| This week Burnt Orange Report will be providing information and analysis on the nine proposed amendments on the ballot. These posts do not constitute an endorsement and are simply for informational purposes.
The third amendment on the ballot is HJR 133 by state Rep. Linda Harper-Brown, Republican from Irving.
Here is the official ballot language:
Proposition 3: The constitutional amendment to authorize a political subdivision of this state to extend the number of days that aircraft parts that are exempt from ad valorem taxation due to their location in this state for a temporary period may be located in this state for purposes of qualifying for the tax exemption.
It should be noted that the ballot language excludes the specific extended number of days. If this proposed amendment is passed, it would allow political subdivisions like municipalities and counties to extend the number of days that aircraft parts must be exported to keep property tax exemption to 730 days. Currently, Texas businesses that export aircraft parts must so by the 175th day to keep the exemption - an increase of 555 days.
Read more about what it does below the jump.
|What this proposed amendment will do if passed is amend Section 1-j, Article VIII of the Texas Constitution. In case you wanted to know more about Section 1, Article VIII, it states that real property and tangible personal property will be taxed unless it is exempt, which can only be permitted by the constitution. Currently, aircraft parts are exempt due to a constitutional amendment that was passed in 1989, which added Section 1-j and created a "freeport exemption".
As noted by the Texas Legislative Council regarding Section 1-j, "To receive tax-exempt status, the property must be acquired in or imported into the state for export; detained in the state to be assembled, stored, manufactured, processed, or fabricated; and transported outside of the state within 175 days after the date of importation or acquisition."
According to the legislative meetings, supporters of the proposed amendment say that Texas aircraft suppliers are put at a competitive disadvantage compared to other states that offer property taxation exemptions. Supporters also say that because of the nature of the industry, aircraft parts may not be needed by customers for several months.
There was no opposition during house and senate meetings on this proposed amendment. However, during the house floor debate questions were brought up about how the amendment would cost local governments. These questions could not be answered because the the number of taxing units and taxable value of parts can't be determined.
Background on Constitutional Amendments: The Legislature proposes constitutional amendments in joint resolutions in the Senate and House. Each amendment must be passed by both bodies by a two-thirds vote, and the governor does not have the ability to veto proposed amendments. If approved by the majority of voters, the amendments take effect immediately unless specified in the resolution.
Source: Texas Legislative Council.