87R5046 CJC-F
 
  By: Johnson of Dallas H.B. No. 2088
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the municipal sales and use tax for street maintenance;
  authorizing an increase in the rate of a tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 327.003, Tax Code, is amended by
  amending Subsections (b) and (c) and adding Subsections (b-1),
  (c-1), and (d) to read as follows:
         (b)  Subject to Subsection (b-1), a [A] municipality may not
  adopt a tax under this chapter or increase the rate of the tax if as
  a result of the adoption of the tax or the increase in the rate of
  the tax the combined rate of all sales and use taxes imposed by the
  municipality and other political subdivisions of this state having
  territory in the municipality would exceed two percent at any
  location in the municipality.
         (b-1)  A municipality that is a member of a subregion of a
  transportation authority governed by a board described in
  Subchapter O, Chapter 452, Transportation Code, may not adopt a tax
  under this chapter or increase the rate of the tax if as a result of
  the adoption of the tax or the increase in the rate of the tax the
  combined rate of all sales and use taxes imposed by the municipality
  and other political subdivisions of this state having territory in
  the municipality would exceed 2.25 percent at any location in the
  municipality.
         (c)  Subject to Subsection (c-1), if [If] the voters of a
  municipality approve the adoption of the tax or the increase in the
  rate of the tax at an election held on the same election date on
  which another political subdivision adopts a sales and use tax or
  approves the increase in the rate of its sales and use tax and as a
  result the combined rate of all sales and use taxes imposed by the
  municipality and other political subdivisions of this state having
  territory in the municipality would exceed two percent at any
  location in the municipality, the election to adopt a sales and use
  tax under this chapter has no effect.
         (c-1)  If the voters of a municipality described by
  Subsection (b-1) approve the adoption of the tax or the increase in
  the rate of the tax at an election held on the same election date on
  which another political subdivision adopts a sales and use tax or
  approves the increase in the rate of its sales and use tax and as a
  result the combined rate of all sales and use taxes imposed by the
  municipality and other political subdivisions of this state having
  territory in the municipality would exceed 2.25 percent at any
  location in the municipality, the election to adopt a sales and use
  tax under this chapter has no effect.
         (d)  This subsection applies only to a municipality
  described by Subsection (b-1) that adopts a tax under this chapter
  at, or increases the rate of a tax under this chapter to, a rate
  that, when added to all other sales and use taxes imposed by the
  municipality and other political subdivisions of this state having
  territory in the municipality, results in a combined sales and use
  tax rate that exceeds two percent at any location in the
  municipality. Notwithstanding any other law, the increment of the
  rate imposed by the municipality under this chapter equal to the
  increment by which the combined sales and use tax rate at a location
  in the municipality's territory exceeds two percent is excluded for
  purposes of any law other than a provision of this chapter in
  computing the combined rate of all sales and use taxes imposed by
  the municipality and other political subdivisions of this state
  having territory in the municipality.
         SECTION 2.  Section 327.004, Tax Code, is amended to read as
  follows:
         Sec. 327.004.  TAX RATE. The tax authorized by this chapter
  may be imposed at any rate that is an increment of one-eighth of one
  percent, that the municipality determines is appropriate, and that
  would not result in a combined rate that exceeds the maximum
  combined rate prescribed by Section 327.003(b) or (b-1), as
  applicable.
         SECTION 3.  Section 327.006, Tax Code, is amended by adding
  Subsection (c) to read as follows:
         (c)  This subsection applies only to a municipality
  described by Section 327.003(b-1) that proposes to adopt the tax
  authorized by this chapter at a rate that would result in a combined
  rate in excess of two percent of all sales and use taxes imposed by
  the municipality and other political subdivisions of this state
  having territory in the municipality. In addition to the statement
  required under Subsection (b), the ballot must include the
  following statement: "If adopted, this proposition may result in a
  combined local sales and use tax rate in (name of municipality) that
  exceeds two percent."
         SECTION 4.  Section 327.0065, Tax Code, is amended by
  amending Subsection (b) and adding Subsection (d) to read as
  follows:
         (b)  A municipality that has adopted a sales and use tax
  under this chapter may by ordinance increase the rate of the tax to
  any rate that is an increment of one-eighth of one percent, that the
  municipality determines is appropriate, and that would not result
  in a combined rate that exceeds the maximum combined rate
  prescribed by Section 327.003(b) or (b-1), as applicable, if the
  increase is authorized at an election held in the municipality.
         (d)  This subsection applies only to a municipality
  described by Section 327.003(b-1) that proposes to increase the
  rate of the tax authorized by this chapter to a rate that would
  result in a combined rate in excess of two percent of all sales and
  use taxes imposed by the municipality and other political
  subdivisions of this state having territory in the municipality.
  In addition to the statement required under Subsection (c), the
  ballot must include the following statement: "If adopted, this
  proposition may result in a combined local sales and use tax rate in
  (name of municipality) that exceeds two percent."
         SECTION 5.  Section 327.007(b), Tax Code, is amended to read
  as follows:
         (b)  An election to reauthorize the tax is called and held in
  the same manner as an election to adopt the tax under Section
  327.006, except the ballot proposition shall be prepared to permit
  voting for or against the proposition: "The reauthorization of the
  local sales and use tax in (name of municipality) at the rate of
  (insert appropriate rate) to continue providing revenue for
  maintenance and repair of municipal streets. The tax expires on the
  (insert "first day of the first calendar quarter occurring after
  the fourth anniversary" or "last day of the first calendar quarter
  occurring after the (insert[,] eighth[,] or 10th anniversary, as
  applicable)") [anniversary] of the date of this election unless the
  imposition of the tax is reauthorized."
         SECTION 6.  Section 327.008, Tax Code, is amended to read as
  follows:
         Sec. 327.008.  USE OF TAX REVENUE. Revenue from the tax
  imposed under this chapter may be used only to maintain and repair a 
  municipal:
               (1)  street or sidewalk; or
               (2)  water, wastewater, or stormwater system located in
  the width of a way of a municipal street [streets or sidewalks
  existing on the date of the election to adopt the tax].
         SECTION 7.  Sections 327.006(c) and 327.0065(d), Tax Code,
  as added by this Act, and Section 327.007(b), Tax Code, as amended
  by this Act, apply only to ballot language for an election ordered
  on or after the effective date of this Act. Ballot language for an
  election ordered before the effective date of this Act is governed
  by the law in effect when the election was ordered.
         SECTION 8.  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, 2021.