By Eiland H.B. No. 1170 77R3618 CBH-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to an exemption from the sales and use tax for taxable 1-3 items used in the performance of a space flight contract. 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 151.355 to read as follows: 1-7 Sec. 151.355. TAXABLE ITEMS USED IN PERFORMANCE OF SPACE 1-8 FLIGHT CONTRACT. (a) In this section: 1-9 (1) "Space flight contract" means a contract with the 1-10 United States Department of Defense, the National Aeronautics and 1-11 Space Administration, or another nongovernmental party for the use 1-12 or provision of taxable items related to the development, 1-13 construction or fabrication, testing, research and development, 1-14 vehicle assembly, processing, remodeling, repair, operation, or 1-15 maintenance of space vehicles and related facilities. 1-16 (2) "Space vehicles and related facilities" means 1-17 tangible personal property that: 1-18 (A) has space flight capability, including a 1-19 space shuttle, orbital space facility, space propulsion system, 1-20 satellite, or space station of any kind; 1-21 (B) is placed on or used aboard property 1-22 described by Subdivision (A); or 1-23 (C) is an integral part of and is used in 1-24 support of a space flight, including tangible personal property 2-1 used in training, launch, ground support, landing, and recovery 2-2 activities. 2-3 (b) A taxable item sold, leased, rented to, or stored, used, 2-4 or consumed by a person in the performance of a space flight 2-5 contract is exempt from the taxes imposed by this chapter if the 2-6 item is included as an allowable direct or indirect item of cost 2-7 under 48 C.F.R. Section 9904.418-30, 48 C.F.R. Section 52.216-7, 48 2-8 C.F.R. Subpart 31.2, or similar federal regulations, regardless of 2-9 whether the contract is a cost-reimbursement contract. 2-10 (c) This section does not apply to a part of direct or 2-11 indirect costs allocated to a contract that is not a space flight 2-12 contract. 2-13 SECTION 2. (a) This Act takes effect July 1, 2001, if it 2-14 receives a vote of two-thirds of all the members elected to each 2-15 house, as provided by Section 39, Article III, Texas Constitution. 2-16 If this Act does not receive the vote necessary for effect on that 2-17 date, this Act takes effect October 1, 2001. 2-18 (b) The change in law made by this Act does not affect taxes 2-19 imposed before the effective date of this Act, and the former law 2-20 is continued in effect for purposes of the liability for and 2-21 collection of those taxes.