HBA-KDB H.B. 1965 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1965 By: Danburg Ways & Means 3/22/2001 Introduced BACKGROUND AND PURPOSE Each year, the Texas Department of Transportation (TxDOT) must remove billboards in connection with state highway improvements. In removing billboards, TxDOT must pay compensation to purchasers of advertising on billboards. However, TxDOT does not have the necessary funding for this purpose, and as a result, billboards are relocated, even in cities that have prohibited relocation. House Bill 1965 provides that billboard advertising services are taxable, and requires the proceeds from the collection of limited sales, excise, and use taxes on the sale or use of billboard advertising services to be deposited to the credit of the highway billboard removal account (account), which may be appropriated only to TxDOT. The bill authorizes TxDOT to use the funds in the account only to remove billboards during the improvement of the state highway system. 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 1965 amends the Tax Code to add billboard advertising service to the definition of "taxable services." The bill requires the proceeds from the collection of limited sales, excise, and use taxes on the sale or use of billboard advertising services to be deposited to the credit of the highway billboard removal account, which is an account in the general revenue fund that may be appropriated only to the Texas Department of Transportation (TxDOT). The bill authorizes TxDOT to use the money only to remove billboards during the improvement of the state highway system. The bill provides that billboard advertising services are a taxable service. EFFECTIVE DATE September 1, 2001.