By Counts                                              H.B. No. 836
         77R2520 SMJ-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the application of the sales and use tax to certain
 1-3     items used in construction by nonprofit water supply and sewer
 1-4     service corporations.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended by
 1-7     adding Section 151.3105 to read as follows:
 1-8           Sec. 151.3105.  ITEMS USED IN CONSTRUCTION BY CERTAIN
 1-9     NONPROFIT WATER SUPPLY CORPORATIONS. (a)  This section applies only
1-10     to a  nonprofit water supply or sewer service corporation that is
1-11     organized under Chapter 67, Water Code, and exempted from the
1-12     payment of taxes under Section 11.30.
1-13           (b)  A taxable item is exempted from the taxes imposed by
1-14     this chapter if sold, leased, or rented to, or stored, used, or
1-15     consumed by, a nonprofit water supply or sewer service corporation
1-16     in connection with construction that is directly related to the
1-17     corporation's purpose under Section 67.002, Water Code.
1-18           SECTION 2. (a)  This Act takes effect July 1, 2001, if it
1-19     receives a vote of two-thirds of all members elected to each house,
1-20     as provided by Section 39, Article III, Texas Constitution.  If
1-21     this Act does not receive the vote necessary for effect on that
1-22     date, this Act takes effect October 1, 2001.
1-23           (b)  The change in law made by this Act does not affect taxes
1-24     imposed before the effective date of this Act, and the law in
 2-1     effect before the effective date of this Act is continued in effect
 2-2     for the purposes of the liability for and collection of those
 2-3     taxes.