HBA-JRA C.S.H.J.R. 39 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.J.R. 39 By: Craddick Ways & Means 5/6/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, certain property is subject to ad valorem taxation in this state. As proposed, C.S.H.J.R. 39 requires the submission to the voters of a constitutional amendment exempting certain goods, wares, merchandise, other tangible personal property, and ores, other than oil, natural gas, and other petroleum products from ad valorem taxation under certain conditions. 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 Article VIII, Texas Constitution, by adding Section 1-n, as follows: Sec. 1-n. (a) Exempts goods, wares, merchandise, other tangible personal property, and ores, other than oil, natural gas, and other petroleum products from ad valorem taxation if the property is acquired in or imported into this state to be forwarded to another location in this state or outside this state; the property is detained at a location in this state that is not owned or under the control of the property owner for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported the property; and the property is transported to another location in this state or outside this state within 270 days of its acquisition or importation. (b) Provides that, for purposes of this section, tangible personal property includes aircraft and aircraft parts; property imported into this state includes property brought into this state; property forwarded to another location in this state or outside this state includes property transported in or affixed to an aircraft to be transported; and property detained at a location in this state for assembling, storing, manufacturing, processing, or fabricating purposes includes property, aircraft, or aircraft parts brought into this state or acquired in this state and used by the person who acquired the property, aircraft, or aircraft parts in this state or who brought the property, aircraft, or aircraft parts into this state for the purpose of repair or maintenance of aircraft operated by a certificated air carrier. (c) Authorizes a county, common or independent school district, junior college district, or municipality, including a home-rule municipality, to tax property otherwise exempt from taxation under Subsection (a) of this section if the governing body of such an entity proposes to provide for the taxation of the property by official action before April 1, 2000, and the voters approve the taxation at an election held for that purpose on November 7, 2000. (d) Provides that, if such an entity takes action, the action takes effect January 1, 2001. Authorizes such an entity to subsequently exempt the property from taxation if the governing body of such an entity proposes to rescind the previous action to tax the property by official action and the voters approve the taxation at an election held for that purpose. (e) Provides that such a rescission applies to each tax year that begins after the date of the election. Prohibits the governing body of an entity that rescinds its previous action to tax the property from subsequently taking action to tax the property. (f) Authorizes a property owner who is eligible to receive the exemption authorized by Section 1-j (Certain tangible personal property exempt from ad valorem taxation) of this article to apply for the exemption authorized by this section in the manner provided by general law, and provides that the owner is not entitled to receive both exemptions for the same property. (g) Effective date: January 1, 2000. Makes application of this Act prospective beginning with taxes imposed in 2001. Provides that this subsection expires January 1, 2002. SECTION 2. Requires this proposed constitutional amendment to be submitted to the voters at an election to be held November 2, 1999. Sets forth the required language of the ballot. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original in the caption to make a conforming change. The substitute deletes SECTIONS 1-4 and SECTION 6 of the original. SECTION 1 of the original would have amended Section 1, Article VIII, Texas Constitution, to exempt all personal property in this state from ad valorem taxation, except for personal property pledged for the payment of a debt before November 2, 1999. The original would have authorized the ad valorem tax on such property to be collected if cessation of the levy and collection of the tax would impair the obligation of the contract by which the debt was created and provided that this exception applies to personal property that was taxable under the law in effect on January 1, 1999, but that became exempt on January 1, 2000, as a result of the amendment of this section. SECTION 2 of the original would have amended Section 1-l, Article VIII, Texas Constitution, to make conforming changes. SECTION 3 of the original would have amended Section 5, Article VIII, Texas Constitution, to make a conforming change. SECTION 4 of the original would have amended Section 8, Article VIII, Texas Constitution, to make conforming changes. SECTION 6 would have repealed Sections 1-i (Mobile Marine Drilling Equipment; Ad Valorem Tax Relief), 1-j (Certain Tangible Personal Property Exempt from Ad Valorem Taxation), 19 (Farm Products, Livestock, Poultry, and Family Supplies; Exemption), and 19a (Implements of Husbandry; Exemption), Article VIII, Texas Constitution. The substitute adds a new SECTION 1 which amends Article VIII, Texas Constitution, by adding Section 1-n, to exempt certain goods, wares, merchandise, other tangible personal property, and ores, other than oil, natural gas, and other petroleum products from ad valorem taxation under certain conditions. For a more complete analysis, please see the Section-by-Section Analysis portion of this document. The substitute incorporates the provisions of SECTION 4 of the original into proposed Section 1n(g). The substitute redesignates SECTION 7 of the original to SECTION 2, and makes conforming changes in the text of the proposition to be submitted to the voters.