HBA-AMW, CBW H.B. 445 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 445
By: Goodman
Ways & Means
7/19/2001
Enrolled



BACKGROUND AND PURPOSE 

Many city streets have deteriorated because of a lack of funding for
repairs and maintenance. Municipalities use some of their tax revenue for
the repair and maintenance of streets.  Prior to the 77th Legislature,
certain municipalities were prohibited from adopting an additional sales
and use tax.  House Bill 445 allows  a municipality to adopt a one-fourth
of one percent municipal sales and use tax for the maintenance and repair
of municipal streets if approved by a majority of registered voters. 

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. 

ANALYSIS

House Bill 445 amends the Tax Code to create a municipal sales and use tax
for the maintenance of municipal streets (maintenance tax).  The bill
authorizes a municipality to adopt the maintenance tax, at an election held
in the municipality, at a rate of one-fourth of one percent and authorizes
the use of tax revenue only to maintain and repair municipal streets
existing on the date of the election. The bill prohibits a municipality
from adopting a maintenance tax if, as a result of the adoption of the tax,
the combined rate of all sales and use taxes imposed by the municipality
and other political subdivisions of this state having territory in the
municipality would exceed two percent at any location in the municipality.
The bill provides that an election to adopt a maintenance tax has no effect
if the voters of a municipality approve the adoption of the tax at an
election held on the same election date on which another political
subdivision adopts a sales and use tax or approves the increase in the rate
of its sales and use tax and as a result the combined rate of all sales and
use taxes imposed by the municipality and other political subdivisions of
this state having territory in the municipality would exceed two percent at
any location in the municipality. 

H.B. 445 sets forth procedures for calling an election to adopt a
maintenance tax, including ballot requirements, and establishes procedures
related to the adoption of such a tax. 

The bill specifies that unless the imposition of the maintenance tax is
reauthorized, the tax expires on the fourth anniversary of the date the tax
originally took effect or the first day of the first calendar quarter
occurring after the fourth anniversary of the date the tax was last
reauthorized.  An election to reauthorize the maintenance tax is called and
held using the same procedures used for the election to adopt the
maintenance tax, except that the bill sets forth different requirements
regarding the language of the ballot proposition.  The bill prohibits a
municipality from calling an election on the question of authorizing a new
maintenance tax before the first anniversary of the date on which the tax
expired if the election to reauthorize the maintenance tax is not held
before the tax expires or if a majority of the votes cast in an election to
reauthorize the tax do not favor reauthorization.   

The bill requires the municipality to notify the comptroller of public
accounts (comptroller) of the scheduled expiration of the maintenance tax
not later than the 10th day after the date the municipality determines that
the tax will expire.  The bill authorizes the comptroller to delay the
scheduled expiration date if the  comptroller notifies the municipality
that more time is required, and specifies that the comptroller must provide
a new expiration date that is not later than the last day of the first
calendar quarter occurring after the notification to the comptroller. 

EFFECTIVE DATE

June 11, 2001.