SRC-TBR S.B. 529 77(R)BILL ANALYSIS


Senate Research CenterS.B. 529
77R13069 DAK-DBy: Bernsen
Finance
4/23/2001
Committee Report (Amended)


DIGEST AND PURPOSE 

Currently, contractors that rent tangible personal property, including
machinery or equipment, for use in completion of a contract for an
improvement to realty for a navigation district or public port authority,
are required to pay sales tax on the rental of such tangible property and
are passing that tax through to navigation districts and port authorities.
As a result, the navigation districts and port authorities are paying sales
tax on the tangible personal property, increasing their financial burden.
If the navigation district or the port authority rented the tangible
personal property directly, no tax would be required to be paid.  S.B. 529
provides navigation district and public port authorities the full benefit
of such tax exemption. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 151.311, Tax Code, by amending Subsections (c)
and (d) and adding Subsection (e), as follows: 

(c)  Provides that the rental of tangible personal property, including
machinery and equipment and its accessories and repair and replacement
parts, for use in the performance of a contract for an improvement of
realty of a navigation district or port authority created under Section 52,
Article III, or Section 59, Article XVI, Texas Constitution, is exempt if
the property meets certain requirements. 

 (d)  Makes a nonsubstantive change by deleting the words "of this code."

(e)  Provides that for purposes of Subsection (b), rather than this
section, tangible personal property is completely consumed if after being
used once for its intended purpose it is used up or destroyed.  Makes a
conforming change. 

SECTION 2.  Provides that Section 151.311, Tax Code, as amended by this
Act, expires August 31, 2003. 

SECTION 3.  Effective date:upon passage or October 1, 2001.
    Makes application of this Act prospective.

SUMMARY OF COMMITTEE CHANGES

Amends As Filed S.B. 529 by adding SECTION 2 and renumbering proposed
SECTION 2 to SECTION 3.