Paxton Bill Hands Cities Up To 25 Percent Of Transit Tax

The text as introduced · 1,284 words

89R8982 JAM-D

By: Paxton, Hagenbuch, Parker
S.B. No. 1557

A BILL TO BE ENTITLED

AN ACT

relating to powers of regional transportation authorities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter E, Chapter 452, Transportation Code,

is amended by adding Section 452.204 to read as follows:

Sec. 452.204. GENERAL MOBILITY PROGRAM. (a) Each

municipality in an authority consisting of one subregion governed

by a subregional board created under Subchapter O shall enter into

an agreement with the subregional board under which up to 25 percent

of the sales and use tax imposed by the authority in that

municipality may be used by that municipality for a general

mobility program that includes:

(1) constructing and maintaining sidewalks, hiking

trails, and biking trails, highways and local and arterial streets,

thoroughfares, and other roads, including bridges and grade

separations;

(2) installing, operating, and maintaining

streetlights and traffic control improvements, including traffic

signals; or

(3) making drainage improvements and taking

drainage-related measures as reasonable and necessary for the

effective use of the transportation facility being installed,

constructed, operated, or maintained under Subdivision (1) or (2).

(b) Under an agreement entered into under Subsection (a), a

municipality shall annually provide to the subregional board a list

of projects the municipality intends to fund through the program.

(c) Of the sales and use tax available to a municipality

through the general mobility program each year:

(1) 50 percent shall be made available to the

municipality on the first day of the authority's fiscal year; and

(2) 50 percent shall be made available to the

municipality on a reimbursement basis before the end of the

authority's fiscal year.

(d) Any money made available to a municipality under

Subsection (c) that is unused by the municipality in the period

described by that subsection must be used by the authority to pay

down any outstanding debt that is secured by a sales and use tax

rate imposed at a rate of one percent. A payment made under this

subsection is in addition to any annual debt payment required of the

authority.

SECTION 2. Section 452.357(a), Transportation Code, is

amended to read as follows:

(a) To secure the payment of an authority's bonds, the

authority may:

(1) pledge not more than 75 percent [ all or part ] of

revenue realized from any tax that the authority may impose;

(2) pledge any part of the revenue of the public

transportation system;

(3) mortgage any part of the public transportation

system, including any part of the system subsequently acquired;

(4) pledge all or part of funds the federal government

has committed to the authority as grants in aid; and

(5) provide that a pledge of revenue described by

Subdivision (1) or (2) is a first lien or charge against that

revenue.

SECTION 3. Section 452.358, Transportation Code, is amended

to read as follows:

Sec. 452.358. USE OF REVENUE. Revenue in excess of amounts

pledged under Section 452.357(a)(1) or (2) shall be used to:

(1) pay the expenses of operation and maintenance of a

public transportation system, including salaries, labor,

materials, and repairs necessary to provide efficient service and

every other proper item of expense; [ and ]

(2) fund operating reserves ; and

(3) fund a general mobility program established under

Section 452.204 .

SECTION 4. Section 452.401(a), Transportation Code, is

amended to read as follows:

(a) The executive committee may impose for an authority a

sales and use tax at the rate of:

(1) one-quarter of one percent;

(2) one-half of one percent; or

(3) three-quarters of one percent[ ; or

[ (4) one percent ].

SECTION 5. Section 452.651(c), Transportation Code, is

amended to read as follows:

(c) An election to withdraw may not be ordered, and a

petition for an election to withdraw may not be accepted for filing,

more frequently than once during each period of 12 months preceding

the anniversary of the date of the election confirming the

authority. If the unit of election is located in an authority

consisting of one subregion governed by a subregional board created

under Subchapter O, an election for withdrawal of the unit of

election under this section may not be ordered, and a petition for

withdrawal may not be accepted, more frequently than once during

1996 and during each third [ sixth ] calendar year after that year.

SECTION 6. Subchapter Q, Chapter 452, Transportation Code,

is amended by adding Section 452.6545 to read as follows:

Sec. 452.6545. EFFECT OF NOTICE OF ELECTION ON CERTAIN

AUTHORITY TO ISSUE OBLIGATIONS. Notwithstanding Subchapter H, on

receipt by the executive committee of the authority of a notice

provided under Section 452.655(c), the authority may not issue

notes, bonds, or other obligations if the issuance would cause the

financial obligation of the unit of election under Section

452.659(a) to accrue because the amount in Section 452.659(b)(3)

would increase. This limitation on issuance continues until:

(1) the effective date of the withdrawal of the unit of

election from the authority, if after an election held under

Section 452.655 less than a majority of the votes received on the

measure in the election favor the proposition; or

(2) the day after the date of the canvass of an

election held under Section 452.655, if a majority of the votes

received on the measure in the election favor the proposition.

SECTION 7. Section 452.658(a), Transportation Code, is

amended to read as follows:

(a) Until the amount of revenue from an authority's sales

and use tax collected in a withdrawn unit of election after the

effective date of withdrawal and paid to the authority equals the

total financial obligation of the unit, the sales and use tax

continues to be collected in the territory of the election unit at

the rate:

(1) at which the tax was imposed; or

(2) of one-half of one percent if:

(A) the tax was imposed at the rate of one

percent; and

(B) the governing body of the withdrawn unit of

election approves the collection of the tax at the lower rate .

SECTION 8. (a) Sections 452.357(a) and 452.401(a),

Transportation Code, as amended by this Act, do not apply to the

imposition of a sales and use tax in a regional transportation

authority that, before the effective date of this Act, has pledged

the revenue from the tax imposed at the rate of one percent as

security for bonds issued by the authority. The imposition of a

sales and use tax in a regional transportation authority that has

pledged the revenue from the tax imposed at the rate of one percent

as security for bonds issued by the authority before the effective

date of this Act is governed by the law in effect when the revenue

was pledged, and that law is continued in effect for that purpose.

(b) The executive committee of a regional transportation

authority may, under Section 452.405, Transportation Code, order

the decrease in the rate at which a sales and use tax is collected in

an authority described by Subsection (a) of this section only

after:

(1) all of the bonds and interest on the bonds that are

payable from or secured by a sales and use tax imposed at the rate of

one percent have been paid by the issuer of the bonds or another

person with the consent or approval of the issuer; or

(2) a sufficient amount for the payment of all bonds

and interest on the bonds to maturity has been set aside by the

issuer of the bonds or another person with the consent or approval

of the issuer in a trust fund held for the benefit of the

bondholders.

SECTION 9. This Act takes effect September 1, 2025.