By: Patrick S.B. No. 32
A BILL TO BE ENTITLED
AN ACT
relating to the rollback tax rate of a taxing unit other than a
school district and to voter approval of a proposed tax rate that
exceeds the rollback tax rate.
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 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 1.05 [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 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 1.05 [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 unit is calculated
according to the following formula, regardless of whether the unit
levied a property tax in the preceding year:
ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
OPERATIONS EXPENSE x 1.05 [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
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 1.05 [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 26.07, Tax Code, is amended to read as
follows:
Sec. 26.07. ELECTION TO RATIFY TAX [REPEAL] INCREASE OF
TAXING UNIT OTHER THAN SCHOOL DISTRICT. (a) The [If the]
governing body of a taxing unit other than a school district may not
adopt [adopts] a tax rate that exceeds the rollback tax rate
calculated as provided by this chapter without voter approval as
provided by this section. To adopt a tax rate that exceeds the
rollback tax rate, the governing body must adopt the rate as a
proposed tax rate and call an election to permit[,] the qualified
voters of the taxing unit [by petition may require that an election
be held to determine whether or not] to approve or disapprove
[reduce] the proposed tax rate [adopted for the current year to the
rollback tax rate calculated as provided by this chapter].
(b) The [A petition is valid only if:
[(1) it states that it is intended to require an
election in the taxing unit on the question of reducing the tax rate
for the current year;
[(2) it is signed by a number of registered voters of
the taxing unit equal to at least:
[(A) seven percent of the number of registered
voters of the taxing unit according to the most recent list of
registered voters if the tax rate adopted for the current tax year
would impose taxes for maintenance and operations in an amount of at
least $5 million; or
[(B) 10 percent of the number of registered
voters of the taxing unit according to the most recent official list
of registered voters if the tax rate adopted for the current tax
year would impose taxes for maintenance and operations in an amount
of less than $5 million; and
[(3) it is submitted to the governing body on or before
the 90th day after the date on which the governing body adopted the
tax rate for the current year.
[(c) Not later than the 20th day after the day a petition is
submitted, the governing body shall determine whether or not the
petition is valid and pass a resolution stating its finding. If the
governing body fails to act within the time allowed, the petition is
treated as if it had been found valid.
[(d) If the] governing body [finds that the petition is
valid (or fails to act within the time allowed), it] shall order
that the [an] election be held in the taxing unit on a date not less
than 30 or more than 90 days after the [last] day on which the
governing body adopted the proposed tax rate. Section 41.001,
Election Code, [it could have acted to approve or disapprove the
petition. A state law requiring local elections to be held on a
specified date] does not apply to the election unless a [specified]
date specified by that section falls within the time permitted by
this section. At the election, the ballots shall be prepared to
permit voting for or against the proposition: "Approving
["Reducing] the proposed ad valorem tax rate of $_____ per $100
valuation in (name of taxing unit) for the current year, a rate that
is $_____ higher per $100 valuation than the [from (the rate
adopted) to (the] rollback tax rate [calculated as provided by this
chapter)]." The ballot proposition must include the proposed tax
rate and the difference between that rate and the rollback tax rate
in the appropriate places.
(c) [(e)] If a majority of the votes cast [qualified voters
voting on the question] in the election favor the proposition, the
proposition is approved and the tax rate for the [taxing unit for
the] current year is the proposed [rollback] tax rate that was
[calculated as provided by this chapter; otherwise, the tax rate
for the current year is the one] adopted by the governing body.
(d) [(f)] If the proposition is not approved as provided by
Subsection (c), the governing body may not adopt a tax rate for the
taxing unit for the current year that exceeds the taxing unit's
rollback tax rate [is reduced by an election called under this
section after tax bills for the unit are mailed, the assessor for
the unit shall prepare and mail corrected tax bills. He shall
include with the bill a brief explanation of the reason for and
effect of the corrected bill. The date on which the taxes become
delinquent for the year is extended by a number of days equal to the
number of days between the date the first tax bills were sent and
the date the corrected tax bills were sent].
[(g) If a property owner pays taxes calculated using the
higher tax rate when the rate is reduced by an election called under
this section, the taxing unit shall refund the difference between
the amount of taxes paid and the amount due under the reduced rate
if the difference between the amount of taxes paid and the amount
due under the reduced rate is $1 or more. If the difference between
the amount of taxes paid and the amount due under the reduced rate
is less than $1, the taxing unit shall refund the difference on
request of the taxpayer. An application for a refund of less than
$1 must be made within 90 days after the date the refund becomes due
or the taxpayer forfeits the right to the refund.]
SECTION 4. Sections 31.12(a) and (b), Tax Code, are amended
to read as follows:
(a) If a refund of a tax provided by Section 11.431(b),
[26.07(g),] 26.15(f), 31.11, or 31.111 is paid on or before the 60th
day after the date the liability for the refund arises, no interest
is due on the amount refunded. If not paid on or before that 60th
day, the amount of the tax to be refunded accrues interest at a rate
of one percent for each month or part of a month that the refund is
unpaid, beginning with the date on which the liability for the
refund arises.
(b) For purposes of this section, liability for a refund
arises:
(1) if the refund is required by Section 11.431(b), on
the date the chief appraiser notifies the collector for the unit of
the approval of the late homestead exemption;
(2) [if the refund is required by Section 26.07(g), on
the date the results of the election to reduce the tax rate are
certified;
[(3)] if the refund is required by Section 26.15(f):
(A) for a correction to the tax roll made under
Section 26.15(b), on the date the change in the tax roll is
certified to the assessor for the taxing unit under Section 25.25;
or
(B) for a correction to the tax roll made under
Section 26.15(c), on the date the change in the tax roll is ordered
by the governing body of the taxing unit;
(3) [(4)] if the refund is required by Section 31.11,
on the date the auditor for the taxing unit determines that the
payment was erroneous or excessive or, if the amount of the refund
exceeds the applicable amount specified by Section 31.11(a), on the
date the governing body of the unit approves the refund; or
(4) [(5)] if the refund is required by Section 31.111,
on the date the collector for the taxing unit determines that the
payment was erroneous.
SECTION 5. Section 33.08(b), Tax Code, is amended to read as
follows:
(b) The governing body of the taxing unit or appraisal
district, in the manner required by law for official action, may
provide that taxes that become delinquent on or after June 1 under
Section [26.07(f),] 26.15(e), 31.03, 31.031, 31.032, 31.04, or
42.42 incur an additional penalty to defray costs of
collection. The amount of the penalty may not exceed the amount of
the compensation specified in the applicable contract with an
attorney under Section 6.30 to be paid in connection with the
collection of the delinquent taxes.
SECTION 6. Section 1101.254(f), Special District Local Laws
Code, as effective April 1, 2013, is amended to read as follows:
(f) This section does not affect the applicability of [any
rights district voters may have to petition for an election under]
Section 26.07, Tax Code, to the district's tax rate, except that if
district voters approve a tax rate increase under this section,
[the voters may not petition for an election under] Section 26.07,
Tax Code, does not apply [as] to the tax rate for that year.
SECTION 7. Section 49.236, Water Code, as added by Chapters
248 (H.B. 1541) and 335 (S.B. 392), Acts of the 78th Legislature,
Regular Session, 2003, is reenacted and amended to read as follows:
Sec. 49.236. NOTICE OF TAX HEARING. (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
(3) contain a statement in substantially the following
form:
"NOTICE OF VOTE ON TAX RATE [TAXPAYERS' RIGHT TO
ROLLBACK ELECTION]
"If taxes on the average residence homestead increase by more
than five [eight] percent, [the qualified voters of the district by
petition may require that] an election must be held to determine
whether to ratify [reduce] the operation and maintenance tax rate
[to the rollback tax rate] under Section 49.236(d), Water Code."
(b) Notice of the hearing shall be:
(1) published at least once in a newspaper having
general circulation in the district at least seven days before the
date of the hearing; or
(2) mailed to each owner of taxable property in the
district, at the address for notice shown on the most recently
certified tax roll of the district, at least 10 days before the date
of the hearing.
(c) The notice provided under this section may not be
smaller than one-quarter page of a standard-size or tabloid-size
newspaper of general circulation, and the headline on the notice
must be in 18-point or larger type.
(d) If the governing body of a district adopts a combined
debt service, operation and maintenance, and contract tax rate that
would impose more than 1.05 [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 must be held to determine whether [or not]
to ratify [reduce] the tax rate adopted for the current year [to the
rollback tax rate] in accordance with the procedures provided by
Section 26.07 [Sections 26.07(b)-(g) and 26.081], Tax Code. For
purposes of Section 26.07, Tax Code, [Sections 26.07(b)-(g)] and
this subsection, the rollback tax rate is the current year's debt
service and contract tax rates plus the operation and maintenance
tax rate that would impose 1.05 [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 8. Section 1063.255, Special District Local Laws
Code, is repealed.
SECTION 9. (a) The change in law made by this Act applies to
the ad valorem tax rate of a taxing unit beginning with the 2013 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 2013 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 2014 tax year, and the law in effect when the tax rate was
adopted applies to the 2013 tax year with respect to that taxing
unit.
SECTION 10. 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 September 1, 2013.