BILL ANALYSIS C.S.H.B. 788 By: Brimer April 12, 1995 Committee Report (Substituted) BACKGROUND Certain cities may enact an economic development sales tax under a law implemented by Senate Bill 376, 72nd Regular Session. To be eligible for this provision the city must not have a mass transit system tax and must have a current combined total sales tax of 7.25% or less. Eligible projects that this tax may finance include: 1). Land, buildings, equipment, facilities and improvements suitable for use for professional and amateur sports, including children's sports; 2). Athletic, entertainment, tourist, convention, and public park facilities, including stadiums, ball parks, auditoriums, amphitheaters, concert halls, learning centers, parks and open space improvements; and 3). Municipal buildings, museum exhibition facilities and related stores, restaurants, concessions and parking and transportation facilities. PURPOSE The purpose of this bill is to includes in the definition of "eligible city" a city located in a county with a population of more than 1,100,000 and that does not have a combined sales and use taxes that exceeds 7.75 percent. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 4B(a)(1), Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), by adding to the definition of "eligible city" a city that is located in a county with a population of more than 1,100,000 according to the most recent federal census, in which there is more than 40 incorporated municipalities, and that has a combined rate of all sales and sue taxes imposed by the city, the state, and other political subdivisions that does not exceed 7.75 percent. Changes the numbering to conform with added definition. SECTION 2. Emergency clause and immediate effective date. COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill raised the sales tax eligibility requirement of the current combined sales tax for a city located in a county with a population of 750,000 or more, from 7.25 percent of less to 7.75 percent or less. The substitute leaves the tax eligibility requirement for a city in a county with a population of 750,000 or more at its current 7.25 percent, and adds to the definition of "eligible city" a city that is located in a county with a population of more than 1,100,000, and has more than 40 incorporated municipalities, who has a combined sales tax rate of 7.75 percent. Changes the numbering to conform with added definition. SUMMARY OF COMMITTEE ACTION H.B. 788 was considered by the committee in a public hearing on March 15, 1995. Testifying on the bill was Bob Bearden, representing the Comptroller's Office. Testifying in favor of the bill was Mayor Bill Abbott, representing the City of Kennedale. No one testified against the bill. H.B. 788 was left pending in committee. H.B. 788 was reconsidered by the committee in a public hearing on April 10, 1995. The committee considered a complete substitute for the bill. The substitute was adopted without objection. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed by a record vote of 8 ayes, 0 nays, 0 pnv, 1 absent.