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


Office of House Bill AnalysisC.S.H.B. 1100
By: Lewis, Ron
Ways & Means
3/25/2001
Committee Report (Substituted)



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.  C.S.H.B. 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

C.S.H.B.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 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 because of its temporary status if the owner demonstrates
to the chief appraiser that the owner intends to incorporate the property
in or attach the property to an identified vessel or other watercraft that
is to be converted, repaired, stored, inspected, or under construction. 

EFFECTIVE DATE

January 1, 2002.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1100 modifies the original bill by providing that the owner of a
vessel or other watercraft  that is to be used out of the state but is in
this state to be constructed, converted, repaired, stored, or inspected may
claim exemption to ad valorem taxation on tangible personal property if the
owner demonstrates to the chief appraiser that the owner intends to
incorporate the property or attach the property to such a vessel or other
watercraft.  The original bill authorized the owner to claim an exemption
on ad valorem taxation of tangible personal property if the owner intended
to incorporate such property in or the property was suitable to for
incorporation in such a vessel or other watercraft.