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ORDINANCE 2007-64 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS RESCINDING AND REPEALING ORDINANCE 1989-70 PERTAINING TO TAXATION OF FREEPORT PROEPRTY FOR TAX YEARS 2007 AND THEREAFTER; AMENDING ARTICLE 4 OF CHAPTER 78, AD VALOREM TAXATION, OF THE CITY OF SAN MARCOS CODE OF ORDINANCES TO ADD A NEW SECTION, EXEMPTION OF FREEPORT PROPERTY; AND PROVIDING AN EFFECTIVE DATE. RECITALS: 1. The Texas Legislature by passage of H.B. 621. H.B. 621 granted an exemption from property taxation for certain personal property defined by the tax code as goods-in-transit. 2. As amended by H.B. 621, Section 11.253 of the Texas Tax Code provides for a local option under which a taxing unit may tax (in reality, continue to tax) good-in- transit if the governing body conducts a public hearing and takes official action to tax goods-in-transit. 3. H.B. 621 did not fully track the constitutional amendment that enabled the legislation, thereby creating a loophole that could result in a much larger exemption from taxation than the exemption authorized by the electorate. 4. On November 5, 2007, the City Council of the City of San Marcos, Texas held a public hearing wherein the members of the public were permitted to speak for or against the taxation of goods-in-transit. 5. The City Council of the City of San Marcos, Texas determines that such personal property, as exempted by Section 11.253 of the Texas Tax Code, should be subject to taxation by the city for the Tax year 2008, and all subsequent years. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS: SECTION 1. The above recitals are hereby incorporated and adopted as part of this Ordinance. SECTION 2. Chapter 78, Article 4 of the San Marcos Code of Ordinances is amended as follows (underlininq indicates added text, strikethrough indicates deleted text): Sec. 78.081 Taxation of Tanaible Personal Property in Transit: