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By: Staples, Averitt S.B. No. 340
(In the Senate - Filed January 31, 2003; February 11, 2003,
read first time and referred to Committee on Finance;
April 14, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 11, Nays 1; April 14, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 340 By: Staples
A BILL TO BE ENTITLED
AN ACT
relating to the rendition of property for ad valorem tax purposes;
providing civil penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 22.01, Tax Code, is amended by amending
Subsection (a) and adding Subsections (f) through (i) to read as
follows:
(a) Except as provided by Chapter 24 [of this code], a
person shall render for taxation all tangible personal property
used for the production of income that the person [he] owns or that
the person [he] manages and controls as a fiduciary on January 1. A
rendition statement shall contain:
(1) the name and address of the property owner;
(2) a description of the property by type or category;
(3) if the property is inventory, a description of
each type of inventory and a general estimate of the quantity of
each type of inventory;
(4) the physical location or taxable situs of the
property; and
(5) the property owner's good faith estimate of the
market value of the property or, at the option of the property
owner, the historical cost when new and the year of acquisition of
the property.
(f) 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
required to contain only:
(1) the name and address of the property owner;
(2) a general description of the property by type or
category; and
(3) the physical location or taxable situs of the
property.
(g) 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 involving the property, except
for:
(1) a proceeding to determine whether the person
complied with this section;
(2) a proceeding under Section 22.29(b); or
(3) a protest under Section 41.41.
(h) If the property that is the subject of the rendition is
regulated by the Public Utility Commission of Texas, the Railroad
Commission of Texas, the federal Surface Transportation Board, or
the Federal Energy Regulatory Commission, 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) 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.
SECTION 2. Section 22.07, Tax Code, is amended by adding
Subsections (c) through (f) to read as follows:
(c) The chief appraiser may 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. The statement
must:
(1) summarize information sufficient to identify the
property, including:
(A) the physical and economic characteristics
relevant to the opinion of value, if appropriate; and
(B) the source of the information used;
(2) state the effective date of the opinion of value;
and
(3) explain the basis of the value rendered. If the
property owner is a business with 50 employees or less, the property
owner may base the estimate of value on the depreciation schedules
used for federal income tax purposes.
(d) The property owner shall 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. The owner's statement is solely for informational
purposes and is not admissible in evidence in any subsequent
protest, suit, appeal, or other proceeding involving the property
other than:
(1) a proceeding to determine whether the property
owner has complied with this section;
(2) a proceeding under Section 22.29(b); or
(3) a protest under Section 41.41.
(e) A statement provided under this section is confidential
information and may not be disclosed, except as provided by Section
22.27.
(f) Failure to comply with this section in a timely manner
is considered to be a failure to timely render under Section 22.01
and penalties as described in Section 22.28 shall be applied by the
chief appraiser.
SECTION 3. Section 22.23, Tax Code, is amended by amending
Subsection (b) and adding Subsection (c) to read as follows:
(b) On written request [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 May 15 [a date not later than April 30]. The chief
appraiser [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 upon good cause shown in writing by the property owner.
(c) 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 roll in
one of the two preceding years, the chief appraiser may not add the
value of the omitted property to the 2001 or 2002 appraisal roll.
This subsection expires January 1, 2005.
SECTION 4. Subsections (b), (c), and (d), Section 22.24,
Tax Code, are amended to read as follows:
(b) A person filing a rendition or report shall include all
information required by Section 22.01 [the form].
(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. A form may not require but may permit a
property owner to furnish information not specifically required by
this chapter to be reported. In addition, a form prescribed or
approved under this subsection must contain the following statement
in bold type: "If you make a false statement on this form, you could
be found guilty of a Class A misdemeanor or a state jail felony
under Section 37.10, Penal Code." [relevant to the appraisal of
property for tax purposes or to the assessment or collection of
property taxes.]
(d) Except as required by Section 22.01(a), a [A] rendition
or report form shall permit but [may] not require a property owner
to state the owner's good faith estimate of [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, 22.29, and 22.30 to read as follows:
Sec. 22.28. PENALTY FOR DELINQUENT REPORT. (a) Except as
otherwise provided by Section 22.30, the chief appraiser shall
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.
(b) The chief appraiser may 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. The chief appraiser shall 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) The chief appraiser shall 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 that:
(1) the person filed a false statement or report with
the intent to commit fraud or to evade the tax; or
(2) the person alters, destroys, or conceals any
record, document, or thing, or presents to the chief appraiser any
altered or fraudulent record, document, or thing, or otherwise
engages in fraudulent conduct, for the purpose of affecting the
course or outcome of an inspection, investigation, determination,
or other proceeding before the appraisal district.
(b) Enforcement of this section shall 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) In making a determination of liability under this
section, the court shall consider:
(1) the person's compliance history with respect to
paying taxes and filing statements or reports;
(2) the type, nature, and taxability of the specific
property involved;
(3) the type, nature, size, and sophistication of the
person's business or other entity for which property is rendered;
(4) the completeness of the person's records;
(5) the person's reliance on advice provided by the
appraisal district that may have contributed to the violation;
(6) any change in appraisal district policy during the
current or preceding tax year that may affect how property is
rendered; and
(7) any other factor the court considers relevant.
(d) The chief appraiser may 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. The chief appraiser shall 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) The chief appraiser
may 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. A written request, accompanied by
supporting documentation, stating the grounds on which penalties
should be waived must 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. The chief appraiser shall make a
determination of the penalty waiver request based on the
information submitted.
(b) The chief appraiser shall notify the person of the chief
appraiser's determination regarding the penalty waiver request
after considering:
(1) the person's compliance history with respect to
paying taxes and filing statements or reports;
(2) the type, nature, and taxability of the specific
property involved;
(3) the type, nature, size, and sophistication of the
person's business or other entity for which property is rendered;
(4) the completeness of the person's records;
(5) the person's reliance on advice provided by the
appraisal district that may have contributed to the person's
failure to comply and the imposition of the penalty;
(6) any change in appraisal district policy during the
current or preceding tax year that may affect how property is
rendered; and
(7) any other factors that may have caused the person
to fail to timely file a statement or report.
(c) A property owner is entitled to protest before the
appraisal review board the failure or refusal of a chief appraiser
to waive a penalty under Subsection (a).
SECTION 6. Section 25.19, Tax Code, is amended by adding
Subsection (k) to read as follows:
(k) Notwithstanding any other provision of this section,
the chief appraiser may not deliver a written notice concerning
property that is required to be rendered or reported under Chapter
22 until after the applicable deadline for filing the rendition
statement or property report.
SECTION 7. 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 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. If the property owner
fails to meet that standard, the protest shall be determined in
favor of the appraisal district.
SECTION 8. (a) Except as provided by Subsection (b) of
this section, this Act takes effect January 1, 2004, and applies
only to the rendition of property for ad valorem tax purposes for a
tax year that begins on or after that date.
(b) Subsection (c), Section 22.23, 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.
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