HBA-JRA H.B. 2697 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2697
By: Hunter
Ways & Means
5/4/1999
Introduced



BACKGROUND AND PURPOSE 

In the mid-1990s questions arose about the taxation of business personal
property, specifically inventory, that has both tangible and intangible
value.  The 75th Texas Legislature clarified that the total sales price of
an item is subject to sales tax.  The purpose of H.B. 2697 is to further
clarify this issue.  H.B. 2697 redefines "intangible personal value" to
exclude intangible value that is associated with and is dependent for its
existence on an item of real or personal property and that is capable of
being owned separately from that item and requires the chief appraiser, in
determining the market value of real or personal property, to include any
intangible value associated with and dependent for its existence on that
property. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1.04(6), Tax Code, to redefine "intangible
personal property" to provide that it does not include intangible value
that is associated with and is dependent for its existence on an item of
real or personal property and that is capable of being owned separately
from that item. 

SECTION 2.  Amends Subchapter A, Chapter 23, Tax Code, by adding Section
23.03, as follows: 

Sec. 23.03.  INTANGIBLE VALUE OF PROPERTY.  Requires the chief appraiser,
in determining the market value of real or personal property, to include
any intangible value associated with and dependent for its existence on
that property, including characteristics such as location, availability of
views, brand name, zoning status, or the existence of a permit or other
authorization governing the use of the property. 

SECTION 3.  Effective date:  January 1, 2000.
Makes application of this Act prospective.

SECTION 4.  Emergency clause.