l,5
COMMISSIONERS' COURT AGENDA REQUEST
PLEASE FURNISH ONE ORIGINAL AND TEN (10) COPIES OF THIS
REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT
MADE BY: Judge Tinley
MEETING DATE: November 26, 2007
OFFICE: County Judge
TIME PREFERRED: 9:30 AM
SUBJECT: Public Hearing on Taxation of Personal Property in Transit.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT: Judge Tinley
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
Time for submitting this request for Court to assure that the matter is posted in
accordance with Title 5, Chapter 551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS RQUEST RECEIVED ON:
5:00 PM previous Tuesday
@ .M.
All Agenda Requests will be screened by the County Judge's Office to determine if adequate
information has been prepared for the Court's formal consideration and action at time of Court
Meetings. Your cooperation will be appreciated and contribute towards your request being
addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners'
Court.

Page 1 of 1
Legislative Session: 80(R)
House Bill 621
Effective: 1-1-08
House Author: Chavez
Senate Sponsor: Duncan et al.
House Bill 621 amends the Tax Code and the Government Code to add an exemption from ad valorem
taxation for "goods-in-transit." The exemption applies to tangible personal property that is acquired in or imported
. - - ' ec-der-i~;re^+ -
ownership interest, used. for assembling, storing, manufacturing, processing, or fabricating purposes, and
transported to another location in Texas or out of state not later than 175 days after the property was acquired in
or imported into Texas. "Goods-in-transit" does not include oil, natural gas, petroleum products, aircraft, dealer's
motor vehicle inventory, dealer's vessel and outboard motor inventory, dealer's heavy equipment inventory, or
retail manufactured housing inventory. House Bill 621 sets out provisions relating to the calculation of the
exemption by the chief appraiser. The bill provides that the exemption applies to all taxing units unless the
governing body of a taxing unit takes specified action to tax the exempt property, and the property remains
subject to ad valorem taxation by such a taxing unit until the taxing unit rescinds or repeals the action to tax the
property. House Bill 621 provides that a property owner who receives the exemption for "goods-in-transit" is not
eligible to receive certain other exemptions for tangible personal property.

http://www.capitol.state.tx.us/Bi1lLookupBillSummary.aspx?LegSess=80R&BiIl=HB621 11 /19/2007
8O(R) HB 621 -Enrolled version -Bill Text
H.B. No. 621
AN ACT
relating to the exemption from ad valorem taxation of tangible
personal property held temporarily at a location in this state for
assembling, storing, manufacturing, processing, or fabricating
____T_pur-po~_. --- __ _------ - ---------
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.253 to read as follows:
Sec. 11.253. TANG_I_BLE_PERSONAL PROPERTY IN TRANSIT. (a) In
this section:
(1) "Dealer's motor vehicle inventory," "dealer's
vessel and outboard motor inventory,_" "dealer's heavy equipment
- - ---
inventory," and "retail manufactured housing inventory„ have the
_____ - -
meanings assigned Subchapter _B, Chapter 23.
(2) "Goods-in-transit" means tangible personal
~ro_pert~that_
(A) is acquired in or_ imported into this state to
be forwarded to another location in this state or outside this
state;
(B) is_detained at a location in this state in
which the owner of th~_ro~erty does not _have _a direct or _i_nd_ir_ect
ownership interest for assemblies, storing, manu_f_acturin ,
processing, or fabricati_n~~ur~ses _by the person w_h_ o _a_cguired or
imported_ the~ro~erty_
(C) is transported to another location i_n_this
state or outside this state not later than 175 days after the date
----- - ---- ---
~,,: the_person_acq_uired the property_ in or _imported the ~ro~erty in_ to
this state; and
_-- - __
(D) _does not include oil, natural gas, petroleum
- - ----- -
products, aircraft, dealer's motor vehicle inventory, dealer's
vessel and outboard motor inventory, dealer's heavy ~u~ment
inventor, or retail manufactured housi~_inventory•
(3} "Location" means_~h_ysical address.
-- ---
(4) "Petroleu~roduct" means a liquid or gaseous
material that is an immediate derivative of the refinin~of ,oil or
natural gas_
(b) A person is entitled_to an exem~tion_from taxation of
- --- ---
the appraised value of that .portion of the ~erson's~ro~erty_that
consists of goods in-transit.
(c)__The exemption provided by Subsection (b)_is subtracted
from the market value of the ~ro~er~_determined under Section
23.01 or 23 12, as ap~licable,_to_determine the taxable value of the
property.
(d) Except _as provided b~ Subsections ( f ) and. ~) , the chief
---
appraiser shall determine the appraised value of moods-in-transit
----
under this subsection. The chief appraiser shall determine the
~ercentage_of the market value_ of tangible~ersonal pr ~erty owned
---- - _ ..
by the property owner and used for the production of income in the
preceding calendar wear that was contributed by~ods-in-transit.
--
For the first year in which the exem~tion_applies_to a taxing unit,
the chief_ap~raiser shall determine that_percentacLe_as if the
exemption applied in the preceding year. The chief appraiser shall
--- - _ -
~pl~ that percentage to the market .value. of the property owner's
_ __.
~r tangible Qersonal property used for the production of income for
- -_ _
the current year to determine the appraised value of
goods-in-transit for the current year.
_- - - - -
(e) In determining the market value of goods-in-transit
- _ ----
that in the preceding year were assembled., stored, manufactured,.
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80(R) HB 621 -Enrolled version -Bill Text Page 2 of 4
processed, or fabricated in this state, the chief appraiser shall
exclude the cost of equipment, machinery, or materials that entered
into .and became component arts of the goods-in-transit but were
not themselves goods-in-transit or that were not transported to
another location in this state or outside this state before the
expiration of 175 days after the date they were brought into this
state by the property owner or acquired by the property owner in
this state. For component parts held in bulk, the chief appraiser
muse the average length of time a component part was held by the
owner o_f t_he component parts duriyn~~g, the preceding .year at a loocation
_ l Tl--..tFll r.__C.tatP i-}la.~ It1a-S-no-t._~_43r1-~~--~-y--'~'~-L1tl~d~~_. th-n nnrit-x.,~f--_tftC-._"rv-..'-',-°.~- -
of the component arts in determining whether the component_~arts
w_er_e transported to anotherlocation in_ this. state or outside this
state before the expiration of 175_ days.
(f) If the property owner was not engaged in transporting
goods-in =transit to another location in this state or outside _t his
state for__the entire preceding_year, th_e__chief appraiser sh__a__ll
calculate the~ercentage of the market value described in
Subsection_(d) for the portion o_f the year in which the~operty
owner was engac~_in trans_portincL goods-in-transit to another
location in this state or outside this state.
(g) If the ~perty owner or the chief appraiser.
demonstrates that the. metho~rovided~Subsection _Id)
significantly understates or overstates the market value of the
~operty qualified for_a_n exemption under Subsection (b) in the
current year, the chief appraiser shall determine the market value
of the goods-in-transit to be_exempt by det_ermininq, according to
the property owner's records and_a~other_available information,
the market value of those goods-in-transit owned by the property
owner on_Januar__1_of the current year,_excludinq the cos t_ of
~~ment,_ machinery,. or materials that entered into and became
component marts of the goods-in_transit but were not themselves
goods-in-transit_or that were not transported to another_1_ocation_
i_n this state or outside this state_b_efore the expiration of__l_75
days after_the_date they were brought into this state the
_ -- -
~roperty owner or _a~uired by the ~oper~ owner in this state.
- -----------
(h)_ The_chief~praiser by written notice delivered to a
-- _ -
property owner who claims an exemption under this section may
require the property _owner_to~rovide codes of pro ep rty records so
the__chief appraiser can determine the amount and value of
goods_in-transit and that the location in this state where the
goods-in-transit were detained for assemblin storing,
------ --- ------
manufacturing,. processing, or fabricating purposes was not owned by
or under the control of the owner of the goods-in_transit If the
property owner fails to deliver the information r~uested in the
notice before the 31st day after the date the notice is delivered to
the property owner, the _propert~ owner. forfeits the__ric~ht to claim
or receive the exemption for that mar.
--- - --
(i)__ Property that. meets__the_rec~uirements of this section
- -- -- _ _
constitutes goods-in-transit re~cardless_of whether the person who
owns the property on January 1__is the~erson who transports the
- - - _
property_to another location in this state or outside this state.
(Z) The_governing..body of a taxing unit, in the manner
- - - --- - -
required for official action b~_the governing bow, m~ provide for
the taxation of goods in-transit exe~t_under Subsection (b) and
not exempt__under other law. The official action to tax the
goods-in-transit must be taken before January 1 of the first tax
year_in which. the governing body proposes to tax goods in transit.
Before acting. to tax the_exempt_ property,__the_governing_body of the
taxing unit must conduct a public hearing as required by Section
1-n(d), Article VIII, Texas Constitution. If the governing body of
a taxing unit provides for the taxation of the goods-in-transit as
provided by this subsection, the exertion prescribed by Subsection
(b)_does not apply to that unit. The goods-in-transit remain
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80(R) HB 621 -Enrolled version -Bill Text Page 3 of 4
subject to taxation by the taxing unit until the governing body of
the taxing unit, in the manner required for official action,
rescinds or repeals its previous action to tax goods-in-transit, or_
otherwise determines that the exemption prescribed by Subsection_
(b) will apply to that taxing unit.
(k) A proper owner who receives the exemption from
taxation provided by Subsection (b) is not eligible to receive the
exemption from__t_axation_provided by Section 11._251 for the same
property.
SECTION 2. Section 26.012(15), Tax Code, is amended to read
---- a ~ f~ > > „r r s : -- - -- _ -- -- --- - _ _ -------
(15) "Lost property levy" means the amount of taxes
levied in the preceding year on property value that was taxable in
the preceding year but is not taxable in the current year because
the property is exempt in the current year under a provision of this
code other than Section 11.251 or 11.253, the property has
qualified for special appraisal under Chapter 23 [~£ ~h;~ ^^~'^] in
the current year, or the property is located in territory that has
ceased to be a part of the unit since the preceding year.
SECTION 3. Section 403.302(d), Government Code, is amended
to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) for a school district for which a deduction from
taxable value is made under Subdivision (4), an amount equal to the
taxable value required to generate revenue when taxed at the school
district's current tax rate in an amount that, when added to the
taxes of the district paid into a tax increment fund as described by
Subdivision (4)(B), is equal to the total amount of taxes the
r district would have paid into the tax increment fund if the district
levied taxes at the rate the district levied in 2005;
(6) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(7) the difference between the comptroller's estimate
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80(R) HB 621 -Enrolled version - Bill Text Page 4 of 4
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
___ _ ---rg) alert' en e~ the ^'°rk ---
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(10) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(12) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(13) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 4. This Act applies only
year beginning on or after the effective
SECTION 5. This Act takes effect
President of the Senate
Speaker of the House
I certify that H.B. No. 621 was passed by the House on April
4, 2007, by the following vote: Yeas 134, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 621 on May 23, 2007, by the following vote: Yeas 145, Nays 0, 2
present, not voting.
Chief Clerk of the House
I certify that H.B. No. 621 was passed by the Senate, with
amendments, on May 18, 2007, by the following vote: Yeas 29, Nays
0.
'fir APPROVED:
Date
Governor
to taxes imposed for a tax
date of this Act.
January 1, 2008.
Secretary of the Senate
lttp://www.capitol.state.tx.us/tlodocs/80R/billtext/html/HB00621 F.HTM 11 /21 /2007