HBA-RBT H.B. 62 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 62
By: Greenberg
Ways & Means
2/16/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the federal government and 18 states have some sort of research
and development tax credit.  Texas does not.  H.B. 62 provides a sales tax
exemption on the purchase of certain equipment used in research and
development.  

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, Tax Code, by adding Section
151.3181, as follows: 

Sec. 151.3181.  EQUIPMENT USED IN RESEARCH OR DEVELOPMENT.  Exempts from
taxes imposed by this chapter machinery, equipment, or replacement parts
that are used directly in the research or development of inventions,
products, processes, or technology by a person primarily engaged in the
manufacturing, processing or fabrication of tangible personal property for
sale to consumers or the performance of scientific or technical services
for a person described above.  Provides that the exemption does not include
office equipment or supplies, or equipment or supplies used in sales or
transportation.  Establishes the meaning of "manufacturing" to be the
meaning assigned by Section 151.318 (Property Used in Manufacturing).  The
meaning assigned by Section 151.318 includes each operation beginning with
the first stage in the production of tangible personal property and ending
with the completion of tangible personal property having the physical
properties (including packaging, if any) that it has when transferred by
the manufacturer to another. 

SECTION 2.  Effective date:  October 1, 1999.  
            Makes application of this Act prospective.  

SECTION 3.  Emergency clause.