1-1 By: Zbranek (Senate Sponsor - Bernsen) H.B. No. 602
1-2 (In the Senate - Received from the House April 30, 2001;
1-3 May 1, 2001, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 10, 2001, reported favorably by
1-5 the following vote: Yeas 6, Nays 0; May 10, 2001, sent to
1-6 printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the creation and financing of hospital districts in
1-10 small counties.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. The heading to Subchapter E, Chapter 285, Health
1-13 and Safety Code, is amended to read as follows:
1-14 SUBCHAPTER E. [HOSPITAL DISTRICT] SALES AND USE TAX
1-15 TO LOWER AD VALOREM TAXES
1-16 SECTION 2. Section 285.061(a), Health and Safety Code, is
1-17 amended to read as follows:
1-18 (a) A hospital district that is authorized to impose ad
1-19 valorem taxes may adopt a sales and use tax to lower the district's
1-20 ad valorem taxes at an election held as provided by this
1-21 subchapter. A district may[,] change the rate of the [its] sales
1-22 and use tax[,] or abolish the [its] sales and use tax at an
1-23 election held as provided by this subchapter. Subject to the
1-24 limitations provided by Subsections (c) and (d), the district may
1-25 impose the tax in increments of one-eighth of one percent, with a
1-26 minimum tax of one-eighth of one percent and a maximum tax of two
1-27 percent.
1-28 SECTION 3. Section 285.062(c), Health and Safety Code, is
1-29 amended to read as follows:
1-30 (c) At an election to adopt the tax, the ballot shall be
1-31 prepared to permit voting for or against the proposition: "The
1-32 adoption of a local sales and use tax in (name of district) at the
1-33 rate of (proposed tax rate) percent to be used to reduce the
1-34 district property taxes."
1-35 SECTION 4. Chapter 285, Health and Safety Code, is amended by
1-36 adding Subchapter L to read as follows:
1-37 SUBCHAPTER L. SALES AND USE TAX TO RAISE REVENUE
1-38 FOR DISTRICTS IN SMALL COUNTIES
1-39 Sec. 285.161. TAX AUTHORIZED. (a) A majority of voters in a
1-40 hospital district created under general or special law of which all
1-41 or a majority of the territory is located in a county or counties
1-42 each with a population of 75,000 or less may impose a sales and use
1-43 tax to raise revenue if the imposition is authorized at an election
1-44 under this subchapter.
1-45 (b) A district may not adopt a tax under this subchapter or
1-46 increase the rate of the tax if as a result of the adoption or
1-47 increase the combined rate of all sales and use taxes imposed by
1-48 the district and other political subdivisions of this state having
1-49 territory in the district would exceed two percent at any location
1-50 in the district.
1-51 Sec. 285.162. TAX RATE; CHANGE IN RATE. (a) A district may
1-52 impose the tax in increments of one-eighth of one percent, with a
1-53 minimum rate of one-eighth of one percent and a maximum rate of two
1-54 percent.
1-55 (b) A district may increase the rate of the tax to a maximum
1-56 of two percent or decrease the rate of the tax to a minimum of
1-57 one-eighth of one percent if the change is approved by a majority
1-58 of the voters of the district at an election called for that
1-59 purpose.
1-60 Sec. 285.163. TAX ELECTION PROCEDURES. (a) An election is
1-61 called by the adoption of a resolution by the governing body of the
1-62 district. The governing body shall call an election if at least
1-63 five percent of the number of registered voters in the district
1-64 petition the governing body to call the election.
2-1 (b) At an election to adopt the tax, the ballot shall be
2-2 prepared to permit voting for or against the proposition: "The
2-3 adoption of a local sales and use tax to raise revenue in (name of
2-4 district) at the rate of (proposed tax rate) percent."
2-5 (c) At an election to abolish the tax, the ballot shall be
2-6 prepared to permit voting for or against the proposition: "The
2-7 abolition of the local sales and use tax to raise revenue in (name
2-8 of district)."
2-9 (d) At an election to change the rate of the tax, the ballot
2-10 shall be prepared to permit voting for or against the proposition:
2-11 "The (increase or decrease, as applicable) in the rate of the local
2-12 sales and use tax to raise revenue imposed by (name of district)
2-13 from (tax rate on election date) percent to (proposed tax rate)
2-14 percent."
2-15 Sec. 285.164. ELECTION IN OTHER TAXING AUTHORITY. (a) In
2-16 this section, "taxing authority" means any entity authorized to
2-17 impose a local sales and use tax.
2-18 (b) If a district or proposed district is included within
2-19 the boundaries of another taxing authority and the adoption or
2-20 increase of the tax under this subchapter would result in a
2-21 combined tax rate by the district and other political subdivisions
2-22 of this state of more than two percent at any location in the
2-23 district, an election to approve or increase the tax under this
2-24 subchapter has no effect unless:
2-25 (1) one or more of the other taxing authorities holds
2-26 an election in accordance with the law governing that authority on
2-27 the same date as the election under this chapter to reduce the tax
2-28 rate of that authority to a rate that will result in a combined tax
2-29 rate by the district and other political subdivisions of not more
2-30 than two percent at any location in the district; and
2-31 (2) the combined tax rate is reduced to not more than
2-32 two percent as a result of that election.
2-33 (c) This section does not permit a taxing authority to
2-34 impose taxes at differential tax rates within the territory of the
2-35 authority.
2-36 Sec. 286.165. USE OF TAX. The taxes imposed may be used to
2-37 pay:
2-38 (1) the indebtedness issued or assumed by the
2-39 district; and
2-40 (2) the maintenance and operating expenses of the
2-41 district.
2-42 Sec. 285.166. EFFECTIVE DATE. (a) The adoption or abolition
2-43 of the tax or a change in the rate of the tax takes effect on the
2-44 first day of the first calendar quarter occurring after the
2-45 expiration of the first complete calendar quarter occurring after
2-46 the date the comptroller receives a notice of the results of the
2-47 election.
2-48 (b) If the comptroller determines that an effective date
2-49 provided by Subsection (a) will occur before the comptroller can
2-50 reasonably take the action required to begin collecting the tax or
2-51 to implement the abolition of the tax or the change in the rate of
2-52 the tax, the effective date may be extended by the comptroller
2-53 until the first day of the next calendar quarter.
2-54 Sec. 285.167. COUNTY SALES AND USE TAX ACT APPLICABLE.
2-55 Except to the extent that a provision of this chapter applies,
2-56 Chapter 323, Tax Code, applies to the tax authorized by this
2-57 chapter in the same manner as that chapter applies to the tax
2-58 authorized by that chapter.
2-59 SECTION 5. Section 286.022(a), Health and Safety Code, is
2-60 amended to read as follows:
2-61 (a) The petition prescribed by Section 286.021 must show:
2-62 (1) that the district is to be created and is to
2-63 operate under Article IX, Section 9, of the Texas Constitution;
2-64 (2) the name of the proposed district;
2-65 (3) the district's boundaries as designated by metes
2-66 and bounds or other sufficient legal description;
2-67 (4) that none of the territory in the district is
2-68 included in another hospital district;
2-69 (5) the names of the temporary directors the
3-1 commissioners court must appoint under Section 286.030 or a request
3-2 that the commissioners court appoint temporary directors;
3-3 (6) whether the district is to impose a property tax
3-4 and the maximum tax rate to be voted on at the creation election,
3-5 which may not exceed 75 cents on the $100 valuation of all taxable
3-6 property in the district;
3-7 (7) whether the district is to impose a sales and use
3-8 tax under Subchapter I and the maximum tax rate to be voted on at
3-9 the creation election, which may not exceed the rate allowed under
3-10 that subchapter;
3-11 (8) the method by which the permanent directors will
3-12 be elected, as provided by Subsection (c); and
3-13 (9) [(8)] the mailing address of each petitioner.
3-14 SECTION 6. Sections 286.023(d) and (e), Health and Safety
3-15 Code, are amended to read as follows:
3-16 (d) At the time and place set for the hearing, the
3-17 commissioners court shall consider the petition. The commissioners
3-18 court shall grant the petition if the court finds that the petition
3-19 is in proper form and contains the information required by Section
3-20 286.022. The commissioners court may grant a petition proposing
3-21 creation of a hospital district that imposes a sales and use tax
3-22 under Subchapter I only if all or a majority of the territory of
3-23 the district is located in a county or counties each with a
3-24 population of 75,000 or less.
3-25 (e) If a petition is granted, the commissioners court shall
3-26 order an election to confirm the district's creation and to
3-27 authorize the levy of a tax not to exceed the maximum tax rate
3-28 [amount] prescribed by the petition [on each $100 of the taxable
3-29 value of all taxable property in the district].
3-30 SECTION 7. Section 286.026, Health and Safety Code, is
3-31 amended to read as follows:
3-32 Sec. 286.026. BALLOT PROPOSITION. (a) The ballot for an
3-33 [the] election proposing to create a hospital district that imposes
3-34 a property tax shall be printed to permit voting for or against the
3-35 proposition: "The creation of the __________ (name of district)
3-36 Hospital District and the levy of annual property taxes for
3-37 hospital purposes at a rate not to exceed __________ (insert the
3-38 amount prescribed by the petition, not to exceed 75 cents) cents on
3-39 each $100 valuation of all taxable property in the district."
3-40 (b) The ballot for an election proposing to create a
3-41 hospital district that imposes a sales and use tax under Subchapter
3-42 I shall be printed to permit voting for or against the proposition:
3-43 "The creation of the __________ (name of district) Hospital
3-44 District and the levy of sales and use taxes for hospital purposes
3-45 at a rate not to exceed __________ (insert the amount prescribed by
3-46 the petition, not to exceed the amount allowed under Subchapter I)
3-47 percent."
3-48 (c) If a bond proposition is submitted to the voters, the
3-49 ballot for the election shall contain the proposition prescribed by
3-50 Subsection (a) or (b) followed by [be printed to permit voting for
3-51 or against the proposition]: "[The creation of the __________
3-52 (name of district) Hospital District, the levy of annual taxes for
3-53 hospital purposes at a rate not to exceed __________ (insert the
3-54 amount prescribed by the petition, not to exceed 75 cents) cents on
3-55 each $100 valuation of all taxable property in the district,] and
3-56 the issuance of bonds in an amount not to exceed __________ (insert
3-57 the amount prescribed by the petition or the commissioners court's
3-58 order) and to mature not later than __________ (insert the date
3-59 prescribed by the petition or the commissioners court's order)."
3-60 SECTION 8. Section 286.101, Health and Safety Code, is
3-61 amended by adding Subsection (g) to read as follows:
3-62 (g) If a district imposes a sales and use tax under
3-63 Subchapter I, the territory added to the district must be located
3-64 in a county or counties each with a population of 75,000 or less,
3-65 and the addition of the territory may not result in a combined tax
3-66 rate by the hospital district and other political subdivisions of
3-67 this state of more than two percent at any location in the
3-68 district.
3-69 SECTION 9. Sections 286.104(b) and (c), Health and Safety
4-1 Code, are amended to read as follows:
4-2 (b) After the board finds that the district is dissolved,
4-3 the board shall[:]
4-4 [(1)] determine the debt owed by the district[;] and:
4-5 (1) if the district imposes a property tax,
4-6 [(2)] impose on the property included in the district's tax rolls
4-7 a tax that is in proportion of the debt to the property value; or
4-8 (2) if the district imposes a sales and use tax under
4-9 Subchapter I, continue the tax until the debt is repaid.
4-10 (c) The board may institute a suit to enforce payment of
4-11 taxes and to foreclose liens to secure the payment of property
4-12 taxes due the district.
4-13 SECTION 10. Section 286.105, Health and Safety Code, is
4-14 amended to read as follows:
4-15 Sec. 286.105. RETURN OF SURPLUS PROPERTY TAX MONEY. (a)
4-16 When all outstanding debts and obligations of the district are
4-17 paid, the board shall order the secretary to return the pro rata
4-18 share of all unused property tax money to each district taxpayer.
4-19 (b) A taxpayer may request that the taxpayer's share of
4-20 surplus property tax money be credited to the taxpayer's county
4-21 taxes. If a taxpayer requests the credit, the board shall direct
4-22 the secretary to transmit the funds to the county tax
4-23 assessor-collector.
4-24 SECTION 11. Section 286.124(b), Health and Safety Code, is
4-25 amended to read as follows:
4-26 (b) The proposed budget must contain a complete financial
4-27 statement, including a statement of:
4-28 (1) the outstanding obligations of the district;
4-29 (2) the amount of cash on hand to the credit of each
4-30 fund of the district;
4-31 (3) the amount of money received by the district from
4-32 all sources during the previous year;
4-33 (4) the amount of money available to the district from
4-34 all sources during the ensuing year;
4-35 (5) the amount of the balances expected at the end of
4-36 the year in which the budget is being prepared;
4-37 (6) the estimated amount of revenues and balances
4-38 available to cover the proposed budget; and
4-39 (7) the estimated property tax rate that will be
4-40 required, if the district imposes a property tax.
4-41 SECTION 12. The heading to Subchapter H, Chapter 286, Health
4-42 and Safety Code, is amended to read as follows:
4-43 SUBCHAPTER H. PROPERTY TAXES
4-44 SECTION 13. Section 286.161, Health and Safety Code, is
4-45 amended to read as follows:
4-46 Sec. 286.161. TAX AUTHORIZED [LEVY OF TAXES]. (a) A
4-47 majority of voters in a district or proposed district may, at the
4-48 creation election under Subchapter B or in conjunction with any
4-49 other district election, authorize the district to impose a
4-50 property tax.
4-51 (b) The board annually may impose property taxes in an
4-52 amount not to exceed the limit approved by the voters at the
4-53 election authorizing the levy of taxes.
4-54 (c) [(b)] The tax rate for all purposes may not exceed 75
4-55 cents on each $100 valuation of all taxable property in the
4-56 district.
4-57 (d) [(c)] The taxes may be used to pay:
4-58 (1) the indebtedness issued or assumed by the
4-59 district; and
4-60 (2) the maintenance and operating expenses of the
4-61 district.
4-62 (e) [(d)] The district may not impose taxes to pay the
4-63 principal of or interest on revenue bonds issued under this
4-64 chapter.
4-65 SECTION 14. Chapter 286, Health and Safety Code, is amended
4-66 by amending Subchapter I and adding Subchapter X to read as
4-67 follows:
4-68 SUBCHAPTER I. SALES AND USE TAXES FOR DISTRICTS
4-69 IN SMALL COUNTIES
5-1 Sec. 286.171. TAX AUTHORIZED. (a) A majority of voters in a
5-2 proposed district of which all or a majority of the territory is
5-3 located in a county or counties each with a population of 75,000 or
5-4 less may impose a sales and use tax if the imposition is authorized
5-5 at the creation election under Subchapter B.
5-6 (b) An election to authorize the imposition of a sales and
5-7 use tax under this subchapter may be held only in conjunction with
5-8 a creation election under Subchapter B.
5-9 Sec. 286.172. LIMITATION ON COMBINED TAX RATE; EFFECT ON
5-10 ELECTIONS. An election to create a hospital district and to
5-11 authorize the imposition of a sales and use tax under this
5-12 subchapter, or an election to change the tax rate under Section
5-13 286.174, has no effect if as a result of the adoption of the sales
5-14 and use tax or the change in the rate the combined rate of all
5-15 sales and use taxes imposed by the district and other political
5-16 subdivisions of this state having territory in the district would
5-17 exceed two percent at any location in the district.
5-18 Sec. 286.173. ELECTION IN OTHER TAXING AUTHORITY. (a) In
5-19 this section, "taxing authority" means any entity authorized to
5-20 impose a local sales and use tax.
5-21 (b) If a district or proposed district is included within
5-22 the boundaries of another taxing authority and the adoption or
5-23 increase of the tax under this subchapter would result in a
5-24 combined tax rate by the district and other political subdivisions
5-25 of this state of more than two percent at any location in the
5-26 district, an election to approve or increase the tax under this
5-27 subchapter has no effect unless:
5-28 (1) one or more of the other taxing authorities holds
5-29 an election in accordance with the law governing that authority on
5-30 the same date as the election under this chapter to reduce the tax
5-31 rate of that authority to a rate that will result in a combined tax
5-32 rate by the district and other political subdivisions of not more
5-33 than two percent at any location in the district; and
5-34 (2) the combined tax rate is reduced to not more than
5-35 two percent as a result of that election.
5-36 (c) This section does not permit a taxing authority to
5-37 impose taxes at differential tax rates within the territory of the
5-38 authority.
5-39 Sec. 286.174. TAX RATE; CHANGE IN RATE. (a) A district may
5-40 impose the tax in increments of one-eighth of one percent, with a
5-41 minimum rate of one-eighth of one percent and a maximum rate of two
5-42 percent.
5-43 (b) Subject to Section 286.172, a district may increase the
5-44 rate of the tax to a maximum of two percent or decrease the rate of
5-45 the tax to a minimum of one-eighth of one percent if the change is
5-46 approved by a majority of the voters of the district at an election
5-47 called for that purpose.
5-48 Sec. 286.175. USE OF TAX. The taxes imposed may be used to
5-49 pay:
5-50 (1) the indebtedness issued or assumed by the
5-51 district; and
5-52 (2) the maintenance and operating expenses of the
5-53 district.
5-54 Sec. 286.176. EFFECTIVE DATE. (a) The adoption or abolition
5-55 of the tax or a change in the rate of the tax takes effect on the
5-56 first day of the first calendar quarter occurring after the
5-57 expiration of the first complete calendar quarter occurring after
5-58 the date the comptroller receives a notice of the results of the
5-59 election.
5-60 (b) If the comptroller determines that an effective date
5-61 provided by Subsection (a) will occur before the comptroller can
5-62 reasonably take the action required to begin collecting the tax or
5-63 to implement the abolition of the tax or the change in the rate of
5-64 the tax, the effective date may be extended by the comptroller
5-65 until the first day of the next calendar quarter.
5-66 Sec. 286.177. COUNTY SALES AND USE TAX ACT APPLICABLE.
5-67 Except to the extent that a provision of this chapter applies,
5-68 Chapter 323, Tax Code, applies to the tax authorized by this
5-69 chapter in the same manner as that chapter applies to the tax
6-1 authorized by that chapter.
6-2 SUBCHAPTER X. MISCELLANEOUS
6-3 Sec. 286.951 [286.181]. LIMITATION ON STATE ASSISTANCE. The
6-4 state may not become obligated for the support or maintenance of a
6-5 hospital district created under this chapter, and the legislature
6-6 may not make a direct appropriation for the construction,
6-7 maintenance, or improvement of a facility of the district.
6-8 SECTION 15. Section 26.012(1), Tax Code, is amended to read
6-9 as follows:
6-10 (1) "Additional sales and use tax" means an additional
6-11 sales and use tax imposed by:
6-12 (A) a city under Section 321.101(b);
6-13 (B) [of this code, a sales and use tax imposed
6-14 by] a county under Chapter 323; [of this code,] or
6-15 (C) [a sales and use tax imposed by] a hospital
6-16 district, other than a hospital district created on or after
6-17 September 1, 2001, that:
6-18 (i) imposes the sales and use tax under
6-19 Subchapter I, Chapter 286, Health and Safety Code; or
6-20 (ii) imposes the sales and use tax under
6-21 Subchapter L, Chapter 285, Health and Safety Code.
6-22 SECTION 16. This Act takes effect September 1, 2001.
6-23 * * * * *