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A BILL TO BE ENTITLED
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AN ACT
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relating to the municipal sales and use tax for street maintenance; |
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authorizing an increase in the rate of a tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 327.003, Tax Code, is amended by |
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amending Subsections (b) and (c) and adding Subsections (b-1), |
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(c-1), and (d) to read as follows: |
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(b) Subject to Subsection (b-1), a [A] municipality may not |
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adopt a tax under this chapter or increase the rate of the tax if as |
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a result of the adoption of the tax or the increase in the rate of |
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the tax the combined rate of all sales and use taxes imposed by the |
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municipality and other political subdivisions of this state having |
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territory in the municipality would exceed two percent at any |
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location in the municipality. |
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(b-1) A municipality that is a member of a subregion of a |
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transportation authority governed by a board described in |
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Subchapter O, Chapter 452, Transportation Code, may not adopt a tax |
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under this chapter or increase the rate of the tax if as a result of |
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the adoption of the tax or the increase in the rate of the tax the |
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combined rate of all sales and use taxes imposed by the municipality |
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and other political subdivisions of this state having territory in |
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the municipality would exceed 2.25 percent at any location in the |
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municipality. |
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(c) Subject to Subsection (c-1), if [If] the voters of a |
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municipality approve the adoption of the tax or the increase in the |
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rate of the tax at an election held on the same election date on |
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which another political subdivision adopts a sales and use tax or |
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approves the increase in the rate of its sales and use tax and as a |
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result the combined rate of all sales and use taxes imposed by the |
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municipality and other political subdivisions of this state having |
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territory in the municipality would exceed two percent at any |
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location in the municipality, the election to adopt a sales and use |
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tax under this chapter has no effect. |
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(c-1) If the voters of a municipality described by |
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Subsection (b-1) approve the adoption of the tax or the increase in |
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the rate of the tax at an election held on the same election date on |
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which another political subdivision adopts a sales and use tax or |
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approves the increase in the rate of its sales and use tax and as a |
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result the combined rate of all sales and use taxes imposed by the |
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municipality and other political subdivisions of this state having |
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territory in the municipality would exceed 2.25 percent at any |
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location in the municipality, the election to adopt a sales and use |
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tax under this chapter has no effect. |
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(d) This subsection applies only to a municipality |
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described by Subsection (b-1) that adopts a tax under this chapter |
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at, or increases the rate of a tax under this chapter to, a rate |
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that, when added to all other sales and use taxes imposed by the |
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municipality and other political subdivisions of this state having |
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territory in the municipality, results in a combined sales and use |
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tax rate that exceeds two percent at any location in the |
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municipality. Notwithstanding any other law, the increment of the |
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rate imposed by the municipality under this chapter equal to the |
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increment by which the combined sales and use tax rate at a location |
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in the municipality's territory exceeds two percent is excluded for |
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purposes of any law other than a provision of this chapter in |
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computing the combined rate of all sales and use taxes imposed by |
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the municipality and other political subdivisions of this state |
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having territory in the municipality. |
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SECTION 2. Section 327.004, Tax Code, is amended to read as |
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follows: |
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Sec. 327.004. TAX RATE. The tax authorized by this chapter |
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may be imposed at any rate that is an increment of one-eighth of one |
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percent, that the municipality determines is appropriate, and that |
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would not result in a combined rate that exceeds the maximum |
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combined rate prescribed by Section 327.003(b) or (b-1), as |
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applicable. |
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SECTION 3. Section 327.006, Tax Code, is amended by adding |
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Subsection (c) to read as follows: |
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(c) This subsection applies only to a municipality |
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described by Section 327.003(b-1) that proposes to adopt the tax |
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authorized by this chapter at a rate that would result in a combined |
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rate in excess of two percent of all sales and use taxes imposed by |
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the municipality and other political subdivisions of this state |
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having territory in the municipality. In addition to the statement |
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required under Subsection (b), the ballot must include the |
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following statement: "If adopted, this proposition may result in a |
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combined local sales and use tax rate in (name of municipality) that |
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exceeds two percent." |
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SECTION 4. Section 327.0065, Tax Code, is amended by |
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amending Subsection (b) and adding Subsection (d) to read as |
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follows: |
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(b) A municipality that has adopted a sales and use tax |
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under this chapter may by ordinance increase the rate of the tax to |
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any rate that is an increment of one-eighth of one percent, that the |
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municipality determines is appropriate, and that would not result |
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in a combined rate that exceeds the maximum combined rate |
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prescribed by Section 327.003(b) or (b-1), as applicable, if the |
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increase is authorized at an election held in the municipality. |
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(d) This subsection applies only to a municipality |
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described by Section 327.003(b-1) that proposes to increase the |
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rate of the tax authorized by this chapter to a rate that would |
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result in a combined rate in excess of two percent of all sales and |
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use taxes imposed by the municipality and other political |
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subdivisions of this state having territory in the municipality. |
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In addition to the statement required under Subsection (c), the |
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ballot must include the following statement: "If adopted, this |
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proposition may result in a combined local sales and use tax rate in |
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(name of municipality) that exceeds two percent." |
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SECTION 5. Section 327.007(b), Tax Code, is amended to read |
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as follows: |
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(b) An election to reauthorize the tax is called and held in |
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the same manner as an election to adopt the tax under Section |
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327.006, except the ballot proposition shall be prepared to permit |
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voting for or against the proposition: "The reauthorization of the |
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local sales and use tax in (name of municipality) at the rate of |
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(insert appropriate rate) to continue providing revenue for |
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maintenance and repair of municipal streets. The tax expires on the |
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(insert "first day of the first calendar quarter occurring after |
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the fourth anniversary" or "last day of the first calendar quarter |
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occurring after the (insert[,] eighth[,] or 10th anniversary, as |
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applicable)") [anniversary] of the date of this election unless the |
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imposition of the tax is reauthorized." |
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SECTION 6. Section 327.008, Tax Code, is amended to read as |
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follows: |
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Sec. 327.008. USE OF TAX REVENUE. Revenue from the tax |
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imposed under this chapter may be used only to maintain and repair a |
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municipal: |
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(1) street or sidewalk; or |
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(2) water, wastewater, or stormwater system located in |
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the width of a way of a municipal street [streets or sidewalks |
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existing on the date of the election to adopt the tax]. |
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SECTION 7. Sections 327.006(c) and 327.0065(d), Tax Code, |
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as added by this Act, and Section 327.007(b), Tax Code, as amended |
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by this Act, apply only to ballot language for an election ordered |
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on or after the effective date of this Act. Ballot language for an |
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election ordered before the effective date of this Act is governed |
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by the law in effect when the election was ordered. |
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SECTION 8. 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 September 1, 2021. |