BILL ANALYSIS



H.B. 1537
By: Craddick
03-21-95
Committee Report (Amended)


BACKGROUND

Chapter 26, Tax Code, establishes the procedures for assessing ad
valorem taxes.  Cities set their tax rates and develop their
budgets based on anticipated collection of tax revenues. 
Corrections to the tax roll allowed under Section 25.25, Tax Code,
take place after a city has completed its tax and budget process. 
Cities, therefore, may be budgeting on revenues that will not exist
and as a result, will have a revenue shortfall.

PURPOSE

The bill would alter the way that the effective tax rate and the
rollback tax rates are calculated.  Definitions of "last year's
debt levy," last year's levy," and "last year's total value" would
not include appraisal roll corrections made pursuant to Section
25.25, Tax Code, but would add the amount of debt taxes refunded
during the preceding year.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 26.012(11), Tax Code, to alter the method
           of determining "Last year's debt levy," to exclude
           appraisal roll corrections made pursuant to Section
           25.25 (Correction of Appraisal Roll), Tax Code, from the
           total taxable value of property on the appraisal roll
           for the preceding year.  Also adds the amount of debt
           taxes refunded during the preceding year [for tax years
           prior to the preceding year] to the debt rate.

SECTION 2. Amends Section 26.012(13), Tax Code, to alter the method
           of determining "Last year's levy," to exclude appraisal
           roll corrections made pursuant to Section 25.25, Tax
           Code, from the total taxable value of property on the
           appraisal roll for the preceding year.  Also adds the
           amount of taxes refunded during the preceding year [for
           tax years prior to the preceding year] to the total
           value of homesteads that qualified for a tax limitation
           in Section 11.26.

SECTION 3. Amends Section 26.012(14), Tax Code, to alter the method
           of determining "Last year's total value," to exclude
           appraisal roll corrections made pursuant to Section
           25.25, Tax Code, from the total taxable value of
           property on the appraisal roll for the preceding year.

SECTION 4. Emergency Clause.

EXPLANATION OF AMENDMENTS

COMMITTEE AMENDMENT #1 amends Sections 1, 2, and 3 of the bill by
deleting "25.25" and substituting "25.25(d)."  This amendment
excludes appraisal roll corrections pursuant to Section 25.25(d)
from the current practice of determining the effective tax rate and
the rollback tax rate.


SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance with the rules, and a public
hearing was held on March 14, 1995.  Representative Craddick
explained the bill.  Without objection, the committee adopted
committee amendment #1 by Representative Marchant.  By a record
vote of 7 ayes, 0 nays, 0 present not voting and 4 absent, the
committee voted to report H.B. 1537 to the House with amendment
with the recommendation that it be sent to the Local and Consent
Calendar and that it do pass. 

     Testimony received in favor of the bill:
           Jim Bridgman, representing himself and the Texas
           Municipal League
           George Moff, representing himself

     Testimony received against the bill:
           Rovin Tyler, representing the Tax Assessor/Collector
           Assn.