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A BILL TO BE ENTITLED
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AN ACT
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relating to the calculation of the ad valorem rollback tax rates of |
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certain taxing units. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 26.04, Tax Code, is amended by amending |
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Subsection (c) and adding Subsections (c-1) and (c-2) to read as |
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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 x |
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1.05 [1.08]) + CURRENT DEBT RATE |
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(c-1) Notwithstanding any other provision of this section, |
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the designated officer or employee may substitute "1.08" for "1.05" |
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in the calculation of the rollback tax rate if: |
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(1) any part of the taxing unit is located in an area |
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declared a disaster area by the governor or the president of the |
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United States during the current tax year; or |
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(2) the governing body finds that a higher tax rate is |
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necessary to protect the health, safety, or property of persons |
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residing in the taxing unit. |
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(c-2) A finding under Subsection (c-1)(2) is not valid |
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unless the finding: |
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(1) is in the form of a resolution adopted by the |
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governing body of the taxing unit; |
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(2) includes a description of the harm to residents of |
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the taxing unit that would occur if the taxing unit were subject to |
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a five percent rollback tax rate; and |
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(3) is approved by a record vote taken at a public |
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meeting of the governing body. |
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SECTION 2. Section 26.041, Tax Code, is amended by amending |
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Subsections (a), (b), and (c) and adding Subsections (c-1) and |
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(c-2) to read as follows: |
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(a) In the first year in which an additional sales and use |
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tax is required to be collected, the effective tax rate and rollback |
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tax rate for the unit are calculated according to the following |
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formulas: |
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EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) / |
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(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN RATE |
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and |
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ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND OPERATIONS RATE x |
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1.05 [1.08]) + CURRENT DEBT RATE - SALES TAX GAIN RATE |
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where "sales tax gain rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the revenue that will |
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be generated by the additional sales and use tax in the following |
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year as calculated under Subsection (d) [of this section] by the |
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current total value. |
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(b) Except as provided by Subsections (a) and (c) [of this
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section], in a year in which a taxing unit imposes an additional |
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sales and use tax the rollback tax rate for the unit is calculated |
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according to the following formula, regardless of whether the unit |
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levied a property tax in the preceding year: |
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ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS |
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EXPENSE x 1.05 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY |
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VALUE)] + (CURRENT DEBT RATE - SALES TAX REVENUE RATE) |
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where "last year's maintenance and operations expense" means the |
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amount spent for maintenance and operations from property tax and |
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additional sales and use tax revenues in the preceding year, and |
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"sales tax revenue rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the revenue that will |
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be generated by the additional sales and use tax in the current year |
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as calculated under Subsection (d) [of this section] by the current |
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total value. |
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(c) In a year in which a taxing unit that has been imposing |
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an additional sales and use tax ceases to impose an additional sales |
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and use tax the effective tax rate and rollback tax rate for the |
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unit are calculated according to the following formulas: |
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EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY LEVY) / |
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(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS RATE |
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and |
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ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS |
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EXPENSE x 1.05 [1.08]) / ([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY |
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VALUE)] + CURRENT DEBT RATE |
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where "sales tax loss rate" means a number expressed in dollars per |
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$100 of taxable value, calculated by dividing the amount of sales |
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and use tax revenue generated in the last four quarters for which |
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the information is available by the current total value and "last |
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year's maintenance and operations expense" means the amount spent |
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for maintenance and operations from property tax and additional |
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sales and use tax revenues in the preceding year. |
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(c-1) Notwithstanding any other provision of this section, |
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the designated officer or employee may substitute "1.08" for "1.05" |
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in the calculation of the rollback tax rate if: |
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(1) any part of the taxing unit is located in an area |
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declared a disaster area by the governor or the president of the |
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United States during the current tax year; or |
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(2) the governing body finds that a higher tax rate is |
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necessary to protect the health, safety, or property of persons |
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residing in the taxing unit. |
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(c-2) A finding under Subsection (c-1)(2) is not valid |
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unless the finding is in compliance with Section 26.04(c-2). |
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SECTION 3. Section 49.236, Water Code, as added by Chapters |
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248 (H.B. 1541) and 335 (S.B. 392), Acts of the 78th Legislature, |
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Regular Session, 2003, is reenacted and amended to read as follows: |
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Sec. 49.236. NOTICE OF TAX HEARING. (a) Before the board |
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adopts an ad valorem tax rate for the district for debt service, |
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operation and maintenance purposes, or contract purposes, the board |
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shall give notice of each meeting of the board at which the adoption |
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of a tax rate will be considered. The notice must: |
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(1) contain a statement in substantially the following |
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form: |
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"NOTICE OF PUBLIC HEARING ON TAX RATE |
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"The (name of the district) will hold a public hearing on a |
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proposed tax rate for the tax year (year of tax levy) on (date and |
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time) at (meeting place). Your individual taxes may increase or |
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decrease, depending on the change in the taxable value of your |
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property in relation to the change in taxable value of all other |
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property and the tax rate that is adopted. |
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"(Names of all board members and, if a vote was taken, an |
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indication of how each voted on the proposed tax rate and an |
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indication of any absences.)"; |
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(2) contain the following information: |
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(A) the district's total adopted tax rate for the |
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preceding year and the proposed tax rate, expressed as an amount per |
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$100; |
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(B) the difference, expressed as an amount per |
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$100 and as a percent increase or decrease, as applicable, in the |
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proposed tax rate compared to the adopted tax rate for the preceding |
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year; |
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(C) the average appraised value of a residence |
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homestead in the district in the preceding year and in the current |
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year; the district's total homestead exemption, other than an |
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exemption available only to disabled persons or persons 65 years of |
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age or older, applicable to that appraised value in each of those |
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years; and the average taxable value of a residence homestead in the |
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district in each of those years, disregarding any homestead |
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exemption available only to disabled persons or persons 65 years of |
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age or older; |
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(D) the amount of tax that would have been |
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imposed by the district in the preceding year on a residence |
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homestead appraised at the average appraised value of a residence |
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homestead in that year, disregarding any homestead exemption |
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available only to disabled persons or persons 65 years of age or |
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older; |
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(E) the amount of tax that would be imposed by the |
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district in the current year on a residence homestead appraised at |
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the average appraised value of a residence homestead in that year, |
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disregarding any homestead exemption available only to disabled |
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persons or persons 65 years of age or older, if the proposed tax |
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rate is adopted; and |
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(F) the difference between the amounts of tax |
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calculated under Paragraphs (D) and (E), expressed in dollars and |
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cents and described as the annual percentage increase or decrease, |
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as applicable, in the tax to be imposed by the district on the |
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average residence homestead in the district in the current year if |
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the proposed tax rate is adopted; and |
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(3) contain a statement in substantially the following |
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form: |
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"NOTICE OF TAXPAYERS' RIGHT TO |
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ROLLBACK ELECTION |
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"If taxes on the average residence homestead increase by more |
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than five [eight] percent, the qualified voters of the district by |
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petition may require that an election be held to determine whether |
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to reduce the operation and maintenance tax rate to the rollback tax |
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rate under Section 49.236(d), Water Code." |
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(b) Notice of the hearing shall be: |
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(1) published at least once in a newspaper having |
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general circulation in the district at least seven days before the |
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date of the hearing; or |
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(2) mailed to each owner of taxable property in the |
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district, at the address for notice shown on the most recently |
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certified tax roll of the district, at least 10 days before the date |
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of the hearing. |
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(c) The notice provided under this section may not be |
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smaller than one-quarter page of a standard-size or tabloid-size |
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newspaper of general circulation, and the headline on the notice |
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must be in 18-point or larger type. |
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(d) If the governing body of a district adopts a combined |
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debt service, operation and maintenance, and contract tax rate that |
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would impose more than 1.05 [1.08] times the amount of tax imposed |
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by the district in the preceding year on a residence homestead |
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appraised at the average appraised value of a residence homestead |
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in the district in that year, disregarding any homestead exemption |
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available only to disabled persons or persons 65 years of age or |
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older, the qualified voters of the district by petition may require |
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that an election be held to determine whether [or not] to reduce the |
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tax rate adopted for the current year to the rollback tax rate in |
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accordance with the procedures provided by Sections 26.07(b)-(g) |
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and 26.081, Tax Code. For purposes of Sections 26.07(b)-(g) and |
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this subsection, the rollback tax rate is the current year's debt |
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service and contract tax rates plus the operation and maintenance |
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tax rate that would impose 1.05 [1.08] times the amount of the |
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operation and maintenance tax imposed by the district in the |
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preceding year on a residence homestead appraised at the average |
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appraised value of a residence homestead in the district in that |
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year, disregarding any homestead exemption available only to |
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disabled persons or persons 65 years of age or older. |
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(e) Notwithstanding any other provision of this section, |
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the board may substitute "eight percent" for "five percent" in |
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Subsection (a) and "1.08" for "1.05" in Subsection (d) if: |
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(1) any part of the district is located in an area |
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declared a disaster area by the governor or the president of the |
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United States during the current tax year; or |
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(2) the board finds that a higher tax rate is necessary |
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to protect the health, safety, or property of persons residing in |
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the district. |
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(f) A finding under Subsection (e)(2) is not valid unless |
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the finding is in compliance with Section 26.04(c-2), Tax Code. |
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SECTION 4. (a) The change in law made by this Act applies |
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to the ad valorem tax rate of a taxing unit beginning with the 2011 |
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tax year, except as provided by Subsection (b) of this section. |
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(b) If the governing body of a taxing unit adopted an ad |
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valorem tax rate for the taxing unit for the 2011 tax year before |
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the effective date of this Act, the change in law made by this Act |
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applies to the ad valorem tax rate of that taxing unit beginning |
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with the 2012 tax year, and the law in effect when the tax rate was |
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adopted applies to the 2011 tax year with respect to that taxing |
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unit. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect on the 91st day after the last day of the |
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legislative session. |