BILL ANALYSIS C.S.H.B. 2087 By: Gallego 03-27-95 Committee Report (Substituted) BACKGROUND By Title D, the Environmental Protection Agency has imposed environmental requirements on municipal landfills. Subsequently, some counties in Texas are finding it difficult to properly dispose of waste and are seeking new remedies. Another problem for certain counties is raising enough revenue to meet financial obligations for their criminal detention centers. Criminal detention centers may house county, state and federal prisoners. For example, Maverick County is experiencing a problem making the bond payments on their facilities because these payments and the operational costs of the center surpasses the budget for the center. This has resulted in the probability that the county will be unable to make its bond payments in the future. PURPOSE This bill provides for an election to raise the sales and use tax in qualifying counties for the purposes of building, operating or maintaining a landfill or a criminal detention center. 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 Subtitle C, Title 3, Tax Code, by adding Chapter 325 (County Sales and Use Tax for Landfill and Criminal Detention Center). Chapter 325 creates a county sales and use tax to build, operate or maintain a landfill and a criminal detention center. Counties of 37,500 or less that border the Rio Grande containing a municipality with a population of more than 15,000 may adopt this tax by an election of the voters. The tax rate would be set at 1/2 percent and may only take effect if the combined rate of all sales and use taxes imposed by the county and other qualifying subdivisions of the state do not exceed two percent at any location in the county. Requires that any additional money beyond what is necessary for the landfill and detention center shall be used for the reduction of property taxes. Upon retirement of the criminal detention center bonds and the closure or sale of the landfill, the tax shall expire. Election procedures and ballot language are also established. SECTION 2. Emergency clause COMPARISON OF ORIGINAL TO SUBSTITUTE The committee substitute narrows the criteria by which a county could qualify under Chapter 325. The original bill defined the criteria as a county with a population of 40,000 or less that borders the Rio Grande. C.S.H.B. defines the criteria as a county with a population of 37,500 or less that borders the Rio Grande containing a municipality with a population of more than 15,000. In addition, the committee substitute includes language to require that any additional money beyond what is necessary for the landfill and detention center be used for the reduction of property taxes, and upon retirement of the criminal detention center bonds and the closure or sale of the landfill, the tax shall expire. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance to the rules and a public hearing was held on March 21, 1995. Representative Gallego explained H.B. 2087. The Chair laid out a committee substitute by Craddick. The Chair laid out committee amendment #1 by Heflin. Without objection, the committee adopted the amendment to the substitute and the staff was directed to incorporate the amendment into the substitute. Without objection, the committee adopted C.S.H.B. 2087. By a record vote of 6 ayes, 0 nays, 0 present not voting and 5 absent, the committee voted to report H.B. 2087 to the House as substituted with the recommendation that it do pass. Testimony received in favor of the bill: Carlos A. Pereda, Jr., representing himself and Maverick County