LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION

April 19, 2005

TO:	Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM:	John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:	SB18 by Williams (Relating to the adoption of an ad valorem tax rate by a taxing unit other than a school district.), Committee Report 1st House, Substituted

No fiscal implication to the State is anticipated.

The bill would require the governing body of a taxing unit other than a school district and water district to hold a public hearing for any proposed property tax increase above the lower of the rollback rate or the effective tax rate. The bill would require a taxing unit other than a school district and water district to receive voter approval to adopt a tax rate that exceeded the rollback rate.

The bill would provide that if the water district's governing body proposes a tax rate that would increase taxes on the average homestead from the preceding year by more than eight percent, an election would be called. If voters did not approve the increase, the taxing unit could not adopt a tax rate for the current year that exceeded the rollback rate. The amendment would also change the public notice requirements to conform to a mandatory rollback election.

The bill would repeal Section 49.236 of the Water Code, as added by Chapter 248, Acts of the 78th Legislature, Regular Session, 2003.

Since the bill would not apply to school districts, no fiscal impact to the State is anticipated.

Local Government Impact

Since the bill would lower the trigger for additional requirements to adopt a tax rate increase and make rollback elections mandatory, it may provide an incentive for the applicable taxing units to set future tax rates at a lower amount than the taxing units might approve under current law.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JOB, SD, WP, DLBe