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


Office of House Bill AnalysisC.S.H.B. 445
By: Goodman
Ways & Means
3/4/2001
Committee Report (Substituted)



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.  C.S.H.B. 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

C.S.H.B. 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. 

C.S.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. 

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 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.  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

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 


COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 445 modifies the original bill by setting forth provisions
regarding an election to reauthorize a municipal sales and use tax for the
maintenance of municipal streets (maintenance tax).  The substitute also
modifies the original bill by setting forth provisions regarding the
expiration date for the maintenance tax and procedures for delay of the
expiration date by the comptroller.