1-1     By:  Goodman, Lewis of Tarrant                         H.B. No. 445
 1-2         (Senate Sponsor - Harris)
 1-3           (In the Senate - Received from the House March 21, 2001;
 1-4     March 22, 2001, read first time and referred to Committee on
 1-5     Intergovernmental Relations; May 7, 2001, reported adversely, with
 1-6     favorable Committee Substitute by the following vote:  Yeas 6, Nays
 1-7     0; May 7, 2001, sent to printer.)
 1-8     COMMITTEE SUBSTITUTE FOR H.B. No. 445                    By:  Madla
 1-9                            A BILL TO BE ENTITLED
1-10                                   AN ACT
1-11     relating to the imposition by certain municipalities of a sales and
1-12     use tax dedicated to street maintenance.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  Subtitle C, Title 3, Tax Code, is amended by
1-15     adding Chapter 327 to read as follows:
1-16      CHAPTER 327.  MUNICIPAL SALES AND USE TAX FOR STREET MAINTENANCE
1-17           Sec. 327.001.  DEFINITION.  In this chapter, "municipal
1-18     street" means the entire width of a way held by a municipality in
1-19     fee or by easement or dedication that has a part open for public
1-20     use for vehicular travel.  The term does not include a designated
1-21     state or federal highway or road or a designated county road.
1-22           Sec. 327.002.  MUNICIPAL SALES AND USE TAX ACT APPLICABLE.
1-23     Except to the extent that a provision of this chapter applies,
1-24     Chapter 321 applies to the tax authorized by this chapter in the
1-25     same manner as that chapter applies to the tax authorized by that
1-26     chapter.
1-27           Sec. 327.003.  TAX AUTHORIZED.  (a)  A municipality may adopt
1-28     the sales and use tax authorized by this chapter at an election
1-29     held in the municipality.
1-30           (b)  A municipality may not adopt a tax under this chapter if
1-31     as a result of the adoption of the tax the combined rate of all
1-32     sales and use taxes imposed by the municipality and other political
1-33     subdivisions of this state having territory in the municipality
1-34     would exceed two percent at any location in the municipality.
1-35           (c)  If the voters of a municipality approve the adoption of
1-36     the tax at an election held on the same election date on which
1-37     another political subdivision adopts a sales and use tax or
1-38     approves the increase in the rate of its sales and use tax and as a
1-39     result the combined rate of all sales and use taxes imposed by the
1-40     municipality and other political subdivisions of this state having
1-41     territory in the municipality would exceed two percent at any
1-42     location in the municipality, the election to adopt a sales and use
1-43     tax under this chapter has no effect.
1-44           Sec. 327.004.  TAX RATE.  The rate of the tax authorized by
1-45     this chapter is one-fourth of one percent.
1-46           Sec. 327.005.  SALES AND USE TAX EFFECTIVE DATE.  (a)  The
1-47     adoption of the tax takes effect on the first day of the first
1-48     calendar quarter occurring after the expiration of the first
1-49     complete calendar quarter occurring after the date on which the
1-50     comptroller receives notice of the results of the election.
1-51           (b)  If the comptroller determines that an effective date
1-52     provided by Subsection (a) will occur before the comptroller can
1-53     reasonably take the action required to begin collecting the tax,
1-54     the effective date may be extended by the comptroller until the
1-55     first day of the next succeeding calendar quarter.
1-56           Sec. 327.006.  ELECTION PROCEDURE.  (a)  An election to adopt
1-57     the tax authorized by this chapter is called by the adoption of an
1-58     ordinance by the governing body of the municipality.
1-59           (b)  At an election to adopt the tax, the ballot shall be
1-60     prepared to permit voting for or against the proposition:  "The
1-61     adoption of a local sales and use tax in (name of municipality) at
1-62     the rate of one-fourth of one percent to provide revenue for
1-63     maintenance and repair of municipal streets."
1-64           Sec. 327.007.  REAUTHORIZATION OF TAX.  (a)  Unless
 2-1     imposition of the sales and use tax authorized by this chapter is
 2-2     reauthorized as provided by this section, the tax expires on:
 2-3                 (1)  the fourth anniversary of the date the tax
 2-4     originally took effect under Section 327.005; or
 2-5                 (2)  the first day of the first calendar quarter
 2-6     occurring after the fourth anniversary of the date the tax was last
 2-7     reauthorized under this section.
 2-8           (b)  An election to reauthorize the tax is called and held in
 2-9     the same manner as an election to adopt the tax under Section
2-10     327.006, except the ballot proposition shall be prepared to permit
2-11     voting for or against the proposition:  "The reauthorization of the
2-12     local sales and use tax in (name of municipality) at the rate of
2-13     one-fourth of one percent to continue providing revenue for
2-14     maintenance and repair of municipal streets."
2-15           (c)  If an election to reauthorize the tax is not held before
2-16     the tax expires as provided by Subsection (a), or if a majority of
2-17     the votes cast in an election to reauthorize the tax do not favor
2-18     reauthorization, the municipality may not call an election on the
2-19     question of authorizing a new tax under this chapter before the
2-20     first anniversary of the date on which the tax expired.
2-21           (d)  Not later than the 10th day after the date the
2-22     municipality determines that the tax will expire as provided by
2-23     Subsection (a), the municipality shall notify the comptroller of
2-24     the scheduled expiration.  The comptroller may delay the scheduled
2-25     expiration date if the comptroller notifies the municipality that
2-26     more time is required.  The comptroller must provide a new
2-27     expiration date that is not later than the last day of the first
2-28     calendar quarter occurring after the notification to the
2-29     comptroller.
2-30           Sec. 327.008.  USE OF TAX REVENUE.  Revenue from the tax
2-31     imposed under this chapter may be used only to maintain and repair
2-32     municipal streets existing on the date of the election to adopt the
2-33     tax.
2-34           SECTION 2.  This Act takes effect immediately if it receives
2-35     a vote of two-thirds of all the members elected to each house, as
2-36     provided by Section 39, Article III, Texas Constitution.  If this
2-37     Act does not receive the vote necessary for immediate effect, this
2-38     Act takes effect September 1, 2001.
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