HBA-RBT H.B. 3851 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3851
By: Christian
Ways & Means
5/3/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the Sam Rayburn Municipal Power Agency that serves the cities of
Jasper, Livingston, and Liberty has incurred a great amount of debt and
requires additional tax revenue to remain solvent. However, the cities have
reached their sales tax ceiling and cannot retire the debt through raising
taxes because the state prohibits raising local sales taxes above a certain
level. Permitting the cities to raise taxes by a one-half cent sales tax to
pay off bonded indebtedness would permit the agency to be relieved of
certain debt. The tax would have to be approved by voters in all three
cities and last for a period not to exceed 10 years.  H.B. 3851 would
authorize certain cities in the Sam Rayburn Municipal Power agency to
impose a one-half cent sales tax. 

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 Subchapter D, Chapter 163, Utilities Code, by adding
Section 163.103, as follows:  

Sec. 163.103. AUTHORITY TO IMPOSE SALES AND USE TAX. Provides that Chapter
321 (Municipal Sales and Use Tax), Tax Code, applies to the tax authorized
by this section in the same manner as that chapter applies to the tax
authorized by that chapter, however, Section 321.101(f) (Tax Authorized,
Tax Code, does not apply to the tax authorized by this section. Authorizes
certain municipalities to adopt or abolish the sales and use tax authorized
by this section at an election held in the municipality. Establishes that
the tax rate is one-half percent. Provides for the effective date of the
adoption or abolition of the tax. Authorizes the effective date to be
extended by the comptroller, if the comptroller does not have an
opportunity to take the required action for the tax collection or tax
abolishment. Provides that an election to adopt or abolish the tax is
called by the adoption of an order by the governing body of the
municipality. Requires the governing body to call an election if a certain
number of voters petition the body to call the election. Sets forth
required language for a ballot to adopt the tax or to abolish the tax.
Authorizes the revenue collected only to be used to retire certain debt of
the municipal power agency. Requires the municipality to share a certain
amount of the debt, if the municipal power agency has not determined a
municipality's share of the bonded indebtedness by a certain date.
Prohibits a sales and use tax from being collected after certain dates.
Requires the municipality to notify the comptroller of the expiration of
the tax by a certain date.  

SECTION 2.  Effective date: September 1, 1999. 

SECTION 3.  Emergency clause.