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.