Texas House Bill HB3826

Texas 2015 - 84th Regular

Caption

Relating to the exemption from ad valorem taxation of certain tangible personal property used by the owner of the property to manufacture, process, or fabricate tangible personal property for ultimate sale.

Impact

The passage of HB3826 is expected to have significant implications for state laws concerning property taxation. By exempting property that is integral to the manufacturing process from ad valorem taxes, the bill aims to incentivize manufacturers to invest more in their operations and facilities within Texas. This could lead to increased competitiveness for Texas manufacturers relative to firms in other states, and may also attract new manufacturing businesses to the state, thus potentially bolstering local economies and job creation.

Summary

House Bill 3826 proposes an amendment to the Texas Tax Code that provides an exemption from ad valorem taxation for certain tangible personal property. Specifically, this bill focuses on property that is utilized by manufacturers to create, process, or fabricate goods intended for sale. The intention of this legislation is to encourage manufacturing activity within the state by relieving manufacturers of some of their tax burdens, thereby potentially fostering economic growth and business development in Texas.

Contention

While the bill seems to offer benefits to the manufacturing sector, it might raise concerns among local governments and taxpayers who could feel the fiscal effects of such exemptions. Local governments often rely on property tax revenue to fund essential services, so exemptions for manufacturing properties could lead to funding shortfalls. Notably, this legislation is conditioned upon the approval of a constitutional amendment proposed by the 84th Legislature, reflecting a balance between state incentives for business and the need for careful consideration of local fiscal impacts.