| 1 | 1 | | 86R5903 CJC-D |
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| 2 | 2 | | By: Cain H.B. No. 4363 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to an increase in the state sales and use tax rate for the |
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| 8 | 8 | | purpose of reducing school district maintenance and operations ad |
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| 9 | 9 | | valorem taxes and a study of additional changes to the rate and |
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| 10 | 10 | | application of the state sales and use tax for that same purpose; |
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| 11 | 11 | | increasing the rate of a tax. |
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| 12 | 12 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 13 | 13 | | SECTION 1. Section 151.051(b), Tax Code, is amended to read |
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| 14 | 14 | | as follows: |
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| 15 | 15 | | (b) The sales tax rate is 10.25 [6-1/4] percent of the sales |
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| 16 | 16 | | price of the taxable item sold. |
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| 17 | 17 | | SECTION 2. Subchapter M, Chapter 151, Tax Code, is amended |
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| 18 | 18 | | by adding Section 151.803 to read as follows: |
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| 19 | 19 | | Sec. 151.803. ALLOCATION OF CERTAIN REVENUE TO SCHOOL |
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| 20 | 20 | | DISTRICT PROPERTY TAX REDUCTION. Notwithstanding Section 151.801, |
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| 21 | 21 | | the comptroller shall deposit an amount of revenue equal to the |
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| 22 | 22 | | proceeds derived from the collection of taxes imposed by this |
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| 23 | 23 | | chapter attributable to the portion of the tax rate in excess of |
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| 24 | 24 | | 6.25 percent of the sales price of the taxable item sold to the |
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| 25 | 25 | | credit of the property tax relief fund. Money credited to the fund |
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| 26 | 26 | | under this section may be appropriated only to reduce school |
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| 27 | 27 | | district maintenance and operations ad valorem tax rates in a |
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| 28 | 28 | | manner consistent with Section 403.109, Government Code. |
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| 29 | 29 | | SECTION 3. (a) The comptroller of public accounts shall |
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| 30 | 30 | | study the rate of, and the exemptions, discounts, exclusions, |
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| 31 | 31 | | credits, and special reporting methods applicable to, the state |
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| 32 | 32 | | sales and use tax for the purpose of identifying alternative |
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| 33 | 33 | | sources of funding for public primary and secondary education in |
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| 34 | 34 | | this state other than local property taxes. |
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| 35 | 35 | | (b) In the study, the comptroller must: |
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| 36 | 36 | | (1) determine the intended purpose of each exemption, |
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| 37 | 37 | | discount, exclusion, credit, or special reporting method and |
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| 38 | 38 | | evaluate whether the exemption, discount, exclusion, credit, or |
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| 39 | 39 | | special reporting method achieves that purpose; |
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| 40 | 40 | | (2) evaluate the effect of each exemption, discount, |
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| 41 | 41 | | exclusion, credit, or special reporting method on state revenue; |
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| 42 | 42 | | and |
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| 43 | 43 | | (3) evaluate the rate at which the state sales and use |
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| 44 | 44 | | tax would need to be imposed to fully fund the cost of public |
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| 45 | 45 | | primary and secondary education in this state if: |
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| 46 | 46 | | (A) each exemption, discount, exclusion, credit, |
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| 47 | 47 | | or special reporting method identified by the comptroller as |
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| 48 | 48 | | underperforming were repealed; and |
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| 49 | 49 | | (B) school district maintenance and operations |
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| 50 | 50 | | ad valorem taxes were abolished. |
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| 51 | 51 | | (c) Not later than November 1, 2020, the comptroller shall |
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| 52 | 52 | | prepare and deliver to the governor, the lieutenant governor, and |
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| 53 | 53 | | each member of the legislature a report of the findings of the |
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| 54 | 54 | | study. |
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| 55 | 55 | | (d) This section expires January 1, 2021. |
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| 56 | 56 | | SECTION 4. This Act takes effect October 1, 2019. |
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