H.B. No. 3016




AN ACT

relating to the determination of the market value of certain drug 
supplies for ad valorem property tax purposes.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  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 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 60 days for use in 
responding to terrorist attack, bioterrorism event, and 
catastrophic man-made or natural disasters, but only that 
percentage of the owner's inventory necessary to treat victims of 
terrorist attack, bioterrorism event, or catastrophic man-made or 
natural disasters 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.
	SECTION 2.  This Act takes effect January 1, 2006.                             




______________________________              ______________________________
 
   President of the Senate                               Speaker of the House      

	I certify that H.B. No. 3016 was passed by the House on April 
19, 2005, by a non-record vote; and that the House concurred in 
Senate amendments to H.B. No. 3016 on May 26, 2005, by a non-record 
vote.

                                                  ______________________________
                                                     Chief Clerk of the House   

	
I certify that H.B. No. 3016 was passed by the Senate, with 
amendments, on May 24, 2005, by the following vote:  Yeas 27, Nays 
4.

                                                  ______________________________
                                                      Secretary of the Senate   



APPROVED: __________________                                                
 
                Date                                                         




 
         __________________                                              
 
              Governor