HBA-RBT H.B. 62 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 62 By: Greenberg Ways & Means 2/16/1999 Introduced BACKGROUND AND PURPOSE Currently, the federal government and 18 states have some sort of research and development tax credit. Texas does not. H.B. 62 provides a sales tax exemption on the purchase of certain equipment used in research and development. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter H, Chapter 151, Tax Code, by adding Section 151.3181, as follows: Sec. 151.3181. EQUIPMENT USED IN RESEARCH OR DEVELOPMENT. Exempts from taxes imposed by this chapter machinery, equipment, or replacement parts that are used directly in the research or development of inventions, products, processes, or technology by a person primarily engaged in the manufacturing, processing or fabrication of tangible personal property for sale to consumers or the performance of scientific or technical services for a person described above. Provides that the exemption does not include office equipment or supplies, or equipment or supplies used in sales or transportation. Establishes the meaning of "manufacturing" to be the meaning assigned by Section 151.318 (Property Used in Manufacturing). The meaning assigned by Section 151.318 includes each operation beginning with the first stage in the production of tangible personal property and ending with the completion of tangible personal property having the physical properties (including packaging, if any) that it has when transferred by the manufacturer to another. SECTION 2. Effective date: October 1, 1999. Makes application of this Act prospective. SECTION 3. Emergency clause.