HBA-JLV H.B. 863 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 863 By: Dutton Ways & Means 3/1/2001 Introduced BACKGROUND AND PURPOSE Current Texas law exempts certain items from the state's 6.25% sales and use tax and generally, food purchased for preparation and consumption is not taxed. Many Texans do not know which items are exempt from the tax, and as a result, some neighborhood merchants may impose the sales tax on items that should not be taxed. House Bill 863 requires retail grocers to post a sign listing all of the items that are exempt from the sales and use tax. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts of the State of Texas in SECTION 1 (Section 151.3015, Tax Code) of this bill. ANALYSIS House Bill 863 amends the Tax Code to require retail grocers to post a sign listing items that are exempt from the sales and use tax. The bill requires the comptroller, by rule, to prescribe the design and size of the sign and the relevant items that must be listed on the sign. The bill also requires the comptroller to determine which items are relevant for listing based on whether the item is usually sold by retail grocers and to review the sign every two years to determine if the listings require amendment. The bill further requires the comptroller to provide the sign to retail grocers at a reasonable charge. Each retail grocer is required to post the sign not later than January 1, 2002. EFFECTIVE DATE September 1, 2001.