BILL ANALYSIS C.S.S.B. 833 By: Madla Finance 04-28-95 Committee Report (Substituted) BACKGROUND In 1975, the Texas Legislature exempted from general sales tax the "training or instructing [of] pilots in a licensed course of instruction" that included any Federal Aviation Administration recognizable flight training. However, in 1977, the comptroller promulgated an "interpreting" regulation that, when applied, barred most legitimate pilot trainers in Texas from claiming that exemption. Moreover, many flight trainers did not receive word of this regulatory change until the late 1980s and early 1990s, and then only during comptroller audits. PURPOSE As proposed, C.S.S.B. 833 rephrases the controlling statutory law to make it unquestionably clear that all Federal Aviation Administration-recognizable flight training will have the sale tax exemption it was granted previously. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 151.328(a), (b), (d), and (e), Tax Code, as follows: (a) Provides that aircraft are exempted from the taxes imposed by Chapter 151 if sold to a person who has a sales tax permit issued under Chapter 151 and uses the aircraft for the purpose of training or instructing pilots in flight instruction recognized by the Federal Aviation Administration (FAA) and that is designed to lead to a pilot certificate or rating issued by the FAA. (b) Provides that repair, remodeling, and maintenance services to aircraft, including an engine or other component part of aircraft, operated by a person described by Subsection (a)(1) or (a)(2) are exempted from the taxes imposed by Chapter 151. (d) Adds supplies to the items that are exempt. Makes conforming changes. (e) Provides that tangible personal property that is permanently affixed or attached as a component part of an aircraft owned or operated by a person described by Subsection (a)(1) or (a)(2), or that is necessary for the normal operations of the aircraft and is pumped, poured, or otherwise placed in the aircraft, is exempted from the taxes imposed by Chapter 151. SECTION 2. (a) Effective date: first day of the first calendar quarter beginning on or after the date that it may take effect under Section 39, Article III, Texas Constitution. (b) Makes application of this Act prospective. SECTION 3. Emergency clause.