HBA-RBT C.S.H.B. 2574 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2574
By: Hilbert
Ways & Means
4/27/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, the portion of the total market value of property that fairly
reflects the property's use in this state must be allocated to the state
for tax purposes if the property is used for a business purpose of the
owner, is taxable by a taxing unit, and is used both in this state and
outside this state. C.S.H.B. 2574 establishes the allocation formula for
business aircraft.   

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 Chapter 21, Tax Code, by adding Section 21.055, as
follows: 

Sec.  21.055.  BUSINESS AIRCRAFT.  Requires the appraisal office to
allocate to this state the portion of the fair market value of an aircraft
that fairly reflects its use in this state if the aircraft is used for a
business purpose of the owner, is taxable by a taxing unit, and is used
continually outside this state, whether regularly or irregularly.  Sets
forth the formula for the calculation of the allocable portion of the total
fair market value of the aircraft as follows: 

The allocable portion of the total fair market value of an aircraft = the
fair market value of the aircraft multiplied by the number of departures by
the aircraft from a location in this state during the year preceding the
tax year and divided by the total number of departures by the aircraft from
all locations during the year preceding the tax year. 

Provides an exception for commercial aircraft.

SECTION 2.  Emergency clause.
  Effective date: upon passage.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute differs from the original in SECTION 1 (proposed Section
21.055, Tax Code) by making reference to an aircraft used continually
outside this state, whether regularly or irregularly, rather than to an
aircraft used both in this state and outside this state.  The substitute
modifies the caption to reflect this change. 

The substitute differs from the original by adding Subdivision (c) to
proposed Section 21.055, Tax Code, in SECTION 1, to provide an exception
for commercial aircraft.