| 1 | 1 | | 84R12318 TJB-D |
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| 2 | 2 | | By: Workman H.B. No. 3776 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the phasing out by 2025 of the ad valorem taxation by a |
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| 8 | 8 | | school district of the tangible personal property a person owns |
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| 9 | 9 | | that consists of inventory. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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| 12 | 12 | | adding Section 11.35 to read as follows: |
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| 13 | 13 | | Sec. 11.35. INVENTORY. (a) A person is entitled to an |
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| 14 | 14 | | exemption from taxation by a school district of the tangible |
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| 15 | 15 | | personal property the person owns that consists of inventory. |
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| 16 | 16 | | (b) This subsection expires January 1, 2025. Subsection (a) |
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| 17 | 17 | | applies to the taxation by a school district of tangible personal |
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| 18 | 18 | | property that consists of inventory only for the 2025 and |
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| 19 | 19 | | subsequent tax years. The taxation by a school district of tangible |
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| 20 | 20 | | personal property that consists of inventory for the 2016, 2017, |
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| 21 | 21 | | 2018, 2019, 2020, 2021, 2022, 2023, and 2024 tax years is governed |
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| 22 | 22 | | by this subsection. A person is entitled to an exemption from |
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| 23 | 23 | | taxation by a school district of the following percentages of the |
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| 24 | 24 | | appraised value of that portion of the tangible personal property |
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| 25 | 25 | | the person owns that consists of inventory for which the person is |
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| 26 | 26 | | not otherwise entitled to an exemption from taxation: |
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| 27 | 27 | | (1) for the 2016 tax year, 10 percent of the appraised |
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| 28 | 28 | | value of the inventory; |
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| 29 | 29 | | (2) for the 2017 tax year, 20 percent of the appraised |
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| 30 | 30 | | value of the inventory; |
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| 31 | 31 | | (3) for the 2018 tax year, 30 percent of the appraised |
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| 32 | 32 | | value of the inventory; |
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| 33 | 33 | | (4) for the 2019 tax year, 40 percent of the appraised |
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| 34 | 34 | | value of the inventory; |
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| 35 | 35 | | (5) for the 2020 tax year, 50 percent of the appraised |
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| 36 | 36 | | value of the inventory; |
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| 37 | 37 | | (6) for the 2021 tax year, 60 percent of the appraised |
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| 38 | 38 | | value of the inventory; |
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| 39 | 39 | | (7) for the 2022 tax year, 70 percent of the appraised |
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| 40 | 40 | | value of the inventory; |
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| 41 | 41 | | (8) for the 2023 tax year, 80 percent of the appraised |
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| 42 | 42 | | value of the inventory; and |
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| 43 | 43 | | (9) for the 2024 tax year, 90 percent of the appraised |
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| 44 | 44 | | value of the inventory. |
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| 45 | 45 | | SECTION 2. Subchapter E, Chapter 42, Education Code, is |
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| 46 | 46 | | amended by adding Section 42.2512 to read as follows: |
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| 47 | 47 | | Sec. 42.2512. ADDITIONAL STATE AID FOR EXEMPTION OF |
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| 48 | 48 | | INVENTORY. (a) Notwithstanding Section 42.2516 or any other |
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| 49 | 49 | | provision of this chapter, a school district is entitled to |
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| 50 | 50 | | additional state aid to the extent that state aid under this chapter |
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| 51 | 51 | | based on the determination of the school district's taxable value |
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| 52 | 52 | | of property as provided under Subchapter M, Chapter 403, Government |
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| 53 | 53 | | Code, does not fully compensate the district for ad valorem tax |
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| 54 | 54 | | revenue lost due to the exemption for inventory under Section |
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| 55 | 55 | | 11.35, Tax Code. |
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| 56 | 56 | | (b) The commissioner, using information provided by the |
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| 57 | 57 | | comptroller, shall compute the amount of additional state aid to |
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| 58 | 58 | | which a district is entitled under Subsection (a). A determination |
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| 59 | 59 | | by the commissioner under this section is final and may not be |
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| 60 | 60 | | appealed. |
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| 61 | 61 | | (c) Notwithstanding any other provision of this chapter, in |
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| 62 | 62 | | computing state aid for the 2016-2017 school year, the taxable |
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| 63 | 63 | | value of property in a school district shall be determined under |
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| 64 | 64 | | Subchapter M, Chapter 403, Government Code, as if the exemption for |
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| 65 | 65 | | inventory under Section 11.35, Tax Code, had been in effect for the |
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| 66 | 66 | | 2015 tax year. This subsection expires September 1, 2017. |
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| 67 | 67 | | SECTION 3. This Act applies only to ad valorem taxes imposed |
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| 68 | 68 | | for a tax year that begins on or after the effective date of this |
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| 69 | 69 | | Act. |
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| 70 | 70 | | SECTION 4. This Act takes effect January 1, 2016, but only |
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| 71 | 71 | | if the constitutional amendment proposed by the 84th Legislature, |
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| 72 | 72 | | Regular Session, 2015, authorizing the legislature to phase out by |
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| 73 | 73 | | 2025 the ad valorem taxation by a school district of the tangible |
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| 74 | 74 | | personal property a person owns that consists of inventory is |
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| 75 | 75 | | approved by the voters. If that amendment is not approved by the |
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| 76 | 76 | | voters, this Act has no effect. |
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