By: Elkins H.B. No. 365
A BILL TO BE ENTITLED
AN ACT
relating to the calculation of the ad valorem rollback tax rates of
certain taxing units.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 26.04, Tax Code, is amended by amending
Subsection (c) and adding Subsections (c-1) and (c-2) 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 1.04 [1.08]) + CURRENT DEBT RATE
(c-1) Notwithstanding any other provision of this section,
the designated officer or employee may substitute "1.08" for "1.04"
in the calculation of the rollback tax rate if:
(1) any part of the taxing unit is located in an area
declared a disaster area by the governor or the president of the
United States during the current tax year.
SECTION 2. Section 26.041, Tax Code, is amended by amending
Subsections (a), (b), and (c) and adding Subsections (c-1) and
(c-2) 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 1.04 [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 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 1.04 [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
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.
(c-1) Notwithstanding any other provision of this section,
the designated officer or employee may substitute "1.08" for "1.04"
in the calculation of the rollback tax rate if:
(1) any part of the taxing unit is located in an area
declared a disaster area by the governor or the president of the
United States during the current tax year.
SECTION 3. Section 26.08, Tax Code, is amended by amending
Subsections (a), (b), (d), (d-1) and (d-2) to read as follows:
Sec. 26.08. ELECTION TO RATIFY [SCHOOL] TAXES. (a) If the
governing body of a taxing unit [school district] adopts a tax rate
that exceeds the taxing unit's [district's] rollback tax rate, the
registered voters of the taxing unit [district] at an election held
for that purpose must determine whether to approve the adopted tax
rate. When increased expenditure of money by a taxing unit [school
district] is necessary to respond to a disaster, including a
tornado, hurricane, flood, or other calamity, but not including a
drought, that has impacted a taxing unit [school district] and the
governor has requested federal disaster assistance for the area in
which the taxing unit [school district] is located, an election is
not required under this section to approve the tax rate adopted by
the governing body for the year following the year in which the
disaster occurs.
(b) The governing body shall order that the election be held
in the taxing unit [school district] on a date not less than 30 or
more than 90 days after the day on which it adopted the tax rate.
Section 41.001, Election Code, does not apply to the election
unless a 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 the ad valorem tax rate of $_____ per $100 valuation in
(name of taxing unit [school district]) for the current year, a rate
that is $_____ higher per $100 valuation than the school district
rollback tax rate." The ballot proposition must include the
adopted tax rate and the difference between that rate and the
rollback tax rate in the appropriate places.
(d) If the proposition is not approved as provided by
Subsection (c), the governing body may not adopt a tax rate for the
taxing unit [school district] for the current year that exceeds the
taxing unit's [school district's] rollback tax rate.
(d-1) If, after tax bills for the taxing unit [school
district] have been mailed, a proposition to approve the taxing
unit's [school district's] adopted tax rate is not approved by the
voters of the taxing unit [district] at an election held under this
section, on subsequent adoption of a new tax rate by the governing
body of the taxing unit [district], the assessor for the taxing unit
[school] shall prepare and mail corrected tax bills. The assessor
shall include with each 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.
(d-2) If a property owner pays taxes calculated using the
originally adopted tax rate of the taxing unit [school district]
and the proposition to approve the adopted tax rate is not approved
by voters, the taxing unit [school district] shall refund the
difference between the amount of taxes paid and the amount due under
the subsequently adopted rate if the difference between the amount
of taxes paid and the amount due under the subsequent rate is $1 or
more. If the difference between the amount of taxes paid and the
amount due under the subsequent rate is less than $1, the taxing
unit [school district] 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. 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 TAXPAYERS' RIGHT TO ROLLBACK ELECTION
"If 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."
(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 1.04 [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 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 1.04 [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.
(e) Notwithstanding any other provision of this section,
the board may substitute "eight percent" for "four percent" in
Subsection (a) and "1.08" for "1.04" in Subsection (d) if:
(1) any part of the district is located in an area
declared a disaster area by the governor or the president of the
United States during the current tax year.
SECTION 5. Section 26.07, Tax Code is repealed.
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 2015
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 2015 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 2016 tax year, and the law in effect when the tax rate was
adopted applies to the 2015 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.