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.