82R9184 SMH-F

By: Williams S.B. No. 1774

A BILL TO BE ENTITLED

AN ACT

relating to the procedure for the adoption of an ad valorem tax rate.

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

SECTION 1. Section 26.012, Tax Code, is amended by amending Subdivisions (4), (9), (13), and (15) and adding Subdivision (16-a) to read as follows:

(4) "Current debt rate" means a rate expressed in dollars per $100 of taxable value and calculated according to the following formula: CURRENT DEBT RATE = [(]CURRENT DEBT SERVICE [- EXCESS COLLECTIONS)] / (CURRENT TOTAL VALUE X COLLECTION RATE) [+ CURRENT JUNIOR COLLEGE LEVY / CURRENT TOTAL VALUE]

(9) "Effective maintenance and operations rate" means a rate expressed in dollars per $100 of taxable value and calculated according to the following formula: EFFECTIVE MAINTENANCE AND OPERATIONS RATE = [(LAST YEAR'S LEVY FOR MAINTENANCE AND OPERATIONS - LOST PROPERTY LEVY FOR MAINTENANCE AND OPERATIONS) + MAINTENANCE AND OPERATIONS LEVY ON NEW PROPERTY VALUE] / CURRENT TOTAL VALUE [LAST YEAR'S LEVY - LAST YEAR'S DEBT LEVY - LAST YEAR'S JUNIOR COLLEGE LEVY / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]

(13) "Last year's levy for maintenance and operations" means the total of:

(A) the amount of taxes that would be generated by multiplying the [total] tax rate adopted by the governing body in the preceding year for maintenance and operations by the total taxable value of property on the appraisal roll for the preceding year, including:

(i) taxable value that was reduced in an appeal under Chapter 42; and

(ii) all appraisal roll supplements and corrections other than corrections made pursuant to Section 25.25(d), as of the date of the calculation, except that last year's taxable value for a school district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.26 and last year's taxable value for a county, municipality, or junior college district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.261; and

(B) the amount of taxes for maintenance and operations refunded by the taxing unit in the preceding year for tax years before that year.

(15) "Lost property levy for maintenance and operations" means the amount of taxes levied for maintenance and operations in the preceding year on property value that was taxable in the preceding year but is not taxable in the current year because the property is exempt in the current year under a provision of this code other than Section 11.251 or 11.253, the property has qualified for special appraisal under Chapter 23 in the current year, or the property is located in territory that has ceased to be a part of the unit since the preceding year.

(16-a) "Maintenance and operations levy on new property value" means the amount of taxes that would be generated by multiplying the tax rate adopted by the governing body for maintenance and operations in the preceding year by the new property value.

SECTION 2. Sections 26.04(c), (d), (e), (e-1), (f), and (g), Tax Code, are amended to read as follows:

(c) An officer or employee designated by the governing body shall calculate the effective maintenance and operations [tax] rate, the current debt rate, the effective tax rate, and the rollback tax rate for the unit, where:

(1) "Effective tax rate" means the sum of the effective maintenance and operations rate and the current debt rate expressed in dollars per $100 of taxable value [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) for a taxing unit other than a school district, 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 ; and

(B) for a school district, a rate calculated in the manner provided by Section 26.08.

(d) The effective maintenance and operations rate for a county is the sum of the effective maintenance and operations rates calculated for each type of tax the county levies. The effective tax rate for a county is the sum of the effective tax rates calculated for each type of tax the county levies. The [and the] rollback tax rate for a county is the sum of the rollback tax rates calculated for each type of tax the county levies.

(e) By August 7 or as soon thereafter as practicable, the designated officer or employee shall submit the rates to the governing body. The designated officer or employee [He] shall electronically deliver [by mail] to [each property owner in the unit or publish in a newspaper in the form prescribed by] the comptroller in a format prescribed by the comptroller:

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

(2) the estimated amount of [interest and sinking] fund balances used for debt service 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 published by the unit in the preceding tax year under Subdivision (6)(B)].

(e-1) The comptroller shall post the information provided under Subsection (e)(1) on the comptroller's Internet website not later than the seventh day after the date the comptroller receives the information. The taxing unit shall publish the information in a local newspaper of general circulation in the taxing unit in a format prescribed by the comptroller, which must include a toll-free telephone number for the public to call for answers to technical questions concerning the calculation of the tax rates by taxing units. [The notice requirements imposed by Subsections (e)(1)-(6) do not apply to a school district.]

(f) If as a result of consolidation of taxing units a taxing unit includes territory that was in two or more taxing units in the preceding year, the amount of taxes imposed in each in the preceding year is combined for purposes of calculating the effective maintenance and operations rate, effective tax rate, and rollback tax rate [rates] under this section.

(g) A [person who owns taxable property is entitled to an injunction prohibiting the] taxing unit may not adopt [in which the property is taxable from adopting] a tax rate if:

(1) the comptroller determines that the assessor or designated officer or employee of the unit, as applicable, has not complied with the computation [or publication] requirements of this section and the failure to comply was not in good faith; or

(2) the assessor or designated officer or employee of the unit has not delivered to the comptroller the information required by Subsection (e) in the time and manner prescribed by the comptroller.

SECTION 3. Section 26.05(a), Tax Code, is amended to read as follows:

(a) The governing body of each taxing unit, before the later of September 30 or the 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) the rate for debt service [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 for maintenance and operations [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].

SECTION 4. Section 321.106(e), Tax Code, is amended to read as follows:

(e) If, in a municipality where a fire control, prevention, and emergency medical services district is composed of the whole municipality, a municipal sales and use tax or a municipal sales and use tax rate increase for the purpose of financing a fire control, prevention, and emergency medical services district is approved, the municipality is responsible for distributing to the district that portion of the municipal sales and use tax revenue received from the comptroller that is to be used for the purposes of financing the fire control, prevention, and emergency medical services district. Not later than the 10th day after the date the municipality receives money under this section from the comptroller, the municipality shall make the distribution in the proportion that the fire control, prevention, and emergency medical services portion of the tax rate bears to the total sales and use tax rate of the municipality. [The amounts distributed to a fire control, prevention, and emergency medical services district are not considered to be sales and use tax revenue for the purpose of property tax reduction and computation of the municipal tax rate under Section 26.041.]

SECTION 5. Section 321.108(f), Tax Code, is amended to read as follows:

(f) If, in a municipality in which a crime control and prevention district is composed of the whole municipality, a municipal sales and use tax or a municipal sales and use tax rate increase for the purpose of financing a crime control and prevention district is approved, the municipality is responsible for distributing to the district that portion of the municipal sales and use tax revenue received from the comptroller that is to be used for the purposes of financing the crime control and prevention district. Not later than the 10th day after the date the municipality receives money under this section from the comptroller, the municipality shall make the distribution in the proportion that the crime control and prevention portion of the tax rate bears to the total sales and use tax rate of the municipality. [The amounts distributed to a crime control and prevention district are not considered to be additional municipal sales and use tax revenue for the purpose of property tax reduction and computation of the municipal tax rate under Section 26.041.]

SECTION 6. Section 321.507(a), Tax Code, is amended to read as follows:

(a) In each year in which a municipality imposes an additional municipal sales and use tax, if the revenue from the collection of the additional tax exceeds the amount of taxes computed for the municipality under Section 26.04(c), [except for the amount required to be deposited in a special account under Subsection (b),] the excess shall be deposited in an account to be called the municipal sales tax debt service fund. Revenue deposited in the municipal sales tax debt service fund may be spent only for the reduction of lawful debts of the municipality, except that deposits that exceed the amount of revenue needed to pay the debt service needs of the municipality in the current year may be used for any municipal purpose consistent with the municipal budget.

SECTION 7. Section 323.105(f), Tax Code, is amended to read as follows:

(f) If, in a county where a crime control and prevention district is composed of the whole county, a county sales and use tax or a county sales and use tax rate increase for the purpose of financing a crime control and prevention district is approved, the county is responsible for distributing to the district that portion of the county sales and use tax revenue received from the comptroller that is to be used for the purposes of financing the crime control and prevention district. Not later than the 10th day after the date the county receives funds under this section from the comptroller, the county shall make the distribution in the proportion that the crime control and prevention portion of the tax rate bears to the total sales and use tax rate of the county. [The amounts distributed to a crime control and prevention district are not considered to be sales and use tax revenue for the purpose of property tax reduction and computation of the county tax rate under Section 26.041, Tax Code.]

SECTION 8. Section 323.505(a), Tax Code, is amended to read as follows:

(a) The money received by a county under this chapter is for the use and benefit of the county and shall be used for the replacement of property tax revenue lost as a result of the adoption of the taxes authorized by this chapter. The [Except as provided by Subsection (b), the] revenue in excess of the revenue used to replace those property taxes shall be used for the reduction of indebtedness of the county. After all indebtedness is paid, the excess may be used for any purpose for which county general revenue may be used. A county may not pledge anticipated revenue from this source to secure the payment of bonds or other indebtedness for a period longer than one year.

SECTION 9. The following provisions of the Tax Code are repealed:

(1) Sections 26.01(c) and (d);

(2) Sections 26.012(1), (5), (10), (11), (12), and (14);

(3) Sections 26.04(h), (i), and (j);

(4) Section 26.041;

(5) Section 26.043;

(6) Section 26.044;

(7) Section 26.0441;

(8) Section 26.045;

(9) Section 31.01(i);

(10) Section 321.507(b); and

(11) Section 323.505(b).

SECTION 10. This Act applies only to ad valorem taxes imposed for a tax year beginning on or after the effective date of this Act.

SECTION 11. This Act takes effect January 1, 2012.