SRC-JBJ, MWN C.S.S.B. 86 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 86
77R13468 DAK-DBy: Ellis, Rodney
Finance
4/22/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, Texas' sales tax, when combined with local tax, is among the
highest in the nation.  In 1999, the legislature approved measures that
created a three-day sales tax holiday on clothing and footwear. C.S.S.B. 86
increases that holiday to two weeks and expands the list of exemptions to
include backpacks and school supplies. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 151H, Tax Code, by adding Section 151.327, as
follows: 

Sec. 151.327. SCHOOL SUPPLIES, TEXTBOOKS, BOOKS, AND OTHER INSTRUCTIONAL
MATERIALS BEFORE START OF SCHOOL.  (a)  Provides that the sale or storage,
use, or other consumption of a school supply is exempted from the taxes
imposed by this chapter if the school supply is purchased for use by a
student in a class in a public or private elementary or secondary school,
during the period applicable to the exemption for clothing and footwear
under Section 151.326 and for a sales price of less than $75 per item. 

(b)  Defines "school supply."  

(c)  Provides that a retailer is not required to obtain an exemption
certificate stating that the school supplies are purchased for use by a
student in a class in a public or private elementary or secondary school
unless the supplies are purchased in a quantity that indicates that the
supplies are not purchased for use by a student in a class in a public or
private elementary or secondary school. 

SECTION 2.  Repealer: Section 151.326(c) (Clothing and Footwear for Limited
Period), Tax Code. 

SECTION 3.  Provides that Section 151.327, Tax Code as amended by this Act,
expires August 31, 2003. 

SECTION 4.  (a)  Provides that this Act takes effect on the first day of
the first calendar quarter beginning on or after the date that it may take
effect under Section 39 (Time of Taking Effect of Laws; Emergencies; Entry
on Journal), Article III, Texas Constitution.  

 (b)  Makes application of this Act prospective.

(c)  Provides that the repeal of Section 151.326(c), Tax Code, by this Act
does not affect the repeal of the exemption under Section 151.326(c), Tax
Code, by the governing body of a local  taxing authority before the
effective date of this Act.  Provides that such repeal by a local authority
is governed by the law in effect on the date of the repeal, and that law is
continued in effect for that purpose. 


SUMMARY OF COMMITTEE CHANGES

SECTION 1.  Amends As Filed S.B. 86 by adding language to proposed Section
151.327, Tax Code. 

SECTION 2.  Amends As Filed S.B. 86 by repealing Section 151.326(c), Tax
Code. 

SECTION 3.  Amends As Filed S.B. 86 by adding a new SECTION 3.

SECTION 4.  Amends As Files S.B. 86 by redesignating the original SECTION 3
as SECTION 4 and adding Subsection (c).