Bill Text: TX SB2516 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the calculation of certain ad valorem tax rates of certain taxing units.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-23 - Referred to Local Government [SB2516 Detail]

Download: Texas-2023-SB2516-Introduced.html

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88R13536 CJC-D
By: Bettencourt S.B. No. 2516

A BILL TO BE ENTITLED
AN ACT
relating to the calculation of certain ad valorem tax rates of
certain taxing units.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 26.04(c), Tax Code, is amended to read as
follows:
(c) After the assessor for the taxing unit submits the
appraisal roll for the taxing unit to the governing body of the
taxing unit as required by Subsection (b), an officer or employee
designated by the governing body shall calculate the no-new-revenue
tax rate and the voter-approval tax rate for the taxing unit, where:
(1) "No-new-revenue tax rate" means a rate expressed
in dollars per $100 of taxable value calculated according to the
following formula:
NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
; and
(2) "Voter-approval tax rate" means a rate expressed
in dollars per $100 of taxable value calculated according to the
following applicable formula:
(A) for a special taxing unit:
VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
OPERATIONS RATE x 1.08) + CURRENT DEBT RATE
; or
(B) for a taxing unit other than a special taxing
unit:
VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
OPERATIONS RATE x 1.025 [1.035]) + (CURRENT DEBT RATE + UNUSED
INCREMENT RATE)
SECTION 2. Sections 26.041(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) In the first year in which an additional sales and use
tax is required to be collected, the no-new-revenue tax rate and
voter-approval tax rate for the taxing unit are calculated
according to the following formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN
RATE
and
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =
(NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.08) + (CURRENT
DEBT RATE - SALES TAX GAIN RATE)
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x
1.025 [1.035]) + (CURRENT DEBT RATE + UNUSED INCREMENT 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) by the current total value.
(b) Except as provided by Subsections (a) and (c), in a year
in which a taxing unit imposes an additional sales and use tax, the
voter-approval tax rate for the taxing unit is calculated according
to the following formula, regardless of whether the taxing unit
levied a property tax in the preceding year:
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST
YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL
VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX
REVENUE RATE)
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x
1.025 [1.035]) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
(CURRENT DEBT RATE + UNUSED INCREMENT 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) 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 no-new-revenue tax rate and voter-approval tax
rate for the taxing unit are calculated according to the following
formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS
RATE
and
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST
YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL
VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x
1.025 [1.035]) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +
(CURRENT DEBT RATE + UNUSED INCREMENT 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.
SECTION 3. 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
2.5 [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 4. Sections 49.23602(a)(2) and (4), Water Code, are
amended to read as follows:
(2) "Mandatory tax election rate" means the rate equal
to the sum of the following tax rates for the district:
(A) the rate that would impose 1.025 [1.035]
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; and
(B) the unused increment rate.
(4) "Voter-approval tax rate" means the rate equal to
the sum of the following tax rates for the district:
(A) the current year's debt service tax rate;
(B) the current year's contract tax rate;
(C) the operation and maintenance tax rate that
would impose 1.025 [1.035] 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; and
(D) the unused increment rate.
SECTION 5. This Act applies only to ad valorem taxes imposed
for an ad valorem tax year that begins on or after the effective
date of this Act.
SECTION 6. This Act takes effect January 1, 2024.