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


Senate Research CenterC.S.H.B. 445
By: Goodman (Harris)
Intergovernmental Relations
5/4/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Many city streets have deteriorated due to a lack of funds for repairs and
maintenance.  As proposed, C.S.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.  REAUTHORIZATION OF TAX.  (a) Sets forth the expiration date
of a sales and use tax authorized by this chapter if the tax is not
reauthorized as provided by this section. 

(b) Provides that an election to reauthorize the tax is called and held in
the same manner as an election to adopt the tax, except that the ballot
proposition will read differently. 

(c) Provides that if an election to reauthorize the tax is not held before
the tax expires as provided by Subsection (a), or if a majority of the
votes cast in an election to reauthorize the tax do not favor
reauthorization, the municipality is prohibited 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. 

(d) Provides that, not later than the 10th day after the date the
municipality determines that the tax will expire as provided by Subsection
(a), the municipality is required 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.

SUMMARY OF COMMITTEE CHANGES

Differs from the original by modifying proposed Section 327.007, Tax Code,
to provide for the reauthorization of the tax as well as the expiration of
the tax.