The Comptroller of Public Accounts proposes amendments to §9.419, concerning procedures for determining property tax exemptions for motor vehicles leased for personal use. The comptroller proposes amendments to implement statutory requirements and new legislation.

The proposed amendments change the heading of §9.419 from "Procedures for Determining Property Tax Exemption for Motor Vehicles Leased for Personal Use" to "Property Tax Exemption for Certain Leased Motor Vehicles".

The proposed amendments §9.419 delete subsection (a) prescribing the effective date of the rule as redundant with the legislation enacting Tax Code, §11.252 and unnecessary as the subsection states the section is effective for motor vehicles leased on or after January 2, 2001, approximately nineteen years ago.

The proposed amendments re-letter subsequent subsections.

The proposed language of re-lettered subsection (a)(1), prescribing the definition of a lease, complies with Tax Code, §11.252(h) and conforms to the definition of a lease in Tax Code, §152.001(6).

The proposed language of re-lettered subsection (a)(2), prescribing the definition of a lessee, conforms with the definition of a lease under re-lettered subsection (a)(1).

The proposed language of re-lettered subsection (a)(3), prescribing the definition of a lessor, conforms with the definition of a lease under re-lettered subsection (a)(1).

The proposed language of re-lettered subsection (a)(4), prescribing the definition of a Lessee's Affidavit, conforms the language to newly amended Tax Code, §11.252.

The proposed language of re-lettered subsection (a)(6), prescribing the definition of reasonable time, provides more concise language.

The proposed language of re-lettered subsection (b)(1) deletes the word "model" from the description of forms in the section.

The proposed language of re-lettered subsection (b)(1)(A) conforms the title of the Lessee's Affidavit to the language of newly amended Tax Code, §11.252.

The proposed language of newly re-lettered subparagraph (b)(1)(B) changes the title of Form 50-288 from "Lessor's Rendition or Property Report for Leased Automobiles" to "Lessor's Rendition or Property Report Leased Automobiles".

The proposed re-lettered subsection (b)(2) adds lessees to the parties required to use the comptroller's forms adopted by reference in the section, and states that the forms are available from the Comptroller of Public Accounts Property Tax Assistance Division. The proposed amended forms may be viewed at comptroller.texas.gov/taxes/property-tax/rules/index.php. The proposal amends subsection (b)(2) to amend subparagraph (A) to replace the word "model" with the word "comptroller" in reference to the forms. The proposal further amends subsection (b)(2) to amend subparagraph (B) to replace the word "comptroller's model" with the word "comptroller" in reference to the forms.

The proposal amends re-lettered subsection (b)(3) to eliminate unnecessary language in order to make the subsection more concise, and adds language to conform to newly amended language in Tax Code, §11.252

The proposal amends re-lettered subsection (b) by removing paragraph (4) as a redundant provision.

The proposal re-numbers subsequent paragraphs.

The proposed amendments re-letter and re-number paragraph (4) to add the statutory authority for chief appraisers to enter into agreements for the electronic exchange of information under Tax Code, §1.085 and confirm that nothing in the section should be construed to limit that authority.

The proposal adds new paragraph (5) to clarify that nothing in the section is to be construed to limit the electronic execution of documents according to the laws of the State of Texas.

The new subsection (c) is proposed to adopt appropriate procedures and requirements for a lessee's affidavit in connection with the appropriate procedures and exemption application requirements of this section to determine if a motor vehicle subject to a lease qualifies for exemption under Tax Code, §11.252.

The proposed new paragraph (1) complies with the language of Tax Code, §11.252, to require that a lessee must not hold a motor vehicle subject to a lease for the production of income, and that the motor vehicle must be used primarily for activities that do not include the production of income.

The proposal adds new paragraph (2), subparagraphs (A), (B) and (C), and clauses (i) and (ii) to comply with newly amended language in Tax Code, §11.252 concerning the presumption of use primarily for motor vehicles that are not involved in the production of income

The proposal deletes subsection (d).

The proposal adds new subsection (d) to prescribe the use of the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to be used by the lessor to report each leased vehicle owned and whether the lessee has designated the vehicle as not held for the production and not used for the production of income in accordance with Tax Code, §11.252(i).

The proposal adds new paragraphs (1)(A), (B), (C) and (D) to require on the lessor report: the year, make, model and vehicle identification number of each leased vehicle; the name of the lessee and address at which the leased vehicle is kept; whether the lessee has designated the vehicle as not held for the production and not used for the production of income; and whether the lessor maintains a lessee's affidavit, electronic image of the lessee's affidavit, or a certified copy of the lessee's affidavit for the leased vehicle.

The proposal adds new paragraph (2) to require that the lessor provide the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to the chief appraiser in the manner provided by subchapter B, Chapter 22, Tax Code in accordance with Tax Code, §11.252(j).

The proposal adds new paragraph (3) to prescribe that the lessor must use the Lessor's Rendition or Property Report Leased Automobiles (Form 50-288) to render each leased vehicle reported on the Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286) for which the lessor does not maintain a lessee's affidavit, an electronic image of a lessee's affidavit, or a certified copy of a lessee's affidavit.

The proposal adds new subsection (e) to require that the lessor to submit the Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286) to the chief appraiser in order to apply for the exemption available under Tax Code, §11.252.

The proposal deletes subsection (f). Tax Code, §11.252 does not provide authority for the lessee's affidavit to be prima facie evidence of qualification for a motor vehicle to be exempt and Tax Code, §11.252 does not authorize a limit or expansion on the chief appraiser's discretion under Tax Code, §11.43 and §11.45 in considering evidence of an exemption.

The proposal deletes subsections (g) and (h). Tax Code, §11.252 does not authorize a limit or expansion on a chief appraiser's authority for review and action on an exemption application. The review and action on the exemption application is authorized for chief appraisers under Tax Code, §11.43 and §11.45.

The proposal re-letters subsequent subsections.

The proposal amends re-lettered subsection (f) to add the language "...electronic images of the affidavits, or certified copies of the affidavits... " to subparagraph (A), (B) & (C) to conform to newly amended language in Tax Code, §11.252 and to combine with existing paragraph (1).

The proposal re-numbers existing subparagraphs A, B, C, and E to new paragraphs numbered 1-4.

The proposal deletes subparagraph (D) as unnecessary and redundant language with subsection (b) of the section.

The proposal amends re-lettered subparagraph (D) to add the language "...electronic images of the affidavits, or certified copies of the affidavits...".

The proposal deletes re-numbered paragraph (2) as the exemption is for the lessor of a qualifying motor vehicle under lease and the chief appraiser has discretionary authority under Tax Code, §11.45 to act on an application for exemption and Tax Code, §11.252 does not provide separate or additional authority for a chief appraiser to request information from the lessees.

The proposal amends re-lettered subsection (g) to change title of Form 50-286 from "Lessor's Application for Personal Use Lease Automobile Exemptions" to "Lessor's Exemption Application Motor Vehicles Leased for Use Other than Production of Income (Form 50-286)".

Tom Currah, Chief Revenue Estimator, has determined that during the first five years that the proposed amendments are in effect, the amendments: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not positively or adversely affect this state's economy. This proposal amends current rules.

Mr. Currah also has determined that the proposed amendments would have no significant fiscal impact on the state government, units of local government, or individuals. The proposed amendments would benefit the public by improving the administration of local property valuation and taxation. There would be no anticipated significant economic cost to the public. The proposed amendments would have no significant fiscal impact on small businesses or rural communities.

You may submit comments on the proposal to Korry Castillo, Director, Property Tax Assistance Division, P.O. Box 13528 Austin, Texas 78711 or to the email address: ptad.rulecomments@cpa.texas.gov. The comptroller must receive your comments no later than 30 days from the date of publication of the proposal in the Texas Register.

The comptroller proposes the amendments under Tax Code, §11.252 (Motor Vehicles Leased for use Other than Production of Income) which requires the comptroller to adopt procedural rules to establish exemption application requirements, appropriate procedures to determine whether a motor vehicle subject to a lease qualifies for an exemption under the section, adoption of a form to be completed by lessees for use by lessors in application for the exemption, and the prescription of a property report form to be used by owners of vehicles subject to a lease.

The comptroller further proposes the amendments under Tax Code, §22.24 (Rendition and Report Forms) which authorizes the comptroller to prescribe and approve forms for the rendition and reporting of property.

These amendments implement Tax Code, §11.252 (Motor Vehicles Leased for Use Other than Production of Income).