By Horn                                                H.B. No. 495

         Substitute the following for H.B. No. 495:

         By Craddick                                        C.S.H.B. No. 495

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the appraisal of an inventory for ad valorem tax

 1-3     purposes.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 23.12(a), Tax Code, is amended to read as

 1-6     follows:

 1-7           (a)  Except as provided by Sections 23.12A and 23.12D of this

 1-8     code, the market value of [an] a personal property inventory is the

 1-9     cost to the owner of acquiring the property, plus, in the case of a

1-10     manufacturer, the cost of putting the property in its current

1-11     condition, less accrued physical, functional, and economic

1-12     obsolescence.  The market value of an inventory consisting of [the

1-13     price for which it would sell as a unit to a purchaser who would

1-14     continue the business.  An inventory shall include] residential

1-15     real property which has never been occupied as a residence and is

1-16     held for sale in the ordinary course of a trade or business,

1-17     provided that the residential real property remains unoccupied, is

1-18     not leased or rented, and produces no income is the price for which

1-19     it would sell as a unit to a purchaser who would continue the

1-20     business.

1-21           SECTION 2.  This Act takes effect January 1, 1998.  The

1-22     change in law made by this Act applies only to an appraisal of an

1-23     inventory for ad valorem tax purposes for a tax year that begins on

1-24     or after the effective date of this Act.  The appraisal of an

 2-1     inventory for ad valorem tax purposes for a tax year that began

 2-2     before the effective date of this Act is governed by the law in

 2-3     effect when the appraisal of the inventory was made, and the former

 2-4     law is continued in effect for that purpose.

 2-5           SECTION 3.  The importance of this legislation and the

 2-6     crowded condition of the calendars in both houses create an

 2-7     emergency and an imperative public necessity that the

 2-8     constitutional rule requiring bills to be read on three several

 2-9     days in each house be suspended, and this rule is hereby suspended.