By: Brown S.B. No. 1114
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" means a flight designed for
1-10 suborbital, orbital, or interplanetary travel capable of placing
1-11 humans at a minimum altitude of 50 miles above mean sea level. The
1-12 term does not include flight by an aircraft as defined by Section
1-13 151.328(c).
1-14 (2) "Space flight contract" means a contract with the
1-15 National Aeronautics and Space Administration for the use or
1-16 provision of taxable items related to the development, construction
1-17 or fabrication, testing, administrative support, research and
1-18 development, vehicle assembly, processing, remodeling, repair,
1-19 operation, or maintenance of space vehicles.
1-20 (3) "Space vehicles" means tangible personal property
1-21 that:
1-22 (A) has space flight capability, including a
1-23 space shuttle, orbital space facility, space propulsion system,
1-24 satellite, or space station of any kind;
1-25 (B) is placed on or used aboard property
2-1 described by Subdivision (A); or
2-2 (C) is an integral part of and is used in
2-3 support of a space flight, including tangible personal property
2-4 used in training, launch, ground support, landing, and recovery
2-5 activities.
2-6 (b) The sale, lease, rental, storage, use, or consumption of
2-7 a taxable item that is used or consumed by a person in the
2-8 performance of a space flight contract is exempt from the taxes
2-9 imposed by this chapter as provided by Subsection (c), and the
2-10 person who uses or consumes the item may claim a refund as provided
2-11 by that subsection, if the item is included as an allowable direct
2-12 or indirect item of cost under 48 C.F.R. Section 9904.418-30, 48
2-13 C.F.R. Section 52.216-7, 48 C.F.R. Subpart 31.2, or similar federal
2-14 regulations, regardless of whether the contract is a
2-15 cost-reimbursement contract.
2-16 (c) A person described by Subsection (b) may apply to the
2-17 comptroller not later than March 31 for a refund of taxes paid
2-18 during the preceding calendar year on taxable items exempt under
2-19 Subsection (b). The comptroller shall determine the total amount
2-20 of valid claims for refunds of taxes paid during the preceding
2-21 calendar year and, not later than May 30, send to each applicant
2-22 who submits a valid refund claim under this section:
2-23 (1) the full amount of the refund if the total amount
2-24 of valid claims for refunds of taxes paid during the preceding
2-25 calendar year does not exceed $800,000; or
2-26 (2) a portion of that refund determined in accordance
3-1 with Subsection (d) if the total amount of valid claims for refunds
3-2 of taxes paid during the preceding calendar year exceeds $800,000.
3-3 (d) If the total amount of valid claims for refunds of taxes
3-4 paid during the preceding year exceeds $800,000, the comptroller
3-5 shall determine the amount of a person's refund by multiplying the
3-6 full amount of that refund by a fraction:
3-7 (1) the numerator of which is $800,000; and
3-8 (2) the denominator of which is the total amount of
3-9 valid claims for refunds of taxes paid during the preceding year.
3-10 (e) A valid refund claim draws interest at the rate
3-11 prescribed by Section 111.060 beginning on the later of March 31 of
3-12 the year in which the claim is filed or the 61st day after the date
3-13 the claim is filed.
3-14 (f) This section does not apply to a part of direct or
3-15 indirect costs allocated to a contract that is not a space flight
3-16 contract.
3-17 SECTION 2. (a) This Act takes effect September 1, 2003, if
3-18 it receives a majority vote of the members elected to each house
3-19 during the 78th Legislature, Regular Session, 2003.
3-20 (b) The change in law made by this Act does not affect taxes
3-21 imposed before the effective date of this Act, and the former law
3-22 is continued in effect for purposes of the liability for and
3-23 collection of those taxes.