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A BILL TO BE ENTITLED
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AN ACT
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relating to the calculation of an effective tax rate and certain |
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notice requirements for local taxing jurisdictions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subdivision (9), Section 26.012, Tax Code, is |
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amended to read as follows: |
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(9) "Effective maintenance and operations rate" means |
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a rate expressed in dollars per $100 of taxable value and calculated |
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according to the following formula: |
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EFFECTIVE MAINTENANCE AND OPERATIONS RATE = |
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LAST YEAR'S - LAST YEAR'S - LAST YEAR'S JUNIOR |
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LEVY DEBT LEVY COLLEGE LEVY |
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[(]CURRENT TOTAL VALUE [-NEW PROPERTY VALUE)] |
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SECTION 2. Subsections (c) and (e), Section 26.04, Tax |
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Code, are amended to read as follows: |
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(c) An officer or employee designated by the governing body |
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shall calculate the effective tax rate and the rollback tax rate for |
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the unit, where: |
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(1) "Effective tax rate" means a rate expressed in |
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dollars per $100 of taxable value calculated according to the |
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following formula: |
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EFFECTIVE TAX RATE = [(]LAST YEAR'S LEVY [-LOST PROPERTY LEVY)] |
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[(]CURRENT TOTAL VALUE [-NEW PROPERTY VALUE)] |
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; and |
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(2) "Rollback tax rate" means a rate expressed in |
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dollars per $100 of taxable value calculated according to the |
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following formula: |
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ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE |
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x 1.08) + CURRENT DEBT RATE |
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(e) By August 7 or as soon thereafter as practicable, the |
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designated officer or employee shall submit the rates to the |
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governing body. The designated officer or employee [He] shall make |
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available upon request by the property owner and include on the home |
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page of any Internet website operated by the unit [deliver by mail
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to each property owner in the unit or publish in a newspaper in the
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form prescribed by the comptroller]: |
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(1) the effective tax rate, the rollback tax rate, and |
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an explanation of how they were calculated; |
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(2) the estimated amount of interest and sinking fund |
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balances and the estimated amount of maintenance and operation or |
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general fund balances remaining at the end of the current fiscal |
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year that are not encumbered with or by corresponding existing debt |
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obligation; |
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(3) a schedule of the unit's debt obligations showing: |
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(A) the amount of principal and interest that |
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will be paid to service the unit's debts in the next year from |
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property tax revenue, including payments of lawfully incurred |
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contractual obligations providing security for the payment of the |
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principal of and interest on bonds and other evidences of |
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indebtedness issued on behalf of the unit by another political |
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subdivision and, if the unit is created under Section 52, Article |
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III, or Section 59, Article XVI, Texas Constitution, payments on |
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debts that the unit anticipates to incur in the next calendar year; |
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(B) the amount by which taxes imposed for debt |
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are to be increased because of the unit's anticipated collection |
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rate; and |
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(C) the total of the amounts listed in Paragraphs |
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(A)-(B), less any amount collected in excess of the previous year's |
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anticipated collections certified as provided in Subsection (b); |
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(4) the amount of additional sales and use tax revenue |
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anticipated in calculations under Section 26.041; |
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(5) a statement that the adoption of a tax rate equal |
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to the effective tax rate would result in an increase or decrease, |
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as applicable, in the amount of taxes imposed by the unit as |
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compared to last year's levy, and the amount of the increase or |
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decrease; |
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(6) in the year that a taxing unit calculates an |
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adjustment under Subsection (i) or (j), a schedule that includes |
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the following elements: |
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(A) the name of the unit discontinuing the |
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department, function, or activity; |
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(B) the amount of property tax revenue spent by |
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the unit listed under Paragraph (A) to operate the discontinued |
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department, function, or activity in the 12 months preceding the |
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month in which the calculations required by this chapter are made; |
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and |
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(C) the name of the unit that operates a distinct |
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department, function, or activity in all or a majority of the |
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territory of a taxing unit that has discontinued operating the |
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distinct department, function, or activity; and |
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(7) in the year following the year in which a taxing |
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unit raised its rollback rate as required by Subsection (j), a |
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schedule that includes the following elements: |
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(A) the amount of property tax revenue spent by |
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the unit to operate the department, function, or activity for which |
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the taxing unit raised the rollback rate as required by Subsection |
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(j) for the 12 months preceding the month in which the calculations |
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required by this chapter are made; and |
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(B) the amount published by the unit in the |
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preceding tax year under Subdivision (6)(B). |
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SECTION 3. Subsection (a), Section 26.06, Tax Code, is |
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amended to read as follows: |
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(a) A public hearing required by Section 26.05 may not be |
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held before the seventh day after the date the notice of the public |
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hearing is given. The second hearing may not be held earlier than |
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the third day after the date of the first hearing. Each hearing |
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must be on a weekday after 6 p.m. or on a Saturday that is not a |
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public holiday. Each hearing must be held inside the boundaries of |
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the unit in a publicly owned building or, if a suitable publicly |
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owned building is not available, in a suitable building to which the |
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public normally has access. At the hearings, the governing body |
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must afford adequate opportunity for proponents and opponents of |
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the tax increase to present their views. |
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SECTION 4. Subsection (b), Section 26.06, Tax Code, as |
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amended by Chapter 1368, Acts of the 79th Legislature, Regular |
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Session, 2005, is amended to read as follows: |
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(b) The notice of each of the public hearings may not be |
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smaller than one-quarter page of a standard-size or a tabloid-size |
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newspaper, and the headline on the notice must be in 18-point or |
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larger type. The notice must: |
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(1) contain a statement in the following form: |
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"NOTICE OF PUBLIC HEARING ON TAX INCREASE |
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"THE (NAME OF THE TAXING UNIT) PROPOSES TO INCREASE TOTAL TAX |
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REVENUES BY (PERCENTAGE BY WHICH PROPOSED TAX RATE EXCEEDS LOWER OF |
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ROLLBACK TAX RATE OR EFFECTIVE TAX RATE CALCULATED UNDER THIS |
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CHAPTER) PERCENT. |
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"Last year, the (name of taxing unit) property tax rate was |
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$(insert tax rate adopted in preceding tax year). That rate raised |
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$(insert total amount of taxes imposed in the preceding tax year), a |
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portion of which was used to fund operations such as (insert sample |
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descriptions of unit's operations). |
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"This year, (name of taxing unit) is proposing a property tax |
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rate of $(insert proposed tax rate). That rate would raise $(insert |
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total amount of taxes that would be imposed), which is $(insert |
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appropriate amount) more than the taxes imposed last year. |
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"There will be two public hearings to consider that increase. |
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The first public hearing will be held on (date and time) at (meeting |
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place). The second hearing will be held on (date and time) at |
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(meeting place). |
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"You have a right to attend the hearings and make comments. |
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You are encouraged to attend and make comments if you wish."; and |
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(2) state that additional information may be obtained |
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from the unit by request or on the home page of any Internet website |
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operated by the unit; the additional information must include a tax |
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calculator, available either on the unit's website or through a |
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link on the unit's website to the appraisal district's website, that |
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allows a homeowner to calculate the effect of the proposed tax rate |
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on the owner's current year taxable value, the effect of the |
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proposed tax rates for all taxing units on the owner's current year |
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taxable value, and the tax rate and the owner's taxable value for |
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the preceding two years. |
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SECTION 5. Section 26.06, Tax Code, is amended by amending |
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Subsections (d) and (e) and adding Subsection (h) to read as |
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follows: |
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(d) At the public hearings the governing body shall announce |
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the date, time, and place of the meeting at which it will vote on the |
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proposed tax rate. After each hearing the governing body shall give |
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notice of the meeting at which it will vote on the proposed tax rate |
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and the notice shall be in the same form as prescribed by |
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Subsections (b) and (c), except that it must state the following: |
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"NOTICE OF VOTE ON TAX RATE INCREASE (if applicable) |
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"THE (NAME OF THE TAXING UNIT) PROPOSES TO INCREASE PROPERTY |
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TAXES FROM THE PRECEDING YEAR BY (PERCENTAGE BY WHICH PROPOSED TAX |
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RATE EXCEEDS LOWER OF ROLLBACK TAX RATE OR EFFECTIVE TAX RATE |
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CALCULATED UNDER THIS CHAPTER) PERCENT. |
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["The (name of the taxing unit) conducted public hearings on
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a proposal to increase the total tax revenues of the (name of the
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taxing unit) from properties on the tax roll in the preceding year
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by (percentage by which proposed tax rate exceeds lower of rollback
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tax rate or effective tax rate calculated under this chapter)
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percent on (dates and times public hearings were conducted).] |
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"The (governing body of the taxing unit) is scheduled to vote |
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on the tax rate that will result in that tax increase at a public |
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meeting to be held on (date and time) at (meeting place)." |
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(e) The meeting to vote on the tax increase may not be |
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earlier than the third day or later than the 14th day after the date |
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of the second public hearing and must be held after 6 p.m. or on a |
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Saturday. The meeting must be held inside the boundaries of the |
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taxing unit in a publicly owned building or, if a suitable publicly |
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owned building is not available, in a suitable building to which the |
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public normally has access. If the governing body does not adopt a |
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tax rate that exceeds the lower of the rollback tax rate or the |
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effective tax rate by the 14th day, it must give a new notice under |
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Subsection (d) before it may adopt a rate that exceeds the lower of |
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the rollback tax rate or the effective tax rate. |
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(h) If the governing body proposes the adoption of a tax |
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rate that exceeds the rollback rate, the governing body must |
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provide written notice to each single-family residence homestead in |
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the taxing unit. The notice shall include information relating to |
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rollback election provisions. |
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SECTION 6. Section 1, Chapter 807, Acts of the 79th |
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Legislature, Regular Session, 2005, amending Subsection (b), |
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Section 26.06, Tax Code, is repealed. |
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SECTION 7. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 8. This Act takes effect January 1, 2008. |