By Horn                                          H.B. No. 495

      75R3220 JD-D                           

                                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 inventory is the price determined in

 1-9     accordance with generally accepted accounting practices for which

1-10     it would sell as a unit to a purchaser who would continue the

1-11     business for which the inventory is used.  An inventory shall

1-12     include residential real property which has never been occupied as

1-13     a residence and is held for sale in the ordinary course of a trade

1-14     or business, provided that the residential real property remains

1-15     unoccupied, is not leased or rented, and produces no income.

1-16           SECTION 2.  This Act takes effect January 1, 1998.  The

1-17     change in law made by this Act applies only to an appraisal of an

1-18     inventory for ad valorem tax purposes for a tax year that begins on

1-19     or after the effective date of this Act.  The appraisal of an

1-20     inventory for ad valorem tax purposes for a tax year that began

1-21     before the effective date of this Act is governed by the law in

1-22     effect when the appraisal of the inventory was made, and the former

1-23     law is continued in effect for that purpose.

1-24           SECTION 3.  The importance of this legislation and the

 2-1     crowded condition of the calendars in both houses create an

 2-2     emergency and an imperative public necessity that the

 2-3     constitutional rule requiring bills to be read on three several

 2-4     days in each house be suspended, and this rule is hereby suspended.