BILL ANALYSIS



S.B. 737
By: Henderson (Wolens)
April 20, 1995
Committee Report (Unamended)


BACKGROUND

In 1987 legislation was introduced that would have placed legal
services under the state sales and use tax.  Instead, an
occupational fee is now charged to all practicing attorneys in the
state. In 1988, the Comptroller put court reporting work products
under the sales tax, which brought into question other legal
services that had not historically been subject to taxation.

PURPOSE

This bill exempts from the sales and use tax, court reporting
services relating to the preparation of documents or other records
for the court, or for a person participating in a suit or
administrative hearing, if the documents are sold to a person
participating in the suit.

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 (Limited Sales, Use and
           Excise Tax), Tax Code, by adding Section 151.353 COURT
           REPORTING SERVICES.

           (a) Exempts court reporting services in preparing
           documents or records in civil or criminal suits only if
           prepared for the court in which the suit or
           administrative proceeding is brought; or, for a person
           participating in a suit or proceeding, and sold to a
           person in the suit.

           (b) The exemption includes services in the preparation
           of deposition or discovery documents, transcripts of
           testimony, and statements of facts.

           (c) The exemption applies to documents or records
           whether recorded on audio, video, or computer readable
           format and the courtroom presentation of the same.

SECTION 2. (a) Effective Date:  First day of the first calendar
           quarter after the date it may take effect pursuant to
           the Texas Constitution.  (b) The change in law by this
           Act does not apply to taxes imposed before the effective
           date.

SECTION 3. Emergency Clause.

SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on April 18, 1995.  Representative Wolens
explained the bill.  By a record vote of 6 ayes, 0 nays, 0 present
not voting and 5 absent, the committee voted to report S.B. 737 to
the House without amendment with the recommendation that it be sent
to the Local & Consent Calendar, and that it do pass.

     Testimony received in favor of the bill:
           Dean Cobb, representing the Texas Court Reporters Assn.