BILL ANALYSIS


                                                         S.B. 737
                                                    By: Henderson
                                                    Jurisprudence
                                                          3-16-95
                                       Committee Report (Amended)
BACKGROUND

In 1987, legislation was introduced that would have placed legal
services under the state sales and use tax.  That effort was
aborted in favor of an across-the-board occupational fee on all
practicing attorneys.  However, in 1988 the Comptroller of Public
Accounts promulgated rules that put specific court reporting work
products under the sales tax and put in question other "legal
services" which historically had not been subject to taxation.

PURPOSE

As proposed, S.B. 737 exempts certain court reporter services from
the sales and use tax.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 151H, Tax Code, by adding Section
151.353, as follows:

     Sec. 151.353.  COURT REPORTING SERVICES.  (a) Exempts court
     reporting services relating to the preparation of a document
     or other record in a civil or criminal suit from the taxes
     imposed if the document is prepared for the use of a person
     participating in a suit or the court in which the suit or
     administrative proceeding is brought.
     
     (b) Provides that court reporting services covered by this
       section include services in the preparation of a deposition
       or discovery document, transcript of testimony, and a
       statement of facts.
       
       (c) Applies the exemption under this section to a document
       or record on audio or video tape or a computer readable
       format and courtroom presentation of same.
SECTION 2. Effective date:  First day of the first calendar quarter
beginning on or after the date that it may take effect under
Section 39, Article III, Texas Constitution.  Makes application of
this Act prospective.

SECTION 3. Emergency clause.