BILL ANALYSIS Senate Research Center S.B. 1334 88R4295 CXP-F By: Creighton Local Government 4/17/2023 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT The State of Texas has long held that certain entities are exempt from certain taxes. For instance, religious institutions qualify for sales tax and ad valorem tax exemptions. However, in some cities, municipally owned utilities adopt increased rates charged to tax exempt entities to recover lost revenue due to the tax exemptions. S.B. 1334 would prohibit a municipality from adopting an increased rate to these utilities to replace lost revenue. As proposed, S.B. 1334 amends current law relating to rates established by municipalities for water or sewer service for certain entities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter Z, Chapter 552, Local Government Code, by adding Section 552.915, as follows: Sec. 552.915. PROHIBITION ON RATE DISCRIMINATION. Prohibits a municipality from establishing a rate for water or sewer utility service applicable only to entities that qualify for a sales tax or ad valorem tax exemption that is higher than a rate established for entities that receive comparable utility service. SECTION 2. Effective date: September 1, 2023.
BILL ANALYSIS
Senate Research Center S.B. 1334
88R4295 CXP-F By: Creighton
Local Government
4/17/2023
As Filed
Senate Research Center
S.B. 1334
88R4295 CXP-F
By: Creighton
Local Government
4/17/2023
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
The State of Texas has long held that certain entities are exempt from certain taxes. For instance, religious institutions qualify for sales tax and ad valorem tax exemptions. However, in some cities, municipally owned utilities adopt increased rates charged to tax exempt entities to recover lost revenue due to the tax exemptions.
S.B. 1334 would prohibit a municipality from adopting an increased rate to these utilities to replace lost revenue.
As proposed, S.B. 1334 amends current law relating to rates established by municipalities for water or sewer service for certain entities.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter Z, Chapter 552, Local Government Code, by adding Section 552.915, as follows:
Sec. 552.915. PROHIBITION ON RATE DISCRIMINATION. Prohibits a municipality from establishing a rate for water or sewer utility service applicable only to entities that qualify for a sales tax or ad valorem tax exemption that is higher than a rate established for entities that receive comparable utility service.
SECTION 2. Effective date: September 1, 2023.