By:  Staples                                           S.B. No. 862
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the exemption from ad valorem taxation for freeport
 1-3     goods.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subsection (h), Section 11.251, Tax Code, is
 1-6     amended to read as follows:
 1-7           (h)  The chief appraiser by written notice delivered to a
 1-8     property owner who claims an exemption under this section may
 1-9     require the property owner to provide copies of inventory or
1-10     property records in order to determine the amount and value of
1-11     freeport goods.  If the property owner fails to deliver the
1-12     information requested in the notice before the 31st day after the
1-13     date the notice is delivered to the property owner or before the
1-14     date the appraisal review board approves the appraisal records
1-15     under Section 41.12, whichever is later, the property owner
1-16     forfeits the right to claim or receive the exemption for that year.
1-17     If the property owner delivers the information requested in the
1-18     notice before the date the appraisal review board approves the
1-19     appraisal records but not before the 31st day after the date the
1-20     notice is delivered to the property owner and the exemption is
1-21     allowed, the property owner is liable to each taxing unit for a
1-22     penalty in an amount equal to 10 percent of the difference between
1-23     the amount of tax imposed by the taxing unit on the inventory or
1-24     property and the amount that would otherwise have been imposed.
1-25     The chief appraiser shall make an entry on the appraisal records
 2-1     for the inventory or property indicating the property owner's
 2-2     liability for the penalty and shall deliver a written notice of
 2-3     imposition of the penalty, explaining the reason for its
 2-4     imposition, to the property owner.  The assessor for a taxing unit
 2-5     that taxes the inventory or property shall add the amount of the
 2-6     penalty to the property owner's tax bill, and the tax collector for
 2-7     the unit shall collect the penalty at the time and in the manner
 2-8     the collector collects the tax.  The amount of the penalty
 2-9     constitutes a lien against the inventory or property against which
2-10     the penalty is imposed, as if it were a tax, and accrues penalty
2-11     and interest in the same manner as a delinquent tax.
2-12           SECTION 2.  Subsection (e), Section 11.43, Tax Code, is
2-13     amended to read as follows:
2-14           (e)  Except as provided by Section 11.422, 11.431, 11.433,
2-15     11.434, [or] 11.435, or 11.439 [of this code], if a person required
2-16     to apply for an exemption in a given year fails to file timely a
2-17     completed application form, the person may not receive the
2-18     exemption for that year.
2-19           SECTION 3.  Subchapter C, Chapter 11, Tax Code, is amended by
2-20     adding Section 11.439 to read as follows:
2-21           Sec. 11.439.  LATE APPLICATION FOR FREEPORT EXEMPTION.
2-22     (a)  The chief appraiser shall accept and approve or deny an
2-23     application for an exemption for freeport goods under Section
2-24     11.251 after the deadline for filing it has passed if it is filed
2-25     before the date the appraisal review board approves the appraisal
2-26     records.
 3-1           (b)  If the application is approved, the property owner is
 3-2     liable to each taxing unit for a penalty in an amount equal to 10
 3-3     percent of the difference between the amount of tax imposed by the
 3-4     taxing unit on the inventory or property, a portion of which
 3-5     consists of freeport goods, and the amount that would otherwise
 3-6     have been imposed.
 3-7           (c)  The chief appraiser shall make an entry on the appraisal
 3-8     records for the inventory or property indicating the property
 3-9     owner's liability for the penalty and shall deliver a written
3-10     notice of imposition of the penalty, explaining the reason for its
3-11     imposition, to the property owner.
3-12           (d)  The tax assessor for a taxing unit that taxes the
3-13     inventory or property shall add the amount of the penalty to the
3-14     property owner's tax bill, and the tax collector for the unit shall
3-15     collect the penalty at the time and in the manner the collector
3-16     collects the tax.  The amount of the penalty constitutes a lien
3-17     against the inventory or property against which the penalty is
3-18     imposed, as if it were a tax, and accrues penalty and interest in
3-19     the same manner as a delinquent tax.
3-20           SECTION 4.  This Act takes effect September 1, 2001.