SRC-AAA H.B. 846 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 846
By: King (Zaffirini)
Finance
5-8-97
Engrossed


DIGEST 

Currently, property acquired for public use by the state or a political
subdivision, through a lease-purchase agreement, is subject to ad valorem
taxation throughout the lease period.  Private companies which lease
property to  the state or political subdivisions retain the title to that
property throughout the lease agreement, and thus are responsible for
paying ad valorem taxes on the property, even though it is in a public
use.  These private companies may cover the costs of paying the ad valorem
taxes by charging the state and subdivisions higher rental prices.  Such
higher  prices could impede political subdivisions with smaller budgets.
H.B. 846 allows for an exemption from ad valorem taxation for property
that is acquired for public use by the state or a political subdivision
through a lease-purchase agreement. 
 
PURPOSE

As proposed, H.B. 846 allows for an exemption from ad valorem taxation for
property that is acquired for public use by the state or a political
subdivision through a lease-purchase agreement. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 11.11, Tax Code, by adding Subsection (h), to
set forth situations in which tangible personal property is owned by this
state or a political subdivision of this state. Provides that tangible
personal property ceases to be owned by this state or a political
subdivision of this state, if the state does not exercise its right to
acquire legal title to the property within a certain period of time.  

SECTION 2. Effective date: January 1, 1998.

SECTION 3. Emergency clause.