By Zbranek H.B. No. 602
77R1523 JAT-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation and financing of hospital districts in
1-3 small counties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The heading to Subchapter E, Chapter 285, Health
1-6 and Safety Code, is amended to read as follows:
1-7 SUBCHAPTER E. [HOSPITAL DISTRICT] SALES AND USE TAX
1-8 TO LOWER AD VALOREM TAXES
1-9 SECTION 2. Section 285.061(a), Health and Safety Code, is
1-10 amended to read as follows:
1-11 (a) A hospital district that is authorized to impose ad
1-12 valorem taxes may adopt a sales and use tax to lower the district's
1-13 ad valorem taxes at an election held as provided by this
1-14 subchapter. A district may[,] change the rate of the [its] sales
1-15 and use tax[,] or abolish the [its] sales and use tax at an
1-16 election held as provided by this subchapter. Subject to the
1-17 limitations provided by Subsections (c) and (d), the district may
1-18 impose the tax in increments of one-eighth of one percent, with a
1-19 minimum tax of one-eighth of one percent and a maximum tax of two
1-20 percent.
1-21 SECTION 3. Section 285.062(c), Health and Safety Code, is
1-22 amended to read as follows:
1-23 (c) At an election to adopt the tax, the ballot shall be
1-24 prepared to permit voting for or against the proposition: "The
2-1 adoption of a local sales and use tax in (name of district) at the
2-2 rate of (proposed tax rate) percent to be used to reduce the
2-3 district property taxes."
2-4 SECTION 4. Chapter 285, Health and Safety Code, is amended by
2-5 adding Subchapter L to read as follows:
2-6 SUBCHAPTER L. SALES AND USE TAX TO RAISE REVENUE
2-7 FOR DISTRICTS IN SMALL COUNTIES
2-8 Sec. 285.161. TAX AUTHORIZED. (a) A majority of voters in a
2-9 hospital district created under general or special law of which all
2-10 or a majority of the territory is located in a county or counties
2-11 each with a population of 75,000 or less may impose a sales and use
2-12 tax to raise revenue if the imposition is authorized at an election
2-13 under this subchapter.
2-14 (b) A district may not adopt a tax under this subchapter or
2-15 increase the rate of the tax if as a result of the adoption or
2-16 increase the combined rate of all sales and use taxes imposed by
2-17 the district and other political subdivisions of this state having
2-18 territory in the district would exceed two percent at any location
2-19 in the district after the application of Section 285.164.
2-20 Sec. 285.162. TAX RATE; CHANGE IN RATE. (a) A district may
2-21 impose the tax in increments of one-eighth of one percent, with a
2-22 minimum rate of one-eighth of one percent and a maximum rate of two
2-23 percent.
2-24 (b) A district may increase the rate of the tax to a maximum
2-25 of two percent or decrease the rate of the tax to a minimum of
2-26 one-eighth of one percent if the change is approved by a majority
2-27 of the voters of the district at an election called for that
3-1 purpose.
3-2 Sec. 285.163. TAX ELECTION PROCEDURES. (a) An election is
3-3 called by the adoption of a resolution by the governing body of the
3-4 district. The governing body shall call an election if at least
3-5 five percent of the number of registered voters in the district
3-6 petition the governing body to call the election.
3-7 (b) At an election to adopt the tax, the ballot shall be
3-8 prepared to permit voting for or against the proposition: "The
3-9 adoption of a local sales and use tax to raise revenue in (name of
3-10 district) at the rate of (proposed tax rate) percent."
3-11 (c) At an election to abolish the tax, the ballot shall be
3-12 prepared to permit voting for or against the proposition: "The
3-13 abolition of the local sales and use tax to raise revenue in (name
3-14 of district)."
3-15 (d) At an election to change the rate of the tax, the ballot
3-16 shall be prepared to permit voting for or against the proposition:
3-17 "The (increase or decrease, as applicable) in the rate of the local
3-18 sales and use tax to raise revenue imposed by (name of district)
3-19 from (tax rate on election date) percent to (proposed tax rate)
3-20 percent."
3-21 Sec. 285.164. IMPOSITION IN DISTRICT WITH OTHER TAXING
3-22 AUTHORITY. (a) In this section, "taxing authority" means an entity
3-23 authorized to impose a tax under:
3-24 (1) Chapter 775 or 776, Health and Safety Code;
3-25 (2) Chapter 326, 334, 335, 363, 377, or 383, Local
3-26 Government Code, or Chapter 384, Local Government Code, as added by
3-27 Chapter 1283, Acts of the 76th Legislature, Regular Session, 1999;
4-1 (3) Chapter 324 or 325, Tax Code;
4-2 (4) the Development Corporation Act of 1979 (Article
4-3 5190.6, Vernon's Texas Civil Statutes);
4-4 (5) Chapter 289, Acts of the 73rd Legislature, Regular
4-5 Session, 1993; or
4-6 (6) Chapter 1316, Acts of the 75th Legislature,
4-7 Regular Session, 1997.
4-8 (b) If a district or proposed district is included within
4-9 the boundaries of another taxing authority and the adoption or
4-10 increase of the tax under this subchapter would result in a
4-11 combined tax rate by the district and other political subdivisions
4-12 of this state of more than two percent at any location in the
4-13 district, the election to approve or increase the tax under this
4-14 subchapter is to be treated for all purposes as an election to
4-15 reduce the tax rate of the other taxing authority to the highest
4-16 rate that will not result in a combined tax rate by the district
4-17 and other political subdivisions of more than two percent at any
4-18 location in the district. If the district or proposed district is
4-19 located within the boundaries of only one taxing authority and the
4-20 adoption or increase of the tax under this subchapter will result
4-21 in a decrease of the tax rate of the taxing authority, the ballot
4-22 at the election to impose or increase the tax must clearly state
4-23 that the adoption or increase of the tax will result in a reduction
4-24 of the tax rate of the taxing authority. If the district or
4-25 proposed district is included within the boundaries of more than
4-26 one taxing authority, the election to impose or increase the tax
4-27 under this subchapter must allow the voters to choose which taxing
5-1 authority's tax will be reduced.
5-2 (c) An election under this section may not be held if the
5-3 taxing authority notifies the entity ordering the election that the
5-4 resulting reduction in the authority's tax will impair any existing
5-5 contracts or bonds.
5-6 (d) This section does not permit a taxing authority to
5-7 impose taxes at differential tax rates within the territory of the
5-8 authority.
5-9 Sec. 286.165. USE OF TAX. The taxes imposed may be used to
5-10 pay:
5-11 (1) the indebtedness issued or assumed by the
5-12 district; and
5-13 (2) the maintenance and operating expenses of the
5-14 district.
5-15 Sec. 285.166. EFFECTIVE DATE. (a) The adoption or abolition
5-16 of the tax or a change in the rate of the tax takes effect on the
5-17 first day of the first calendar quarter occurring after the
5-18 expiration of the first complete calendar quarter occurring after
5-19 the date the comptroller receives a notice of the results of the
5-20 election.
5-21 (b) If the comptroller determines that an effective date
5-22 provided by Subsection (a) will occur before the comptroller can
5-23 reasonably take the action required to begin collecting the tax or
5-24 to implement the abolition of the tax or the change in the rate of
5-25 the tax, the effective date may be extended by the comptroller
5-26 until the first day of the next calendar quarter.
5-27 Sec. 285.167. COUNTY SALES AND USE TAX ACT APPLICABLE.
6-1 Except to the extent that a provision of this chapter applies,
6-2 Chapter 323, Tax Code, applies to the tax authorized by this
6-3 chapter in the same manner as that chapter applies to the tax
6-4 authorized by that chapter.
6-5 SECTION 5. Section 286.022(a), Health and Safety Code, is
6-6 amended to read as follows:
6-7 (a) The petition prescribed by Section 286.021 must show:
6-8 (1) that the district is to be created and is to
6-9 operate under Article IX, Section 9, of the Texas Constitution;
6-10 (2) the name of the proposed district;
6-11 (3) the district's boundaries as designated by metes
6-12 and bounds or other sufficient legal description;
6-13 (4) that none of the territory in the district is
6-14 included in another hospital district;
6-15 (5) the names of the temporary directors the
6-16 commissioners court must appoint under Section 286.030 or a request
6-17 that the commissioners court appoint temporary directors;
6-18 (6) whether the district is to impose a property tax
6-19 and the maximum tax rate to be voted on at the creation election,
6-20 which may not exceed 75 cents on the $100 valuation of all taxable
6-21 property in the district;
6-22 (7) whether the district is to impose a sales and use
6-23 tax under Subchapter I and the maximum tax rate to be voted on at
6-24 the creation election, which may not exceed the rate allowed under
6-25 that subchapter;
6-26 (8) the method by which the permanent directors will
6-27 be elected, as provided by Subsection (c); and
7-1 (9) [(8)] the mailing address of each petitioner.
7-2 SECTION 6. Sections 286.023(d) and (e), Health and Safety
7-3 Code, are amended to read as follows:
7-4 (d) At the time and place set for the hearing, the
7-5 commissioners court shall consider the petition. The commissioners
7-6 court shall grant the petition if the court finds that the petition
7-7 is in proper form and contains the information required by Section
7-8 286.022. The commissioners court may grant a petition proposing
7-9 creation of a hospital district that imposes a sales and use tax
7-10 under Subchapter I only if all or a majority of the territory of
7-11 the district is located in a county or counties each with a
7-12 population of 75,000 or less.
7-13 (e) If a petition is granted, the commissioners court shall
7-14 order an election to confirm the district's creation and to
7-15 authorize the levy of a tax not to exceed the maximum tax rate
7-16 [amount] prescribed by the petition [on each $100 of the taxable
7-17 value of all taxable property in the district].
7-18 SECTION 7. Section 286.026, Health and Safety Code, is
7-19 amended to read as follows:
7-20 Sec. 286.026. BALLOT PROPOSITION. (a) The ballot for an
7-21 [the] election proposing to create a hospital district that imposes
7-22 a property tax shall be printed to permit voting for or against the
7-23 proposition: "The creation of the __________ (name of district)
7-24 Hospital District and the levy of annual property taxes for
7-25 hospital purposes at a rate not to exceed __________ (insert the
7-26 amount prescribed by the petition, not to exceed 75 cents) cents on
7-27 each $100 valuation of all taxable property in the district."
8-1 (b) The ballot for an election proposing to create a
8-2 hospital district that imposes a sales and use tax under Subchapter
8-3 I shall be printed to permit voting for or against the proposition:
8-4 "The creation of the __________ (name of district) Hospital
8-5 District and the levy of sales and use taxes for hospital purposes
8-6 at a rate not to exceed __________ (insert the amount prescribed by
8-7 the petition, not to exceed the amount allowed under Subchapter I)
8-8 percent."
8-9 (c) If a bond proposition is submitted to the voters, the
8-10 ballot for the election shall contain the proposition prescribed by
8-11 Subsection (a) or (b) followed by [be printed to permit voting for
8-12 or against the proposition]: "[The creation of the __________
8-13 (name of district) Hospital District, the levy of annual taxes for
8-14 hospital purposes at a rate not to exceed __________ (insert the
8-15 amount prescribed by the petition, not to exceed 75 cents) cents on
8-16 each $100 valuation of all taxable property in the district,] and
8-17 the issuance of bonds in an amount not to exceed __________ (insert
8-18 the amount prescribed by the petition or the commissioners court's
8-19 order) and to mature not later than __________ (insert the date
8-20 prescribed by the petition or the commissioners court's order)."
8-21 SECTION 8. Section 286.101, Health and Safety Code, is
8-22 amended by adding Subsection (g) to read as follows:
8-23 (g) If a district imposes a sales and use tax under
8-24 Subchapter I, the territory added to the district must be located
8-25 in a county or counties each with a population of 75,000 or less,
8-26 and the addition of the territory may not result in a combined tax
8-27 rate by the hospital district and other political subdivisions of
9-1 this state of more than two percent at any location in the
9-2 district.
9-3 SECTION 9. Sections 286.104(b) and (c), Health and Safety
9-4 Code, are amended to read as follows:
9-5 (b) After the board finds that the district is dissolved,
9-6 the board shall[:]
9-7 [(1)] determine the debt owed by the district[;] and:
9-8 (1) if the district imposes a property tax,
9-9 [(2)] impose on the property included in the district's tax rolls
9-10 a tax that is in proportion of the debt to the property value; or
9-11 (2) if the district imposes a sales and use tax under
9-12 Subchapter I, continue the tax until the debt is repaid.
9-13 (c) The board may institute a suit to enforce payment of
9-14 taxes and to foreclose liens to secure the payment of property
9-15 taxes due the district.
9-16 SECTION 10. Section 286.105, Health and Safety Code, is
9-17 amended to read as follows:
9-18 Sec. 286.105. RETURN OF SURPLUS PROPERTY TAX MONEY. (a)
9-19 When all outstanding debts and obligations of the district are
9-20 paid, the board shall order the secretary to return the pro rata
9-21 share of all unused property tax money to each district taxpayer.
9-22 (b) A taxpayer may request that the taxpayer's share of
9-23 surplus property tax money be credited to the taxpayer's county
9-24 taxes. If a taxpayer requests the credit, the board shall direct
9-25 the secretary to transmit the funds to the county tax
9-26 assessor-collector.
9-27 SECTION 11. Section 286.124(b), Health and Safety Code, is
10-1 amended to read as follows:
10-2 (b) The proposed budget must contain a complete financial
10-3 statement, including a statement of:
10-4 (1) the outstanding obligations of the district;
10-5 (2) the amount of cash on hand to the credit of each
10-6 fund of the district;
10-7 (3) the amount of money received by the district from
10-8 all sources during the previous year;
10-9 (4) the amount of money available to the district from
10-10 all sources during the ensuing year;
10-11 (5) the amount of the balances expected at the end of
10-12 the year in which the budget is being prepared;
10-13 (6) the estimated amount of revenues and balances
10-14 available to cover the proposed budget; and
10-15 (7) the estimated property tax rate that will be
10-16 required, if the district imposes a property tax.
10-17 SECTION 12. The heading to Subchapter H, Chapter 286, Health
10-18 and Safety Code, is amended to read as follows:
10-19 SUBCHAPTER H. PROPERTY TAXES
10-20 SECTION 13. Section 286.161, Health and Safety Code, is
10-21 amended to read as follows:
10-22 Sec. 286.161. TAX AUTHORIZED [LEVY OF TAXES]. (a) A
10-23 majority of voters in a district or proposed district may, at the
10-24 creation election under Subchapter B or in conjunction with any
10-25 other district election, authorize the district to impose a
10-26 property tax.
10-27 (b) The board annually may impose property taxes in an
11-1 amount not to exceed the limit approved by the voters at the
11-2 election authorizing the levy of taxes.
11-3 (c) [(b)] The tax rate for all purposes may not exceed 75
11-4 cents on each $100 valuation of all taxable property in the
11-5 district.
11-6 (d) [(c)] The taxes may be used to pay:
11-7 (1) the indebtedness issued or assumed by the
11-8 district; and
11-9 (2) the maintenance and operating expenses of the
11-10 district.
11-11 (e) [(d)] The district may not impose taxes to pay the
11-12 principal of or interest on revenue bonds issued under this
11-13 chapter.
11-14 SECTION 14. Chapter 286, Health and Safety Code, is amended
11-15 by amending Subchapter I and adding Subchapter X to read as
11-16 follows:
11-17 SUBCHAPTER I. SALES AND USE TAXES FOR DISTRICTS
11-18 IN SMALL COUNTIES
11-19 Sec. 286.171. TAX AUTHORIZED. (a) A majority of voters in a
11-20 proposed district of which all or a majority of the territory is
11-21 located in a county or counties each with a population of 75,000 or
11-22 less may impose a sales and use tax if the imposition is authorized
11-23 at the creation election under Subchapter B.
11-24 (b) An election to authorize the imposition of a sales and
11-25 use tax under this subchapter may be held only in conjunction with
11-26 a creation election under Subchapter B.
11-27 Sec. 286.172. LIMITATION ON COMBINED TAX RATE; EFFECT ON
12-1 ELECTIONS. An election to create a hospital district and to
12-2 authorize the imposition of a sales and use tax under this
12-3 subchapter, or an election to change the tax rate under Section
12-4 286.174, has no effect if as a result of the adoption of the sales
12-5 and use tax or the change in the rate the combined rate of all
12-6 sales and use taxes imposed by the district and other political
12-7 subdivisions of this state having territory in the district would
12-8 exceed two percent at any location in the district after the
12-9 application of Section 286.173.
12-10 Sec. 286.173. IMPOSITION IN DISTRICT WITH OTHER TAXING
12-11 AUTHORITY. (a) In this section, "taxing authority" means an entity
12-12 authorized to impose a tax under:
12-13 (1) Chapter 775 or 776, Health and Safety Code;
12-14 (2) Chapter 326, 334, 335, 363, 377, or 383, Local
12-15 Government Code, or Chapter 384, Local Government Code, as added by
12-16 Chapter 1283, Acts of the 76th Legislature, Regular Session, 1999;
12-17 (3) Chapter 324 or 325, Tax Code;
12-18 (4) the Development Corporation Act of 1979 (Article
12-19 5190.6, Vernon's Texas Civil Statutes);
12-20 (5) Chapter 289, Acts of the 73rd Legislature, Regular
12-21 Session, 1993; or
12-22 (6) Chapter 1316, Acts of the 75th Legislature,
12-23 Regular Session, 1997.
12-24 (b) If a district or proposed district is included within
12-25 the boundaries of another taxing authority and the adoption or
12-26 increase of the tax under this subchapter would result in a
12-27 combined tax rate by the district and other political subdivisions
13-1 of this state of more than two percent at any location in the
13-2 district, the election to approve or increase the tax under this
13-3 subchapter is to be treated for all purposes as an election to
13-4 reduce the tax rate of the other taxing authority to the highest
13-5 rate that will not result in a combined tax rate by the district
13-6 and other political subdivisions of more than two percent at any
13-7 location in the district. If the district or proposed district is
13-8 located within the boundaries of only one taxing authority, and the
13-9 adoption or increase of the tax under this subchapter will result
13-10 in a decrease of the tax rate of the taxing authority, the ballot
13-11 at the election to impose or increase the tax must clearly state
13-12 that the adoption or increase of the tax will result in a reduction
13-13 of the tax rate of the taxing authority. If the district or
13-14 proposed district is included within the boundaries of more than
13-15 one taxing authority, the election to impose or increase the tax
13-16 under this subchapter must allow the voters to choose which taxing
13-17 authority's tax will be reduced.
13-18 (c) An election under this section may not be held if the
13-19 taxing authority notifies the entity ordering the election that the
13-20 resulting reduction in the authority's tax will impair any existing
13-21 contracts or bonds.
13-22 (d) This section does not permit a taxing authority to
13-23 impose taxes at differential tax rates within the territory of the
13-24 authority.
13-25 Sec. 286.174. TAX RATE; CHANGE IN RATE. (a) A district may
13-26 impose the tax in increments of one-eighth of one percent, with a
13-27 minimum rate of one-eighth of one percent and a maximum rate of two
14-1 percent.
14-2 (b) Subject to Section 286.172, a district may increase the
14-3 rate of the tax to a maximum of two percent or decrease the rate of
14-4 the tax to a minimum of one-eighth of one percent if the change is
14-5 approved by a majority of the voters of the district at an election
14-6 called for that purpose.
14-7 Sec. 286.175. USE OF TAX. The taxes imposed may be used to
14-8 pay:
14-9 (1) the indebtedness issued or assumed by the
14-10 district; and
14-11 (2) the maintenance and operating expenses of the
14-12 district.
14-13 Sec. 286.176. EFFECTIVE DATE. (a) The adoption or abolition
14-14 of the tax or a change in the rate of the tax takes effect on the
14-15 first day of the first calendar quarter occurring after the
14-16 expiration of the first complete calendar quarter occurring after
14-17 the date the comptroller receives a notice of the results of the
14-18 election.
14-19 (b) If the comptroller determines that an effective date
14-20 provided by Subsection (a) will occur before the comptroller can
14-21 reasonably take the action required to begin collecting the tax or
14-22 to implement the abolition of the tax or the change in the rate of
14-23 the tax, the effective date may be extended by the comptroller
14-24 until the first day of the next calendar quarter.
14-25 Sec. 286.177. COUNTY SALES AND USE TAX ACT APPLICABLE.
14-26 Except to the extent that a provision of this chapter applies,
14-27 Chapter 323, Tax Code, applies to the tax authorized by this
15-1 chapter in the same manner as that chapter applies to the tax
15-2 authorized by that chapter.
15-3 SUBCHAPTER X. MISCELLANEOUS
15-4 Sec. 286.951 [286.181]. LIMITATION ON STATE ASSISTANCE. The
15-5 state may not become obligated for the support or maintenance of a
15-6 hospital district created under this chapter, and the legislature
15-7 may not make a direct appropriation for the construction,
15-8 maintenance, or improvement of a facility of the district.
15-9 SECTION 15. Section 26.012(1), Tax Code, is amended to read
15-10 as follows:
15-11 (1) "Additional sales and use tax" means an additional
15-12 sales and use tax imposed by:
15-13 (A) a city under Section 321.101(b);
15-14 (B) [of this code, a sales and use tax imposed
15-15 by] a county under Chapter 323; [of this code,] or
15-16 (C) [a sales and use tax imposed by] a hospital
15-17 district, other than a hospital district created on or after
15-18 September 1, 2001, that:
15-19 (i) imposes the sales and use tax under
15-20 Subchapter I, Chapter 286, Health and Safety Code; or
15-21 (ii) imposes the sales and use tax under
15-22 Subchapter L, Chapter 285, Health and Safety Code.
15-23 SECTION 16. This Act takes effect September 1, 2001.