BILL ANALYSIS



C.S.H.B. 366
By: Hartnett
March 22, 1995
Committee Report (Substituted)


BACKGROUND

Section 11.14 establishes ad valorem taxation for income-producing
tangible personal property, regardless of its value.  When a
property has a value less than $500, the tax generated may not
cover the cost of collection.  For properties with very low taxable
values, taxing authorities are required by law to assess and
collect a tax even though they may lose money on it.

PURPOSE

The bill establishes a minimum value of $500 for ad valorem
taxation of income-producing tangible personal property and mineral
interest.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter B, Chapter 11, Tax Code, by adding
           Section 11.145 and 11.146.
           Section 11.145 INCOME-PRODUCING TANGIBLE PERSONAL
           PROPERTY HAVING VALUE OF LESS THAN $500.
           (a)  Provides that income-producing tangible personal
           property having value of less than $500 is exempt from
           taxation.
           (b)  Applies the exemption to each separate taxing unit
           in which a person holds or uses tangible personal
           property for the production of income.  All property in
           each taxing unit is aggregated to determine taxable
           value.

           Section 11.146 MINERAL INTEREST HAVING VALUE OF LESS
           THAN $500.
           (a)  Provides that mineral interest having value of less
           than $500 is exempt from taxation.
           (b)  Applies the exemption to each separate taxing unit
           in which a person owns a mineral interest.  All mineral
           interests in each taxing unit are aggregated to
           determine taxable value.
           

SECTION 2. Amends Section 11.43(a), Tax Code, by including Sections
           11.145 and 11.146 as sections excluded from the
           exemption application process.

SECTION 3. Effective Date:  January 1, 1996, but only if the
           constitutional amendment granting authorization is
           approved by the voters.

SECTION 4. Emergency Clause.






COMPARISON OF ORIGINAL TO SUBSTITUTE

H.B. 366 exempts income-producing tangible personal property with
a value of less than $500 from ad valorem taxation.  C.S.H.B. 366
extends this exemption to mineral interest.  C.S.H.B. 366 changes
the application of the exemption from each separate location to
each separate taxing unit.  C.S.H.B. 366 also changes the effective
date from January 1, 1997 to January 1, 1996.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance to the rules and a public
hearing was held on February 28, 1995.  Without objection, H.B. 366
was left pending before the committee.

On March 7, 1995, the committee approved C.S.H.B. 366 by Wolens
without objection.  By a record vote of 8 ayes, 0 nays, 0 present
not voting and 3 absent, the committee voted to report H.B. 366 as
substituted to the House with the recommendation that it do pass.

     Testimony received in favor of the bill:
           W. Kenneth Nolan, representing Dallas Central Appraisal
           District
           George H. Moff, representing himself
           David Luther, representing himself
           Bill Allaway, representing Texas Assn. of Taxpayers

     Neutral testimony on the bill:
           Frank Battle, representing the Texas Assn. of School
           Boards