BILL ANALYSIS

C.S.H.B. 103

By: Troxclair

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that, while public interest in the accountability regarding local tax and bond measures is growing, there is currently no centralized system or database for taxpayers to track current and historical information regarding taxes imposed and bonds issued by taxing units in the state. The bill author has also informed the committee of the struggles that Texans often face in trying to understand the full extent of their tax obligations, particularly when multiple political subdivisions, such as school districts, cities, and counties, levy taxes simultaneously. Additionally, the bill author has informed the committee that voters can often find it difficult to assess how past tax-rate and bond elections have impacted current tax rates, debt accumulation, and the progress of bond-funded projects. C.S.H.B. 103 seeks to empower taxpayers with critical information relating to their financial obligations to local governments and increase transparency in the state by requiring the comptroller of public accounts, in coordination with the Bond Review Board, to develop and maintain a publicly accessible and free online database that includes current and historical information regarding taxes imposed and bonds issued by each taxing unit in Texas.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the comptroller of public accounts in SECTION 1 of this bill.

ANALYSIS

Bond, Tax, and Project Database

C.S.H.B. 103 amends the Government Code to require the comptroller of public accounts to consult and coordinate with the Bond Review Board to develop and maintain a database of current and historical information regarding taxes imposed and bonds issued by each taxing unit in Texas. The database must include the following:

· for each bond proposed or issued by a taxing unit:

o the language of the ballot proposition to approve the bond, if the bond was or will be submitted to the voters of the taxing unit at an election held for that purpose;

o the projected interest and sinking (I&S) fund tax rate or projected tax rate for debt service, as applicable, associated with a proposed bond;

o the result of any election held for the purpose of approving the issuance of a proposed bond;

o a list of the projects to be funded using the bond;

o an accounting of the use of the proceeds of any issued bond, including a description of any project paid for with the proceeds; and

o a description of any increase in the I&S fund tax rate or tax rate for debt service, as applicable, resulting from the issuance of a bond;

· the language of the ballot proposition and the result of any tax rate election held under Tax Code provisions relating to property tax assessment, including the following:

o the taxing unit's adopted tax rate;

o the taxing unit's voter-approval tax rate;

o the difference between the adopted tax rate and the voter-approval tax rate for the taxing unit;

o the taxing unit's tax rate for the preceding tax year;

o the number of votes cast in the election in favor of the proposition and against the proposition; and

o if the proposition is not approved by the voters of the taxing unit, the taxing unit's tax rate for the tax year;

· for maintenance taxes levied or proposed by a public school district:

o the district's proposed or approved tax rate; and

o the language of the ballot proposition to authorize the levy, assessment, and collection of maintenance taxes;

· a report generation function that allows the comptroller to generate a report of the information required for each taxing unit, disaggregated by geographic area within the taxing unit; and

· a function that allows for the proposal of updates or corrections to the information contained in the database.

The bill requires a taxing unit to provide to the comptroller data for each proposed bond independent of any other proposed bond, bond refinancing, or property tax rate change for the purpose of the inclusion in the database of the required information relating to each bond proposed or issued by a taxing unit. The bill requires a taxing unit to provide to the comptroller the applicable required information for the current tax year and any other information requested by the comptroller for the purpose of maintaining the database by August 7 or as soon thereafter as practicable. The bill requires a taxing unit, not later than January 1, 2026, to provide to the comptroller all available current and historical applicable required information for the 2015 through 2025 tax years and sets this requirement to expire on January 31, 2026.

Operation and Maintenance of Database

C.S.H.B. 103 authorizes the comptroller to do the following:

· consult with the appropriate officer of, or other person representing, a taxing unit to obtain the information necessary to operate and maintain the database; and

· contract with a third party for the development or maintenance of the database.

The bill requires the comptroller to coordinate with the Department of Information Resources (DIR) to include a separate link to the database on the website "Texas.gov/PropertyTaxes" and prohibits the comptroller from charging a fee to the public for access to the database.

Noncompliance; Civil Penalty

C.S.H.B. 103 requires the comptroller, if a taxing unit does not provide information to the comptroller as required by the bill, to send written notice to the taxing unit that, as follows:

· describes the information the taxing unit is required to provide to the comptroller; and

· informs the taxing unit that the taxing unit is liable for a civil penalty of $1,000 if the taxing unit does not provide the required information on or before the 30th day after the date the comptroller sends the written notice.

The bill makes a taxing unit that does not provide the required information liable to the state for a civil penalty of $1,000. The bill authorizes the attorney general to bring an action to recover the civil penalty imposed under these provisions. The bill establishes as a defense to an action brought under these provisions that a taxing unit provided the required information or documents to the extent the information or documents are not exempt from disclosure or confidential under state public information law.

Rulemaking

C.S.H.B. 103 authorizes the comptroller to establish procedures and adopt rules necessary to implement the bill's provisions.

Definitions

C.S.H.B. 103 defines the following terms:

· "tax year" and "taxing unit" by reference to the Property Tax Code; and

· "voter-approval tax rate" as the voter-approval tax rate for a taxing unit calculated under Tax Code provisions relating to property tax assessment.

C.S.H.B. 103 requires the comptroller to create the database required by the bill's provisions and DIR to create a link to the database on its website as soon as practicable after January 1, 2026.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 103 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes definitions that were not in the introduced for "tax year" and "voter-approval tax rate."

While both the substitute and the introduced require the comptroller to consult and coordinate with the Bond Review Board to develop and maintain a database regarding current and historical information, they differ as follows:

· whereas the introduced specified that the information is in regard to taxing unit bonds, taxes, and bond-related projects, the substitute specifies that the information is in regard to taxes imposed and bonds issued by each taxing unit in Texas;

· while both versions require information for each bond proposed or issued by the taxing unit, the introduced additionally required information for each debt obligation issued or proposed by a taxing unit, which the substitute does not require;

· while both versions require the language of an applicable ballot proposition to be included in the database under a certain condition, they set out different conditions applicable to that requirement, as follows:

o the introduced specified inclusion of the language if the bond or other debt obligation has been approved or will be approved at an election; and

o the substitute specifies inclusion of the language if, instead, the bond was or will be submitted to the voters of the taxing unit at an election held for that purpose and omits the introduced version's requirement to include language if a debt obligation has been approved or will be approved;

· the substitute includes a requirement absent from the introduced for the database to include the language of the ballot proposition of any tax rate election held under Tax Code provisions relating to property tax assessment; and

· while both the introduced and the substitute require the database to include the result of any such election held under those Tax Code provisions, the substitute includes the following information, absent from the introduced, among the information relating to the election that must be included in the database:

o the difference between the adopted tax rate and the voter-approval tax rate for the taxing unit;

o the taxing unit's tax rate for the preceding tax year;

o the number of votes cast in the election in favor of the proposition and against the proposition; and

o if the proposition is not approved by the voters of the taxing unit, the taxing unit's tax rate for the tax year.

With respect to the database's report generation function required by both the introduced and the substitute that allows for disaggregation by geographic area, the substitute, but not the introduced, requires disaggregation within the taxing unit.

The substitute includes a provision absent from the introduced requiring a taxing unit to provide to the comptroller data for each proposed bond independent of any other proposed bond, bond refinancing, or property tax rate change for the purpose of the inclusion in the database of the required information relating to each bond proposed or issued by a taxing unit.

With respect to the requirement in both the introduced and the substitute for a taxing unit to provide the comptroller with the applicable required information and any other information requested by the comptroller for the purpose of maintaining the database, the substitute includes provisions that were not in the introduced that, as follows:

· establish that a taxing unit must provide this information by August 7 or as soon thereafter as practicable; and

· specify that the information to be provided is for the current tax year.

The substitute includes a temporary provision, which is set to expire January 31, 2026, and is absent from the introduced, requiring a taxing unit, not later than January 1, 2026, to provide to the comptroller all available current and historical applicable required information for the 2015 through 2025 tax years.

Whereas the substitute includes a requirement absent from the introduced for the comptroller to coordinate with DIR to include a separate link to the database on the website "Texas.gov/Property Taxes," the introduced required the comptroller to create and post the database on the comptroller's website. Whereas the introduced set January 1, 2026, as the deadline by which the database must be created and posted, the substitute requires the creation of the database by the comptroller and creation of the link by DIR as soon as practicable after January 1, 2026.

Whereas the introduced authorized the comptroller to establish procedures and adopt rules as necessary to implement only its provisions regarding the database, the substitute instead makes that authority applicable to all of the substitute's provisions.

The substitute omits the provisions from the introduced providing that its implementation is mandatory only if a specific appropriation is made for that purpose.