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.