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.