Texas 2017 - 85th Regular

Texas House Bill HB345 Compare Versions

Only one version of the bill is available at this time.

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1	1	85R1720 SMH-D
2	2	By: Canales H.B. No. 345
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the calculation of the ad valorem rollback tax rate of a
8	8	taxing unit.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 26.012, Tax Code, is amended by adding
11	11	Subdivisions (2-a) and (10-a) to read as follows:
12	12	(2-a) "Consumer price index" means the average over a
13	13	calendar year of the index that the comptroller considers to most
14	14	accurately report changes in the purchasing power of the dollar for
15	15	consumers in this state.
16	16	(10-a) "Inflation rate" means the amount, expressed in
17	17	decimal form rounded to the nearest thousandth, computed by
18	18	determining the percentage change in the consumer price index for
19	19	the preceding calendar year as compared to the consumer price index
20	20	for the calendar year preceding that calendar year.
21	21	SECTION 2. Section 26.04, Tax Code, is amended by adding
22	22	Subsections (b-1) and (c-1) and amending Subsection (c) to read as
23	23	follows:
24	24	(b-1) By August 1 or as soon thereafter as practicable, the
25	25	comptroller shall determine the inflation rate for the current year
26	26	and publish the rate in the Texas Register.
27	27	(c) An officer or employee designated by the governing body
28	28	shall calculate the effective tax rate and the rollback tax rate for
29	29	the unit, where:
30	30	(1) "Effective tax rate" means a rate expressed in
31	31	dollars per $100 of taxable value calculated according to the
32	32	following formula:
33	33	EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
34	34	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
35	35	; and
36	36	(2) "Rollback tax rate" means a rate expressed in
37	37	dollars per $100 of taxable value calculated according to the
38	38	following formula:
39	39	ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
40	40	OPERATIONS RATE x 1.05 [1.08]) + CURRENT DEBT RATE
41	41	(c-1) Notwithstanding any other provision of this section,
42	42	if the inflation rate exceeds five percent, the designated officer
43	43	or employee shall substitute the amount equal to the sum of one and
44	44	the lesser of the inflation rate or 0.08 for "1.05" in the
45	45	calculation of the rollback tax rate.
46	46	SECTION 3. Section 26.041, Tax Code, is amended by amending
47	47	Subsections (a), (b), and (c) and adding Subsection (c-1) to read as
48	48	follows:
49	49	(a) In the first year in which an additional sales and use
50	50	tax is required to be collected, the effective tax rate and rollback
51	51	tax rate for the unit are calculated according to the following
52	52	formulas:
53	53	EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
54	54	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] -
55	55	SALES TAX GAIN RATE
56	56	and
57	57	ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
58	58	OPERATIONS RATE x 1.05 [1.08]) + CURRENT DEBT RATE -
59	59	SALES TAX GAIN RATE
60	60	where "sales tax gain rate" means a number expressed in dollars per
61	61	$100 of taxable value, calculated by dividing the revenue that will
62	62	be generated by the additional sales and use tax in the following
63	63	year as calculated under Subsection (d) [of this section] by the
64	64	current total value.
65	65	(b) Except as provided by Subsections (a) and (c) [of this
66	66	section], in a year in which a taxing unit imposes an additional
67	67	sales and use tax the rollback tax rate for the unit is calculated
68	68	according to the following formula, regardless of whether the unit
69	69	levied a property tax in the preceding year:
70	70	ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
71	71	OPERATIONS EXPENSE x 1.05 [1.08]) / ([TOTAL] CURRENT
72	72	TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE
73	73	- SALES TAX REVENUE RATE)
74	74	where "last year's maintenance and operations expense" means the
75	75	amount spent for maintenance and operations from property tax and
76	76	additional sales and use tax revenues in the preceding year, and
77	77	"sales tax revenue rate" means a number expressed in dollars per
78	78	$100 of taxable value, calculated by dividing the revenue that will
79	79	be generated by the additional sales and use tax in the current year
80	80	as calculated under Subsection (d) [of this section] by the current
81	81	total value.
82	82	(c) In a year in which a taxing unit that has been imposing
83	83	an additional sales and use tax ceases to impose an additional sales
84	84	and use tax the effective tax rate and rollback tax rate for the
85	85	unit are calculated according to the following formulas:
86	86	EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
87	87	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
88	88	SALES TAX LOSS RATE
89	89	and
90	90	ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
91	91	OPERATIONS EXPENSE x 1.05 [1.08]) / ([TOTAL] CURRENT
92	92	TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
93	93	where "sales tax loss rate" means a number expressed in dollars per
94	94	$100 of taxable value, calculated by dividing the amount of sales
95	95	and use tax revenue generated in the last four quarters for which
96	96	the information is available by the current total value and "last
97	97	year's maintenance and operations expense" means the amount spent
98	98	for maintenance and operations from property tax and additional
99	99	sales and use tax revenues in the preceding year.
100	100	(c-1) Notwithstanding any other provision of this section,
101	101	if the inflation rate exceeds five percent, the designated officer
102	102	or employee shall substitute the amount equal to the sum of one and
103	103	the lesser of the inflation rate or 0.08 for "1.05" in the
104	104	calculation of the rollback tax rate.
105	105	SECTION 4. Section 8876.152(b), Special District Local Laws
106	106	Code, is amended to read as follows:
107	107	(b) Sections 49.236(a)(1) and (2) and (b) [Section 49.236],
108	108	Water Code, apply [as added by Chapter 248 (H.B. 1541), Acts of the
109	109	78th Legislature, Regular Session, 2003, applies] to the district.
110	110	SECTION 5. Section 49.236, Water Code, as added by Chapter
111	111	335 (S.B. 392), Acts of the 78th Legislature, Regular Session,
112	112	2003, is amended by amending Subsections (a) and (d) and adding
113	113	Subsection (e) to read as follows:
114	114	(a) Before the board adopts an ad valorem tax rate for the
115	115	district for debt service, operation and maintenance purposes, or
116	116	contract purposes, the board shall give notice of each meeting of
117	117	the board at which the adoption of a tax rate will be considered.
118	118	The notice must:
119	119	(1) contain a statement in substantially the following
120	120	form:
121	121	"NOTICE OF PUBLIC HEARING ON TAX RATE
122	122	"The (name of the district) will hold a public hearing on a
123	123	proposed tax rate for the tax year (year of tax levy) on (date and
124	124	time) at (meeting place). Your individual taxes may increase or
125	125	decrease, depending on the change in the taxable value of your
126	126	property in relation to the change in taxable value of all other
127	127	property and the tax rate that is adopted.
128	128	"(Names of all board members and, if a vote was taken, an
129	129	indication of how each voted on the proposed tax rate and an
130	130	indication of any absences.)";
131	131	(2) contain the following information:
132	132	(A) the district's total adopted tax rate for the
133	133	preceding year and the proposed tax rate, expressed as an amount per
134	134	$100;
135	135	(B) the difference, expressed as an amount per
136	136	$100 and as a percent increase or decrease, as applicable, in the
137	137	proposed tax rate compared to the adopted tax rate for the preceding
138	138	year;
139	139	(C) the average appraised value of a residence
140	140	homestead in the district in the preceding year and in the current
141	141	year; the district's total homestead exemption, other than an
142	142	exemption available only to disabled persons or persons 65 years of
143	143	age or older, applicable to that appraised value in each of those
144	144	years; and the average taxable value of a residence homestead in the
145	145	district in each of those years, disregarding any homestead
146	146	exemption available only to disabled persons or persons 65 years of
147	147	age or older;
148	148	(D) the amount of tax that would have been
149	149	imposed by the district in the preceding year on a residence
150	150	homestead appraised at the average appraised value of a residence
151	151	homestead in that year, disregarding any homestead exemption
152	152	available only to disabled persons or persons 65 years of age or
153	153	older;
154	154	(E) the amount of tax that would be imposed by the
155	155	district in the current year on a residence homestead appraised at
156	156	the average appraised value of a residence homestead in that year,
157	157	disregarding any homestead exemption available only to disabled
158	158	persons or persons 65 years of age or older, if the proposed tax
159	159	rate is adopted; [and]
160	160	(F) the difference between the amounts of tax
161	161	calculated under Paragraphs (D) and (E), expressed in dollars and
162	162	cents and described as the annual percentage increase or decrease,
163	163	as applicable, in the tax to be imposed by the district on the
164	164	average residence homestead in the district in the current year if
165	165	the proposed tax rate is adopted; and
166	166	(G) if the proposed combined debt service,
167	167	operation and maintenance, and contract tax rate exceeds the
168	168	rollback tax rate, a description of the purpose of the proposed tax
169	169	increase; and
170	170	(3) contain a statement in substantially the following
171	171	form:
172	172	"NOTICE OF TAXPAYERS' RIGHT TO ROLLBACK ELECTION
173	173	"If operation and maintenance taxes on the average residence
174	174	homestead increase by more than five [eight] percent, the qualified
175	175	voters of the district by petition may require that an election be
176	176	held to determine whether to reduce the [operation and maintenance]
177	177	tax rate to the rollback tax rate under Section 49.236(d), Water
178	178	Code."
179	179	(d) If the governing body of a district adopts a combined
180	180	debt service, operation and maintenance, and contract tax rate that
181	181	exceeds the rollback tax rate [would impose more than 1.08 times the
182	182	amount of tax imposed by the district in the preceding year on a
183	183	residence homestead appraised at the average appraised value of a
184	184	residence homestead in the district in that year, disregarding any
185	185	homestead exemption available only to disabled persons or persons
186	186	65 years of age or older], the qualified voters of the district by
187	187	petition may require that an election be held to determine whether
188	188	[or not] to reduce the tax rate adopted for the current year to the
189	189	rollback tax rate in accordance with the procedures provided by
190	190	Sections 26.07(b)-(g) and 26.081, Tax Code. For purposes of
191	191	Sections 26.07(b)-(g) and this section [subsection], the rollback
192	192	tax rate is the sum of the following tax rates:
193	193	(1) the current year's debt service tax rate;
194	194	(2) the current year's [and] contract tax rate; and
195	195	(3) [rates plus] the operation and maintenance tax
196	196	rate that would impose 1.05 [1.08] times the amount of the operation
197	197	and maintenance tax imposed by the district in the preceding year on
198	198	a residence homestead appraised at the average appraised value of a
199	199	residence homestead in the district in that year, disregarding any
200	200	homestead exemption available only to disabled persons or persons
201	201	65 years of age or older.
202	202	(e) Notwithstanding any other provision of this section, if
203	203	the inflation rate as determined by the comptroller under Section
204	204	26.04(b-1), Tax Code, exceeds five percent, the board shall
205	205	substitute "the lesser of the inflation rate or eight percent" for
206	206	"five percent" in Subsection (a) of this section and the amount
207	207	equal to the sum of one and the lesser of the inflation rate as
208	208	determined by the comptroller under Section 26.04(b-1), Tax Code,
209	209	or 0.08 for "1.05" in Subsection (d) of this section.
210	210	SECTION 6. The following provisions are repealed:
211	211	(1) Section 49.236, Water Code, as added by Chapter
212	212	248 (H.B. 1541), Acts of the 78th Legislature, Regular Session,
213	213	2003; and
214	214	(2) Section 49.2361, Water Code.
215	215	SECTION 7. (a) The change in law made by this Act applies to
216	216	the ad valorem tax rate of a taxing unit beginning with the 2017 tax
217	217	year, except as provided by Subsection (b) of this section.
218	218	(b) If the governing body of a taxing unit adopted an ad
219	219	valorem tax rate for the taxing unit for the 2017 tax year before
220	220	the effective date of this Act, the change in law made by this Act
221	221	applies to the ad valorem tax rate of that taxing unit beginning
222	222	with the 2018 tax year, and the law in effect when the tax rate was
223	223	adopted applies to the 2017 tax year with respect to that taxing
224	224	unit.
225	225	SECTION 8. This Act takes effect immediately if it receives
226	226	a vote of two-thirds of all the members elected to each house, as
227	227	provided by Section 39, Article III, Texas Constitution. If this
228	228	Act does not receive the vote necessary for immediate effect, this
229	229	Act takes effect on the 91st day after the last day of the
230	230	legislative session.