86R5124 SMH-D
 
  By: Shaheen H.B. No. 913
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the calculation of the ad valorem rollback tax rate of a
  taxing unit other than a school district.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 26.04(c), Tax Code, is amended to read as
  follows:
         (c)  An officer or employee designated by the governing body
  shall calculate the effective tax rate and the rollback tax rate for
  the taxing 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 1.04 [1.08]) + CURRENT DEBT RATE
         SECTION 2.  Sections 26.041(a), (b), and (c), Tax Code, are
  amended to read as follows:
         (a)  In the first year in which an additional sales and use
  tax is required to be collected, the effective tax rate and rollback
  tax rate for the taxing unit are calculated according to the
  following formulas:
         EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
  LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] -
  SALES TAX GAIN RATE
  and
         ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
  OPERATIONS RATE x 1.04 [1.08]) + CURRENT DEBT RATE -
  SALES TAX GAIN RATE
  where "sales tax gain rate" means a number expressed in dollars per
  $100 of taxable value, calculated by dividing the revenue that will
  be generated by the additional sales and use tax in the following
  year as calculated under Subsection (d) [of this section] by the
  current total value.
         (b)  Except as provided by Subsections (a) and (c) [of this
  section], in a year in which a taxing unit imposes an additional
  sales and use tax the rollback tax rate for the taxing unit is
  calculated according to the following formula, regardless of
  whether the taxing unit levied a property tax in the preceding year:
         ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
  OPERATIONS EXPENSE x 1.04 [1.08]) / ([TOTAL] CURRENT
  TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE
  - SALES TAX REVENUE RATE)
  where "last year's maintenance and operations expense" means the
  amount spent for maintenance and operations from property tax and
  additional sales and use tax revenues in the preceding year, and
  "sales tax revenue rate" means a number expressed in dollars per
  $100 of taxable value, calculated by dividing the revenue that will
  be generated by the additional sales and use tax in the current year
  as calculated under Subsection (d) [of this section] by the current
  total value.
         (c)  In a year in which a taxing unit that has been imposing
  an additional sales and use tax ceases to impose an additional sales
  and use tax the effective tax rate and rollback tax rate for the
  taxing unit are calculated according to the following formulas:
         EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
  LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
  SALES TAX LOSS RATE
  and
  ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
  OPERATIONS EXPENSE x 1.04 [1.08]) / ([TOTAL] CURRENT
  TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
  where "sales tax loss rate" means a number expressed in dollars per
  $100 of taxable value, calculated by dividing the amount of sales
  and use tax revenue generated in the last four quarters for which
  the information is available by the current total value and "last
  year's maintenance and operations expense" means the amount spent
  for maintenance and operations from property tax and additional
  sales and use tax revenues in the preceding year.
         SECTION 3.  Section 8876.152(b), Special District Local Laws
  Code, is amended to read as follows:
         (b)  Sections 49.236(a)(1) and (2) and (b) [Section 49.236],
  Water Code, apply [as added by Chapter 248 (H.B. 1541), Acts of the
  78th Legislature, Regular Session, 2003, applies] to the district.
         SECTION 4.  Sections 49.236(a) and (d), Water Code, as added
  by Chapter 335 (S.B. 392), Acts of the 78th Legislature, Regular
  Session, 2003, are amended to read as follows:
         (a)  Before the board adopts an ad valorem tax rate for the
  district for debt service, operation and maintenance purposes, or
  contract purposes, the board shall give notice of each meeting of
  the board at which the adoption of a tax rate will be considered.
  The notice must:
               (1)  contain a statement in substantially the following
  form:
  "NOTICE OF PUBLIC HEARING ON TAX RATE
         "The (name of the district) will hold a public hearing on a
  proposed tax rate for the tax year (year of tax levy) on (date and
  time) at (meeting place). Your individual taxes may increase or
  decrease, depending on the change in the taxable value of your
  property in relation to the change in taxable value of all other
  property and the tax rate that is adopted.
         "(Names of all board members and, if a vote was taken, an
  indication of how each voted on the proposed tax rate and an
  indication of any absences.)";
               (2)  contain the following information:
                     (A)  the district's total adopted tax rate for the
  preceding year and the proposed tax rate, expressed as an amount per
  $100;
                     (B)  the difference, expressed as an amount per
  $100 and as a percent increase or decrease, as applicable, in the
  proposed tax rate compared to the adopted tax rate for the preceding
  year;
                     (C)  the average appraised value of a residence
  homestead in the district in the preceding year and in the current
  year; the district's total homestead exemption, other than an
  exemption available only to disabled persons or persons 65 years of
  age or older, applicable to that appraised value in each of those
  years; and the average taxable value of a residence homestead in the
  district in each of those years, disregarding any homestead
  exemption available only to disabled persons or persons 65 years of
  age or older;
                     (D)  the amount of tax that would have been
  imposed by the district in the preceding year on a residence
  homestead appraised at the average appraised value of a residence
  homestead in that year, disregarding any homestead exemption
  available only to disabled persons or persons 65 years of age or
  older;
                     (E)  the amount of tax that would be imposed by the
  district in the current year on a residence homestead appraised at
  the average appraised value of a residence homestead in that year,
  disregarding any homestead exemption available only to disabled
  persons or persons 65 years of age or older, if the proposed tax
  rate is adopted; [and]
                     (F)  the difference between the amounts of tax
  calculated under Paragraphs (D) and (E), expressed in dollars and
  cents and described as the annual percentage increase or decrease,
  as applicable, in the tax to be imposed by the district on the
  average residence homestead in the district in the current year if
  the proposed tax rate is adopted; and
                     (G)  if the proposed combined debt service,
  operation and maintenance, and contract tax rate exceeds the
  rollback tax rate, a description of the purpose of the proposed tax
  increase; and
               (3)  contain a statement in substantially the following
  form:
  "NOTICE OF TAXPAYERS' RIGHT TO ROLLBACK ELECTION
         "If operation and maintenance taxes on the average residence
  homestead increase by more than four [eight] percent, the qualified
  voters of the district by petition may require that an election be
  held to determine whether to reduce the [operation and maintenance]
  tax rate to the rollback tax rate under Section 49.236(d), Water
  Code."
         (d)  If the governing body of a district adopts a combined
  debt service, operation and maintenance, and contract tax rate that
  exceeds the rollback tax rate [would impose more than 1.08 times the
  amount of tax imposed by the district in the preceding year on a
  residence homestead appraised at the average appraised value of a
  residence homestead in the district in that year, disregarding any
  homestead exemption available only to disabled persons or persons
  65 years of age or older], the qualified voters of the district by
  petition may require that an election be held to determine whether
  [or not] to reduce the tax rate adopted for the current year to the
  rollback tax rate in accordance with the procedures provided by
  Sections 26.07(b)-(g) and 26.081, Tax Code. For purposes of
  Sections 26.07(b)-(g) and this section [subsection], the rollback
  tax rate is the sum of the following tax rates:
               (1)  the current year's debt service tax rate;
               (2)  the current year's [and] contract tax rate; and
               (3)  [rates plus] the operation and maintenance tax
  rate that would impose 1.04 [1.08] times the amount of the operation
  and maintenance tax imposed by the district in the preceding year on
  a residence homestead appraised at the average appraised value of a
  residence homestead in the district in that year, disregarding any
  homestead exemption available only to disabled persons or persons
  65 years of age or older.
         SECTION 5.  The following provisions are repealed:
               (1)  Section 49.236, Water Code, as added by Chapter
  248 (H.B. 1541), Acts of the 78th Legislature, Regular Session,
  2003; and
               (2)  Section 49.2361, Water Code.
         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 2019 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 2019 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 2020 tax year, and the law in effect when the tax rate was
  adopted applies to the 2019 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.