By:  Nixon                                            S.B. No. 1876
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the authority of certain municipalities to impose a
 1-2     sales and use tax to retire the debt of a municipal power agency
 1-3     created by the municipalities.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter D, Chapter 163, Utilities Code, is
 1-6     amended by adding Section 163.103 to read as follows:
 1-7           Sec. 163.103.  AUTHORITY TO IMPOSE SALES AND USE TAX.
 1-8     (a)  Except to the extent that a provision of this section applies,
 1-9     Chapter 321, Tax Code, applies to the tax authorized by this
1-10     section in the same manner as that chapter applies to the tax
1-11     authorized by that chapter.  Section 321.101(f), Tax Code, does not
1-12     apply to the tax authorized by this section; provided, however,
1-13     that Section 321.101(f), Tax Code, does apply to a municipality the
1-14     electric utility of which has between 30,000 and 50,000 meter
1-15     connections.
1-16           (b)  A municipality that participates in a municipal power
1-17     agency created under this subchapter may adopt or abolish the sales
1-18     and use tax authorized by this section at an election held in the
1-19     municipality.  The rate of the tax authorized by this section is
1-20     one-half percent.
1-21           (c)  The adoption or abolition of the tax takes effect on the
1-22     first day of the first calendar quarter occurring after the
1-23     expiration of the first complete calendar quarter occurring after
1-24     the date the comptroller receives a notice of the results of the
 2-1     election.  If the comptroller determines that an effective date
 2-2     provided by this subsection will occur before the comptroller can
 2-3     reasonably take the action required to begin collecting the tax or
 2-4     to implement the abolition of the tax, the effective date may be
 2-5     extended by the comptroller until the first day of the next
 2-6     succeeding calendar quarter.
 2-7           (d)  An election to adopt or abolish the tax authorized by
 2-8     this section is called by the adoption of an order by the governing
 2-9     body of the municipality.  The governing body shall call an
2-10     election if a number of qualified voters of the municipality equal
2-11     to at least five percent of the number of registered voters in the
2-12     municipality petitions the governing body to call the election.
2-13           (e)  At an election to adopt the tax, the ballot shall be
2-14     prepared to permit voting for or against the proposition:  "The
2-15     adoption of a sales and use tax in _________(name of municipality)
2-16     at the rate of one-half percent to provide revenue to retire the
2-17     municipality's share of the bonded indebtedness of the ______(name
2-18     of agency) municipal power agency."
2-19           (f)  At an election to abolish the tax, the ballot shall be
2-20     prepared to permit voting for or against the proposition:  "The
2-21     abolition of the sales and use tax in _________(name of
2-22     municipality) used to retire the municipality's share of the bonded
2-23     indebtedness of the ______(name of agency) municipal power agency."
2-24           (g)  Revenue from the tax imposed under this section may be
2-25     used only to retire the municipality's share of the bonded
2-26     indebtedness, on September 1, 1999, of the municipal power agency
 3-1     in which the municipality participates.  If the municipal power
 3-2     agency has not determined a municipality's share of the bonded
 3-3     indebtedness on or before September 1, 1999, the municipality's
 3-4     share of the debt shall be determined in accordance with the ratio
 3-5     that the population of the municipality bears to the total
 3-6     population of all participating public entities.
 3-7           (h)  A sales and use tax imposed under this section may not
 3-8     be collected after the last day of the first calendar quarter
 3-9     occurring after the earlier of:
3-10                 (1)  the 10th anniversary of the date the municipality
3-11     began collecting the tax; or
3-12                 (2)  the date the municipality notifies the comptroller
3-13     that the municipality has abolished the tax or that the
3-14     municipality's share of the bonded indebtedness has been paid in
3-15     full or the full amount of money, excluding guaranteed interest,
3-16     necessary to pay in full the municipality's share of the bonded
3-17     indebtedness has been set aside in a trust account dedicated to the
3-18     payment of the bonds.
3-19           (i)  The municipality shall notify the comptroller of the
3-20     expiration of the tax not later than the 60th day before the
3-21     expiration date.
3-22           SECTION 2.  This Act takes effect September 1, 1999.
3-23           SECTION 3.  The importance of this legislation and the
3-24     crowded condition of the calendars in both houses create an
3-25     emergency and an imperative public necessity that the
3-26     constitutional rule requiring bills to be read on three several
 4-1     days in each house be suspended, and this rule is hereby suspended.