HBA-CBW H.B. 2627 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2627 By: Bonnen Ways & Means 3/30/2001 Introduced BACKGROUND AND PURPOSE Under current law, the fees for health and fitness club memberships are assessed a sales and use tax. Many of these facilities compete with tax exempt organizations providing the same services. These tax exempt organizations include YMCAs, community centers, city and county parks and recreation centers, community colleges, and universities. According to a report by the federal government entitled "Healthy People 2000," physical activity and fitness is a priority for a healthy life. As a result, physicians often prescribe exercise and physical activity to their patients as a way to reduce health risks. However, a tax on these health and fitness club memberships may discourage people from joining these clubs. House Bill 2627 exempts membership in or admission to a health spa from sales and use taxes by excluding it from the definition of "amusement services," "sale," and "purchase." RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 2627 amends the Tax Code to exempt membership in or admission to a health spa from limited sales, excise, and use taxes by excluding it from the definitions of "Amusement services," "sale," and "purchase." EFFECTIVE DATE July 1, 2001, or if the Act does not receive the necessary vote, the Act takes effect October 1, 2001.