By Luna H.B. No. 1543
77R5053 DAK-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the sales and use tax imposed by municipal crime
1-3 control and prevention districts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 363.055(a) and (c), Local Government
1-6 Code, are amended to read as follows:
1-7 (a) The proposed rate for the district sales and use tax
1-8 imposed under Subchapter B, Chapter 321, Tax Code, or Subchapter B,
1-9 Chapter 323, Tax Code, may be only:
1-10 (1) one-eighth of one percent;
1-11 (2) one-fourth of one percent;
1-12 (3) three-eighths of one percent; or
1-13 (4) one-half of one percent.
1-14 (c) A municipality that creates a district shall adopt a
1-15 sales and use tax under Section 321.106 [323.105], Tax Code, for
1-16 financing the operation of the district [in the same manner as a
1-17 county under that section].
1-18 SECTION 2. Subchapter B, Chapter 321, Tax Code, is amended by
1-19 adding Section 321.106 to read as follows:
1-20 Sec. 321.106. MUNICIPAL CRIME CONTROL AND PREVENTION
1-21 DISTRICT TAX. (a) Subject to an election held in accordance with
1-22 Chapter 363, Local Government Code, a municipality in which a crime
1-23 control and prevention district is established shall adopt a sales
1-24 and use tax in the area of the district for the purpose of
2-1 financing the operation of the crime control and prevention
2-2 district. The revenue from the tax may be used only for the
2-3 purpose of financing the operation of the crime control and
2-4 prevention district. The proposition for adopting a tax under this
2-5 section and the proposition for creation of a crime control and
2-6 prevention district shall be submitted at the same election.
2-7 (b) A tax adopted for a district under this section for
2-8 financing the operation of the district may be decreased in
2-9 increments of one-eighth of one percent by order of the board of
2-10 directors of the district.
2-11 (c) The governing body of the municipality that proposed the
2-12 creation of the crime control and prevention district may call an
2-13 election on the question of decreasing the tax rate in increments
2-14 of one-eighth of one percent in the district if the district was
2-15 created before January 1, 1996. The governing body may dedicate a
2-16 portion of the tax for the payment of bonds used in conjunction
2-17 with the renovation or extension of a county-owned or municipally
2-18 owned convention center facility, as defined in Section 351.001,
2-19 that was constructed before 1969 if the dedication is approved by a
2-20 majority of the qualified voters in an election held in the
2-21 district on the question of decreasing the tax rate. At the
2-22 election, the ballot shall be printed to provide for voting for or
2-23 against the following proposition: "The decrease of the
2-24 ____________________ Crime Control and Prevention District sales
2-25 and use tax rate to ____________ percent and authorizing the use of
2-26 _______________ of one percent for the payment of bonds issued for
2-27 the renovation or extension of certain county-owned or municipally
3-1 owned convention center facilities as that term is defined under
3-2 Section 351.001, Tax Code, and authorizing that the tax expire on
3-3 payment of the bonds."
3-4 (d) The rate of a tax adopted for a district under this
3-5 section may be increased in increments of one-eighth of one
3-6 percent, not to exceed a total tax rate of one-half percent for
3-7 financing the operation of the crime control and prevention
3-8 district, by order of the board of directors of the crime control
3-9 and prevention district if approved by a majority of the qualified
3-10 voters voting at an election called by the board and held in the
3-11 district on the question of increasing the tax rate. At the
3-12 election, the ballot shall be printed to provide for voting for or
3-13 against the following proposition: "The increase of the
3-14 ______________ Crime Control and Prevention District sales and use
3-15 tax rate to ____________ percent." If there is an increase or
3-16 decrease under this subsection in the rate of a tax imposed under
3-17 this section, the new rate takes effect on the first day of the
3-18 next calendar quarter after the expiration of one calendar quarter
3-19 after the comptroller receives notice of the increase or decrease.
3-20 However, if the comptroller notifies the president of the board of
3-21 directors of the district in writing within 10 days after receipt
3-22 of the notification that the comptroller requires more time to
3-23 implement reporting and collection procedures, the comptroller may
3-24 delay implementation of the rate change for one whole calendar
3-25 quarter. In that event, the new rate takes effect on the first day
3-26 of the next calendar quarter following the elapsed quarter.
3-27 (e) The comptroller shall remit to the municipality amounts
4-1 collected at the rate imposed under this section as part of the
4-2 regular allocation of municipal tax revenue collected by the
4-3 comptroller if the district is composed of the entire municipality.
4-4 The comptroller shall, if the district is composed of an area less
4-5 than the entire municipality, remit that amount to the district.
4-6 Retailers may not be required to use the allocation and reporting
4-7 procedures in the collection of taxes under this section different
4-8 from the procedures that retailers use in the collection of other
4-9 sales and use taxes under this chapter. An item, transaction, or
4-10 service that is taxable in a municipality under a sales or use tax
4-11 authorized by another section of this chapter is taxable under this
4-12 section. An item, transaction, or service that is not taxable in a
4-13 municipality under a sales or use tax authorized by another section
4-14 of this chapter is not taxable under this section.
4-15 (f) If, in a municipality where a crime control and
4-16 prevention district is composed of the whole municipality, a
4-17 municipal sales and use tax or a municipal sales and use tax rate
4-18 increase for the purpose of financing a crime control and
4-19 prevention district is approved, the municipality is responsible
4-20 for distributing to the district that portion of the municipal
4-21 sales and use tax revenue received from the comptroller that is to
4-22 be used for the purposes of financing the crime control and
4-23 prevention district. Not later than the 10th day after the date
4-24 the municipality receives funds under this section from the
4-25 comptroller, the municipality shall make the distribution in the
4-26 proportion that the crime control and prevention portion of the tax
4-27 rate bears to the total sales and use tax rate of the municipality.
5-1 The amounts distributed to a crime control and prevention district
5-2 are not considered to be sales and use tax revenue for the purpose
5-3 of property tax reduction and computation of the municipal tax rate
5-4 under Section 26.041.
5-5 (g) For purposes of the tax imposed under this section, a
5-6 reference in this chapter to the municipality as the territory in
5-7 which the tax or an incident of the tax applies means only the
5-8 territory located in the crime control and prevention district, if
5-9 that district is composed of an area less than an entire
5-10 municipality.
5-11 (h) The comptroller may adopt rules and the governing body
5-12 of the municipality may adopt orders to administer this section.
5-13 SECTION 3. (a) In a crime control and prevention district
5-14 created by a municipality before the effective date of this Act,
5-15 an item, transaction, or service that is taxable in the
5-16 municipality under a sales or use tax authorized by Chapter 321,
5-17 Tax Code, is taxable under Section 321.106, Tax Code, as added by
5-18 this Act, for the district, and an item, transaction, or service
5-19 that is not taxable in the municipality under a sales or use tax
5-20 authorized by Chapter 321, Tax Code, is not taxable under Section
5-21 321.106, Tax Code, as added by this Act, for the district.
5-22 (b) The comptroller shall implement any change necessary as
5-23 a result of the change in law made by this Act on or before January
5-24 1, 2002.
5-25 SECTION 4. This Act takes effect immediately if it receives
5-26 a vote of two-thirds of all the members elected to each house, as
5-27 provided by Section 39, Article III, Texas Constitution. If this
6-1 Act does not receive the vote necessary for immediate effect, this
6-2 Act takes effect September 1, 2001.