By:  Shapiro                                          S.B. No. 1415
         99S0822/1                           
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the sales tax on real property service.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Section 151.0048, Tax Code, is amended by adding
 1-4     Subsections (d) and (e) to read as follows:
 1-5           (d)  "Real property service" does not include a service
 1-6     listed under Subsection (a) if the service is performed by an
 1-7     employee permanently assigned to one rental property by a property
 1-8     management company and the property management company is
 1-9     reimbursed by the property owner on a dollar-for-dollar basis.  An
1-10     employee permanently assigned to one rental property is considered
1-11     an employee of that property if the employee remains assigned to
1-12     the property while employed by successive owners or management
1-13     companies.  An individual is treated as an employee of the property
1-14     management company if:  (i)  the employee is employed by either the
1-15     property management company or an affiliate of the property
1-16     management company; (ii)  the property management company is
1-17     contractually obligated to the property owner to exercise control
1-18     over the employee; and (iii)  the property management company
1-19     manages and directs the employee's day-to-day activities.  The
1-20     property management company must collect tax on a service listed
1-21     under Subsection (a) if the service is performed by the same
1-22     employee for other properties.  The management company owes tax on
1-23     the purchase price of all taxable items purchased and provided to
1-24     employees providing services on managed rental property.
 2-1           (e)  In this section, "property management company" means a
 2-2     person:
 2-3                 (1)  who, for consideration, operates and manages all
 2-4     the activities at a property held by the owner for purposes of
 2-5     rental, including an office building, mall, or other retail or
 2-6     office complex, an apartment complex, a duplex, or a home; and
 2-7                 (2)  whose responsibilities include securing tenants,
 2-8     hiring and supervising employees for operation or upkeep of the
 2-9     property, receiving and applying revenues, and incurring and paying
2-10     expenses derived from the operation of the property as directed by
2-11     the owner.
2-12           SECTION 2.  (a)  This Act takes effect on the first day of
2-13     the first calendar quarter beginning on or after the date that it
2-14     may take effect under Section 39, Article III, Texas Constitution.
2-15           (b)  The change in law made by this Act is intended to
2-16     clarify existing law in effect before the effective date of this
2-17     Act and is not intended to make a substantive change in the law.
2-18           SECTION 3.  The importance of this legislation and the
2-19     crowded condition of the calendars in both houses create an
2-20     emergency and an imperative public necessity that the
2-21     constitutional rule requiring bills to be read on three several
2-22     days in each house be suspended, and this rule is hereby suspended,
2-23     and that this Act take effect and be in force according to its
2-24     terms, and it is so enacted.