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A BILL TO BE ENTITLED
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AN ACT
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relating to the effect of an election at which the voters fail to |
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approve or vote to reduce the ad valorem tax rate adopted by the |
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governing body of a taxing unit. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 26.06(b-1), Tax Code, is amended to read |
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as follows: |
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(b-1) If the proposed tax rate exceeds the no-new-revenue |
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tax rate and the voter-approval tax rate of the taxing unit, the |
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notice must contain a statement in the following form: |
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"NOTICE OF PUBLIC HEARING ON TAX INCREASE |
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"PROPOSED TAX RATE $__________ per $100 |
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"NO-NEW-REVENUE TAX RATE $__________ per $100 |
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"VOTER-APPROVAL TAX RATE $__________ per $100 |
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"The no-new-revenue tax rate is the tax rate for the (current |
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tax year) tax year that will raise the same amount of property tax |
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revenue for (name of taxing unit) from the same properties in both |
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the (preceding tax year) tax year and the (current tax year) tax |
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year. |
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"The voter-approval tax rate is the highest tax rate that |
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(name of taxing unit) may adopt without holding an election to seek |
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voter approval of the rate. |
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"The proposed tax rate is greater than the no-new-revenue tax |
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rate. This means that (name of taxing unit) is proposing to |
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increase property taxes for the (current tax year) tax year. |
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"A public hearing on the proposed tax rate will be held on |
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(date and time) at (meeting place). |
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"The proposed tax rate is also greater than the |
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voter-approval tax rate. If (name of taxing unit) adopts the |
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proposed tax rate, (name of taxing unit) is required to hold an |
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election so that the voters may accept or reject the proposed tax |
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rate. If a majority of the voters reject the proposed tax rate, the |
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tax rate of the (name of taxing unit) will be the lesser of the |
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no-new-revenue tax rate or voter-approval tax rate. The election |
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will be held on (date of election). You may contact the (name of |
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office responsible for administering the election) for information |
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about voting locations. The hours of voting on election day are |
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(voting hours). |
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"Your taxes owed under any of the tax rates mentioned above |
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can be calculated as follows: |
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"Property tax amount = tax rate x taxable value of your |
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property / 100 |
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"(Names of all members of the governing body, showing how |
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each voted on the proposal to consider the tax increase or, if one |
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or more were absent, indicating the absences.) |
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"The 86th Texas Legislature modified the manner in which the |
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voter-approval tax rate is calculated to limit the rate of growth of |
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property taxes in the state." |
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SECTION 2. Sections 26.063(b) and (c), Tax Code, are |
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amended to read as follows: |
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(b) This subsection applies only to a taxing unit that is |
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required to hold an election under Section 26.07. In the notice |
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required to be provided by the taxing unit under Section 26.06(b-1) |
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or (b-3), as applicable, the taxing unit shall: |
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(1) add the following to the end of the list of rates |
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included in the notice: |
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"DE MINIMIS RATE $__________ per $100"; |
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(2) substitute the following for the definition of |
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"voter-approval tax rate": "The voter-approval tax rate is the |
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highest tax rate that (name of taxing unit) may adopt without |
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holding an election to seek voter approval of the rate, unless the |
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de minimis rate for (name of taxing unit) exceeds the |
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voter-approval tax rate for (name of taxing unit)."; |
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(3) add the following definition of "de minimis |
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rate": "The de minimis rate is the rate equal to the sum of the |
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no-new-revenue maintenance and operations rate for (name of taxing |
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unit), the rate that will raise $500,000, and the current debt rate |
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for (name of taxing unit)."; and |
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(4) substitute the following for the provision that |
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provides notice that an election is required: "The proposed tax |
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rate is greater than the voter-approval tax rate and the de minimis |
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rate. If (name of taxing unit) adopts the proposed tax rate, (name |
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of taxing unit) is required to hold an election so that the voters |
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may accept or reject the proposed tax rate. If a majority of the |
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voters reject the proposed tax rate, the tax rate of the (name of |
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taxing unit) will be the lesser of the no-new-revenue tax rate or |
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voter-approval tax rate of the (name of taxing unit). The election |
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will be held on (date of election). You may contact the (name of |
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office responsible for administering the election) for information |
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about voting locations. The hours of voting on election day are |
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(voting hours).". |
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(c) This subsection applies only to a taxing unit for which |
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the qualified voters of the taxing unit may petition to hold an |
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election under Section 26.075. In the notice required to be |
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provided by the taxing unit under Section 26.06(b-1) or (b-3), as |
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applicable, the taxing unit shall: |
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(1) add the following to the end of the list of rates |
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included in the notice: |
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"DE MINIMIS RATE $__________ per $100"; |
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(2) substitute the following for the definition of |
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"voter-approval tax rate": "The voter-approval tax rate is the |
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highest tax rate that (name of taxing unit) may adopt without |
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holding an election to seek voter approval of the rate, unless the |
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de minimis rate for (name of taxing unit) exceeds the |
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voter-approval tax rate for (name of taxing unit)."; |
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(3) add the following definition of "de minimis |
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rate": "The de minimis rate is the rate equal to the sum of the |
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no-new-revenue maintenance and operations rate for (name of taxing |
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unit), the rate that will raise $500,000, and the current debt rate |
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for (name of taxing unit)."; and |
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(4) substitute the following for the provision that |
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provides notice that an election is required: "The proposed tax |
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rate is greater than the voter-approval tax rate but not greater |
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than the de minimis rate. However, the proposed tax rate exceeds |
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the rate that allows voters to petition for an election under |
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Section 26.075, Tax Code. If (name of taxing unit) adopts the |
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proposed tax rate, the qualified voters of the (name of taxing unit) |
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may petition the (name of taxing unit) to require an election to be |
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held to determine whether to reduce the proposed tax rate. If a |
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majority of the voters reject the proposed tax rate, the tax rate of |
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the (name of taxing unit) will be the lesser of the no-new-revenue |
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tax rate or voter-approval tax rate of the (name of taxing unit).". |
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SECTION 3. Sections 26.07(e) and (g), Tax Code, are amended |
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to read as follows: |
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(e) If the proposition is not approved as provided by |
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Subsection (d), the taxing unit's tax rate for the current tax year |
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is the lesser of the taxing unit's no-new-revenue tax rate or |
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voter-approval tax rate. |
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(g) If a property owner pays taxes calculated using the |
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originally adopted tax rate of the taxing unit and the proposition |
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to approve the adopted tax rate is not approved by voters, the |
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taxing unit shall refund the difference between the amount of taxes |
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paid and the amount due under the no-new-revenue tax rate or |
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voter-approval tax rate, as applicable, if the difference between |
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the amount of taxes paid and the amount due under the applicable |
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[voter-approval] tax rate is $1 or more. If the difference between |
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the amount of taxes paid and the amount due under the applicable |
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[voter-approval] tax rate is less than $1, the taxing unit shall |
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refund the difference on request of the taxpayer. An application |
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for a refund of less than $1 must be made within 90 days after the |
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date the refund becomes due or the taxpayer forfeits the right to |
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the refund. |
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SECTION 4. Sections 26.075(c), (g), and (h), Tax Code, are |
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amended to read as follows: |
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(c) The qualified voters of a taxing unit by petition may |
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require that an election be held to determine whether to reduce the |
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tax rate adopted by the governing body of the taxing unit for the |
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current tax year to the lesser of the taxing unit's no-new-revenue |
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tax rate or voter-approval tax rate. |
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(g) At the election, the ballots shall be prepared to permit |
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voting for or against the proposition: "Reducing the tax rate in |
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(name of taxing unit) for the current year from (insert tax rate |
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adopted for current year) to (insert lesser of no-new-revenue tax |
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rate or voter-approval tax rate)." |
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(h) If a majority of the votes cast in the election favor the |
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proposition, the tax rate for the current tax year is the lesser of |
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the taxing unit's no-new-revenue tax rate or voter-approval tax |
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rate. |
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SECTION 5. Section 26.08(d), Tax Code, is amended to read as |
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follows: |
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(d) If the proposition is not approved as provided by |
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Subsection (c), the governing body may not adopt a tax rate for the |
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school district for the current year that exceeds the lesser of the |
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school district's no-new-revenue tax rate or voter-approval tax |
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rate. |
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SECTION 6. Section 49.236(a), Water Code, is amended to |
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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 |
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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 at a |
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greater or lesser rate, or even decrease, depending on the tax rate |
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that is adopted and 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. The change in the taxable value of your property in |
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relation to the change in the taxable value of all other property |
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determines the distribution of the tax burden among all property |
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owners. |
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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; |
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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 requires or |
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authorizes an election to approve or reduce the tax rate, as |
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applicable, a description of the purpose of the proposed tax |
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increase; |
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(3) contain a statement in substantially the following |
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form, as applicable: |
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(A) if the district is a district described by |
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Section 49.23601: |
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"NOTICE OF VOTE ON TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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eight percent, an election must be held to determine whether to |
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approve the operation and maintenance tax rate under Section |
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49.23601, Water Code."; |
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(B) if the district is a district described by |
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Section 49.23602: |
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"NOTICE OF VOTE ON TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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3.5 percent, an election must be held to determine whether to |
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approve the operation and maintenance tax rate under Section |
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49.23602, Water Code."; or |
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(C) if the district is a district described by |
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Section 49.23603: |
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"NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE |
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"If the district adopts a combined debt service, operation |
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and maintenance, and contract tax rate that would result in the |
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taxes on the average residence homestead increasing by more than |
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eight percent, the qualified voters of the district by petition may |
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require that an election be held to determine whether to reduce the |
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operation and maintenance tax rate [to the voter-approval tax rate] |
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under Section 49.23603, Water Code."; and |
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(4) include the following statement: "The 86th Texas |
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Legislature modified the manner in which the voter-approval tax |
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rate is calculated to limit the rate of growth of property taxes in |
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the state.". |
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SECTION 7. Sections 49.23601(a) and (c), Water Code, are |
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amended to read as follows: |
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(a) In this section: |
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(1) "No-new-revenue tax rate" has the meaning assigned |
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by Section 26.04(c), Tax Code. |
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(2) "Voter-approval [, "voter-approval] tax rate" |
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means the rate equal to the sum of the following tax rates for the |
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district: |
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(A) [(1)] the current year's debt service tax |
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rate; |
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(B) [(2)] the current year's contract tax rate; |
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and |
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(C) [(3)] the operation and maintenance tax rate |
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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. |
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(c) If the board of a district adopts a combined debt |
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service, contract, and operation and maintenance tax rate that |
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would impose more than 1.08 times the amount of tax imposed by the |
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district in the preceding year on a residence homestead appraised |
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at the average appraised value of a residence homestead in the |
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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, an election must be held in accordance with the procedures |
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provided by Sections 26.07(c)-(g), Tax Code, to determine whether |
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to approve the adopted tax rate. If the adopted tax rate is not |
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approved at the election, the district's tax rate is the lesser of |
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the district's no-new-revenue tax rate or voter-approval tax rate. |
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SECTION 8. Section 49.23602(a), Water Code, is amended by |
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adding Subdivision (2-a) to read as follows: |
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(2-a) "No-new-revenue tax rate" has the meaning |
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assigned by Section 26.04(c), Tax Code. |
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SECTION 9. Section 49.23602(c), Water Code, is amended to |
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read as follows: |
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(c) If the board of a district adopts a combined debt |
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service, contract, and operation and maintenance tax rate that |
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exceeds the district's mandatory tax election rate, an election |
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must be held in accordance with the procedures provided by Sections |
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26.07(c)-(g), Tax Code, to determine whether to approve the adopted |
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tax rate. If the adopted tax rate is not approved at the election, |
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the district's tax rate is the lesser of the district's |
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no-new-revenue tax rate or voter-approval tax rate. |
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SECTION 10. Sections 49.23603(a) and (c), Water Code, are |
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amended to read as follows: |
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(a) In this section: |
|
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(1) "No-new-revenue tax rate" has the meaning assigned |
|
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by Section 26.04(c), Tax Code. |
|
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(2) "Voter-approval [, "voter-approval] tax rate" |
|
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means the rate equal to the sum of the following tax rates for the |
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district: |
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(A) [(1)] the current year's debt service tax |
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rate; |
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(B) [(2)] the current year's contract tax rate; |
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and |
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(C) [(3)] the operation and maintenance tax rate |
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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. |
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(c) If the board of a district adopts a combined debt |
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service, contract, and operation and maintenance tax rate that |
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would impose more than 1.08 times the amount of tax imposed by the |
|
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district in the preceding year on a residence homestead appraised |
|
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at the average appraised value of a residence homestead in the |
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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 |
|
|
that an election be held to determine whether to reduce the tax rate |
|
|
adopted for the current year to the lesser of the district's |
|
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no-new-revenue tax rate or voter-approval tax rate in accordance |
|
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with the procedures provided by Sections 26.075 and 26.081, Tax |
|
|
Code. |
|
|
SECTION 11. The change in law made by this Act applies to |
|
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the ad valorem tax rate of a taxing unit beginning with the 2022 tax |
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year. |
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SECTION 12. This Act takes effect January 1, 2022. |