H.B. 2726 78(R)    BILL ANALYSIS


H.B. 2726
By: Talton
Local Government Ways and Means
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

Currently, under Section 23.20, Tax Code, Waiver of Special Appraisal, a
taxpayer may waive the right to special appraisal - usually open-space
valuation - to one or more taxing entities.  If special appraisal is
waived, the taxpayer's property is taxed by the taxing unit at it's market
value, rather than at open-space value, for example.  The taxpayer's
property is therefore taxed at the higher of the two values by the taxing
unit from which waiver is requested, continuing to be taxed at the lower
value (usually open-space) by the other taxing units that tax the
property. 

Under Section 23.12, Tax Code, Inventory, a taxpayer is entitled to have
inventory (residential real property which has never been occupied and is
held for sale - most notably vacant lots) taxed at the price for which it
would sell to a purchaser who would continue the business.  Inventory
appraisal usually results in a discount for the property.   

HB 2726 proposes to allow a taxpayer who has property appraised under
Section 23.12 to waive inventory appraisal from one or more taxing units
and continue to receive inventory appraisal from the other taxing units in
which the property is located.       

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.  

ANALYSIS

SECTION 1.  
Specifies that an owner of inventory like an owner of real property, may
waive the right to a special appraisal.  The waiver of this right to
special appraisal may be submitted at any time and follows the same
existing procedures that exist for waiving the right to special appraisal
of real property.   

Makes conforming changes to Section 23.20(e), Tax Code, to reflect the
name change of the Texas Natural Resource Conservation Commission to the
Texas Commission on Environmental Quality. Also, specifies that waivers
under this section that apply to real property are properly and timely
executed. 

SECTION 2.  
Specifies the effect date of this Act.


EFFECTIVE DATE

January 1, 2004 and applies only to the appraisal of property for ad
valorem tax purposes for a tax year beginning on or after that date.