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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 rate of a |
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taxing unit. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 26.012, Tax Code, is amended by adding |
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Subdivisions (2-a) and (10-a) to read as follows: |
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(2-a) "Consumer price index" means the average over a |
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calendar year of the index that the comptroller considers to most |
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accurately report changes in the purchasing power of the dollar for |
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consumers in this state. |
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(10-a) "Inflation rate" means the amount, expressed in |
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decimal form rounded to the nearest thousandth, computed by |
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determining the percentage change in the consumer price index for |
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the preceding calendar year as compared to the consumer price index |
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for the calendar year preceding that calendar year. |
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SECTION 2. Section 26.04, Tax Code, is amended by adding |
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Subsection (b-1) and amending Subsection (c) to read as follows: |
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(b-1) By August 1 or as soon thereafter as practicable, the |
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comptroller shall determine the inflation rate for the current year |
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and publish the rate in the Texas Register. |
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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 |
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LEVY) / (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 |
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OPERATIONS RATE x (1 + INFLATION RATE) [1.08]) + |
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CURRENT DEBT RATE |
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SECTION 3. Sections 26.041(a), (b), and (c), Tax Code, are |
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amended 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 |
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LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - |
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SALES TAX GAIN RATE |
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and |
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ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND |
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OPERATIONS RATE x (1 + INFLATION RATE) [1.08]) + |
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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 |
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OPERATIONS EXPENSE x (1 + INFLATION RATE) [1.08]) / |
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([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + |
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(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 |
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LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + |
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SALES TAX LOSS RATE |
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and |
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ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND |
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OPERATIONS EXPENSE x (1 + INFLATION RATE) [1.08]) / |
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([TOTAL] CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + |
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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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SECTION 4. Section 8876.152(b), Special District Local Laws |
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Code, is amended to read as follows: |
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(b) Sections 49.236(a)(1) and (2) and (b) [Section 49.236], |
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Water Code, apply [as added by Chapter 248 (H.B. 1541), Acts of the
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78th Legislature, Regular Session, 2003, applies] to the district. |
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SECTION 5. Section 49.236, Water Code, as added by Chapter |
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335 (S.B. 392), Acts of the 78th Legislature, Regular Session, |
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2003, is amended by amending Subsections (a) and (d) and adding |
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Subsection (e) to read as follows: |
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(a) Before the board adopts an ad valorem tax rate for the |
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district for debt service, operation and maintenance purposes, or |
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contract purposes, the board shall give notice of each meeting of |
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the board at which the adoption of a tax rate will be considered. |
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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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(G) if the proposed combined debt service, |
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operation and maintenance, and contract tax rate exceeds the |
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rollback tax rate, a description of the purpose of the proposed tax |
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increase; 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 ROLLBACK ELECTION |
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"If operation and maintenance taxes on the average residence |
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homestead increase by more than the inflation rate [eight percent], |
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the qualified voters of the district by petition may require that an |
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election be held to determine whether to reduce the [operation and
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maintenance] tax rate to the rollback tax rate under Section |
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49.236(d), Water Code." |
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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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exceeds the rollback tax rate [would impose more than 1.08 times the
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amount of tax imposed by the district in the preceding year on a
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residence homestead appraised at the average appraised value of a
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residence homestead in the district in that year, disregarding any
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homestead exemption available only to disabled persons or persons
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65 years of age or older], 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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[or not] to reduce the tax rate adopted for the current year to the |
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rollback tax rate in accordance with the procedures provided by |
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Sections 26.07(b)-(g) and 26.081, Tax Code. For purposes of |
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Sections 26.07(b)-(g) and this section [subsection], the rollback |
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tax rate is the sum of the following tax rates: |
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(1) the current year's debt service tax rate; |
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(2) the current year's [and] contract tax rate; and |
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(3) [rates plus] the operation and maintenance tax |
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rate that would impose [1.08 times] the amount of the operation and |
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maintenance tax imposed by the district in the preceding year on a |
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residence homestead appraised at the average appraised value of a |
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residence homestead in the district in that year, disregarding any |
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homestead exemption available only to disabled persons or persons |
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65 years of age or older, multiplied by the sum of one and the |
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inflation rate. |
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(e) In this section, "inflation rate" means the rate |
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determined by the comptroller and published in the Texas Register |
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as provided by Section 26.04(b-1), Tax Code. |
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SECTION 6. The following provisions are repealed: |
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(1) Section 49.236, Water Code, as added by Chapter |
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248 (H.B. 1541), Acts of the 78th Legislature, Regular Session, |
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2003; and |
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(2) Section 49.2361, Water Code. |
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SECTION 7. The change in law made by this Act applies to the |
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ad valorem tax rate of a taxing unit beginning with the 2018 tax |
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year. |
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SECTION 8. This Act takes effect January 1, 2018. |