HBA-LJP S.J.R. 6 77(R) BILL ANALYSIS Office of House Bill AnalysisS.J.R. 6 By: Duncan Ways & Means 5/11/2001 Engrossed BACKGROUND AND PURPOSE Under current law, certain tangible personal property is exempt from ad valorem taxation if the property is detained in this state for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported the property. Warehouse inventory that otherwise would be exempt is subject to taxation by the state, which may place the Texas warehousing industry at a competitive disadvantage with similar industries in neighboring states and across the border. As proposed, Senate Joint Resolution 6 requires the submission to the voters of a constitutional amendment authorizing the legislature by general law to exempt specified tangible property from ad valorem taxation that is detained for specified operations in this state in a location that is not owned or under control of the property owner. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this resolution does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Joint Resolution 6 amends the Texas Constitution to authorize the legislature to exempt specified tangible personal property, excluding petroleum products, from ad valorem taxation if the property is acquired in or imported into this state to be forwarded to another location in or outside of this state, if the property is detained for certain operations at a location in this state that is not owned or under the control of the property owner, and if the property is transported to another location in this state or outside this state no later than 270 days after the property is acquired or imported in the state. S.J.R. 6 authorizes an eligible property owner to apply for the above ad valorem tax exemption authorized by the legislature. However, a property owner who receives such an exemption is not entitled to receive ad valorem tax exemption for the same property under other tax exemption provisions. The resolution authorizes the governing body of a political subdivision that imposes ad valorem taxes to provide for the taxation of tangible property that is exempt as a goods-in-transit and not exempt under other law. Before acting to tax the exempt property, the governing body of the political subdivision must conduct a public hearing at which members of the public are permitted to speak for or against the taxation of the property. FOR ELECTION This proposed constitutional amendment shall be submitted to the voters at an election to be held November 6, 2001. If the voters approve the amendment, S.J.R. 6 takes effect January 1, 2002.