BILL ANALYSIS
C.S.S.B. 640
By: Montford (Holzheauser)
May 8, 1995
Committee Report (Substituted)
BACKGROUND
Each year, the Comptroller of Public Accounts evaluates those areas
of state law administered by that agency. In the course of these
evaluations, a number of recommendations are produced that would
simplify tax collection and enforcement procedures for both
taxpayers and the comptroller's office. These recommendations
represent technical corrections and changes which clarify, correct,
or conform to existing statutory provisions of the Tax Code.
PURPOSE
This bill amends various taxes and fees in the Tax Code, and amends
various tax-related provisions outside the Tax Code to clarify and
simplify the administration, collection, and enforcement of taxes
and fees.
The bill amends provisions in the following areas:
Collection and Enforcement Procedures
Venue and Jurisdiction in a Suit to Recover Taxes
Sales and Use Tax
Motor Fuels Tax
Cigarette Tax
Cigar and Tobacco Products Tax
Hotel Occupancy Tax
Controlled Substances Tax
Gas Production Tax
Battery Fee
Tire Fee
Local Tax Rates
Amusement Tax
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 111.010 (Suit to Recover Taxes),
Subsection (c), Tax Code, by providing that venue for,
and jurisdiction of, a suit arising under this section
is exclusively conferred upon the district courts of
Travis County.
SECTION 2. Amends Section 111.060 (Interest on Delinquent Tax),
Subsection (c), Tax Code, to provide that Subsection (b)
of this section does not apply to the taxes imposed by
certain chapters of this code or under an agreement made
under Section 153.017 of this code.
SECTION 3. Amends Section 111.101 (Settlement Before
Redetermination), Tax Code, by deleting existing
Subsection (b) regarding a settlement being ineffective.
SECTION 4. Amends Section 111.201 (Assessment and Refund
Limitation), Tax Code, by deleting the refund
provisions. Also retitles the section "Assessment
Limitation."
SECTION 5. Amends Sections 151.0047 (Real Property Repair and
Remodeling), and 151.0048 (Real Property Service), Tax
Code.
151.0047 Adds improvements to a manufacturing or
processing production unit in a petrochemical refinery
or chemical plant to the definition of "real property
repair and remodeling," for the purposes of the sales
tax.
151.0048 Further defines "real property service" and
provides a definition for "contractor," for the purposes
of the sales tax.
SECTION 6. Amends Section 151.154 (Resale Certificate: Liability
of Purchaser), Tax Code, as follows:
(a) Requires the purchaser to be liable for payment of
the sales tax on the value of the taxable item for any
period during which the taxable item is used, if a
purchaser who gives a resale certificate makes any
divergent use of the taxable item.
(b) Provides that the value of an item of tangible
personal property is the fair market rental value of the
tangible personal property, which is the amount that a
purchaser would pay on the open market to rent or lease
the property. Provides that the value of a taxable
service is the fair market value of the taxable service.
(c) Requires the original purchase price to be the
measure of the tax, if an item of tangible personal
property has no fair market rental value or if a taxable
service has no fair market value.
(d) Allows the person making the divergent use to pay
a sales tax on the original purchase price without
credit for taxes previously paid.
(e) Provides that a purchaser of a taxable item is
exempted from the tax if the item is donated to an
exempted organization.
SECTION 7. Amends Section 151.155 (Exemption Certificate), Tax
Code, as follows:
(a) Requires the purchaser to be liable for payment of
the sales tax on the value of the taxable item for any
period during which the taxable item is used, if a
purchaser who gives a resale certificate makes any
divergent use of the taxable item.
(b) Provides that the value of an item of tangible
personal property is the fair market rental value of the
tangible personal property, which is the amount that a
purchaser would pay on the open market to rent or lease
the property. Provides that the value of a taxable
service is the fair market value of the taxable service.
(c) Requires the original purchase price to be the
measure of the tax, if an item of tangible personal
property has no fair market rental value or if a taxable
service has no fair market value.
(d) Allows the person making the divergent use to pay
a sales tax on the original purchase price without
credit for taxes previously paid.
(e) Provides that a purchaser of a taxable item is
exempted from the tax if the item is donated to an
exempted organization.
SECTION 8. Amends Section 151.157 (Customs Brokers), Subsection
(f), Tax Code, to change the citation from
Administrative Procedure and Texas Register Act to the
Government Code.
SECTION 9. Amends Section 151.3111 (Services on Certain Exempted
Personal Property), Subsection (b), Tax Code to clarify
that service on machinery and equipment (originally
purchased for more than $50,000) used in the commercial
timber industry, is not exempt from sales, use and
excise taxes.
SECTION 10. Amends Section 151.313 (Health Care Supplies),
Subsection (a), Tax Code, by including hospital
beds in the items that are exempted from the taxes
imposed by this chapter.
SECTION 11. Amends Section 151.314 (Food and Food Products),
Subsection (e), Tax Code, by providing that a sale
is exempted under this subsection if the sale is
made by a person under 19 years old who is a member
of a nonprofit organization. Current law exempts
persons under 18 years of age.
SECTION 12. Amends Section 151.316 (Agricultural Items), Tax
Code, by amending Subsection (a) and adding
Subsections (c) and (d), as follows:
(a) Expands the definition of "machinery and equipment"
used in the processing, packing and marketing of
agricultural products to include required pollution
control equipment. Also codifies the qualification of
an "original producer." A producer qualifies if more
than 95% of the products being processed belong to that
producer.
(c) Defines "farm or ranch" and "original producer."
(d) Authorizes two or more corporations that operate
agricultural activities on the same tract or adjacent
tracts of land and that are entirely owned by an
individual or a combination of the individual, the
individual's spouse, and the individual's children to
qualify as an "original producer" for the purposes of
Subsection (a)(8).
SECTION 13. Amends Subchapter H, Chapter 151, Tax Code, by
adding Section 151.3161 TIMBER OPERATIONS.
(a) Exempts the first $50,000 worth of each unit of
machinery or equipment that is used in a commercial
timber operation, from sales, use and excise taxes.
(b) Provides that Subsection (a) does not apply to the
purchase of machinery or equipment through a rental or
lease agreement with a term of less than 12 months.
(c) Defines "machinery or equipment."
SECTION 14. Amends Section 151.317 (Gas and Electricity),
Subsection (c), Tax Code, to further define
"residential use." Also adds the off-wing repair
of jet engines to the category of "commercial use."
SECTION 15. Amends Sections 151.318 (Property Used in
Manufacturing), Tax Code, by amending Subsections
(b), (e), (m), and (n) and adding Subsection (q),
as follows:
(b) Includes semiconductor fabrication cleanrooms and
equipment to the list of items that are exempt from
sales, use and excise taxes.
(e) Provides that this section does not apply to taxable
items rented or leased for less than one year.
(m) Adds a reference to Subsection (h)(5) [a 75 percent
reduction of sales & use tax for property purchased
during 1994] to the list of refunds that do not affect
the application of local sales and use taxes.
(n) Adds supplies, including aluminum oxide, nitric
acid, and sodium cyanide used in electrochemical plating
or a similar process that are used in the overhauling,
retrofitting, or repairing of jet engines to the items
that are eligible for a refund or reduction in taxes.
(q) Defines "semiconductor fabrication cleanrooms and
equipment."
SECTION 16. Amends Section 151.319 (Newspapers and Property
Used in Newspaper Publication), Subsection (e), Tax
Code, to delete wrapping, packing, and packaging
supplies from the list of items not exempted from
sales and use taxes.
SECTION 17. Amends Section 151.342 (Agribusiness Items), Tax
Code, to include poultry cages that are used
exclusively as containers for transporting poultry
from a poultry farm to a location where the poultry
is processed, packaged, or marketed to the items
exempt from sales and use taxes.
SECTION 18. Amends Section 151.350 (Labor to Repair Certain
Property), Tax Code, as follows:
Retitles the section "Labor to Restore Certain
Property."
(a) Provides that labor to restore (rather than
repair), real or tangible personal property is exempted
from the taxes imposed by this chapter if the
restoration is performed on damaged property in a
disaster area, if the damage was caused by the disaster.
(b) Provides that the exemption does not apply to
tangible personal property transferred by the service
provider to the purchaser as part of the service.
(d) Defines "restore."
SECTION 19. Amends Section 151.509 (Petition for
Redetermination), Tax Code, to require a person
petitioning for a redetermination of a
determination made under Section 111.022 to file,
before the determination becomes final, security as
the comptroller requires to ensure compliance with
this chapter. Authorizes the security to be sold
by the comptroller in the manner provided by
Chapter 111A.
SECTION 20. Amends Section 151.712 (Civil Penalty for Persons
Certifying Exports), Subsection (g), Tax Code, to
change the citation from the Administrative
Procedure and Texas Register Act to the Government
Code.
SECTION 21. Amends Sections 153.002 (Tax Liability on Leased
Vehicles), Subsections (b) and (d), Tax Code, as
follows:
(b) Deletes the requirement of filing a bond with an
application for an interstate trucker's permit.
(d) Makes the filing of certain documents relating to
an application for an interstate trucker's permit
permissive (i.e. "may" instead of "shall").
SECTION 22. Amends Section 153.017 (Cooperative Agreements with
Other States), Tax Code, by amending Subsections
(b) and (f) and by adding Subsections (g) and (h),
as follows:
(b) Allows agreements between states to include
additional information.
(f) Provides a statute of this state prevails over an
inconsistent rule of the comptroller. A statute of this
state prevails over an inconsistent provision of an
agreement entered into under this section, except as
otherwise provided by this section.
(g) Authorizes the comptroller to segregate in a
separate fund or account, the amount of motor fuel taxes
estimated to be due to other jurisdictions or otherwise
subject to refund during the fiscal year, penalties and
interest on those taxes due other jurisdictions,
licensing fees, and other costs collected under the
agreement. Authorizes the comptroller to issue a
warrant or make an electronic transfer of the amount as
necessary to carry out the purposes of the agreement on
a determination of an amount held that is due to be
remitted to another jurisdiction. Authorizes an
auditing cost, membership fee, and other cost associated
with the agreement to be paid from interest earned on
funds segregated under this subsection. Requires any
interest earnings in excess of the costs associated with
the agreement to be credited to general revenue.
(h) Provides that the legislature finds that it is in
the public interest to enter into motor fuel tax
agreements with other jurisdictions that may provide for
the temporary remittal of amounts due other
jurisdictions that exceed the amounts collected.
Requires the comptroller to ensure that reasonable
measures are developed to recover motor fuel taxes and
other amounts due this state during each biennium.
SECTION 23. Amends Section 153.116 (Bonds and Other Security
for Taxes), Subsection (e), Tax Code, by deleting
references to the F.S.L.I.C.
SECTION 24. Amends Section 153.205 (Statement for Diesel Fuel
Tax Free), Tax Code, by adding Subsection (i), to
prohibit a permitted supplier from making a tax-free sale to a purchaser using a signed statement
for the sale of more than 3,000 gallons of diesel
fuel in a single transaction, or in a calendar
month in which the supplier has previously sold
more than 10,000 gallons of diesel fuel to the
purchaser.
SECTION 25. Amends Section 153.206 (Collection and Payment of
Tax: Allowances), Subsection (f), Tax Code, by
correctly identifying the commodity being sold,
which is "diesel fuel," not "gasoline."
SECTION 26. Amends Section 153.218 (Bonds and Other Security
for Taxes), Subsection (e), Tax Code, by deleting
references to the F.S.L.I.C.
SECTION 27. Amends Section 153.220 (Invoices), Subsection (a),
Tax Code, to require delivery of diesel fuel into
the fuel supply tanks of a motor vehicle operated
for commercial purposes and described by Section
153.001(12), rather than having a capacity of 60 or
more gallons, to be evidenced by an invoice issued
in duplicate by a dealer.
SECTION 28. Amends Section 153.304 (Dealer's Permit), Tax Code,
to provide that a dealer's permit authorizes a
dealer to collect and remit taxes on liquefied gas
delivered into the fuel supply tanks of motor
vehicles displaying an out-of-state license plate,
the motor vehicle of an interstate trucker licensed
under an agreement entered into under Section
153.017, or a motor vehicle displaying a motor
vehicle dealer's liquefied gas tax decal.
SECTION 29. Amends Section 153.305 (Liquified Gas Tax Decal
Permit), Tax Code, by adding Subsection (e), to
provide that an interstate trucker is not required
to prepay the tax under Subsection (a) for a motor
vehicle operated for commercial purposes and
described by Section 153.001(12).
SECTION 30. Amends Section 153.306 (Interstate Trucker's
Permit), Tax Code, by allowing persons to import
liquified gas into the state, but prohibits them
from receiving liquified gas for their vehicles
without the proper decal.
SECTION 31. Amends Section 153.402 (Prohibited Acts; Civil
Penalties), Tax Code, to provide that a person
forfeits to the state a civil penalty of not less
than $25 nor more than $200 if the person makes a
delivery of liquefied gas into the fuel supply tank
of a motor vehicle bearing Texas license plates and
no Texas liquefied gas tax decal, unless licensed
under a multistate fuels tax agreement.
SECTION 32. Amends Section 153.403 (Criminal Offenses), Tax
Code, by establishing that operating a motor
vehicle on liquified gas without the proper decal
is an offense.
SECTION 33. Amends Section 154.042 (Distributor), Subsection
(d), Tax Code, by changing the citation from the
Civil Statutes to the Government Code.
SECTION 34. Amends Section 154.051 (Cigarette Tax Recovery
Trust Fund), Subsection (m), Tax Code, by changing
the citation from the Civil Statutes to the
Government Code.
SECTION 35. Amends Section 154.101 (Permits), Subsection (g),
Tax Code, by changing the citation from the Civil
Statutes to the Government Code.
SECTION 36. Amends Section 154.114 (Suspension or Revocation of
a Permit), Tax Code, as follows:
Retitles the Section "Final Suspension or Revocation of
a Permit."
(a) Authorizes the treasurer to suspend or revoke a
person's permit.
(c) Requires the treasurer to mail the written notice
by certified mail, return receipt requested, to the
permit holder's mailing address as it appears on the
treasurer's records.
(d) Requires the treasurer to give the permit holder not
less than 10 days' notice of a final hearing.
SECTION 37. Amends Subchapter D, Chapter 154 (Cigarette Tax),
Tax Code, by adding Section 154.1141 SUMMARY
SUSPENSION OF A PERMIT.
(a) Authorizes the treasurer to suspend a person's
permit without notice or a hearing for failure to comply
with this chapter or a rule adopted under this chapter
if the person's continued operation constitutes an
immediate and substantial threat to the collection of
taxes imposed by this chapter.
(b) Requires proceedings for a preliminary hearing
before the treasurer or the treasurer's representative,
to be initiated simultaneously with the summary
suspension if the treasurer summarily suspends a
person's permit. Requires the preliminary hearing to
be set not later than 10 days after summary suspension.
(c) Requires the permit holder to show cause, at the
preliminary hearing, why the permit should not remain
suspended pending a final hearing on suspension or
revocation.
(d) Provides that Chapter 2001, Government Code, does
not apply to a summary suspension under this section.
(e) Requires the treasurer to serve notice on the permit
holder informing the permit holder of the right to a
preliminary hearing before the treasurer or the
treasurer's representative, and of the time and place
of the preliminary hearing to initiate a proceeding to
summarily suspend a person's permit. Requires the
notice to be personally served on the permit holder, or
sent by mail, to the permit holder's mailing address as
it appears in the treasurer's records. Requires the
notice to state the alleged violations that constitute
the grounds for summary suspension. Provides that the
suspension is effective at the time the notice is
served. Requires the permit holder to immediately
surrender the permit to the treasurer or the treasurer's
representative if the notice is served in person.
Requires the permit holder to immediately return the
permit to the treasurer if notice is served by mail.
(f) Provides that Section 154.114 (Suspension or
Revocation of a Permit), governs a final administrative
hearing under this section.
SECTION 38. Amends Section 154.1145 (Hearings), Tax Code, to
require the treasurer to conduct all hearings
required by this chapter in accordance with Chapter
2001, Government Code, unless otherwise provided by
this chapter.
SECTION 39. Amends Section 154.201 (Record of Purchase or
Receipt), Tax Code, to add export warehouses to the
businesses that are required to keep records of all
cigarettes purchased or received.
SECTION 40. Amends Section 154.301 (Investigation and Audit
Costs), Tax Code, as follows:
Retitles the Section "Compliance Investigation and
Recovery of Costs."
Authorizes the treasurer to collect from a person who
has failed to comply with this chapter reasonable
expenses incurred in the compliance investigation as an
additional penalty. Authorizes the comptroller to use
funds as appropriated by the legislature.
SECTION 41. Amends Section 154.304 (Inspection), Subsection
(a), Tax Code, to authorize the treasurer to remain
on the premises as long as necessary to determine
the tax liability of a person dealing in
cigarettes, or to determine compliance with this
chapter.
SECTION 42. Amends Section 154.308 (Deficiency Determination),
Tax Code, as follows:
Retitles the Section "Deficiency Determination,
Penalties and Interest."
Allows the treasurer to determine penalties and interest
in the same manner as in determining a deficiency of
taxes.
SECTION 43. Amends Section 155.041 (Permits), Subsection (g),
Tax Code, by changing the citation from the Civil
Statutes to the Government Code.
SECTION 44. Amends Section 155.059 (Suspension or Revocation of
a Permit), Tax Code, as follows:
Retitles the Section "Final Suspension or Revocation of
Permit.
(a) Authorizes the treasurer to suspend or revoke a
person's permit.
(c) Requires the treasurer to mail the written notice
by certified mail, return receipt requested, to the
permit holder's mailing address as it appears on the
treasurer's records.
(d) Requires the treasurer to give the permit holder not
less than 10 days' notice of a final hearing.
SECTION 45. Amends Subchapter C, Chapter 155, Tax Code, by
adding Section 155.0591 SUMMARY SUSPENSION OF A
PERMIT.
(a) Authorizes the treasurer to suspend a person's
permit without notice or a hearing for failure to comply
with this chapter or a rule adopted under this chapter
if the person's continued operation constitutes an
immediate and substantial threat to the collection of
taxes imposed by this chapter.
(b) Requires proceedings for a preliminary hearing
before the treasurer or the treasurer's representative
to be initiated simultaneously with the summary
suspension if the treasurer summarily suspends a
person's permit. Requires the preliminary hearing to
be set not later than 10 days after summary suspension.
(c) Requires the permit holder to show cause, at the
preliminary hearing, why the permit should not remain
suspended pending a final hearing on suspension or
revocation.
(d) Provides that Chapter 2001, Government Code, does
not apply to a summary suspension under this section.
(e) Requires the treasurer to serve notice on the permit
holder informing the permit holder of the right to a
preliminary hearing before the treasurer or the
treasurer's representative, and of the time and place
of the preliminary hearing to initiate a proceeding to
summarily suspend a person's permit. Requires the
notice to be personally served on the permit holder, or
sent by mail, to the permit holder's mailing address as
it appears in the treasurer's records. Requires the
notice to state the alleged violations that constitute
the grounds for summary suspension. Provides that the
suspension is effective at the time the notice is
served. Requires the permit holder to immediately
surrender the permit to the treasurer or the treasurer's
representative if the notice is served in person.
Requires the permit holder to immediately return the
permit to the treasurer if notice is served by mail.
(f) Provides that Section 155.059 (Suspension or
Revocation of a Permit), governs a final administrative
hearing under this section.
SECTION 46. Amends Section 155.0595 (Hearings), Tax Code, to
require the treasurer to conduct all hearings
required by this chapter in accordance with Chapter
2001, Government Code, unless otherwise provided by
this chapter.
SECTION 47. Amends Section 155.101 (Record of Purchase or
Receipt), Tax Code, to add export warehouses to the
businesses that are required to keep records of all
tobacco products purchased or received.
SECTION 48. Amends Section 155.181 (Investigation and Audit
Costs), Tax Code, as follows:
Retitles the Section "Compliance Investigation and
Recovery of Costs."
Authorizes the treasurer to collect from a person who
has failed to comply with this chapter reasonable
expenses incurred in the compliance investigation as an
additional penalty. Authorizes the comptroller to use
funds as appropriated by the legislature.
SECTION 49. Amends Section 155.183 (Inspection), Subsection
(a), Tax Code, to authorize the treasurer to remain
on the premises as long as necessary to determine
the tax liability of a person dealing in tobacco
products, or to determine compliance with this
chapter.
SECTION 50. Amends Section 155.185 (Deficiency Determination),
Tax Code, as follows:
Retitles the Section "Deficiency Determination,
Penalties and Interest."
Allows the treasurer to determine penalties and interest
in the same manner as in determining a deficiency of
taxes.
SECTION 51. Amends Section 155.212 (Books and Records), Tax
Code, to provide that a person commits an offense
if the person knowingly makes, delivers to, and
files with the treasurer a false or incomplete
return or report.
SECTION 52. Amends Section 156.001 (Definitions), Tax Code, to
expand the definition of what is not a "hotel."
SECTION 53. Amends Section 159.101 (Tax Imposed; Rate of Tax),
Subsections (f), (g), (h), and (i), Tax Code, as
follows:
Deletes Subsection (f) regarding a tax collection in
jeopardy, and redesignates the remaining Subsections
(f)-(h).
SECTION 54. Amends Section 159.103 (Exemption), Tax Code, to
provide that the possession, purchase, acquisition,
importation, manufacture, or production of a
taxable substance is exempt from the tax imposed by
this chapter, if the activity is authorized by law.
SECTION 55. Amends the heading to Subchapter C, Chapter 159,
Tax Code, from "CRIMINAL PROVISIONS; SEIZURE AND
FORFEITURE," to "CRIMINAL PROVISIONS."
SECTION 56. Amends Section 159.203 (Previously Used
Certificates), Tax Code, to provide that an offense
under this section is a felony of the third degree.
Provides that venue of a prosecution under this
section is in Travis County.
SECTION 57. Amends Section 159.205 (Forfeiture), Tax Code, as
follows:
Retitles the Section, "Right to Collect Subordinate to
Other Laws."
(a) Deletes Subsection (a) regarding seized property
and redesignates the last paragraph of the remaining
text as Subsection (b).
SECTION 58. Amends Section 159.206 (Settlement or Compromise of
Tax), Tax Code, by deleting Subsection (b)
regarding an administrative hearing.
SECTION 59. Amends Section 201.201 (Tax Due), Tax Code, to
provide that the tax imposed by this chapter for
gas produced and saved is due at the office of the
comptroller in Austin on the 20th day of the second
month following the month of production, rather
than the last day of each calendar month for gas
produced and saved in the preceding month.
SECTION 60. Amends Section 361.138 (Fee on the Sale of
Batteries), Health and Safety Code, by amending
Subsection (a) and adding Subsections (l), (m), and
(n), as follows:
(a) Defines "engaged in business in this state," "lead-acid battery," "purchased for resale," "storage," and
"use."
(l) Imposes a fee on the storage, use, or other
consumption in this state, of a lead-acid battery at the
same rate as provided by Subsection (b), unless
purchased for resale.
(m) Provides that a person storing, using, or consuming
a lead-acid battery in this state is liable for the fee,
and is responsible for reporting and paying it to the
comptroller in the same manner as under Subsections
(c)(2) and (d).
(n) Provides that a person storing, using, or consuming
a lead-acid battery in this state is not liable for the
fee once the person has paid the fee and received a
receipt showing that the fee has been paid.
SECTION 61. Amends Section 361.472 (Waste Tire Recycling Fees),
Health and Safety Code, by adding Subsection (k) to
define "engaged in business in this state,"
"purchased for resale," "storage," and "use."
SECTION 62. Amends Section 361.472 (Waste Tire Recycling Fees),
Subsection (c), Health and Safety Code, to exclude
bicycle tires or solid industrial tires from the
fee.
SECTION 63. Amends Section 4A(e), Development Corporation Act
of 1979, (Article 5190.6, Revised Statutes), to
provide that the tax imposed by this section takes
effect as provided by Section 321.102(a), Tax Code.
Deletes the provision regarding concurrent
elections.
SECTION 64. Amends Sections 12(3) and (6), Article 8817
(Regulation of musical, skill, or pleasure coin-operated machines), Revised Statutes, to delete the
requirement that statements accompanying
applications for licensure be sworn.
SECTION 65. Amends Section 19(1), Article 8817, Revised
Statutes, by deleting references to import
licenses.
SECTION 66. Repeals Section 159.204 (Property Subject to
Seizure), Tax Code.
SECTION 67. Provides that the changes in law made by this Act
do not affect the collection or enforcement of
taxes imposed before the effective date, with the
exception of changes made to Section 201.201, Tax
Code.
Statement of legislative intent: The changes to Section
151.318(b)(2) and (q), Tax Code, other than the last two
sentences of Subsection (q), be considered as a
clarification of existing law, and not a substantive
change.
SECTION 68. Requires the comptroller to administer this Act
consistent with legislation (if enacted),
transferring the responsibilities of the treasurer
to the comptroller.
SECTION 69. Effective Date: October 1, 1995.
SECTION 70. Emergency Clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.S.B. 640 contains language that includes improvements to a
manufacturing or processing production unit in a petrochemical
refinery or chemical plant to the definition of "real property
repair and remodeling," for the purposes of the sales tax. S.B.
640 does not include this language.
C.S.S.B 640 clarifies the exemption for machinery and equipment
used in the timber industry by amending Section 151.311, and adding
Section 151.3161, Tax Code, whereas S.B. 640 includes this
clarification in Section 151.316.
C.S.S.B. 640 expands the definition of "machinery and equipment"
used in the processing, packing and marketing of agricultural
products to include required pollution control equipment. Also
codifies the qualification of an "original producer." A producer
qualifies if more than 95% of the products being processed belong
to that producer. S.B. 640 does not include this language.
C.S.S.B. 640 also provides a clarification of the exemption for
containers used in transporting poultry. S.B. 640 does not include
this language.
C.S.S.B. 640 expands the definition of what is not considered a
hotel, by specifying dormitories that are owned or leased and
operated by an institution of higher education. S.B. 640 only
specifies dormitories that are owned and operated by an institution
of higher education.
C.S.S.B 640 also includes a statement of legislative intent for
Sections 151.318(b)(2) and (q). S.B. 640 does not include a
statement of intent.
S.B. 640 defines "debt collection services" for purposes of the
sales, use and excise tax. C.S.S.B 640 does not contain this
provision.
SUMMARY OF COMMITTEE ACTION
Pursuant to an announcement on the House floor, the committee met
in a formal meeting on April 27, 1995. The chair laid out S.B.
640. The committee considered a complete substitute by
Representative Holzheauser. Without objection, C.S.H.B. 640 was
adopted. By a record vote of 7 ayes, 0 nays, 0 present not voting
and 4 absent, the committee voted to report S.B. 640 to the House
as substituted with the recommendation that it do pass.