HBA-JRA H.B. 2697 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2697 By: Hunter Ways & Means 5/4/1999 Introduced BACKGROUND AND PURPOSE In the mid-1990s questions arose about the taxation of business personal property, specifically inventory, that has both tangible and intangible value. The 75th Texas Legislature clarified that the total sales price of an item is subject to sales tax. The purpose of H.B. 2697 is to further clarify this issue. H.B. 2697 redefines "intangible personal value" to exclude intangible value that is associated with and is dependent for its existence on an item of real or personal property and that is capable of being owned separately from that item and requires the chief appraiser, in determining the market value of real or personal property, to include any intangible value associated with and dependent for its existence on that property. 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 Section 1.04(6), Tax Code, to redefine "intangible personal property" to provide that it does not include intangible value that is associated with and is dependent for its existence on an item of real or personal property and that is capable of being owned separately from that item. SECTION 2. Amends Subchapter A, Chapter 23, Tax Code, by adding Section 23.03, as follows: Sec. 23.03. INTANGIBLE VALUE OF PROPERTY. Requires the chief appraiser, in determining the market value of real or personal property, to include any intangible value associated with and dependent for its existence on that property, including characteristics such as location, availability of views, brand name, zoning status, or the existence of a permit or other authorization governing the use of the property. SECTION 3. Effective date: January 1, 2000. Makes application of this Act prospective. SECTION 4. Emergency clause.