HBA-SEB H.B. 3705 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3705 By: Van de Putte Urban Affairs 3/30/1999 Introduced BACKGROUND AND PURPOSE The term "advanced transportation" includes light rail, commuter rail, fixed guideways, high occupancy vehicle lanes, as well as other transportation facilities and services. In light of the growing population of Texas, the development of such means of transportation may be useful as a means of relieving traffic congestion on streets and highways. H.B. 3705 authorizes the board of a rapid transit authority to order an election to create an advanced transportation district (district) within the authority's boundaries and to impose a sales and use tax for advanced transportation. It also authorizes the authority to order an election to impose a sales and use tax for local development within a district's boundaries. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 451, Transportation Code, by adding Subchapter O, as follows: SUBCHAPTER O. ADVANCED TRANSPORTATION DISTRICT Sec. 451.701. DEFINITIONS. Defines "advanced transportation," "local development," "district," and "participating unit." Sec. 451.702. ELECTION AUTHORIZED. Authorizes the board of a rapid transit authority (board, authority) to order an election to create an advanced transportation district (district) within the authority's boundaries and to impose a sales and use tax for advanced transportation. Provides that an authority that has such authorization is one in which the sales and use tax is imposed at a rate of one-half of one percent and in which the principal municipality has a population of 700,000 or more. Requires a sales and use tax that is approved at the election to be one-fourth of one percent until January 1, 2011, and one-half of one percent thereafter. Requires the board to provide written notification of the board's intention to call an election to the governing body of each municipality and the commissioners court of each county, any part of which is in the authority, at least 120 days prior to an election. Requires the authority to pay the costs of an election. Sets forth the language of the ballot. Requires the proceeds of the sales and use tax imposed under this section to be used by the district only for advanced transportation purposes. Sec. 451.703. CONDUCT OF INITIAL ELECTION: SEPARATE RESULT. Requires the election to be conducted so that votes are separately tabulated and canvassed and that the result is declared in each municipality of the authority and in the unincorporated area of a county in the authority. Sec. 451.704. RESULTS OF ELECTION; ORDER. Establishes that a district is created if a majority of the votes cast in the principal municipality of the authority are in favor of the proposition. Sets forth the composition of the district. Requires the board to record the results in its minutes and to adopt an order regarding the specifics of the newly created district and the election results if the district is created. Provides that the order must be accompanied by a map of the district showing the district's boundaries. Requires a copy of the order and map to be filed with the Texas Department of Transportation, with the comptroller, and in the deed records of each county in which the district is located. Sec. 451.705. SUBSEQUENT ELECTIONS. Authorizes the governing body of a municipality to order an election at a later date on the question of joining a district if the voters of a municipality within the authority do not vote to join the district at the initial election. Authorizes the commissioners court of the county to order an election at a later date on the question of joining the district if the voters of the unincorporated area of the county do not vote to join the district at the initial election. Requires the subsequent election to be held in the same manner as the initial election, except that the governmental entity is required to pay the costs of the election, canvass the vote, declare the results, and notify the district of the results. Sec. 451.706. LOCAL DEVELOPMENT SALES AND USE TAX. (a) Authorizes the authority to order an election to impose a sales an use tax until January 1, 2011, for local development within a district's boundaries. Provides that the election is to be held on the same date as the election for creating the district is held. Requires the rate of such sales and use tax for local development to be one-fourth of one percent. Requires the election to impose the tax to be effective only if the district is created and a majority of the votes within the district are cast in favor of the proposition. Provides that the board must provide to the governing body of each municipality and the commissioners court of each county within the authority written notification of the board's intent to call an election for the proposition for the local development sales and use tax within a specific time frame. Requires the notice to also inform the entities of the provisions of Subsection (b). Establishes that the ballot proposition must state the exact purpose for which the sales and use tax will be used. Requires the ballot proposition to state that the local development sales and use tax shall be retained by the district for advanced transportation purposes if the governing body has not adopted a pre-election document as required by Subsection (b). (b) Requires a district to distribute the proceeds of the district's sales and use tax for local development purposes in a participating unit to the governing body of that unit. Provides that, within a specific time frame, the governing body of each political subdivision within the authority must adopt an official pre-election document setting forth the exact local development purpose for which the funds will be used and must deliver a copy of the document to the board within seven days after its passage. Requires all funds received by the participating unit from the district to be used by the governing body exclusively for the purposes set forth in the pre-election document. Prohibits the governing body from amending the pre-election document after the date of its original adoption. Requires the proceeds of the local development sales and use tax to be retained by the district for advanced transportation purposes if a pre-election document is not adopted by the governing body at least 180 days prior to the election date. (c) Authorizes a district to order an election prior to January 1, 2009, to impose a local development sales and use tax until January 1, 2011, within the district's boundaries if the authority does not order an election under Subsection (a) or if the first election fails. Requires the rate of the sales and use tax for local development to be one-fourth of one percent. Establishes that the district must provide written notification of the district's intention to call the election to the governing body of each municipality and the commissioners court of each county of the authority within a specific time frame. Requires the notice to also inform the entities of the provisions of Subsection (d). Provides that the ballot proposition must state the exact purpose for which the sales and use tax will be used by the governing body of the participating unit. Requires the ballot proposition to state that the local development sales and use tax shall be retained by the district for advanced transportation purposes if the governing body has not adopted a preelection document as required by Subsection (d). (d) Requires a district to distribute the proceeds of the district's sales and use tax for local development purposes in a participating unit to the governing body of that unit. Provides that, within a specific time frame, the governing body of each participating unit must adopt an official pre-election document setting forth the exact local development purpose for which the funds will be used and must deliver a copy of the document to the board within seven days after its passage. Requires all funds received by the participating unit from the district to be used by the governing body exclusively for the purposes set forth in the pre-election document. Prohibits the governing body from amending the preelection document after the date of its original adoption. Requires the proceeds of the local development sales and use tax to be retained by the district for advanced transportation purposes if a pre-election document is not adopted by the governing body at least 180 days prior to the election date. (e) Requires any local development sales and use tax authorized under this section to automatically cease effective January 1, 2011. (f) Requires the authority or district to pay the costs of an election ordered under this section. Sec. 451.707. ACCOUNTING. Requires the comptroller to maintain an account of the sales and use tax collected by a district in each participating unit and to provide monthly reports of the collections to the governing body of the district. Sec. 451.708. LIMITATION ON TAX RATE. Prohibits the combined rate of all sales and use taxes imposed by a district and all other political subdivisions of the state from exceeding two percent in any location in the district. Requires the election of a participating unit to join the district to automatically repeal all local sales and use taxes in that unit except for the sales and use tax of the authority and a sales and use tax of not more than one percent imposed by a municipality under Section 321.101(a) (regarding sales and use tax) or 321.103(a) (regarding sales tax), Tax Code, if the imposition of the district's tax would exceed the limit. Sets forth the effective date of the sales and use tax and the repeal of any local sales and use taxes. Sec. 451.709. GOVERNANCE OF DISTRICT. Requires the board to act as the governing body of a district. Provides that the board is responsible for the management, operation, and control of the district. Provides that the business of the district is conducted through its governing body and by the employees of the authority acting under the control and direction of the general manager of the authority. Authorizes the district to enter into contracts with the authority or other private or public entities to conduct the business of the district. Provides that the district has the same powers of the authority that called the election creating the district as provided by Subchapters B (Powers of Authorities), C (Management of Authority), F (Special Programs and Services), H (Bonds), I (Taxation), and K (Boards). Sec. 451.710. DISTRICT ASSETS AND RECORDKEEPING. Requires an asset of a district to be held in the name of the authority. Requires the authority to keep separate books and accounting records for the funds, revenues, expenses, and other property of the district. Sec. 451.711. NATURE OF DISTRICT. Provides that a district is a governmental unit under Chapter 101, Civil Practices and Remedies Code (Tort Claims), and that the operations of the district are not proprietary functions for any purpose, including the application of that chapter. Sec. 451.712. ANNEXATION OF TERRITORY BY MUNICIPALITY. Provides that territory that is not in a district becomes part of the district on annexation by a municipality that is in the district . SECTION 2.Emergency clause. Effective date: upon passage.