HBA-GUM H.B. 2999 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2999
By: Janek
Ways & Means
4/9/1999
Introduced



BACKGROUND AND PURPOSE 

The Texas Constitution (Article VIII, section 1-j) and the Tax Code
(Section 11.251 (Tangible Personal Property Exempt)) allow local
governments to exempt goods being shipped out of state from property taxes.
Such goods are known are "freeport goods."  The language of the current
statute provides only for total and immediate exemption by a local
government.  H.B. 2999 allows a local government to exempt all or a
percentage of the value of the goods in transit.  This bill provides that
if the taxing unit is a county, a county freeport zone may be established.
This bill also sets forth the provisions for granting a freeport tax
exemption by percentage and prohibits rescinding or reducing existing
exemptions. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 11.251, Tax Code, by adding Subsections (l) and
(m), as follows: 

(l)  Authorizes  the governing body of a taxing unit that before April 1,
1990, taxed freeport goods as provided by Section  1-j, Article VIII, Texas
Constitution, to exempt from taxation by the taxing unit all or a specified
percentage of the value of freeport goods; or, if the taxing unit is a
county, to establish a county freeport zone in which a portion of the
county is subject to exemption under Subdivision (1). 

(m)  Provides that if the governing body grants a partial percentage
exemption under Subsection (l), the governing body may subsequently exempt
a greater percentage of freeport goods but may not reduce the percentage
previously exempt from taxation by the taxing unit. Prohibits the governing
body from rescinding or repealing an original or subsequent exemption
granted under this subsection.  Requires the chief appraiser, when granting
a percentage exemption under this section,  to apply the applicable
percentage to the appraised value of freeport goods in determining the
portion of a property owner's inventory or other property that is exempt.
Provides that the percentage exemption or change in the amount of the
percentage exemption adopted under this subsection takes effect on the next
January 1 following the date of adoption unless the governing body provides
that the exemption or change applies to taxes imposed in the tax year of
the adoption. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.