1-1 AN ACT
1-2 relating to the public notice required to be provided by a school
1-3 district before adopting a proposed budget and tax rate.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 44.004, Education Code, is amended to
1-6 read as follows:
1-7 Sec. 44.004. NOTICE OF BUDGET AND TAX RATE MEETING; BUDGET
1-8 ADOPTION. (a) When the budget has been prepared under Section
1-9 44.002, the president shall call a meeting of the board of trustees
1-10 for[, stating that] the purpose of adopting [the meeting is the
1-11 adoption of] a budget for the succeeding fiscal year.
1-12 (b) The president shall provide for the publication of
1-13 notice of the budget and proposed tax rate meeting in a daily,
1-14 weekly, or biweekly newspaper published in the district. If no
1-15 daily, weekly, or biweekly newspaper is published in the district,
1-16 the president shall provide for the publication of notice in at
1-17 least one newspaper of general circulation in the county in which
1-18 the district's central administrative office is located. [Notice
1-19 published under this subsection is in addition to notice required
1-20 by other law.] Notice under this subsection shall be published not
1-21 earlier than the 30th day or later than the 10th day before the
1-22 date of the hearing. [A district may include the notice required
1-23 under this subsection in a notice required under Section 26.06, Tax
1-24 Code.]
2-1 (c) The notice of public meeting to discuss and adopt the
2-2 budget and the proposed tax rate may not be smaller than
2-3 one-quarter page of a standard-size or a tabloid-size newspaper,
2-4 and the headline on the notice must be in 18-point or larger type.
2-5 Subject to Subsection (d), the notice must:
2-6 (1) contain a statement in the following form:
2-7 "NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET
2-8 AND PROPOSED TAX RATE
2-9 "The (name of school district) will hold a public meeting at
2-10 (time, date, year) in (name of room, building, physical location,
2-11 city, state). The purpose of this meeting is to discuss the school
2-12 district's budget that will determine the tax rate that will be
2-13 adopted. Public participation in the discussion is invited." The
2-14 statement of the purpose of the meeting must be in bold type. In
2-15 reduced type, the notice must state: "The tax rate that is
2-16 ultimately adopted at this meeting or at a separate meeting at a
2-17 later date may not exceed the proposed rate shown below unless the
2-18 district publishes a revised notice containing the same information
2-19 and comparisons set out below and holds another public meeting to
2-20 discuss the revised notice.";
2-21 (2) contain a section entitled "Comparison of Proposed
2-22 Rates with Last Year's Rates," which must:
2-23 (A) show in rows the tax rates described by
2-24 Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
2-25 property, for columns entitled "Maintenance & Operations,"
2-26 "Interest & Sinking Fund," and "Total," which is the sum of
2-27 "Maintenance & Operations" and "Interest & Sinking Fund":
3-1 (i) the school district's "Last Year's
3-2 Rate";
3-3 (ii) the "Rate to Maintain Same Level of
3-4 Maintenance & Operations Revenue & Pay Debt Service," which:
3-5 (a) in the case of
3-6 "Maintenance & Operations," is the tax rate that, when applied to
3-7 the current taxable value for the district, as certified by the
3-8 chief appraiser under Section 26.01, Tax Code, and as adjusted to
3-9 reflect changes made by the chief appraiser as of the time the
3-10 notice is prepared, would impose taxes in an amount that, when
3-11 added to state funds to be distributed to the district under
3-12 Chapter 42, would provide the same amount of maintenance and
3-13 operations taxes and state funds distributed under Chapter 42 per
3-14 student in average daily attendance for the applicable school year
3-15 that was available to the district in the preceding school year;
3-16 and
3-17 (b) in the case of
3-18 "Interest & Sinking Fund," is the tax rate that, when applied to
3-19 the current taxable value for the district, as certified by the
3-20 chief appraiser under Section 26.01, Tax Code, and as adjusted to
3-21 reflect changes made by the chief appraiser as of the time the
3-22 notice is prepared, and when multiplied by the district's
3-23 anticipated collection rate, would impose taxes in an amount that,
3-24 when added to state funds to be distributed to the district under
3-25 Chapter 46 and any excess taxes collected to service the district's
3-26 debt during the preceding year but not used for that purpose during
3-27 that year, would provide the amount required to service the
4-1 district's debt; and
4-2 (iii) the "Proposed Rate";
4-3 (B) contain fourth and fifth columns aligned
4-4 with the columns required by Paragraph (A) that show, for each row
4-5 required by Paragraph (A):
4-6 (i) the "Local Revenue per Student," which
4-7 is computed by multiplying the district's total taxable value of
4-8 property, as certified by the chief appraiser for the applicable
4-9 school year under Section 26.01, Tax Code, and as adjusted to
4-10 reflect changes made by the chief appraiser as of the time the
4-11 notice is prepared, by the total tax rate, and dividing the product
4-12 by the number of students in average daily attendance in the
4-13 district for the applicable school year; and
4-14 (ii) the "State Revenue per Student,"
4-15 which is computed by determining the amount of state aid received
4-16 or to be received by the district under Chapters 42, 43, and 46 and
4-17 dividing that amount by the number of students in average daily
4-18 attendance in the district for the applicable school year; and
4-19 (C) contain an asterisk after each calculation
4-20 for "Interest & Sinking Fund" and a footnote to the section that,
4-21 in reduced type, states "The Interest & Sinking Fund tax revenue is
4-22 used to pay for bonded indebtedness on construction, equipment, or
4-23 both. The bonds, and the tax rate necessary to pay those bonds,
4-24 were approved by the voters of this district.";
4-25 (3) contain a section entitled "Comparison of
4-26 Proposed Levy with Last Year's Levy on Average Residence," which
4-27 must:
5-1 (A) show in rows the information described by
5-2 Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
5-3 entitled "Last Year" and "This Year":
5-4 (i) "Average Market Value of Residences,"
5-5 determined using the same group of residences for each year;
5-6 (ii) "Average Taxable Value of
5-7 Residences," determined after taking into account the limitation on
5-8 the appraised value of residences under Section 23.23, Tax Code,
5-9 and after subtracting all homestead exemptions applicable in each
5-10 year, other than exemptions available only to disabled persons or
5-11 persons 65 years of age or older or their surviving spouses, and
5-12 using the same group of residences for each year;
5-13 (iii) "Last Year's Rate Versus Proposed
5-14 Rate per $100 Value"; and
5-15 (iv) "Taxes Due on Average Residence,"
5-16 determined using the same group of residences for each year; and
5-17 (B) contain the following information:
5-18 "Increase (Decrease) in Taxes" expressed in dollars and cents,
5-19 which is computed by subtracting the "Taxes Due on Average
5-20 Residence" for the preceding tax year from the "Taxes Due on
5-21 Average Residence" for the current tax year;
5-22 (4) contain the following statement in bold print:
5-23 "Under state law, the dollar amount of school taxes imposed on the
5-24 residence of a person 65 years of age or older or of the surviving
5-25 spouse of such a person, if the surviving spouse was 55 years of
5-26 age or older when the person died, may not be increased above the
5-27 amount paid in the first year after the person turned 65,
6-1 regardless of changes in tax rate or property value.";
6-2 (5) contain the following statement in bold print:
6-3 "Notice of Rollback Rate: The highest tax rate the district can
6-4 adopt before requiring voter approval at an election is (the school
6-5 district rollback rate determined under Section 26.08, Tax Code).
6-6 This election will be automatically held if the district adopts a
6-7 rate in excess of the rollback rate of (the school district
6-8 rollback rate)."; and
6-9 (6) contain a section entitled "Fund Balances," which
6-10 must include the estimated amount of interest and sinking fund
6-11 balances and the estimated amount of maintenance and operation or
6-12 general fund balances remaining at the end of the current fiscal
6-13 year that are not encumbered with or by corresponding debt
6-14 obligation, less estimated funds necessary for the operation of the
6-15 district before the receipt of the first payment under Chapter 42
6-16 in the succeeding school year.
6-17 (c-1) For purposes of the notice prescribed by Subsection
6-18 (c) for 1999, in the section of the notice prescribed by Subsection
6-19 (c)(2), immediately under the row showing the required information
6-20 for "Last Year's Rate," there shall be included:
6-21 (1) a row entitled "Less State-Funded Tax Relief"
6-22 showing for each column the amount, expressed as a tax rate, by
6-23 which the applicable tax rate in the row entitled "Last Year's
6-24 Rate" is reduced for the 1999 tax year because of the changes in
6-25 law made by S.B. No. 4, Acts of the 76th Legislature, Regular
6-26 Session, 1999, as determined by the commissioner; and
6-27 (2) a row entitled "Last Year's Rate Adjusted for Tax
7-1 Relief" showing for each column the tax rate determined by
7-2 subtracting the applicable tax rate in the row entitled "Less
7-3 State-Funded Tax Relief" from the applicable tax rate in the row
7-4 entitled "Last Year's Rate."
7-5 (c-2) For purposes of the notice prescribed by Subsection
7-6 (c) for 1999, the calculations in the row for the "Rate to Maintain
7-7 Same Level of Maintenance & Operations Revenue & Pay Debt Service"
7-8 shall be made without consideration of state revenue received by
7-9 the district in the 1999-2000 school year for the pay raise for
7-10 classroom teachers, full-time librarians, full-time counselors, and
7-11 full-time school nurses enacted by the 76th Legislature. After the
7-12 title "Rate to Maintain Same Level of Maintenance & Operations
7-13 Revenue & Pay Debt Service" there shall be included a distinctive
7-14 asterisk and a related footnote to the section that, in reduced
7-15 type, states "The Rate to Maintain the Same Level of Maintenance &
7-16 Operations Revenue & Pay Debt Service does not reflect state
7-17 revenue received by the district in the 1999-2000 school year for
7-18 the pay raise for classroom teachers, full-time librarians,
7-19 full-time counselors, and full-time school nurses enacted by the
7-20 76th Legislature."
7-21 (c-3) The commissioner shall adopt emergency rules as soon
7-22 as practicable after the effective date of this section prescribing
7-23 the manner in which a school district determines the information
7-24 required by Subsection (c-1) to be included in the notice
7-25 prescribed by Subsection (c).
7-26 (c-4) The commissioner shall adopt emergency rules as soon
7-27 as practicable after the effective date of this section prescribing
8-1 the manner in which a school district makes the calculations for
8-2 the row entitled "Rate to Maintain Same Level of Maintenance &
8-3 Operations Revenue & Pay Debt Service" in accordance with
8-4 Subsection (c-2). The commissioner shall adopt emergency rules as
8-5 soon as practicable after the effective date of this section
8-6 modifying the statement to be included in the footnote prescribed
8-7 by Subsection (c-2) to include the annual dollar amount of the pay
8-8 raise described by that statement and to make any other changes to
8-9 reflect the action taken by the 76th Legislature with respect to
8-10 that pay raise.
8-11 (c-5) This subsection and Subsections (c-1), (c-2), (c-3),
8-12 and (c-4) expire May 1, 2000.
8-13 (d) The comptroller shall prescribe the language and format
8-14 to be used in the part of the notice required by Subsection (c). A
8-15 notice under Subsection (c) is not valid if it does not
8-16 substantially conform to the language and format prescribed by the
8-17 comptroller under this subsection.
8-18 (e) A person who owns taxable property in a school district
8-19 is entitled to an injunction restraining the collection of taxes by
8-20 the district if the district has not complied with the requirements
8-21 of Subsections (b), (c), and (d), and the failure to comply was not
8-22 in good faith. An action to enjoin the collection of taxes must be
8-23 filed before the date the school district delivers substantially
8-24 all of its tax bills.
8-25 (f) The board of trustees, at the meeting called for that
8-26 purpose, shall adopt a budget to cover all expenditures for the
8-27 school district for the next succeeding fiscal year. Any taxpayer
9-1 of the district may be present and participate in the meeting
9-2 [hearing].
9-3 (g) [(d)] The budget must be adopted before the adoption of
9-4 the tax rate for the tax year in which the fiscal year covered by
9-5 the budget begins.
9-6 SECTION 2. Section 26.04, Tax Code, is amended by amending
9-7 Subsection (e) and adding Subsection (e-1) to read as follows:
9-8 (e) By August 7 or as soon thereafter as practicable, the
9-9 designated officer or employee shall submit the rates to the
9-10 governing body. He shall deliver by mail to each property owner in
9-11 the unit or publish in a newspaper in the form prescribed by the
9-12 comptroller:
9-13 (1) the effective tax rate, the rollback tax rate, and
9-14 an explanation of how they were calculated;
9-15 (2) the estimated amount of interest and sinking fund
9-16 balances and the estimated amount of maintenance and operation or
9-17 general fund balances remaining at the end of the current fiscal
9-18 year that are not encumbered with or by corresponding existing debt
9-19 obligation[, except that for a school district, estimated funds
9-20 necessary for the operation of the district prior to the receipt of
9-21 the first state education aid payment in the succeeding school year
9-22 shall be subtracted from the estimated fund balances];
9-23 (3) a schedule of the unit's debt obligations showing:
9-24 (A) the amount of principal and interest that
9-25 will be paid to service the unit's debts in the next year from
9-26 property tax revenue, including payments of lawfully incurred
9-27 contractual obligations providing security for the payment of the
10-1 principal of and interest on bonds and other evidences of
10-2 indebtedness issued on behalf of the unit by another political
10-3 subdivision and, if the unit is created under Section 52, Article
10-4 III, or Section 59, Article XVI, Texas Constitution, payments on
10-5 debts that the unit anticipates to incur in the next calendar year;
10-6 (B) the amount by which taxes imposed for debt
10-7 are to be increased because of the unit's anticipated collection
10-8 rate; and
10-9 (C) the total of the amounts listed in
10-10 Paragraphs (A)-(B), less any amount collected in excess of the
10-11 previous year's anticipated collections certified as provided in
10-12 Subsection (b);
10-13 (4) the amount of additional sales and use tax revenue
10-14 anticipated in calculations under Section 26.041;
10-15 (5) in the year that a taxing unit calculates an
10-16 adjustment under Subsection (i) or (j), the unit shall publish a
10-17 schedule that includes the following elements:
10-18 (A) the name of the unit discontinuing the
10-19 department, function, or activity;
10-20 (B) the amount of property tax revenue spent by
10-21 the unit listed under Paragraph (A) to operate the discontinued
10-22 department, function, or activity in the 12 months preceding the
10-23 month in which the calculations required by this chapter are made;
10-24 and
10-25 (C) the name of the unit that operates a
10-26 distinct department, function, or activity in all or a majority of
10-27 the territory of a taxing unit that has discontinued operating the
11-1 distinct department, function, or activity; and
11-2 (6) in the year following the year in which a taxing
11-3 unit raised its rollback rate as required by Subsection (j), the
11-4 taxing unit shall publish a schedule that includes the following
11-5 elements:
11-6 (A) the amount of property tax revenue spent by
11-7 the unit to operate the department, function, or activity for which
11-8 the taxing unit raised the rollback rate as required by Subsection
11-9 (j) for the 12 months preceding the month in which the calculations
11-10 required by this chapter are made; and
11-11 (B) the amount published by the unit in the
11-12 preceding tax year under Subdivision (5)(B).
11-13 (e-1) The notice requirements imposed by Subsections
11-14 (e)(1)-(6) do not apply to a school district.
11-15 SECTION 3. Section 26.05(d), Tax Code, is amended to read as
11-16 follows:
11-17 (d) The governing body of a taxing unit other than a school
11-18 district may not adopt a tax rate that if applied to the total
11-19 taxable value would impose an amount of taxes that exceeds last
11-20 year's levy until it has held a public hearing on the proposed tax
11-21 rate and has otherwise complied with Section 26.06.
11-22 SECTION 4. Section 26.06, Tax Code, is amended by adding
11-23 Subsection (g) to read as follows:
11-24 (g) This section does not apply to a school district. A
11-25 school district shall provide notice of a public hearing on a tax
11-26 increase as required by Section 44.004, Education Code.
11-27 SECTION 5. The importance of this legislation and the
12-1 crowded condition of the calendars in both houses create an
12-2 emergency and an imperative public necessity that the
12-3 constitutional rule requiring bills to be read on three several
12-4 days in each house be suspended, and this rule is hereby suspended,
12-5 and that this Act take effect and be in force from and after its
12-6 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2075 was passed by the House on May
11, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 2075 on May 27, 1999, by the
following vote: Yeas 137, Nays 0, 2 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2075 was passed by the Senate, with
amendments, on May 24, 1999, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor