S.B. No.18
AN ACT
relating to the adoption of ad valorem tax rates by taxing units and
to related tax bills.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsections (b) and (d), Section 26.05, Tax
Code, are amended to read as follows:
(b) A taxing unit may not impose property taxes in any year
until the governing body has adopted a tax rate for that year, and
the annual tax rate must be set by ordinance, resolution, or order,
depending on the method prescribed by law for adoption of a law by
the governing body. The vote on the ordinance, resolution, or order
setting the tax rate must be separate from the vote adopting the
budget. The vote on the ordinance, resolution, or order setting a
tax rate that exceeds the effective tax rate must be a record vote.
A motion to adopt an ordinance, resolution, or order setting a tax
rate that exceeds the effective tax rate must be made in the
following form: “I move that property taxes be increased by the
adoption of a tax rate of (specify tax rate).” If the ordinance,
resolution, or order sets a tax rate that, if applied to the total
taxable value, will impose an amount of taxes to fund maintenance
and operation expenditures of the taxing unit that exceeds the
amount of taxes imposed for that purpose in the preceding year, the
taxing unit must:
(1) include in the ordinance, resolution, or order in
type larger than the type used in any other portion of the document:
(A) the following statement: “THIS TAX RATE WILL
RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR’S
TAX RATE.”; and
(B) if the tax rate exceeds the effective
maintenance and operations rate, the following statement: “THE TAX
RATE WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000
HOME BY APPROXIMATELY $(Insert amount).”; and
(2) include on the home page of any Internet website
operated by the unit:
(A) the following statement: “(Insert name of
unit) ADOPTED A TAX RATE THAT WILL RAISE MORE TAXES FOR MAINTENANCE
AND OPERATIONS THAN LAST YEAR’S TAX RATE”; and
(B) if the tax rate exceeds the effective
maintenance and operations rate, the following statement: “THE TAX
RATE WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000
HOME BY APPROXIMATELY $(Insert amount).”
(d) The governing body of a taxing unit other than a school
district may not adopt a tax rate that exceeds the lower of the
rollback tax rate or [103 percent of] the effective tax rate
calculated as provided by this chapter until the governing body has
held two [a] public hearings [hearing] on the proposed tax rate and
has otherwise complied with Section 26.06 and Section 26.065. The
governing body of a taxing unit shall reduce a tax rate set by law or
by vote of the electorate to the lower of the rollback tax rate or
[103 percent of] the effective tax rate and may not adopt a higher
rate unless it first complies with Section 26.06.
SECTION 2. Subsections (a) through (e), Section 26.06, Tax
Code, are amended to read as follows:
(a) A public hearing required by Section 26.05 may not be
held before the seventh day after the date the notice of the public
hearing [on the proposed tax increase] is given. The second hearing
may not be held earlier than the third day after the date of the
first hearing. Each [The] hearing must be on a weekday that is not a
public holiday. Each [The] hearing must be held inside the
boundaries of the unit in a publicly owned building or, if a
suitable publicly owned building is not available, in a suitable
building to which the public normally has access. At the hearings
[hearing], the governing body must afford adequate opportunity for
proponents and opponents of the tax increase to present their
views.
(b) The notice of each of the [a] public hearings [hearing]
may not be smaller than one-quarter page of a standard-size or a
tabloid-size newspaper, and the headline on the notice must be in
18-point or larger type. The notice must[:
[(1)] contain a statement in the following form:
“NOTICE OF PUBLIC HEARING ON TAX INCREASE
“Last year, the (name of taxing unit) property tax rate was
$(insert tax rate adopted in preceding tax year). That rate raised
$(insert total amount of taxes imposed in the preceding tax year), a
portion of which was used to fund operations such as (insert sample
descriptions of unit’s operations).
“This year, (name of taxing unit) is proposing a property tax
rate of $(insert proposed tax rate). That rate would raise $(insert
total amount of taxes that would be imposed), which is $(insert
appropriate amount) more than the taxes imposed last year.
“There will be two public hearings to consider that increase.
The first public hearing will be held on (date and time) at (meeting
place). The second hearing will be held on (date and time) at
(meeting place).
“You have a right to attend the hearings and make comments.
You are encouraged to attend and make comments if you wish.”
[“The (name of the taxing unit) will hold a public hearing on
a proposal to increase total tax revenues from properties on the tax
roll in the preceding year by (percentage by which proposed tax rate
exceeds lower of rollback tax rate or effective tax rate calculated
under this chapter) percent. Your individual taxes may increase at
a greater or lesser rate, or even 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.
[“The public hearing will be held on (date and time) at
(meeting place).
[“(Names of all members of the governing body, showing how
each voted on the proposal to consider the tax increase or, if one
or more were absent, indicating the absences.)”; and
[(2) contain the following information:
[(A) the unit’s 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 taxing unit in the preceding year and in the
current year; the unit’s 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
unit 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 unit 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 unit in the current year on a residence homestead appraised at
the average appraised value of a residence homestead in the current
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 increase or decrease, as
applicable, in the tax to be imposed by the unit on the average
residence homestead in the unit in the current year if the proposed
tax rate is adopted.]
(c) The notice of a public hearing under this section may be
delivered by mail to each property owner in the unit, or [it] may be
published in a newspaper. If the notice is published in a
newspaper, it may not be in the part of the paper in which legal
notices and classified advertisements appear. If the taxing unit
operates an Internet website, the notice must be posted on the
website from the date the notice is first published until the second
public hearing is concluded.
(d) At the public hearings [hearing] the governing body
shall announce the date, time, and place of the meeting at which it
will vote on the proposed tax rate. After each [the] hearing the
governing body shall give notice of the meeting at which it will
vote on the proposed tax rate and the notice shall be in the same
form as prescribed by Subsections (b) and (c), except that it must
state the following:
“NOTICE OF VOTE ON TAX RATE
“The (name of the taxing unit) conducted [a] public hearings
[hearing] on a proposal to increase the total tax revenues of the
(name of the taxing unit) from properties on the tax roll in the
preceding year by (percentage by which proposed tax rate exceeds
lower of rollback tax rate or effective tax rate calculated under
this chapter) percent on (dates [date] and times [time] public
hearings were [hearing was] conducted).
“The (governing body of the taxing unit) is scheduled to vote
on the tax rate that will result in that tax increase at a public
meeting to be held on (date and time) at (meeting place).”
(e) The meeting to vote on the tax increase may not be
earlier than the third day or later than the 14th day after the date
of the second public hearing. The meeting must be held inside the
boundaries of the taxing unit in a publicly owned building or, if a
suitable publicly owned building is not available, in a suitable
building to which the public normally has access. If the governing
body does not adopt a tax rate that exceeds the lower of the
rollback tax rate or [103 percent of] the effective tax rate by the
14th day, it must give a new notice under Subsection (d) before it
may adopt a rate that exceeds the lower of the rollback tax rate or
[103 percent of] the effective tax rate.
SECTION 3. Subsection (d), Section 26.065, Tax Code, is
amended to read as follows:
(d) The notice of the public hearing required by Subsection
(b) must contain a statement that is substantially the same as the
statement required by Section 26.06(b) [26.06(b)(1) and must
contain information that is substantially the same as the
information required by Section 26.06(b)(2)].
SECTION 4. Subsection (b), Section 26.07, Tax Code, is
amended to read as follows:
(b) A petition is valid only if:
(1) it states that it is intended to require an
election in the taxing unit on the question of reducing the tax rate
for the current year;
(2) it is signed by a number of registered voters of
the taxing unit equal to at least:
(A) seven percent of the number of registered
voters of the taxing unit according to the most recent list of
registered voters if the tax rate adopted for the current tax year
would impose taxes for maintenance and operations in an amount of at
least $5 million; or
(B) 10 percent of the number of registered voters
of the taxing unit according to the most recent official list of
registered voters if the tax rate adopted for the current tax year
would impose taxes for maintenance and operations in an amount of
less than $5 million; and
(3) it is submitted to the governing body on or before
the 90th day after the date on which the governing body adopted the
tax rate for the current year.
SECTION 5. Section 31.01, Tax Code, is amended by amending
Subsection (c) and adding Subsection (c-1) to read as follows:
(c) The tax bill or a separate statement accompanying the
tax bill shall:
(1) identify the property subject to the tax;
(2) state the appraised value, assessed value, and
taxable value of the property;
(3) if the property is land appraised as provided by
Subchapter C, D, E, or H, Chapter 23, state the market value and the
taxable value for purposes of deferred or additional taxation as
provided by Section 23.46, 23.55, 23.76, or 23.9807, as applicable;
(4) state the assessment ratio for the unit;
(5) state the type and amount of any partial exemption
applicable to the property, indicating whether it applies to
appraised or assessed value;
(6) state the total tax rate for the unit;
(7) state the amount of tax due, the due date, and the
delinquency date;
(8) explain the payment option and discounts provided
by Sections 31.03 and 31.05, if available to the unit’s taxpayers,
and state the date on which each of the discount periods provided by
Section 31.05 concludes, if the discounts are available;
(9) state the rates of penalty and interest imposed
for delinquent payment of the tax;
(10) include the name and telephone number of the
assessor for the unit and, if different, of the collector for the
unit; [and]
(11) for real property, state for the current tax year
and each of the preceding five tax years:
(A) the appraised value and taxable value of the
property;
(B) the total tax rate for the unit;
(C) the amount of taxes imposed on the property
by the unit; and
(D) the difference, expressed as a percent
increase or decrease, as applicable, in the amount of taxes imposed
on the property by the unit compared to the amount imposed for the
preceding tax year;
(12) for real property, state the differences,
expressed as a percent increase or decrease, as applicable, in the
following for the current tax year as compared to the fifth tax year
before that tax year:
(A) the appraised value and taxable value of the
property;
(B) the total tax rate for the unit; and
(C) the amount of taxes imposed on the property
by the unit; and
(13) include any other information required by the
comptroller.
(c-1) If for any of the preceding six tax years any
information required by Subsection (c)(11) or (12) to be included
in a tax bill or separate statement is unavailable, the tax bill or
statement must state that the information is not available for that
year.
SECTION 6. Subsection (f), Section 26.06, Tax Code, is
repealed.
SECTION 7. (a) The change in law made by this Act applies
to the ad valorem tax rate of a taxing unit beginning with the 2005
tax year, except as provided by Subsection (b) of this section.
(b) If the governing body of a taxing unit has adopted an ad
valorem tax rate for the taxing unit for the 2005 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 2006 tax year, and the law in effect when the tax rate was
adopted applies to the 2005 tax year with respect to that taxing
unit.
SECTION 8. 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 September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 18 passed the Senate on
May 12, 2005, by the following vote: Yeas 27, Nays 4.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 18 passed the House on
May 25, 2005, by a non-record vote.**
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor
**Due to a clerical error in the endorsement of the House vote on
the bill back for S.B. No. 18, the certification page of the
Enrolled Version of the bill reflects, in error, that it was a
non-record vote. The actual vote on final passage in the House, as
recorded in the House Journal, was: Yeas 144, Nays 0, two present
not voting (See Daily House Journal, page 4470, May 25, 2005).
Therefore, the bill received the necessary vote for immediate
effect.
