SRC-JBJ S.B. 1876 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1876
76R12866 CBH-DBy: Nixon
Intergovernmental Relations
4/26/1999
As Filed


DIGEST 

Currently, the Sam Rayburn Municipal Power Agency that serves the cities of
Jasper, Livingston, and Liberty has incurred a great amount of debt and
requires additional tax revenue to remain solvent. However, the cities have
reach their sales tax ceiling and cannot not retire the debt through
raising taxes because the state prohibits raising local sales taxes above a
certain level.  Permitting the cities to raise taxes by a one-half cent
sales tax to pay off bonded indebtedness would permit the agency to be
relived of certain debt.  The tax would have to be approved by voters in
all three cities and last for a period not to exceed 10 years.  S.B. 1876
would authorize certain cities in the Sam Rayburn Municipal Power agency to
impose a one-half cent sales tax. 

PURPOSE

As proposed, S.B. 1876 authorizes certain municipalities to impose a sales
and use tax to retire the debt of a municipal power agency created by the
municipalities. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 163D, Utilities Code, by adding Section 163.103,
as follows: 

Sec. 163.103.  AUTHORITY TO IMPOSE SALES AND USE TAX.  Provides that
Chapter 321, Tax Code, applies to the tax authorized by this section in the
same manner as that chapter applies to the tax authorized by that chapter,
however Section 321.101(f), Tax Code, does not apply to the tax authorized
by this section.  Authorizes certain municipalities to adopt or abolish the
sales and use tax authorized by this section at an election held in the
municipality. Establishes that the tax rate is one-half percent.  Provides
for the effective date of the adoption or abolition of the tax.  Authorizes
the effective date to be extended by the comptroller, if the comptroller
does not have an opportunity to take the required action for the tax
collection or tax abolishment.  Provides that an election to adopt or
abolish the tax is called by the adoption of an order by the governing body
of the municipality.  Requires the governing body to call an election if a
certain number of voters petition the body to call the election.  Sets
forth required language for a ballot to adopt the tax or to abolish the
tax.  Authorizes the revenue collected only to be used to retire certain
debt of the municipal power agency.  Requires the municipality to share a
certain amount of the debt, if the municipal power agency has not
determined a municipality's share of the bonded indebtedness by a certain
date.  Prohibits a sales and use tax from being collected after certain
dates.  Requires the municipality to notify the comptroller of the
expiration of the tax by a certain date. 

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Emergency clause.