84R12182 SMH-D

By: Elkins H.B. No. 3614

A BILL TO BE ENTITLED

AN ACT

relating to the procedure for the adoption of an ad valorem tax rate by a taxing unit.

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

SECTION 1. Section 26.01(d), Tax Code, is amended to read as follows:

(d) The chief appraiser shall prepare and certify to the assessor for each taxing unit a list of those properties of which the chief appraiser has knowledge that are reasonably likely to be taxable by that unit but that are not included on the appraisal roll certified to the assessor under Subsection (a) or included on the listing certified to the assessor under Subsection (c). The chief appraiser shall include on the list for each property the market value, appraised value, and kind and amount of any partial exemptions as determined by the appraisal district for the preceding year and a reasonable estimate of the market value, appraised value, and kind and amount of any partial exemptions for the current year. Until the property is added to the appraisal roll, the assessor for the taxing unit shall include each property on the list in the calculations prescribed by Sections 26.04 and 26.041[, and for that purpose shall use the lower market value, appraised value, or taxable value, as appropriate, included on or computed using the information included on the list for the property].

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

(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 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 effective tax rate and the rollback tax rate calculated without regard to Section 26.03;

(3) the difference between the amount of taxes that would be imposed by the unit if the unit were to adopt a tax rate equal to the effective tax rate as calculated with regard to Section 26.03 and the amount of taxes that would be imposed by the unit if the unit were to adopt a tax rate equal to the effective tax rate calculated without regard to that section;

(4) 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;

(5) [(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);

(D) the amount of the debt that was not approved by the voters;

(E) the percentage of the debt that was not approved by the voters;

(F) the amount of the debt service for the next year that is for debt that was not approved by the voters; and

(G) the percentage of the debt service for the next year that is for debt that was not approved by the voters;

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

(7) [(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;

(8) [(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

(9) [(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 (8)(B) [(6)(B)].

(e-1) The notice requirements imposed by Subsections (e)(1)-(8) [(e)(1)-(6)] do not apply to a school district.

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) 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)(5)(C) [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 calculated 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.

SECTION 4. The heading to Section 140.010, Local Government Code, is amended to read as follows:

Sec. 140.010. PROPOSED PROPERTY TAX RATE NOTICE FOR CERTAIN TAXING UNITS [COUNTIES AND MUNICIPALITIES].

SECTION 5. Section 140.010, Local Government Code, is amended by amending Subsections (a), (b), (c), (d), (e), (f), and (h) and adding Subsection (a-1) to read as follows:

(a) In this section:

(1) "Effective [, "effective] tax rate" and "rollback tax rate" mean the effective tax rate and rollback tax rate of a taxing unit [county or municipality, as applicable,] as calculated under Chapter 26, Tax Code.

(2) "Taxing unit" has the meaning assigned by Section 1.04, Tax Code.

(a-1) This section applies to a taxing unit other than:

(1) a school district; or

(2) a district to which Section 49.236, Water Code, applies.

(b) Except as provided by this subsection, each taxing unit [county and municipality] shall provide notice of the taxing unit's [county's or municipality's] proposed property tax rate in the manner provided by this section. A taxing unit [county or municipality] to which Section 26.052, Tax Code, applies may provide notice of the taxing unit's [county's or municipality's] proposed property tax rate in the manner provided by this section or in the manner provided by Section 26.052, Tax Code.

(c) A taxing unit [county or municipality] that provides notice of the taxing unit's [county's or municipality's] proposed property tax rate in the manner provided by this section is exempt from the notice and publication requirements of Sections 26.04(e), 26.052, and 26.06, Tax Code, as applicable, and is not subject to an injunction for failure to comply with those requirements.

(d) A taxing unit [county or municipality] that proposes a property tax rate that does not exceed the lower of the effective tax rate or the rollback tax rate shall provide the following notice:

"NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX

RATE FOR (INSERT NAME OF TAXING UNIT [COUNTY OR MUNICIPALITY])

"A tax rate of $______ per $100 valuation has been proposed by the governing body of (insert name of taxing unit [county or municipality]).

PROPOSED TAX RATE $______ per $100

PRECEDING YEAR'S TAX RATE $______ per $100

EFFECTIVE TAX RATE $______ per $100 "The effective tax rate is the total tax rate needed to raise the same amount of property tax revenue for (insert name of taxing unit [county or municipality]) from the same properties in both the (insert preceding tax year) tax year and the (insert current tax year) tax year.

"YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS

FOLLOWS:

property tax amount = (rate) x (taxable value of your property) /

100

"For assistance or detailed information about tax calculations, please contact:

(insert name of [county or municipal] tax assessor-collector for taxing unit)

(insert name of taxing unit [county or municipality]) tax assessor-collector

(insert address)

(insert telephone number)

(insert e-mail address)

(insert Internet website address, if applicable)"

(e) A taxing unit [county or municipality] that proposes a property tax rate that exceeds the lower of the effective tax rate or the rollback tax rate shall provide the following notice:

"NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX

RATE FOR (INSERT NAME OF TAXING UNIT [COUNTY OR MUNICIPALITY])

"A tax rate of $_____ per $100 valuation has been proposed for adoption by the governing body of (insert name of taxing unit [county or municipality]). This rate exceeds the lower of the effective or rollback tax rate, and state law requires that two public hearings be held by the governing body before adopting the proposed tax rate.

PROPOSED TAX RATE $______ per $100

PRECEDING YEAR'S TAX RATE $______ per $100

EFFECTIVE TAX RATE $______ per $100

ROLLBACK TAX RATE $______ per $100 "The effective tax rate is the total tax rate needed to raise the same amount of property tax revenue for (insert name of taxing unit [county or municipality]) from the same properties in both the (insert preceding tax year) tax year and the (insert current tax year) tax year. "The rollback tax rate is the highest tax rate that (insert name of taxing unit [county or municipality]) may adopt before voters are entitled to petition for an election to limit the rate that may be approved to the rollback rate.

"YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS

FOLLOWS:

property tax amount = (rate) x (taxable value of your property) /

100

"For assistance or detailed information about tax calculations, please contact:

(insert name of [county or municipal] tax assessor-collector for taxing unit)

(insert name of taxing unit [county or municipality]) tax assessor-collector

(insert address)

(insert telephone number)

(insert e-mail address)

(insert Internet website address, if applicable) "You are urged to attend and express your views at the following public hearings on the proposed tax rate:

First Hearing: (insert date and time) at (insert location of meeting).

Second Hearing: (insert date and time) at (insert location of meeting)."

(f) A taxing unit [county or municipality] shall:

(1) provide the notice required by Subsection (d) or (e), as applicable, not later than the later of September 1 or the 30th day after the date the certified appraisal roll is received by the taxing unit by:

(A) publishing the notice in a newspaper having general circulation in:

(i) the county, in the case of notice published by a county; or

(ii) the county in which the taxing unit [municipality] is located or primarily located, in the case of notice published by a taxing unit other than a county [municipality]; or

(B) mailing the notice to each property owner in[:

[(i)] the taxing unit [county, in the case of notice provided by a county; or

[(ii) the municipality, in the case of notice provided by a municipality]; and

(2) post the notice on the Internet website of the taxing unit [county or municipality], if applicable, beginning not later than the later of September 1 or the 30th day after the date the certified appraisal roll is received by the taxing unit and continuing until the taxing unit [county or municipality] adopts a tax rate.

(h) A taxing unit [county or municipality] that provides notice under this section shall on request provide any information described by Sections 26.04(e)(1)-(9) [26.04(e)(1)-(7)], Tax Code, regarding the taxing unit [county or municipality, as applicable].

SECTION 6. (a) The change in law made by this Act applies to the ad valorem tax rate of a taxing unit beginning with the 2015 tax year, except as provided by Subsection (b) of this section.

(b) If the governing body of a taxing unit adopted an ad valorem tax rate for the taxing unit for the 2015 tax year before the effective date of this Act, the change in law made by this Act applies to the ad valorem tax rate of that taxing unit beginning with the 2016 tax year, and the law in effect when the tax rate was adopted applies to the 2015 tax year with respect to that taxing unit.

SECTION 7. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect on the 91st day after the last day of the legislative session.