SRC-TJG S.B. 340 78(R)BILL ANALYSIS
Senate Research CenterS.B. 340
By: Staples
Finance
7/14/2003
Enrolled
DIGEST AND PURPOSE
Currently, Section 22.01, Tax Code, requires the rendering of personal
property used in the production of income for ad valorem tax purposes.
However, no penalty exists for the failure to render such property. S.B.
340 creates a penalty for the failure to render such properties and
provides criteria for the information that is required to be included in
the rendition statement.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the comptroller of public
accounts in SECTION 1 (Section 1.085, Tax Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1.085, Tax Code, by amending Subsection (b) and
adding Subsections (e), (f), and (g), as follows:
(b) Requires an agreement between a chief appraiser and the property owner
to meet certain conditions.
(e) Requires and authorizes the comptroller of public accounts
(comptroller) to take certain actions, by rule.
(f) Authorizes the chief appraiser, in an agreement entered into under
this section, to select the medium, format, content, and method to be used
by the appraisal district form among those prescribed by the comptroller
under Subsection (e).
(g) Requires the chief appraiser, notwithstanding Subsection (a), if a
property owner whose property is included in 25 or more accounts in the
appraisal records of the appraisal district requests the chief appraiser
to enter into an agreement for the delivery of the notice required by
Section 25.19 in an electronic format, to enter into an agreement under
this section for that purpose and to deliver the notice in accordance with
an electronic medium, format, content, and method prescribed by the
comptroller under Subsection (e).
SECTION 2. Amends Section 1.09, Tax Code, to require the office or agency
with which the form is filed to make printed and electronic versions of
the forms readily and timely available and to furnish a property owner a
form without charge, when a property owner is required by this title to
use a form.
SECTION 3. Amends Section 22.01, Tax Code, by amending Subsection (a) and
adding Subsections (f) through (j), as follows:
(a) Requires a rendition statement to contain certain information related
to tangible property for taxation. Deletes existing text "he" and
replaces it with "the person." Makes a nonsubstantive change.
(f) Provides that notwithstanding Subsections (a) and (b), a rendition
statement of a person who owns tangible personal property used for the
production of income located in the appraisal district that, in the
owner's opinion, has an aggregate value of less than $20,000 is only
required to render the name and address of the property owner, a general
description of the property by type or category, and the physical location
or situs of the property.
(g) Provides that a person's good faith estimate of the market value of
the property under Subsection (a)(5) is solely for the purpose of
compliance with the requirement to render tangible personal property and
is inadmissible in any subsequent protest, hearing, appeal, suit, or other
proceeding under this title involving whether the person complied with
this section, a proceeding under Section 22.29(b), or a protest under
Section 41.41.
(h) Provides that if the property is the subject of the rendition is
regulated by certain state or federal regulatory entities, the owner of
the property is considered to have complied with the requirements of this
section if the owner provides to the chief appraiser, on written request
of the chief appraiser, a copy of the annual regulatory report covering
the property and sufficient information to enable the chief appraiser to
allocate the value of the property among the appropriate taxing units for
which the appraisal district appraises property.
(i) Provides that Subsection (a) does not apply to a property owner whose
property is subject to appraisal by a third party retained by the
appraisal district if the property owner provides information
substantially equivalent to that required by Subsection (a) regarding the
property directly to the third party appraiser.
(j) Provides that Subsection (a) does not apply to property that is exempt
from taxation.
SECTION 4. Amends Section 22.02, Tax Code, as follows:
Sec. 22.02. New heading: RENDITION OF PROPERTY LOSING EXEMPTION DURING
TAX YEAR OR FOR WHICH EXEMPTION APPLICATION IS DENIED. (a) Created from
existing text.
(b) Requires the person who owns the property on the date the application
is denied, if the chief appraiser denies an application for an exemption
for property described by Section 22.01(a), to render the property for
taxation in the manner provided by Section 22.01 within 30 days after the
date of denial.
SECTION 5. Amends Section 22.07, Tax Code, by adding Subsections (c)-(f),
as follows:
(c) Authorizes the chief appraiser to request either in writing or by
electronic means, that the property owner provide a statement containing
supporting information indicating how the value rendered under Section
22.01(a)(5) was determined. Requires the statement to include certain
information.
(d) Requires the property owner to deliver the statement to the chief
appraiser, either in writing or by electronic means, not later than the
21st day after the date the chief appraiser's request is received.
Provides that the owner's statement is solely for informational purposes
and it is not admissible in evidence in any subsequent protest, suit,
appeal, or other proceeding under this title involving the property other
than certain proceedings and protests.
(e) Provides that a statement provided under this section is confidential
information and prohibits the statement from being disclosed, except as
provided by Section 22.27.
(f) Provides that failure to comply with this section in a timely manner
is considered to be a failure to timely render under Section 22.01 and
requires penalties as described in Section 22.28 to be applied by the
chief appraiser.
SECTION 3. Amends Section 22.23, Tax Code, by amending Subsection (b) and
adding Subsection (c), as follows:
(b) Requires, rather than authorizes, the chief appraiser, on written
request of the property owner, rather than for good cause shown in
writing, to extend a deadline for filing a rendition statement or property
report to May 15, rather than by written order to a date not later than
April 30. Authorizes the chief appraiser to further extend the deadline
an additional 15 days upon good cause shown in writing by the property
owner. Deletes existing text related to extending the filing deadline
until April 30, for property regulated by the Public Utility Commission of
Texas or the Railroad Commission of Texas.
(c) Prohibits the chief appraiser from adding the value of the omitted
property to the 2001 or 2002 appraisal role, if before December 1, 2003, a
person files a rendition statement for the 2003 tax year that provides the
information required by Section 22.01 as that section exists on January 1,
2004, and, as a result of that information, the chief appraiser discovers
that some or all of that person's tangible personal property used for the
production of income was omitted from the appraisal role in one of the two
preceding years. Provides that this subsection expires January 1, 2005.
SECTION 7. Amends Sections 22.24(b), (c), and (d), Tax Code, as follows:
(b) Requires a person filing a rendition or report to include all
information required by Section 22.01, rather than by the form.
(c) Provides that a form may not require, but may permit, a property owner
to furnish information not specifically required by this chapter to be
reported. Requires, in addition, a form prescribed or approved under this
subsection to contain a certain statement in bold type. Deletes existing
text related to information not relevant to the appraisal of property for
tax purposes or to the assessment or collection of property taxes.
(d) Requires a rendition or report form to permit but not require a
property owner to state the owner's good faith estimate of the market
value of the property, except as required by Section 22.01(a), rather than
providing that a form must permit but may not require a property owner to
state an opinion about the market value of the owner's property. Makes a
nonsubstantive change.
SECTION 8. Amends Subchapter B, Chapter 22, Tax Code, by adding Sections
22.28, 22.29, and 22.30, as follows:
Sec. 22.28. PENALTY FOR DELINQUENT REPORT. (a) Requires the chief
appraiser, except as otherwise provided by Section 22.30, to impose a
penalty on a person who fails to timely file a rendition statement or
property report required by this chapter in an amount equal to 10 percent
of the total amount of taxes imposed on the property for that year by
taxing units participating in the appraisal district, rather than 10
percent of the amount of the tax due.
(b) Authorizes the chief appraiser to retain a portion of a penalty
collected under this section, not to exceed 20 percent of the amount of
the penalty, to cover the chief appraiser's costs of collecting the
penalty. Requires the chief appraiser to distribute the remainder of the
penalty to each taxing unit participating in the appraisal district that
imposes taxes on the property in proportion to the taxing unit's share of
the total amount of taxes imposed on the property by all taxing units
participating in the district.
Sec. 22.29. PENALTY FOR FRAUD OR INTENT TO EVADE TAX. (a) Requires the
chief appraiser to impose an additional penalty on the person equal to 50
percent of the total amount of taxes imposed on the property for the tax
year of the statement or report by the taxing units participating in the
appraisal district if it is finally determined by a court of competent
jurisdiction that the person took certain actions related to fraud or the
intent to evade the tax.
(b) Requires enforcement of this section to be by a proceeding initiated
by the district or county attorney of the county in which the appraisal is
established, on behalf of the appraisal district.
(c) Requires the court, in making a determination of liability under this
section, to consider certain information.
(d) Authorizes the chief appraiser to retain a portion of a penalty
collected under this section, not to exceed 20 percent of the amount of
the penalty, to cover the chief appraiser's costs of collecting the
penalty. Requires the chief appraiser to distribute the remainder of the
penalty to each taxing unit participating in the appraisal district that
imposes taxes on the property in proportion to the taxing unit's share of
the total amount of taxes imposed on the property by all taxing units
participating in the district.
Sec. 22.30. WAIVER OF PENALTY. (a) Authorizes the chief appraiser to
waive the penalty imposed by Section 22.28 or 22.29 if the chief appraiser
determines that the person exercised reasonable diligence to comply with
or has substantially complied with the requirements of this chapter.
Requires a written request, accompanied by supporting documentation,
stating the grounds on which penalties should be waived to be sent to the
chief appraiser not later than the 30th day after the date the person
received notification of the imposition of the penalty. Requires the
chief appraiser to make a determination of the penalty waiver request
based on the information submitted.
(b) Requires the chief appraiser to notify the person of the chief
appraiser's determination regarding the penalty waiver request after
considering certain factors.
(c) Provides that a property owner is entitled to protest before the
appraisal review board the failure or refusal of the chief appraiser to
waive a penalty under Subsection (a).
SECTION 9. Amends Section 23.23, Tax Code, by adding Subsection (f), as
follows:
(f) Provides that notwithstanding Subsections (a) and (e), and except as
provided by Subdivision (2), an improvement to property that would
otherwise constitute a new improvement is not treated as a new improvement
if the improvement is a replacement structure for a structure that was
rendered uninhabitable or unusable by a casualty or by mold or water
damage. Provides that for purposes of appraising the property in the tax
year in which the structure would have constituted a new improvement,
certain conditions apply.
SECTION 10. Amends Section 25.19, Tax Code, by adding Subsection (k), to
prohibit the chief appraiser, not withstanding any other provision of this
section, from delivering a written notice concerning property that is
required to be rendered or reported under Chapter 22 until the applicable
deadline for filing the rendition statement has passed.
SECTION 11. Amends Section 41.43, Tax Code, by amending Subsection (a)
and adding Subsection (d), as follows:
(a) Makes a conforming change related to the creation of Subsection (d),
as added by this Act. Provides that in a protest authorized by Section
41.41(a)(1), rather than 41.41(1), the appraisal district has the burden
of establishing the value of the property by a preponderance of the
evidence presented at the hearing.
(d) Provides that if the property owner fails to deliver, before the date
of the hearing, a rendition statement or property report required by
Chapter 22 or a response to the chief appraiser's request for information
under Section 22.07(c), the property owner has the burden of establishing
the value of the property by a preponderance of the evidence presented at
the hearing. Requires the protest to be determined in favor of the
appraisal district, if the property owner fails to meet the standard.
SECTION 12. (a) Effective date: January 1, 2004, except as provided by
Subsections (b) and (c).
Makes application of this Act prospective.
(b) Provides that Sections 1.085 and 1.09, Tax Code, as amended by this
Act, take effect January 1, 2005.
(c) Provides that Section 22.23(c), Tax Code, as added by this Act, takes
effect September 1, 2003, and applies to the rendition of property for ad
valorem tax purposes for the 2003 tax year.
(d) Makes application of Section 23.23(f), Tax Code, as added by this Act,
prospective.
(e) Makes application of Section 1.085, Tax Code, prospective to January
1, 2005, except as provided by Subsection (f).
(f) Provides that notwithstanding Subsection (b) of this section, in the
case of an appraisal district established for a county with a population
of 500,000 or less, the changes in law made by this Act to Section 1.085,
Tax Code, apply only to an agreement between the chief appraiser and a
property owner entered into on or after January 1, 2006. Provides that an
agreement between the chief appraiser of such an appraisal district and a
property owner entered into before January 1, 2006, is governed by the law
in effect on the date the agreement was entered into, and the former law
is continued in effect for that purpose.
(g) Provides that notwithstanding Subsection (b) of this section, an
appraisal district established in a county with a population of 500,000 or
less or a taxing unit located in a county with a population of 500,000 or
less is not required to comply with Section 1.09, Tax Code, as amended by
this Act, until January 1, 2006.