By: Duncan, West S.B. No. 326
(Hilderbran)
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from ad valorem taxation of certain
tangible personal property stored temporarily at a location in this
state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 11.253, Tax Code, is
amended by amending Subdivision (2) and adding Subdivisions (5) and
(6) to read as follows:
(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 stored under a contract of bailment by a
public warehouse operator [detained] at one or more public
warehouse facilities [a location] in this state that are not in any
way owned or controlled by [in which] the owner of the personal
property [does not have a direct or indirect ownership interest]
for the account of [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.
(5) "Bailee" and "warehouse" have the meanings
assigned by Section 7.102, Business & Commerce Code.
(6) "Public warehouse operator" means a person that:
(A) is both a bailee and a warehouse; and
(B) stores under a contract of bailment, at one
or more public warehouse facilities, tangible personal property
that is owned by other persons solely for the account of those
persons and not for the operator's account.
SECTION 2. Section 11.253, Tax Code, is amended by amending
Subsections (e) and (h) and adding Subsections (j-1) and (j-2) to
read as follows:
(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.
(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 storage [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.
(j-1) Notwithstanding Subsection (j) or official action
that was taken under that subsection before September 1, 2011, to
tax goods-in-transit exempt under Subsection (b) and not exempt
under other law, a taxing unit may not tax such goods-in-transit in
a tax year that begins on or after January 1, 2012, unless the
governing body of the taxing unit takes action on or after September
1, 2011, in the manner required for official action by the governing
body, to provide for the taxation of the goods-in-transit. 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.
(j-2) Notwithstanding Subsection (j-1), if under Subsection
(j) the governing body of a taxing unit, before September 1, 2011,
took action to provide for the taxation of goods-in-transit and
pledged the taxes imposed on the goods-in-transit for the payment
of a debt of the taxing unit, the tax officials of the taxing unit
may continue to impose the taxes against the goods-in-transit until
the debt is discharged, if cessation of the imposition would impair
the obligation of the contract by which the debt was created.
SECTION 3. Subdivision (2), Subsection (a), Section 11.253,
Tax Code, as amended by this Act, applies only to an ad valorem tax
year that begins on or after January 1, 2012.
SECTION 4. (a) Except as provided by Subsection (b) of
this section, this Act takes effect January 1, 2012.
(b) Section 2 of this Act takes effect September 1, 2011.