voters can force elections on hospital and college district rates

The text as introduced · 4,264 words

89R11031 CJC-D

By: Bettencourt
S.B. No. 2528

A BILL TO BE ENTITLED

AN ACT

relating to the calculation of the petition election tax rate for

certain taxing units and the ability of the voters to petition for

an election to determine whether to reduce the ad valorem tax rate

adopted by those taxing units to the petition election tax rate.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 5.07(f), Tax Code, is amended to read as

follows:

(f) The comptroller shall prescribe tax rate calculation

forms to be used by the designated officer or employee of each

taxing unit to calculate and submit the no-new-revenue tax rate ,

[ and ] the voter-approval tax rate , and, if applicable, the petition

election tax rate for the taxing unit as required by Chapter 26.

SECTION 2. The heading to Section 26.04, Tax Code, is

amended to read as follows:

Sec. 26.04. SUBMISSION OF ROLL TO GOVERNING BODY;

NO-NEW-REVENUE , [ AND ] VOTER-APPROVAL , AND PETITION ELECTION TAX

RATES.

SECTION 3. Section 26.04, Tax Code, is amended by adding

Subsection (c-1) and amending Subsections (c-2), (d-1), (d-2),

(d-3), (e), (e-5), and (f) to read as follows:

(c-1) This subsection applies only to a taxing unit that is

a hospital district or a junior college district. In addition to

the tax rates an officer or employee designated by the governing

body of a taxing unit to which this section applies is required to

calculate under Subsection (c), the officer or employee shall

calculate the petition election tax rate for the taxing unit

according to the formula prescribed by Section 26.076.

(c-2) Notwithstanding any other provision of this section,

if the assessor for a taxing unit receives a certified estimate of

the taxable value of property in the taxing unit under Section

26.01(a-1), the officer or employee designated by the governing

body of the taxing unit shall calculate the no-new-revenue tax

rate , the [ and ] voter-approval tax rate , and, if applicable, the

petition election tax rate using the certified estimate of taxable

value.

(d-1) The designated officer or employee shall use the tax

rate calculation forms prescribed by the comptroller under Section

5.07 in calculating the no-new-revenue tax rate , [ and ] the

voter-approval tax rate , and, if applicable, the petition election

tax rate .

(d-2) The designated officer or employee may not submit the

no-new-revenue tax rate , [ and ] the voter-approval tax rate , and, if

applicable, the petition election tax rate to the governing body of

the taxing unit and the taxing unit may not adopt a tax rate until

the designated officer or employee certifies on the tax rate

calculation forms that the designated officer or employee has

accurately calculated the tax rates and has used values that are the

same as the values shown in the taxing unit's certified appraisal

roll in performing the calculations.

(d-3) As soon as practicable after the designated officer or

employee calculates the no-new-revenue tax rate , [ and ] the

voter-approval tax rate , and, if applicable, the petition election

tax rate of the taxing unit, the designated officer or employee

shall submit the tax rate calculation forms used in calculating the

rates to the county assessor-collector for each county in which all

or part of the territory of the taxing unit is located.

(e) By August 7 or as soon thereafter as practicable, the

designated officer or employee shall submit the rates to the

governing body. The designated officer or employee shall post

prominently on the home page of the taxing unit's Internet website

in the form prescribed by the comptroller:

(1) the no-new-revenue tax rate, the voter-approval

tax rate, and, if applicable, the petition election tax rate and an

explanation of how each of those rates was [ they were ] calculated;

(2) the estimated amount of interest and sinking fund

balances and the estimated amount of maintenance and operation or

general fund balances remaining at the end of the current fiscal

year that are not encumbered with or by corresponding existing debt

obligation; and

(3) a schedule of the taxing unit's debt obligations

showing:

(A) the amount of principal and interest that

will be paid to service the taxing unit's debts in the next year

from property tax revenue, including payments of lawfully incurred

contractual obligations providing security for the payment of the

principal of and interest on bonds and other evidences of

indebtedness issued on behalf of the taxing unit by another

political subdivision and, if the taxing unit is created under

Section 52, Article III, or Section 59, Article XVI, Texas

Constitution, payments on debts that the taxing unit anticipates to

incur in the next calendar year;

(B) the amount by which taxes imposed for debt

are to be increased because of the taxing unit's anticipated

collection rate; and

(C) the total of the amounts listed in Paragraphs

(A)-(B), less any amount collected in excess of the previous year's

anticipated collections certified as provided in Subsection (b).

(e-5) The governing body of a taxing unit shall include as

an appendix to the taxing unit's budget for a fiscal year the tax

rate calculation forms used by the designated officer or employee

of the taxing unit to calculate the no-new-revenue tax rate , [ and ]

the voter-approval tax rate , and, if applicable, the petition

election tax rate of the taxing unit for the tax year in which the

fiscal year begins.

(f) If as a result of consolidation of taxing units a taxing

unit includes territory that was in two or more taxing units in the

preceding year, the amount of taxes imposed in each in the preceding

year is combined for purposes of calculating the no-new-revenue ,

[ and ] voter-approval , and, if applicable, petition election tax

rates under this section.

SECTION 4. Section 26.041, Tax Code, is amended by adding

Subsections (a-1), (b-1), and (c-1) to read as follows:

(a-1) In this subsection, "sales tax gain rate" has the

meaning assigned by Subsection (a). In the first year in which an

additional sales and use tax is required to be collected, the

petition election tax rate of a taxing unit that is a hospital

district or a junior college district is calculated according to

the following formula:

PETITION ELECTION TAX RATE = (NO-NEW-REVENUE

MAINTENANCE AND OPERATIONS RATE x 1.035) + (CURRENT

DEBT RATE - SALES TAX GAIN RATE)

(b-1) In this subsection, "last year's maintenance and

operations expense" and "sales tax revenue rate" have the meanings

assigned by Subsection (b). Except as provided by Subsections

(a-1) and (c-1), in a year in which a taxing unit that is a hospital

district or a junior college district imposes an additional sales

and use tax, the petition election 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:

PETITION ELECTION TAX RATE = [(LAST YEAR'S MAINTENANCE

AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE

- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX

REVENUE RATE)

(c-1) In this subsection, "last year's maintenance and

operations expense" has the meaning assigned by Subsection (c). In

a year in which a taxing unit that is a hospital district or a junior

college district and that has been imposing an additional sales and

use tax ceases to impose an additional sales and use tax, the

petition election tax rate for the taxing unit is calculated

according to the following formula:

PETITION ELECTION TAX RATE = [(LAST YEAR'S MAINTENANCE

AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE

- NEW PROPERTY VALUE)] + CURRENT DEBT RATE

SECTION 5. Chapter 26, Tax Code, is amended by adding

Sections 26.064 and 26.076 to read as follows:

Sec. 26.064. ALTERNATE PROVISIONS FOR TAX RATE NOTICE WHEN

ADOPTED RATE EXCEEDS PETITION ELECTION TAX RATE. (a) This section

applies only to a taxing unit:

(1) that is a hospital district or a junior college

district;

(2) that is required to provide notice under Section

26.06(b-2) or 26.061; and

(3) for which the adopted tax rate exceeds the

petition election tax rate.

(b) In the notice required to be provided by the taxing unit

under Section 26.06(b-2) or 26.061, as applicable, the taxing unit

shall:

(1) add the following to the end of the list of rates

included in the notice:

"PETITION ELECTION TAX 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

adopted tax rate for (name of taxing unit) exceeds the petition

election tax rate for (name of taxing unit) and the voters of the

taxing unit petition for an election to reduce the tax rate under

Section 26.076, Tax Code.";

(3) add the following definition of "petition election

tax rate": "The petition election tax rate is the highest tax rate

(name of taxing unit) may adopt before the voters of the taxing unit

may petition for an election to reduce the tax rate under Section

26.076, Tax Code."; and

(4) substitute the following for the provision that

provides notice that an election is not required: "The proposed tax

rate is not greater than the voter-approval tax rate. This means

that (name of taxing unit) is not required to hold an election so

that the voters may accept or reject the proposed tax rate.

However, the proposed tax rate exceeds the rate that allows voters

to petition for an election to reduce the tax rate under Section

26.076, 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 petition election tax rate of the (name

of taxing unit)."

Sec. 26.076. PETITION ELECTION TO REDUCE TAX RATE OF

HOSPITAL DISTRICT OR JUNIOR COLLEGE DISTRICT. (a) In this section,

"petition election tax rate" means a rate expressed in dollars per

$100 of taxable value calculated according to the following

formula:

PETITION ELECTION TAX RATE = (NO-NEW-REVENUE

MAINTENANCE AND OPERATIONS RATE x 1.035) + CURRENT

DEBT RATE

(b) This section applies only:

(1) to a taxing unit that is a hospital district or a

junior college district; and

(2) in a tax year in which a taxing unit to which this

section applies adopts a tax rate that:

(A) exceeds the taxing unit's petition election

tax rate; and

(B) does not exceed the taxing unit's voter

approval tax rate.

(c) The qualified voters of a taxing unit to which this

section applies 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 petition

election tax rate.

(d) A petition is valid only if the petition:

(1) states that it is intended to require an election

in the taxing unit on the question of reducing the taxing unit's

adopted tax rate for the current tax year;

(2) is signed by a number of registered voters of the

taxing unit equal to at least three percent of the registered voters

of the taxing unit determined according to the most recent list of

those voters; and

(3) is submitted to the governing body of the taxing

unit not later than the 90th day after the date on which the

governing body adopts the tax rate for the current tax year.

(e) Not later than the 20th day after the date on which a

petition is submitted, the governing body shall determine whether

the petition is valid and must by resolution state the governing

body's determination. If the governing body fails to make the

determination in the time and manner required by this subsection,

the petition is considered to be valid for the purposes of this

section.

(f) If the governing body determines that the petition is

valid or fails to make the determination in the time and manner

required by Subsection (e), the governing body shall order that an

election be held in the taxing unit on the next uniform election

date that allows sufficient time to comply with the requirements of

other law.

(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 petition election 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 petition

election tax rate.

(i) If the proposition is not approved as provided by

Subsection (h), the tax rate for the taxing unit for the current tax

year is the tax rate adopted by the governing body of the taxing

unit for the current tax year.

(j) If the tax rate is reduced by an election held under this

section after tax bills for the taxing unit have been mailed, the

assessor for the taxing unit shall prepare and mail corrected tax

bills. The assessor shall include with the bill a brief explanation

of the reason for and effect of the corrected bill. The date on

which the taxes become delinquent for the tax 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.

(k) If a property owner pays taxes calculated using the

higher tax rate when the tax rate is reduced by an election held

under this section, the taxing unit shall refund the difference

between the amount of taxes paid and the amount due under the

reduced tax rate if the difference between the amount of taxes paid

and the amount due under the reduced tax rate is $1 or more. If the

difference between the amount of taxes paid and the amount due under

the reduced 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 6. Sections 26.16(a), (d), and (d-1), Tax Code, are

amended to read as follows:

(a) Each county shall maintain an Internet website. The

county assessor-collector for each county shall post on the

Internet website maintained by the county the following information

for the most recent five tax years for each taxing unit all or part

of the territory of which is located in the county:

(1) the adopted tax rate;

(2) the maintenance and operations rate;

(3) the debt rate;

(4) the no-new-revenue tax rate;

(5) the no-new-revenue maintenance and operations

rate; [ and ]

(6) the voter-approval tax rate ; and

(7) if applicable, the petition election tax rate .

(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

taxing 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

taxing unit's debt service for the following year.

"The no-new-revenue 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 no-new-revenue 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 voter-approval tax rate is the highest tax rate a taxing

unit may adopt before requiring voter approval at an election. An

election will automatically be held if a taxing unit wishes to adopt

a tax rate in excess of the taxing unit's voter-approval tax rate.

"The petition election tax rate is the highest tax rate a

taxing unit that is a hospital district or a junior college district

may adopt before the voters of the taxing unit may petition for an

election to reduce the tax rate under Section 26.076, Tax Code. "

(d-1) In addition to posting the information described by

Subsection (a), the county assessor-collector shall post on the

Internet website of the county for each taxing unit all or part of

the territory of which is located in the county:

(1) the tax rate calculation forms used by the

designated officer or employee of each taxing unit to calculate the

no-new-revenue and voter-approval tax rates of the taxing unit for

the most recent five tax years beginning with the 2020 tax year and,

if applicable, the forms used to calculate the petition election

tax rates of the taxing unit for the most recent five tax years

beginning with the 2026 tax year , as certified by the designated

officer or employee under Section 26.04(d-2); and

(2) the name and official contact information for each

member of the governing body of the taxing unit.

SECTION 7. Sections 26.17(b) and (e), Tax Code, are amended

to read as follows:

(b) The database must include, with respect to each property

listed on the appraisal roll for the appraisal district:

(1) the property's identification number;

(2) the property's market value;

(3) the property's taxable value;

(4) the name of each taxing unit in which the property

is located;

(5) for each taxing unit other than a school district

in which the property is located:

(A) the no-new-revenue tax rate; [ and ]

(B) the voter-approval tax rate; and

(C) if applicable, the petition election tax

rate;

(6) for each school district in which the property is

located:

(A) the tax rate that would maintain the same

amount of state and local revenue per student that the district

received in the school year beginning in the preceding tax year; and

(B) the voter-approval tax rate;

(7) the tax rate proposed by the governing body of each

taxing unit in which the property is located;

(8) for each taxing unit other than a school district

in which the property is located, the taxes that would be imposed on

the property if the taxing unit adopted a tax rate equal to:

(A) the no-new-revenue tax rate; and

(B) the proposed tax rate;

(9) for each school district in which the property is

located, the taxes that would be imposed on the property if the

district adopted a tax rate equal to:

(A) the tax rate that would maintain the same

amount of state and local revenue per student that the district

received in the school year beginning in the preceding tax year; and

(B) the proposed tax rate;

(10) for each taxing unit other than a school district

in which the property is located, the difference between the amount

calculated under Subdivision (8)(A) and the amount calculated under

Subdivision (8)(B);

(11) for each school district in which the property is

located, the difference between the amount calculated under

Subdivision (9)(A) and the amount calculated under Subdivision

(9)(B);

(12) the date, time, and location of the public

hearing, if applicable, on the proposed tax rate to be held by the

governing body of each taxing unit in which the property is located;

(13) the date, time, and location of the public

meeting, if applicable, at which the tax rate will be adopted to be

held by the governing body of each taxing unit in which the property

is located; and

(14) for each taxing unit in which the property is

located, an e-mail address at which the taxing unit is capable of

receiving written comments regarding the proposed tax rate of the

taxing unit.

(e) The officer or employee designated by the governing body

of each taxing unit in which the property is located to calculate

the no-new-revenue tax rate , [ and ] the voter-approval tax rate ,

and, if applicable, the petition election tax rate for the taxing

unit must electronically incorporate into the database:

(1) the information described by Subsections (b)(5),

(6), (7), (12), and (13), as applicable, as the information becomes

available; and

(2) the tax rate calculation forms prepared under

Section 26.04(d-1) at the same time the designated officer or

employee submits the tax rates to the governing body of the taxing

unit under Section 26.04(e).

SECTION 8. Section 31.12(b), Tax Code, is amended to read as

follows:

(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 taxing

unit of the approval of the late homestead exemption;

(2) if the refund is required by Section 26.07(g) ,

[ or ] 26.075(k), or 26.076(k), on the date the results of the

election to approve or reduce the tax rate, as applicable, 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 taxing unit approves the refund;

(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; or

(6) if the refund is required by Section 31.112, on the

date required by Section 31.112(d) or (e), as applicable.

SECTION 9. 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 26.075(j), 26.076(j), 26.15(e), 31.03, 31.031, 31.032,

31.033, 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 10. Section 281.107(j), Health and Safety Code, is

amended to read as follows:

(j) The portion of the rate of ad valorem tax that is to be

levied and assessed each year by or for the district that is

allocated by the district to the payment of the principal of and the

interest on bonds and other obligations or the maintenance of

reserves therefor in accordance with this section shall be applied

as a payment on current debt in calculating the current debt rate

under the applicable voter-approval tax rate and petition election

tax rate provisions of Chapter 26, Tax Code.

SECTION 11. 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 Section

26.07 or 26.076 , 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 (d), 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 :

(1) Section 26.07, Tax Code, applies to the adopted

rate if that rate exceeds the district's voter-approval tax rate ;

and

(2) Section 26.076, Tax Code, applies to the adopted

tax rate if that rate exceeds the district's petition election tax

rate .

SECTION 12. This Act applies only to an ad valorem tax year

that begins on or after the effective date of this Act.

SECTION 13. This Act takes effect January 1, 2026.