This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
79R1316 MFC-D
By: Chavez H.B. No. 121
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from ad valorem taxation of tangible
personal property held temporarily at a location in this state for
assembling, storing, manufacturing, processing, or fabricating
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:
(1) "Dealer's motor vehicle inventory," "dealer's
vessel and outboard motor inventory," "dealer's heavy equipment
inventory," and "retail manufactured housing inventory" have the
meanings assigned by Subchapter B, Chapter 23.
(2) "Goods-in-transit" means tangible personal
property that:
(A) is acquired in or imported into this state to
be forwarded to another location in this state or outside this
state;
(B) is detained at a location in this state in
which the owner of the property does not have a direct or indirect
ownership interest for assembling, storing, manufacturing,
processing, or fabricating purposes by the person who acquired or
imported the property;
(C) is transported to another location in this
state or outside this state not later than 175 days after the date
the person acquired the property in or imported the property into
this state; and
(D) does not include oil, natural gas, petroleum
products, aircraft, dealer's motor vehicle inventory, dealer's
vessel and outboard motor inventory, dealer's heavy equipment
inventory, or retail manufactured housing inventory.
(3) "Location" means a physical address.
(4) "Petroleum product" means a liquid or gaseous
material that is an immediate derivative of the refining of oil or
natural gas.
(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 tangible personal property owned
by the property owner and used for the production of income in the
preceding calendar year that was contributed by goods-in-transit.
For the first year in which the exemption applies to a taxing unit,
the chief appraiser shall determine that percentage as if the
exemption applied in the preceding year. The chief appraiser shall
apply that percentage to the market value of the property owner's
tangible personal property used for the production of income 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, stored, manufactured,
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 outside this state before the
expiration of 175 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 outside this
state before the expiration of 175 days.
(f) If the property owner was not engaged in transporting
goods-in-transit to another location in this state or outside 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 outside 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 outside this state before the expiration of 175
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 so
the chief appraiser can determine the amount and value of
goods-in-transit and that 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 this section
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 outside 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 goods-in-transit exempt under Subsection (b) and
not exempt under other law. The official action to tax the
goods-in-transit must be taken before January 1 of the first tax
year in which the governing body proposes to tax goods-in-transit.
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. If the governing body of
a taxing unit provides for the taxation of the goods-in-transit as
provided by this subsection, the exemption prescribed by Subsection
(b) does not apply to that unit. The goods-in-transit remain
subject to taxation by the taxing unit until the governing body of
the taxing unit, in the manner required for official action,
rescinds or repeals its previous action to tax goods-in-transit, or
otherwise determines that the exemption prescribed by Subsection
(b) will apply to that taxing unit.
(k) A property owner who receives the exemption from
taxation provided by Subsection (b) is not eligible to receive the
exemption from taxation provided by Section 11.251 for the same
property.
SECTION 2. Section 26.012(15), Tax Code, is amended to read
as follows:
(15) "Lost property levy" means the amount of taxes
levied in the preceding year on property value that was taxable in
the preceding year but is not taxable in the current year because
the property is exempt in the current year under a provision of this
code other than Section 11.251 or 11.253, the property has
qualified for special appraisal under Chapter 23 [of this code] in
the current year, or the property is located in territory that has
ceased to be a part of the unit since the preceding year.
SECTION 3. 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 individuals who receive a tax limitation under
Section 11.26, Tax Code, 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 4. This Act applies only to taxes imposed for a tax
year beginning on or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2006.