75R9876 JD-D                           

         By Smith                                              H.B. No. 2044

         Substitute the following for H.B. No. 2044:

         By Craddick                                       C.S.H.B. No. 2044

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to notice that a municipality must provide before holding

 1-3     a public hearing on the adoption of an ad valorem tax increase.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 26.05(d), Tax Code, is amended to read as

 1-6     follows:

 1-7           (d)  The governing body may not adopt a tax rate that exceeds

 1-8     the lower of the rollback tax rate or 103 percent of the effective

 1-9     tax rate calculated as provided by Section 26.04 of this code until

1-10     it has held a public hearing on the proposed increase and has

1-11     otherwise complied with Section 26.06 or 26.065 of this code.  The

1-12     governing body of a taxing unit shall reduce a tax rate set by law

1-13     or by vote of the electorate to the lower of the rollback tax rate

1-14     or 103 percent of the effective tax rate and may not adopt a higher

1-15     rate unless it first complies with Section 26.06 or 26.065 of this

1-16     code.

1-17           SECTION 2.  Chapter 26, Tax Code, is amended by adding

1-18     Section 26.065 to read as follows:

1-19           Sec. 26.065.  NOTICE OF HEARING ON MUNICIPAL TAX INCREASE.

1-20     (a)  Sections 26.05(b) and (c) do not apply to a municipality.  The

1-21     governing body of a municipality required to hold a public hearing

1-22     by Section 26.05(d) shall:

1-23                 (1)  if the municipality operates a water or wastewater

1-24     utility system, include a copy of the notice with the utility bill

 2-1     sent to customers of the utility system who reside in the

 2-2     municipality;

 2-3                 (2)  publish a notice of the public hearing in the

 2-4     newspaper of general circulation in the municipality that has the

 2-5     highest subscription rate in the municipality; and

 2-6                 (3)  mail a copy of the notice to the household of each

 2-7     person who voted in the most recent general election for municipal

 2-8     officers conducted in the municipality, according to the voting

 2-9     records of the municipality, if the person's household was not

2-10     mailed a copy of the notice under Subdivision (1).

2-11           (b)  A notice required by Subsection (a)(2) may not be

2-12     smaller than one-quarter page of the standard-size page of the

2-13     newspaper in which the notice is required to be published, and the

2-14     headline on the notice must be in 18-point or larger type.  The

2-15     notice may not be published in the part of the newspaper in which

2-16     legal notices or classified advertisements appear.

2-17           (c)  The notice must contain a statement in the following

2-18     form:

2-19            "NOTICE OF PUBLIC HEARING ON MUNICIPAL TAX INCREASE"

2-20           "This notice is required by law.  It is to inform you that

2-21     the governing body of (name of municipality) will hold a public

2-22     hearing on a proposal to increase total tax revenues from

2-23     properties on the tax roll in (the preceding year) by (percentage

2-24     by which the proposed tax rate exceeds the lower of the

2-25     municipality's effective or rollback tax rate) percent.  Your

2-26     individual (name of municipality) taxes may increase at a greater

2-27     or lesser rate, or even decrease, depending on the change in the

 3-1     taxable value of your property in relation to the change in taxable

 3-2     value of all other property subject to taxation by (name of

 3-3     municipality).

 3-4           "The governing body of (name of municipality) will hold the

 3-5     public hearing on (date and time) at (meeting place)."

 3-6           (d)  If the municipality has access to a public, educational,

 3-7     or governmental television channel, the municipality shall also

 3-8     broadcast the notice required by Subsection (c) on that channel.

 3-9     The notice must be broadcast at least five times a day on each of

3-10     seven days preceding the date of the public hearing on the proposed

3-11     tax increase.

3-12           (e)  If the percentage by which the municipality's proposed

3-13     tax rate exceeds the lower of the municipality's effective or

3-14     rollback tax rate includes a fraction of one percent, in a

3-15     statement required by Subsection (c), the fraction may not be

3-16     expressed in decimal form by more than two digits to the right of

3-17     the decimal point, and for that purpose shall be rounded to the

3-18     nearest one-hundredth of one percent if necessary.

3-19           (f)  Notwithstanding Section 26.06(a), the governing body of

3-20     the municipality may not hold the public hearing required by

3-21     Section 26.05 before the seventh day after the later of:

3-22                 (1)  the date that the notice required by Subsection

3-23     (a)(2) is published; or

3-24                 (2)  the earliest date on which all or substantially

3-25     all the notices required by Subsections (a)(1) and (3) have been

3-26     mailed.

3-27           SECTION 3.  This Act takes effect January 1, 1998.

 4-1           SECTION 4.  The importance of this legislation and the

 4-2     crowded condition of the calendars in both houses create an

 4-3     emergency and an imperative public necessity that the

 4-4     constitutional rule requiring bills to be read on three several

 4-5     days in each house be suspended, and this rule is hereby suspended.