
vehicles under this subsection, the exemption provided by Subsection (a)
does not apply to a municipality. 

(g)  Provides that if not continued in effect by the legislature, this
section expires December 31, 2003. 

  (h)  Defines "lease" and "motor vehicle."

SECTION 2.Effective date:  January 1, 2002.
  Makes application of this Act retroactive to January 2, 2001.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.  Amends As Filed S.B. 248 by adding proposed Sections 11.252(f)
and (g) and redesignating proposed Section 11.252(f) as Section 11.252(h).