84R586 SMH-D
By: Bettencourt S.B. No. 766
A BILL TO BE ENTITLED
AN ACT
relating to the calculation of certain ad valorem tax rates of a
taxing unit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 26.04(c), (e), and (e-1), Tax Code, are
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 / (CURRENT TOTAL
VALUE - NEW PROPERTY VALUE) [(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:
(A) the following formula for a taxing unit other
than a school district:
ROLLBACK TAX RATE = EFFECTIVE TAX RATE x 1.08 [(EFFECTIVE
MAINTENANCE AND OPERATIONS RATE x 1.08) + CURRENT DEBT RATE]
; or
(B) Section 26.08 for a school district.
(e) By August 7 or as soon thereafter as practicable, the
designated officer or employee shall submit the rates to the
governing body. The designated officer or employee [He] shall
deliver by mail to each property owner in the unit or publish in a
newspaper in the form prescribed by the comptroller:
(1) the effective tax rate, the rollback tax rate, and
an explanation of how they were calculated;
(2) the estimated amount of interest and sinking fund
balances and the estimated amount of maintenance and operation or
general fund balances remaining at the end of the current fiscal
year that are not encumbered with or by corresponding existing debt
obligation;
(3) a schedule of the unit's debt obligations showing:
(A) the amount of principal and interest that
will be paid to service the unit's debts in the next year from
property tax revenue, including payments of lawfully incurred
contractual obligations providing security for the payment of the
principal of and interest on bonds and other evidences of
indebtedness issued on behalf of the unit by another political
subdivision and, if the unit is created under Section 52, Article
III, or Section 59, Article XVI, Texas Constitution, payments on
debts that the unit anticipates to incur in the next calendar year;
(B) the amount by which taxes imposed for debt
are to be increased because of the unit's anticipated collection
rate; and
(C) the total of the amounts listed in Paragraphs
(A)-(B), less any amount collected in excess of the previous year's
anticipated collections certified as provided in Subsection (b);
(4) the amount of additional sales and use tax revenue
anticipated in calculations under Section 26.041; and
(5) a statement that the adoption of a tax rate equal
to the effective tax rate would result in an increase or decrease,
as applicable, in the amount of taxes imposed by the unit as
compared to last year's levy, and the amount of the increase or
decrease[;
[(6) in the year that a taxing unit calculates an
adjustment under Subsection (i) or (j), a schedule that includes
the following elements:
[(A) the name of the unit discontinuing the
department, function, or activity;
[(B) the amount of property tax revenue spent by
the unit listed under Paragraph (A) to operate the discontinued
department, function, or activity in the 12 months preceding the
month in which the calculations required by this chapter are made;
and
[(C) the name of the unit that operates a
distinct department, function, or activity in all or a majority of
the territory of a taxing unit that has discontinued operating the
distinct department, function, or activity; and
[(7) in the year following the year in which a taxing
unit raised its rollback rate as required by Subsection (j), a
schedule that includes the following elements:
[(A) the amount of property tax revenue spent by
the unit to operate the department, function, or activity for which
the taxing unit raised the rollback rate as required by Subsection
(j) for the 12 months preceding the month in which the calculations
required by this chapter are made; and
[(B) the amount published by the unit in the
preceding tax year under Subdivision (6)(B)].
(e-1) The notice requirements imposed by Subsection (e)
[Subsections (e)(1)-(6)] do not apply to a school district.
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 / (CURRENT TOTAL
VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN RATE
[(LAST YEAR'S LEVY - LOST PROPERTY LEVY) / (CURRENT
TOTAL VALUE - NEW PROPERTY VALUE) - SALES TAX GAIN
RATE]
and
ROLLBACK TAX RATE = (EFFECTIVE TAX RATE x 1.08) - SALES
TAX GAIN RATE [(EFFECTIVE MAINTENANCE AND OPERATIONS
RATE x 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 EXPENSE x 1.08) /
(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX
REVENUE RATE [[(LAST YEAR'S MAINTENANCE AND OPERATIONS
EXPENSE x 1.08) / (TOTAL CURRENT 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 / (CURRENT TOTAL
VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS 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 EXPENSE x 1.08) /
(CURRENT TOTAL VALUE - NEW PROPERTY VALUE) [[(LAST
YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) /
(TOTAL CURRENT 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. Sections 26.044(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) The first time that a county adopts a tax rate after
September 1, 1991, in which the state criminal justice mandate
applies to the county, the effective maintenance and operation rate
and effective tax rate for the county are [is] increased by the rate
calculated according to the following formula:
(State Criminal Justice Mandate) / (Current Total
Value - New Property Value)
(b) In the second and subsequent years that a county adopts
a tax rate, if the amount spent by the county for the state criminal
justice mandate increased over the previous year, the effective
maintenance and operation rate and effective tax rate for the
county are [is] increased by the rate calculated according to the
following formula:
(This Year's State Criminal Justice Mandate - Previous
Year's State Criminal Justice Mandate) / (Current
Total Value - New Property Value)
(c) The county shall include a notice of the increase in the
effective maintenance and operation rate and effective tax rate
provided by this section, including a description and amount of the
state criminal justice mandate, in the information published under
Section 26.04(e) and Section 26.06(b) [of this code].
SECTION 4. Sections 26.0441(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) In the first tax year in which a taxing unit adopts a tax
rate after January 1, 2000, and in which the enhanced minimum
eligibility standards for indigent health care established under
Section 61.006, Health and Safety Code, apply to the taxing unit,
the effective maintenance and operations rate and effective tax
rate for the taxing unit are [is] increased by the rate computed
according to the following formula:
Amount of Increase = Enhanced Indigent Health Care
Expenditures / (Current Total Value - New Property
Value)
(b) In each subsequent tax year, if the taxing unit's
enhanced indigent health care expenses exceed the amount of those
expenses for the preceding year, the effective maintenance and
operations rate and effective tax rate for the taxing unit are [is]
increased by the rate computed according to the following formula:
Amount of Increase = (Current Tax Year's Enhanced
Indigent Health Care Expenditures - Preceding Tax
Year's Indigent Health Care Expenditures) / (Current
Total Value - New Property Value)
(c) The taxing unit shall include a notice of the increase
in its effective maintenance and operations rate and effective tax
rate provided by this section, including a brief description and
the amount of the enhanced indigent health care expenditures, in
the information published under Section 26.04(e) and, if
applicable, Section 26.06(b).
SECTION 5. Section 26.08(n), Tax Code, is amended to read as
follows:
(n) For purposes of this section, the rollback tax rate of a
school district [whose maintenance and operations tax rate for the
2005 tax year was $1.50 or less per $100 of taxable value] is equal
to the amount computed by multiplying the effective tax rate of the
district by 1.04[:
[(1) for the 2006 tax year, the sum of the rate that is
equal to 88.67 percent of the maintenance and operations tax rate
adopted by the district for the 2005 tax year, the rate of $0.04 per
$100 of taxable value, and the district's current debt rate; and
[(2) for the 2007 and subsequent tax years, the lesser
of the following:
[(A) the sum of the following:
[(i) the rate per $100 of taxable value that
is equal to the product of the state compression percentage, as
determined under Section 42.2516, Education Code, for the current
year and $1.50;
[(ii) the rate of $0.04 per $100 of taxable
value;
[(iii) the rate that is equal to the sum of
the differences for the 2006 and each subsequent tax year between
the adopted tax rate of the district for that year if the rate was
approved at an election under this section and the rollback tax rate
of the district for that year; and
[(iv) the district's current debt rate; or
[(B) the sum of the following:
[(i) the effective maintenance and
operations tax rate of the district as computed under Subsection
(i) or (k), as applicable;
[(ii) the rate per $100 of taxable value
that is equal to the product of the state compression percentage, as
determined under Section 42.2516, Education Code, for the current
year and $0.06; and
[(iii) the district's current debt rate].
SECTION 6. Section 42.2522(e), Education Code, is amended
to read as follows:
(e) The commissioner shall notify school districts as soon
as practicable as to the availability of funds under this section.
[For purposes of computing a rollback tax rate under Section 26.08,
Tax Code, a district shall adjust the district's tax rate limit to
reflect assistance received under this section.]
SECTION 7. Section 45.261(e), Education Code, is amended to
read as follows:
(e) Any part of a school district's tax rate attributable to
producing revenue for purposes of Subsection (c)(1) is considered
part of the district's[:
[(1) current debt rate for purposes of computing a
rollback tax rate under Section 26.08, Tax Code; and
[(2)] interest and sinking fund tax rate.
SECTION 8. (a) The following provisions are repealed:
(1) Section 281.107(j), Health and Safety Code;
(2) Section 26.01(d), Tax Code;
(3) Sections 26.012(3), (4), (5), (10), and (15), Tax
Code;
(4) Section 26.03, Tax Code;
(5) Sections 26.04(i) and (j), Tax Code;
(6) Sections 26.08(e), (g), (h), (i), (i-1), (j), (o),
and (p), Tax Code; and
(7) Section 222.1071(l), Transportation Code.
(b) Section 57.29, Chapter 4 (S.B. 1), Acts of the 82nd
Legislature, 1st Called Session, 2011, which amended Subsection
(i), Section 26.08, Tax Code, is repealed.
SECTION 9. This Act applies to the ad valorem tax rate of a
taxing unit beginning with the 2016 tax year.
SECTION 10. This Act takes effect January 1, 2016.