By Wilson                                             H.B. No. 2637
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to incentives for film, video and audio recording
    1-3  production in Texas.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subsection (a), Section 151.318, Tax Code, is
    1-6  amended to read as follows:
    1-7        (a)  The following items are exempted from the taxes imposed
    1-8  by this chapter:
    1-9              (1)  tangible personal property that will become an
   1-10  ingredient or component part of tangible personal property
   1-11  manufactured, processed, or fabricated for ultimate sale;
   1-12              (2)  tangible personal property used or consumed in or
   1-13  during the actual manufacturing, processing, or fabrication of
   1-14  tangible personal property for ultimate sale, or in commercial
   1-15  production of a film negative or a video or audio recording master,
   1-16  of which a copy is intended for sale, if the use or consumption of
   1-17  the property is necessary or essential to the manufacturing,
   1-18  processing, or fabrication operation; and
   1-19              (3)  services performed directly on the product being
   1-20  manufactured prior to its distribution for sale and for the purpose
   1-21  of making the product more marketable.
   1-22        SECTION 2.  Subsection (e), Section 151.318, Chapter 151, Tax
   1-23  Code, is amended to read as follows:
    2-1        (d)  This section does not apply to any taxable item rented
    2-2  or leased to a person engaged in manufacturing, except that
    2-3  equipment rented or leased for the commercial production of a film
    2-4  negative or a video or audio recording master, of which a copy is
    2-5  intended for sale, is subject to the reduction of taxes as provided
    2-6  by Subsection (g) of this section.
    2-7        SECTION 3.  This Act takes effect September 1, 1993.
    2-8        SECTION 4.  The importance of this legislation and the
    2-9  crowded condition of the calendars in both houses create an
   2-10  emergency and an imperative public necessity that the
   2-11  constitutional rule requiring bills to be read on three several
   2-12  days in each house be suspended, and this rule is hereby suspended.