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78R5541 CBH-F
By: Jackson S.B. No. 712
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from the sales and use tax for taxable
items used in the performance of a space flight contract.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.357 to read as follows:
Sec. 151.357. TAXABLE ITEMS USED IN PERFORMANCE OF SPACE
FLIGHT CONTRACT. (a) In this section:
(1) "Space flight" means a flight designed for
suborbital, orbital, or interplanetary travel capable of placing
humans at a minimum altitude of 50 miles above mean sea level. The
term does not include flight by an aircraft as defined by Section
151.328(c).
(2) "Space flight contract" means a contract with the
National Aeronautics and Space Administration for the use or
provision of taxable items related to the development, construction
or fabrication, testing, administrative support, research and
development, vehicle assembly, processing, remodeling, repair,
operation, or maintenance of space vehicles.
(3) "Space vehicles" means tangible personal property
that:
(A) has space flight capability, including a
space shuttle, orbital space facility, space propulsion system,
satellite, or space station of any kind;
(B) is placed on or used aboard property
described by Subdivision (A); or
(C) is an integral part of and is used in support
of a space flight, including tangible personal property used in
training, launch, ground support, landing, and recovery
activities.
(b) The sale, lease, rental, storage, use, or consumption of
a taxable item that is used or consumed by a person in the
performance of a space flight contract is exempt from the taxes
imposed by this chapter as provided by Subsection (c), and the
person who uses or consumes the item may claim a refund as provided
by that subsection, if the item is included as an allowable direct
or indirect item of cost under 48 C.F.R. Section 9904.418-30, 48
C.F.R. Section 52.216-7, 48 C.F.R. Subpart 31.2, or similar federal
regulations, regardless of whether the contract is a
cost-reimbursement contract.
(c) A person described by Subsection (b) may apply to the
comptroller not later than March 31 for a refund of taxes paid
during the preceding calendar year on taxable items exempt under
Subsection (b). The comptroller shall determine the total amount of
valid claims for refunds of taxes paid during the preceding
calendar year and, not later than May 30, send to each applicant who
submits a valid refund claim under this section:
(1) the full amount of the refund if the total amount
of valid claims for refunds of taxes paid during the preceding
calendar year does not exceed $800,000; or
(2) a portion of that refund determined in accordance
with Subsection (d) if the total amount of valid claims for refunds
of taxes paid during the preceding calendar year exceeds $800,000.
(d) If the total amount of valid claims for refunds of taxes
paid during the preceding year exceeds $800,000, the comptroller
shall determine the amount of a person's refund by multiplying the
full amount of that refund by a fraction:
(1) the numerator of which is $800,000; and
(2) the denominator of which is the total amount of
valid claims for refunds of taxes paid during the preceding year.
(e) A valid refund claim draws interest at the rate
prescribed by Section 111.060 beginning on the later of March 31 of
the year in which the claim is filed or the 61st day after the date
the claim is filed.
(f) This section does not apply to a part of direct or
indirect costs allocated to a contract that is not a space flight
contract.
SECTION 2. (a) This Act takes effect September 1, 2003.
(b) The change in law made by this Act does not affect taxes
imposed before the effective date of this Act, and the former law is
continued in effect for purposes of the liability for and
collection of those taxes.