78R149 JD-F
By: Duncan S.B. No. 495
A BILL TO BE ENTITLED
AN ACT
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.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.253 to read as follows:
Sec. 11.253. TANGIBLE PERSONAL PROPERTY IN TRANSIT.
(a) In this section, "goods-in-transit" means tangible personal
property that meets the requirements of Section 1-n, Article VIII,
Texas Constitution, as proposed by S.J.R. No. 6, 77th Legislature,
Regular Session, 2001.
(b) A person is entitled to an exemption from taxation of
the appraised value of that portion of the person's property that
consists of goods-in-transit.
(c) The exemption provided by Subsection (b) is subtracted
from the market value of the property determined under Section
23.01 or 23.12, as applicable, to determine the taxable value of the
property.
(d) Except as provided by Subsections (f) and (g), the chief
appraiser shall determine the appraised value of goods-in-transit
under this subsection. The chief appraiser shall determine the
percentage of the market value of inventory or other property owned
by the property owner in the preceding calendar year that was
contributed by goods-in-transit. For the first year to which the
exemption applies to a taxing unit, the chief appraiser shall
determine that percentage as if the exemption applied to the
preceding year. The chief appraiser shall apply that percentage to
the market value of the property owner's inventory or other
property for the current year to determine the appraised value of
goods-in-transit for the current year.
(e) In determining the market value of goods-in-transit
that in the preceding year were assembled, manufactured, repaired,
maintained, processed, or fabricated in this state, the chief
appraiser shall exclude the cost of equipment, machinery, or
materials that entered into and became component parts of the
goods-in-transit but were not themselves goods-in-transit or that
were not transported to another location in this state or out of
this state before the expiration of 270 days after the date they
were brought into this state by the property owner or acquired by
the property owner in this state. For component parts held in bulk,
the chief appraiser may use the average length of time a component
part was held by the owner of the component parts during the
preceding year at a location in this state that was not owned by or
under the control of the owner of the component parts in determining
whether the component parts were transported to another location in
this state or out of this state before the expiration of 270 days.
(f) If the property owner was not engaged in transporting
goods-in-transit to another location in this state or out of this
state for the entire preceding year, the chief appraiser shall
calculate the percentage of the market value described in
Subsection (d) for the portion of the year in which the property
owner was engaged in transporting goods-in-transit to another
location in this state or out of this state.
(g) If the property owner or the chief appraiser
demonstrates that the method provided by Subsection (d)
significantly understates or overstates the market value of the
property qualified for an exemption under Subsection (b) in the
current year, the chief appraiser shall determine the market value
of the goods-in-transit to be exempt by determining, according to
the property owner's records and any other available information,
the market value of those goods-in-transit owned by the property
owner on January 1 of the current year, excluding the cost of
equipment, machinery, or materials that entered into and became
component parts of the goods-in-transit but were not themselves
goods-in-transit or that were not transported to another location
in this state or out of this state before the expiration of 270 days
after the date they were brought into this state by the property
owner or acquired by the property owner in this state.
(h) The chief appraiser by written notice delivered to a
property owner who claims an exemption under this section may
require the property owner to provide copies of property records to
determine the amount and value of goods-in-transit and whether the
location in this state where the goods-in-transit were detained for
assembling, storing, manufacturing, processing, or fabricating
purposes was not owned by or under the control of the owner of the
goods-in-transit. If the property owner fails to deliver the
information requested in the notice before the 31st day after the
date the notice is delivered to the property owner, the property
owner forfeits the right to claim or receive the exemption for that
year.
(i) Property that meets the requirements of Section 1-n(a),
Article VIII, Texas Constitution, as proposed by S.J.R. No. 6, 77th
Legislature, Regular Session, 2001, constitutes goods-in-transit
regardless of whether the person who owns the property on January 1
is the person who transports it to another location in this state or
out of this state.
(j) The governing body of a taxing unit, in the manner
required for official action by the governing body, may provide for
the taxation of tangible personal property exempt under Subsection
(b) and not exempt under other law. Before acting to tax the exempt
property, the governing body of the taxing unit must conduct a
public hearing as required by Section 1-n(d), Article VIII, Texas
Constitution, as proposed by S.J.R. No. 6, 77th Legislature,
Regular Session, 2001. If the governing body of a taxing unit
provides for the taxation of the property as provided by this
subsection, the exemption prescribed by Subsection (b) does not
apply to that unit.
SECTION 2. Section 11.437(a), Tax Code, is amended to read
as follows:
(a) A person who operates a warehouse used primarily for the
storage of cotton for transportation to another location in this
state or outside of this state may apply for an exemption under
Section 11.251 or 11.253 for cotton stored in the warehouse on
behalf of all the owners of the cotton. An exemption granted under
this section applies to all cotton stored in the warehouse that is
eligible to be exempt under Section 11.251 or 11.253. Cotton that is
stored in a warehouse covered by an exemption granted under this
section and that is transported to another location in this state or
outside of this state is presumed to have been transported to
another location in this state or outside of this state within the
time permitted by Section 1-j, Article VIII, [Section 1-j, of the]
Texas Constitution, or by Section 1-n, Article VIII, Texas
Constitution, as proposed by S.J.R. No. 6, 77th Legislature,
Regular Session, 2001, for cotton to qualify for an exemption under
that section.
SECTION 3. Section 22.01(e), Tax Code, is amended to read as
follows:
(e) Notwithstanding Subsections (a) and (b), a person is not
required to render for taxation cotton that:
(1) the person manages and controls as a fiduciary;
(2) is stored in a warehouse for which an exemption for
cotton has been granted under Section 11.437 [11.436]; and
(3) the person intends to transport to another
location in this state or outside of this [the] state within the
time permitted by Section 1-j, Article VIII, [Section 1-j, of the]
Texas Constitution, or by Section 1-n, Article VIII, Texas
Constitution, as proposed by S.J.R. No. 6, 77th Legislature,
Regular Session, 2001, for cotton to qualify for an exemption under
that section.
SECTION 4. Section 403.302(d), Government Code, is amended
to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(6) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(7) the portion of the appraised value of residence
homesteads of the elderly on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(8) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(10) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(11) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(12) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 5. This Act takes effect January 1, 2004, and
applies only to taxes imposed for a tax year beginning on or after
that date.