81R6854 SMH-D

By: Howard of Fort Bend H.B. No. 1221

A BILL TO BE ENTITLED

AN ACT

relating to the provision of information by tax officials related to ad valorem tax rates.

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

SECTION 1. Sections 25.19(b) and (i), Tax Code, are amended to read as follows:

(b) The chief appraiser shall separate real from personal property and include in the notice for each:

(1) a list of the taxing units in which the property is taxable;

(2) the appraised value of the property in the preceding year;

(3) the taxable value of the property in the preceding year for each taxing unit taxing the property;

(4) the appraised value of the property for the current year and the kind and amount of each partial exemption, if any, approved for the current year;

(5) [if the appraised value is greater than it was in the preceding year, the amount of tax that would be imposed on the property on the basis of the tax rate for the preceding year;

[(6)] in italic typeface, the following statement: "The Texas Legislature does not set the amount of your local taxes. Your property tax burden is decided by your locally elected officials, and all inquiries concerning your taxes should be directed to those officials";

(6) [(7)] a detailed explanation of the time and procedure for protesting the value;

(7) [(8)] the date and place the appraisal review board will begin hearing protests; and

(8) [(9)] a brief explanation that the governing body of each taxing unit decides whether or not taxes on the property will increase and the appraisal district only determines the value of the property.

(i) Delivery with a notice required by Subsection (a) or (g) of a copy of the pamphlet published by the comptroller under Section 5.06 or a copy of the notice published by the chief appraiser under Section 41.70 is sufficient to comply with the requirement that the notice include the information specified by Subsection (b)(6) [(b)(7)] or (g)(3), as applicable.

SECTION 2. Section 26.04, Tax Code, is amended by amending Subsections (b), (c), and (e) and adding Subsection (e-2) to read as follows:

(b) The assessor shall submit the appraisal roll for the unit showing the total appraised, assessed, and taxable values of all property and the total taxable value of new property to the governing body of the unit not later than the 21st day after the date the appraisal roll is certified to the assessor. On or before the 21st day after the date the appraisal roll is certified to the assessor [by August 1 or as soon thereafter as practicable. By August 1 or as soon thereafter as practicable], the taxing unit's collector shall certify an estimate of the collection rate for the current year to the governing body. If the collector certified an anticipated collection rate in the preceding year and the actual collection rate in that year exceeded the anticipated rate, the collector shall also certify the amount of debt taxes collected in excess of the anticipated amount in the preceding year.

(c) Not later than the 30th day after the date the appraisal roll is certified to the assessor, an [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 1.08) + CURRENT DEBT RATE

(e) Not later than the fifth day after the date the designated officer or employee completes the calculations required by Subsections (c) and (d) [By August 7 or as soon thereafter as practicable], the designated officer or employee shall submit the rates to the governing body and shall provide to the chief appraiser[. He shall deliver by mail to each property owner in the unit or publish in a newspaper] in the form prescribed by the comptroller:

(1) the effective tax rate, the rollback tax rate, and an explanation of how they were calculated;

(2) the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding existing debt obligation;

(3) a schedule of the unit's debt obligations showing:

(A) the amount of principal and interest that will be paid to service the unit's debts in the next year from property tax revenue, including payments of lawfully incurred contractual obligations providing security for the payment of the principal of and interest on bonds and other evidences of indebtedness issued on behalf of the unit by another political subdivision and, if the unit is created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, payments on debts that the unit anticipates to incur in the next calendar year;

(B) the amount by which taxes imposed for debt are to be increased because of the unit's anticipated collection rate; and

(C) the total of the amounts listed in Paragraphs (A)-(B), less any amount collected in excess of the previous year's anticipated collections certified as provided in Subsection (b);

(4) the amount of additional sales and use tax revenue anticipated in calculations under Section 26.041;

(5) a statement that the adoption of a tax rate equal to the effective tax rate would result in an increase or decrease, as applicable, in the amount of taxes imposed by the unit as compared to last year's levy, and the amount of the increase or decrease;

(6) in the year that a taxing unit calculates an adjustment under Subsection (i) or (j), a schedule that includes the following elements:

(A) the name of the unit discontinuing the department, function, or activity;

(B) the amount of property tax revenue spent by the unit listed under Paragraph (A) to operate the discontinued department, function, or activity in the 12 months preceding the month in which the calculations required by this chapter are made; and

(C) the name of the unit that operates a distinct department, function, or activity in all or a majority of the territory of a taxing unit that has discontinued operating the distinct department, function, or activity; and

(7) in the year following the year in which a taxing unit raised its rollback rate as required by Subsection (j), a schedule that includes the following elements:

(A) the amount of property tax revenue spent by the unit to operate the department, function, or activity for which the taxing unit raised the rollback rate as required by Subsection (j) for the 12 months preceding the month in which the calculations required by this chapter are made; and

(B) the amount included in the schedule provided to the chief appraiser [published] by the unit in the preceding tax year under Subdivision (6)(B).

(e-2) Not later than the 10th day after the date the chief appraiser receives the information provided under Subsection (e), the chief appraiser shall deliver a clear and understandable written notice to each owner of property in the taxing unit containing the following information:

(1) a list of the taxing units other than school districts in which the property is taxable;

(2) the appraised value of the property for the current year and the kind and amount of each partial exemption, if any, approved for the current year;

(3) the amount of tax that would be imposed on the property on the basis of the effective tax rate and the rollback rate provided to the chief appraiser;

(4) the information described by Subsections (e)(2)-(7);

(5) a detailed explanation of the procedures by which a taxpayer may provide input on the adoption of the tax rate; and

(6) a brief explanation that the governing body of the taxing unit decides whether taxes on the property will increase, and the appraisal district only determines the value of the property.

SECTION 3. Section 26.05, Tax Code, is amended by amending Subsections (a), (c), and (d) and adding Subsection (d-1) to read as follows:

(a) The governing body of each taxing unit, before the later of September 30 or the 90th [60th] day after the date the certified appraisal roll is received by the taxing unit, shall adopt a tax rate for the current tax year and shall notify the assessor for the unit of the rate adopted. The tax rate consists of two components, each of which must be approved separately. The components are:

(1) for a taxing unit other than a school district, the rate that, if applied to the total taxable value, will impose the total amount published under Section 26.04(e)(3)(C), less any amount of additional sales and use tax revenue that will be used to pay debt service, or, for a school district, the rate published under Section 44.004(c)(5)(A)(ii)(b), Education Code; and

(2) the rate that, if applied to the total taxable value, will impose the amount of taxes needed to fund maintenance and operation expenditures of the unit for the next year.

(c) If the designated officer or employee [governing body of a taxing unit] does not comply with Section 26.04(e) by the date required by that section and the failure to comply was caused by circumstances beyond the designated officer's or employee's control, such as a natural disaster [adopt a tax rate before the date required by Subsection (a)], the tax rate for the taxing unit for that tax year is the lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. A tax rate established by this subsection is treated as an adopted tax rate. Before the fifth day after the establishment of a tax rate by this subsection, the governing body of the taxing unit must ratify the applicable tax rate in the manner required by Subsection (b).

(d) The governing body of a taxing unit other than a school district may not adopt a tax rate that exceeds the lower of the rollback tax rate or the effective tax rate calculated as provided by this chapter until the chief appraiser has delivered the notice required by Section 26.04(e-2) and the governing body has complied with Subsection (d-1) of this section and has held two public hearings on the proposed tax rate and [has] otherwise complied with Section 26.06 and Section 26.065. The governing body of a taxing unit shall reduce a tax rate set by law or by vote of the electorate to the lower of the rollback tax rate or the effective tax rate and may not adopt a higher rate unless it first complies with Section 26.06.

(d-1) Before giving notice of the public hearings on the proposed tax rate under Section 26.06, the governing body of a taxing unit that is required to comply with that section must take a record vote on a proposal to place consideration of an increase in taxes on the agenda for the meeting at which the governing body will adopt the tax rate. The motion for the vote must be made in the following form: "I move that a proposal to increase property taxes by the adoption of a tax rate of (specify tax rate) be placed on the agenda for the meeting to be held on (date at which the governing body anticipates adopting the tax rate)."

SECTION 4. This Act applies only to a tax year beginning on or after the effective date of this Act.

SECTION 5. This Act takes effect January 1, 2010.