LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 21, 1995 TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 1744 Committee on Ways & Means By: Jackson House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 1744 (Relating to the appraisal of signs for ad valorem tax purposes.) this office has determined the following: The bill would require that signs be appraised, for property tax purposes, by means of the cost approach to value. The cost approach establishes value based on the amount it would cost to replace a property with one of equal utility. The bill would also require the Comptroller to adopt a manual for the appraisal of signs and distribute to each appraisal district a copy of the sign appraisal manual. Appraisal districts would be required to use the manual in appraising signs. Current law requires all taxable property to be appraised at its market value as of January 1, and that the market value be determined by application of generally accepted appraisal techniques. Generally accepted appraisal technique requires an appraiser to apply all applicable approaches to value (market, income, and cost). Limiting the appraisal of signs to only the cost approach could result in over or under appraisal in different circumstances. No significant fiscal implication to the State is anticipated. The fiscal implication to units of local government cannot be determined. Source: Comptroller of Public Accounts LBB Staff: JK, BR, DF