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F I S C A L I M P A C T R E P O R T
SPONSOR Cisneros
ORIGINAL DATE
LAST UPDATED
2/18/07
2/24/07 HB
SHORT TITLE Electric Power Plant Property Valuation
SB 874
ANALYST Francis
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
* See Narrative
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates HB666
Relates to HB665, SB340
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
Response Received From
Taxation and Revenue Department
SUMMARY
Synopsis of Bill
Senate Bill 874 modifies the valuation methodology for property used in the generation,
distribution or transmission of electricity. The valuation can include deductions for “functional"
and “economic" obsolescence.
.
Economic obsolescence is defined as the loss of value caused by unfavorable economic
influences or factors outside of the property not including physical depreciation.
.
Functional obsolescence is loss due to functional inadequacies or deficiencies caused by
factors within the property not including physical depreciation.
The taxpayer choosing to include economic and/or functional obsolescence must submit a claim
documenting the obsolescence. Such documentation may include industry comparisons, volume
reductions, and other objective evidence of obsolescence. The Taxation and Revenue