SRC-JEC H.B. 445 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 445
By: Goodman (Harris)
Intergovernmental Relations
4/18/2001
Engrossed


DIGEST AND PURPOSE 

Many city streets have deteriorated due to a lack of funds for repairs and
maintenance.  As proposed, H.B. 445 allows a municipality to adopt a sales
and use tax for the maintenance and repair of municipal streets, contingent
on approval of the voters. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 3C, Tax Code, by adding Chapter 327, as follows:

CHAPTER 327.  MUNICIPAL SALES AND USE TAX FOR STREET MAINTENANCE

 Sec. 327.001.  DEFINITION.  Defines "municipal street."

Sec. 327.002.  MUNICIPAL SALES AND USE TAX ACT APPLICABLE.  Provides that
Chapter 321 applies to the tax authorized by this chapter in the same
manner authorized by that chapter except to the extent that a provision of
this chapter applies. 

Sec. 327.003.  TAX AUTHORIZED.  (a) Authorizes a municipality to adopt the
sales and use tax authorized by this chapter at an election held in the
municipality. 

(b) Prohibits a municipality from adopting a tax under this chapter if as a
result of the adoption of the tax the combined rate of all sales and use
taxes imposed by the municipality and other political subdivisions of this
state having territory in the municipality would exceed two percent at any
location in the municipality. 

(c) Provides that an election to adopt a sales and use tax under this
chapter has no effect if the election occurs on the same date on which
another political subdivision adopts a sales and use tax or increases the
rate of its sales and use tax and the two elections result in a combined
rate of sales and use tax that exceeds two percent at any location in the
municipality. 

Sec. 327.004.  TAX RATE.  Provides that the rate of tax authorized by this
chapter is onefourth of one percent. 

Sec. 327.005.  SALES AND USE TAX EFFECTIVE DATE.  (a) Sets forth the date
on which the adoption of the tax takes effect. 

(b) Authorizes the comptroller to extend the effective date of the tax
until a certain date if the comptroller determines that the effective date
under Subsection (a) will occur  before the comptroller can reasonably take
the action required to begin collecting the tax. 

Sec. 327.006.  ELECTION PROCEDURE.  (a) Provides that an election to adopt
the tax authorized by this chapter is called by the adoption of an
ordinance by the governing body of the municipality. 

(b) Sets forth the wording of a ballot for an election to adopt the tax.

Sec. 327.007.  EXPIRATION OF TAX.  (a) Sets forth the expiration date of a
sales and use tax authorized by this chapter. 

(b) Prohibits the municipality from calling an election on the question of
authorizing a new tax under this chapter before the first anniversary of
the date on which the previous tax expired. 

(c) Requires the municipality to notify the comptroller of the scheduled
expiration. Authorizes the comptroller to delay the scheduled expiration
date if more time is required.  Requires the comptroller to provide a new
expiration date that is not later than a certain date. 

Sec. 327.008.  USE OF TAX REVENUE.  Limits the use of revenue from a tax
imposed under this chapter to maintaining and repairing municipal streets
existing on the date of the election to adopt the tax. 

SECTION 2.  Effective date: upon passage or September 1, 2001.