79S20048 SMH-D
By: Williams S.B. No. 33
A BILL TO BE ENTITLED
AN ACT
relating to certain limitations on the ad valorem tax rates of
certain taxing units.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (c), Section 26.04, 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
1.05 [1.08]) + CURRENT DEBT RATE
SECTION 2. Subsections (a), (b), and (c), Section 26.041,
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 1.05
[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
1.05 [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 1.05 [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. Subsection (b), Section 26.07, Tax Code, as
amended by Senate Bill No. 18, Acts of the 79th Legislature, Regular
Session, 2005, is amended to read as follows:
(b) A petition is valid only if:
(1) it states that it is intended to require an
election in the taxing unit on the question of reducing the tax rate
for the current year;
(2) it is signed by a number of registered voters of
the taxing unit equal to at least 10[:
[(A) seven] percent of the number of [registered]
voters of the taxing unit who voted in [according to] the most
recent gubernatorial election [list of registered voters if the tax
rate adopted for the current tax year would impose taxes for
maintenance and operations in an amount of at least $5 million; or
[(B) 10 percent of the number of registered
voters of the taxing unit according to the most recent official list
of registered voters if the tax rate adopted for the current tax
year would impose taxes for maintenance and operations in an amount
of less than $5 million]; and
(3) it is submitted to the governing body on or before
the 90th day after the date on which the governing body adopted the
tax rate for the current year.
SECTION 4. Chapter 26, Tax Code, is amended by adding
Section 26.071 to read as follows:
Sec. 26.071. ELECTION ON INCREASE IN TAX RATE OF CERTAIN
TAXING UNITS. (a) This section applies only to:
(1) a junior college district; or
(2) a county or municipality for which the proposed
tax rate to impose taxes for maintenance and operations
expenditures for the current tax year would impose taxes in an
amount that does not exceed $5 million when applied to the current
total value for the county or municipality.
(b) Sections 26.07 and 26.08 do not apply to a taxing unit to
which this section applies.
(c) In a formula provided by this chapter for the
calculation of the rollback tax rate of the taxing unit, 1.08 shall
be substituted for 1.05.
(d) If the governing body of the taxing unit adopts a tax
rate that exceeds the rollback tax rate calculated as provided by
this chapter, the qualified voters of the taxing unit by petition
may require that an election be held to determine whether to reduce
the tax rate adopted for the current year to the rollback tax rate
calculated as provided by this chapter.
(e) A petition is valid only if:
(1) it states that it is intended to require an
election in the taxing unit on the question of reducing the tax rate
for the current year;
(2) it is signed by a number of registered voters of
the district equal to at least 10 percent of the number of
registered voters of the taxing unit according to the most recent
official list of registered voters; and
(3) it is submitted to the governing body on or before
the 90th day after the date on which the governing body adopted the
tax rate for the current year.
(f) Not later than the 20th day after the day a petition is
submitted, the governing body shall determine whether the petition
is valid and pass a resolution stating its finding. If the
governing body fails to act within the time allowed, the petition is
treated as if it had been found valid.
(g) If the governing body finds that the petition is valid
(or fails to act within the time allowed), it shall order that an
election be held in the taxing unit on a date not less than 30 or
more than 90 days after the last day on which it could have acted to
approve or disapprove the petition. A state law requiring local
elections to be held on a specified date does not apply to the
election unless a specified date falls within the time permitted by
this section. At the election, the ballots shall be prepared to
permit voting for or against the proposition: "Reducing the tax
rate in (name of taxing unit) for the current year from (the rate
adopted) to (the rollback tax rate calculated as provided by this
chapter)."
(h) If a majority of the qualified voters voting on the
question in the election favor the proposition, the tax rate for the
taxing unit for the current year is the rollback tax rate calculated
as provided by this chapter; otherwise, the tax rate for the current
year is the one adopted by the governing body.
(i) If the tax rate is reduced by an election called under
this section after tax bills for the unit are mailed, the assessor
for the taxing unit shall prepare and mail corrected tax bills. The
collector shall include with the bill a brief explanation of the
reason for and effect of the corrected bill. The date on which the
taxes become delinquent for the year is extended by a number of days
equal to the number of days between the date the first tax bills
were sent and the date the corrected tax bills were sent.
(j) If a property owner pays taxes calculated using the
higher tax rate when the rate is reduced by an election called under
this section, the taxing unit shall refund the difference between
the amount of taxes paid and the amount due under the reduced rate
if the difference between the amount of taxes paid and the amount
due under the reduced rate is $1 or more. If the difference between
the amount of taxes paid and the amount due under the reduced rate
is less than $1, the taxing unit shall refund the difference on
request of the taxpayer. An application for a refund of less than
$1 must be made within 90 days after the date the refund becomes due
or the taxpayer forfeits the right to the refund.
(k) Section 33.08(b) applies to a tax bill sent under
Subsection (i).
(l) Sections 31.12(a) and (b) apply to a refund due under
Subsection (j). Liability for the refund arises on the date the
election is canvassed.
SECTION 5. Section 49.236, Water Code, as added by Chapters
248 and 335, Acts of the 78th Legislature, Regular Session, 2003, is
reenacted and amended to read as follows:
Sec. 49.236. NOTICE OF TAX HEARING. (a) Before the board
adopts an ad valorem tax rate for the district for debt service,
operation and maintenance purposes, or contract purposes, the board
shall give notice of each meeting of the board at which the adoption
of a tax rate will be considered. The notice must:
(1) contain a statement in substantially the following
form:
"NOTICE OF PUBLIC HEARING ON TAX RATE
"The (name of the district) will hold a public hearing on a
proposed tax rate for the tax year (year of tax levy) on (date and
time) at (meeting place). Your individual taxes may increase or
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.
"(Names of all board members and, if a vote was taken, an
indication of how each voted on the proposed tax rate and an
indication of any absences.)";
(2) contain the following information:
(A) the district's total 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 district in the preceding year and in the current
year; the district's total 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
district 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 district 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
district in the current 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, 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 percentage increase or decrease,
as applicable, in the tax to be imposed by the district on the
average residence homestead in the district in the current year if
the proposed tax rate is adopted; and
(3) contain a statement in substantially the following
form:
"NOTICE OF TAXPAYERS' RIGHT TO ROLLBACK ELECTION
"If taxes on the average residence homestead increase by more
than five [eight] percent, the qualified voters of the district by
petition may require that an election be held to determine whether
to reduce the operation and maintenance tax rate to the rollback tax
rate under Section 49.236(d), Water Code."
(b) Notice of the hearing shall be:
(1) published at least once in a newspaper having
general circulation in the district at least seven days before the
date of the hearing; or
(2) mailed to each owner of taxable property in the
district, at the address for notice shown on the most recently
certified tax roll of the district, at least 10 days before the date
of the hearing.
(c) The notice provided under this section may not be
smaller than one-quarter page of a standard-size or tabloid-size
newspaper of general circulation, and the headline on the notice
must be in 18-point or larger type.
(d) If the governing body of a district adopts a combined
debt service, operation and maintenance, and contract tax rate that
would impose more than 1.05 [1.08] times the amount of tax imposed
by the district in the preceding year on a residence homestead
appraised at the average appraised value of a residence homestead
in the district in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older, the qualified voters of the district by petition may require
that an election be held to determine whether [or not] to reduce the
tax rate adopted for the current year to the rollback tax rate in
accordance with the procedures provided by Section 26.07 [Sections
26.07(b)-(g) and 26.081], Tax Code. For purposes of Section 26.07,
Tax Code, [Sections 26.07(b)-(g)] and this subsection, the rollback
tax rate is the current year's debt service and contract tax rates
plus the operation and maintenance tax rate that would impose 1.05
[1.08] times the amount of the operation and maintenance tax
imposed by the district in the preceding year on a residence
homestead appraised at the average appraised value of a residence
homestead in the district in that year, disregarding any homestead
exemption available only to disabled persons or persons 65 years of
age or older.
SECTION 6. The change in law made by this Act applies to the
ad valorem tax rate of a taxing unit beginning with the 2006 tax
year. The tax rate for a tax year before the 2006 tax year is
covered by the law in effect immediately before the effective date
of this Act, and that law is continued in effect for that purpose.
SECTION 7. This Act takes effect January 1, 2006.