| 1 | 1 | | By: Bettencourt, et al. S.B. No. 516 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to increasing the period of time for exempting freeport |
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| 7 | 7 | | goods from ad valorem taxation. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Sections 11.251(e), (g), and (k), Tax Code, are |
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| 10 | 10 | | amended to read as follows: |
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| 11 | 11 | | (e) In determining the market value of freeport goods that |
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| 12 | 12 | | in the preceding year were assembled, manufactured, repaired, |
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| 13 | 13 | | maintained, processed, or fabricated in this state or used by the |
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| 14 | 14 | | person who acquired or imported the property in the repair or |
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| 15 | 15 | | maintenance of aircraft operated by a certificated air carrier, the |
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| 16 | 16 | | chief appraiser shall exclude the cost of equipment, machinery, or |
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| 17 | 17 | | materials that entered into and became component parts of the |
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| 18 | 18 | | freeport goods but were not themselves freeport goods or that were |
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| 19 | 19 | | not transported outside the state before the expiration of 365 |
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| 20 | 20 | | [175] days, or, if applicable, the greater number of days adopted by |
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| 21 | 21 | | the taxing unit as authorized by Subsection (l), after they were |
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| 22 | 22 | | brought into this state by the property owner or acquired by the |
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| 23 | 23 | | property owner in this state. For component parts held in bulk, the |
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| 24 | 24 | | chief appraiser may use the average length of time a component part |
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| 25 | 25 | | was held in this state by the property owner during the preceding |
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| 26 | 26 | | year in determining whether the component parts were transported |
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| 27 | 27 | | out of this state before the expiration of 365 [175] days or, if |
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| 28 | 28 | | applicable, the greater number of days adopted by the taxing unit as |
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| 29 | 29 | | authorized by Subsection (l). |
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| 30 | 30 | | (g) If the property owner or the chief appraiser |
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| 31 | 31 | | demonstrates that the method provided by Subsection (d) |
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| 32 | 32 | | significantly understates or overstates the market value of the |
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| 33 | 33 | | property qualified for an exemption under Subsection (b) in the |
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| 34 | 34 | | current year, the chief appraiser shall determine the market value |
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| 35 | 35 | | of the freeport goods to be exempt by determining, according to the |
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| 36 | 36 | | property owner's records and any other available information, the |
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| 37 | 37 | | market value of those freeport goods owned by the property owner on |
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| 38 | 38 | | January 1 of the current year, excluding the cost of equipment, |
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| 39 | 39 | | machinery, or materials that entered into and became component |
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| 40 | 40 | | parts of the freeport goods but were not themselves freeport goods |
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| 41 | 41 | | or that were not transported outside the state before the |
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| 42 | 42 | | expiration of 365 [175] days, or, if applicable, the greater number |
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| 43 | 43 | | of days adopted by the taxing unit as authorized by Subsection (l), |
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| 44 | 44 | | after they were brought into this state by the property owner or |
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| 45 | 45 | | acquired by the property owner in this state. |
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| 46 | 46 | | (k) Property that meets the requirements of Article VIII, |
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| 47 | 47 | | Sections 1-j(a)(1) and (2), of the Texas Constitution and that is |
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| 48 | 48 | | transported outside of this state not later than 365 [175] days, or, |
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| 49 | 49 | | if applicable, the greater number of days adopted by the taxing unit |
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| 50 | 50 | | as authorized by Subsection (l), after the date the person who owns |
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| 51 | 51 | | it on January 1 acquired it or imported it into this state is |
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| 52 | 52 | | freeport goods regardless of whether the person who owns it on |
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| 53 | 53 | | January 1 is the person who transports it outside of this state. |
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| 54 | 54 | | SECTION 2. This Act applies only to a tax year beginning on |
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| 55 | 55 | | or after the effective date of this Act. |
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| 56 | 56 | | SECTION 3. This Act takes effect January 1, 2016, but only |
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| 57 | 57 | | if the constitutional amendment proposed by the 84th Legislature, |
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| 58 | 58 | | Regular Session, 2015, extending the number of days that certain |
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| 59 | 59 | | tangible personal property to be transported outside of this state |
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| 60 | 60 | | is exempt from ad valorem taxation is approved by the voters. If |
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| 61 | 61 | | that amendment is not approved by the voters, this Act has no |
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| 62 | 62 | | effect. |
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