1111 ......... WILLIAM P. CLEMENTS. JR. GOVERNOR ....... •• STATE OF TEXAS OFFICE OF THE GOVERNOR AUSTIN. TEXAS 78711 MEMORANDUM TO: GOVERNOR CLEMENTS FROM: Rich Thomas SUBJECT: November 3rd Ballot Impact on Maquiladoras October 5, 1987 A problem has confronted the maquiladora-related industry in Texas since 1985 when a Dallas appellate court decided that local appraisal districts could tax inventory that had previously been considered a part of interstate commerce. For example, Chrysler Corporation in El Paso was taxed, for the first time, $261,000 in 1986 on their inventory, which was destined to go to their maquiladnra facility. So Chrysler moved their inventory and shifted jobs out of Texas to Juarez. If the emphasis is to encourage companies and distributors to locate in Texas to supply maquiladoras, this tax will have to be changed. Proposed Amendment No. II on the November 3rd ballot will solve this problem by exempting from local ad valorem taxation all tangible property including goods, wares, and merchandise located in the state for less th4k_11.5 days if the property is in the state for assembling, storing, manufacturing, or processing.