LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 20, 2001
  
  
          TO:  Honorable Rodney Ellis, Chair, Senate Committee on Finance
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB174  by Duncan (Relating to the exemption from ad
               valorem taxation of tangible personal property held at
               certain locations only temporarily for assembling,
               manufacturing, processing, or other commercial
               purposes.), Committee Report 1st House, Substituted
  
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*  No fiscal implication to the State is anticipated.                    *
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Currently, Article VIII, Section 1-j of the Texas Constitution and
Section 11.251 of the Tax Code provide for a "freeport exemption."  The
exemption, which may be granted at the option of each city, county,
school district, or junior college district, exempts goods, wares, ores,
raw materials and other types of inventory that are brought into or
acquired in the state and transported out of the state within 175 days of
acquisition.

A self-enacting constitutional amendment, such as SJR 6, which this bill
could implement, could cause revenue losses to taxing units that granted
the new exemption.  Because this bill would not become effective without
a constitutional amendment, and because SJR 6 would be self-enacting,
this bill would have no fiscal implications.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, BR