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A BILL TO BE ENTITLED
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AN ACT
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relating to the calculation of certain ad valorem tax rates of |
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certain taxing units. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 26.04(c), Tax Code, is amended to read as |
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follows: |
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(c) After the assessor for the taxing unit submits the |
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appraisal roll for the taxing unit to the governing body of the |
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taxing unit as required by Subsection (b), an officer or employee |
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designated by the governing body shall calculate the no-new-revenue |
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tax rate and the voter-approval tax rate for the taxing unit, where: |
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(1) "No-new-revenue tax rate" means a rate expressed |
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in dollars per $100 of taxable value calculated according to the |
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following formula: |
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NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY |
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LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE) |
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; and |
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(2) "Voter-approval tax rate" means a rate expressed |
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in dollars per $100 of taxable value calculated according to the |
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following applicable formula: |
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(A) for a special taxing unit: |
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VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND |
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OPERATIONS RATE x 1.08) + CURRENT DEBT RATE |
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; or |
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(B) for a taxing unit other than a special taxing |
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unit: |
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VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND |
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OPERATIONS RATE x 1.025 [1.035]) + (CURRENT DEBT RATE + UNUSED |
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INCREMENT RATE) |
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SECTION 2. Sections 26.041(a), (b), and (c), Tax Code, are |
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amended to read as follows: |
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(a) In the first year in which an additional sales and use |
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tax is required to be collected, the no-new-revenue tax rate and |
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voter-approval tax rate for the taxing unit are calculated |
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according to the following formulas: |
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NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY |
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LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN |
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RATE |
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and |
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VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = |
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(NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.08) + (CURRENT |
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DEBT RATE - SALES TAX GAIN RATE) |
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or |
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VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL |
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TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x |
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1.025 [1.035]) + (CURRENT DEBT RATE + UNUSED INCREMENT RATE - SALES |
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TAX GAIN RATE) |
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where "sales tax gain rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the revenue that will |
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be generated by the additional sales and use tax in the following |
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year as calculated under Subsection (d) by the current total value. |
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(b) Except as provided by Subsections (a) and (c), in a year |
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in which a taxing unit imposes an additional sales and use tax, the |
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voter-approval tax rate for the taxing unit is calculated according |
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to the following formula, regardless of whether the taxing unit |
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levied a property tax in the preceding year: |
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VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST |
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YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL |
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VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX |
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REVENUE RATE) |
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or |
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VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL |
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TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x |
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1.025 [1.035]) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + |
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(CURRENT DEBT RATE + UNUSED INCREMENT RATE - SALES TAX REVENUE RATE) |
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where "last year's maintenance and operations expense" means the |
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amount spent for maintenance and operations from property tax and |
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additional sales and use tax revenues in the preceding year, and |
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"sales tax revenue rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the revenue that will |
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be generated by the additional sales and use tax in the current year |
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as calculated under Subsection (d) by the current total value. |
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(c) In a year in which a taxing unit that has been imposing |
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an additional sales and use tax ceases to impose an additional sales |
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and use tax, the no-new-revenue tax rate and voter-approval tax |
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rate for the taxing unit are calculated according to the following |
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formulas: |
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NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY |
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LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS |
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RATE |
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and |
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VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST |
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YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL |
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VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE |
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or |
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VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL |
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TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x |
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1.025 [1.035]) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + |
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(CURRENT DEBT RATE + UNUSED INCREMENT RATE) |
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where "sales tax loss rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the amount of sales |
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and use tax revenue generated in the last four quarters for which |
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the information is available by the current total value and "last |
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year's maintenance and operations expense" means the amount spent |
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for maintenance and operations from property tax and additional |
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sales and use tax revenues in the preceding year. |
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SECTION 3. Section 49.236(a), Water Code, is amended to |
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read as follows: |
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(a) Before the board adopts an ad valorem tax rate for the |
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district for debt service, operation and maintenance purposes, or |
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contract purposes, the board shall give notice of each meeting of |
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the board at which the adoption of a tax rate will be considered. |
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The notice must: |
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(1) contain a statement in substantially the following |
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form: |
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"NOTICE OF PUBLIC HEARING ON TAX RATE |
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"The (name of the district) will hold a public hearing on a |
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proposed tax rate for the tax year (year of tax levy) on (date and |
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time) at (meeting place). Your individual taxes may increase at a |
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greater or lesser rate, or even decrease, depending on the tax rate |
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that is adopted and on the change in the taxable value of your |
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property in relation to the change in taxable value of all other |
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property. The change in the taxable value of your property in |
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relation to the change in the taxable value of all other property |
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determines the distribution of the tax burden among all property |
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owners. |
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"Visit Texas.gov/PropertyTaxes to find a link to your local |
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property tax database on which you can easily access information |
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regarding your property taxes, including information about |
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proposed tax rates and scheduled public hearings of each entity |
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that taxes your property. |
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"(Names of all board members and, if a vote was taken, an |
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indication of how each voted on the proposed tax rate and an |
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indication of any absences.)"; |
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(2) contain the following information: |
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(A) the district's total adopted tax rate for the |
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preceding year and the proposed tax rate, expressed as an amount per |
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$100; |
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(B) the difference, expressed as an amount per |
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$100 and as a percent increase or decrease, as applicable, in the |
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proposed tax rate compared to the adopted tax rate for the preceding |
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year; |
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(C) the average appraised value of a residence |
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homestead in the district in the preceding year and in the current |
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year; the district's total homestead exemption, other than an |
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exemption available only to disabled persons or persons 65 years of |
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age or older, applicable to that appraised value in each of those |
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years; and the average taxable value of a residence homestead in the |
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district in each of those years, disregarding any homestead |
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exemption available only to disabled persons or persons 65 years of |
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age or older; |
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(D) the amount of tax that would have been |
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imposed by the district in the preceding year on a residence |
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homestead appraised at the average appraised value of a residence |
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homestead in that year, disregarding any homestead exemption |
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available only to disabled persons or persons 65 years of age or |
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older; |
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(E) the amount of tax that would be imposed by the |
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district in the current year on a residence homestead appraised at |
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the average appraised value of a residence homestead in that year, |
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disregarding any homestead exemption available only to disabled |
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persons or persons 65 years of age or older, if the proposed tax |
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rate is adopted; |
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(F) the difference between the amounts of tax |
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calculated under Paragraphs (D) and (E), expressed in dollars and |
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cents and described as the annual percentage increase or decrease, |
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as applicable, in the tax to be imposed by the district on the |
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average residence homestead in the district in the current year if |
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the proposed tax rate is adopted; and |
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(G) if the proposed combined debt service, |
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operation and maintenance, and contract tax rate requires or |
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authorizes an election to approve or reduce the tax rate, as |
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applicable, a description of the purpose of the proposed tax |
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increase; |
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(3) contain a statement in substantially the following |
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form, as applicable: |
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(A) if the district is a district described by |
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Section 49.23601: |
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"NOTICE OF VOTE ON TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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eight percent, an election must be held to determine whether to |
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approve the operation and maintenance tax rate under Section |
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49.23601, Water Code."; |
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(B) if the district is a district described by |
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Section 49.23602: |
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"NOTICE OF VOTE ON TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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2.5 [3.5] percent, an election must be held to determine whether to |
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approve the operation and maintenance tax rate under Section |
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49.23602, Water Code."; or |
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(C) if the district is a district described by |
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Section 49.23603: |
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"NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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eight percent, the qualified voters of the district by petition may |
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require that an election be held to determine whether to reduce the |
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operation and maintenance tax rate to the voter-approval tax rate |
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under Section 49.23603, Water Code."; and |
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(4) include the following statement: "The 86th Texas |
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Legislature modified the manner in which the voter-approval tax |
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rate is calculated to limit the rate of growth of property taxes in |
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the state.". |
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SECTION 4. Sections 49.23602(a)(2) and (4), Water Code, are |
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amended to read as follows: |
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(2) "Mandatory tax election rate" means the rate equal |
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to the sum of the following tax rates for the district: |
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(A) the rate that would impose 1.025 [1.035] |
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times the amount of tax imposed by the district in the preceding |
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year on a residence homestead appraised at the average appraised |
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value of a residence homestead in the district in that year, |
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disregarding any homestead exemption available only to disabled |
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persons or persons 65 years of age or older; and |
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(B) the unused increment rate. |
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(4) "Voter-approval tax rate" means the rate equal to |
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the sum of the following tax rates for the district: |
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(A) the current year's debt service tax rate; |
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(B) the current year's contract tax rate; |
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(C) the operation and maintenance tax rate that |
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would impose 1.025 [1.035] times the amount of the operation and |
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maintenance tax imposed by the district in the preceding year on a |
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residence homestead appraised at the average appraised value of a |
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residence homestead in the district in that year, disregarding any |
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homestead exemption available only to disabled persons or persons |
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65 years of age or older; and |
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(D) the unused increment rate. |
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SECTION 5. This Act applies only to ad valorem taxes imposed |
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for an ad valorem tax year that begins on or after the effective |
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date of this Act. |
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SECTION 6. This Act takes effect January 1, 2024. |