1-1     By:  Carona                                            S.B. No. 248
 1-2           (In the Senate - Filed January 16, 2001; January 17, 2001,
 1-3     read first time and referred to Committee on Finance;
 1-4     April 24, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 12, Nays 0; April 24, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 248                 By:  Whitmire
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the exemption from ad valorem taxation of motor
1-11     vehicles leased for personal use.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by
1-14     adding Section 11.252 to read as follows:
1-15           Sec. 11.252.  MOTOR VEHICLES LEASED FOR PERSONAL USE.
1-16     (a)  The owner of a motor vehicle that is subject to a lease is
1-17     entitled to an exemption from taxation of the vehicle if:
1-18                 (1)  the lessee does not hold the vehicle for the
1-19     production of income; and
1-20                 (2)  the vehicle is used primarily for activities that
1-21     do not involve the production of income.
1-22           (b)  For purposes of this section, a motor vehicle is used
1-23     primarily for activities that do not involve the production of
1-24     income if more than 50 percent of the use of the vehicle is for
1-25     those activities.
1-26           (c)  The comptroller by rule shall establish exemption
1-27     application requirements and appropriate procedures to determine
1-28     whether a motor vehicle subject to a lease qualifies for an
1-29     exemption under Subsection (a).
1-30           (d)  In connection with the requirements and procedures under
1-31     Subsection (c), the comptroller by rule shall adopt a form to be
1-32     completed by the lessee of a motor vehicle for which the owner of
1-33     the vehicle may apply for an exemption under Subsection (a).  The
1-34     form shall require the lessee to provide the lessee's name,
1-35     address, and driver's license or personal identification
1-36     certificate number and to certify under oath that the lessee does
1-37     not hold the vehicle for the production of income and that the
1-38     vehicle is used primarily for activities that do not involve the
1-39     production of income.  The comptroller shall include on the form a
1-40     notice of the penalties prescribed by Section 37.10, Penal Code,
1-41     for making a false statement on the form.
1-42           (e)  The owner of a motor vehicle that is subject to a lease
1-43     shall maintain the form completed by the lessee of the vehicle and
1-44     make the form available for inspection and copying by the chief
1-45     appraiser of the applicable appraisal district at all reasonable
1-46     times.  If the owner does not maintain a completed form relating to
1-47     the vehicle, the owner:
1-48                 (1)  must render the vehicle for taxation in the
1-49     applicable rendition statement or property report filed by the
1-50     owner under Chapter 22; and
1-51                 (2)  may not file an application for an exemption under
1-52     Subsection (a) for the vehicle.
1-53           (f)  The governing body of a municipality by ordinance
1-54     adopted before January 1, 2002, may provide for the taxation of
1-55     leased motor vehicles otherwise exempted under Subsection (a).  If
1-56     the governing body of a municipality provides for the taxation of
1-57     leased motor vehicles under this subsection, the exemption provided
1-58     by Subsection (a) does not apply to that municipality.
1-59           (g)  If not continued in effect by the legislature, this
1-60     section expires December 31, 2003.
1-61           (h)  In this section:
1-62                 (1)  "Lease" has the meaning assigned by Section
1-63     152.001(6).
1-64                 (2)  "Motor vehicle" means a passenger car or truck
 2-1     with a shipping weight of not more than 9,000 pounds.
 2-2           SECTION 2.  This Act takes effect January 1, 2002, and
 2-3     applies only to ad valorem taxes imposed on a motor vehicle that is
 2-4     subject to a lease entered into on or after January 2, 2001.
 2-5                                  * * * * *