78R2095 JD-D

By:  Shapiro                                                      S.B. No. 972



A BILL TO BE ENTITLED

AN ACT

relating to the addition of certain municipalities to the territory 
of a regional transportation authority.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter P, Chapter 452, Transportation Code, 
is amended by adding Section 452.6025 to read as follows:
	Sec. 452.6025.  ADDITION OF CERTAIN MUNICIPALITIES BY 
ELECTION.  (a)  This section applies only to a municipality that:
		(1)  has created an industrial development corporation 
under Section 4A or 4B, Development Corporation Act of 1979 
(Article 5190.6, Vernon's Texas Civil Statutes); and
		(2)  levies a sales and use tax under Section 4A or 4B 
of that Act for the benefit of the corporation.
	(b)  The territory of a municipality that is not part of an 
authority may 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, Vernon's Texas Civil Statutes), as applicable, to the 
highest rate that will not impair:
		(1)  the imposition of the authority's sales and use 
tax; and        
		(2)  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)  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, Vernon's Texas Civil Statutes), as reduced under 
Subsection (b), will impair the imposition of the authority's sales 
and use tax, the governing body of the municipality shall 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, Vernon's 
Texas Civil Statutes), will not impair the imposition of the 
authority's sales and use tax.
	(d)  The rate of the municipality's sales and use tax under 
Chapter 321, as reduced under Subsection (c), remains in effect 
until the earlier of the date that:
		(1)  the bonds or other obligations are paid in full; or               
		(2)  the amount of money necessary to pay in full the 
bonds or other obligations has been set aside in a trust account 
dedicated to the payment of the bonds or other obligations.
	(e)  On the earlier date under Subsection (d):                          
		(1)  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, Vernon's Texas Civil 
Statutes), is reduced to the highest rate that will not impair the 
imposition of the authority's sales and use tax; and
		(2)  the rate of the municipality's sales and use tax 
under Chapter 321, Tax Code, is increased accordingly.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.