Enrolled Bill Summary

            The Texas Constitution exempts from property taxation certain property, known as freeport property, that is acquired in or imported to Texas and held in the state up to 175 days for assembling, manufacturing, storing, processing, or manufacturing purposes before being exported from Texas. Such property includes goods, wares, merchandise, other tangible personal property, and ores, other than oil, natural gas, and other petroleum products. The provision allows local governments that previously taxed such property either to continue taxing the property or to grant the exemption by an irrevocable decision to forego such taxation.

            Senate Joint Resolution 6 proposes a state constitutional amendment that empowers the legislature to authorize a similar exemption applicable to the same types of property, acquired in or imported to Texas, and held in the state for like purposes. The difference, compared to the existing constitutional provision, is that the property may be either exported from Texas or forwarded to another Texas location, and may be held up to 270 days but not at a location owned or controlled by the owner of the acquired or imported property. The amendment allows a local government either to tax such property or to grant an exemption, but any decision to grant an exemption must be preceded by a public hearing on the matter. A property owner who is eligible for the freeport exemption may apply for the new exemption but cannot receive both. If voters approve the proposed amendment, it takes effect January 1, 2002.