HBA-KDB H.B. 1100 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1100
By: Lewis, Ron
Ways & Means
2/26/2001
Introduced



BACKGROUND AND PURPOSE 

Under current law, property that is in this state on a temporary basis is
not subject to ad valorem taxation. Vessels and other watercraft that are
constructed in Texas but used outside of the state may be subject to ad
valorem taxation even though such property is in this state on a temporary
basis.  Such a property tax may convince shipbuilders to construct their
vessels elsewhere, which could potentially place jobs associated with
shipbuilding  at risk.  House Bill 1100 provides that vessels and other
watercraft that are constructed in but used outside of this state are not
subject to ad valorem taxation. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1100 amends the Tax Code to provide that a commercially-used or
noncommercially-used vessel or other watercraft  that is used outside of
this state and is in this state solely to be constructed or converted, in
addition to being repaired, stored, or inspected is presumed to be
interstate, international, or foreign commerce and not located in this
state for longer than a temporary period and is not taxed as real personal
property.  Tangible personal property in this state that the owner intends
to incorporate in and that is suitable to be incorporated in a vessel or
watercraft that is to be converted, repaired stored, inspected or under
construction, is presumed to be in interstate, international, or foreign
commerce and not located in this state for longer than a temporary period
and is not taxed as tangible personal property due to its temporary status. 

EFFECTIVE DATE

January 1, 2002.