Floor Packet Page No. 441                                                   



	

Amend CSHB 3 by adding the following appropriately numbered 

SECTION:       

	SECTION       .  Section 23.12, Tax Code, is amended by adding 

Subsection (h) to read as follows:

	(h)  In this subsection, "drug supplies held in surplus" 

means drugs, as defined by the TEXAS FOOD, DRUG AND COSMETIC ACT, 

Section 431.002(14), Health and Safety Code, that are owned by a 

person who holds a wholesale drug distributor license under Chapter 

431, Health and Safety Code, other than a pharmaceutical drug 

manufacturer, retail pharmacy, or chain pharmacy, and that are held 

for less than a temporary period, for use in responding to 

catastrophic man-made or natural disasters, public emergencies and 

local trauma needs, but only that percentage of the owner's 

inventory necessary to treat victims of catastrophic man-made or 

natural disasters, public emergencies and incidents of local trauma 

by attending physicians or other emergency health care personnel.  

In determining the market value of drug supplies held in surplus, 

the chief appraiser shall exclude as economic obsolescence from the 

market value the value attributable to drug supplies held in 

surplus that exceed the amount of drugs held for normal market 

purposes.  For rendition purposes, in calculating the number of 

days drug supplies held in surplus are held in an inventory, the 

owner shall quantify the average number of days of the owner's 

day-to-day working inventory (cycle stock) that the owner holds to 

meet normal customer demand and shall subtract that number of days 

from the average number of days the owner holds the owner's total 

drug inventory.  When the owner renders the owner's total drug 

inventory, the owner shall include information sufficient to 

establish the validity of the owner's calculations under this 

subsection.  Notwithstanding any other provision of this 

subsection, the percentage of an owner's drug supplies held in 

surplus inventory may not exceed 10 percent of the owner's total 

inventory of drugs as defined by Section 431.002(14), Health and 

Safety Code.