87R7270 TJB-F
 
  By: Murphy H.B. No. 4495
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the allocation for ad valorem tax purposes of the value
  of vessels and other watercraft used outside this state.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 21.021(a) and (b), Tax Code, are
  amended to read as follows:
         (a)  A vessel or other watercraft used as an instrumentality
  of commerce, [(]as defined by [in] Section 21.031, [21.031(b) of
  this code)] is taxable pursuant to Section 21.02 [of this code].
         (b)  A special-purpose vessel or other watercraft not used as
  an instrumentality of commerce, [(]as defined by [in] Section
  21.031, [21.031(b) of this code)] is deemed to be located on January
  1 for more than a temporary period for purposes of Section 21.02 [of
  this code] in the taxing unit in which it was physically located
  during the year preceding the tax year. If the vessel or watercraft
  was physically located in more than one taxing unit during the year
  preceding the tax year, it is deemed to be located for more than a
  temporary period for purposes of Section 21.02 [of this code] in the
  taxing unit in which it was physically located for the longest
  period during the year preceding the tax year or for 30 days,
  whichever is longer. If a vessel or other watercraft is not deemed
  to be located in any taxing unit on January 1 for more than a
  temporary period pursuant to this subsection, the property is
  taxable as provided by Subdivisions (2) through (4) of Section
  21.02 [of this code].
         SECTION 2.  Section 21.031, Tax Code, is amended by amending
  Subsection (b) and adding Subsections (b-1), (b-2), (b-3), and (i)
  to read as follows:
         (b)  The appraisal office shall make the allocation as
  provided by Subsections (b-1), (b-2), and (b-3).
         (b-1)  Except as provided by Subsection (b-2), the [follows:
               [(1)  The] allocable portion of the total fair market
  value of a vessel or other watercraft used as an instrumentality of
  commerce that is taxable in this state is determined by multiplying
  the total fair market value by a fraction, the numerator of which is
  the number of miles the vessel or watercraft was operated in this
  state during the year preceding the tax year and the denominator of
  which is the total number of miles the vessel or watercraft was
  operated during the year preceding the tax year. [For purposes of
  this section, "vessel or other watercraft used as an
  instrumentality of commerce" means a vessel or other watercraft
  that is primarily employed in the transportation of cargo,
  passengers, or equipment, and that is economically employed when it
  is moving from point to point as a means of transportation.]
         (b-2)  This subsection applies only to a property owner that
  operates a fleet of vessels or other watercraft used as
  instrumentalities of commerce and that elects in writing submitted
  to the appraisal office to have the appraisal office make the
  allocation under this subsection. The allocable portion of the
  total fair market value of a vessel or other watercraft used as an
  instrumentality of commerce that is taxable in this state is
  determined by multiplying the total fair market value of all
  vessels or other watercraft of the property owner's fleet that are
  taxable in this state by a fraction, the numerator of which is the
  number of miles that all the vessels or watercraft of the fleet
  operated in this state during the year preceding the tax year and
  the denominator of which is the total number of miles that all the
  vessels or watercraft of the fleet were operated during the year
  preceding the tax year.
         (b-3) [(2)]  The allocable portion of the total fair market
  value of a special-purpose vessel or other watercraft not used as an
  instrumentality of commerce is determined by multiplying the total
  fair market value by a fraction, the numerator of which is the
  number of days the vessel or watercraft was physically located in
  this state during the year preceding the tax year and the
  denominator of which is 365. [For purposes of this section,
  "special-purpose vessel or other watercraft not used as an
  instrumentality of commerce" means a vessel or other watercraft
  that:
                     [(A) is designed to be transient and customarily
  is moved from location to location on a more or less regular basis;
                     [(B) is economically employed when operated in a
  localized area or in a fixed place; and
                     [(C) is not primarily employed to transport cargo,
  passengers, and equipment but rather to perform some specialized
  function or operation not requiring constant movement from point to
  point.]
         (i)  For purposes of this section:
               (1)  "Special-purpose vessel or other watercraft not
  used as an instrumentality of commerce" means a vessel or other
  watercraft that:
                     (A)  is designed to be transient and customarily
  is moved from location to location on a more or less regular basis;
                     (B)  is economically employed when operated in a
  localized area or in a fixed place; and
                     (C)  is not primarily employed to transport cargo,
  passengers, and equipment but rather to perform some specialized
  function or operation not requiring constant movement from point to
  point.
               (2)  "Vessel or other watercraft used as an
  instrumentality of commerce" means a vessel or other watercraft
  that is primarily employed in the transportation of cargo,
  passengers, or equipment, and that is economically employed when it
  is moving from point to point as a means of transportation.
         SECTION 3.  The change in law made by this Act applies only
  to the allocation of the value of vessels and other watercraft for
  ad valorem tax purposes beginning on or after the effective date of
  this Act.
         SECTION 4.  This Act takes effect January 1, 2022.