BILL ANALYSIS



C.S.H.B. 1744
By: Jackson
April 17, 1995
Committee Report (Substituted)


BACKGROUND

Chapter 23, Tax Code, provides for appraisal methods and procedures
for property tax purposes, and Subchapter B [under this Chapter]
includes provisions for special appraisals.  Section 23.01 requires
all taxable property to be appraised at its market value as of
January 1, and that the market value be determined by the
application of generally accepted appraisal techniques.  Generally
accepted appraisal technique requires an appraiser to apply all
applicable approaches to value (market, income or cost).  The cost
approach establishes value in the amount it would cost to replace
a property with one of equal utility.

PURPOSE

This bill would require that signs be appraised, for property tax
purposes, by means of the cost approach to value.

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter B, Chapter 23, Tax Code, by adding
Section 23.145 (Signs).

     (a) On-premise and off-premise signs are appraised by means
of:
           (1) determining the replacement or reproduction cost of
the sign;
           (2) calculating the amount of the cost lost to
depreciation; and
           (3) subtracting the depreciation from the cost.

     (b) Prohibits intangible property interest from inclusion in
appraised value.

     (c) "Sign," "off-premise sign," and "on-premise sign," have
the meanings assigned under   Section 216.002, Local Government
Code.

SECTION 2.  Effective date: January 1, 1996

SECTION 3.  Emergency clause

COMPARISON OF ORIGINAL TO SUBSTITUTE

The committee substitute specifies a more in depth definition of
cost approach and prohibits the use of intangible property interest
in determining the appraised value of a sign.

C.S.H.B. 1744 also deletes the requirement from the original bill
that the comptroller adopt an appraisal manual and that the
appraisal districts use it.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on March 21, 1995.  Representative Jackson
explained the bill.  Representatives Jackson and Talton offered
closing remarks.  Without objection, H.B. 1744 was left pending
before the committee.

On March 28, 1995, the committee met in a public hearing and
considered H.B. 1744 on pending business.  Representative Jackson
explained the bill.  The bill was referred to the Subcommittee on
Property Tax.

On April 6, 1995, the Subcommittee on Property Tax convened in a
formal meeting and considered H.B. 1744.  The subcommittee
considered a complete substitute.  Without objection, C.S.H.B. 1744
was adopted.  By a record vote of 4 ayes, 0 nays, 0 present not
voting and 1 absent, the subcommittee voted to report H.B. 1744 to
the full committee as substituted with the recommendation that it
do pass.

On April 11, 1995, the committee met in a public hearing and
considered H.B. 1744 on subcommittee report.  The committee
considered a committee substitute by Representative Horn.  Without
objection, C.S.H.B. 1744 was adopted.  By a record vote of 9 ayes,
0 nays, 0 present not voting and 2 absent, the committee voted to
report H.B. 1744 to the House as substituted with the
recommendation that it be sent to the Local and Consent Calendar
and that it do pass.


     Testimony received in favor of the bill (3/21/95):
           Mark Ritter, representing Sign Ad, Inc.
           Jack A. Howard, representing himself and Fetzer/Howard,
Inc.

     Testimony received neutrally on the bill (3/21/95):
           Tim Wooten, representing the Comptroller of Public
Accounts