BILL ANALYSIS



H.B. 596
By: Duncan
March 15, 1995
Committee Report (Unamended)


BACKGROUND

Chapter 151, Tax Code is the Limited Sales, Excise, and Use Tax
Act.  Subchapter H, Chapter 151, Tax Code, provides for exemptions
on limited sales, excise, and use taxes.  Currently, student
organizations at public institutions of higher education can only
qualify for a tax exempt status by going through a lengthy process. 
Because the administrative offices in these organizations turn over
frequently, compliance with the complex rules and requirements
necessary to obtain and maintain the exemption is difficult.  

PURPOSE

This bill proposes to exempt a taxable item sold by a non-profit
student organization, that is affiliated with a public or private
institution of higher education and that has no more than one
single-day sale per month, from the state sales tax and from the
state use tax until the item is sold or transferred by the
purchaser

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant 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 151.321 (University and College Student
           Organizations).

     (a)   Exempts a taxable item sold by a student organization
           from the state sales tax if the organization holds no
           more than one single-day sale per month.

     (b)   Allows the exemption to be applied only to qualified,
           not-for-profit student organizations affiliated with a
           recognized institution of higher education who files a
           certification with the Comptroller as required under
           subsection (c).

     (c)   Requires a student organization to file a biennial
           certification with the Comptroller to verify its
           qualification for the exemption.

     (d)   Exempts a taxable item sold by a student organization
           under this section from the state use tax until the item
           is resold or transferred by the purchaser.

SECTION 2. Effective date of the first quarter that follows either
ninety days after        adjournment of the session or the first
day of the calendar quarter that follows          immediate effect
depending on whether the bill obtains two-thirds vote of all          members of each house.

SECTION 3. Emergency Clause


SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance to the rules and a public
hearing was held on March 14, 1995.  Representatives Duncan and
Naishtat explained the bill.  By a record vote of 7 ayes, 0 nays,
0 present not voting and 4 absent, the committee voted to report
H.B. 596 to the House without amendment with the recommendation
that it be sent to the Local and Consent Calendar and that it do
pass.