85R8842 CJC-D

By: Leach H.B. No. 1723

A BILL TO BE ENTITLED

AN ACT

relating to the allocation of certain surplus state revenue for periodic reductions in the state sales and use tax rates.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter G, Chapter 403, Government Code, is amended by adding Section 403.108 to read as follows:

Sec. 403.108. SALES TAX REDUCTION FUND. (a) The sales tax reduction fund is a special fund in the state treasury outside the general revenue fund. The comptroller shall administer the fund. The fund consists of:

(1) money transferred to the fund in accordance with Subsection (b);

(2) money deposited to the credit of the fund in accordance with Subsection (c); and

(3) interest earned on money in the fund.

(b) The comptroller shall transfer money to the fund as directed by the legislature in the General Appropriations Act or by other law.

(c) The comptroller shall deposit to the credit of the fund money that would be transferred to the economic stabilization fund under Subsections (b), (c), (d), and (e), Section 49-g, Article III, Texas Constitution, on the transfer dates described by Subsections (b) and (c) of that section, but for the limitation prescribed by Subsection (g) of that section.

(d) Money in the fund may be used only for a state sales tax reduction period under Section 151.051, Tax Code, and is not subject to appropriation unless transferred to the general revenue fund, or an account in the general revenue fund, as provided by that section.

SECTION 2. Section 151.051, Tax Code, is amended to read as follows:

Sec. 151.051. SALES TAX IMPOSED. (a) A tax is imposed on each sale of a taxable item in this state at a rate determined by the comptroller as provided by this section.

(b) Except as provided by this section, the [The] sales tax rate is 6-1/4 percent of the sales price of the taxable item sold.

(c) Not later than the 90th day of each state fiscal year, the comptroller shall determine whether there are sufficient balances in the sales tax reduction fund so that 95 percent of the balances would equal or exceed the amount necessary to reimburse the general revenue fund for the estimated amount of state sales and use tax revenue the state would forgo if the state sales tax rate were reduced by at least one-tenth of one percent for a period of not less than two consecutive days.

(d) If the comptroller determines under Subsection (c) that 95 percent of the balances in the sales tax reduction fund would support a reduction in the state sales tax rate for at least the period described by Subsection (c), the comptroller shall declare a reduced sales tax rate. The comptroller shall determine the length of the period during which the sales tax rate will be reduced, and the reduced sales tax rate for that period, in a manner that provides for the greatest reduction in the sales tax rate for the longest period of time possible given the comptroller's determination of the fund's available balance under Subsection (c). The reduced sales tax rate must be a rate that is a whole-number multiple of one-tenth of one percent lower than the tax rate otherwise provided by Subsection (b) and must take effect on the first day of a calendar quarter.

(e) The comptroller shall publish notice of the reduced state sales tax rate and the period during which the sales tax rate is reduced in the Texas Register, shall mail notice of the reduced sales tax rate to each permit holder, and may provide notice by other means the comptroller determines prudent.

(f) On the day after the last day of the period for which the state sales tax rate is reduced under this section, the comptroller shall calculate the positive difference between the estimated state sales and use tax revenue anticipated to be collected during the period for which the sales tax rate is reduced and the estimated state sales and use tax revenue that would be collected during the same period if the sales tax rate were not reduced during that period. Except as provided by Subsection (g), the comptroller shall transfer from the sales tax reduction fund to the general revenue fund an amount of money equal to the amount calculated as provided by this subsection.

(g) Before making the transfer required by Subsection (f), the comptroller shall determine what portion of the amount of money calculated as provided by that subsection would have been deposited to the credit of a dedicated account in the general revenue fund or to another fund under a provision of the constitution of this state approved by the voters of this state before, or under a general law in effect on, January 1, 2017, had the state sales tax rate not been reduced under Subsection (d). The comptroller shall transfer to the credit of each of those dedicated accounts and other funds the amount of money that would have been deposited to the account or fund had the sales tax rate not been reduced.

(h) The comptroller shall adopt rules to implement this section.

SECTION 3. Section 151.101, Tax Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b) The tax is at the same percentage rate as is provided by or determined under Section 151.051 [of this code] on the sales price of the taxable item.

(c) The comptroller shall include notice of a reduced state use tax rate and the period during which the use tax rate is reduced in each notice published, mailed, or otherwise provided under Section 151.051(e).

SECTION 4. This Act takes effect September 1, 2017.