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78S10245 JD-F
By: Isett H.B. No. 104
A BILL TO BE ENTITLED
AN ACT
relating to the ad valorem tax rates of certain taxing units.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 26.04(c), Tax Code, is amended to read as
follows:
(c) An officer or employee designated by the governing body
shall calculate the effective tax rate and the rollback tax rate for
the unit, where:
(1) "Effective tax rate" means a rate expressed in
dollars per $100 of taxable value calculated according to the
following formula:
EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
; and
(2) "Rollback tax rate" means a rate expressed in
dollars per $100 of taxable value calculated according to the
following formula:
ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x
1.03 [1.08]) + CURRENT DEBT RATE
SECTION 2. Sections 26.041(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) In the first year in which an additional sales and use
tax is required to be collected, the effective tax rate and rollback
tax rate for the unit are calculated according to the following
formulas:
EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN RATE
and
ROLLBACK RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x 1.03
[1.08]) + CURRENT DEBT RATE - SALES TAX GAIN RATE
where "sales tax gain rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the following
year as calculated under Subsection (d) [of this section] by the
current total value.
(b) Except as provided by Subsections (a) and (c) [of this
section], in a year in which a taxing unit imposes an additional
sales and use tax the rollback tax rate for the unit is calculated
according to the following formula, regardless of whether the unit
levied a property tax in the preceding year:
ROLLBACK RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X
1.03 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
(CURRENT DEBT RATE - SALES TAX REVENUE RATE)
where "last year's maintenance and operations expense" means the
amount spent for maintenance and operations from property tax and
additional sales and use tax revenues in the preceding year, and
"sales tax revenue rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the current year
as calculated under Subsection (d) [of this section] by the current
total value.
(c) In a year in which a taxing unit that has been imposing
an additional sales and use tax ceases to impose an additional sales
and use tax the effective tax rate and rollback tax rate for the
unit are calculated according to the following formulas:
EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS RATE
and
ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS
EXPENSE X 1.03 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY
VALUE)] + CURRENT DEBT RATE
where "sales tax loss rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the amount of sales
and use tax revenue generated in the last four quarters for which
the information is available by the current total value and "last
year's maintenance and operations expense" means the amount spent
for maintenance and operations from property tax and additional
sales and use tax revenues in the preceding year.
SECTION 3. Section 26.05, Tax Code, is amended by amending
Subsection (d) and adding Subsection (g) to read as follows:
(d) The governing body of a taxing unit [district] other
than a school district and other than a county or municipality to
which Subsection (g) applies may not adopt a tax rate that exceeds
the lower of the rollback tax rate or 103 percent of the effective
tax rate calculated as provided by this chapter until the governing
body has held a public hearing on the proposed tax rate and has
otherwise complied with Sections [Section] 26.06 and [Section]
26.065. The governing body of a taxing unit to which this
subsection applies shall reduce a tax rate set by law or by vote of
the electorate to the lower of the rollback tax rate or 103 percent
of the effective tax rate and may not adopt a higher rate unless it
first complies with Section 26.06.
(g) This subsection applies only to a county or municipality
for which the total tax rate proposed for the current tax year would
impose taxes in an amount of $5,000,000 or more when applied to the
current total value for the county or municipality. The governing
body of the county or municipality may not adopt a tax rate that
exceeds the effective tax rate calculated as provided by this
chapter until the governing body has held a public hearing on the
proposed tax rate and has otherwise complied with Sections 26.06
and 26.065. The governing body of a county or municipality to which
this subsection applies shall reduce a tax rate set by law or by
vote of the electorate to the effective tax rate and may not adopt a
higher rate unless it first complies with Section 26.06.
SECTION 4. Section 26.06, Tax Code, is amended by amending
Subsections (b), (d), and (e) and adding Subsection (h) to read as
follows:
(b) The notice of a public hearing to be conducted by the
governing body of a taxing unit other than a county or a
municipality to which Section 26.05(g) applies may not be smaller
than one-quarter page of a standard-size or a tabloid-size
newspaper, and the headline on the notice must be in 18-point or
larger type. The notice must:
(1) contain a statement in the following form:
"NOTICE OF PUBLIC HEARING ON TAX INCREASE
"The (name of the taxing unit) will hold a public hearing on a
proposal to increase total tax revenues from properties on the tax
roll in the preceding year by (percentage by which proposed tax rate
exceeds lower of rollback tax rate or effective tax rate calculated
under this chapter) percent. Your individual taxes may increase at
a greater or lesser rate, or even decrease, depending on the change
in the taxable value of your property in relation to the change in
taxable value of all other property and the tax rate that is
adopted.
"The public hearing will be held on (date and time) at
(meeting place).
"(Names of all members of the governing body, showing how
each voted on the proposal to consider the tax increase or, if one
or more were absent, indicating the absences.)"; and
(2) contain the following information:
(A) the unit's adopted tax rate for the preceding
year and the proposed tax rate, expressed as an amount per $100;
(B) the difference, expressed as an amount per
$100 and as a percent increase or decrease, as applicable, in the
proposed tax rate compared to the adopted tax rate for the preceding
year;
(C) the average appraised value of a residence
homestead in the taxing unit in the preceding year and in the
current year; the unit's homestead exemption, other than an
exemption available only to disabled persons or persons 65 years of
age or older, applicable to that appraised value in each of those
years; and the average taxable value of a residence homestead in the
unit in each of those years, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older;
(D) the amount of tax that would have been
imposed by the unit in the preceding year on a residence homestead
appraised at the average appraised value of a residence homestead
in that year, disregarding any homestead exemption available only
to disabled persons or persons 65 years of age or older;
(E) the amount of tax that would be imposed by the
unit in the current year on a residence homestead appraised at the
average appraised value of a residence homestead in the current
year, disregarding any homestead exemption available only to
disabled persons or persons 65 years of age or older, if the
proposed tax rate is adopted; and
(F) the difference between the amounts of tax
calculated under Paragraphs (D) and (E), expressed in dollars and
cents and described as the annual increase or decrease, as
applicable, in the tax to be imposed by the unit on the average
residence homestead in the unit in the current year if the proposed
tax rate is adopted.
(d) At the public hearing the governing body shall announce
the date, time, and place of the meeting at which it will vote on the
proposed tax rate. After the hearing the governing body of a taxing
unit other than a county or a municipality to which Section 26.05(g)
applies shall give notice of the meeting at which it will vote on
the proposed tax rate and the notice shall be in the same form as
prescribed by Subsections (b) and (c), except that it must state the
following:
"NOTICE OF VOTE ON TAX RATE
"The (name of the taxing unit) conducted a public hearing on a
proposal to increase the total tax revenues of the (name of the
taxing unit) from properties on the tax roll in the preceding year
by (percentage by which proposed tax rate exceeds lower of rollback
tax rate or effective tax rate calculated under this chapter)
percent on (date and time public hearing was conducted).
"The (governing body of the taxing unit) is scheduled to vote
on the tax rate that will result in that tax increase at a public
meeting to be held on (date and time) at (meeting place)."
(e) The meeting to vote on the tax increase may not be
earlier than the third day or later than the 14th day after the date
of the public hearing. The meeting must be held inside the
boundaries of the taxing unit in a publicly owned building or, if a
suitable publicly owned building is not available, in a suitable
building to which the public normally has access. If the governing
body of a taxing unit other than a county or a municipality to which
Section 26.05(g) applies does not adopt a tax rate that exceeds the
lower of the rollback tax rate or 103 percent of the effective tax
rate by the 14th day, it must give a new notice under Subsection (d)
before it may adopt a rate that exceeds the lower of the rollback
tax rate or 103 percent of the effective tax rate. If the governing
body of a county or a municipality to which Section 26.05(g) applies
does not adopt a tax rate that exceeds the effective tax rate by the
14th day, it must give a new notice under Subsection (d) before it
may adopt a rate that exceeds the effective tax rate.
(h) This subsection applies only to a county or a
municipality to which Section 26.05(g) applies. Subsections (b)
and (d) govern the notice of the public hearing to be conducted by
the governing body of the county or municipality and the notice of
the meeting of the governing body to vote on the tax rate, except
that:
(1) the statement otherwise required by Subsection
(b)(1) must be in the following form:
"NOTICE OF PUBLIC HEARING ON TAX INCREASE
"The (name of the county or municipality) will hold a public
hearing on a proposal to increase total tax revenues from
properties on the tax roll in the preceding year by (percentage by
which proposed tax rate exceeds the effective tax rate calculated
under this chapter) percent. Your individual taxes may increase at
a greater or lesser rate, or even decrease, depending on the change
in the taxable value of your property in relation to the change in
taxable value of all other property and the tax rate that is
adopted.
"The public hearing will be held on (date and time) at
(meeting place).
"(Names of all members of county or municipal governing body,
showing how each voted on the proposal to consider the tax increase
or, if one or more were absent, indicating the absences.)"; and
(2) the notice required by Subsection (d) must state
the following:
"NOTICE OF VOTE ON TAX RATE
"The (name of the county or municipality) conducted a public
hearing on a proposal to increase the total tax revenues of the
(county or municipality) from properties on the tax roll in the
preceding year by (percentage by which proposed tax rate exceeds
the effective tax rate calculated under this chapter) percent on
(date and time public hearing was conducted).
"The (governing body of the county or municipality) is
scheduled to vote on the tax rate that will result in that tax
increase at a public meeting to be held on (date and time) at
(meeting place)."
SECTION 5. Section 26.065(d), Tax Code, is amended to read
as follows:
(d) The notice of the public hearing required by Subsection
(b) must contain a statement that is substantially the same as the
statement required by Section 26.06(b)(1) or (h)(1), as applicable,
and must contain information that is substantially the same as the
information required by Section 26.06(b)(2).
SECTION 6. (a) This Act takes effect November 1, 2003.
(b) The change in law made by this Act applies to the ad
valorem tax rate of a taxing unit beginning with the 2004 tax year.