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A BILL TO BE ENTITLED
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AN ACT
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relating to the substitution of a local sales and use tax for |
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property taxes imposed by certain local governments; authorizing |
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the imposition of a tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 3, Tax Code, is amended by |
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adding Chapter 328 to read as follows: |
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CHAPTER 328. SUPPLEMENTAL LOCAL SALES AND USE TAX |
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Sec. 328.001. DEFINITIONS. In this chapter: |
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(1) "Lost property tax revenue" means the estimated |
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amount of property tax revenue to be received by a qualifying local |
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government for the tax year in which that government adopts an |
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ordinance or order described by Subdivision (2)(A), multiplied by |
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1.08. |
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(2) "Qualifying local government" means a |
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municipality or county that: |
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(A) before June 30 of a year: |
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(i) adopts an ordinance or order providing |
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that, beginning January 1 of the following year, the local |
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government will not impose a property tax and instead elects to |
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impose a supplemental sales and use tax; and |
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(ii) forwards a certified copy of the |
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ordinance or order described by Subparagraph (i) to the |
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comptroller; or |
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(B) in a preceding year, adopted and forwarded to |
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the comptroller an ordinance or order described by Paragraph (A) |
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but has not subsequently adopted an ordinance or order abolishing |
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the supplemental sales and use tax imposed by the government. |
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(3) "Supplemental sales and use tax" means a sales and |
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use tax authorized by this chapter. |
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Sec. 328.002. APPLICABILITY OF OTHER LAW. (a) Except as |
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otherwise provided by this chapter: |
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(1) Chapter 321 applies to a supplemental sales and |
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use tax imposed by a municipality; and |
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(2) Chapter 323 applies to a supplemental sales and |
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use tax imposed by a county. |
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(b) The following provisions do not apply to a supplemental |
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sales and use tax: |
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(1) Sections 321.101 and 323.101; |
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(2) Subchapter E, Chapter 321, Subchapter E, Chapter |
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323, and the other provisions of Chapters 321 and 323 relating to an |
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election; |
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(3) Sections 321.506-321.508; and |
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(4) Section 323.505. |
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(c) A supplemental sales and use tax is not an additional |
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sales and use tax for purposes of Section 321.101 or any other law. |
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Sec. 328.003. TAX AUTHORIZED. (a) A qualifying local |
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government by adoption of an ordinance or order may adopt, |
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increase, reduce, or abolish the supplemental sales and use tax. |
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The tax is in addition to any other sales and use tax authorized by |
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law, but may only be imposed during a period during which the |
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qualifying local government does not impose a property tax. |
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(b) A qualifying local government is not required to call an |
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election to adopt, increase, reduce, or abolish the supplemental |
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sales and use tax. |
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Sec. 328.004. TAX RATE; INCREASE, REDUCTION, OR ABOLITION |
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OF TAX. (a) In the first year in which a qualifying local |
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government imposes the supplemental sales and use tax, the rate of |
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the tax is equal to a rate that, when applied to the estimated |
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cumulative sales price of the sale, use, storage, or other |
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consumption of taxable items within the local government during |
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that year, would produce an amount equal to the local government's |
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lost property tax revenue. The ordinance or order authorizing the |
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tax and adopted under Section 328.003 must specify the tax rate. |
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(b) A qualifying local government that imposes the |
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supplemental sales and use tax may by adoption of an ordinance or |
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order annually increase or reduce the rate of the tax in increments |
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of one-eighth of one percent. A reduction in the rate of the tax may |
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not impair any outstanding debt or other obligation payable from |
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the tax. |
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(c) A qualifying local government that imposes the |
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supplemental sales and use tax may by adoption of an ordinance or |
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order abolish the tax if there is no outstanding debt secured by the |
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tax. |
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(d) A certified copy of an ordinance or order described by |
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this section must be forwarded to the comptroller before June 30 of |
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the year preceding the January 1 on which the action approved in the |
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ordinance or order is to take effect. |
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Sec. 328.005. SALES AND USE TAX EFFECTIVE DATE. The |
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adoption, increase, reduction, or abolition of the supplemental |
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sales and use tax takes effect on the next January 1 that is at least |
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six months after the date the qualifying local government forwards |
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to the comptroller the copy of the ordinance or order adopting, |
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increasing, reducing, or abolishing the tax, as applicable. |
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Sec. 328.006. EFFECT ON COMBINED LOCAL TAX RATE. The rate |
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of a supplemental sales and use tax may not be considered for |
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purposes of determining the combined local tax rate in any area. |
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Sec. 328.007. USE OF TAX REVENUE. Revenue from a |
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supplemental sales and use tax is for the use and benefit of the |
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qualifying local government imposing the tax and may be used for any |
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purpose for which the general funds of that government may be used. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect December 1, 2017. |