80R9482 SMH-D

By: Patrick, Dan S.B. No. 1565

A BILL TO BE ENTITLED

AN ACT

relating to a local option election in the Metropolitan Transit Authority of Harris County to set a limitation of not less than three percent on the maximum average annual increase in the appraised value of residence homesteads for purposes of ad valorem taxation by each county, municipality, and junior college district in the territory of the transit authority and to require the redistribution of not more than one-eighth of the sales and use tax revenue of the transit authority to those taxing units.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 23.23, Tax Code, is amended by amending Subsection (a) and adding Subsections (g) and (h) to read as follows:

(a) Except as provided by Subsection (g), the [The] appraised value of a residence homestead for a tax year may not exceed the lesser of:

(1) the market value of the property; or

(2) the sum of:

(A) 10 percent of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised;

(B) the appraised value of the property for the last year in which the property was appraised; and

(C) the market value of all new improvements to the property.

(g) The Commissioners Court of Harris County may call an election in the Metropolitan Transit Authority of Harris County to permit the voters of the transit authority to determine whether a percentage limitation on increases in appraised value determined in the manner provided by Subsection (a)(2) using a percentage of not less than three percent in place of the percentage specified by Subsection (a)(2)(A) will apply to the taxation of residence homesteads by each county, municipality, and junior college district having territory in the territory of the transit authority, and concurrently to permit the voters of the transit authority to determine whether not more than one-eighth of the sales and use tax revenue of the transit authority shall be redistributed to those taxing units. The election shall be held on the date of the next general election for state and county officers. The ballot proposition shall specify the proposed percentage limitation on increases in appraised value and the proposed portion of the sales and use tax revenue to be redistributed. If a majority of the votes cast at the election favor the establishment of the proposed limitation and redistribution, the limitation applies beginning with the tax year following the year in which the election is held and remains in effect until amended or repealed by the voters of the Metropolitan Transit Authority of Harris County at a subsequent election called by the Commissioners Court of Harris County for that purpose. An election under this subsection to amend or repeal a limitation on increases in appraised value shall be held on the date of the next general election for state and county officers. If the voters of the Metropolitan Transit Authority of Harris County amend or repeal a limitation, the amendment or repeal applies beginning with the tax year after the year in which the election is held. A limitation on increases in appraised value established under this subsection applies only to residence homesteads located in the portion of the applicable taxing unit that is located in the territory of the Metropolitan Transit Authority of Harris County.

(h) If in any tax year the limitation on increases in appraised value provided by Subsection (a)(2) applies to a residence homestead taxable by a taxing unit having territory in the territory of the Metropolitan Transit Authority of Harris County and the voters of the transit authority have established for application in that tax year a limitation on increases in appraised value under Subsection (g), the lower limitation applies to the taxation of the residence homestead by the taxing unit.

SECTION 2. Chapter 26, Tax Code, is amended by adding Section 26.042 to read as follows:

Sec. 26.042. EFFECTIVE TAX RATE AND ROLLBACK TAX RATE OF TAXING UNITS IN TERRITORY OF METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY. (a) If the designated officer or employee of a taxing unit estimates that the taxing unit will receive more sales and use tax revenue under Section 451.421, Transportation Code, in the current tax year than the taxing unit received in the preceding tax year, the effective tax rate and the rollback tax rate of the taxing unit are reduced by the rate expressed in dollars per $100 of taxable value computed by:

(1) subtracting the amount of sales and use tax revenue received under that section by the taxing unit in the preceding tax year from the amount of sales and use tax revenue estimated to be received under that section by the taxing unit in the current tax year; and

(2) dividing the amount computed under Subdivision (1) by the current total value for the taxing unit.

(b) If the designated officer or employee of a taxing unit estimates that the taxing unit will receive less sales and use tax revenue under Section 451.421, Transportation Code, in the current tax year than the taxing unit received in the preceding tax year, the effective tax rate and the rollback tax rate of the taxing unit are increased by the rate expressed in dollars per $100 of taxable value computed by:

(1) subtracting the amount of sales and use tax revenue estimated to be received under that section by the taxing unit in the current tax year from the amount of sales and use tax revenue received under that section by the taxing unit in the preceding tax year; and

(2) dividing the amount computed under Subdivision (1) by the current total value for the taxing unit.

SECTION 3. Section 42.26(d), Tax Code, is amended to read as follows:

(d) For purposes of this section, the value of the property subject to the suit and the value of a comparable property or sample property that is used for comparison must be the market value determined by the appraisal district when the property is a residence homestead subject to a [the] limitation on appraised value imposed by or established under Section 23.23.

SECTION 4. Subchapter I, Chapter 451, Transportation Code, is amended by adding Section 451.421 to read as follows:

Sec. 451.421. REDISTRIBUTION OF PORTION OF SALES AND USE TAX REVENUE. (a) If at an election called under Section 23.23(g), Tax Code, the voters of an authority determine that a portion of the sales and use tax revenue of the authority shall be redistributed to each county, municipality, and junior college district having territory in the territory of the authority as provided by that section, the comptroller shall send to the Harris County treasurer a portion of the sales and use tax revenue required to be sent to the authority by Section 322.302, Tax Code, as specified by the ballot proposition at the same time that the comptroller sends the remainder of that revenue to the authority as provided by Section 322.302, Tax Code.

(b) Not later than December 1 of each year, the Harris County treasurer shall distribute to the treasurer for each county, municipality, and junior college district having territory in the territory of the authority an amount of the revenue sent to the Harris County treasurer under Subsection (a) and interest earned on that revenue computed by:

(1) multiplying the amount by which the current total value, as defined by Section 26.012, Tax Code, for each taxing unit that is entitled to receive a share of the revenue is reduced because of the approval by the voters of the authority of the limitation on increases in the appraised value of residence homesteads under Section 23.23(g), Tax Code, by the ad valorem tax rate of the taxing unit for the current tax year;

(2) adding the amounts computed under Subdivision (1) for all of the taxing units that are entitled to receive a share of the revenue;

(3) dividing the amount computed with regard to the applicable taxing unit under Subdivision (1) by the amount computed under Subdivision (2); and

(4) multiplying the amount computed under Subdivision (3) by the sum of the total amount of sales and use tax revenue to be distributed under this subsection and any interest earned on that revenue.

SECTION 5. The provisions of this Act applying to the appraisal of a residence homestead for ad valorem tax purposes apply only for a tax year that begins on or after January 1, 2008.

SECTION 6. This Act takes effect January 1, 2008, but only if the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, authorizing the legislature to provide for a local option election in the Metropolitan Transit Authority of Harris County to set a limitation of not less than three percent on the maximum average annual increase in the appraised value of residence homesteads for purposes of ad valorem taxation by each county, municipality, and junior college district in the territory of the transit authority and to require the redistribution of not more than one-eighth of the sales and use tax revenue of the transit authority to those political subdivisions is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.