By Rusling, Averitt, et al. H.B. No. 2608
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the exemption from ad valorem taxation of certain
1-3 tangible personal property held at a location for not more than a
1-4 specified period.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
1-7 adding Section 11.252 to read as follows:
1-8 Sec. 11.252. TANGIBLE PERSONAL PROPERTY IN TRANSIT EXEMPT.
1-9 (a) In this section, "goods-in-transit" means property that has
1-10 been exempted from taxation by the governing body of a taxing unit
1-11 under Section 1-m, Article VIII, Texas Constitution.
1-12 (b) A person is entitled to an exemption from taxation of
1-13 the appraised value of that portion of the person's property that
1-14 consists of goods-in-transit.
1-15 (c) The exemption provided by Subsection (b) is subtracted
1-16 from the market value of the property determined under Section
1-17 23.12 to determine the taxable value of the property.
1-18 (d) Except as provided by Subsections (f) and (g), the chief
1-19 appraiser shall determine the appraised value of goods-in-transit
1-20 under this subsection. The chief appraiser shall determine the
1-21 percentage of the market value of inventory or property owned by
1-22 the property owner in the preceding calendar year that was
1-23 contributed by goods-in-transit. The chief appraiser shall apply
2-1 that percentage to the market value of the property owner's
2-2 inventory or property for the current year to determine the
2-3 appraised value of goods-in-transit for the current year.
2-4 (e) In determining the market value of goods-in-transit that
2-5 in the preceding year were assembled, manufactured, repaired,
2-6 maintained, processed, or fabricated in this state or used by the
2-7 person who acquired or imported the property in the repair or
2-8 maintenance of aircraft operated by a certificated air carrier, the
2-9 chief appraiser shall exclude the cost of equipment, machinery, or
2-10 materials that entered into and became component parts of the
2-11 goods-in-transit but were not themselves goods-in-transit or that
2-12 were not transported to another location in this state or out of
2-13 this state before the expiration of 270 days after the date they
2-14 were brought into this state by the property owner or acquired by
2-15 the property owner in this state. For component parts held in
2-16 bulk, the chief appraiser may use the average length of time a
2-17 component part was held at a location in this state by the property
2-18 owner during the preceding year in determining whether the
2-19 component parts were transported to another location in this state
2-20 or out of this state before the expiration of 270 days.
2-21 (f) If the property owner was not engaged in transporting
2-22 goods-in-transit to other locations in this state or out of this
2-23 state for the entire preceding year, the chief appraiser shall
2-24 calculate the percentage of market value described in Subsection
2-25 (d) for the portion of the year in which the property owner was
3-1 engaged in transporting goods-in-transit to other locations in this
3-2 state or out of this state.
3-3 (g) If the property owner or the chief appraiser
3-4 demonstrates that the method provided by Subsection (d)
3-5 significantly understates or overstates the market value of the
3-6 property qualified for an exemption under Subsection (b) in the
3-7 current year, the chief appraiser shall determine the market value
3-8 of the goods-in-transit to be exempt by determining, according to
3-9 the property owner's records and any other available information,
3-10 the market value of those goods-in-transit owned by the property
3-11 owner on January 1 of the current year, excluding the cost of
3-12 equipment, machinery, or materials that entered into and became
3-13 component parts of the goods-in-transit but were not themselves
3-14 goods-in-transit or that were not transported to other locations in
3-15 this state or outside the state before the expiration of 270 days
3-16 after the date they were brought into this state by the property
3-17 owner or acquired by the property owner in this state.
3-18 (h) The chief appraiser by written notice delivered to a
3-19 property owner who claims an exemption under this section may
3-20 require the property owner to provide copies of property records to
3-21 determine the amount and value of goods-in-transit. If the
3-22 property owner fails to deliver the information requested in the
3-23 notice before the 31st day after the date the notice is delivered
3-24 to the property owner, the property owner forfeits the right to
3-25 claim or receive the exemption for that year.
4-1 (i) The exemption provided by Subsection (b) does not apply
4-2 to a school district created under Section 3, Article VII, Texas
4-3 Constitution, other than a junior college district.
4-4 (j) Petroleum products as set forth in Section 1-m, Article
4-5 VIII, Texas Constitution, means liquid and gaseous materials that
4-6 are the immediate derivatives of the refining of oil or natural
4-7 gas.
4-8 (k) Property that meets the requirements of Section 1-m(a),
4-9 Article VIII, Texas Constitution, and that is transported to
4-10 another location in this state or outside of this state not later
4-11 than 270 days after the date the person who owns it on January 1
4-12 acquired it or imported it into this state constitutes
4-13 goods-in-transit regardless of whether the person who owns the
4-14 property on January 1 is the person who transports it to another
4-15 location in this state or outside of this state.
4-16 SECTION 2. Section 11.436(a), Tax Code, as added by Chapter
4-17 779, Acts of the 73rd Legislature, Regular Session, 1993, is
4-18 amended to read as follows:
4-19 (a) A person who operates a warehouse used primarily for the
4-20 storage of cotton for transportation to other locations in this
4-21 state or outside of this state may apply for an exemption under
4-22 Section 11.251 or 11.252 for cotton stored in the warehouse on
4-23 behalf of all the owners of the cotton. An exemption granted under
4-24 this section applies to all cotton stored in the warehouse that is
4-25 eligible to be exempt under Section 11.251 or 11.252. Cotton that
5-1 is stored in a warehouse covered by an exemption granted under this
5-2 section and that is transported to other locations in this state or
5-3 outside of this state is presumed to have been transported to other
5-4 locations in this state or outside of this state within the time
5-5 permitted by Section 1-j or 1-m, Article VIII, <Section 1-j, of
5-6 the> Texas Constitution, for cotton to qualify for an exemption
5-7 under that section.
5-8 SECTION 3. Section 22.01(e), Tax Code, is amended to read as
5-9 follows:
5-10 (e) Notwithstanding Subsections (a) and (b), a person is not
5-11 required to render for taxation cotton that:
5-12 (1) the person manages and controls as a fiduciary;
5-13 (2) is stored in a warehouse for which an exemption
5-14 for cotton has been granted under Section 11.436; and
5-15 (3) the person intends to transport to other locations
5-16 in this state or outside of this <the> state within the time
5-17 permitted by Section 1-j or 1-m, Article VIII, <Section 1-j, of
5-18 the> Texas Constitution, for cotton to qualify for an exemption
5-19 under that section.
5-20 SECTION 4. This Act takes effect January 1, 1996, and
5-21 applies only to taxes imposed for tax years beginning on or after
5-22 that date, but only if the constitutional amendment proposed by
5-23 H.J.R. No. 107, 74th Legislature, Regular Session, 1995, takes
5-24 effect. If that amendment is not approved by the voters, this Act
5-25 has no effect.
6-1 SECTION 5. The importance of this legislation and the
6-2 crowded condition of the calendars in both houses create an
6-3 emergency and an imperative public necessity that the
6-4 constitutional rule requiring bills to be read on three several
6-5 days in each house be suspended, and this rule is hereby suspended.