1-1 By: Brown S.B. No. 1114 1-2 (In the Senate - Filed March 6, 2001; March 7, 2001, read 1-3 first time and referred to Committee on Finance; April 24, 2001, 1-4 reported adversely, with favorable Committee Substitute by the 1-5 following vote: Yeas 12, Nays 0; April 24, 2001, sent to printer.) 1-6 COMMITTEE SUBSTITUTE FOR S.B. No. 1114 By: Jackson 1-7 A BILL TO BE ENTITLED 1-8 AN ACT 1-9 relating to an exemption from the sales and use tax for taxable 1-10 items used in the performance of a space flight contract. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended 1-13 by adding Section 151.355 to read as follows: 1-14 Sec. 151.355. TAXABLE ITEMS USED IN PERFORMANCE OF SPACE 1-15 FLIGHT CONTRACT. (a) In this section: 1-16 (1) "Space flight" means a flight designed for 1-17 suborbital, orbital, or interplanetary travel capable of placing 1-18 humans at a minimum altitude of 50 miles above mean sea level. The 1-19 term does not include flight by an aircraft as defined by Section 1-20 151.328(c). 1-21 (2) "Space flight contract" means a contract with the 1-22 National Aeronautics and Space Administration for the use or 1-23 provision of taxable items related to the development, construction 1-24 or fabrication, testing, administrative support, research and 1-25 development, vehicle assembly, processing, remodeling, repair, 1-26 operation, or maintenance of space vehicles. 1-27 (3) "Space vehicles" means tangible personal property 1-28 that: 1-29 (A) has space flight capability, including a 1-30 space shuttle, orbital space facility, space propulsion system, 1-31 satellite, or space station of any kind; 1-32 (B) is placed on or used aboard property 1-33 described by Paragraph (A); or 1-34 (C) is an integral part of and is used in 1-35 support of a space flight, including tangible personal property 1-36 used in training, launch, ground support, landing, and recovery 1-37 activities. 1-38 (b) The sale, lease, rental, storage, use, or consumption of 1-39 a taxable item that is used or consumed by a person in the 1-40 performance of a space flight contract is exempt from the taxes 1-41 imposed by this chapter if the item is included as an allowable 1-42 direct or indirect item of cost under 48 C.F.R. Section 1-43 9904.418-30, 48 C.F.R. Section 52.216-7, 48 C.F.R. Subpart 31.2, or 1-44 similar federal regulations, regardless of whether the contract is 1-45 a cost-reimbursement contract. 1-46 (c) This section does not apply to a part of direct or 1-47 indirect costs allocated to a contract that is not a space flight 1-48 contract. 1-49 SECTION 2. (a) This Act takes effect September 1, 2003, if 1-50 it receives a majority vote of the members elected to each house 1-51 during the 78th Legislature, Regular Session, 2003. 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 * * * * *