Texas 2023 - 88th 3rd C.S.

Texas House Bill HB187 Compare Versions

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1	1	By: Harrison H.B. No. 187
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the calculation of certain ad valorem tax rates of a
7	7	taxing unit and the manner in which a proposed ad valorem tax rate
8	8	that exceeds the voter-approval tax rate is approved; making
9	9	conforming changes.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 48.202(f), Education Code, is amended to
12	12	read as follows:
13	13	(f) For a school year in which the dollar amount guaranteed
14	14	level of state and local funds per weighted student per cent of tax
15	15	effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount
16	16	guaranteed level of state and local funds per weighted student per
17	17	cent of tax effort ("GL") under Subsection (a-1)(2) for the
18	18	preceding school year, a school district shall reduce the
19	19	district's tax rate under Section 45.0032(b)(2) for the tax year
20	20	that corresponds to that school year to a rate that results in the
21	21	amount of state and local funds per weighted student per cent of tax
22	22	effort available to the district at the dollar amount guaranteed
23	23	level for the preceding school year. A school district is not
24	24	entitled to the amount equal to the increase of revenue described by
25	25	this subsection for the school year for which the district must
26	26	reduce the district's tax rate. For [Unless Section 26.042(e), Tax
27	27	Code, applies to the district, for] a tax year in which a district
28	28	must reduce the district's tax rate under this subsection, the
29	29	district may not increase the district's maintenance and operations
30	30	tax rate to a rate that exceeds the maximum maintenance and
31	31	operations tax rate permitted under Section 45.003(d) or (f), as
32	32	applicable, minus the reduction of tax effort required under this
33	33	subsection. This subsection does not apply if the amount of state
34	34	funds appropriated for a school year specifically excludes the
35	35	amount necessary to provide the dollar amount guaranteed level of
36	36	state and local funds per weighted student per cent of tax effort
37	37	under Subsection (a-1)(2).
38	38	SECTION 2. Section 3828.157, Special District Local Laws
39	39	Code, is amended to read as follows:
40	40	Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE
41	41	PROVISIONS. Sections 26.04, [26.042,] 26.05, and 26.07, [and
42	42	26.075,] Tax Code, do not apply to a tax imposed under Section
43	43	3828.153 or 3828.156.
44	44	SECTION 3. Section 8876.152(a), Special District Local Laws
45	45	Code, is amended to read as follows:
46	46	(a) Sections 26.04, [26.042,] 26.05, 26.06, 26.061, and
47	47	26.07, [and 26.075,] Tax Code, do not apply to a tax imposed by the
48	48	district.
49	49	SECTION 4. Section 26.012(3), Tax Code, is amended to read
50	50	as follows:
51	51	(3) "Current debt service" means the minimum dollar
52	52	amount required to be expended for debt service for the current
53	53	year.
54	54	SECTION 5. Section 26.04(c), Tax Code, is amended to read as
55	55	follows:
56	56	(c) After the assessor for the taxing unit submits the
57	57	appraisal roll for the taxing unit to the governing body of the
58	58	taxing unit as required by Subsection (b), an officer or employee
59	59	designated by the governing body shall calculate the no-new-revenue
60	60	tax rate and the voter-approval tax rate for the taxing unit, where:
61	61	(1) "No-new-revenue tax rate" means a rate expressed
62	62	in dollars per $100 of taxable value calculated according to the
63	63	following formula:
64	64	NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY LEVY) /
65	65	(CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
66	66	; and
67	67	(2) "Voter-approval tax rate" means a rate expressed
68	68	in dollars per $100 of taxable value calculated according to the
69	69	following [applicable] formula:
70	70	[(A) for a special taxing unit:]
71	71	VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND
72	72	OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE
73	73	[; or
74	74	[(B) for a taxing unit other than a special
75	75	taxing unit:
76	76	[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
77	77	OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT
78	78	RATE)]
79	79	SECTION 6. Sections 26.041(a), (b), and (c), Tax Code, are
80	80	amended to read as follows:
81	81	(a) In the first year in which an additional sales and use
82	82	tax is required to be collected, the no-new-revenue tax rate and
83	83	voter-approval tax rate for the taxing unit are calculated
84	84	according to the following formulas:
85	85	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
86	86	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
87	87	PROPERTY VALUE)] - SALES TAX GAIN RATE
88	88	and
89	89	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
90	90	= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x
91	91	1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[)
92	92	[or
93	93	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
94	94	THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE
95	95	AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +
96	96	UNUSED INCREMENT RATE - SALES TAX GAIN RATE)]
97	97	where "sales tax gain rate" means a number expressed in dollars per
98	98	$100 of taxable value, calculated by dividing the revenue that will
99	99	be generated by the additional sales and use tax in the following
100	100	year as calculated under Subsection (d) by the current total value.
101	101	(b) Except as provided by Subsections (a) and (c), in a year
102	102	in which a taxing unit imposes an additional sales and use tax, the
103	103	voter-approval tax rate for the taxing unit is calculated according
104	104	to the following formula, regardless of whether the taxing unit
105	105	levied a property tax in the preceding year:
106	106	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
107	107	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
108	108	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
109	109	+ (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
110	110	[or
111	111	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN
112	112	SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND
113	113	OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE -
114	114	NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
115	115	INCREMENT RATE - SALES TAX REVENUE RATE)]
116	116	where "last year's maintenance and operations expense" means the
117	117	amount spent for maintenance and operations from property tax and
118	118	additional sales and use tax revenues in the preceding year, and
119	119	"sales tax revenue rate" means a number expressed in dollars per
120	120	$100 of taxable value, calculated by dividing the revenue that will
121	121	be generated by the additional sales and use tax in the current year
122	122	as calculated under Subsection (d) by the current total value.
123	123	(c) In a year in which a taxing unit that has been imposing
124	124	an additional sales and use tax ceases to impose an additional sales
125	125	and use tax, the no-new-revenue tax rate and voter-approval tax
126	126	rate for the taxing unit are calculated according to the following
127	127	formulas:
128	128	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
129	129	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
130	130	PROPERTY VALUE)] + SALES TAX LOSS RATE
131	131	and
132	132	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
133	133	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
134	134	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
135	135	+ CURRENT DEBT RATE
136	136	[or
137	137	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
138	138	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
139	139	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
140	140	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
141	141	INCREMENT RATE)]
142	142	where "sales tax loss rate" means a number expressed in dollars per
143	143	$100 of taxable value, calculated by dividing the amount of sales
144	144	and use tax revenue generated in the last four quarters for which
145	145	the information is available by the current total value and "last
146	146	year's maintenance and operations expense" means the amount spent
147	147	for maintenance and operations from property tax and additional
148	148	sales and use tax revenues in the preceding year.
149	149	SECTION 7. Section 26.07(b), Tax Code, is amended to read as
150	150	follows:
151	151	(b) If the governing body of a [special] taxing unit [or a
152	152	municipality with a population of 30,000 or more] adopts a tax rate
153	153	that exceeds the taxing unit's voter-approval tax rate, [or the
154	154	governing body of a taxing unit other than a special taxing unit or
155	155	a municipality with a population of less than 30,000 regardless of
156	156	whether it is a special taxing unit adopts a tax rate that exceeds
157	157	the greater of the taxing unit's voter-approval tax rate or de
158	158	minimis rate,] the registered voters of the taxing unit at an
159	159	election held for that purpose must determine whether to approve
160	160	the adopted tax rate.
161	161	SECTION 8. Sections 31.12(a) and (b), Tax Code, are amended
162	162	to read as follows:
163	163	(a) If a refund of a tax provided by Section 11.431(b),
164	164	26.07(g), [26.075(k),] 26.15(f), 31.11, 31.111, or 31.112 is paid
165	165	on or before the 60th day after the date the liability for the
166	166	refund arises, no interest is due on the amount refunded. If not
167	167	paid on or before that 60th day, the amount of the tax to be refunded
168	168	accrues interest at a rate of one percent for each month or part of a
169	169	month that the refund is unpaid, beginning with the date on which
170	170	the liability for the refund arises.
171	171	(b) For purposes of this section, liability for a refund
172	172	arises:
173	173	(1) if the refund is required by Section 11.431(b), on
174	174	the date the chief appraiser notifies the collector for the taxing
175	175	unit of the approval of the late homestead exemption;
176	176	(2) if the refund is required by Section 26.07(g) [or
177	177	26.075(k)], on the date the results of the election to approve [or
178	178	reduce] the tax rate[, as applicable,] are certified;
179	179	(3) if the refund is required by Section 26.15(f):
180	180	(A) for a correction to the tax roll made under
181	181	Section 26.15(b), on the date the change in the tax roll is
182	182	certified to the assessor for the taxing unit under Section 25.25;
183	183	or
184	184	(B) for a correction to the tax roll made under
185	185	Section 26.15(c), on the date the change in the tax roll is ordered
186	186	by the governing body of the taxing unit;
187	187	(4) if the refund is required by Section 31.11, on the
188	188	date the auditor for the taxing unit determines that the payment was
189	189	erroneous or excessive or, if the amount of the refund exceeds the
190	190	applicable amount specified by Section 31.11(a), on the date the
191	191	governing body of the taxing unit approves the refund;
192	192	(5) if the refund is required by Section 31.111, on the
193	193	date the collector for the taxing unit determines that the payment
194	194	was erroneous; or
195	195	(6) if the refund is required by Section 31.112, on the
196	196	date required by Section 31.112(d) or (e), as applicable.
197	197	SECTION 9. Section 33.08(b), Tax Code, is amended to read as
198	198	follows:
199	199	(b) The governing body of the taxing unit or appraisal
200	200	district, in the manner required by law for official action, may
201	201	provide that taxes that become delinquent on or after June 1 under
202	202	Section [26.075(j),] 26.15(e), 31.03, 31.031, 31.032, 31.033,
203	203	31.04, or 42.42 incur an additional penalty to defray costs of
204	204	collection. The amount of the penalty may not exceed the amount of
205	205	the compensation specified in the applicable contract with an
206	206	attorney under Section 6.30 to be paid in connection with the
207	207	collection of the delinquent taxes.
208	208	SECTION 10. Section 49.057, Water Code, is amended by
209	209	amending Subsection (b) and adding Subsection (j) to read as
210	210	follows:
211	211	(b) The board shall adopt an annual budget. The board of a
212	212	developed district[, as defined by Section 49.23602,] shall include
213	213	as an appendix to the budget the district's:
214	214	(1) audited financial statements;
215	215	(2) bond transcripts; and
216	216	(3) engineer's reports required by Section 49.106.
217	217	(j) In this section, "developed district" means a district
218	218	that has financed, completed, and issued bonds to pay for all land,
219	219	works, improvements, facilities, plants, equipment, and appliances
220	220	necessary to serve at least 95 percent of the projected build-out of
221	221	the district in accordance with the purposes for its creation or the
222	222	purposes authorized by the constitution, this code, or any other
223	223	law.
224	224	SECTION 11. Section 49.107(g), Water Code, is amended to
225	225	read as follows:
226	226	(g) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
227	227	[and 26.075,] Tax Code, do not apply to a tax levied and collected
228	228	under this section or an ad valorem tax levied and collected for the
229	229	payment of the interest on and principal of bonds issued by a
230	230	district.
231	231	SECTION 12. Section 49.108(f), Water Code, is amended to
232	232	read as follows:
233	233	(f) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
234	234	[and 26.075,] Tax Code, do not apply to a tax levied and collected
235	235	for payments made under a contract approved in accordance with this
236	236	section.
237	237	SECTION 13. Section 49.236(a), Water Code, is amended to
238	238	read as follows:
239	239	(a) Before the board adopts an ad valorem tax rate for the
240	240	district for debt service, operation and maintenance purposes, or
241	241	contract purposes, the board shall give notice of each meeting of
242	242	the board at which the adoption of a tax rate will be considered.
243	243	The notice must:
244	244	(1) contain a statement in substantially the following
245	245	form:
246	246	"NOTICE OF PUBLIC HEARING ON TAX RATE
247	247	"The (name of the district) will hold a public hearing on a
248	248	proposed tax rate for the tax year (year of tax levy) on (date and
249	249	time) at (meeting place). Your individual taxes may increase at a
250	250	greater or lesser rate, or even decrease, depending on the tax rate
251	251	that is adopted and on the change in the taxable value of your
252	252	property in relation to the change in taxable value of all other
253	253	property. The change in the taxable value of your property in
254	254	relation to the change in the taxable value of all other property
255	255	determines the distribution of the tax burden among all property
256	256	owners.
257	257	"Visit Texas.gov/PropertyTaxes to find a link to your local
258	258	property tax database on which you can easily access information
259	259	regarding your property taxes, including information about
260	260	proposed tax rates and scheduled public hearings of each entity
261	261	that taxes your property.
262	262	"(Names of all board members and, if a vote was taken, an
263	263	indication of how each voted on the proposed tax rate and an
264	264	indication of any absences.)";
265	265	(2) contain the following information:
266	266	(A) the district's total adopted tax rate for the
267	267	preceding year and the proposed tax rate, expressed as an amount per
268	268	$100;
269	269	(B) the difference, expressed as an amount per
270	270	$100 and as a percent increase or decrease, as applicable, in the
271	271	proposed tax rate compared to the adopted tax rate for the preceding
272	272	year;
273	273	(C) the average appraised value of a residence
274	274	homestead in the district in the preceding year and in the current
275	275	year; the district's total homestead exemption, other than an
276	276	exemption available only to disabled persons or persons 65 years of
277	277	age or older, applicable to that appraised value in each of those
278	278	years; and the average taxable value of a residence homestead in the
279	279	district in each of those years, disregarding any homestead
280	280	exemption available only to disabled persons or persons 65 years of
281	281	age or older;
282	282	(D) the amount of tax that would have been
283	283	imposed by the district in the preceding year on a residence
284	284	homestead appraised at the average appraised value of a residence
285	285	homestead in that year, disregarding any homestead exemption
286	286	available only to disabled persons or persons 65 years of age or
287	287	older;
288	288	(E) the amount of tax that would be imposed by the
289	289	district in the current year on a residence homestead appraised at
290	290	the average appraised value of a residence homestead in that year,
291	291	disregarding any homestead exemption available only to disabled
292	292	persons or persons 65 years of age or older, if the proposed tax
293	293	rate is adopted;
294	294	(F) the difference between the amounts of tax
295	295	calculated under Paragraphs (D) and (E), expressed in dollars and
296	296	cents and described as the annual percentage increase or decrease,
297	297	as applicable, in the tax to be imposed by the district on the
298	298	average residence homestead in the district in the current year if
299	299	the proposed tax rate is adopted; and
300	300	(G) if the proposed combined debt service,
301	301	operation and maintenance, and contract tax rate requires [or
302	302	authorizes] an election to approve [or reduce] the tax rate, [as
303	303	applicable,] a description of the purpose of the proposed tax
304	304	increase;
305	305	(3) contain a statement in substantially the following
306	306	form[, as applicable:
307	307	[(A) if the district is a district described by
308	308	Section 49.23601]:
309	309	"NOTICE OF VOTE ON TAX RATE
310	310	"If the district adopts a combined debt service, operation
311	311	and maintenance, and contract tax rate that would result in the
312	312	taxes on the average residence homestead increasing from the
313	313	preceding year [by more than eight percent], an election must be
314	314	held to determine whether to approve the operation and maintenance
315	315	tax rate under Section 49.23601, Water Code.";
316	316	[(B) if the district is a district described by
317	317	Section 49.23602:
318	318	["NOTICE OF VOTE ON TAX RATE
319	319	["If the district adopts a combined debt service, operation
320	320	and maintenance, and contract tax rate that would result in the
321	321	taxes on the average residence homestead increasing by more than
322	322	3.5 percent, an election must be held to determine whether to
323	323	approve the operation and maintenance tax rate under Section
324	324	49.23602, Water Code."; or
325	325	[(C) if the district is a district described by
326	326	Section 49.23603:
327	327	["NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE
328	328	["If the district adopts a combined debt service, operation
329	329	and maintenance, and contract tax rate that would result in the
330	330	taxes on the average residence homestead increasing by more than
331	331	eight percent, the qualified voters of the district by petition may
332	332	require that an election be held to determine whether to reduce the
333	333	operation and maintenance tax rate to the voter-approval tax rate
334	334	under Section 49.23603, Water Code.";] and
335	335	(4) include the following statement: "The 86th Texas
336	336	Legislature modified the manner in which the voter-approval tax
337	337	rate is calculated to limit the rate of growth of property taxes in
338	338	the state.".
339	339	SECTION 14. The heading to Section 49.23601, Water Code, is
340	340	amended to read as follows:
341	341	Sec. 49.23601. AUTOMATIC ELECTION TO APPROVE TAX RATE [FOR
342	342	LOW TAX RATE DISTRICTS].
343	343	SECTION 15. Sections 49.23601(a) and (c), Water Code, are
344	344	amended to read as follows:
345	345	(a) In this section, "voter-approval tax rate" means the
346	346	rate equal to the sum of the following tax rates for the district:
347	347	(1) the current year's debt service tax rate;
348	348	(2) the current year's contract tax rate; and
349	349	(3) the operation and maintenance tax rate that would
350	350	impose [1.08 times] the amount of [the] operation and maintenance
351	351	tax imposed by the district in the preceding year on a residence
352	352	homestead appraised at the average appraised value of a residence
353	353	homestead in the district in that year, disregarding any homestead
354	354	exemption available only to disabled persons or persons 65 years of
355	355	age or older.
356	356	(c) If the board of a district adopts a combined debt
357	357	service, contract, and operation and maintenance tax rate that
358	358	would impose more than [1.08 times] the amount of tax imposed by the
359	359	district in the preceding year on a residence homestead appraised
360	360	at the average appraised value of a residence homestead in the
361	361	district in that year, disregarding any homestead exemption
362	362	available only to disabled persons or persons 65 years of age or
363	363	older, an election must be held in accordance with the procedures
364	364	provided by Sections 26.07(c)-(g), Tax Code, to determine whether
365	365	to approve the adopted tax rate. If the adopted tax rate is not
366	366	approved at the election, the district's tax rate is the
367	367	voter-approval tax rate.
368	368	SECTION 16. The following provisions are repealed:
369	369	(1) Section 45.0032(d), Education Code;
370	370	(2) Section 120.007(d), Local Government Code;
371	371	(3) Sections 26.012(8-a) and (19), Tax Code;
372	372	(4) Section 26.013, Tax Code;
373	373	(5) Section 26.042, Tax Code;
374	374	(6) Section 26.0501(c), Tax Code;
375	375	(7) Section 26.063, Tax Code;
376	376	(8) Section 26.075, Tax Code;
377	377	(9) Section 49.23601(b), Water Code;
378	378	(10) Section 49.23602, Water Code; and
379	379	(11) Section 49.23603, Water Code.
380	380	SECTION 17. This Act applies only to ad valorem taxes
381	381	imposed for an ad valorem tax year that begins on or after the
382	382	effective date of this Act.
383	383	SECTION 18. This Act takes effect January 1, 2025.