HBA-CMT S.B. 1574 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1574 By: Gallegos Ways & Means 5/3/2001 Engrossed BACKGROUND AND PURPOSE Currently, New York, Miami, and New Orleans are the only coffee exchange ports in the United States. The Greater Houston Coffee Association is attempting to make Harris County an exchange port for coffee on the New York Board of Trade. Current state law places an ad valorem tax on coffee stored in Texas, but the New York Board of Trade will not consider the Greater Houston Coffee Association's application unless coffee and cocoa are exempted from ad valorem taxes. Miami has experienced substantial increases in coffee storage since it was designated as an exchange port. Harris County, with its proximity to Mexico and other coffee producing nations, may also experience a similar growth in coffee storage. Designation as a coffee exchange port would increase coffee imports to Texas and may spur development and create additional jobs in coffee-related industries. Senate Bill 1574 exempts from ad valorem taxation green coffee and raw cocoa held in Harris County. 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. ANALYSIS Senate Bill 1574 amends the Tax Code to entitle a person to an exemption from taxation of raw cocoa and green coffee (exemption) that the person holds in Harris County. The bill provides that an exemption, once allowed, need not be claimed in subsequent years, and the exemption applies to all raw cocoa and green coffee the person holds until the cocoa's or the coffee's qualification for the exemption changes. The bill authorizes the chief appraiser to require a person who holds raw cocoa or green coffee for which an exemption in a prior year has been granted to file a new application to confirm the cocoa's or the coffee's current qualification for the exemption by delivering a written notice that a new application is required, accompanied by an appropriate application form, to the person. EFFECTIVE DATE January 1, 2002, if the constitutional amendment proposed by the 77th Legislature to authorize the legislature to exempt from ad valorem taxation raw cocoa and green coffee that is held in Harris County is approved by the voters.