By Bernsen S.B. No. 529
77R3234 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to an exemption from the sales and use tax for tangible
1-3 personal property rented in connection with the improvement of
1-4 realty of a navigation district or port authority.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 151.311, Tax Code, is amended by amending
1-7 Subsections (c) and (d) and adding Subsection (e) to read as
1-8 follows:
1-9 (c) The rental of tangible personal property, including
1-10 machinery and equipment and its accessories and repair and
1-11 replacement parts, for use in the performance of a contract for an
1-12 improvement of realty of a navigation district or port authority
1-13 created under Section 52, Article III, or Section 59, Article XVI,
1-14 Texas Constitution, is exempt if the property is:
1-15 (1) necessary and essential to perform the contract;
1-16 (2) rented for the sole purpose of being used to
1-17 perform the contract; and
1-18 (3) used only at the job site.
1-19 (d) The purchase of a taxable service for use in the
1-20 performance of a contract for an improvement to realty that is
1-21 performed for an organization exempted under Section 151.309 or
1-22 151.310 [of this code] is exempt if the service is performed at the
1-23 job site and if:
1-24 (1) the contract expressly requires the specific
2-1 service to be provided or purchased by the person performing the
2-2 contract; or
2-3 (2) the service is integral to the performance of the
2-4 contract.
2-5 (e) [(d)] For purposes of Subsection (b) [this section],
2-6 tangible personal property is completely consumed if after being
2-7 used once for its intended purpose it is used up or destroyed.
2-8 Tangible personal property that is rented or leased for use in the
2-9 performance of the contract cannot be completely consumed for
2-10 purposes of Subsection (b) [this section].
2-11 SECTION 2. (a) This Act takes effect July 1, 2001, if it
2-12 receives a vote of two-thirds of all the members elected to each
2-13 house, as provided by Section 39, Article III, Texas Constitution.
2-14 If this Act does not receive the vote necessary for effect on that
2-15 date, this Act takes effect October 1, 2001.
2-16 (b) The change in law made by this Act does not affect taxes
2-17 imposed before the effective date of this Act, and the former law
2-18 is continued in effect for purposes of the liability for and
2-19 collection of those taxes.