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78R15558 DAK-F


By:  Wentworth                                                    S.B. No. 1705

Substitute the following for S.B. No. 1705:                                   

By:  Puente                                                   C.S.S.B. No. 1705



A BILL TO BE ENTITLED

AN ACT

relating to the authority of certain taxing entities to repeal the 
local sales and use tax exemption for telecommunications services.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1. Section 322.109, Tax Code, is amended by amending 
Subsection (d) and adding Subsections (f), (g), and (h) to read as 
follows:
	(d)  The governing board of a taxing entity created under 
Chapter 451, Transportation Code, may not repeal the application of 
the exemption provided by Subsection (a) unless the repeal is first 
approved by a majority of the members of the governing body of each 
municipality that created the taxing entity, except as authorized 
by Subsection (f).  A reinstatement of the exemption must be 
approved in the same manner.
	(f)  The governing board of a taxing entity created before 
1980 in which the principal municipality has a population of less 
than 1.2 million may not repeal the application of the exemption 
provided by Subsection (a) unless the repeal is first approved by a 
majority vote of a committee created under Section 451.061(d), 
Transportation Code.  A reinstatement of the exemption must be 
approved in the same manner.
	(g)  The imposition or collection of revenue resulting from a 
repeal of the application of the exemption provided by Subsection 
(a) under the procedure provided by Subsection (e) is tolled for any 
period during which the governing board obtains receipts from sales 
and use tax, collected for the purpose of an advanced 
transportation district created under Section 451.702, 
Transportation Code, in excess of the amount of revenue generated 
by the repeal of the application of the exemption.
	(h)  If the application of the exemption provided by 
Subsection (a) is repealed, a telecommunications services provider 
whose services were previously exempt under Subsection (a) may 
retain one percent of all sales and use taxes imposed as a result of 
the repeal.
	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.