HBA-SEP H.B. 836 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 836 By: Counts Ways & Means 3/15/2001 Introduced BACKGROUND AND PURPOSE The 75th Legislature created regional water planning groups that were charged with developing plans to supply water to their region for the next 50 years. The first set of plans completed by these groups requested funding for utilities to replace or repair aging water supply infrastructure. To address the inadequacy of present infrastructure, cities, municipal utility districts, and various water entities will need to begin construction. These entities have been provided with a sales tax exemption on sales and services that relate to the infrastructure construction necessary to accomplish this task. Nonprofit water supply corporations which also need to begin construction are often located in rural, low income areas where citizens may not be able to afford the necessary infrastructure upgrades. House Bill 836 exempts a taxable item from limited sales, excise, and use taxes if sold, leased, rented, stored, used, or consumed by a nonprofit water supply or sewer service corporation in connection with construction that is directly related to the corporation's purpose. 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 836 amends the Tax Code to exempt a taxable item from limited sales, excise, and use taxes if sold, leased, rented, stored, used, or consumed by a nonprofit water supply or sewer service corporation in connection with construction that is directly related to the corporation's purpose. EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.