JWB S.B. 590 75(R)BILL ANALYSIS WAYS & MEANS S.B. 590 By: Duncan (Turner, Bob) 4-11-97 Committee Report (Unamended) BACKGROUND Sections 321 and 323, Tax Code, impose the municipal sales and use tax and the county sales and use tax. Fully implemented, the taxes cannot cause the local tax rate to exceed two percent. Any election to raise the sales tax rate that causes the cumulative rate to exceed two percent is invalid. Currently, there is no provision for an adjustment in this situation. PURPOSE The bill would establish the requirements for the adoption or increase of local sales and use taxes by a municipality or county in which previous elections adopting the taxes are invalid. 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 321.101, Tax Code (Tax Authorized), by adding Subsection (h), to authorize a municipality, in which the adoption or increase of a sales and use tax approved by the voters in an election is void, to adopt or increase the sales and use tax previously approved by the voters by an ordinance or resolution of the governing body of the municipality if certain conditions exist. Requires the governing body of the municipality to decide to adopt or increase the sales and use tax before June 30, 1997. Requires the municipal secretary to send the comptroller a certified copy of the ordinance or resolution by regular or certified mail, if the governing body of the municipality adopts or increases the sales and use tax under this subsection. Sets forth the date the tax takes effect. Provides that this subsection expires October 1, 1998. SECTION 2.Amends Section 323.101, Tax Code, by adding Subsection (g), to authorize a county, in which the adoption or increase of a sales and use tax approved by the voters in an election is void, to adopt or increase the sales and use tax previously approved by the voters by a resolution of the commissioners court if certain conditions exist. Requires the commissioners court of the county to decide to adopt or increase the sales and use tax before June 30, 1997. Requires the county judge to send the comptroller a certified copy of the resolution by regular or certified mail, if the commissioners court adopts or increases the sales and use tax under this subsection. Sets forth the date the tax takes effect. Provides that this subsection expires October 1, 1998. SECTION 3.Emergency clause.