Bill Text: TX HB705 | 2019-2020 | 86th Legislature | Comm Sub


Bill Title: Relating to the substitution of a local sales and use tax for maintenance and operations property taxes imposed by certain local governments; authorizing the imposition of a tax.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2019-03-21 - Considered in Calendars [HB705 Detail]

Download: Texas-2019-HB705-Comm_Sub.html
  86R16512 CJC-D
 
  By: Geren, Krause, Darby, et al. H.B. No. 705
 
  Substitute the following for H.B. No. 705:
 
  By:  Bohac C.S.H.B. No. 705
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the substitution of a local sales and use tax for
  maintenance and operations property taxes imposed by certain local
  governments; authorizing the imposition of a tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle C, Title 3, Tax Code, is amended by
  adding Chapter 328 to read as follows:
  CHAPTER 328. SUPPLEMENTAL LOCAL SALES AND USE TAX
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 328.0001.  DEFINITIONS. In this chapter:
               (1)  "Lost property tax revenue" means the estimated
  amount of property tax revenue to be received by a qualifying local
  government for maintenance and operations purposes for the tax year
  in which the local government adopts an ordinance or order
  described by Subdivision (2)(A).
               (2)  "Qualifying local government" means a
  municipality or county that:
                     (A)  before June 30 of a year:
                           (i)  adopts an ordinance or order providing
  that, beginning January 1 of the following year, the local
  government will not impose a property tax for purposes of funding
  maintenance and operations expenditures and instead elects to
  impose a supplemental sales and use tax for those purposes; and
                           (ii)  forwards a certified copy of the
  ordinance or order described by Subparagraph (i) to the
  comptroller; or
                     (B)  in a preceding year, adopted and forwarded to
  the comptroller an ordinance or order described by Paragraph (A)
  but has not subsequently adopted an ordinance or order abolishing
  the supplemental sales and use tax imposed by the government.
               (3)  "Supplemental sales and use tax" means a sales and
  use tax authorized by this chapter.
         Sec. 328.0002.  APPLICABILITY OF OTHER LAW. (a) Except as
  otherwise provided by this chapter:
               (1)  Chapter 321 applies to a supplemental sales and
  use tax imposed by a municipality; and
               (2)  Chapter 323 applies to a supplemental sales and
  use tax imposed by a county.
         (b)  The following provisions do not apply to a supplemental
  sales and use tax:
               (1)  Sections 321.101 and 323.101;
               (2)  Subchapter E, Chapter 321, Subchapter E, Chapter
  323, and the other provisions of Chapters 321 and 323 relating to an
  election;
               (3)  Sections 321.506-321.508; and
               (4)  Section 323.505.
         (c)  A supplemental sales and use tax is not an additional
  sales and use tax for purposes of Section 321.101 or any other law.
         Sec. 328.0003.  EFFECT ON COMBINED LOCAL TAX RATE. The rate
  of a supplemental sales and use tax may not be considered for
  purposes of determining the combined local tax rate in any area.
  SUBCHAPTER B. IMPOSITION OF TAX
         Sec. 328.0051.  TAX AUTHORIZED. (a) Subject to Section
  328.0052, a qualifying local government by adoption of an ordinance
  or order may adopt, increase, reduce, or abolish the supplemental
  sales and use tax. The tax is in addition to any other sales and use
  tax authorized by law, but may be imposed only during a period
  during which the qualifying local government does not impose a
  property tax for purposes of funding the local government's
  maintenance and operations expenditures.
         (b)  Except as provided by Subchapter C, a qualifying local
  government is not required to call an election to adopt, increase,
  reduce, or abolish the supplemental sales and use tax.
         Sec. 328.0052.  TAX RATE; INCREASE, REDUCTION, OR ABOLITION
  OF TAX. (a) The supplemental sales and use tax rate may not exceed
  two percent.
         (b)  Subject to Subsection (a), in the first year in which a
  qualifying local government imposes the supplemental sales and use
  tax, the rate of the tax is equal to a rate that, when applied to the
  estimated cumulative sales price of the sale, use, storage, or
  other consumption of taxable items within the local government
  during that year, would produce an amount equal to the local
  government's lost property tax revenue. The ordinance or order
  authorizing the tax and adopted under Section 328.0051 must specify
  the tax rate.
         (c)  A qualifying local government that imposes the
  supplemental sales and use tax may by adoption of an ordinance or
  order annually increase or reduce the rate of the tax. An increase
  in the rate of the tax is subject to the limitation prescribed by
  Subsection (a). A reduction in the rate of the tax may not impair
  any outstanding debt or other obligation payable from the tax.
         (d)  A qualifying local government that imposes the
  supplemental sales and use tax may by adoption of an ordinance or
  order abolish the tax if there is no outstanding debt secured by the
  tax.
         (e)  A certified copy of an ordinance or order described by
  this section must be forwarded to the comptroller before June 30 of
  the year preceding the January 1 on which the action approved in the
  ordinance or order is to take effect.
         Sec. 328.0053.  SALES AND USE TAX EFFECTIVE DATE. The
  adoption, increase, reduction, or abolition of the supplemental
  sales and use tax takes effect on the next January 1 that is at least
  six months after the date the qualifying local government forwards
  to the comptroller the copy of the ordinance or order adopting,
  increasing, reducing, or abolishing the tax, as applicable.
  SUBCHAPTER C. PETITION FOR ELECTION
         Sec. 328.0101.  PETITION FOR ELECTION. (a) The registered
  voters of a municipality or county may petition the governing body
  of the municipality or county to call an election on the question of
  adoption by the municipality or county of a supplemental sales and
  use tax.
         (b)  A petition under this section must be:
               (1)  signed by at least 20 percent of the registered
  voters of the municipality or county; and
               (2)  submitted to the governing body of the
  municipality or county.
         (c)  The governing body of the municipality or county shall
  validate the petition not later than the 30th day after the date the
  petition is submitted to the governing body.
         Sec. 328.0102.  ELECTION. On receipt of a valid petition
  under Section 328.0101, the governing body of the municipality or
  county shall adopt an ordinance or order calling an election on the
  question of adoption by the municipality or county of a
  supplemental sales and use tax.
         Sec. 328.0103.  ELECTION DATE.  An election under this
  subchapter must be held on the next uniform election date that
  occurs after the date on which the governing body of the
  municipality or county adopts the ordinance or order calling the
  election and that allows sufficient time to comply with the
  requirements of other law.
         Sec. 328.0104.  BALLOT.  At the election, the ballot shall be
  prepared to permit voting for or against the proposition:  
  "Requiring (name of municipality or county) to adopt a supplemental
  sales and use tax on the earliest date allowed by law to allow (name
  of municipality or county) to reduce its maintenance and operations
  property tax rate to zero."
         Sec. 328.0105.  ELECTION RESULTS. If a majority of the
  voters voting in the election favor the proposition, the governing
  body of the municipality or county shall take the actions necessary
  to become a qualifying local government on the earliest date
  practicable under this chapter.
  SUBCHAPTER D. USE OF TAX REVENUE
         Sec. 328.0151.  USE OF TAX REVENUE. Revenue from a
  supplemental sales and use tax is for the use and benefit of the
  qualifying local government imposing the tax and may be used for any
  purpose for which the general funds of the local government may be
  used.
         SECTION 2.  Section 26.04, Tax Code, is amended by adding
  Subsection (c-1) to read as follows:
         (c-1)  Notwithstanding Subsection (c), the officer or
  employee designated by the governing body of a municipality or
  county that imposes a supplemental sales and use tax under Chapter
  328 shall calculate only the municipality's or county's current
  debt rate.
         SECTION 3.  Section 26.05, Tax Code, is amended by adding
  Subsection (h) to read as follows:
         (h)  For purposes of this chapter, the tax rate of a
  municipality or county that imposes a supplemental sales and use
  tax under Chapter 328 is the municipality's or county's current debt
  rate.
         SECTION 4.  Chapter 26, Tax Code, is amended by adding
  Section 26.0521 to read as follows:
         Sec. 26.0521.  TAX RATE NOTICE OF MUNICIPALITY OR COUNTY
  IMPOSING SUPPLEMENTAL SALES AND USE TAX. A municipality or county
  that imposes a supplemental sales and use tax under Chapter 328:
               (1)  shall provide notice of the municipality's or
  county's tax rate in the manner provided by Section 26.052 for the
  proposed tax rate of a taxing unit to which that section applies;
  and
               (2)  is exempt from notice and publication requirements
  and is not subject to an injunction to the same extent as provided
  by Section 26.052(b) for a taxing unit to which that section
  applies.
         SECTION 5.  Section 26.09, Tax Code, is amended by adding
  Subsection (f) to read as follows:
         (f)  For purposes of calculating the tax imposed on property
  by a municipality or county that imposes a supplemental sales and
  use tax under Chapter 328, the tax rate of the municipality or
  county is considered to be the municipality's or county's current
  debt rate.
         SECTION 6.  Notwithstanding Sections 328.0001(2),
  328.0052(e), and 328.0053, Tax Code, as added by this Act:
               (1)  in 2019, a municipality or county may adopt an
  ordinance or order adopting a supplemental sales and use tax and
  forward a certified copy of the ordinance or order to the
  comptroller of public accounts before December 1 of that year; and
               (2)  a supplemental sales and use tax adopted by a
  municipality or county under Subdivision (1) of this section takes
  effect January 1, 2020.
         SECTION 7.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2019.
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