88R460 CJC-D
By: Middleton S.B. No. 1324
A BILL TO BE ENTITLED
AN ACT
relating to the effect of an election at which the voters fail to
approve or vote to reduce the ad valorem tax rate adopted by the
governing body of a taxing unit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 26.06(b-1), Tax Code, is amended to read
as follows:
(b-1) If the proposed tax rate exceeds the no-new-revenue
tax rate and the voter-approval tax rate of the taxing unit, the
notice must contain a statement in the following form:
"NOTICE OF PUBLIC HEARING ON TAX INCREASE
"PROPOSED TAX RATE $__________ per $100
"NO-NEW-REVENUE TAX RATE $__________ per $100
"VOTER-APPROVAL TAX RATE $__________ per $100
"The no-new-revenue tax rate is the tax rate for the (current
tax year) tax year that will raise the same amount of property tax
revenue for (name of taxing unit) from the same properties in both
the (preceding tax year) tax year and the (current tax year) tax
year.
"The voter-approval tax rate is the highest tax rate that
(name of taxing unit) may adopt without holding an election to seek
voter approval of the rate.
"The proposed tax rate is greater than the no-new-revenue tax
rate. This means that (name of taxing unit) is proposing to
increase property taxes for the (current tax year) tax year.
"A public hearing on the proposed tax rate will be held on
(date and time) at (meeting place).
"The proposed tax rate is also greater than the
voter-approval tax rate. If (name of taxing unit) adopts the
proposed tax rate, (name of taxing unit) is required to hold an
election so that the voters may accept or reject the proposed tax
rate. If a majority of the voters reject the proposed tax rate, the
tax rate of the (name of taxing unit) will be the lesser of the
no-new-revenue tax rate or voter-approval tax rate. The election
will be held on (date of election). You may contact the (name of
office responsible for administering the election) for information
about voting locations. The hours of voting on election day are
(voting hours).
"Your taxes owed under any of the tax rates mentioned above
can be calculated as follows:
"Property tax amount = tax rate x taxable value of your
property / 100
"(Names of all members of the governing body, showing how
each voted on the proposal to consider the tax increase or, if one
or more were absent, indicating the absences.)
"Visit Texas.gov/PropertyTaxes to find a link to your local
property tax database on which you can easily access information
regarding your property taxes, including information about
proposed tax rates and scheduled public hearings of each entity
that taxes your property.
"The 86th Texas Legislature modified the manner in which the
voter-approval tax rate is calculated to limit the rate of growth of
property taxes in the state."
SECTION 2. Sections 26.063(b) and (c), Tax Code, are
amended to read as follows:
(b) This subsection applies only to a taxing unit that is
required to hold an election under Section 26.07. In the notice
required to be provided by the taxing unit under Section 26.06(b-1)
or (b-3), as applicable, the taxing unit shall:
(1) add the following to the end of the list of rates
included in the notice:
"DE MINIMIS RATE $__________ per $100";
(2) substitute the following for the definition of
"voter-approval tax rate": "The voter-approval tax rate is the
highest tax rate that (name of taxing unit) may adopt without
holding an election to seek voter approval of the rate, unless the
de minimis rate for (name of taxing unit) exceeds the
voter-approval tax rate for (name of taxing unit).";
(3) add the following definition of "de minimis
rate": "The de minimis rate is the rate equal to the sum of the
no-new-revenue maintenance and operations rate for (name of taxing
unit), the rate that will raise $500,000, and the current debt rate
for (name of taxing unit)."; and
(4) substitute the following for the provision that
provides notice that an election is required: "The proposed tax
rate is greater than the voter-approval tax rate and the de minimis
rate. If (name of taxing unit) adopts the proposed tax rate, (name
of taxing unit) is required to hold an election so that the voters
may accept or reject the proposed tax rate. If a majority of the
voters reject the proposed tax rate, the tax rate of the (name of
taxing unit) will be the lesser of the no-new-revenue tax rate or
voter-approval tax rate of the (name of taxing unit). The election
will be held on (date of election). You may contact the (name of
office responsible for administering the election) for information
about voting locations. The hours of voting on election day are
(voting hours).".
(c) This subsection applies only to a taxing unit for which
the qualified voters of the taxing unit may petition to hold an
election under Section 26.075. In the notice required to be
provided by the taxing unit under Section 26.06(b-1) or (b-3), as
applicable, the taxing unit shall:
(1) add the following to the end of the list of rates
included in the notice:
"DE MINIMIS RATE $__________ per $100";
(2) substitute the following for the definition of
"voter-approval tax rate": "The voter-approval tax rate is the
highest tax rate that (name of taxing unit) may adopt without
holding an election to seek voter approval of the rate, unless the
de minimis rate for (name of taxing unit) exceeds the
voter-approval tax rate for (name of taxing unit).";
(3) add the following definition of "de minimis
rate": "The de minimis rate is the rate equal to the sum of the
no-new-revenue maintenance and operations rate for (name of taxing
unit), the rate that will raise $500,000, and the current debt rate
for (name of taxing unit)."; and
(4) substitute the following for the provision that
provides notice that an election is required: "The proposed tax
rate is greater than the voter-approval tax rate but not greater
than the de minimis rate. However, the proposed tax rate exceeds
the rate that allows voters to petition for an election under
Section 26.075, Tax Code. If (name of taxing unit) adopts the
proposed tax rate, the qualified voters of the (name of taxing unit)
may petition the (name of taxing unit) to require an election to be
held to determine whether to reduce the proposed tax rate. If a
majority of the voters reject the proposed tax rate, the tax rate of
the (name of taxing unit) will be the lesser of the no-new-revenue
tax rate or voter-approval tax rate of the (name of taxing unit).".
SECTION 3. Sections 26.07(e) and (g), Tax Code, are amended
to read as follows:
(e) If the proposition is not approved as provided by
Subsection (d), the taxing unit's tax rate for the current tax year
is the lesser of the taxing unit's no-new-revenue tax rate or
voter-approval tax rate.
(g) If a property owner pays taxes calculated using the
originally adopted tax rate of the taxing unit and the proposition
to approve the adopted tax rate is not approved by voters, the
taxing unit shall refund the difference between the amount of taxes
paid and the amount due under the no-new-revenue tax rate or
voter-approval tax rate, as applicable, if the difference between
the amount of taxes paid and the amount due under the applicable
[voter-approval] tax rate is $1 or more. If the difference between
the amount of taxes paid and the amount due under the applicable
[voter-approval] tax rate is less than $1, the taxing unit shall
refund the difference on request of the taxpayer. An application
for a refund of less than $1 must be made within 90 days after the
date the refund becomes due or the taxpayer forfeits the right to
the refund.
SECTION 4. Sections 26.075(c), (g), and (h), Tax Code, are
amended to read as follows:
(c) The qualified voters of a taxing unit by petition may
require that an election be held to determine whether to reduce the
tax rate adopted by the governing body of the taxing unit for the
current tax year to the lesser of the taxing unit's no-new-revenue
tax rate or voter-approval tax rate.
(g) At the election, the ballots shall be prepared to permit
voting for or against the proposition: "Reducing the tax rate in
(name of taxing unit) for the current year from (insert tax rate
adopted for current year) to (insert lesser of no-new-revenue tax
rate or voter-approval tax rate)."
(h) If a majority of the votes cast in the election favor the
proposition, the tax rate for the current tax year is the lesser of
the taxing unit's no-new-revenue tax rate or voter-approval tax
rate.
SECTION 5. Section 26.08(d), Tax Code, is amended to read as
follows:
(d) If the proposition is not approved as provided by
Subsection (c), the governing body may not adopt a tax rate for the
school district for the current year that exceeds the lesser of the
school district's no-new-revenue tax rate or voter-approval tax
rate.
SECTION 6. Section 49.236(a), Water Code, is amended to
read as follows:
(a) Before the board adopts an ad valorem tax rate for the
district for debt service, operation and maintenance purposes, or
contract purposes, the board shall give notice of each meeting of
the board at which the adoption of a tax rate will be considered.
The notice must:
(1) contain a statement in substantially the following
form:
"NOTICE OF PUBLIC HEARING ON TAX RATE
"The (name of the district) will hold a public hearing on a
proposed tax rate for the tax year (year of tax levy) on (date and
time) at (meeting place). Your individual taxes may increase at a
greater or lesser rate, or even decrease, depending on the tax rate
that is adopted and on the change in the taxable value of your
property in relation to the change in taxable value of all other
property. The change in the taxable value of your property in
relation to the change in the taxable value of all other property
determines the distribution of the tax burden among all property
owners.
"Visit Texas.gov/PropertyTaxes to find a link to your local
property tax database on which you can easily access information
regarding your property taxes, including information about
proposed tax rates and scheduled public hearings of each entity
that taxes your property.
"(Names of all board members and, if a vote was taken, an
indication of how each voted on the proposed tax rate and an
indication of any absences.)";
(2) contain the following information:
(A) the district's total adopted tax rate for the
preceding year and the proposed tax rate, expressed as an amount per
$100;
(B) the difference, expressed as an amount per
$100 and as a percent increase or decrease, as applicable, in the
proposed tax rate compared to the adopted tax rate for the preceding
year;
(C) the average appraised value of a residence
homestead in the district in the preceding year and in the current
year; the district's total homestead exemption, other than an
exemption available only to disabled persons or persons 65 years of
age or older, applicable to that appraised value in each of those
years; and the average taxable value of a residence homestead in the
district in each of those years, disregarding any homestead
exemption available only to disabled persons or persons 65 years of
age or older;
(D) the amount of tax that would have been
imposed by the district in the preceding year on a residence
homestead appraised at the average appraised value of a residence
homestead in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older;
(E) the amount of tax that would be imposed by the
district in the current year on a residence homestead appraised at
the average appraised value of a residence homestead in that year,
disregarding any homestead exemption available only to disabled
persons or persons 65 years of age or older, if the proposed tax
rate is adopted;
(F) the difference between the amounts of tax
calculated under Paragraphs (D) and (E), expressed in dollars and
cents and described as the annual percentage increase or decrease,
as applicable, in the tax to be imposed by the district on the
average residence homestead in the district in the current year if
the proposed tax rate is adopted; and
(G) if the proposed combined debt service,
operation and maintenance, and contract tax rate requires or
authorizes an election to approve or reduce the tax rate, as
applicable, a description of the purpose of the proposed tax
increase;
(3) contain a statement in substantially the following
form, as applicable:
(A) if the district is a district described by
Section 49.23601:
"NOTICE OF VOTE ON TAX RATE
"If the district adopts a combined debt service, operation
and maintenance, and contract tax rate that would result in the
taxes on the average residence homestead increasing by more than
eight percent, an election must be held to determine whether to
approve the operation and maintenance tax rate under Section
49.23601, Water Code.";
(B) if the district is a district described by
Section 49.23602:
"NOTICE OF VOTE ON TAX RATE
"If the district adopts a combined debt service, operation
and maintenance, and contract tax rate that would result in the
taxes on the average residence homestead increasing by more than
3.5 percent, an election must be held to determine whether to
approve the operation and maintenance tax rate under Section
49.23602, Water Code."; or
(C) if the district is a district described by
Section 49.23603:
"NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE
"If the district adopts a combined debt service, operation
and maintenance, and contract tax rate that would result in the
taxes on the average residence homestead increasing by more than
eight percent, the qualified voters of the district by petition may
require that an election be held to determine whether to reduce the
operation and maintenance tax rate [to the voter-approval tax rate]
under Section 49.23603, Water Code."; and
(4) include the following statement: "The 86th Texas
Legislature modified the manner in which the voter-approval tax
rate is calculated to limit the rate of growth of property taxes in
the state.".
SECTION 7. Sections 49.23601(a) and (c), Water Code, are
amended to read as follows:
(a) In this section:
(1) "No-new-revenue tax rate" has the meaning assigned
by Section 26.04(c), Tax Code.
(2) "Voter-approval [, "voter-approval] tax rate"
means the rate equal to the sum of the following tax rates for the
district:
(A) [(1)] the current year's debt service tax
rate;
(B) [(2)] the current year's contract tax rate;
and
(C) [(3)] the operation and maintenance tax rate
that would impose 1.08 times the amount of the operation and
maintenance tax imposed by the district in the preceding year on a
residence homestead appraised at the average appraised value of a
residence homestead in the district in that year, disregarding any
homestead exemption available only to disabled persons or persons
65 years of age or older.
(c) If the board of a district adopts a combined debt
service, contract, and operation and maintenance tax rate that
would impose more than 1.08 times the amount of tax imposed by the
district in the preceding year on a residence homestead appraised
at the average appraised value of a residence homestead in the
district in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older, an election must be held in accordance with the procedures
provided by Sections 26.07(c)-(g), Tax Code, to determine whether
to approve the adopted tax rate. If the adopted tax rate is not
approved at the election, the district's tax rate is the lesser of
the district's no-new-revenue tax rate or voter-approval tax rate.
SECTION 8. Section 49.23602(a), Water Code, is amended by
adding Subdivision (2-a) to read as follows:
(2-a) "No-new-revenue tax rate" has the meaning
assigned by Section 26.04(c), Tax Code.
SECTION 9. Section 49.23602(c), Water Code, is amended to
read as follows:
(c) If the board of a district adopts a combined debt
service, contract, and operation and maintenance tax rate that
exceeds the district's mandatory tax election rate, an election
must be held in accordance with the procedures provided by Sections
26.07(c)-(g), Tax Code, to determine whether to approve the adopted
tax rate. If the adopted tax rate is not approved at the election,
the district's tax rate is the lesser of the district's
no-new-revenue tax rate or voter-approval tax rate.
SECTION 10. Sections 49.23603(a) and (c), Water Code, are
amended to read as follows:
(a) In this section:
(1) "No-new-revenue tax rate" has the meaning assigned
by Section 26.04(c), Tax Code.
(2) "Voter-approval [, "voter-approval] tax rate"
means the rate equal to the sum of the following tax rates for the
district:
(A) [(1)] the current year's debt service tax
rate;
(B) [(2)] the current year's contract tax rate;
and
(C) [(3)] the operation and maintenance tax rate
that would impose 1.08 times the amount of the operation and
maintenance tax imposed by the district in the preceding year on a
residence homestead appraised at the average appraised value of a
residence homestead in the district in that year, disregarding any
homestead exemption available only to disabled persons or persons
65 years of age or older.
(c) If the board of a district adopts a combined debt
service, contract, and operation and maintenance tax rate that
would impose more than 1.08 times the amount of tax imposed by the
district in the preceding year on a residence homestead appraised
at the average appraised value of a residence homestead in the
district in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older, the qualified voters of the district by petition may require
that an election be held to determine whether to reduce the tax rate
adopted for the current year to the lesser of the district's
no-new-revenue tax rate or voter-approval tax rate in accordance
with the procedures provided by Sections 26.075 and 26.081, Tax
Code.
SECTION 11. The change in law made by this Act applies to
the ad valorem tax rate of a taxing unit beginning with the 2024 tax
year.
SECTION 12. This Act takes effect January 1, 2024.