By: Harper-Brown, Ratliff, Hilderbran H.B. No. 3121
(Senate Sponsor - Deuell)
(In the Senate - Received from the House May 8, 2013;
May 9, 2013, read first time and referred to Committee on Finance;
May 15, 2013, reported favorably by the following vote:
Yeas 14, Nays 0; May 15, 2013, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the qualifications for the exemption from ad valorem
taxation for aircraft parts located in this state for a limited
time.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.251, Tax Code, is amended by amending
Subsections (b), (c), (e), (g), and (k) and adding Subsection (l) to
read as follows:
(b) A person is entitled to an exemption from taxation by a
taxing unit of the appraised value of that portion of the person's
inventory or property consisting of freeport goods as determined
under this section for the taxing unit.
(c) The exemption provided by Subsection (b) is subtracted
from the market value of the inventory or property determined under
Section 23.12 to determine the taxable value of the inventory or
property for the taxing unit.
(e) In determining the market value of freeport goods that
in the preceding year were assembled, manufactured, repaired,
maintained, processed, or fabricated in this state or used by the
person who acquired or imported the property in the repair or
maintenance of aircraft operated by a certificated air carrier, the
chief appraiser shall exclude the cost of equipment, machinery, or
materials that entered into and became component parts of the
freeport goods but were not themselves freeport goods or that were
not transported outside the state before the expiration of 175
days, or, if applicable, the greater number of days adopted by the
taxing unit as authorized by Subsection (l), after 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 in this state by the property owner during the preceding
year in determining whether the component parts were transported
out of this state before the expiration of 175 days or, if
applicable, the greater number of days adopted by the taxing unit as
authorized by Subsection (l).
(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 freeport goods to be exempt by determining, according to the
property owner's records and any other available information, the
market value of those freeport goods 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 freeport goods but were not themselves freeport goods
or that were not transported outside the state before the
expiration of 175 days, or, if applicable, the greater number of
days adopted by the taxing unit as authorized by Subsection (l),
after they were brought into this state by the property owner or
acquired by the property owner in this state.
(k) Property that meets the requirements of Article VIII,
Sections 1-j(a)(1) and (2), of the Texas Constitution and that is
transported outside of this state not later than 175 days, or, if
applicable, the greater number of days adopted by the taxing unit as
authorized by Subsection (l), after the date the person who owns it
on January 1 acquired it or imported it into this state is freeport
goods regardless of whether the person who owns it on January 1 is
the person who transports it outside of this state.
(l) The governing body of a taxing unit, in the manner
provided by law for official action, may extend the date by which
freeport goods that are aircraft parts must be transported outside
the state to a date not later than the 730th day after the date the
person acquired or imported the property in this state. An
extension adopted by official action under this subsection applies
only to the exemption from ad valorem taxation by the taxing unit
adopting the extension and applies to:
(1) the tax year:
(A) in which the extension is adopted if
officially adopted before June 1 of a tax year; or
(B) immediately following the tax year in which
the extension is adopted if officially adopted on or after June 1 of
a tax year; and
(2) each tax year following the year of adoption of the
extension.
SECTION 2. This Act applies only to a tax year beginning on
or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2014, but only
if the constitutional amendment proposed by the 83rd Legislature,
Regular Session, 2013, to authorize a political subdivision of this
state to extend the number of days that aircraft parts that are
exempt from ad valorem taxation due to their location in this state
for a temporary period may be located in this state for purposes of
qualifying for the tax exemption is approved by the voters. If that
amendment is not approved by the voters, this Act has no effect.
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