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  H.B. No. 621
 
 
 
 
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 the
  property 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)  for a school district for which a deduction from
  taxable value is made under Subdivision (4), an amount equal to the
  taxable value required to generate revenue when taxed at the school
  district's current tax rate in an amount that, when added to the
  taxes of the district paid into a tax increment fund as described by
  Subdivision (4)(B), is equal to the total amount of taxes the
  district would have paid into the tax increment fund if the district
  levied taxes at the rate the district levied in 2005;
               (6)  the total dollar amount of any exemptions granted
  under Section 11.251 or 11.253, Tax Code;
               (7)  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;
               (8)  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;
               (9)  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;
               (10)  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;
               (11)  the appraised value of property the collection of
  delinquent taxes on which is deferred under Section 33.06, Tax
  Code;
               (12)  the portion of the appraised value of property
  the collection of delinquent taxes on which is deferred under
  Section 33.065, Tax Code; and
               (13)  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, 2008.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 621 was passed by the House on April
  4, 2007, by the following vote:  Yeas 134, Nays 0, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 621 on May 23, 2007, by the following vote:  Yeas 145, Nays 0, 2
  present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 621 was passed by the Senate, with
  amendments, on May 18, 2007, by the following vote:  Yeas 29, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor