SRC-SLL, DBM S.B. 1804 76(R)BILL ANALYSIS


Senate Research CenterS.B. 1804
By: Barrientos
Finance
8/23/1999
Enrolled


DIGEST 

Currently, the property tax rollback rate can be adjusted when one
governmental unit transfers a department or function to another
governmental unit; these are usually transfers of departments between
cities and counties.  The language in the law assumes complete transfers of
functions or departments and does not allow one governmental unit to assume
a greater financial responsibility for simultaneous functions conducted by
both governmental units through separate departments. Travis County and the
city of Austin both operate EMS departments.  The city of Austin serves
areas outside its corporate boundaries, which Travis County would like to
serve, including other incorporated cities in Travis County; however,
because of the rollback tax rate law, neither Travis County nor the city of
Austin can transfer a portion of the EMS function without subjecting
themselves to a greater risk of exceeding the rollback tax rate in the next
fiscal year.  In addition, a governmental unit giving up all or part of a
function has its property tax rollback decreased dollar for dollar in
property taxes, even though property taxes may comprise only a portion of
the general fund budget spent on the function.  S.B. 1804 sets forth
provisions for the calculation of a tax rollback rate. 

PURPOSE

As enrolled, S.B. 1804 sets forth provisions for the calculation of a tax
rollback rate. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 26.04, Tax Code, by adding Subsections (k), (l),
(m), (n), (o), (p), and (q), as follows: 

(k) Provides that this subsection applies to certain taxing units.  Sets
forth the formula for determining the rollback tax rate of a taxing unit to
which this subsection applies.  Sets forth the formula for reducing the tax
levied on a department, function, or activity if the taxing unit did not
fund all or part of the department, function, or activity for the full 12
months preceding the month in which the calculations required by this
chapter are made. 

(l)  Provides that this subsection applies to certain taxing units.  Sets
forth the formula for determining the rollback tax rate of a taxing unit to
which this subsection applies.  Sets forth the formula for reducing the tax
levied on a department, function, or activity if the taxing unit did not
fund all or part of the department, function, or activity for the full 12
months preceding the month in which the calculations required by this
chapter are made. 

 (m)  Defines "funding."   

(n)  Provides that, notwithstanding any other provision of this section,
for purposes of calculating the rollback tax rate under Subsection (k) or
(l), the effective maintenance and operations rate of the taxing unit is
increased or reduced only by the rate that would generate the amount of ad
valorem tax revenue spent by the taxing unit on that part of the funding of
the department, function, or activity that is assumed or discontinued by
the taxing authority.  Authorizes the taxing unit to use any reasonable
method to calculate the amount of ad valorem tax revenue that is or has
been spent to fund the department, function, or activity, if the
department, function, or activity has been funded by revenue sources other
than ad valorem taxes. 

(o) Requires the taxing unit to publish a schedule including certain
elements in a year in which a taxing unit calculates an adjustment under
Subsection (k) or (l).   

(p) Requires the taxing unit to publish a schedule including certain
elements in the year immediately following a year in which the rollback tax
rate of a taxing unit is increased under Subsection (l). 

(q) Provides that this subsection and Subsections (k) - (p), expire January
1, 2001.   

SECTION 2.Emergency clause.
  Effective date: upon passage.