HBA-ALS H.B. 591 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 591
By: West, George
Ways and Means
3/11/1999
Introduced



BACKGROUND AND PURPOSE 

Under current law, a qualified county may impose or repeal a county sales
and use tax if it is approved at a county election.  However, a county may
not adopt a sales and use tax if the resulting combined rate of all sales
and use taxes that are imposed by the county and other political
subdivisions exceeds two percent at any location in the county. There is
concern that this restriction does not allow certain counties to impose
sufficient sales and use taxes. 

Under H.B. 591,  a qualified county may increase or decrease the rate of
sales and use tax in increments of one-eighth of one percent, with a
minimum  tax of one-eighth of one percent and a maximum tax of two percent,
if such a change is approved by the voters at an election.  However, the
bill stipulates that a county may not increase the tax rate if the increase
results in a combined sales and use tax of the county and other political
subdivisions which exceeds two percent anywhere in the county.  The bill
sets out the effective date of tax rate change and specifies the language
that is required to appear on the ballot in an election to change the tax
rate.   

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 Sections 323.101(a),(d), and (e), Tax Code, by adding
that a qualified county is authorized to increase or reduce the rate of the
county sales and use tax under this chapter if approved in an election by a
majority of qualified voters in that county.  Authorizes a county to impose
the tax in increments of one-eighth of one percent  with a minimum tax of
one-eighth of one percent and a maximum tax of two percent.  Makes
conforming changes. 

SECTION 2.  Amends Section 323.102, Tax Code, by adding Subsection (d) to
provide that a change in the tax rate imposed under this chapter takes
effect on the first day of the calendar quarter that follows the first
complete calendar quarter following the date that the comptroller receives
notice of the action as required by Section 323.405(b). 

SECTION 3. Amends Section 323.103, Tax Code, by adding language that
provides for an imposed tax on  receipts from the retail sale of taxable
items in a county that has adopted the tax authorized by this chapter at a
rate approved at the election.  Removes language providing for an imposed
tax on receipts from the retail sale of taxable items in a county that has
adopted the tax authorized by this chapter of one half of one percent, or
at a rate of one percent in a county that has no territory within a
municipality's limits. 

SECTION 4. Amends Section 323.404, Tax Code, to delete.  Deletes "one half
percent" county sales and use tax from the required ballot wording in an
election to adopt or change the tax rate which would reduce the county
property tax rate.  Deletes Subsection (b) requiring that a ballot must
provide for voting for or against an  "Adoption of a one half percent
county sales and use tax within the county to be used to reduce the county
property tax rate" in an election in a county that does not have territory
within a municipality's limits.  Redesignates existing Subsection (c) to
Subsection (b).  Makes conforming and nonsubstantive changes. 


SECTION 5.  Amends Section 323.405(a), Tax Code, by making conforming and
nonsubstantive changes. 

SECTION 6.  Emergency clause. 
                       Effective date: upon passage.