By Carona                                              S.B. No. 248
         77R3397 JD-F                           
                                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.  (a)
 1-8     The owner of a motor vehicle that is subject to a lease is entitled
 1-9     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
 2-1     the vehicle may apply for an exemption under Subsection (a).   The
 2-2     form shall require the lessee to provide the lessee's name,
 2-3     address, and driver's license or personal identification
 2-4     certificate number, and to certify under oath that the lessee does
 2-5     not hold the vehicle for the production of income and that the
 2-6     vehicle is used primarily for activities that do not involve the
 2-7     production of income.  The comptroller shall include on the form a
 2-8     notice of the penalties prescribed by Section 37.10, Penal Code,
 2-9     for making a false statement on the form.
2-10           (e)  The owner of a motor vehicle that is subject to a lease
2-11     shall maintain the form completed by the lessee of the vehicle and
2-12     make the form available for inspection and copying by the chief
2-13     appraiser of the applicable appraisal district at all reasonable
2-14     times.  If the owner does not maintain a completed form relating to
2-15     the vehicle, the owner:
2-16                 (1)  must render the vehicle for taxation in the
2-17     applicable rendition statement or property report filed by the
2-18     owner under Chapter 22; and
2-19                 (2)  may not file an application for an exemption under
2-20     Subsection (a) for the vehicle.
2-21           (f)  In this section:
2-22                 (1)  "Lease" has the meaning assigned by Section
2-23     152.001(6).
2-24                 (2)  "Motor vehicle" means a passenger car or truck
2-25     with a shipping weight of not more than 9,000 pounds.
2-26           SECTION 2.  This Act takes effect January 1, 2002, and
2-27     applies only to ad valorem taxes imposed on a motor vehicle that is
 3-1     subject to a lease entered into on or after January 2, 2001.