1-1 By: Armbrister S.B. No. 1199
1-2 (In the Senate - Filed March 12, 1993; March 16, 1993, read
1-3 first time and referred to Committee on Finance; April 15, 1993,
1-4 reported favorably by the following vote: Yeas 11, Nays 0;
1-5 April 15, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the taxation of items that are incorporated in or used
1-24 for the improvement of realty for exempt organizations; providing a
1-25 prior contracts exemption for certain equipment and machinery
1-26 purchases.
1-27 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-28 SECTION 1. Section 151.311, Tax Code, is amended to read as
1-29 follows:
1-30 Sec. 151.311. TAXABLE ITEMS INCORPORATED INTO OR <PROPERTY>
1-31 USED FOR IMPROVEMENT OF REALTY OF AN EXEMPT ENTITY <OF A SCHOOL
1-32 DISTRICT OR NONPROFIT HOSPITAL>. (a) The purchase of tangible
1-33 personal property for use in the performance of a contract for an
1-34 improvement to realty for an organization exempted under Section
1-35 151.309 or 151.310 of this code is exempt if the tangible personal
1-36 property is incorporated into realty in the performance of the
1-37 contract.
1-38 (b) The purchase of tangible personal property, other than
1-39 machinery or equipment and its accessories and repair and
1-40 replacement parts, for use in the performance of a contract for an
1-41 improvement to realty for an organization exempted under Section
1-42 151.309 or 151.310 of this code is exempt if the tangible personal
1-43 property is:
1-44 (1) necessary and essential for the performance of the
1-45 contract; and
1-46 (2) completely consumed at the job site.
1-47 (c) The purchase of a taxable service for use in the
1-48 performance of a contract for an improvement to realty that is
1-49 performed for an organization exempted under Section 151.309 or
1-50 151.310 of this code is exempt if the service is performed at the
1-51 job site and if:
1-52 (1) the contract expressly requires the specific
1-53 service to be provided or purchased by the person performing the
1-54 contract; or
1-55 (2) the service is integral to the performance of the
1-56 contract.
1-57 (d) For purposes of this section, tangible personal property
1-58 is completely consumed if after being used once for its intended
1-59 purpose it is used up or destroyed. Tangible personal property
1-60 that is rented or leased for use in the performance of the contract
1-61 cannot be completely consumed for purposes of this section.
1-62 <Tangible personal property purchased by a contractor for use in
1-63 the performance of a contract for the improvement of realty for a
1-64 school district or nonprofit hospital is exempted from the taxes
1-65 imposed by this chapter to the extent of the value of the tangible
1-66 personal property used or consumed or both in the performance of
1-67 the contract. In this section "nonprofit hospital" means a
1-68 hospital licensed under Chapter 241 or 577, Health and Safety Code,
2-1 that is operated as a charitable or nonprofit establishment.>
2-2 SECTION 2. (a) There are exempted from the taxes imposed by
2-3 Chapter 151, Tax Code, machinery or equipment and its accessories
2-4 and repair and replacement parts purchased by a contractor for use
2-5 in the performance of a contract for the improvement of realty for
2-6 a school district or nonprofit hospital that became subject to
2-7 sales or use tax because of amendments to Section 151.311, Tax
2-8 Code, and that were purchased subject to a written contract or bid
2-9 entered into on or before the effective date of this Act. The
2-10 exemption provided by this section has no effect after three years
2-11 from the effective date of this Act.
2-12 (b) In this section, "nonprofit hospital" means a hospital
2-13 licensed under Chapter 241 or 577, Health and Safety Code, that is
2-14 operated as a charitable or nonprofit establishment.
2-15 SECTION 3. This Act takes effect on the first day of the
2-16 first quarter following the 91st day after the day on which the
2-17 73rd Legislature, Regular Session, 1993, adjourns.
2-18 SECTION 4. This Act applies to taxes due on or after the
2-19 effective date of this Act. Taxes due before the effective date of
2-20 this Act are governed by the law in effect when the taxes became
2-21 due, and that law is continued in effect for the collection of
2-22 taxes due and for civil and criminal enforcement of the liability
2-23 for those taxes.
2-24 SECTION 5. The importance of this legislation and the
2-25 crowded condition of the calendars in both houses create an
2-26 emergency and an imperative public necessity that the
2-27 constitutional rule requiring bills to be read on three several
2-28 days in each house be suspended, and this rule is hereby suspended.
2-29 * * * * *
2-30 Austin,
2-31 Texas
2-32 April 15, 1993
2-33 Hon. Bob Bullock
2-34 President of the Senate
2-35 Sir:
2-36 We, your Committee on Finance to which was referred S.B. No. 1199,
2-37 have had the same under consideration, and I am instructed to
2-38 report it back to the Senate with the recommendation that it do
2-39 pass and be printed.
2-40 Montford,
2-41 Chairman
2-42 * * * * *
2-43 WITNESSES
2-44 FOR AGAINST ON
2-45 ___________________________________________________________________
2-46 Name: Wade Anderson, Asst. Dir. Tax Admin. x
2-47 Representing: Comptroller's Office
2-48 City: Austin
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