78R4269 SMH-D
By: Allen H.B. No. 1851
A BILL TO BE ENTITLED
AN ACT
relating to the rendition and appraisal of property for ad valorem
tax purposes and to the consequences of a failure to timely render
property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 22.01(a), Tax Code, is amended to read as
follows:
(a) Except as provided by Chapter 24 [of this code], a
person shall render for taxation:
(1) all tangible personal property used for the
production of income that the person [he] owns or [that he] manages
and controls as a fiduciary on January 1, if the aggregate cost of
all of the tangible personal property used for the production of
income that the person owns or manages and controls as a fiduciary
on that date and that is located in the appraisal district is at
least $100,000; and
(2) all real property used for the production of
income, other than property appraised under Subchapter C, D, E, F,
G, or H, Chapter 23, that the person owns or manages and controls as
a fiduciary on January 1.
SECTION 2. Section 22.23(b), Tax Code, is amended to read as
follows:
(b) For good cause shown in writing by the property owner,
the chief appraiser shall [may] extend a deadline for filing a
rendition statement or property report by written order to a date
not later than April 30. The [However, if the property that is the
subject of the rendition is regulated by the Public Utility
Commission of Texas or the Railroad Commission of Texas, the] chief
appraiser[, upon written request by the property owner, shall
extend the filing deadline until April 30, and] may further extend
the deadline an additional 15 days for [upon] good cause shown in
writing by the property owner.
SECTION 3. Subchapter B, Chapter 22, Tax Code, is amended by
adding Section 22.231 to read as follows:
Sec. 22.231. REQUIREMENT TO DELIVER RENDITION STATEMENT OR
PROPERTY REPORT; INJUNCTION. (a) A requirement under this chapter
to deliver a rendition statement or property report to a chief
appraiser is mandatory.
(b) If a person required by this chapter to deliver a
rendition statement or property report to the chief appraiser fails
to deliver the statement or report in the time required by this
chapter, the chief appraiser may bring suit for an injunction
requiring the person to deliver the statement or report.
SECTION 4. Section 22.24, Tax Code, is amended by amending
Subsection (c), adding Subsections (c-1) and (c-2), and amending
Subsection (d) to read as follows:
(c) The comptroller may prescribe or approve different
forms for different kinds of property but shall ensure that each
form requires a property owner to furnish the information necessary
to identify the property and to determine its ownership,
taxability, and situs.
(c-1) A rendition or report form for tangible personal
property used for the production of income must require the
property owner to state:
(1) the location of the property;
(2) the original cost of the property as reflected in
the books and records of the property owner;
(3) the tax year in which the property owner acquired
the property; and
(4) the property owner's good faith estimate of the
market value of the property.
(c-2) A rendition or report form may require a property
owner to include other information that the comptroller determines
to be necessary for the proper administration of taxation of
property subject to this chapter but may not require a property
owner to furnish information not relevant to the appraisal of
property for tax purposes or to the assessment or collection of
property taxes.
(d) A rendition or report form for property other than
tangible personal property used for the production of income shall
permit but may not require a property owner to state the property
owner's [his] opinion about the market value of the [his] property.
SECTION 5. Subchapter B, Chapter 22, Tax Code, is amended by
adding Sections 22.28 and 22.29 to read as follows:
Sec. 22.28. FAILURE TO TIMELY DELIVER RENDITION STATEMENT
OR PROPERTY REPORT; OMISSION OF PROPERTY; PENALTIES. (a) If a
person required by Section 22.01(a), 22.04, or 22.05 to deliver a
rendition statement or property report to the chief appraiser fails
to deliver the statement or report in the time required by this
chapter, a penalty is imposed on the property required to be
included in the statement or report payable to each taxing unit that
imposes taxes on the property. The amount of the penalty payable to
each taxing unit is equal to five percent of the amount of taxes
ultimately imposed by the taxing unit for the tax year on the
property that was required to be included in the statement or report
for the first calendar month the person fails to deliver the
statement or report plus five percent for each additional month or
portion of a month the person fails to deliver the statement or
report, not to exceed a total of 25 percent of the amount of taxes
ultimately imposed by the taxing unit for the tax year on the
property.
(b) If a person required by Section 22.01(a), 22.04, or
22.05 to deliver a rendition statement or property report to the
chief appraiser delivers the statement or report in the time
required by this chapter but omits property required to be included
in the statement or report, a penalty is imposed on the property
omitted from the statement or report payable to each taxing unit
that imposes taxes on the property. The amount of the penalty
payable to each taxing unit is equal to 25 percent of the amount of
taxes ultimately imposed by the taxing unit for the tax year on the
omitted property.
(c) Notwithstanding Subsections (a) and (b), if the amount
of the penalty computed under the applicable subsection is less
than $1, the amount of the penalty is $1.
(d) If a person required by Section 22.01(a), 22.04, or
22.05 to deliver a rendition statement or property report to the
chief appraiser fails to deliver the statement or report in the time
required by this chapter or omits property from the statement or
report, the chief appraiser shall:
(1) appraise the property as of January 1 of the year
in which the person was required to deliver the rendition statement
or property report or was required to include the property on the
statement or report and enter in the appraisal records the
appraised and taxable value of the property, if the property was not
previously included in the appraisal records;
(2) make an entry in the appraisal records for the
property indicating liability for the penalty imposed under
Subsection (a) or (b) and the amount of the penalty, if known; and
(3) send a written notice of imposition of the penalty
to the person required to deliver the statement or report that
includes an explanation of the procedures for protesting the
imposition of the penalty.
(e) The assessor for each taxing unit that imposes taxes on
the property shall add the amount of the penalty to the unit's tax
bill for taxes on the property or, if the tax bill has been
delivered, shall deliver to the property owner a supplemental bill
for the penalty. The penalty is due and shall be collected at the
same time and in the same manner as the taxes on the property.
(f) A penalty imposed under Subsection (a) or (b) that
becomes delinquent accrues penalties and interest in the same
manner as a delinquent tax.
(g) A penalty imposed under Subsection (a) or (b) and any
penalty or interest accruing on the penalty:
(1) are the personal obligation of the property owner;
and
(2) constitute a lien on the property on which the
penalty is imposed.
Sec. 22.29. INVESTIGATIONS AND AUDITS. (a) The chief
appraiser, or a person authorized by the chief appraiser in
writing, may:
(1) examine, copy, and photograph the books, records,
and papers of a person who files a rendition statement or property
report required by this chapter to verify the accuracy of the
statement or report; and
(2) by delivery of written notice to the property
owner or to an employee, representative, or agent of the property
owner, not later than the 20th working day after the date the notice
is delivered, require the property owner to produce to the chief
appraiser or an agent or designated representative of the chief
appraiser for inspection the books, records, and papers used as a
basis for the preparation of the rendition statement or property
report.
(b) If the chief appraiser determines as the result of an
investigation under this section that the chief appraiser's
reliance on a rendition statement or property report resulted in
the omission of tangible personal property in the current tax year
or in any one of the two preceding tax years or the undervaluation
of real property in the current tax year or in any one of the five
preceding tax years, the chief appraiser shall add the omitted
tangible personal property or the portion of the appraised value of
undervalued real property that was erroneously omitted for each tax
year to the appraisal roll as provided by Section 25.21 for other
property that escapes taxation.
(c) The chief appraiser may not conduct an investigation of
a property owner under this section more frequently than once every
three years, except that if the chief appraiser takes action under
Subsection (b) as a result of an investigation of a property owner,
the chief appraiser may conduct an investigation of the property
owner in the following year.
(d) Copies of books, records, or papers made or retained by
the chief appraiser or an agent or representative of the chief
appraiser in the course of an investigation under this section are
confidential to the same degree that a rendition statement or
property report is confidential under Section 22.27.
(e) The chief appraiser may not employ a person on a
contingency fee basis to conduct an audit under this section.
SECTION 6. The heading to Section 23.011, Tax Code, is
amended to read as follows:
Sec. 23.011. COST METHOD OF APPRAISAL: REAL PROPERTY.
SECTION 7. Subchapter A, Chapter 23, Tax Code, is amended by
adding Section 23.0115 to read as follows:
Sec. 23.0115. COST METHOD OF APPRAISAL: TANGIBLE PERSONAL
PROPERTY. (a) If the chief appraiser uses the cost method of
appraisal to determine the market value of tangible personal
property used for the production of income on the basis of
information provided in a rendition statement or property report,
the chief appraiser shall use the methods and procedures specified
by the appraisal manuals developed under Subsection (b) to
determine the depreciated value of the property.
(b) The comptroller by rule shall develop and distribute to
each appraisal office appraisal manuals that:
(1) prescribe depreciation schedules for common types
of tangible personal property used for the production of income;
(2) specify the methods of applying the schedules to
appraise property on the basis of information provided in a
rendition statement or property report; and
(3) prescribe the method that a chief appraiser shall
use to calculate depreciation for any type of tangible personal
property used for the production of income that is not covered by a
depreciation schedule prescribed by the comptroller.
SECTION 8. Section 23.013, Tax Code, is amended to read as
follows:
Sec. 23.013. MARKET DATA COMPARISON METHOD OF APPRAISAL.
If the chief appraiser uses the market data comparison method of
appraisal to determine the market value of [real] property, the
chief appraiser shall use comparable sales data and shall adjust
the comparable sales to the subject property.
SECTION 9. Subchapter C, Chapter 41, Tax Code, is amended by
adding Section 41.414 to read as follows:
Sec. 41.414. PROTEST OF PENALTY FOR FAILURE TO RENDER
PROPERTY. (a) An owner of property on which a penalty is imposed
under Section 22.28 for a failure to deliver a rendition statement
or property report in the time required by Chapter 22 or for the
omission of property required to be included in a rendition
statement or property report may protest the imposition of the
penalty.
(b) A protest under this section shall be determined in
favor of the property owner if the owner shows that the owner's
failure to timely deliver the rendition statement or property
report or the owner's omission of property required to be included
in the rendition statement or property report was not intentional
or for the purpose of evading or illegally avoiding the payment of
taxes.
(c) If the appraisal review board determines the protest in
favor of the property owner, the board may reduce or waive the
penalty.
SECTION 10. Section 41.43, Tax Code, is amended by amending
Subsection (a) and adding Subsection (d) to read as follows:
(a) Except as provided by Subsection (d), in [In] a protest
authorized by Section 41.41(a)(1) [41.41(1)] or (2), the appraisal
district has the burden of establishing the value of the property by
a preponderance of the evidence presented at the hearing. If the
appraisal district fails to meet that standard, the protest shall
be determined in favor of the property owner.
(d) If before the date of the hearing the property owner
fails to deliver a rendition statement or property report as
required by Chapter 22 for the property that is the subject of the
protest:
(1) the property owner has the burden of establishing
the market value of the property by a preponderance of the evidence
presented at the hearing; and
(2) if the property owner fails to meet the standard
provided by Subdivision (1), the protest shall be determined in
favor of the appraisal district.
SECTION 11. Section 42.29, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c) Notwithstanding Subsection (a), a property owner may
not be awarded attorney's fees if the property owner fails to timely
deliver a rendition statement or property report as required by
Chapter 22 for the property that is the subject of the appeal.
SECTION 12. (a) This Act takes effect January 1, 2004, and
applies only to ad valorem taxes imposed for a tax year beginning on
or after that date and the rendition of property for ad valorem tax
purposes for a tax year that begins on or after that date.
(b) Section 22.29, Tax Code, as added by this Act,
authorizes the addition to an appraisal roll of omitted tangible
personal property or the portion of the appraised value of
undervalued real property that was erroneously omitted only for a
tax year beginning on or after the effective date of this Act.