HBA-JRA H.B. 1785 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1785 By: Dutton Ways & Means 4/8/1999 Introduced BACKGROUND AND PURPOSE The Transportation Code provides that transportation authorities are funded through sales and use taxes. State law imposes a two percent cap for local sales taxes in any location in the state. Transit authorities are not allowed to impose different tax rates with the territory of the authority. H.B. 1785 returns one-half of the sales and use tax collected by certain transit authorities to the municipality or county from which it was collected upon request of the municipality or county, but provides that such money may only be spent for the internal transportation needs of and traffic management in the municipality or county. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Comptroller of Public Accounts in SECTION 1 (Section 322.3025, Tax Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 322, Tax Code, by adding Section 322.3025, as follows: Sec. 322.3025. DISTRIBUTION OF SALES AND USE TAX TO CERTAIN POLITICAL SUBDIVISIONS. (a) Makes this section applicable to a transit authority in which the principal municipality has a population of more than 1.2 million. (b) Requires the Comptroller of Public Accounts (comptroller) to remit to the municipality one-half of the sales and use tax collected for the authority in the territory of the municipality on the request of the governing body of a municipality that is located in that authority. (c) Requires the comptroller to remit to the county one-half of the sales and use tax collected for the authority in the unincorporated territory of the county on the request of the commissioners court of a county that is located in that authority. (d) Authorizes the money remitted to a municipality or county under this section to be spent only for the internal transportation needs of and traffic management in the municipality or county. (e) Requires the comptroller, by rule, to establish the date a request under Subsection (b) or (c) takes effect and the process by which a municipality or county may revoke or rescind its request. (f) Defines "authority" and "principal municipality" in this section. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.