LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 23, 1997
         
         
      TO: Honorable Tom Craddick, Chair            IN RE:  Senate Bill No. 1153, Committee Report 2nd House, Substituted
          Committee on Ways & Means                              By: Brown
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1153 ( relating 
to the appraisal and ad valorem taxation of personal property.) 
this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1153-Committee Report 2nd House, Substituted
         
Section  403.302 of the Government Code requires the Comptroller 
to conduct a property value study to determine the total taxable 
value for each school district.  Total taxable value is an element 
in the state's school funding formula.  Passage of the bill 
could cause a change in school district taxable values reported 
to the Commissioner of Education by the Comptroller.  A reduction 
in school district taxable values could increase the state's 
cost of public education based on current law funding formulas.
         

         
 
The bill would amend Chapter 23 of the Tax Code to expand the 
definition of "vessel" to include trailers designed to carry 
a vessel and either a trailer or semi-trailer as defined by 
Section 501.002, Transportation code.

Legislation in 1993 
and 1995 exempted motor vehicle and boat dealer inventories 
from the statutory requirement that the market value for business 
inventory is the price for which it would sell on January 1 
as a unit to a purchaser who would continue the business.  The 
legislation created a new, required method for appraising motor 
vehicle and boat dealer inventories.  The market value of these 
inventories is determined by dividing the total annual sales 
from the special inventory for the prior calendar year by 12. 
 The bill would apply the same appraisal methodology to qualified 
trailer inventories.  

The bill would take effect January 
1, 1998 and apply to a tax year beginning on or after that date.
          
To the extent that the provisions of the bill reduce taxable 
heavy equipment inventory valuations from current law, there 
would be a reduction in local tax levies.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,RR ,BR