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A BILL TO BE ENTITLED
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AN ACT
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relating to the calculation of certain ad valorem tax rates of a |
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taxing unit and the manner in which a proposed ad valorem tax rate |
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that exceeds the voter-approval tax rate is approved; making |
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conforming changes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 48.202(f), Education Code, is amended to |
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read as follows: |
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(f) For a school year in which the dollar amount guaranteed |
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level of state and local funds per weighted student per cent of tax |
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effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount |
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guaranteed level of state and local funds per weighted student per |
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cent of tax effort ("GL") under Subsection (a-1)(2) for the |
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preceding school year, a school district shall reduce the |
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district's tax rate under Section 45.0032(b)(2) for the tax year |
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that corresponds to that school year to a rate that results in the |
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amount of state and local funds per weighted student per cent of tax |
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effort available to the district at the dollar amount guaranteed |
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level for the preceding school year. A school district is not |
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entitled to the amount equal to the increase of revenue described by |
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this subsection for the school year for which the district must |
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reduce the district's tax rate. For [Unless Section 26.042(e), Tax |
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Code, applies to the district, for] a tax year in which a district |
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must reduce the district's tax rate under this subsection, the |
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district may not increase the district's maintenance and operations |
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tax rate to a rate that exceeds the maximum maintenance and |
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operations tax rate permitted under Section 45.003(d) or (f), as |
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applicable, minus the reduction of tax effort required under this |
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subsection. This subsection does not apply if the amount of state |
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funds appropriated for a school year specifically excludes the |
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amount necessary to provide the dollar amount guaranteed level of |
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state and local funds per weighted student per cent of tax effort |
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under Subsection (a-1)(2). |
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SECTION 2. Section 3828.157, Special District Local Laws |
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Code, is amended to read as follows: |
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Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE |
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PROVISIONS. Sections 26.04, [26.042,] 26.05, 26.07, and 26.075, |
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Tax Code, do not apply to a tax imposed under Section 3828.153 or |
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3828.156. |
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SECTION 3. Section 8876.152(a), Special District Local Laws |
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Code, is amended to read as follows: |
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(a) Sections 26.04, [26.042,] 26.05, 26.06, 26.061, 26.07, |
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and 26.075, Tax Code, do not apply to a tax imposed by the district. |
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SECTION 4. Section 26.04(c), Tax Code, is amended to read as |
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follows: |
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(c) After the assessor for the taxing unit submits the |
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appraisal roll for the taxing unit to the governing body of the |
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taxing unit as required by Subsection (b), an officer or employee |
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designated by the governing body shall calculate the no-new-revenue |
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tax rate and the voter-approval tax rate for the taxing unit, where: |
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(1) "No-new-revenue tax rate" means a rate expressed |
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in dollars per $100 of taxable value calculated according to the |
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following formula: |
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NO-NEW-REVENUE 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) "Voter-approval tax rate" means a rate expressed |
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in dollars per $100 of taxable value calculated according to the |
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following [applicable] formula: |
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[(A) for a special taxing unit:] |
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VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND |
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OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE |
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[; or |
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[(B) for a taxing unit other than a special taxing |
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unit: |
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[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND |
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OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT |
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RATE)] |
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SECTION 5. 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 no-new-revenue tax rate and |
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voter-approval tax rate for the taxing unit are calculated |
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according to the following formulas: |
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NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - |
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LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW |
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PROPERTY VALUE)] - SALES TAX GAIN RATE |
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and |
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VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT] |
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= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x |
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1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[) |
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[or |
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[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER |
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THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE |
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AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + |
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UNUSED INCREMENT 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) by the current total value. |
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(b) Except as provided by Subsections (a) and (c), in a year |
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in which a taxing unit imposes an additional sales and use tax, the |
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voter-approval tax rate for the taxing unit is calculated according |
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to the following formula, regardless of whether the taxing unit |
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levied a property tax in the preceding year: |
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VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT] |
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= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE |
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[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] |
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+ (CURRENT DEBT RATE - SALES TAX REVENUE RATE) |
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[or |
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[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER |
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THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE |
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AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE |
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- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED |
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INCREMENT 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) by the current 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 no-new-revenue tax rate and voter-approval tax |
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rate for the taxing unit are calculated according to the following |
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formulas: |
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NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - |
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LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW |
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PROPERTY VALUE)] + SALES TAX LOSS RATE |
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and |
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VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT] |
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= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE |
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[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] |
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+ CURRENT DEBT RATE |
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[or |
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[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER |
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THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE |
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AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE |
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- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED |
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INCREMENT 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 6. Section 26.063(a), Tax Code, is amended to read |
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as follows: |
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(a) This section applies only to a taxing unit: |
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(1) other than [that is: |
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[(A) a taxing unit other than a special taxing |
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unit; or |
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[(B)] a municipality with a population of [less |
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than] 30,000 or more [, regardless of whether it is a special taxing |
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unit]; |
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(2) that is required to provide notice under Section |
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26.06(b-1) or (b-3); and |
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(3) for which the de minimis rate exceeds the |
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voter-approval tax rate. |
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SECTION 7. Section 26.07(b), Tax Code, is amended to read as |
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follows: |
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(b) If the governing body of a [special taxing unit or a] |
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municipality with a population of 30,000 or more adopts a tax rate |
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that exceeds the taxing unit's voter-approval tax rate, or the |
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governing body of a taxing unit other than a [special taxing unit or |
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a] municipality with a population of [less than] 30,000 or more |
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[regardless of whether it is a special taxing unit] adopts a tax |
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rate that exceeds the greater of the taxing unit's voter-approval |
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tax rate or de minimis rate, the registered voters of the taxing |
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unit at an election held for that purpose must determine whether to |
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approve the adopted tax rate. |
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SECTION 8. Sections 26.075(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) This section applies only to a taxing unit other than: |
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(1) [a special taxing unit; |
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[(2)] a school district; or |
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(2) [(3)] a municipality with a population of 30,000 |
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or more. |
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(b) This section applies to a taxing unit only in a tax year |
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in which the taxing unit's: |
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(1) de minimis rate exceeds the taxing unit's |
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voter-approval tax rate; and |
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(2) adopted tax rate is: |
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(A) equal to or lower than the taxing unit's de |
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minimis rate; and |
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(B) greater than the [greater of the] taxing |
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unit's[: |
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[(i)] voter-approval tax rate [calculated |
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as if the taxing unit were a special taxing unit; or |
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[(ii) voter-approval tax rate]. |
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SECTION 9. Section 49.107(g), Water Code, is amended to |
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read as follows: |
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(g) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and |
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26.075, Tax Code, do not apply to a tax levied and collected under |
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this section or an ad valorem tax levied and collected for the |
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payment of the interest on and principal of bonds issued by a |
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district. |
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SECTION 10. Section 49.108(f), Water Code, is amended to |
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read as follows: |
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(f) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and |
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26.075, Tax Code, do not apply to a tax levied and collected for |
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payments made under a contract approved in accordance with this |
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section. |
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SECTION 11. Section 49.23602(a)(3), Water Code, is amended |
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to read as follows: |
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(3) "Unused increment rate" has the meaning assigned |
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by Section 49.23604 [26.013, Tax Code]. |
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SECTION 12. Subchapter H, Chapter 49, Water Code, is |
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amended by adding Section 49.23604 to read as follows: |
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Sec. 49.23604. UNUSED INCREMENT RATE. (a) In this section: |
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(1) "Actual tax rate" means a district's actual tax |
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rate used to levy taxes in the applicable preceding tax year. |
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(2) "Current total value" has the meaning assigned by |
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Section 26.012, Tax Code. |
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(3) "Foregone revenue amount" means the greater of: |
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(A) zero; or |
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(B) the amount expressed in dollars calculated |
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according to the following formula: |
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FOREGONE REVENUE AMOUNT = (VOTER-APPROVAL TAX RATE - ACTUAL |
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TAX RATE) x PRECEDING TOTAL VALUE |
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(4) "Preceding total value" means a district's current |
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total value in the applicable preceding tax year. |
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(5) "Voter-approval tax rate" means a district's |
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voter-approval tax rate in the applicable preceding tax year, as |
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adopted by the district during the applicable preceding tax year, |
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less the unused increment rate for that preceding tax year. |
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(6) "Year 1" means the third tax year preceding the |
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current tax year. |
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(7) "Year 2" means the second tax year preceding the |
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current tax year. |
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(8) "Year 3" means the tax year preceding the current |
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tax year. |
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(b) In Section 49.23602, "unused increment rate" means the |
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greater of: |
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(1) zero; or |
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(2) the rate expressed in dollars per $100 of taxable |
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value calculated according to the following formula: |
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UNUSED INCREMENT RATE = (YEAR 1 FOREGONE REVENUE AMOUNT + |
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YEAR 2 FOREGONE REVENUE AMOUNT + YEAR 3 FOREGONE REVENUE AMOUNT) / |
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CURRENT TOTAL VALUE |
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SECTION 13. The following provisions are repealed: |
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(1) Section 45.0032(d), Education Code; |
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(2) Section 120.007(d), Local Government Code; |
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(3) Section 26.012(19), Tax Code; |
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(4) Section 26.013, Tax Code; |
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(5) Section 26.042, Tax Code; and |
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(6) Section 26.0501(c), Tax Code. |
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SECTION 14. This Act applies only to ad valorem taxes |
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imposed for an ad valorem tax year that begins on or after the |
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effective date of this Act. |
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SECTION 15. This Act takes effect January 1, 2026. |