HBA-NMO H.B. 86 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 86
By: Gutierrez
Ways & Means
2/25/1999
Introduced



BACKGROUND AND PURPOSE 

Current law exempts the sale of certain items, such as certain food and
health care supplies, from limited sales, excise, and use taxes.  Because
this state currently has a budget surplus, this may be an appropriate time
to consider certain forms of tax relief.  H.B. 86 adds diapers and deletes
insulin from a list of health care supplies exempted from limited sales,
excise, and use taxes.  This bill also exempts from limited sales, excise,
and use taxes the sale of clothing, footwear, and fabrics priced less than
$50, and school supplies prior to the start of school.     

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not 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, to add diapers and delete
insulin from a list of items exempt from taxes imposed by this chapter
(limited sales, excise, and use taxes). 

SECTION 2.  Amends Subchapter H, Chapter 151, Tax Code, by adding Section
151.325, as follows: 

Sec.  151.325.  CERTAIN PRICED CLOTHING OR FOOTWEAR; FABRICS.   Exempts the
sale of clothing or footwear, priced less than $50, from taxes imposed by
this chapter. Provides that this exemption does not apply to an article of
clothing or footwear designed and primarily used for athletic activity; nor
to accessories, including jewelry, handbags, luggage, umbrella, wallets,
watches, and similar items.  Exempts from the taxes imposed by this chapter
the retail sale of component parts of clothing or footwear, including
fabric, thread, knitting yarn, buttons, and  zippers, if the sale price is
less than $50 and the purchaser is not in the business of fabricating or
manufacturing clothing or footwear for sale. 

SECTION 3.  Amends Subchapter H, Chapter 151, Tax Code, by adding Section
151.326, as follows:  

Sec.  151.326.  SCHOOL SUPPLIES PRIOR TO START OF SCHOOL.  Exempts from the
taxes imposed  by this chapter an item that is required for use by a
student in an  elementary or secondary school classroom which is on a list
issued by the student's respective teacher or school, and purchased during
August.  Provides that the purchaser of the item must give the seller an
exemption certificate, unless the seller maintains a separate section that
contains only the items that qualify as exempt. 

SECTION 4.  Effective date:  the first day of the first calendar quarter
beginning on or after the date that is 90 days after adjournment.  Makes
application of this Act prospective. 

SECTION 5.  Emergency clause.