BILL ANALYSIS


                                                         H.B. 366
                                             By: Hartnett (Brown)
                                                          Finance
                                                         05-16-95
                              Senate Committee Report (Unamended)
BACKGROUND

Section 11.14, Tax Code, establishes ad valorem taxation for income
producing tangible personal property, regardless of its value. 
When property has a value less than $500, the tax generated may not
cover the cost of the 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.

PURPOSE

As proposed, H.B. 366 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 grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 11B, Tax Code, by adding Sections 11.145
and 11.146, as follows:

     Sec.  11.145.  INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY
     HAVING VALUE OF LESS THAN $500.  (a)  Exempts a person from
     taxation of the tangible personal property the person owns
     that is held or used for the production of income if that
     property has a taxable value of less than $500.
     
     (b)  Provides that the exemption provided by Subsection (a)
       applies to each separate taxing unit in which a person holds
       or uses tangible personal property for the production of
       income, and, for the purposes of Subsection (a), all
       property in each taxing unit is aggregated to determine
       taxable value.
       
            Sec.  11.146.  MINERAL INTEREST HAVING VALUE OF LESS THAN
     $500. (a)  Entitles a person to an exemption from taxation of
     a mineral interest the person owns if the interest has a
     taxable value of less than $500.
     
     (b)  Applies the exemption provided by Subsection (a)
       applies to each separate taxing unit in which a person owns
       a mineral interest and, for the purposes of Subsection (a),
       all mineral interests in each taxing unit are aggregated to
       determine value.
     SECTION 2.     Amends Section 11.43(a), Tax Code, to make a conforming
change.

SECTION 3. Effective date:  January 1, 1996, but only if the
constitutional amendment proposed by the 74th Legislature, Regular
Session, 1995, authorizing the legislature to exempt from ad
valorem taxation personal property and mineral interests having a
value insufficient to recover the administrative costs of
collecting the taxes is approved by the voters.  Provides that this
Act has no effect if that amendment is not approved by the voters.

SECTION 4. Emergency clause.