HBA-CBW, AMW H.B. 445 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 445 By: Goodman Ways & Means 2/15/2001 Introduced BACKGROUND AND PURPOSE Many city streets have deteriorated due to lack of funds for repairs and maintenance. Municipalities use some of their tax revenue for the repair and maintenance of streets. Under current law, certain municipalities are prohibited from adopting an additional sales and use tax. House Bill 445 allows a municipality to adopt a one-fourth of one percent municipal sales and use tax for the maintenance and repair of municipal streets if approved by a majority of registered voters. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 445 amends the Tax Code to create a municipal sales and use tax for the maintenance of municipal streets (maintenance tax). The bill authorizes a municipality to adopt the maintenance tax, at an election held in the municipality, at a rate of one-fourth of one percent and authorizes the use of tax revenue only to maintain and repair municipal streets existing on the date of the election. The bill prohibits a municipality from adopting a maintenance tax 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. The bill provides that an election to adopt a maintenance tax has no effect if the voters of a municipality approve the adoption of the tax at an election held on the same election date on which another political subdivision adopts a sales and use tax or approves the increase in the rate of its sales and use tax and as a result 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. H.B. 445 sets forth procedures for calling an election to adopt a maintenance tax, including ballot requirements, and establishes procedures related to the adoption of such a tax. EFFECTIVE DATE On passage.