| 1 | 1 | | 84R7888 SMH-D |
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| 2 | 2 | | By: Bettencourt S.B. No. 1692 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the establishment of a limit on the maximum ad valorem |
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| 8 | 8 | | tax rate of a county or municipality for a tax year based on |
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| 9 | 9 | | inflation and the rate of population growth. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Chapter 26, Tax Code, is amended by adding |
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| 12 | 12 | | Section 26.046 to read as follows: |
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| 13 | 13 | | Sec. 26.046. ANNUAL LIMIT ON TAX RATE OF COUNTY OR |
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| 14 | 14 | | MUNICIPALITY. (a) In this section: |
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| 15 | 15 | | (1) "Consumer price index" means the index that the |
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| 16 | 16 | | comptroller considers to most accurately report changes in the |
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| 17 | 17 | | purchasing power of the dollar for consumers in this state. |
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| 18 | 18 | | (2) "Inflation rate" means the amount, expressed in |
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| 19 | 19 | | decimal form rounded to the nearest thousandth, computed by |
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| 20 | 20 | | determining the percentage change in the consumer price index for |
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| 21 | 21 | | the most recent 12-month period for which the index can be |
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| 22 | 22 | | determined as compared to the consumer price index for the 12-month |
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| 23 | 23 | | period preceding that period. |
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| 24 | 24 | | (3) "Population growth rate" means the annual rate of |
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| 25 | 25 | | growth of a county's or municipality's population, as applicable, |
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| 26 | 26 | | as determined in accordance with the most recent annual population |
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| 27 | 27 | | estimates provided by the state demographer under Section 468.004, |
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| 28 | 28 | | Government Code, expressed in decimal form rounded to the nearest |
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| 29 | 29 | | thousandth. |
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| 30 | 30 | | (b) By July 1 or as soon thereafter as practicable, the |
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| 31 | 31 | | comptroller shall determine the rate of inflation in this state and |
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| 32 | 32 | | publish that rate in the Texas Register. |
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| 33 | 33 | | (c) The governing body of a county or municipality may not |
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| 34 | 34 | | adopt a tax rate for a tax year that exceeds the rate, expressed in |
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| 35 | 35 | | dollars per $100 of taxable value, computed by: |
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| 36 | 36 | | (1) multiplying the total amount of funds received by |
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| 37 | 37 | | the county or municipality from all sources during the preceding |
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| 38 | 38 | | tax year by the sum of 1 and the population growth rate; |
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| 39 | 39 | | (2) multiplying the amount computed under Subdivision |
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| 40 | 40 | | (1) by the sum of 1 and the inflation rate; |
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| 41 | 41 | | (3) subtracting from the amount computed under |
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| 42 | 42 | | Subdivision (2) the amount of revenue estimated to be received by |
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| 43 | 43 | | the county or municipality in the current tax year from all sources |
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| 44 | 44 | | other than ad valorem taxes; and |
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| 45 | 45 | | (4) dividing the amount computed under Subdivision (3) |
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| 46 | 46 | | by the current total value for the county or municipality. |
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| 47 | 47 | | (d) By August 7 or as soon thereafter as practicable, an |
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| 48 | 48 | | officer or employee designated by the governing body of a county or |
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| 49 | 49 | | municipality shall calculate the rate described by Subsection (c) |
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| 50 | 50 | | and submit the rate to the governing body of the county or |
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| 51 | 51 | | municipality. |
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| 52 | 52 | | (e) Notwithstanding Subsection (c), the governing body of a |
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| 53 | 53 | | county or municipality may adopt a tax rate for a tax year that |
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| 54 | 54 | | exceeds the rate computed under that subsection if: |
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| 55 | 55 | | (1) before the adoption of a tax rate for that tax year |
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| 56 | 56 | | the county or municipality pledged the taxes for payment of a debt; |
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| 57 | 57 | | and |
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| 58 | 58 | | (2) adopting a rate less than or equal to the rate |
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| 59 | 59 | | computed under that subsection would impair the obligation of the |
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| 60 | 60 | | contract creating the debt. |
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| 61 | 61 | | SECTION 2. (a) The change in law made by this Act applies to |
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| 62 | 62 | | the ad valorem tax rate of a county or municipality beginning with |
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| 63 | 63 | | the 2015 tax year, except as provided by Subsection (b) of this |
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| 64 | 64 | | section. |
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| 65 | 65 | | (b) If the governing body of a county or municipality |
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| 66 | 66 | | adopted an ad valorem tax rate for the county or municipality for |
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| 67 | 67 | | the 2015 tax year before the effective date of this Act, the change |
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| 68 | 68 | | in law made by this Act applies to the ad valorem tax rate of that |
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| 69 | 69 | | county or municipality beginning with the 2016 tax year, and the law |
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| 70 | 70 | | in effect when the tax rate was adopted applies to the 2015 tax year |
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| 71 | 71 | | with respect to that county or municipality. |
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| 72 | 72 | | SECTION 3. This Act takes effect immediately if it receives |
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| 73 | 73 | | a vote of two-thirds of all the members elected to each house, as |
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| 74 | 74 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 75 | 75 | | Act does not receive the vote necessary for immediate effect, this |
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| 76 | 76 | | Act takes effect September 1, 2015. |
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