CS C.S.H.B. 2230 75(R)BILL ANALYSIS WAYS & MEANS C.S.H.B. 2230 By: Keel 5-1-97 Committee Report (Substituted) BACKGROUND Subchapter I, Chapter 451, Transportation Code (Taxation), provides for the collection of a sales and use tax by metropolitan rapid transit authorities. Voters in the authority must authorize the sales and use tax rate to be collected, which cannot exceed one percent. In certain cases, authorization to collect the maximum tax rate was approved by the voters at the same election that created the authority but the full authorization was not collected initially. As a result, the board of such an authority has been able to increase the rate at which the sales and use tax is collected over the years without further approval by the voters. There is no method for the public to force the board to lower the rate. PURPOSE The bill would provide for the automatic expiration of a tax rate set in certain transit authorities at three-quarters of one percent or one percent unless the continuation of that tax rate is approved by a majority of votes at an election called for that purpose. 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 Subchapter I, Chapter 451, Transportation Code (Taxation), by adding Section 451.4051. TAX RATE IN CERTAIN AUTHORITIES. (a) Provides that this section applies only to an authority in which the board has lowered the tax rate from the maximum permissible amount and subsequently raised the tax rate back to the maximum permissible amount. (b) Provides that if on September 1, 1997, an affected authority has in effect a sales and use tax of three-quarters of one percent or one percent, the tax rate expires on December 1, 1997, unless the continuation of the rate is approved by a majority of the votes recorded at an election called for that purpose on the uniform election date in November 1997. (c) Provides that the ballots at an election held under this section shall be printed to provide for voting for or against the following proposition: "The continuation of the local sales and use tax rate of (percentage)." Sections 451.411-451.413 apply to an election under this section as if the election were held to increase or decrease the tax rate. (d) Provides that if a tax rate expires under this section, the board may set the tax rate at one-quarter of one percent or one-half of one percent. SECTION 2.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE HB 2230 as filed applied to an authority that was confirmed before July 1, 1985, in which the principal municipality has a population of less than 750,000. C.S.H.B 2230 applies to an authority in which the board has lowered the tax rate form the maximum permissible amount and subsequently raised the tax rate back to the maximum permissible amount. The substitute also removes the provision in H.B. 2230 requiring subsequent retention elections for the tax rate.