84R7888 SMH-D
By: Bettencourt S.B. No. 1692
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a limit on the maximum ad valorem
tax rate of a county or municipality for a tax year based on
inflation and the rate of population growth.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 26, Tax Code, is amended by adding
Section 26.046 to read as follows:
Sec. 26.046. ANNUAL LIMIT ON TAX RATE OF COUNTY OR
MUNICIPALITY. (a) In this section:
(1) "Consumer price index" means the index that the
comptroller considers to most accurately report changes in the
purchasing power of the dollar for consumers in this state.
(2) "Inflation rate" means the amount, expressed in
decimal form rounded to the nearest thousandth, computed by
determining the percentage change in the consumer price index for
the most recent 12-month period for which the index can be
determined as compared to the consumer price index for the 12-month
period preceding that period.
(3) "Population growth rate" means the annual rate of
growth of a county's or municipality's population, as applicable,
as determined in accordance with the most recent annual population
estimates provided by the state demographer under Section 468.004,
Government Code, expressed in decimal form rounded to the nearest
thousandth.
(b) By July 1 or as soon thereafter as practicable, the
comptroller shall determine the rate of inflation in this state and
publish that rate in the Texas Register.
(c) The governing body of a county or municipality may not
adopt a tax rate for a tax year that exceeds the rate, expressed in
dollars per $100 of taxable value, computed by:
(1) multiplying the total amount of funds received by
the county or municipality from all sources during the preceding
tax year by the sum of 1 and the population growth rate;
(2) multiplying the amount computed under Subdivision
(1) by the sum of 1 and the inflation rate;
(3) subtracting from the amount computed under
Subdivision (2) the amount of revenue estimated to be received by
the county or municipality in the current tax year from all sources
other than ad valorem taxes; and
(4) dividing the amount computed under Subdivision (3)
by the current total value for the county or municipality.
(d) By August 7 or as soon thereafter as practicable, an
officer or employee designated by the governing body of a county or
municipality shall calculate the rate described by Subsection (c)
and submit the rate to the governing body of the county or
municipality.
(e) Notwithstanding Subsection (c), the governing body of a
county or municipality may adopt a tax rate for a tax year that
exceeds the rate computed under that subsection if:
(1) before the adoption of a tax rate for that tax year
the county or municipality pledged the taxes for payment of a debt;
and
(2) adopting a rate less than or equal to the rate
computed under that subsection would impair the obligation of the
contract creating the debt.
SECTION 2. (a) The change in law made by this Act applies to
the ad valorem tax rate of a county or municipality beginning with
the 2015 tax year, except as provided by Subsection (b) of this
section.
(b) If the governing body of a county or municipality
adopted an ad valorem tax rate for the county or municipality 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
county or municipality 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 county or municipality.
SECTION 3. 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, 2015.