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.