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


Office of House Bill AnalysisH.B. 445
By: Goodman
Ways & Means
2/15/2001
Introduced



BACKGROUND AND PURPOSE 

 Many city streets have deteriorated due to lack of  funds for repairs and
maintenance.  Municipalities use some of their tax revenue for the repair
and maintenance of streets. Under current law, certain municipalities are
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. 

EFFECTIVE DATE

On passage.