89R11377 RDS-D

By: Shaheen H.B. No. 5252

A BILL TO BE ENTITLED

AN ACT

relating to the authority of a municipality to adopt, increase or decrease the rate of, or repeal an additional sales and use tax for property tax relief by ordinance or resolution of the governing body of the municipality.

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

SECTION 1. Section 504.257(c), Local Government Code, is amended to read as follows:

(c) If an authorizing municipality reduces the rate of an additional sales and use tax under Chapter 321, Tax Code, to impose a tax under this chapter for a limited period as provided by this section, and the municipality does not [have an election to] change the rate of the additional sales and use tax before the tax under this chapter expires, on the date the tax under this chapter expires, the rate of the municipality's additional sales and use tax returns to the rate in effect immediately before the tax under this chapter was adopted. [The municipality is not required to hold an election under Chapter 321, Tax Code, to impose the additional sales and use tax at that rate.]

SECTION 2. Section 504.260(a), Local Government Code, is amended to read as follows:

(a) At an election held under Section 504.251 or 504.258, the authorizing municipality may also allow the voters to vote on a ballot proposition to limit the use of the sales and use tax to a specific project. If an authorizing municipality elects to limit the use of the tax to a specific project, in the ballot proposition prescribed by Section 504.256 [or 504.261] a description of the project shall be substituted for the words "new and expanded business enterprises."

SECTION 3. Section 321.101(b), Tax Code, is amended to read as follows:

(b) The governing body of a [A] municipality [that is not disqualified] may by ordinance or resolution [, by a majority vote of the qualified voters of the municipality voting at an election held for that purpose,] adopt, increase or decrease the rate of, or repeal an additional sales and use tax for the benefit of the municipality in accordance with this chapter. [A municipality is disqualified from adopting the additional sales and use tax if the municipality:

[(1) is included within the boundaries of a rapid transit authority created under Chapter 451, Transportation Code;

[(2) is included within the boundaries of a regional transportation authority created under Chapter 452, Transportation Code, by a principal municipality having a population of less than 1.1 million according to the most recent federal decennial census, unless the municipality has a population of 400,000 or more and is located in more than one county;

[(3) is wholly or partly located in a county that contains territory within the boundaries of a regional transportation authority created under Chapter 452, Transportation Code, by a principal municipality having a population in excess of 1.1 million according to the most recent federal decennial census, unless:

[(A) the municipality is a contiguous municipality; or

[(B) the municipality is not included within the boundaries of the authority and is located wholly or partly in a county in which fewer than 250 persons are residents of both the county and the authority according to the most recent federal census; or

[(C) the municipality is not and on January 1, 1993, was not included within the boundaries of the authority; or

[(4) imposes a tax authorized by Chapter 453, Transportation Code.]

SECTION 4. Section 321.1025(c), Tax Code, is amended to read as follows:

(c) If the annexation is approved by the voters, the governing body of the municipality shall repeal [election is to be treated for all purposes as an election to abolish] the additional sales and use tax in the municipality [and the tax is repealed] in the manner provided by this chapter.

SECTION 5. Sections 321.404(a) and (b), Tax Code, are amended to read as follows:

(a) In an election to adopt the tax, the ballot shall be printed to provide for voting for or against the applicable proposition: "A sales and use tax is adopted within the city at the rate of _______ percent" (insert appropriate rate) [or "The adoption of an additional sales and use tax within the city at the rate of ________ percent to be used to reduce the property tax rate" (insert appropriate rate)].

(b) In an election to repeal the tax, the ballot shall be printed to provide for voting for or against the applicable proposition: "The local sales and use tax within the city is abolished [" or "The abolition of the additional sales and use tax within the city]."

SECTION 6. Section 321.409(a), Tax Code, is amended to read as follows:

(a) Notwithstanding any provisions of this code or other state law, a municipality may by a combined ballot proposition lower or repeal any municipal sales tax [, including the additional sales tax for property tax relief,] and by the same proposition raise or adopt any other municipal sales tax [, including the additional sales tax for property tax relief].

SECTION 7. Section 323.101(e), Tax Code, is amended to read as follows:

(e) If the voters of a county approve the adoption of a sales and use tax at an election held on the same election date on which a municipality having territory in the county adopts a sales and use tax [or an additional sales and use tax] and as a result the combined rate of all sales and use taxes imposed by the county and other political subdivisions of this state having territory in the county would exceed two percent at any location in the county, the election to adopt a county sales and use tax has no effect.

SECTION 8. Section 453.151(a), Transportation Code, is amended to read as follows:

(a) If the board determines that implementation of a mass transit plan developed by the transit department is feasible, the board shall order an election to approve a local sales and use tax at the rate determined by the board under Section 453.401 [unless the municipality that created the transit department imposes an additional sales and use tax under Section 321.101(b), Tax Code].

SECTION 9. The following provisions are repealed:

(1) Section 504.261, Local Government Code;

(2) Sections 321.101(c), (d), and (e), Tax Code;

(3) Sections 321.401(d) and (e), Tax Code;

(4) Section 321.403(b), Tax Code;

(5) Section 321.404(c), Tax Code; and

(6) Section 453.151(b), Transportation Code.

SECTION 10. The changes in law made by this Act apply only to the adoption, increase or decrease in the rate of, or repeal of an additional sales and use tax for property tax relief by a municipality under Chapter 321, Tax Code, on or after the effective date of this Act.

SECTION 11. This Act takes effect September 1, 2025.