HBA-LJP H.J.R. 25 77(R) BILL ANALYSIS Office of House Bill AnalysisH.J.R. 25 By: Gallego Ways & Means 3/1/2001 Introduced 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. House Joint Resolution 25 authorizes an ad valorem tax exemption for certain tangible property 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 House Joint Resolution 25 amends the Texas Constitution to make certain tangible personal property, excluding petroleum products, exempt from ad valorem taxation if the property is acquired in or imported into this state to be transported 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. The resolution authorizes a governing body of a municipality, county, junior college district, or school district to tax property that is otherwise exempt from ad valorem taxation if: _before April 1, 2002, there is an official action proposing to provide for the taxation of certain tangible property; and _the voters approve the taxation of the property at an election held for that purpose on November 5, 2002. The resolution provides that such an action to tax property that is otherwise exempt from ad valorem taxation takes effect January 1, 2003. H.J.R. 25 authorizes that the taxed property may subsequently be exempt from taxation if the appropriate local governing body by official action proposes to rescind the taxation and the voters of the area at an election held for that purpose approve the rescission. The resolution provides that the property is exempt from taxation beginning the tax year after the election and after such a rescission, the appropriate local governing body is not authorized to subsequently take action to tax the property. H.J.R. 25 authorizes an eligible property owner to apply for the above ad valorem tax exemption. 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 for certain tangible personal property. FOR ELECTION This proposed constitutional amendment shall be submitted to the voters an election to be held November 6, 2001. If the voters approve the amendment, H.J.R. 25 takes effect January 1, 2002 and the exemption from taxation applies beginning with taxes imposed in 2003.