HBA-RBT H.B. 2426 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2426
By: King, Tracy
Ways & Means
4/6/1999
Introduced



BACKGROUND AND PURPOSE 

In 1991, a sales tax exemption on the purchase of machinery and equipment
used for construction work done for public entities and recognized
non-profit organizations was removed through the omnibus tax legislation.
This exemption had been in place since the late 1960s.  H.B. 2426
reinstates the previous exemption by removing a tax on the purchase of
machinery and equipment used solely for construction work done for public
entities such as the state, cities, and counties and for recognized
non-profit organizations. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter H, Chapter 151, Section 151.311, Tax Code, to
provide that the purchase of tangible personal property, including, rather
than other than, machinery or equipment and its accessories and repair and
replacement parts, for use in the performance of a contract for an
improvement to realty for an organization exempted under Section 151.309
(Governmental Entities) or 151.310 (Religious, Educational, and Public
Service Organizations), Tax Code, is exempt if the tangible personal
property is necessary and essential for the performance of the contract,
completely consumed at the job site, or equipment which is purchased or
rented for use on the project. 

SECTION 2.  Emergency clause.
  Effective date: upon passage.