SRC-JJJ H.B. 2858 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2858
By: Siebert (Wentworth)
Intergovernmental Relations
5/13/1999
Engrossed


DIGEST 

In 1987, the legislature enacted legislation allowing taxing entities the
authority to repeal the application of the sales tax exemption for
telecommunication services, thereby expanding the sales tax base.
Currently, five state-authorized transit authorities have repealed the
exemption and are collecting a sales tax on telecommunications services.
Examples of telecommunications services subject to the sales tax exemption
include basic local exchange service, installation and service connection
fees, intrastate long-distance service paging, and facsimile services and
mobile telephone services.  H.B. 2858 would amend Section 322.109, Tax
Code, to specify that taxing authorities governed by appointed boards be
required to submit any plan to increase taxes for approval by the
appointing elected body or to the voters. 

PURPOSE

As proposed, H.B. 2858 establishes provisions regarding the authority of
certain taxing entities to repeal the local sales and use tax exemption for
telecommunications services.   

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 322.019, Tax Code, by amending Subsection
(b),adding a new Subsection (d), and redesignating existing Subsection (d)
as (e), to prohibit the governing board of a taxing entity created under
Chapter 451, Transportation Code from repealing the application of the
exemption provided by Subsection (a) unless the repeal is first approved by
a majority of the members of the governing body of each municipality that
created the taxing entity.  Provides that a reinstatement of the exemption
must be approved in the same manner.  Makes conforming changes.  

SECTION 2. Makes application of this Act prospective. 

SECTION 3. Emergency clause. 
  Effective date: upon passage.