Bill Text: TX HB1165 | 2017-2018 | 85th Legislature | Introduced

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Bill Title: Relating to the calculation of the ad valorem rollback tax rate of a taxing unit and voter approval of a proposed tax rate that exceeds the rollback tax rate.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-02-21 - Referred to Ways & Means [HB1165 Detail]

Download: Texas-2017-HB1165-Introduced.html

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85R3108 SMH-F
By: Paul H.B. No. 1165

A BILL TO BE ENTITLED
AN ACT
relating to the calculation of the ad valorem rollback tax rate of a
taxing unit and voter approval of a proposed tax rate that exceeds
the rollback tax rate.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 26.04, Tax Code, is amended by amending
Subsection (c) and adding Subsection (c-1) to read as follows:
(c) An officer or employee designated by the governing body
shall calculate the effective tax rate and the rollback tax rate for
the unit, where:
(1) "Effective tax rate" means a rate expressed in
dollars per $100 of taxable value calculated according to the
following formula:
EFFECTIVE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
; and
(2) "Rollback tax rate" means a rate expressed in
dollars per $100 of taxable value calculated according to the
following formula:
ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
OPERATIONS RATE x 1.06 [1.08]) + CURRENT DEBT RATE
(c-1) Notwithstanding any other provision of this section,
the governing body may direct the designated officer or employee to
substitute "1.08" for "1.06" in the calculation of the rollback tax
rate if any part of the taxing unit is located in an area declared a
disaster area during the current tax year by the governor or by the
president of the United States.
SECTION 2. Section 26.041, Tax Code, is amended by amending
Subsections (a), (b), and (c) and adding Subsection (c-1) to read as
follows:
(a) In the first year in which an additional sales and use
tax is required to be collected, the effective tax rate and rollback
tax rate for the unit are calculated according to the following
formulas:
EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] -
SALES TAX GAIN RATE
and
ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE AND
OPERATIONS RATE x 1.06 [1.08]) + CURRENT DEBT RATE -
SALES TAX GAIN RATE
where "sales tax gain rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the following
year as calculated under Subsection (d) [of this section] by the
current total value.
(b) Except as provided by Subsections (a) and (c) [of this
section], in a year in which a taxing unit imposes an additional
sales and use tax the rollback tax rate for the unit is calculated
according to the following formula, regardless of whether the unit
levied a property tax in the preceding year:
ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
OPERATIONS EXPENSE x 1.06 [1.08]) / ([TOTAL] CURRENT
TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE
- SALES TAX REVENUE RATE)
where "last year's maintenance and operations expense" means the
amount spent for maintenance and operations from property tax and
additional sales and use tax revenues in the preceding year, and
"sales tax revenue rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the current year
as calculated under Subsection (d) [of this section] by the current
total value.
(c) In a year in which a taxing unit that has been imposing
an additional sales and use tax ceases to impose an additional sales
and use tax the effective tax rate and rollback tax rate for the
unit are calculated according to the following formulas:
EFFECTIVE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
SALES TAX LOSS RATE
and
ROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND
OPERATIONS EXPENSE x 1.06 [1.08]) / ([TOTAL] CURRENT
TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
where "sales tax loss rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the amount of sales
and use tax revenue generated in the last four quarters for which
the information is available by the current total value and "last
year's maintenance and operations expense" means the amount spent
for maintenance and operations from property tax and additional
sales and use tax revenues in the preceding year.
(c-1) Notwithstanding any other provision of this section,
the governing body may direct the designated officer or employee to
substitute "1.08" for "1.06" in the calculation of the rollback tax
rate if any part of the taxing unit is located in an area declared a
disaster area during the current tax year by the governor or by the
president of the United States.
SECTION 3. The heading to Section 26.08, Tax Code, is
amended to read as follows:
Sec. 26.08. ELECTION TO RATIFY TAX RATE [SCHOOL TAXES].
SECTION 4. Sections 26.08(a), (b), (d), (d-1), (d-2), (e),
and (h), Tax Code, are amended to read as follows:
(a) If the governing body of a taxing unit [school district]
adopts a tax rate that exceeds the taxing unit's [district's]
rollback tax rate, the registered voters of the taxing unit
[district] at an election held for that purpose must determine
whether to approve the adopted tax rate. When increased
expenditure of money by a taxing unit [school district] is
necessary to respond to a disaster, including a tornado, hurricane,
flood, or other calamity, but not including a drought, that has
impacted the taxing unit [a school district] and the governor has
requested federal disaster assistance for the area in which the
taxing unit [school district] is located, an election is not
required under this section to approve the tax rate adopted by the
governing body for the year following the year in which the disaster
occurs.
(b) The governing body shall order that the election be held
in the taxing unit [school district] on a date not less than 30 or
more than 90 days after the day on which it adopted the tax rate.
Section 41.001, Election Code, does not apply to the election
unless a date specified by that section falls within the time
permitted by this section. At the election, the ballots shall be
prepared to permit voting for or against the
proposition: "Approving the ad valorem tax rate of $_____ per $100
valuation in (name of taxing unit [school district]) for the
current year, a rate that is $_____ higher per $100 valuation than
the [school district] rollback tax rate of (name of taxing unit),
for the purpose of (description of purpose of increase)." The
ballot proposition must include the adopted tax rate and the
difference between that rate and the rollback tax rate in the
appropriate places.
(d) If the proposition is not approved as provided by
Subsection (c), the governing body may not adopt a tax rate for the
taxing unit [school district] for the current year that exceeds the
taxing unit's [school district's] rollback tax rate.
(d-1) If, after tax bills for the taxing unit [school
district] have been mailed, a proposition to approve the taxing
unit's [school district's] adopted tax rate is not approved by the
voters of the taxing unit [district] at an election held under this
section, on subsequent adoption of a new tax rate by the governing
body of the taxing unit [district], the assessor for the taxing unit
[school] shall prepare and mail corrected tax bills. The assessor
shall include with each bill a brief explanation of the reason for
and effect of the corrected bill. The date on which the taxes
become delinquent for the year is extended by a number of days equal
to the number of days between the date the first tax bills were sent
and the date the corrected tax bills were sent.
(d-2) If a property owner pays taxes calculated using the
originally adopted tax rate of the taxing unit [school district]
and the proposition to approve the adopted tax rate is not approved
by the voters, the taxing unit [school district] shall refund the
difference between the amount of taxes paid and the amount due under
the subsequently adopted rate if the difference between the amount
of taxes paid and the amount due under the subsequent rate is $1 or
more. If the difference between the amount of taxes paid and the
amount due under the subsequent rate is less than $1, the taxing
unit [school district] 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.
(e) For purposes of this section, local tax funds dedicated
to a junior college district under Section 45.105(e), Education
Code, shall be eliminated from the calculation of the tax rate
adopted by the governing body of a [the] school district. However,
the funds dedicated to the junior college district are subject to
Section 26.085.
(h) For purposes of this section, increases in taxable
values and tax levies occurring within a reinvestment zone under
Chapter 311 (Tax Increment Financing Act), in which a school [the]
district is a participant, shall be eliminated from the calculation
of the tax rate adopted by the governing body of the school
district.
SECTION 5. Section 26.16(d), Tax Code, is amended to read as
follows:
(d) The county assessor-collector shall post immediately
below the table prescribed by Subsection (c) the following
statement:
"The county is providing this table of property tax rate
information as a service to the residents of the county. Each
individual taxing unit is responsible for calculating the property
tax rates listed in this table pertaining to that taxing unit and
providing that information to the county.
"The adopted tax rate is the tax rate adopted by the governing
body of a taxing unit.
"The maintenance and operations rate is the component of the
adopted tax rate of a taxing unit that will impose the amount of
taxes needed to fund maintenance and operation expenditures of the
unit for the following year.
"The debt rate is the component of the adopted tax rate of a
taxing unit that will impose the amount of taxes needed to fund the
unit's debt service for the following year.
"The effective tax rate is the tax rate that would generate
the same amount of revenue in the current tax year as was generated
by a taxing unit's adopted tax rate in the preceding tax year from
property that is taxable in both the current tax year and the
preceding tax year.
"The effective maintenance and operations rate is the tax
rate that would generate the same amount of revenue for maintenance
and operations in the current tax year as was generated by a taxing
unit's maintenance and operations rate in the preceding tax year
from property that is taxable in both the current tax year and the
preceding tax year.
"The rollback tax rate is the highest tax rate a taxing unit
may adopt before requiring voter approval at an election. An [In
the case of a taxing unit other than a school district, the voters
by petition may require that a rollback election be held if the unit
adopts a tax rate in excess of the unit's rollback tax rate. In the
case of a school district, an] election will automatically be held
if a taxing unit [the district] wishes to adopt a tax rate in excess
of the unit's [district's] rollback tax rate."
SECTION 6. Sections 31.12(a) and (b), Tax Code, are amended
to read as follows:
(a) If a refund of a tax provided by Section 11.431(b),
26.08(d-2) [26.07(g)], 26.15(f), 31.11, or 31.111 is paid on or
before the 60th day after the date the liability for the refund
arises, no interest is due on the amount refunded. If not paid on or
before that 60th day, the amount of the tax to be refunded accrues
interest at a rate of one percent for each month or part of a month
that the refund is unpaid, beginning with the date on which the
liability for the refund arises.
(b) For purposes of this section, liability for a refund
arises:
(1) if the refund is required by Section 11.431(b), on
the date the chief appraiser notifies the collector for the unit of
the approval of the late homestead exemption;
(2) if the refund is required by Section 26.08(d-2)
[26.07(g)], on the date the results of the election to reduce the
tax rate are certified;
(3) if the refund is required by Section 26.15(f):
(A) for a correction to the tax roll made under
Section 26.15(b), on the date the change in the tax roll is
certified to the assessor for the taxing unit under Section 25.25;
or
(B) for a correction to the tax roll made under
Section 26.15(c), on the date the change in the tax roll is ordered
by the governing body of the taxing unit;
(4) if the refund is required by Section 31.11, on the
date the auditor for the taxing unit determines that the payment was
erroneous or excessive or, if the amount of the refund exceeds the
applicable amount specified by Section 31.11(a), on the date the
governing body of the unit approves the refund; or
(5) if the refund is required by Section 31.111, on the
date the collector for the taxing unit determines that the payment
was erroneous.
SECTION 7. Section 33.08(b), Tax Code, is amended to read as
follows:
(b) The governing body of the taxing unit or appraisal
district, in the manner required by law for official action, may
provide that taxes that become delinquent on or after June 1 under
Section 26.08(d-1) [26.07(f)], 26.15(e), 31.03, 31.031, 31.032,
31.04, or 42.42 incur an additional penalty to defray costs of
collection. The amount of the penalty may not exceed the amount of
the compensation specified in the applicable contract with an
attorney under Section 6.30 to be paid in connection with the
collection of the delinquent taxes.
SECTION 8. Section 130.016(b), Education Code, is amended
to read as follows:
(b) If the board of trustees of an independent school
district that divests itself of the management, control, and
operation of a junior college district under this section or under
Section 130.017 [of this code] was authorized by [Subsection (e)
of] Section 45.105(e) or under former Section 20.48(e) [20.48 of
this code] to dedicate a portion of its tax levy to the junior
college district before the divestment, the junior college district
may levy an ad valorem tax from and after the divestment. In the
first two years in which the junior college district levies an ad
valorem tax, the tax rate adopted by the governing body may not
exceed the rate that, if applied to the total taxable value
submitted to the governing body under Section 26.04, Tax Code,
would impose an amount equal to the amount of taxes of the school
district dedicated to the junior college under [Subsection (e) of]
Section 45.105(e) or former Section 20.48(e) [20.48 of this code]
in the last dedication before the divestment. In subsequent years,
the tax rate of the junior college district is subject to Section
26.08 [26.07], Tax Code.
SECTION 9. Sections 281.124(d) and (e), Health and Safety
Code, are amended to read as follows:
(d) If a majority of the votes cast in the election favor the
proposition, the tax rate for the specified tax year is the rate
approved by the voters, and that rate is not subject to [a rollback
election under] Section 26.08 [26.07], Tax Code. The board shall
adopt the tax rate as provided by Chapter 26, Tax Code.
(e) If the proposition is not approved as provided by
Subsection (c), the board may not adopt a tax rate for the district
for the specified tax year that exceeds the rate that was not
approved, and Section 26.08 [26.07], Tax Code, applies to the
adopted rate if that rate exceeds the district's rollback tax rate.
SECTION 10. Section 140.010(e), Local Government Code, is
amended to read as follows:
(e) A county or municipality that proposes a property tax
rate that exceeds the lower of the effective tax rate or the
rollback tax rate shall provide the following notice:
"NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX
RATE FOR (INSERT NAME OF COUNTY OR MUNICIPALITY)
"A tax rate of $_____ per $100 valuation has been proposed for
adoption by the governing body of (insert name of county or
municipality). This rate exceeds the lower of the effective or
rollback tax rate, and state law requires that two public hearings
be held by the governing body before adopting the proposed tax
rate. The governing body of (insert name of county or
municipality) proposes to use revenue attributable to the tax rate
increase for the purpose of (description of purpose of increase).
PROPOSED TAX RATE$______ per $100
PRECEDING YEAR'S TAX RATE$______ per $100
EFFECTIVE TAX RATE$______ per $100
ROLLBACK TAX RATE$______ per $100
"The effective tax rate is the total tax rate needed to raise the
same amount of property tax revenue for (insert name of county or
municipality) from the same properties in both the (insert
preceding tax year) tax year and the (insert current tax year) tax
year.
"The rollback tax rate is the highest tax rate that (insert name of
county or municipality) may adopt without holding [before voters
are entitled to petition for] an election to ratify [limit] the rate
[that may be approved to the rollback rate].
"YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS
FOLLOWS:
property tax amount = (rate) x (taxable value of your property) /
100
"For assistance or detailed information about tax calculations,
please contact:
(insert name of county or municipal tax assessor-collector)
(insert name of county or municipality) tax
assessor-collector
(insert address)
(insert telephone number)
(insert e-mail address)
(insert Internet website address, if applicable)
"You are urged to attend and express your views at the following
public hearings on the proposed tax rate:
First Hearing: (insert date and time) at (insert location of
meeting).
Second Hearing: (insert date and time) at (insert location
of meeting)."
SECTION 11. Section 1101.254(f), Special District Local
Laws Code, is amended to read as follows:
(f) This section does not affect the applicability of [any
rights district voters may have to petition for an election under]
Section 26.08 [26.07], Tax Code, to the district's tax rate, except
that if district voters approve a tax rate increase under this
section, [the voters may not petition for an election under]
Section 26.08 [26.07], Tax Code, does not apply [as] to the tax rate
for that year.
SECTION 12. Sections 1122.2522, 3828.157, and 8876.152,
Special District Local Laws Code, are amended to read as follows:
Sec. 1122.2522. ROLLBACK TAX RATE PROVISIONS APPLICABLE.
[(a)] If in any year the board adopts a tax rate that exceeds the
rollback tax rate calculated as provided by Chapter 26, Tax Code,
[the qualified voters of the district by petition may require that]
an election under Section 26.08 of that code must be held to
determine whether or not to approve [reduce] the tax rate adopted by
the board for that year [to the rollback tax rate].
[(b) To the extent a conflict exists between this section
and a provision of the Tax Code, the provision of the Tax Code
prevails.]
Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE
PROVISIONS. Sections 26.04, 26.05, and 26.08 [26.07], Tax Code, do
not apply to a tax imposed under Section 3828.153 or 3828.156.
Sec. 8876.152. APPLICABILITY OF CERTAIN TAX PROVISIONS.
(a) Sections 26.04, 26.05, 26.06, and 26.08 [26.07], Tax Code, do
not apply to a tax imposed by the district.
(b) Sections 49.236(a)(1) and (2) and (b) [Section 49.236],
Water Code, apply [as added by Chapter 248 (H.B. 1541), Acts of the
78th Legislature, Regular Session, 2003, applies] to the district.
SECTION 13. Section 49.107(g), Water Code, is amended to
read as follows:
(g) Sections 26.04, 26.05, and 26.08 [26.07], Tax Code, do
not apply to a tax levied and collected under this section or an ad
valorem tax levied and collected for the payment of the interest on
and principal of bonds issued by a district.
SECTION 14. Section 49.108(f), Water Code, is amended to
read as follows:
(f) Sections 26.04, 26.05, and 26.08 [26.07], Tax Code, do
not apply to a tax levied and collected for payments made under a
contract approved in accordance with this section.
SECTION 15. Section 49.236, Water Code, as added by Chapter
335 (S.B. 392), Acts of the 78th Legislature, Regular Session,
2003, is amended by amending Subsections (a) and (d) and adding
Subsection (e) 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 or
decrease, depending on the change in the taxable value of your
property in relation to the change in taxable value of all other
property and the tax rate that is adopted.
"(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; [and]
(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 exceeds the
rollback tax rate, a description of the purpose of the proposed tax
increase; and
(3) contain a statement in substantially the following
form:
"NOTICE OF VOTE ON TAX RATE [TAXPAYERS' RIGHT TO ROLLBACK ELECTION]
"If operation and maintenance taxes on the average residence
homestead increase by more than six [eight] percent, [the qualified
voters of the district by petition may require that] an election
must be held to determine whether to ratify [reduce] the operation
and maintenance tax rate [to the rollback tax rate] under Section
49.236(d), Water Code."
(d) If the governing body of a district adopts a combined
debt service, operation and maintenance, and contract tax rate that
exceeds the rollback tax rate, [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 must be held to determine
whether [or not] to ratify [reduce] the tax rate adopted for the
current year [to the rollback tax rate] in accordance with the
procedures provided by Sections 26.08(b)-(d) [26.07(b)-(g) and
26.081], Tax Code. For purposes of Sections 26.08(b)-(d)
[26.07(b)-(g)] and this section [subsection], the rollback tax rate
is the sum of the following tax rates:
(1) the current year's debt service tax rate;
(2) the current year's [and] contract tax rate; and
(3) [rates plus] the operation and maintenance tax
rate that would impose 1.06 [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.
(e) Notwithstanding any other provision of this section,
the board may substitute "eight percent" for "six percent" in
Subsection (a) and "1.08" for "1.06" in Subsection (d) if any part
of the district is located in an area declared a disaster area
during the current tax year by the governor or by the president of
the United States.
SECTION 16. The following provisions are repealed:
(1) Section 1063.255, Special District Local Laws
Code;
(2) Section 26.07, Tax Code;
(3) Section 49.236, Water Code, as added by Chapter
248 (H.B. 1541), Acts of the 78th Legislature, Regular Session,
2003; and
(4) Section 49.2361, Water Code.
SECTION 17. (a) The change in law made by this Act applies
to the ad valorem tax rate of a taxing unit beginning with the 2017
tax year, except as provided by Subsection (b) of this section.
(b) If the governing body of a taxing unit adopted an ad
valorem tax rate for the taxing unit for the 2017 tax year before
the effective date of this Act, the change in law made by this Act
applies to the ad valorem tax rate of that taxing unit beginning
with the 2018 tax year, and the law in effect when the tax rate was
adopted applies to the 2017 tax year with respect to that taxing
unit.
SECTION 18. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect on the 91st day after the last day of
the legislative session.