87R5046 CJC-F
By: Johnson S.B. No. 1803
A BILL TO BE ENTITLED
AN ACT
relating to the municipal sales and use tax for street maintenance;
authorizing an increase in the rate of a tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 327.003, Tax Code, is amended by
amending Subsections (b) and (c) and adding Subsections (b-1),
(c-1), and (d) to read as follows:
(b) Subject to Subsection (b-1), a [A] municipality may not
adopt a tax under this chapter or increase the rate of the tax if as
a result of the adoption of the tax or the increase in the rate 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.
(b-1) A municipality that is a member of a subregion of a
transportation authority governed by a board described in
Subchapter O, Chapter 452, Transportation Code, may not adopt a tax
under this chapter or increase the rate of the tax if as a result of
the adoption of the tax or the increase in the rate 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 2.25 percent at any location in the
municipality.
(c) Subject to Subsection (c-1), if [If] the voters of a
municipality approve the adoption of the tax or the increase in the
rate 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, the election to adopt a sales and use
tax under this chapter has no effect.
(c-1) If the voters of a municipality described by
Subsection (b-1) approve the adoption of the tax or the increase in
the rate 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 2.25 percent at any
location in the municipality, the election to adopt a sales and use
tax under this chapter has no effect.
(d) This subsection applies only to a municipality
described by Subsection (b-1) that adopts a tax under this chapter
at, or increases the rate of a tax under this chapter to, a rate
that, when added to all other sales and use taxes imposed by the
municipality and other political subdivisions of this state having
territory in the municipality, results in a combined sales and use
tax rate that exceeds two percent at any location in the
municipality. Notwithstanding any other law, the increment of the
rate imposed by the municipality under this chapter equal to the
increment by which the combined sales and use tax rate at a location
in the municipality's territory exceeds two percent is excluded for
purposes of any law other than a provision of this chapter in
computing 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.
SECTION 2. Section 327.004, Tax Code, is amended to read as
follows:
Sec. 327.004. TAX RATE. The tax authorized by this chapter
may be imposed at any rate that is an increment of one-eighth of one
percent, that the municipality determines is appropriate, and that
would not result in a combined rate that exceeds the maximum
combined rate prescribed by Section 327.003(b) or (b-1), as
applicable.
SECTION 3. Section 327.006, Tax Code, is amended by adding
Subsection (c) to read as follows:
(c) This subsection applies only to a municipality
described by Section 327.003(b-1) that proposes to adopt the tax
authorized by this chapter at a rate that would result in a combined
rate in excess of two percent of all sales and use taxes imposed by
the municipality and other political subdivisions of this state
having territory in the municipality. In addition to the statement
required under Subsection (b), the ballot must include the
following statement: "If adopted, this proposition may result in a
combined local sales and use tax rate in (name of municipality) that
exceeds two percent."
SECTION 4. Section 327.0065, Tax Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) A municipality that has adopted a sales and use tax
under this chapter may by ordinance increase the rate of the tax to
any rate that is an increment of one-eighth of one percent, that the
municipality determines is appropriate, and that would not result
in a combined rate that exceeds the maximum combined rate
prescribed by Section 327.003(b) or (b-1), as applicable, if the
increase is authorized at an election held in the municipality.
(d) This subsection applies only to a municipality
described by Section 327.003(b-1) that proposes to increase the
rate of the tax authorized by this chapter to a rate that would
result in a combined rate in excess of two percent of all sales and
use taxes imposed by the municipality and other political
subdivisions of this state having territory in the municipality.
In addition to the statement required under Subsection (c), the
ballot must include the following statement: "If adopted, this
proposition may result in a combined local sales and use tax rate in
(name of municipality) that exceeds two percent."
SECTION 5. Section 327.007(b), Tax Code, is amended to read
as follows:
(b) An election to reauthorize the tax is called and held in
the same manner as an election to adopt the tax under Section
327.006, except the ballot proposition shall be prepared to permit
voting for or against the proposition: "The reauthorization of the
local sales and use tax in (name of municipality) at the rate of
(insert appropriate rate) to continue providing revenue for
maintenance and repair of municipal streets. The tax expires on the
(insert "first day of the first calendar quarter occurring after
the fourth anniversary" or "last day of the first calendar quarter
occurring after the (insert[,] eighth[,] or 10th anniversary, as
applicable)") [anniversary] of the date of this election unless the
imposition of the tax is reauthorized."
SECTION 6. Section 327.008, Tax Code, is amended to read as
follows:
Sec. 327.008. USE OF TAX REVENUE. Revenue from the tax
imposed under this chapter may be used only to maintain and repair a
municipal:
(1) street or sidewalk; or
(2) water, wastewater, or stormwater system located in
the width of a way of a municipal street [streets or sidewalks
existing on the date of the election to adopt the tax].
SECTION 7. Sections 327.006(c) and 327.0065(d), Tax Code,
as added by this Act, and Section 327.007(b), Tax Code, as amended
by this Act, apply only to ballot language for an election ordered
on or after the effective date of this Act. Ballot language for an
election ordered before the effective date of this Act is governed
by the law in effect when the election was ordered.
SECTION 8. 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, 2021.