1-1     By:  Bernsen                                           S.B. No. 529
 1-2           (In the Senate - Filed February 2, 2001; February 6, 2001,
 1-3     read first time and referred to Committee on Finance;
 1-4     April 24, 2001, reported favorably, as amended, by the following
 1-5     vote:  Yeas 12, Nays 0; April 24, 2001, sent to printer.)
 1-6     COMMITTEE AMENDMENT NO. 1                                By:  Ogden
 1-7           Amend S.B. No. 529 by inserting an appropriately numbered
 1-8     SECTION of the bill to read as follows and renumbering subsequent
 1-9     SECTION appropriately:
1-10           SECTION 2.  Subsection (c), Section 151.311, Tax Code, as
1-11     added by this Act, expires August 31, 2003.
1-12                            A BILL TO BE ENTITLED
1-13                                   AN ACT
1-14     relating to an exemption from the sales and use tax for tangible
1-15     personal property rented in connection with the improvement of
1-16     realty of a navigation district or port authority.
1-17           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-18           SECTION 1.  Section 151.311, Tax Code, is amended by amending
1-19     Subsections (c) and (d) and adding Subsection (e) to read as
1-20     follows:
1-21           (c)  The rental of tangible personal property, including
1-22     machinery and equipment and its accessories and repair and
1-23     replacement parts,  for use in the performance of a contract for an
1-24     improvement of realty of a navigation district or port authority
1-25     created under Section 52, Article III, or Section 59, Article XVI,
1-26     Texas Constitution, is exempt if the property is:
1-27                 (1)  necessary and essential to perform the contract;
1-28                 (2)  rented for the sole purpose of being used to
1-29     perform the contract; and
1-30                 (3)  used only at the job site.
1-31           (d)  The purchase of a taxable service for use in the
1-32     performance of a contract for an improvement to realty that is
1-33     performed for an organization exempted under Section 151.309 or
1-34     151.310 [of this code] is exempt if the service is performed at the
1-35     job site and if:
1-36                 (1)  the contract expressly requires the specific
1-37     service to be provided or purchased by the person performing the
1-38     contract; or
1-39                 (2)  the service is integral to the performance of the
1-40     contract.
1-41           (e) [(d)]  For purposes of Subsection (b) [this section],
1-42     tangible personal property is completely consumed if after being
1-43     used once for its intended purpose it is used up or destroyed.
1-44     Tangible personal property that is rented or leased for use in the
1-45     performance of the contract cannot be completely consumed for
1-46     purposes of Subsection (b) [this section].
1-47           SECTION 2.  (a)  This Act takes effect July 1, 2001, if it
1-48     receives a vote of two-thirds of all the members elected to each
1-49     house, as provided by Section 39, Article III, Texas Constitution.
1-50     If this Act does not receive the vote necessary for effect on that
1-51     date, this Act takes effect October 1, 2001.
1-52           (b)  The change in law made by this Act does not affect taxes
1-53     imposed before the effective date of this Act, and the former law
1-54     is continued in effect for purposes of the liability for and
1-55     collection of those taxes.
1-56                                  * * * * *