JWB H.B. 1614 75(R)BILL ANALYSIS


WAYS & MEANS
H.B. 1614
By: Jackson
4-7-97
Committee Report (Amended)




BACKGROUND 

Chapter 23, Tax Code (Appraisal Methods and Procedures), provides for
appraisal methods and procedures for property tax purposes.  Section 23.01
(Appraisals Generally), requires all taxable property to be appraised at
its market value as determined by the application of generally accepted
appraisal techniques, and the same or similar appraisal techniques shall
be used in appraising the same or similar kinds of property.  Generally
accepted appraisal technique requires an appraiser to apply all applicable
approaches to value (market, income, or cost). 

Current law allows the appraisal of signs and billboards to use all
applicable techniques.  Some counties appraise signs or billboards based
on the potential income derived from the location of a sign or billboard.

PURPOSE

This bill provides that the appraised value of signs be appraised by means
of the cost approach to value.  

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 23, Tax Code, by adding Section
23.145.  SIGNS. 
 
(a)  Provides the method for appraising signs:  (1) determining the
replacement or reproduction cost of the sign;  (2) calculating the amount
of the cost lost to depreciation; (3) subtracting the depreciation from
the cost. 

 (b)  Prohibits appraised value form including intangible property
interest.  

 (c)   Provides that permanent on-premise signs be appraised at their
contributory value to the premises where the sign is located.  Also
prohibits the appraised value of land on which an off-premise sign is
located from including any amount attributable to the value of the sign or
to the location of the sign on the land. 

 (d)   Defines "sign," "off-premise sign," and "on-premise sign" to have
the same meaning as in Section 216.002, Local Government Code. 

SECTION 2.  Effective date: January 1, 1998.

SECTION 3.  Emergency clause.


 

EXPLANATION OF AMENDMENTS

Committee Amendment Number 1 by Heflin strikes all language in Section
23.145(c), Tax Code, (as added by this bill) and reletters subsequent
sections accordingly.  

Section 23.145(c), Tax Code, would have provided that permanent on-premise
signs be appraised at their contributory value to the premises where the
sign is located.  It also prohibited the appraised value of land on which
an off-premise sign is located from including any amount attributable to
the value of the sign or to the location of the sign on the land.