HBA-NLM S.B. 1511 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1511 By: Ogden County Affairs 5/14/1999 Engrossed BACKGROUND AND PURPOSE Currently, certain local governments are authorized to levy local taxes, including a county sales tax and a metropolitan transit authority (MTA) tax. However, state law prohibits local taxes from exceeding a total of 2 percent. An MTA tax imposed within a small area of a county may limit the amount of sales tax the county can levy. This limitation may prevent some counties from being able to raise enough revenue to pay for necessary county services. S.B. 1511 sets forth provisions regarding the creation of a county assistance district in certain counties in which a rapid transit or regional transportation authority is located. 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 Subtitle B, Title 12, Local Government Code, by adding Chapter 384 to read as follows: CHAPTER 384. COUNTY ASSISTANCE DISTRICT Sec. 384.001. DEFINITION. Defines "district." Sec. 384.002. APPLICABILITY. Provides that this chapter applies only to a county that has a population of less than 45,000 and any portion of which is included in an authority governed by Chapter 451 or 452, Transportation Code. Sec. 384.003. CREATION AND FUNCTIONS OF DISTRICT. (a) Authorizes the commissioners court of the county to call an election on the question of creating a county assistance district (district) under this chapter to perform certain district functions. (b) Provides that the order calling the election must define the boundaries of the district to include any portion of the county that is not located in an authority governed by Chapter 451 or 452, Transportation Code, and call for the election to be held within those boundaries. (c) Specifies that the ballot at the election must be printed to permit voting for or against the proposition, and provides the language for the ballot. (d) Provides that the district is created if a majority of the votes received at the election favor the creation of the district. (e) Prohibits another election on the question of creating a county assistance district, if a majority of the votes received at the election are against the creation of the district, from being held in the county before the first anniversary of the most recent election concerning the creation of a district. (f) Authorizes the commissioners court to call an election to be held in an area of the county that is not located in a district created under this section to determine whether the area should be included in the district and whether the district's sales and use tax should be imposed in the area. Prohibits an election from being held in an area that is included in an authority governed by Chapter 451 or 452, Transportation Code. Provides that the area is included in the district and the sales and use tax is imposed if a majority of the votes received at the election favor inclusion in the district and imposition of the sales and use tax. Sec. 384.004. POLITICAL SUBDIVISION. Establishes that a district is a political subdivision of this state. Sec. 384.005. GOVERNING BODY. Provides that the commissioners court of the county in which the district is created is the governing body of the district. Specifies that a member of the commissioners court is not entitled to compensation for service on the governing body of the district but is entitled to reimbursement for actual and necessary expenses. Sec. 384.006. GENERAL POWERS OF DISTRICT. Sets forth the general powers and authority of a district. Establishes the rulemaking authority of the district. Authorizes a district to contract with a public or private person to perform any act the district is authorized to perform under this chapter. Prohibits a district from levying an ad valorem tax. Sec. 384.007. SALES AND USE TAX. Authorizes a district by order to impose a sales and use tax under this chapter to finance the operations of the district only if the tax is approved at an election held under Section 384.003. Prohibits a district from adopting a sales and use tax under this chapter if the adoption of the tax would result in a combined tax rate of all local sales and use taxes of more than two percent in any location in the district. Sec. 384.008. TAX CODE APPLICABLE. Provides that Chapter 323, Tax Code, governs the imposition, computation, administration, collection, and remittance of a tax authorized under this chapter except as inconsistent with this chapter, and specifies that Section 323.101(b), Tax Code, does not apply to a tax authorized by this chapter. Sec. 384.009. TAX RATE. Specifies that the rate of a tax adopted under this chapter must be one-eighth, one-fourth, three-eighths, or one-half of one percent. Sec. 384.010. REPEAL OR RATE CHANGE. Authorizes a district that has adopted a sales and use tax under this chapter to, by order and subject to Section 384.007(b), change the rate of the tax or repeal the tax if the change or repeal is approved by a majority of the votes received in the district at an election held for that purpose. Authorizes the tax to be changed in one or more increments of one-eighth of one percent to a maximum of one-half of one percent. Sets forth the ballot for an election to change the tax and the ballot for the election to repeal the tax. Sec. 384.011. IMPOSITION OF TAX. Specifies that a tax is imposed on the receipts from the sale at retail of taxable items in the district at the rate approved at the election, if the district adopts the tax. Provides that there is also imposed an excise tax on the use, storage, or other consumption in the district of tangible personal property purchased, leased, or rented from a retailer during the period that the tax is effective in the district. Provides that the rate of the excise tax is the same as the rate of the sales tax portion of the tax and is applied to the sale price of the tangible personal property. Sec. 384.012. EFFECTIVE DATE OF TAX. Specifies the date on which the adoption of the tax, the change of the tax rate, or the repeal of the tax takes effect. SECTION 2. Emergency clause. Effective date: upon passage.