SRC-LBB S.B. 972 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 972
78R2095 JD-DBy: Shapiro
Infrastructure Development and Security
4/16/2003
As Filed


DIGEST AND PURPOSE 

For the territory of a municipality to be added to a regional
transportation authority, such as the Dallas Rapid Transit System, the
citizens of the municipality must first approve the expansion through a
referendum.  Some municipalities cannot be added immediately because the
addition of the authority's sales and use tax would, in combination with
other municipal taxes, exceed the two percent cap that may be imposed in
the territory of a municipality.  As proposed, S.B. 972 authorizes certain
municipalities to be added to the territory of a regional transportation
authority by election, but would postpone the addition until currently
imposed sales and use taxes are reduced to such a level that the
imposition of the authority's sales and use tax would not exceed the two
percent cap. 

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 Subchapter P, Chapter 452, Transportation Code, by
adding Section 452.6025, as follows: 

Sec. 452.6025.  ADDITION OF CERTAIN MUNICIPALITIES BY ELECTION.  (a)
Provides that this section applies only to a municipality that has created
an industrial development corporation under Section 4A or 4B, Development
Corporation Act of 1979 (Article 5190.6, V.T.C.S.) and levies a sales and
use tax under Section 4A or 4B of that Act for the benefit of the
corporation. 

(b)  Authorizes the territory of a municipality that is not part of an
authority to be added to an authority in the manner otherwise provided by
this subchapter, except that if addition of the territory of the
municipality to the authority would impair the imposition of the
authority's sales and use tax because the addition would result in a
combined sales and use tax rate of more than two percent in the
municipality, the election in a municipality to approve the addition of
the municipality to the authority is to be treated for all purposes as an
election to reduce the rate of the municipality's sales and use tax levied
under Section 4A or 4B, Development Corporation Act of 1979 (Article
5190.6, V.T.C.S.), as applicable, to the highest rate that will not impair
the imposition of the authority's sales and use tax and  any outstanding
bonds or other obligations that are payable in whole or in part from the
proceeds of the sales and use tax levied under Section 4A or 4B of that
Act, as applicable. 

(c)  Requires the governing body of a municipality, if the rate of the
municipality's sales and use tax levied under Section 4A or 4B,
Development Corporation Act of 1979 (Article 5190.6, V.T.C.S.), as reduced
under Subsection (b), will impair the imposition of the authority's sales
and use tax, to reduce the rate of the municipality's sales and use tax
under Chapter 321, Tax Code, to the highest rate that, when combined with
the reduced rate of the municipality's sales and use tax levied under
Section 4A or 4B, Development Corporation Act of 1979 (Article  5190.6,
V.T.C.S.), will not impair the imposition of the authority's sales and use
tax. 

(d)  Provides that the rate of the municipality's sales and use tax under
Chapter 321, as reduced under Subsection (c), remains in effect until a
certain date. 
  
(e)  Provides that, on the earlier date under Subsection (d),  the rate of
the municipality's sales and use tax levied by the municipality under
Section 4A or 4B, Development Corporation Act of 1979 (Article 5190.6,
V.T.C.S.), is reduced to the highest rate that will not impair the
imposition of the authority's sales and use tax and the rate of the
municipality's sales and use tax under Chapter 321, Tax Code, is increased
accordingly. 

SECTION 2.  Effective date:  upon passage or September 1, 2003.