By:  Carona                                            S.B. No. 248
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the exemption from ad valorem taxation of motor
 1-3     vehicles leased for personal use.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by
 1-6     adding Section 11.252 to read as follows:
 1-7           Sec. 11.252.  MOTOR VEHICLES LEASED FOR PERSONAL USE.
 1-8     (a)  The owner of a motor vehicle that is subject to a lease is
 1-9     entitled to an exemption from taxation of the vehicle if:
1-10                 (1)  the lessee does not hold the vehicle for the
1-11     production of income; and
1-12                 (2)  the vehicle is used primarily for activities that
1-13     do not involve the production of income.
1-14           (b)  For purposes of this section, a motor vehicle is used
1-15     primarily for activities that do not involve the production of
1-16     income if more than 50 percent of the use of the vehicle is for
1-17     those activities.
1-18           (c)  The comptroller by rule shall establish exemption
1-19     application requirements and appropriate procedures to determine
1-20     whether a motor vehicle subject to a lease qualifies for an
1-21     exemption under Subsection (a).
1-22           (d)  In connection with the requirements and procedures under
1-23     Subsection (c), the comptroller by rule shall adopt a form to be
1-24     completed by the lessee of a motor vehicle for which the owner of
1-25     the vehicle may apply for an exemption under Subsection (a).  The
 2-1     form shall require the lessee to provide the lessee's name,
 2-2     address, and driver's license or personal identification
 2-3     certificate number and to certify under oath that the lessee does
 2-4     not hold the vehicle for the production of income and that the
 2-5     vehicle is used primarily for activities that do not involve the
 2-6     production of income.  The comptroller shall include on the form a
 2-7     notice of the penalties prescribed by Section 37.10, Penal Code,
 2-8     for making a false statement on the form.
 2-9           (e)  The owner of a motor vehicle that is subject to a lease
2-10     shall maintain the form completed by the lessee of the vehicle and
2-11     make the form available for inspection and copying by the chief
2-12     appraiser of the applicable appraisal district at all reasonable
2-13     times.  If the owner does not maintain a completed form relating to
2-14     the vehicle, the owner:
2-15                 (1)  must render the vehicle for taxation in the
2-16     applicable rendition statement or property report filed by the
2-17     owner under Chapter 22; and
2-18                 (2)  may not file an application for an exemption under
2-19     Subsection (a) for the vehicle.
2-20           (f)  The governing body of a municipality by ordinance
2-21     adopted before January 1, 2002, may provide for the taxation of
2-22     leased motor vehicles otherwise exempted under Subsection (a).  If
2-23     the governing body of a municipality provides for the taxation of
2-24     leased motor vehicles under this subsection, the exemption provided
2-25     by Subsection (a) does not apply to that municipality.
2-26           (g)  If not continued in effect by the legislature, this
 3-1     section expires December 31, 2003.
 3-2           (h)  In this section:
 3-3                 (1)  "Lease" has the meaning assigned by Section
 3-4     152.001(6).
 3-5                 (2)  "Motor vehicle" means a passenger car or truck
 3-6     with a shipping weight of not more than 9,000 pounds.
 3-7           SECTION 2.  This Act takes effect January 1, 2002, and
 3-8     applies only to ad valorem taxes imposed on a motor vehicle that is
 3-9     subject to a lease entered into on or after January 2, 2001.