1-1 By: Barrientos S.B. No. 1804
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Finance; April 29, 1999,
1-4 reported adversely, with favorable Committee Substitute by the
1-5 following vote: Yeas 9, Nays 0; April 29, 1999, sent to printer.)
1-6 COMMITTEE SUBSTITUTE FOR S.B. No. 1804 By: Barrientos
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to the calculation of a tax rollback rate.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 26.04, Tax Code, is amended by amending
1-12 Subsections (e), (i), and (j), and adding Subsections (k) and (l)
1-13 to read as follows:
1-14 (e) By August 7 or as soon thereafter as practicable, the
1-15 designated officer or employee shall submit the rates to the
1-16 governing body. He shall deliver by mail to each property owner in
1-17 the unit or publish in a newspaper in the form prescribed by the
1-18 comptroller:
1-19 (1) the effective tax rate, the rollback tax rate, and
1-20 an explanation of how they were calculated;
1-21 (2) the estimated amount of interest and sinking fund
1-22 balances and the estimated amount of maintenance and operation or
1-23 general fund balances remaining at the end of the current fiscal
1-24 year that are not encumbered with or by corresponding existing debt
1-25 obligation, except that for a school district, estimated funds
1-26 necessary for the operation of the district prior to the receipt of
1-27 the first state education aid payment in the succeeding school year
1-28 shall be subtracted from the estimated fund balances;
1-29 (3) a schedule of the unit's debt obligations showing:
1-30 (A) the amount of principal and interest that
1-31 will be paid to service the unit's debts in the next year from
1-32 property tax revenue, including payments of lawfully incurred
1-33 contractual obligations providing security for the payment of the
1-34 principal of and interest on bonds and other evidences of
1-35 indebtedness issued on behalf of the unit by another political
1-36 subdivision and, if the unit is created under Section 52, Article
1-37 III, or Section 59, Article XVI, Texas Constitution, payments on
1-38 debts that the unit anticipates to incur in the next calendar year;
1-39 (B) the amount by which taxes imposed for debt
1-40 are to be increased because of the unit's anticipated collection
1-41 rate; and
1-42 (C) the total of the amounts listed in
1-43 Paragraphs (A)-(B), less any amount collected in excess of the
1-44 previous year's anticipated collections certified as provided in
1-45 Subsection (b); and
1-46 (4) the amount of additional sales and use tax revenue
1-47 anticipated in calculations under Section 26.041;[.]
1-48 (5) in the year that a taxing unit calculates an
1-49 adjustment under Subsection (i) or (j), the unit shall publish a
1-50 schedule that includes the following elements:
1-51 (A) the name of the unit transferring
1-52 responsibility for funding of [discontinuing] the department,
1-53 function, or activity;
1-54 (B) the amount of property tax revenue spent by
1-55 the unit listed under Paragraph (A) to operate the [discontinued]
1-56 department, function, or activity in the 12 months preceding the
1-57 month in which the calculations required by this chapter are made;
1-58 and
1-59 (C) the name of the unit that accepts funding
1-60 responsibility for [operates] a distinct department, function, or
1-61 activity in all or a majority of the territory of a taxing unit
1-62 that has transferred responsibility for funding of [discontinued
1-63 operating] the distinct department, function, or activity; and
1-64 (6) in the year following the year in which a taxing
2-1 unit raised its rollback rate as required by Subsection (j), the
2-2 taxing unit shall publish a schedule that includes the following
2-3 elements:
2-4 (A) the amount of property tax revenue spent by
2-5 the unit to fund [operate] the department, function, or activity
2-6 for which the taxing unit raised the rollback rate as required by
2-7 Subsection (j) for the 12 months preceding the month in which the
2-8 calculations required by this chapter are made; and
2-9 (B) the amount published by the unit in the
2-10 preceding tax year under Subdivision (5)(B).
2-11 (i) This subsection applies to a taxing unit that has agreed
2-12 by written contract to transfer all or part of the responsibility
2-13 for funding a distinct department, function, or activity to another
2-14 taxing unit and reduces its taxation for the purpose of funding
2-15 [discontinues operating] that distinct department, function, or
2-16 activity if that reduced portion of the funding [operation] of that
2-17 department, function, or activity in all or a majority of the
2-18 territory of the taxing unit is continued by another existing
2-19 taxing unit or by a new taxing unit. The rollback tax rate of a
2-20 taxing unit to which this subsection applies in the first tax year
2-21 in which a budget is adopted that reduces [does not allocate
2-22 revenue to] the funding of the [discontinued] department, function,
2-23 or activity is calculated as otherwise provided by this section,
2-24 except that last year's levy used to calculate the effective
2-25 maintenance and operations rate of the unit is reduced by the
2-26 decrease in the amount of maintenance and operations tax revenue
2-27 spent by the taxing unit on [to operate] the department, function,
2-28 or activity compared to the amount of maintenance and operations
2-29 tax revenue spent in [for] the 12 months preceding the month in
2-30 which the calculations required by this chapter are made [and in
2-31 which the unit operated the discontinued department, function, or
2-32 activity]. If the unit did not fund all or part of [operate] that
2-33 department, function, or activity for the full 12 months preceding
2-34 the month in which the calculations required by this chapter are
2-35 made, the unit shall reduce last year's levy used for calculating
2-36 the effective maintenance and operations rate of the unit by the
2-37 amount of the decrease in the amount of maintenance and operations
2-38 tax compared to the amount of revenue spent in the last full fiscal
2-39 year in which the unit funded all or part of [operated] the
2-40 [discontinued] department, function, or activity.
2-41 (j) This subsection applies to a taxing unit that had agreed
2-42 by written contract to accept the transfer of all or part of the
2-43 responsibility for funding a distinct department, function, or
2-44 activity from another taxing unit and funds all or part of
2-45 [operates] a distinct department, function, or activity if the
2-46 funding for [operation of] a substantially similar department,
2-47 function, or activity in all or a majority of the territory of the
2-48 taxing unit has been reduced [discontinued] by another taxing unit,
2-49 including a dissolved taxing unit. The rollback tax rate of a
2-50 taxing unit to which this subsection applies in the first tax year
2-51 after the other taxing unit reduced the funding of [discontinued]
2-52 the substantially similar department, function, or activity in
2-53 which a budget is adopted that allocates revenue to the department,
2-54 function, or activity is calculated as otherwise provided by this
2-55 section, except that last year's levy used to calculate the
2-56 effective maintenance and operations rate of the unit is increased
2-57 by the amount of the decrease of maintenance and operations tax
2-58 revenue spent by the taxing unit that reduced funding for
2-59 [discontinued operating] the substantially similar department,
2-60 function, or activity compared to the amount of maintenance and
2-61 operations tax revenue spent on [to operate] that department,
2-62 function, or activity in [for] the 12 months preceding the month in
2-63 which the calculations required by this chapter are made [and in
2-64 which the unit operated the discontinued department, function, or
2-65 activity]. If the unit did not fund [operate] the [discontinued]
2-66 department, function, or activity for the full 12 months preceding
2-67 the month in which the calculations required by this chapter are
2-68 made, the unit may increase last year's levy used to calculate the
2-69 effective maintenance and operations rate by an amount not to
3-1 exceed the decrease in the amount of property tax revenue spent by
3-2 the other [discontinuing] unit to fund [operate] the [discontinued]
3-3 department, function, or activity compared to the amount of
3-4 maintenance and operations tax revenue spent in the last full
3-5 fiscal year before [in which] the other [discontinuing] unit
3-6 reduced funding for [operated] the department, function, or
3-7 activity.
3-8 (k) As the term is used in Subsections (i) and (j),
3-9 "funding" includes a payment made to another taxing unit through a
3-10 written contract for the operation of the department, function, or
3-11 activity. The term does not include a payment made by a taxing
3-12 unit from funds received from another taxing unit through a written
3-13 contract to operate the department, function, or activity.
3-14 (l) Notwithstanding any other provision of this section, the
3-15 rollback tax rate of a taxing unit is increased or reduced under
3-16 Subsection (i) or (j) only in the amount of ad valorem tax revenue
3-17 spent by the taxing unit on that part of the funding of the
3-18 department, function, or activity that is assumed or discontinued
3-19 by the taxing authority. If the department, function, or activity
3-20 has been funded by revenue sources other than ad valorem taxes, the
3-21 taxing unit may use any reasonable method to calculate the amount
3-22 of ad valorem tax revenue that is or has been spent to fund the
3-23 department, function, or activity.
3-24 SECTION 2. This Act takes effect September 1, 1999.
3-25 SECTION 3. The importance of this legislation and the
3-26 crowded condition of the calendars in both houses create an
3-27 emergency and an imperative public necessity that the
3-28 constitutional rule requiring bills to be read on three several
3-29 days in each house be suspended, and this rule is hereby suspended.
3-30 * * * * *