By Isett H.B. No. 2021
77R5576 JD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the ad valorem tax rates of certain taxing units.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 26.04(c), Tax Code, is amended to read as
1-5 follows:
1-6 (c) An officer or employee designated by the governing body
1-7 shall calculate the effective tax rate and the rollback tax rate
1-8 for the unit, where:
1-9 (1) "Effective tax rate" means a rate expressed in
1-10 dollars per $100 of taxable value calculated according to the
1-11 following formula:
1-12 EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
1-13 (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
1-14 ; and
1-15 (2) "Rollback tax rate" means a rate expressed in
1-16 dollars per $100 of taxable value calculated according to the
1-17 following formula:
1-18 ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x
1-19 1.04 [1.08]) + CURRENT DEBT RATE
1-20 SECTION 2. Sections 26.041(a), (b), and (c), Tax Code, are
1-21 amended to read as follows:
1-22 (a) In the first year in which an additional sales and use
1-23 tax is required to be collected, the effective tax rate and
1-24 rollback tax rate for the unit are calculated according to the
2-1 following formulas:
2-2 EFFECTIVE TAX RATE = ((LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
2-3 (CURRENT TOTAL VALUE - NEW PROPERTY VALUE) - SALES TAX GAIN RATE
2-4 and
2-5 ROLLBACK RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x 1.04
2-6 [1.08]) + CURRENT DEBT RATE - SALES TAX GAIN RATE
2-7 where "sales tax gain rate" means a number expressed in dollars per
2-8 $100 of taxable value, calculated by dividing the revenue that will
2-9 be generated by the additional sales and use tax in the following
2-10 year as calculated under Subsection (d) [of this section] by the
2-11 current total value.
2-12 (b) Except as provided by Subsections (a) and (c) [of this
2-13 section], in a year in which a taxing unit imposes an additional
2-14 sales and use tax the rollback tax rate for the unit is calculated
2-15 according to the following formula, regardless of whether the unit
2-16 levied a property tax in the preceding year:
2-17 ROLLBACK RATE = ((LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X
2-18 1.04 [1.08]) / (TOTAL CURRENT VALUE - NEW PROPERTY VALUE)) +
2-19 (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
2-20 where "last year's maintenance and operations expense" means the
2-21 amount spent for maintenance and operations from property tax and
2-22 additional sales and use tax revenues in the preceding year, and
2-23 "sales tax revenue rate" means a number expressed in dollars per
2-24 $100 of taxable value, calculated by dividing the revenue that will
2-25 be generated by the additional sales and use tax in the current
2-26 year as calculated under Subsection (d) [of this section] by the
2-27 current total value.
3-1 (c) In a year in which a taxing unit that has been imposing
3-2 an additional sales and use tax ceases to impose an additional
3-3 sales and use tax the effective tax rate and rollback tax rate for
3-4 the unit are calculated according to the following formulas:
3-5 EFFECTIVE TAX RATE = ((LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
3-6 (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)) + SALES TAX LOSS RATE
3-7 and
3-8 ROLLBACK TAX RATE = ((LAST YEAR'S MAINTENANCE AND OPERATIONS
3-9 EXPENSE X 1.04 [1.08]) / (TOTAL CURRENT VALUE - NEW PROPERTY
3-10 VALUE)) + CURRENT DEBT RATE
3-11 where "sales tax loss rate" means a number expressed in dollars per
3-12 $100 of taxable value, calculated by dividing the amount of sales
3-13 and use tax revenue generated in the last four quarters for which
3-14 the information is available by the current total value and "last
3-15 year's maintenance and operations expense" means the amount spent
3-16 for maintenance and operations from property tax and additional
3-17 sales and use tax revenues in the preceding year.
3-18 SECTION 3. Section 26.05, Tax Code, is amended by amending
3-19 Subsection (d) and adding Subsection (g) to read as follows:
3-20 (d) The governing body of a taxing district other than a
3-21 school district and other than a county or municipality to which
3-22 Subsection (g) applies may not adopt a tax rate that exceeds the
3-23 lower of the rollback tax rate or 103 percent of the effective tax
3-24 rate calculated as provided by this chapter until the governing
3-25 body has held a public hearing on the proposed tax rate and has
3-26 otherwise complied with Sections [Section] 26.06 and [Section]
3-27 26.065. The governing body of a taxing unit to which this
4-1 subsection applies shall reduce a tax rate set by law or by vote of
4-2 the electorate to the lower of the rollback tax rate or 103 percent
4-3 of the effective tax rate and may not adopt a higher rate unless it
4-4 first complies with Section 26.06.
4-5 (g) This subsection applies only to a county or municipality
4-6 for which the total tax rate proposed for the current tax year
4-7 would impose taxes in an amount of $5,000,000 or more when applied
4-8 to the total current value, as defined by Section 26.012, for the
4-9 county or municipality. The governing body of the county or
4-10 municipality may not adopt a tax rate that exceeds the effective
4-11 tax rate calculated as provided by this chapter until the governing
4-12 body has held a public hearing on the proposed tax rate and has
4-13 otherwise complied with Sections 26.06 and 26.065. The governing
4-14 body of a county or municipality to which this subsection applies
4-15 shall reduce a tax rate set by law or by vote of the electorate to
4-16 the effective tax rate and may not adopt a higher rate unless it
4-17 first complies with Section 26.06.
4-18 SECTION 4. Section 26.06, Tax Code, is amended by amending
4-19 Subsections (b), (d), (e), and (f), and adding Subsection (h) to
4-20 read as follows:
4-21 (b) The notice of a public hearing to be conducted by the
4-22 governing body of a taxing unit other than a county or a
4-23 municipality to which Section 26.05(g) applies may not be smaller
4-24 than one-quarter page of a standard-size or a tabloid-size
4-25 newspaper, and the headline on the notice must be in 18-point or
4-26 larger type. The notice must:
4-27 (1) contain a statement in the following form:
5-1 "NOTICE OF PUBLIC HEARING ON TAX INCREASE
5-2 "The (name of the taxing unit) will hold a public hearing on
5-3 a proposal to increase total tax revenues from properties on the
5-4 tax roll in the preceding year by (percentage by which proposed tax
5-5 rate exceeds lower of rollback tax rate or effective tax rate
5-6 calculated under this chapter) percent. Your individual taxes may
5-7 increase at a greater or lesser rate, or even decrease, depending
5-8 on the change in the taxable value of your property in relation to
5-9 the change in taxable value of all other property and the tax rate
5-10 that is adopted.
5-11 "The public hearing will be held on (date and time) at
5-12 (meeting place).
5-13 "(Names of all members of the governing body, showing how
5-14 each voted on the proposal to consider the tax increase or, if one
5-15 or more were absent, indicating the absences.)"; and
5-16 (2) contain the following information:
5-17 (A) the unit's adopted tax rate for the
5-18 preceding year and the proposed tax rate, expressed as an amount
5-19 per $100;
5-20 (B) the difference, expressed as an amount per
5-21 $100 and as a percent increase or decrease, as applicable, in the
5-22 proposed tax rate compared to the adopted tax rate for the
5-23 preceding year;
5-24 (C) the average appraised value of a residence
5-25 homestead in the taxing unit in the preceding year and in the
5-26 current year; the unit's homestead exemption, other than an
5-27 exemption available only to disabled persons or persons 65 years of
6-1 age or older, applicable to that appraised value in each of those
6-2 years; and the average taxable value of a residence homestead in
6-3 the unit in each of those years, disregarding any homestead
6-4 exemption available only to disabled persons or persons 65 years of
6-5 age or older;
6-6 (D) the amount of tax that would have been
6-7 imposed by the unit in the preceding year on a residence homestead
6-8 appraised at the average appraised value of a residence homestead
6-9 in that year, disregarding any homestead exemption available only
6-10 to disabled persons or persons 65 years of age or older;
6-11 (E) the amount of tax that would be imposed by
6-12 the unit in the current year on a residence homestead appraised at
6-13 the average appraised value of a residence homestead in the current
6-14 year, disregarding any homestead exemption available only to
6-15 disabled persons or persons 65 years of age or older, if the
6-16 proposed tax rate is adopted; and
6-17 (F) the difference between the amounts of tax
6-18 calculated under Paragraphs (D) and (E), expressed in dollars and
6-19 cents and described as the annual increase or decrease, as
6-20 applicable, in the tax to be imposed by the unit on the average
6-21 residence homestead in the unit in the current year if the proposed
6-22 tax rate is adopted.
6-23 (d) At the public hearing the governing body shall announce
6-24 the date, time, and place of the meeting at which it will vote on
6-25 the proposed tax rate. After the hearing the governing body of a
6-26 taxing unit other than a county or a municipality to which Section
6-27 26.05(g) applies shall give notice of the meeting at which it will
7-1 vote on the proposed tax rate and the notice shall be in the same
7-2 form as prescribed by Subsections (b) and (c), except that it must
7-3 state the following:
7-4 "NOTICE OF VOTE ON TAX RATE
7-5 "The (name of the taxing unit) conducted a public hearing on
7-6 a proposal to increase the total tax revenues of the (name of the
7-7 taxing unit) from properties on the tax roll in the preceding year
7-8 by (percentage by which proposed tax rate exceeds lower of rollback
7-9 tax rate or effective tax rate calculated under this chapter)
7-10 percent on (date and time public hearing was conducted).
7-11 "The (governing body of the taxing unit) is scheduled to vote
7-12 on the tax rate that will result in that tax increase at a public
7-13 meeting to be held on (date and time) at (meeting place)."
7-14 (e) The meeting to vote on the tax increase may not be
7-15 earlier than the third day or later than the 14th day after the
7-16 date of the public hearing. The meeting must be held inside the
7-17 boundaries of the taxing unit in a publicly owned building or, if a
7-18 suitable publicly owned building is not available, in a suitable
7-19 building to which the public normally has access. If the governing
7-20 body of a taxing unit other than a county or a municipality to
7-21 which Section 26.05(g) applies does not adopt a tax rate that
7-22 exceeds the lower of the rollback tax rate or 103 percent of the
7-23 effective tax rate by the 14th day, it must give a new notice under
7-24 Subsection (d) before it may adopt a rate that exceeds the lower of
7-25 the rollback tax rate or 103 percent of the effective tax rate. If
7-26 the governing body of a county or a municipality to which Section
7-27 26.05(g) applies does not adopt a tax rate that exceeds the
8-1 effective tax rate by the 14th day, it must give a new notice under
8-2 Subsection (d) before it may adopt a rate that exceeds the
8-3 effective tax rate.
8-4 (f) The comptroller by rule shall prescribe the language and
8-5 format to be used in the part of the notice required by Subsection
8-6 (b)(2) or (h). A notice under Subsection (b) or (h) is not valid if
8-7 it does not substantially conform to the language and format
8-8 prescribed by the comptroller under this subsection.
8-9 (h) This subsection applies only to a county or a
8-10 municipality to which Section 26.05(g) applies. Subsections (b)
8-11 and (d) govern the notice of the public hearing to be conducted by
8-12 the governing body of the county or municipality and the notice of
8-13 the meeting of the governing body to vote on the tax rate, except
8-14 that:
8-15 (1) the statement otherwise required by Subsection
8-16 (b)(1) must be in the following form:
8-17 "NOTICE OF PUBLIC HEARING ON TAX INCREASE
8-18 "The (name of the county or municipality) will hold a public
8-19 hearing on a proposal to increase total tax revenues from
8-20 properties on the tax roll in the preceding year by (percentage by
8-21 which proposed tax rate exceeds the effective tax rate calculated
8-22 under this chapter) percent. Your individual taxes may increase at
8-23 a greater or lesser rate, or even decrease, depending on the change
8-24 in the taxable value of your property in relation to the change in
8-25 taxable value of all other property and the tax rate that is
8-26 adopted.
8-27 "The public hearing will be held on (date and time) at
9-1 (meeting place).
9-2 "(Names of all members of county or municipal governing body,
9-3 showing how each voted on the proposal to consider the tax increase
9-4 or, if one or more were absent, indicating the absences.)"; and
9-5 (2) the notice required by Subsection (d) must state
9-6 the following:
9-7 "NOTICE OF VOTE ON TAX RATE
9-8 "The (name of the county or municipality) conducted a public
9-9 hearing on a proposal to increase the total tax revenues of the
9-10 (county or municipality) from properties on the tax roll in the
9-11 preceding year by (percentage by which proposed tax rate exceeds
9-12 the effective tax rate calculated under this chapter) percent on
9-13 (date and time public hearing was conducted).
9-14 "The (governing body of the county or municipality) is
9-15 scheduled to vote on the tax rate that will result in that tax
9-16 increase at a public meeting to be held on (date and time) at
9-17 (meeting place)."
9-18 SECTION 5. Section 26.065(d), Tax Code, is amended to read as
9-19 follows:
9-20 (d) The notice of the public hearing required by Subsection
9-21 (b) must contain a statement that is substantially the same as the
9-22 statement required by Section 26.06(b)(1) or (h)(1) and must
9-23 contain information that is substantially the same as the
9-24 information required by Section 26.06(b)(2).
9-25 SECTION 6. (a) This Act takes effect September 1, 2001.
9-26 (b) The change in law made by this Act applies to the ad
9-27 valorem tax rate of a taxing unit beginning with the 2001 tax year,
10-1 except as provided by Subsection (c) of this section.
10-2 (c) If the governing body of a taxing unit has adopted an ad
10-3 valorem tax rate for the taxing unit for the 2001 tax year before
10-4 September 1, 2001, the change in law made by this Act applies to
10-5 the ad valorem tax rate of that taxing unit beginning with the 2002
10-6 tax year.