HBA-SEB, NLM, MAJ C.S.H.B. 598 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 598
By: Gallego
Ways & Means
4/13/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, the cost of labor is exempt from the application of sales taxes
if the labor is used to restore personal and tangible property damaged by a
disaster in a declared disaster area. However, the building materials used
to restore that property are subject to sales taxes.  C.S.H.B. 598 exempts
from taxes imposed under Chapter 151 (Limited Sales, Excise, and Use Tax),
Tax Code, building materials used to restore a residence damaged by
disaster in a declared area. 

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
151.351, as follows: 

Sec. 151.351.  BUILDING MATERIAL USED TO RESTORE CERTAIN PROPERTY. Exempts
from the taxes imposed by this chapter (Limited Sales, Excise, and Use Tax)
the building material used to restore a residence homestead and
incorporated into the homestead if the amount of the charge for the
building material is separately itemized and the restoration is performed
on a residence homestead damaged within a disaster area by the condition
that caused the area to be declared a disaster area.  Provides that the
exemption applies if the restoration is performed within 18 months after
the date the area is declared a disaster area. Defines "building material,"
"disaster area," "residence homestead," and "restore" for this section. 

SECTION 2.  Makes application of this Act effective on the first day of the
first calendar quarter beginning on or after the earliest date that it may
take effect under Section 39, Article III, Texas Constitution. Makes
application of this Act prospective. 

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original in SECTION 1 by modifying proposed
Section 151.351(a), Tax Code, to specify that building material used to
restore a residence homestead in a disaster area is exempt from limited
sales, excise, and use taxes if the restoration is performed within 18
months after the date the area is declared a disaster area.  The original
made no reference to a time frame.