1-1     By:  Gallego (Senate Sponsor - Duncan)                  H.B. No. 82
 1-2           (In the Senate - Received from the House March 19, 2001;
 1-3     March 20, 2001, read first time and referred to Committee on
 1-4     Finance; April 17, 2001, reported favorably by the following vote:
 1-5     Yeas 9, Nays 0; April 17, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to an exemption from sales and use taxes for certain
 1-9     taxable items sold by a qualified student organization affiliated
1-10     with an institution of higher education.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1. Section 151.321, Tax Code, is amended to read as
1-13     follows:
1-14           Sec. 151.321.  UNIVERSITY AND COLLEGE STUDENT ORGANIZATIONS.
1-15     (a)  A taxable item sold by a qualified student organization and
1-16     for which the sales price is $5,000 or less, is exempted from the
1-17     taxes imposed by Subchapter C, except that a taxable item
1-18     manufactured by or donated to the organization is exempt from the
1-19     taxes imposed by Subchapter C regardless of sales price unless sold
1-20     to the donor, if the student organization:
1-21                 (1)  sells the item at a sale that may last for one day
1-22     only and the primary purpose of which is to raise funds for the
1-23     organization; and
1-24                 (2)  holds not more than one sale described by
1-25     Subdivision (1) each month for which an exemption is claimed for an
1-26     item sold.
1-27           (b)  In each calendar year, the first $5,000 of a qualified
1-28     student organization's total receipts from sales of taxable items
1-29     not otherwise exempt under Subsection (a) is exempt from the taxes
1-30     imposed by Subchapter C.
1-31           (c)  A student organization qualifies for the exemptions
1-32     [exemption] under Subsections [Subsection] (a) and (b) if the
1-33     student organization:
1-34                 (1)  is affiliated with an institution of higher
1-35     education as defined by Section 61.003, Education Code, or a
1-36     private or independent college or university that is located in
1-37     this state and that is accredited by a recognized accrediting
1-38     agency under Section 61.003, Education Code;
1-39                 (2)  has as its primary purpose a purpose other than
1-40     engaging in business or performing an activity designed to make a
1-41     profit; and
1-42                 (3)  files a certification with the comptroller as
1-43     required by Subsection (d) [(c)].
1-44           (d) [(c)]  A student organization must file with the
1-45     comptroller a certification issued by the institution, college, or
1-46     university described in Subsection (c)(1) [(b)(1)] showing that the
1-47     organization is affiliated with the institution, college, or
1-48     university.
1-49           (e) [(d)]  The storage, use, or consumption of a taxable item
1-50     acquired tax-free under this section is exempted from the use tax
1-51     imposed by Subchapter D until the item is resold or subsequently
1-52     transferred.
1-53           SECTION 2. (a)  This Act takes effect October 1, 2001.
1-54           (b)  The change in law made by this Act does not affect taxes
1-55     imposed before the effective date of this Act, and the law in
1-56     effect before the effective date of this Act is continued in effect
1-57     for purposes of liability for and collection of those taxes.
1-58           (c)  For purposes of application of Section 151.321(b), Tax
1-59     Code, as added by this Act, to the 2001 calendar year, the period
1-60     beginning October 1, 2001, and ending December 31, 2001, is treated
1-61     as a calendar year.
1-62                                  * * * * *