By Staples                                             S.B. No. 862
         77R4120 SMH-F                           
                                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. Section 11.251(h), Tax Code, is amended to read as
 1-6     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. The
 2-1     chief appraiser shall make an entry on the appraisal records for
 2-2     the inventory or property indicating the property owner's liability
 2-3     for the penalty and shall deliver a written notice of imposition of
 2-4     the penalty, explaining the reason for its imposition, to the
 2-5     property owner.  The assessor for a taxing unit that taxes the
 2-6     inventory or property shall add the amount of the penalty to the
 2-7     property owner's tax bill, and the tax collector for the unit shall
 2-8     collect the penalty at the time and in the manner the collector
 2-9     collects the tax.  The amount of the penalty constitutes a lien
2-10     against the inventory or property against which the penalty is
2-11     imposed, as if it were a tax, and accrues penalty and interest in
2-12     the same manner as a delinquent tax.
2-13           SECTION 2. Section 11.43(e), Tax Code, is amended to read as
2-14     follows:
2-15           (e)  Except as provided by Section 11.422, 11.431, 11.433,
2-16     11.434, [or] 11.435, or 11.439 [of this code], if a person required
2-17     to apply for an exemption in a given year fails to file timely a
2-18     completed application form, the person may not receive the
2-19     exemption for that year.
2-20           SECTION 3. Subchapter C, Chapter 11, Tax Code, is amended by
2-21     adding Section 11.439 to read as follows:
2-22           Sec. 11.439.  LATE APPLICATION FOR FREEPORT EXEMPTION. (a)
2-23     The chief appraiser shall accept and approve or deny an application
2-24     for an exemption for freeport goods under Section 11.251 after the
2-25     deadline for filing it has passed if it is filed before the date
2-26     the appraisal review board approves the appraisal records.
2-27           (b)  If the application is approved, the property owner is
 3-1     liable to each taxing unit for a penalty in an amount equal to 10
 3-2     percent of the difference between the amount of tax imposed by the
 3-3     taxing unit on the inventory or property, a portion of which
 3-4     consists of freeport goods, and the amount that would otherwise
 3-5     have been imposed.
 3-6           (c)  The chief appraiser shall make an entry on the appraisal
 3-7     records for the inventory or property indicating the property
 3-8     owner's liability for the penalty and shall deliver a written
 3-9     notice of imposition of the penalty, explaining the reason for its
3-10     imposition, to the property owner.
3-11           (d)  The tax assessor for a taxing unit that taxes the
3-12     inventory or property shall add the amount of the penalty to the
3-13     property owner's tax bill, and the tax collector for the unit shall
3-14     collect the penalty at the time and in the manner the collector
3-15     collects the tax.  The amount of the penalty constitutes a lien
3-16     against the inventory or property against which the penalty is
3-17     imposed, as if it were a tax, and accrues penalty and interest in
3-18     the same manner as a delinquent tax.
3-19           SECTION 4. This Act takes effect September 1, 2001.