SRC-DBM C.S.S.B. 441 76(R)    BILL ANALYSIS


Senate Research CenterC.S.S.B. 441
76R10077  DAK-DBy: Ellis
Finance
3/31/1999
Committee Report (Substituted)


DIGEST 

Currently, Texas' sales tax, when combined with local tax, is among the
highest in the nation.  By eliminating the sales tax on certain necessary
items, Texans can lessen the regressiveness of its sales tax. C.S.S.B. 441
would exempt a drug or medicine, insulin, diapers, medical or therapeutic
appliances, devices, and any related supplies.  C.S.S.B. would also exempt
taxes on articles of clothing or footwear worn on or about the human body
up to $200. 

PURPOSE

As proposed, C.S.S.B. 441 provides information concerning exemptions from
the sales tax. 

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 151.313(a), Tax Code, to exempt from taxes a
drug or medicine, other than insulin, if prescribed or dispensed for a
human or animal by a licensed practitioner of the healing arts,  insulin, a
drug or medicine without regard to whether it is prescribed or dispersed by
a licensed practitioner of the healing arts, that is labeled with a
national drug code issued by the federal Food and Drug Administration and
specifically formulated and labeled for children 12 years of age and
younger, and a therapeutic appliance, device, and any related supplies
specifically designed for those products, if dispensed or prescribed by a
licensed practitioner of the healing arts, when those items are purchased
and used by an individual for whom the items listed in this subsection were
dispensed or prescribed,  and a diaper.  Makes conforming changes. 

SECTION 2.  Amends Chapter 151H, Tax Code, by adding Section 151.325, as
follows: 

Sec. 151.325.  CLOTHING FOR FOOTWEAR FOR LIMITED PERIOD.  Exempts from
taxes the clothing sales occurring during a period beginning at 12:01 a.m.
on the first Saturday in August and ending at 12 midnight on the second
Friday after the first Saturday in August, of clothing or footwear costing
less than $200  to be worn on or about the human body.  Sets forth items
not covered by this tax exemption.     

SECTION 3. Effective date: October 1, 1999.
  Makes application of this Act prospective.

SECTION 4.Emergency clause.     

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Amends Section 151.313(a), Tax Code, to set forth items which are exempted
from taxes imposed by this chapter.  Makes conforming changes. 

SECTION 2.

Redesignated from existing SECTION 3.  Deletes proposed SECTION 2.  Adds
new heading.  Exempts from taxes the clothing sales occurring during a
specified period, beginning at 12:01 a.m. on the first Saturday in August
and ending at 12 midnight on the second Friday after the first Saturday in
August, rather than during August, of clothing or footwear costing  less
than $200, rather than $500, to be worn on or about the human body, rather
than by a person younger than 13 years of age. 

SECTION 3.

Redesignated from existing SECTION 4.  Changes effective date to October 1,
1999.  Deletes the effective date of the first day of  the first calendar
quarter beginning on or after the date  it may take effect under Section
39, Article III, Texas Constitution. 

SECTION 4.

  Redesignated from existing SECTION 5.