Texas 2017 - 85th 1st C.S.

Texas House Bill HB4 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	85S11945 SMH-D
2		-	By: Bonnen of Brazoria, Raymond, Shine, H.B. No. 4
3		-	Murphy, Darby, et al.
4		-	Substitute the following for H.B. No. 4:
5		-	By: Springer C.S.H.B. No. 4
	1	+	85S10084 SMH-D
	2	+	By: Bonnen of Brazoria H.B. No. 4
6	3
7	4
8	5		A BILL TO BE ENTITLED
9	6		AN ACT
10	7		relating to the calculation of the ad valorem rollback tax rate of a
11	8		taxing unit and voter approval of a proposed tax rate that exceeds
12	9		the rollback tax rate.
13	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	11		SECTION 1. Section 26.012, Tax Code, is amended by adding
15	12		Subdivision (18) to read as follows:
16		-	(18) "Small taxing unit" means:
17		-	(A) a taxing unit, other than a school district,
18		-	for which the maintenance and operations tax rate proposed for the
19		-	current tax year:
20		-	(i) is two cents or less per $100 of taxable
	13	+	(18) "Small taxing unit" means a taxing unit, other
	14	+	than a school district, for which the maintenance and operations
	15	+	tax rate proposed for the current tax year:
	16	+	(A) is two cents or less per $100 of taxable
21	17		value; or
22		-	(ii) would impose taxes of $25 million or
23		-	less when applied to the current total value for the taxing unit; or
24		-	(B) a junior college district.
	18	+	(B) would impose taxes of $25 million or less
	19	+	when applied to the current total value for the taxing unit.
25	20		SECTION 2. Section 26.04, Tax Code, is amended by amending
26	21		Subsection (c) and adding Subsection (c-1) to read as follows:
27	22		(c) An officer or employee designated by the governing body
28	23		shall calculate the effective tax rate and the rollback tax rate for
29	24		the unit, where:
30	25		(1) "Effective tax rate" means a rate expressed in
31	26		dollars per $100 of taxable value calculated according to the
32	27		following formula:
33	28		EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
34	29		LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
35	30		; and
36	31		(2) "Rollback tax rate" means a rate expressed in
37	32		dollars per $100 of taxable value calculated according to the
38	33		following applicable formula:
39	34		(A) for a small taxing unit:
40	35		ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
41	36		OPERATIONS RATE x 1.08) + CURRENT DEBT RATE
42	37		; or
43	38		(B) for a taxing unit other than a small taxing
44	39		unit:
45	40		ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
46		-	OPERATIONS RATE x 1.06) + CURRENT DEBT RATE
	41	+	OPERATIONS RATE x 1.05) + CURRENT DEBT RATE
47	42		(c-1) Notwithstanding any other provision of this section,
48	43		the governing body of a taxing unit other than a small taxing unit
49	44		may direct the designated officer or employee to calculate the
50	45		rollback tax rate of the unit according to the formula applicable to
51	46		a small taxing unit if any part of the unit is located in an area
52	47		declared a disaster area during the current tax year by the governor
53		-	or by the president of the United States. The designated officer or
54		-	employee at the direction of the governing body may continue
55		-	calculating the rollback tax rate in the manner provided by this
56		-	subsection until the earlier of:
57		-	(1) the first tax year in which the total taxable value
58		-	of property taxable by the taxing unit as shown on the appraisal
59		-	roll for the taxing unit submitted by the assessor for the taxing
60		-	unit to the governing body exceeds the total taxable value of
61		-	property taxable by the taxing unit on January 1 of the tax year in
62		-	which the disaster occurred; or
63		-	(2) the third tax year after the tax year in which the
64		-	disaster occurred.
	48	+	or by the president of the United States.
65	49		SECTION 3. Section 26.041, Tax Code, is amended by amending
66	50		Subsections (a), (b), and (c) and adding Subsection (c-1) to read as
67	51		follows:
68	52		(a) In the first year in which an additional sales and use
69	53		tax is required to be collected, the effective tax rate and rollback
70	54		tax rate for the unit are calculated according to the following
71	55		formulas:
72	56		EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
73	57		LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] -
74	58		SALES TAX GAIN RATE
75	59		[and]
76	60		ROLLBACK TAX RATE FOR SMALL TAXING UNIT = (EFFECTIVE
77	61		MAINTENANCE AND OPERATIONS RATE x 1.08) + CURRENT DEBT
78	62		RATE - SALES TAX GAIN RATE
79	63		and
80	64		ROLLBACK TAX RATE FOR TAXING UNIT OTHER THAN SMALL
81	65		TAXING UNIT = (EFFECTIVE MAINTENANCE AND OPERATIONS
82		-	RATE x 1.06) + CURRENT DEBT RATE - SALES TAX GAIN RATE
	66	+	RATE x 1.05) + CURRENT DEBT RATE - SALES TAX GAIN RATE
83	67		where "sales tax gain rate" means a number expressed in dollars per
84	68		$100 of taxable value, calculated by dividing the revenue that will
85	69		be generated by the additional sales and use tax in the following
86	70		year as calculated under Subsection (d) [of this section] by the
87	71		current total value.
88	72		(b) Except as provided by Subsections (a) and (c) [of this
89	73		section], in a year in which a taxing unit imposes an additional
90	74		sales and use tax, the rollback tax rate for the unit is calculated
91	75		according to the following applicable formula, regardless of
92	76		whether the unit levied a property tax in the preceding year:
93	77		ROLLBACK TAX RATE FOR SMALL TAXING UNIT = [(LAST YEAR'S
94	78		MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / ([TOTAL]
95	79		CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT
96	80		DEBT RATE - SALES TAX REVENUE RATE)
97	81		or
98	82		ROLLBACK TAX RATE FOR TAXING UNIT OTHER THAN SMALL
99	83		TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS
100		-	EXPENSE x 1.06) / (CURRENT TOTAL VALUE - NEW PROPERTY
	84	+	EXPENSE x 1.05) / (CURRENT TOTAL VALUE - NEW PROPERTY
101	85		VALUE)] + (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
102	86		where "last year's maintenance and operations expense" means the
103	87		amount spent for maintenance and operations from property tax and
104	88		additional sales and use tax revenues in the preceding year, and
105	89		"sales tax revenue rate" means a number expressed in dollars per
106	90		$100 of taxable value, calculated by dividing the revenue that will
107	91		be generated by the additional sales and use tax in the current year
108	92		as calculated under Subsection (d) [of this section] by the current
109	93		total value.
110	94		(c) In a year in which a taxing unit that has been imposing
111	95		an additional sales and use tax ceases to impose an additional sales
112	96		and use tax, the effective tax rate and rollback tax rate for the
113	97		unit are calculated according to the following formulas:
114	98		EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
115	99		LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
116	100		SALES TAX LOSS RATE
117	101		[and]
118	102		ROLLBACK TAX RATE FOR SMALL TAXING UNIT = [(LAST YEAR'S
119	103		MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / ([TOTAL]
120	104		CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT
121	105		DEBT RATE
122	106		and
123	107		ROLLBACK TAX RATE FOR TAXING UNIT OTHER THAN SMALL
124	108		TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS
125		-	EXPENSE x 1.06) / (CURRENT TOTAL VALUE - NEW PROPERTY
	109	+	EXPENSE x 1.05) / (CURRENT TOTAL VALUE - NEW PROPERTY
126	110		VALUE)] + CURRENT DEBT RATE
127	111		where "sales tax loss rate" means a number expressed in dollars per
128	112		$100 of taxable value, calculated by dividing the amount of sales
129	113		and use tax revenue generated in the last four quarters for which
130	114		the information is available by the current total value and "last
131	115		year's maintenance and operations expense" means the amount spent
132	116		for maintenance and operations from property tax and additional
133	117		sales and use tax revenues in the preceding year.
134	118		(c-1) Notwithstanding any other provision of this section,
135	119		the governing body of a taxing unit other than a small taxing unit
136	120		may direct the designated officer or employee to calculate the
137	121		rollback tax rate of the unit according to the formula applicable to
138	122		a small taxing unit if any part of the unit is located in an area
139	123		declared a disaster area during the current tax year by the governor
140		-	or by the president of the United States. The designated officer or
141		-	employee at the direction of the governing body may continue
142		-	calculating the rollback tax rate in the manner provided by this
143		-	subsection until the earlier of:
144		-	(1) the first tax year in which the total taxable value
145		-	of property taxable by the taxing unit as shown on the appraisal
146		-	roll for the taxing unit submitted by the assessor for the taxing
147		-	unit to the governing body exceeds the total taxable value of
148		-	property taxable by the taxing unit on January 1 of the tax year in
149		-	which the disaster occurred; or
150		-	(2) the third tax year after the tax year in which the
151		-	disaster occurred.
	124	+	or by the president of the United States.
152	125		SECTION 4. The heading to Section 26.043, Tax Code, is
153	126		amended to read as follows:
154	127		Sec. 26.043. ROLLBACK AND EFFECTIVE TAX RATES [RATE] IN
155	128		CITY IMPOSING MASS TRANSIT SALES AND USE TAX.
156	129		SECTION 5. The heading to Section 26.07, Tax Code, is
157	130		amended to read as follows:
158	131		Sec. 26.07. ELECTION TO REDUCE TAX RATE OF SMALL TAXING UNIT
159	132		[REPEAL INCREASE].
160	133		SECTION 6. Section 26.07(a), Tax Code, is amended to read as
161	134		follows:
162	135		(a) If the governing body of a small taxing unit [other than
163	136		a school district] adopts a tax rate that exceeds the taxing unit's
164	137		rollback tax rate calculated as provided by this chapter, the
165	138		qualified voters of the taxing unit by petition may require that an
166	139		election be held to determine whether or not to reduce the tax rate
167	140		adopted for the current year to the rollback tax rate calculated as
168	141		provided by this chapter.
169	142		SECTION 7. The heading to Section 26.08, Tax Code, is
170	143		amended to read as follows:
171	144		Sec. 26.08. ELECTION TO APPROVE TAX RATE OF TAXING UNIT
172	145		OTHER THAN SMALL TAXING UNIT [RATIFY SCHOOL TAXES].
173	146		SECTION 8. Section 26.08, Tax Code, is amended by amending
174	147		Subsections (a), (b), (d), (d-1), (d-2), (e), and (h) and adding
175	148		Subsection (r) to read as follows:
176	149		(a) If the governing body of a taxing unit other than a small
177	150		taxing unit [school district] adopts a tax rate that exceeds the
178	151		taxing unit's [district's] rollback tax rate, the registered voters
179	152		of the taxing unit [district] at an election held for that purpose
180	153		must determine whether to approve the adopted tax rate. When
181		-	increased expenditure of money by a school district is necessary to
182		-	respond to a disaster, including a tornado, hurricane, flood, or
183		-	other calamity, but not including a drought, that has impacted the
184		-	[a] school district and the governor has requested federal disaster
185		-	assistance for the area in which the school district is located, an
186		-	election is not required under this section to approve the tax rate
187		-	adopted by the governing body for the year following the year in
188		-	which the disaster occurs.
	154	+	increased expenditure of money by a taxing unit [school district]
	155	+	is necessary to respond to a disaster, including a tornado,
	156	+	hurricane, flood, or other calamity, but not including a drought,
	157	+	that has impacted the taxing unit [a school district] and the
	158	+	governor has requested federal disaster assistance for the area in
	159	+	which the taxing unit [school district] is located, an election is
	160	+	not required under this section to approve the tax rate adopted by
	161	+	the governing body for the year following the year in which the
	162	+	disaster occurs.
189	163		(b) The governing body shall order that the election be held
190	164		in the taxing unit [school district] on a date not less than 30 or
191	165		more than 90 days after the day on which it adopted the tax rate.
192	166		Section 41.001, Election Code, does not apply to the election
193	167		unless a date specified by that section falls within the time
194	168		permitted by this section. At the election, the ballots shall be
195	169		prepared to permit voting for or against the proposition:
196	170		"Approving the ad valorem tax rate of $_____ per $100 valuation in
197	171		(name of taxing unit [school district]) for the current year, a rate
198	172		that is $_____ higher per $100 valuation than the [school district]
199	173		rollback tax rate of (name of taxing unit), for the purpose of
200	174		(description of purpose of increase)." The ballot proposition must
201	175		include the adopted tax rate and the difference between that rate
202	176		and the rollback tax rate in the appropriate places.
203	177		(d) If the proposition is not approved as provided by
204	178		Subsection (c), the governing body may not adopt a tax rate for the
205	179		taxing unit [school district] for the current year that exceeds the
206	180		taxing unit's [school district's] rollback tax rate.
207	181		(d-1) If, after tax bills for the taxing unit [school
208	182		district] have been mailed, a proposition to approve the taxing
209	183		unit's [school district's] adopted tax rate is not approved by the
210	184		voters of the taxing unit [district] at an election held under this
211	185		section, on subsequent adoption of a new tax rate by the governing
212	186		body of the taxing unit [district], the assessor for the taxing unit
213	187		[school] shall prepare and mail corrected tax bills. The assessor
214	188		shall include with each bill a brief explanation of the reason for
215	189		and effect of the corrected bill. The date on which the taxes
216	190		become delinquent for the year is extended by a number of days equal
217	191		to the number of days between the date the first tax bills were sent
218	192		and the date the corrected tax bills were sent.
219	193		(d-2) If a property owner pays taxes calculated using the
220	194		originally adopted tax rate of the taxing unit [school district]
221	195		and the proposition to approve the adopted tax rate is not approved
222	196		by the voters, the taxing unit [school district] shall refund the
223	197		difference between the amount of taxes paid and the amount due under
224	198		the subsequently adopted rate if the difference between the amount
225	199		of taxes paid and the amount due under the subsequent rate is $1 or
226	200		more. If the difference between the amount of taxes paid and the
227	201		amount due under the subsequent rate is less than $1, the taxing
228	202		unit [school district] shall refund the difference on request of
229	203		the taxpayer. An application for a refund of less than $1 must be
230	204		made within 90 days after the date the refund becomes due or the
231	205		taxpayer forfeits the right to the refund.
232	206		(e) For purposes of this section, local tax funds dedicated
233	207		to a junior college district under Section 45.105(e), Education
234	208		Code, shall be eliminated from the calculation of the tax rate
235	209		adopted by the governing body of a [the] school district. However,
236	210		the funds dedicated to the junior college district are subject to
237	211		Section 26.085.
238	212		(h) For purposes of this section, increases in taxable
239	213		values and tax levies occurring within a reinvestment zone under
240	214		Chapter 311 (Tax Increment Financing Act), in which a school [the]
241	215		district is a participant, shall be eliminated from the calculation
242	216		of the tax rate adopted by the governing body of the school
243	217		district.
244	218		(r) Except as otherwise expressly provided by law, this
245	219		section does not apply to a tax imposed by a taxing unit if a
246	220		provision of an uncodified local or special law enacted by the 85th
247	221		Legislature, Regular Session, 2017, or by an earlier legislature
248	222		provides that Section 26.07 does not apply to a tax imposed by the
249	223		taxing unit.
250	224		SECTION 9. Section 26.16(d), Tax Code, is amended to read as
251	225		follows:
252	226		(d) The county assessor-collector shall post immediately
253	227		below the table prescribed by Subsection (c) the following
254	228		statement:
255	229		"The county is providing this table of property tax rate
256	230		information as a service to the residents of the county. Each
257	231		individual taxing unit is responsible for calculating the property
258	232		tax rates listed in this table pertaining to that taxing unit and
259	233		providing that information to the county.
260	234		"The adopted tax rate is the tax rate adopted by the governing
261	235		body of a taxing unit.
262	236		"The maintenance and operations rate is the component of the
263	237		adopted tax rate of a taxing unit that will impose the amount of
264	238		taxes needed to fund maintenance and operation expenditures of the
265	239		unit for the following year.
266	240		"The debt rate is the component of the adopted tax rate of a
267	241		taxing unit that will impose the amount of taxes needed to fund the
268	242		unit's debt service for the following year.
269	243		"The effective tax rate is the tax rate that would generate
270	244		the same amount of revenue in the current tax year as was generated
271	245		by a taxing unit's adopted tax rate in the preceding tax year from
272	246		property that is taxable in both the current tax year and the
273	247		preceding tax year.
274	248		"The effective maintenance and operations rate is the tax
275	249		rate that would generate the same amount of revenue for maintenance
276	250		and operations in the current tax year as was generated by a taxing
277	251		unit's maintenance and operations rate in the preceding tax year
278	252		from property that is taxable in both the current tax year and the
279	253		preceding tax year.
280	254		"The rollback tax rate is the highest tax rate a taxing unit
281	255		may adopt before requiring voter approval at an election. In the
282	256		case of a small taxing unit [other than a school district], the
283	257		voters by petition may require that a rollback election be held if
284	258		the unit adopts a tax rate in excess of the unit's rollback tax
285	259		rate. In the case of a taxing unit other than a small taxing unit
286	260		[school district], an election will automatically be held if the
287	261		unit [district] wishes to adopt a tax rate in excess of the unit's
288	262		[district's] rollback tax rate."
289	263		SECTION 10. Sections 31.12(a) and (b), Tax Code, as amended
290	264		by S.B. 2242, Acts of the 85th Legislature, Regular Session, 2017,
291	265		are amended to read as follows:
292	266		(a) If a refund of a tax provided by Section 11.431(b),
293	267		26.07(g), 26.08(d-2), 26.15(f), 31.11, 31.111, or 31.112 is paid on
294	268		or before the 60th day after the date the liability for the refund
295	269		arises, no interest is due on the amount refunded. If not paid on or
296	270		before that 60th day, the amount of the tax to be refunded accrues
297	271		interest at a rate of one percent for each month or part of a month
298	272		that the refund is unpaid, beginning with the date on which the
299	273		liability for the refund arises.
300	274		(b) For purposes of this section, liability for a refund
301	275		arises:
302	276		(1) if the refund is required by Section 11.431(b), on
303	277		the date the chief appraiser notifies the collector for the unit of
304	278		the approval of the late homestead exemption;
305	279		(2) if the refund is required by Section 26.07(g), on
306	280		the date the results of the election to reduce the tax rate are
307	281		certified;
308	282		(3) if the refund is required by Section 26.08(d-2),
309	283		on the date the subsequent tax rate is adopted;
310	284		(4) if the refund is required by Section 26.15(f):
311	285		(A) for a correction to the tax roll made under
312	286		Section 26.15(b), on the date the change in the tax roll is
313	287		certified to the assessor for the taxing unit under Section 25.25;
314	288		or
315	289		(B) for a correction to the tax roll made under
316	290		Section 26.15(c), on the date the change in the tax roll is ordered
317	291		by the governing body of the taxing unit;
318	292		(5) [(4)] if the refund is required by Section 31.11,
319	293		on the date the auditor for the taxing unit determines that the
320	294		payment was erroneous or excessive or, if the amount of the refund
321	295		exceeds the applicable amount specified by Section 31.11(a), on the
322	296		date the governing body of the unit approves the refund;
323	297		(6) [(5)] if the refund is required by Section 31.111,
324	298		on the date the collector for the taxing unit determines that the
325	299		payment was erroneous; or
326	300		(7) [(6)] if the refund is required by Section 31.112,
327	301		on the date required by Section 31.112(d) or (e), as applicable.
328	302		SECTION 11. Section 33.08(b), Tax Code, is amended to read
329	303		as follows:
330	304		(b) The governing body of the taxing unit or appraisal
331	305		district, in the manner required by law for official action, may
332	306		provide that taxes that become delinquent on or after June 1 under
333	307		Section 26.07(f), 26.08(d-1), 26.15(e), 31.03, 31.031, 31.032,
334	308		31.04, or 42.42 incur an additional penalty to defray costs of
335	309		collection. The amount of the penalty may not exceed the amount of
336	310		the compensation specified in the applicable contract with an
337	311		attorney under Section 6.30 to be paid in connection with the
338	312		collection of the delinquent taxes.
339	313		SECTION 12. Section 130.016(b), Education Code, is amended
340	314		to read as follows:
341	315		(b) If the board of trustees of an independent school
342	316		district that divests itself of the management, control, and
343	317		operation of a junior college district under this section or under
344	318		Section 130.017 [of this code] was authorized by [Subsection (e)
345	319		of] Section 45.105(e) or under former Section 20.48(e) [20.48 of
346	320		this code] to dedicate a portion of its tax levy to the junior
347	321		college district before the divestment, the junior college district
348	322		may levy an ad valorem tax from and after the divestment. In the
349	323		first two years in which the junior college district levies an ad
350	324		valorem tax, the tax rate adopted by the governing body may not
351	325		exceed the rate that, if applied to the total taxable value
352	326		submitted to the governing body under Section 26.04, Tax Code,
353	327		would impose an amount equal to the amount of taxes of the school
354	328		district dedicated to the junior college under [Subsection (e) of]
355	329		Section 45.105(e) or former Section 20.48(e) [20.48 of this code]
356	330		in the last dedication before the divestment. In subsequent years,
357	331		the tax rate of the junior college district is subject to Section
358	332		26.07 or 26.08, Tax Code, as applicable.
359	333		SECTION 13. Sections 281.124(d) and (e), Health and Safety
360	334		Code, are amended to read as follows:
361	335		(d) If a majority of the votes cast in the election favor the
362	336		proposition, the tax rate for the specified tax year is the rate
363	337		approved by the voters, and that rate is not subject to a rollback
364	338		election under Section 26.07 or 26.08, Tax Code. The board shall
365	339		adopt the tax rate as provided by Chapter 26, Tax Code, as
366	340		applicable.
367	341		(e) If the proposition is not approved as provided by
368	342		Subsection (c), the board may not adopt a tax rate for the district
369	343		for the specified tax year that exceeds the rate that was not
370	344		approved, and Section 26.07 or 26.08, Tax Code, as applicable,
371	345		applies to the adopted rate if that rate exceeds the district's
372	346		rollback tax rate.
373	347		SECTION 14. Section 140.010, Local Government Code, is
374	348		amended by amending Subsections (a), (e), (f), and (g) and adding
375	349		Subsection (e-1) to read as follows:
376	350		(a) In this section:
377	351		(1) "Effective[, "effective] tax rate" and "rollback
378	352		tax rate" mean the effective tax rate and rollback tax rate of a
379	353		county or municipality, as applicable, as calculated under Chapter
380	354		26, Tax Code.
381	355		(2) "Small taxing unit" has the meaning assigned by
382	356		Section 26.012, Tax Code.
383	357		(e) A county or municipality that is a small taxing unit and
384	358		that proposes a property tax rate that exceeds the lower of the
385	359		effective tax rate or the rollback tax rate shall provide the
386	360		following notice:
387	361		"NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX
388	362		RATE FOR (INSERT NAME OF COUNTY OR MUNICIPALITY)
389	363		"A tax rate of $_____ per $100 valuation has been proposed for
390	364		adoption by the governing body of (insert name of county or
391	365		municipality). This rate exceeds the lower of the effective or
392	366		rollback tax rate, and state law requires that two public hearings
393	367		be held by the governing body before adopting the proposed tax rate.
394	368		The governing body of (insert name of county or municipality)
395	369		proposes to use revenue attributable to the tax rate increase for
396	370		the purpose of (description of purpose of increase).
397	371		PROPOSED TAX RATE$______ per $100
398	372		PRECEDING YEAR'S TAX RATE$______ per $100
399	373		EFFECTIVE TAX RATE$______ per $100
400	374		ROLLBACK TAX RATE$______ per $100
401	375		"The effective tax rate is the total tax rate needed to raise the
402	376		same amount of property tax revenue for (insert name of county or
403	377		municipality) from the same properties in both the (insert
404	378		preceding tax year) tax year and the (insert current tax year) tax
405	379		year.
406	380		"The rollback tax rate is the highest tax rate that (insert name of
407	381		county or municipality) may adopt before the voters are entitled to
408	382		petition for an election to limit the rate that may be approved to
409	383		the rollback tax rate.
410	384		"YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS
411	385		FOLLOWS:
412	386		property tax amount = (rate) x (taxable value of your property) /
413	387		100
414	388		"For assistance or detailed information about tax calculations,
415	389		please contact:
416	390		(insert name of county or municipal tax assessor-collector)
417	391		(insert name of county or municipality) tax
418	392		assessor-collector
419	393		(insert address)
420	394		(insert telephone number)
421	395		(insert e-mail address)
422	396		(insert Internet website address, if applicable)
423	397		"You are urged to attend and express your views at the following
424	398		public hearings on the proposed tax rate:
425	399		First Hearing: (insert date and time) at (insert location of
426	400		meeting).
427	401		Second Hearing: (insert date and time) at (insert location
428	402		of meeting)."
429	403		(e-1) A county or municipality that is not a small taxing
430	404		unit and that proposes a property tax rate that exceeds the lower of
431	405		the effective tax rate or the rollback tax rate shall provide the
432	406		following notice:
433	407		"NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX
434	408		RATE FOR (INSERT NAME OF COUNTY OR MUNICIPALITY)
435	409		"A tax rate of $_____ per $100 valuation has been proposed for
436	410		adoption by the governing body of (insert name of county or
437	411		municipality). This rate exceeds the lower of the effective or
438	412		rollback tax rate, and state law requires that two public hearings
439	413		be held by the governing body before adopting the proposed tax rate.
440	414		The governing body of (insert name of county or municipality)
441	415		proposes to use revenue attributable to the tax rate increase for
442	416		the purpose of (description of purpose of increase).
443	417		PROPOSED TAX RATE$______ per $100
444	418		PRECEDING YEAR'S TAX RATE$______ per $100
445	419		EFFECTIVE TAX RATE$______ per $100
446	420		ROLLBACK TAX RATE$______ per $100
447	421		"The effective tax rate is the total tax rate needed to raise the
448	422		same amount of property tax revenue for (insert name of county or
449	423		municipality) from the same properties in both the (insert
450	424		preceding tax year) tax year and the (insert current tax year) tax
451	425		year.
452	426		"The rollback tax rate is the highest tax rate that (insert name of
453	427		county or municipality) may adopt before the (insert "county" or
454	428		"city") is required to hold an election to limit the rate that may
455	429		be approved to the rollback tax rate.
456	430		"YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS
457	431		FOLLOWS:
458	432		property tax amount = (rate) x (taxable value of your property) /
459	433		100
460	434		"For assistance or detailed information about tax calculations,
461	435		please contact:
462	436		(insert name of county or municipal tax assessor-collector)
463	437		(insert name of county or municipality) tax
464	438		assessor-collector
465	439		(insert address)
466	440		(insert telephone number)
467	441		(insert e-mail address)
468	442		(insert Internet website address, if applicable)
469	443		"You are urged to attend and express your views at the following
470	444		public hearings on the proposed tax rate:
471	445		First Hearing: (insert date and time) at (insert location of
472	446		meeting).
473	447		Second Hearing: (insert date and time) at (insert location
474	448		of meeting)."
475	449		(f) A county or municipality shall:
476	450		(1) provide the notice required by Subsection (d),
477	451		[or] (e), or (e-1), as applicable, not later than the later of
478	452		September 1 or the 30th day after the first date that the taxing
479	453		unit has received each applicable certified appraisal roll by:
480	454		(A) publishing the notice in a newspaper having
481	455		general circulation in:
482	456		(i) the county, in the case of notice
483	457		published by a county; or
484	458		(ii) the county in which the municipality
485	459		is located or primarily located, in the case of notice published by
486	460		a municipality; or
487	461		(B) mailing the notice to each property owner in:
488	462		(i) the county, in the case of notice
489	463		provided by a county; or
490	464		(ii) the municipality, in the case of
491	465		notice provided by a municipality; and
492	466		(2) post the notice on the Internet website of the
493	467		county or municipality, if applicable, beginning not later than the
494	468		later of September 1 or the 30th day after the first date that the
495	469		taxing unit has received each applicable certified appraisal roll
496	470		and continuing until the county or municipality adopts a tax rate.
497	471		(g) If the notice required by Subsection (d), [or] (e), or
498	472		(e-1) is published in a newspaper:
499	473		(1) the notice may not be smaller than one-quarter
500	474		page of a standard-size or a tabloid-size newspaper; and
501	475		(2) the headline on the notice must be in 24-point or
502	476		larger type.
503	477		SECTION 15. Section 1122.2522, Special District Local Laws
504	478		Code, is amended by amending Subsection (a) and adding Subsection
505	479		(a-1) to read as follows:
506	480		(a) If in any year the board adopts a tax rate that exceeds
507	481		the rollback tax rate calculated as provided by Chapter 26, Tax
508	482		Code, and the district is a small taxing unit as defined by Section
509	483		26.012 of that code, the qualified voters of the district by
510	484		petition may require that an election be held to determine whether
511	485		or not to reduce the tax rate adopted by the board for that year to
512	486		the rollback tax rate.
513	487		(a-1) If in any year the board adopts a tax rate that exceeds
514	488		the rollback tax rate calculated as provided by Chapter 26, Tax
515	489		Code, and the district is not a small taxing unit as defined by
516	490		Section 26.012 of that code, an election must be held to determine
517	491		whether or not to approve the tax rate adopted by the board for that
518	492		year.
519	493		SECTION 16. Sections 3828.157 and 8876.152, Special
520	494		District Local Laws Code, are amended to read as follows:
521	495		Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE
522	496		PROVISIONS. Sections 26.04, 26.05, [and] 26.07, and 26.08, Tax
523	497		Code, do not apply to a tax imposed under Section 3828.153 or
524	498		3828.156.
525	499		Sec. 8876.152. APPLICABILITY OF CERTAIN TAX PROVISIONS.
526	500		(a) Sections 26.04, 26.05, 26.06, [and] 26.07, and 26.08, Tax Code,
527	501		do not apply to a tax imposed by the district.
528	502		(b) Sections 49.236(a)(1) and (2) and (b) [Section 49.236],
529	503		Water Code, apply [as added by Chapter 248 (H.B. 1541), Acts of the
530	504		78th Legislature, Regular Session, 2003, applies] to the district.
531	505		SECTION 17. Section 49.107(g), Water Code, is amended to
532	506		read as follows:
533	507		(g) Sections 26.04, 26.05, [and] 26.07, and 26.08, Tax Code,
534	508		do not apply to a tax levied and collected under this section or an
535	509		ad valorem tax levied and collected for the payment of the interest
536	510		on and principal of bonds issued by a district.
537	511		SECTION 18. Section 49.108(f), Water Code, is amended to
538	512		read as follows:
539	513		(f) Sections 26.04, 26.05, [and] 26.07, and 26.08, Tax Code,
540	514		do not apply to a tax levied and collected for payments made under a
541	515		contract approved in accordance with this section.
542	516		SECTION 19. Section 49.236, Water Code, as added by Chapter
543	517		335 (S.B. 392), Acts of the 78th Legislature, Regular Session,
544	518		2003, is amended by amending Subsections (a) and (d) and adding
545	519		Subsections (e), (f), (g), (h), (i), (j), (k), (l), and (m) to read
546	520		as follows:
547	521		(a) Before the board adopts an ad valorem tax rate for the
548	522		district for debt service, operation and maintenance purposes, or
549	523		contract purposes, the board shall give notice of each meeting of
550	524		the board at which the adoption of a tax rate will be considered.
551	525		The notice must:
552	526		(1) contain a statement in substantially the following
553	527		form:
554	528		"NOTICE OF PUBLIC HEARING ON TAX RATE
555	529		"The (name of the district) will hold a public hearing on a
556	530		proposed tax rate for the tax year (year of tax levy) on (date and
557	531		time) at (meeting place). Your individual taxes may increase or
558	532		decrease, depending on the change in the taxable value of your
559	533		property in relation to the change in taxable value of all other
560	534		property and the tax rate that is adopted.
561	535		"(Names of all board members and, if a vote was taken, an
562	536		indication of how each voted on the proposed tax rate and an
563	537		indication of any absences.)";
564	538		(2) contain the following information:
565	539		(A) the district's total adopted tax rate for the
566	540		preceding year and the proposed tax rate, expressed as an amount per
567	541		$100;
568	542		(B) the difference, expressed as an amount per
569	543		$100 and as a percent increase or decrease, as applicable, in the
570	544		proposed tax rate compared to the adopted tax rate for the preceding
571	545		year;
572	546		(C) the average appraised value of a residence
573	547		homestead in the district in the preceding year and in the current
574	548		year; the district's total homestead exemption, other than an
575	549		exemption available only to disabled persons or persons 65 years of
576	550		age or older, applicable to that appraised value in each of those
577	551		years; and the average taxable value of a residence homestead in
578	552		the district in each of those years, disregarding any homestead
579	553		exemption available only to disabled persons or persons 65 years of
580	554		age or older;
581	555		(D) the amount of tax that would have been
582	556		imposed by the district in the preceding year on a residence
583	557		homestead appraised at the average appraised value of a residence
584	558		homestead in that year, disregarding any homestead exemption
585	559		available only to disabled persons or persons 65 years of age or
586	560		older;
587	561		(E) the amount of tax that would be imposed by the
588	562		district in the current year on a residence homestead appraised at
589	563		the average appraised value of a residence homestead in that year,
590	564		disregarding any homestead exemption available only to disabled
591	565		persons or persons 65 years of age or older, if the proposed tax
592	566		rate is adopted; [and]
593	567		(F) the difference between the amounts of tax
594	568		calculated under Paragraphs (D) and (E), expressed in dollars and
595	569		cents and described as the annual percentage increase or decrease,
596	570		as applicable, in the tax to be imposed by the district on the
597	571		average residence homestead in the district in the current year if
598	572		the proposed tax rate is adopted; and
599	573		(G) if the proposed combined debt service,
600		-	operation and maintenance, and contract tax rate ~~authorizes~~ or
601		-	~~requires~~ an election in the district to approve the tax rate, a
	574	+	operation and maintenance, and contract tax rate requires or
	575	+	authorizes an election in the district to approve the tax rate, a
602	576		description of the purpose of the proposed tax increase; and
603	577		(3) contain a statement in substantially the following
604	578		form, as applicable:
605		-	(A) if the district is a small taxing unit:
	579	+	(A) if the district is not a small taxing unit:
	580	+	"NOTICE OF VOTE ON TAX RATE [TAXPAYERS' RIGHT TO ROLLBACK ELECTION]
	581	+	"If taxes on the average residence homestead increase by more
	582	+	than five [eight] percent, [the qualified voters of the district by
	583	+	petition may require that] an election must be held to determine
	584	+	whether to approve [reduce] the [operation and maintenance] tax
	585	+	rate [to the rollback tax rate] under Section 49.236(d), Water
	586	+	Code."; or
	587	+	(B) if the district is a small taxing unit:
606	588		"NOTICE OF TAXPAYERS' RIGHT TO ROLLBACK ELECTION
607	589		"If taxes on the average residence homestead increase by more
608	590		than eight percent, the qualified voters of the district by
609	591		petition may require that an election be held to determine whether
610		-	to approve [reduce] the [operation and maintenance] tax rate [to
611		-	the rollback tax rate] under Section 49.236(d), Water Code."; or
612		-	(B) if the district is a taxing unit other than a
613		-	small taxing unit:
614		-	"NOTICE OF VOTE ON TAX RATE
615		-	"If taxes on the average residence homestead increase by more
616		-	than six percent, an election must be held to determine whether to
617		-	approve the tax rate under Section 49.236(i), Water Code."
618		-	(d) This subsection and Subsections (e)-(h) apply to a
	592	+	to approve the tax rate under Section 49.236(e), Water Code."
	593	+	(d) This subsection applies to a district only if the
	594	+	district is not a small taxing unit. If the board [governing body]
	595	+	of the [a] district adopts a combined debt service, operation and
	596	+	maintenance, and contract tax rate that would impose more than 1.05
	597	+	[1.08] times the amount of tax imposed by the district in the
	598	+	preceding year on a residence homestead appraised at the average
	599	+	appraised value of a residence homestead in the district in that
	600	+	year, disregarding any homestead exemption available only to
	601	+	disabled persons or persons 65 years of age or older, [the qualified
	602	+	voters of the district by petition may require that] an election
	603	+	must be held to determine whether [or not] to approve [reduce] the
	604	+	tax rate adopted for the current year [to the rollback tax rate] in
	605	+	accordance with the procedures provided by Sections 26.08(b), (c),
	606	+	(d), (d-1), and (d-2) [26.07(b)-(g) and 26.081], Tax Code.
	607	+	(e) This subsection and Subsections (f)-(i) apply to a
619	608		district only if the district is a small taxing unit. If the board
620		-	[governing body] of the [a] district adopts a combined debt
621		-	service, operation and maintenance, and contract tax rate that
622		-	would impose more than 1.08 times the amount of tax imposed by the
623		-	district in the preceding year on a residence homestead appraised
624		-	at the average appraised value of a residence homestead in the
625		-	district in that year, disregarding any homestead exemption
626		-	available only to disabled persons or persons 65 years of age or
627		-	older, the qualified voters of the district by petition may require
628		-	that an election be held to determine whether [or not] to approve
629		-	[reduce] the tax rate adopted for the current year [to the rollback
630		-	tax rate] in accordance with the procedures provided by Subsections
631		-	(e)-(h) of this section and Section [Sections 26.07(b)-(g) and]
632		-	26.081, Tax Code.
633		-	(e) A petition under Subsection (d) is valid only if:
	609	+	of the district adopts a combined debt service, operation and
	610	+	maintenance, and contract tax rate that would impose more than 1.08
	611	+	times the amount of tax imposed by the district in the preceding
	612	+	year on a residence homestead appraised at the average appraised
	613	+	value of a residence homestead in the district in that year,
	614	+	disregarding any homestead exemption available only to disabled
	615	+	persons or persons 65 years of age or older, the qualified voters of
	616	+	the district by petition may require that an election be held to
	617	+	determine whether to approve the tax rate adopted for the current
	618	+	year in accordance with the procedures provided by Subsections
	619	+	(f)-(i) of this section and Section 26.081, Tax Code.
	620	+	(f) A petition is valid only if:
634	621		(1) it states that it is intended to require an
635	622		election in the district on the question of approving the tax rate
636	623		adopted for the current year;
637	624		(2) it is signed by a number of registered voters of
638	625		the district equal to at least:
639	626		(A) seven percent of the number of registered
640	627		voters of the district according to the most recent official list of
641	628		registered voters if the tax rate adopted for the current tax year
642	629		would impose taxes for operation and maintenance in an amount of at
643	630		least $5 million; or
644	631		(B) 10 percent of the number of registered voters
645	632		of the district according to the most recent official list of
646	633		registered voters if the tax rate adopted for the current tax year
647	634		would impose taxes for operation and maintenance in an amount of
648	635		less than $5 million; and
649	636		(3) it is submitted to the board on or before the 90th
650	637		day after the date on which the board adopted the tax rate for the
651	638		current year.
652		-	(f) Not later than the 20th day after the day a petition is
	639	+	(g) Not later than the 20th day after the day a petition is
653	640		submitted, the board shall determine whether or not the petition is
654	641		valid and pass a resolution stating its finding. If the board fails
655	642		to act within the time allowed, the petition is treated as if it had
656	643		been found valid.
657		-	(g) If the board finds that the petition is valid (or fails
	644	+	(h) If the board finds that the petition is valid (or fails
658	645		to act within the time allowed), it shall order that an election be
659	646		held in the district on a date not less than 30 or more than 90 days
660	647		after the last day on which it could have acted to approve or
661	648		disapprove the petition. A state law requiring local elections to
662	649		be held on a specified date does not apply to the election unless a
663	650		specified date falls within the time permitted by this subsection.
664	651		At the election, the ballots shall be prepared to permit voting for
665	652		or against the proposition: "Approving the ad valorem tax rate of
666	653		$____ per $100 valuation in (name of district) for the current year,
667	654		a rate that is $____ higher per $100 valuation than the district's
668	655		rollback tax rate, for the purpose of (description of purpose of
669	656		increase)." The ballot proposition must include the adopted tax
670	657		rate and the difference between that rate and the rollback tax rate
671	658		in the appropriate places.
672		-	(h) Sections 26.08(c), (d), (d-1), and (d-2), Tax Code,
673		-	apply to an election under Subsection (d) of this section in the
	659	+	(i) Sections 26.08(c), (d), (d-1), and (d-2), Tax Code,
	660	+	apply to an election under Subsection (e) of this section in the
674	661		same manner as those subsections apply to an election under Section
675	662		26.08, Tax Code.
676		-	(i) This subsection applies to a district only if the
677		-	district is a taxing unit other than a small taxing unit. If the
678		-	board of the district adopts a combined debt service, operation and
679		-	maintenance, and contract tax rate that would impose more than 1.06
680		-	times the amount of tax imposed by the district in the preceding
681		-	year on a residence homestead appraised at the average appraised
682		-	value of a residence homestead in the district in that year,
683		-	disregarding any homestead exemption available only to disabled
684		-	persons or persons 65 years of age or older, an election must be
685		-	held to determine whether to approve the tax rate adopted for the
686		-	current year in accordance with the procedures provided by Sections
687		-	26.08(b), (c), (d), (d-1), and (d-2), Tax Code.
688	663		(j) For purposes of Subsection (d) [Sections 26.07(b)-(g)
689	664		and this subsection], the rollback tax rate of a district is the sum
690	665		of the following tax rates:
691	666		(1) the current year's debt service tax rate;
692	667		(2) the current year's [and] contract tax rate; and
693	668		(3) [rates plus] the operation and maintenance tax
694		-	rate that would impose 1.08 times the amount of the operation ~~and~~
695		-	maintenance tax imposed by the district in the preceding year on a
696		-	residence homestead appraised at the average appraised value of a
	669	+	rate that would impose 1.05 [1.08] times the amount of the operation
	670	+	and maintenance tax imposed by the district in the preceding year on
	671	+	a residence homestead appraised at the average appraised value of a
697	672		residence homestead in the district in that year, disregarding any
698	673		homestead exemption available only to disabled persons or persons
699	674		65 years of age or older.
700		-	(k) For purposes of Subsection (i), the rollback tax rate of
	675	+	(k) For purposes of Subsection (e), the rollback tax rate of
701	676		a district is the sum of the following tax rates:
702	677		(1) the current year's debt service tax rate;
703	678		(2) the current year's contract tax rate; and
704	679		(3) the operation and maintenance tax rate that would
705		-	impose 1.06 times the amount of the operation and maintenance tax
	680	+	impose 1.08 times the amount of the operation and maintenance tax
706	681		imposed by the district in the preceding year on a residence
707	682		homestead appraised at the average appraised value of a residence
708	683		homestead in the district in that year, disregarding any homestead
709	684		exemption available only to disabled persons or persons 65 years of
710	685		age or older.
711	686		(l) Notwithstanding any other provision of this section,
712		-	the board of a district that is a taxing unit other than a small
713		-	taxing unit may substitute "eight percent" for "six percent" in
714		-	Subsection (a)(3)(B) and "1.08" for "1.06" in Subsections (i) and
715		-	(k) if any part of the district is located in an area declared a
	687	+	the board may substitute "eight percent" for "five percent" in
	688	+	Subsection (a)(3)(A) and "1.08" for "1.05" in Subsections (d) and
	689	+	(j) if any part of the district is located in an area declared a
716	690		disaster area during the current tax year by the governor or by the
717		-	president of the United States. The board may continue doing so
718		-	until the earlier of:
719		-	(1) the first tax year in which the total taxable value
720		-	of property taxable by the district as shown on the appraisal roll
721		-	for the district submitted by the assessor for the district to the
722		-	board exceeds the total taxable value of property taxable by the
723		-	district on January 1 of the tax year in which the disaster
724		-	occurred; or
725		-	(2) the third tax year after the tax year in which the
726		-	disaster occurred.
727		-	(m) In this section:
728		-	(1) "Small taxing unit" has the meaning assigned by
729		-	Section 26.012, Tax Code.
730		-	(2) "Taxing unit" has the meaning assigned by Section
731		-	1.04, Tax Code.
	691	+	president of the United States.
	692	+	(m) In this section, "small taxing unit" has the meaning
	693	+	assigned by Section 26.012, Tax Code.
732	694		SECTION 20. The following provisions are repealed:
733	695		(1) Section 49.236, Water Code, as added by Chapter
734	696		248 (H.B. 1541), Acts of the 78th Legislature, Regular Session,
735	697		2003; and
736	698		(2) Section 49.2361, Water Code.
737		-	SECTION 21. This Act takes effect January 1, 2018.
	699	+	SECTION 21. The changes in law made by this Act relating to
	700	+	the ad valorem tax rate of a taxing unit apply beginning with the
	701	+	2018 tax year.
	702	+	SECTION 22. This Act takes effect January 1, 2018.