79R7259 JD-F

By:  Hill                                                         H.B. No. 3016



A BILL TO BE ENTITLED

AN ACT

relating to the treatment for ad valorem tax purposes of certain 
drugs and medicines located in this state for a temporary period.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 11.01, Tax Code, is amended by adding 
Subsection (e) to read as follows:
	(e)  Tangible personal property consisting of drug supplies 
that are held in an inventory of a wholesale drug distributor and 
located in this state on January 1 for a temporary period are not 
taxable in this state.  Drug supplies that are located in this state 
for less than 60 days are considered to be located in this state for 
a temporary period.  In determining the number of days that drug 
supplies are held in an inventory of a wholesale drug distributor in 
this state and whether the drug supplies were transported out of 
that inventory within 60 days, the chief appraiser and the 
wholesale drug distributor shall rely on information that shows the 
average number of days that drug supplies were held in the inventory 
of the wholesale drug distributor during the preceding tax year.  In 
this subsection:
		(1)  "Drug supplies" means products that are described 
by Section 151.313(c) as drugs or medicines for purposes of Section 
151.313.
		(2)  "Wholesale drug distributor" means a person who 
holds a license as a wholesale drug distributor under Subchapter I, 
Chapter 431, Health and Safety Code.
	SECTION 2.  Section 22.01, Tax Code, is amended by adding 
Subsection (k) to read as follows:
	(k)  Subsections (a) and (b) do not apply to drug supplies 
covered by Section 11.01(e).
	SECTION 3.  This Act applies only to ad valorem taxes imposed 
for a tax year beginning on or after the effective date of this Act.
	SECTION 4.  This Act takes effect January 1, 2006.