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April 8, 1999     (512) 463-0300

AUSTIN - A $250 million sales tax cut passed out of the Senate today. The bill exempts both diapers and over-the-counter children's medicine from sales tax. The Committee Substitute for Senate Bill (CSSB) 441 also includes a 14-day sales tax holiday in August for school clothes and shoes.

Houston Senator Rodney Ellis, the bill's sponsor, said, "I think this is a real tax cut for families that they can really understand." Ellis says sales taxes take the most from those who can afford it the least.

Austin Senator Gonzalo Barrientos supported the legislation, but questioned why bipartisan support was not there when he proposed similar legislation last session, "We have heard for the last several months about tax cuts and about surplus of funds and what we're going to do this session. This is probably one of the most important pieces of legislation that we'll take up this year."

Lt. Governor Rick Perry was supportive of the bill--and the tax cut, "This tax cut also puts some of the state's surplus back where it needs to be--back into Texans' pockets."

Legislation that would reduce the cost of a long distance call within Texas drew hours of testimony in the Subcommittee on Technology and Business Growth. CSSB 560 would lower local access charges; the fees Southwestern Bell charges long distance companies to connect in-state long distance calls. Southwestern Bell's current rates are more than 11 cents a minute and would be reduced in phases to half or less.

Waco Senator David Sibley sponsors the bill and says he is trying to do what is best for competition and consumers, "Right now we're trying to cuddle, I guess, walk a tightrope, to make sure there's some access out there for competitors and for other reasons but at the same time it ought not be too high. It ought to be reasonable."

The bill will extend a cap on local rates to the year 2003 or later if an amendment proposed today is adopted. Proposed amendments would lower access charges an additional one half cent more than the original bill and would implement the changes in two stages instead of three.

Lt. Governor Perry spoke optimistically about the bill, "The telecom bill is shaping up to be a win win situation for business and residential consumers and telecommunication businesses in Texas."

The Senate will reconvene tomorrow, April 9, at 9:00 a.m.

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