BILL ANALYSIS H.B. 1611 By: Stiles March 15, 1995 Committee Report (Unamended) BACKGROUND Stevedoring firms are businesses providing ship owners with the service of loading and securing cargo. They provide the machinery (cranes, forklifts, etc.) used to move the cargo, the manpower used to operate the equipment and to secure the cargo, and the securing material (ropes, cables, pallets, etc.). The ship owner is charged an agreed upon fee for providing the services and the cost of providing the securing materials. Section 151.329, Tax Code, provides for exemptions to the sales and use tax for certain ships and ship equipment. Currently, owners or operators of a ship that is used exclusively in foreign or interstate coastal commerce are exempt from paying sales and use tax for materials and supplies that become a part of the ship; or are loaded on the ship and used in its maintenance and operation. Stevedoring firms are not presently included in this exemption. PURPOSE This bill would exempt from the sales and use tax materials or supplies provided in connection with stevedoring services to a vessel in interstate or foreign commerce if the materials or supplies are loaded upon the vessel and not removed before departure. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 151.329 (Certain Ships and Equipment), Tax Code, by adding Subdivision (5) to provide a tax exemption for materials and supplies used for stevedoring services for certain ships if the materials and supplies are loaded on the ship and not removed before departure. SECTION 2. Provides an effective date for the Act; makes application of the Act prospective. SECTION 3. Emergency clause. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance to the rules and a public hearing was held on March 14, 1995. Representative Stiles explained the bill. By a record vote of 7 ayes, 0 nays, 0 present not voting and 4 absent, the committee voted to report H.B. 1611 to the House without amendment with the recommendation that it do pass. Testimony received in favor of the bill: Edward A. Gilbert, representing the West Gulf Maritime Assn.