HBA-AMW H.B. 1170 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1170 By: Eiland Ways & Means 3/30/2001 Introduced BACKGROUND AND PURPOSE Headquartered in Houston, the United Space Alliance (USA) is one of the world's leading space operations companies. As the prime contractor for NASA's Space Shuttle Program, USA is responsible for the day-to-day operation and management of the United States Space Shuttle fleet and the flight design, planning, and preparation services for NASA. Although current law exempts NASA from limited sales, excise, and use taxes because it is a governmental agency, goods and services that are indirect costs purchased for use by USA and its shuttle and space station subcontractors in the performance of space flight contracts are not exempt from such taxes. House Bill 1170 exempts from limited sales, excise, and use taxes all goods and services that are indirect costs purchased for use in the performance of space flight contracts. 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. ANALYSIS House Bill 1170 amends the Tax Code to provide that a taxable item sold, leased, rented to, or stored, used, or consumed by a person in the performance of a space flight contract is exempt from limited sales, excise, and use taxes if the item is included as an allowable direct or indirect item of cost under regulations relating to the federal acquisition regulations system or similar federal regulations, regardless of whether the contract is a cost-reimbursement contract. The bill specifies that this exemption does not apply to a part of direct or indirect costs allocated to a contract that is not a space flight contract. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.