HBA-SEB H.B. 253 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 253 By: Hilderbran Ways and Means 3/1/1999 Introduced BACKGROUND AND PURPOSE Currently, various health care supplies are exempt from sales tax. H.B. 253 includes diapers, overthe-counter medications, and medical appliances and devices in the tax exemption. The bill also exempts clothing and footwear purchased between July 24 and August 8 from the sales tax and makes access to the Internet tax-free. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 151.313(a), Tax Code, by deleting the provision that exempts only drugs or medicine specifically prescribed or dispensed by a licensed practitioner of the healing arts from the taxes imposed by this chapter (Limited Sales, Excise, and Use Tax). Exempts diapers, rather than insulin, from the taxes. Includes medical appliances along with therapeutic appliances, devices, and related supplies in the tax exemptions. Excludes contraceptives from the tax exemptions when a licensed practitioner of the healing arts does not prescribe or dispense them. Makes conforming and nonsubstantive changes. SECTION 2. Amends Section 151.323, Tax Code, to include Internet access in a list of certain telecommunications services that are exempt from the taxes imposed by this chapter. Defines "Internet." Creates a subsection from existing text. Makes nonsubstantive changes. SECTION 3. Amends Subchapter H, Chapter 151, Tax Code, by adding Section 151.325, as follows: Sec. 151.325. CERTAIN PRICED CLOTHING OR FOOTWEAR; FABRICS. (a) Exempts articles of clothing or footwear from this chapter's taxes when bought between July 24 and August 8 and if the sales price is less than $50. (b) Provides that Subsection (a) does not apply to articles of clothing or footwear primarily designed for use in an athletic activity. Provides that accessories, such as jewelry, handbags, or umbrellas, also do not fall under the items mentioned in Subsection (a). (c) Exempts component parts of articles of clothing such as thread, buttons, and fabric from the taxes if the sales price of the property is less than $50 and if the person who purchases the property is not in the business of fabricating or manufacturing clothing or footwear for sale. SECTION 4. Provides that this Act takes effect on the first day of the first calendar quarter beginning on or after the 90th day after adjournment. Makes application of this Act prospective. SECTION 5. Emergency clause. Effective date: upon passage.