SRC-TNM S.B. 767 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 767
By: Ratliff
State Affairs
4-23-97
As Filed


DIGEST 

Currently, Texas law imposes a higher tax on landowners growing timber
than on those growing other agriculture commodities.  Farmers and ranchers
receive a 100 percent exemption from sales tax for equipment and machinery
used in farming and ranching.  Timber operators receive no exemptions for
items used in timber management operations.  There is some concern that
the private nonindustrial landowners in East Texas are not planting enough
trees on their lands to meet the future demands of a growing population.
The costs of reforestation and forest management often lead the private
landowner to convert land from timber to other land use decisions which
offer 100 percent tax exemption.  S.B. 767 would allow for a full sales
tax exemption for fertilizers, fungicides, herbicides, defoliants, and
desiccants used in timber operations. 

PURPOSE

As proposed, S.B. 767 outlines provisions regarding the application of the
sales and use tax to certain materials used in commercial timber
operations. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 151.3161, Tax Code, by amending Subsection (c)
and adding Subsection (d), to provide that a fertilizer, fungicide,
insecticide, herbicide, defoliant, or desiccant used exclusively in a
commercial timber operation to produce timber products to be sold in the
regular course of business of the commercial timber operation is exempted
from the tax imposed by this chapter.  Makes a conforming change. 

SECTION 2. (a) Effective date: the first day of the first calendar quarter
beginning on or after 90 days after adjournment. 

(b) Makes application of this Act prospective.

SECTION 3. Emergency clause.