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. 3-10 COMMITTEE AMENDMENT NO. 1 3-11 Amend SB 248 by striking subsection (b) on page 1, lines 3-12 14-17 of the Senate engrossment, and inserting the following: 3-13 (b) For purposes of this section, a motor vehicle is 3-14 presumed to be used primarily for activities that do not involve 3-15 the production of income if 50 percent or more of the miles it is 3-16 driven in a year are for non-income producing purposes. 3-17 Davis of Dallas 3-18 COMMITTEE AMENDMENT NO. 2 3-19 Amend SB 248 by adding the following language after 3-20 subsection (h) on page 3, Senate engrossment: 3-21 (i) In addition to the requirements of subsections (c) and 3-22 (d), the comptroller by rule shall prescribe a property report form 3-23 to be completed by the lessor describing the leased motor vehicles 3-24 which the lessor owns. The property report form shall require the 3-25 lessor to list each leased vehicle the lessor owns on January 1, to 3-26 provide the year, make, model and vehicle identification number of 4-1 each leased vehicle, and to provide the name of the lessee, the 4-2 address at which the vehicle is kept, and an indication of whether 4-3 the lessee has designated the vehicle as not held for the 4-4 production and not used for the production of income. 4-5 (j) The lessor shall provide the chief appraiser with the 4-6 completed property report form adopted by the comptroller in the 4-7 manner provided by Subchapter B, Chapter 22, of the code. 4-8 Davis of Dallas