By Hilbert H.B. No. 2413 76R5948 CBH-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to exempting certain machinery and equipment used for 1-3 certain telecommunications services from the sales and use tax. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended 1-6 by adding Section 151.3235 to read as follows: 1-7 Sec. 151.3235. CERTAIN TELECOMMUNICATIONS MACHINERY AND 1-8 EQUIPMENT. (a) In this section: 1-9 (1) "Internet" means, collectively, the computer and 1-10 telecommunications facilities, including equipment and operating 1-11 software, that comprise the interconnected worldwide network or 1-12 networks that employ the Transmission Control Protocol/Internet 1-13 Protocol, or any predecessor or successor protocols to that 1-14 protocol. 1-15 (2) "Internet service" means the offering or provision 1-16 of use of the Internet. 1-17 (3) "Telecommunications provider" means a person who 1-18 provides telecommunications services for a fee directly to the 1-19 public, or to a class of users in a manner that effectively 1-20 constitutes making those services directly available to the public, 1-21 regardless of the facilities used. The term does not include a 1-22 person selling or providing telecommunications services, such as a 1-23 hotel, motel, or owner or lessee of an office, residential 1-24 building, or development, that contracts and pays for 2-1 telecommunications services for resale to guests or tenants. 2-2 (b) Machinery, equipment, operating software, and 2-3 replacement parts and accessories used to provide 2-4 telecommunications service or Internet service are exempt from the 2-5 taxes imposed by this chapter if the machinery, equipment, 2-6 operating software, replacement parts, or accessories are sold, 2-7 leased, or rented to, or stored, used, or consumed by: 2-8 (1) a telecommunications provider in the conduct of a 2-9 telecommunications service or Internet service business; or 2-10 (2) a subsidiary, affiliate, partner, or co-venturer 2-11 of the telecommunications provider who uses the equipment to 2-12 upgrade systems to allow for the provision of the 2-13 telecommunications service or Internet service. 2-14 (c) The exemption provided by this section does not include 2-15 office furniture and related office equipment. 2-16 SECTION 2. (a) This Act takes effect on the first day of 2-17 the first calendar quarter beginning on or after the earliest date 2-18 that it may take effect under Section 39, Article III, Texas 2-19 Constitution. 2-20 (b) The change in law made by this Act does not affect taxes 2-21 imposed before the effective date of this Act, and the law in 2-22 effect before that date is continued in effect for purposes of the 2-23 liability for and collection of those taxes. 2-24 SECTION 3. The importance of this legislation and the 2-25 crowded condition of the calendars in both houses create an 2-26 emergency and an imperative public necessity that the 2-27 constitutional rule requiring bills to be read on three several 3-1 days in each house be suspended, and this rule is hereby suspended, 3-2 and that this Act take effect and be in force according to its 3-3 terms, and it is so enacted.