HomeMy WebLinkAboutOrdinance 17856-10-2007ORDINANCE NO.17856-10-2007
AN ORDINANCE PROVIDING FOR TIIE CONTINUED
TAXATION OF GOODS-IN-TRANSIT, AS DEFINED IN AND
SUBJECT TO EXENII'TION UNDER TEXAS TAX CODE,
SECTION 11.253; 1VIAI~ING CERTAIN FINDINGS OF FACT IN
RELATION TIIERETO; PROVIDING FOR SEVERABILITY; AND
PROVING AN EFFECTIVE DATE.
WI~EREAS, pursuant to House Bill 621, adopted by the 80th Texas Legislature,
Subchapter B, Chapter 11 of the Texas Tax Code (the "Code") was amended to add
Section 11.253, which provides for the exemption from taxation of the appraised value of
property defined as "goods-in-transit" by Section 11.253(a)(2) of the Code ("Goods-in-
Transit"); and
WI3EREAS, Section 11.253(j) of the Code permits the City to opt out of the
exemption provided by Section 11.253(b) of the Code and to continue taxing Goods-in-
Transit that are not otherwise exempt from taxation if by not later than December 31,
2007 the City Council adopts an ordinance providing for taxation of such Goods-in-
Transit after conducting a public hearing at which members of the public are permitted to
speak for or against the taxation of such Goods-in-Transit; and
WHLEREAS, Tarrant Appraisal District has notified the City that if the City does
not opt out of the exemption provided by Section 11.253 of the Code by adopting an
ordinance providing for the continued taxation of Goods-in-Transit, at least $1.6 billion
in property value will be removed from the City's tax roils in 2008, which will reduce
anticipated tax revenue in that year by over $13 million;
Page 1
Ordinance Providing for Continued Taxation of
Goods-in-Transit (Tax Code § 11.253; HB 621)
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF FORT WORTH, TEXAS:
Section 1.
FINDINGS OF FACT.
That the City Council hereby makes the following fmdings of fact:
1.1. The statements and facts set forth in the recitals of this Ordinance are true
and correct.
1.2. On October 30, 2007, during the City Council's regularly scheduled
meeting and prior to the adoption of this Ordinance, the City Council
conducted a public hearing at which members of the public were permitted
to speak for or against the taxation of Goods-in-Transit. Notice of the
public hearing was posted in accordance with applicable law. After
affording all interested persons an opportunity to speak for or against the
taxation of Goods-in-Transit, the City Council closed the public hearing.
The public hearing satisfied the requirements of Article VIII, Section 1-
n(d) of the Texas Constitution and Section 11.253(j) of the Texas Tax
Code.
1.3. Failure to opt out of the exemption provided by Section 11.253(b) of the
Code by adopting an ordinance that allows for the continued taxation of
Goods-in-Transit will cause at least $1.6 billion in property value to be
removed from the City's tax rolls in 2008, thereby creating significant
financial hardship for the City and potentially creating financial hardship
Page 2
Ordinance Providing for Continued Taxation of
Goods-in-Transit (Tax Code § 11.253; HB 621)
for taxpayers in the City who would not be eligible to receive the
exemption.
Section 2.
CONTIlVI[TED TAXATION OF GOODS-IN-TRANSIT.
That, in accordance with and as permitted by Section 11.253(j) of the Code, the
City Council hereby provides for the continued taxation of Goods-in-Transit, as defined
in Section 11.253(b) of the Code and which are not otherwise exempt from taxation, in
the same manner as undertaken prior to the effectiveness of Section 11.253 of the Code.
Such Goods-in-Transit shall continue to be taxable unless the City Council, in the manner
required for official action by the City Council, subsequently adopts an Ordinance
repealing this Ordinance and ordaining that Goods-in-Transit will thereafter be exempt
from taxation in accordance with Section 11.253(b) of the Code.
Section 3.
SEVERABII.,ITY.
That if any portion, section or part of a section of this Ordinance is subsequently
declared invalid, inoperative or void for any reason by a court of competent jurisdiction,
the remaining portions, sections or parts of sections of this Ordinance shall be and remain
in full force and effect and shall not in any way be impaired or affected by such decision,
opinion or judgment.
Page 3
Ordinance Providing for Continued Taxation of
Goods-in-Transit (Tax Code § 11.253; HB 621)
Section 4.
IMMEDIATE EFFECT.
That this Ordinance shall take effect upon its adoption.
AND IT IS SO ORDAINED.
--- .ADOPTED AND EFFECTIVE: October 30, 2007
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Vaky
Assistant City Attorney
M&C: G-15952
Page 4
Ordinance Providing for Continued Taxation of
Goods-in-Transit (Tax Code § 11.253; HB 621)
Cit,~ of Fort lMortfe, Texas
IVlayor and Council Communication
COUNCIL ACTION: Approved on 10/30/2007 -Ordinance No. 17856-10-2007
DATE: Tuesday, October 30, 2007
LOG NAME: 12TAX
REFERENCE NO.: G-15952
SUBJECT:
Conduct Public Hearing Providing for the Continued Taxation of Goods-in-Transit, as Defined in and
Subject to Exemption Under Texas Tax Code, Section 11.253, and Adopt Ordinance
RECOMMENDATION:
It is recommended that the City Council:
1. Conduct a public hearing to allow members of the public to speak for or against the continued taxation of
Goods-in-Transit, as defined in and subject to exemption under Texas Tax Code, Section 11.253; and
2. Adopt the attached ordinance providing for the continued taxation of Goods-in-Transit, as defined in and
subject to exemption under Texas Tax Code, Section 11.253.
DISCUSSION:
House Bill 621, which was adopted by the Texas Legislature in its last session and became effective on
September 1, 2007, amended the Texas Tax Code to provide a new property tax exemption for "Goods-in-
Transit". Goods-in-Transit are generally certain goods that reside temporarily in warehouses within a city
while awaiting shipment to other locations within or outside of the State of Texas. This exemption expands
the current freeport exemption, which covers only goods that are ultimately shipped outside of Texas. The
specific definition of Goods-in-Transit is set forth in Section 11.253(a)(2) of the Texas Tax Code.
A city may opt out of this expanded tax exemption by adopting an ordinance that provides for the continued
taxation of Goods-in-Transit that are not otherwise subject to a current exemption. A public hearing at which
members of the public are permitted to speak for or against the continued taxation of such Goods-in-Transit
must be conducted before such an ordinance can be adopted. In order for the ordinance to be effective for
the 2008 tax year, it must be adopted no later than December 31, 2007.
Tarrant Appraisal District has notified the City that if the City does not opt out of the Goods-in-Transit tax
exemption, approximately $1.6 billion in property value will be removed from the City's tax rolls in 2008,
reducing anticipated tax revenues to the 2008 tax year alone by over $13 million. Because of the financial
hardship that the City would face if the Goods-in-Transit tax exemption takes effect, City staff recommends
that, following the public hearing, the City Council adopt the attached ordinance providing for the continued
taxation of Goods-in-Transit.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will save the City approximately $13,904,803 in anticipated tax
revenues attributable to the 2008 tax year.
Logname: 12TAX Page 1 of 2
TO Fund/Account/Centers FROM Fund/AccountlCenters
Submitted for City Manager's Office bv: Karen Montgomery (6222)
Originating Department Head: David Yett (7623)
Additional Information Contact: Peter Vaky (7601)
T.J. Patterson (6168)
Logname: 12TAX Page 2 of 2