Bill Text: TX SB1814 | 2023-2024 | 88th Legislature | Comm Sub

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Bill Title: Relating to the current debt rate and tax rate of a taxing unit for ad valorem tax purposes.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed - Dead) 2023-05-23 - Committee report sent to Calendars [SB1814 Detail]

Download: Texas-2023-SB1814-Comm_Sub.html

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88R30273 SHH-D
By: Bettencourt S.B. No. 1814
(Shine)
Substitute the following for S.B. No. 1814: No.

A BILL TO BE ENTITLED
AN ACT
relating to the current debt rate and tax rate of a taxing unit for
ad valorem tax purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 44.004(c), Education Code, is amended to
read as follows:
(c) The notice of public meeting to discuss and adopt the
budget and the proposed tax rate 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. Subject
to Subsection (d), the notice must:
(1) contain a statement in the following form:
"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
"The (name of school district) will hold a public meeting at
(time, date, year) in (name of room, building, physical location,
city, state). The purpose of this meeting is to discuss the school
district's budget that will determine the tax rate that will be
adopted. Public participation in the discussion is invited." The
statement of the purpose of the meeting must be in bold type. In
reduced type, the notice must state: "The tax rate that is
ultimately adopted at this meeting or at a separate meeting at a
later date may not exceed the proposed rate shown below unless the
district publishes a revised notice containing the same information
and comparisons set out below and holds another public meeting to
discuss the revised notice." In addition, in reduced type, the
notice must state: "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.";
(2) contain a section entitled "Comparison of Proposed
Budget with Last Year's Budget," which must show the difference,
expressed as a percent increase or decrease, as applicable, in the
amounts budgeted for the preceding fiscal year and the amount
budgeted for the fiscal year that begins in the current tax year for
each of the following:
(A) maintenance and operations;
(B) debt service; and
(C) total expenditures;
(3) contain a section entitled "Total Appraised Value
and Total Taxable Value," which must show the total appraised value
and the total taxable value of all property and the total appraised
value and the total taxable value of new property taxable by the
district in the preceding tax year and the current tax year as
calculated under Section 26.04, Tax Code;
(4) contain a statement of the total amount of the
outstanding and unpaid bonded indebtedness of the school district;
(5) contain a section entitled "Comparison of Proposed
Rates with Last Year's Rates," which must:
(A) show in rows the tax rates described by
Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
property, for columns entitled "Maintenance & Operations,"
"Interest & Sinking Fund," and "Total," which is the sum of
"Maintenance & Operations" and "Interest & Sinking Fund":
(i) the school district's "Last Year's
Rate";
(ii) the "Rate to Maintain Same Level of
Maintenance & Operations Revenue & Pay Debt Service," which:
(a) in the case of "Maintenance &
Operations," is the tax rate that, when applied to the current
taxable value for the district, as certified by the chief appraiser
under Section 26.01, Tax Code, and as adjusted to reflect changes
made by the chief appraiser as of the time the notice is prepared,
would impose taxes in an amount that, when added to state funds to
be distributed to the district under Chapter 48, would provide the
same amount of maintenance and operations taxes and state funds
distributed under Chapter 48 per student in average daily
attendance for the applicable school year that was available to the
district in the preceding school year; and
(b) in the case of "Interest & Sinking
Fund," is the tax rate that, when applied to the current taxable
value for the district, as certified by the chief appraiser under
Section 26.01, Tax Code, and as adjusted to reflect changes made by
the chief appraiser as of the time the notice is prepared, and when
multiplied by the district's anticipated collection rate, would
impose taxes in an amount that, when added to state funds to be
distributed to the district under Chapter 46 and any excess taxes
collected to service the district's debt during the preceding tax
year but not used for that purpose during that year, would provide
the minimum dollar amount required to be paid to service the
district's debt; and
(iii) the "Proposed Rate";
(B) contain fourth and fifth columns aligned with
the columns required by Paragraph (A) that show, for each row
required by Paragraph (A):
(i) the "Local Revenue per Student," which
is computed by multiplying the district's total taxable value of
property, as certified by the chief appraiser for the applicable
school year under Section 26.01, Tax Code, and as adjusted to
reflect changes made by the chief appraiser as of the time the
notice is prepared, by the total tax rate, and dividing the product
by the number of students in average daily attendance in the
district for the applicable school year; and
(ii) the "State Revenue per Student," which
is computed by determining the amount of state aid received or to be
received by the district under Chapters 43, 46, and 48 and dividing
that amount by the number of students in average daily attendance in
the district for the applicable school year; and
(C) contain an asterisk after each calculation
for "Interest & Sinking Fund" and a footnote to the section that, in
reduced type, states "The Interest & Sinking Fund tax revenue is
used to pay for bonded indebtedness on construction, equipment, or
both. The bonds, and the tax rate necessary to pay those bonds, were
approved by the voters of this district.";
(6) contain a section entitled "Comparison of Proposed
Levy with Last Year's Levy on Average Residence," which must:
(A) show in rows the information described by
Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
entitled "Last Year" and "This Year":
(i) "Average Market Value of Residences,"
determined using the same group of residences for each year;
(ii) "Average Taxable Value of Residences,"
determined after taking into account the limitation on the
appraised value of residences under Section 23.23, Tax Code, and
after subtracting all homestead exemptions applicable in each year,
other than exemptions available only to disabled persons or persons
65 years of age or older or their surviving spouses, and using the
same group of residences for each year;
(iii) "Last Year's Rate Versus Proposed
Rate per $100 Value"; and
(iv) "Taxes Due on Average Residence,"
determined using the same group of residences for each year; and
(B) contain the following information: "Increase
(Decrease) in Taxes" expressed in dollars and cents, which is
computed by subtracting the "Taxes Due on Average Residence" for
the preceding tax year from the "Taxes Due on Average Residence" for
the current tax year;
(7) contain the following statement in bold print:
"Under state law, the dollar amount of school taxes imposed on the
residence of a person 65 years of age or older or of the surviving
spouse of such a person, if the surviving spouse was 55 years of age
or older when the person died, may not be increased above the amount
paid in the first year after the person turned 65, regardless of
changes in tax rate or property value.";
(8) contain the following statement in bold print:
"Notice of Voter-Approval Rate: The highest tax rate the district
can adopt before requiring voter approval at an election is (the
school district voter-approval rate determined under Section
26.08, Tax Code). This election will be automatically held if the
district adopts a rate in excess of the voter-approval rate of (the
school district voter-approval rate)."; and
(9) contain a section entitled "Fund Balances," which
must include 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 debt
obligation, less estimated funds necessary for the operation of the
district before the receipt of the first payment under Chapter 48 in
the succeeding school year.
SECTION 2. Section 26.012(3), Tax Code, is amended to read
as follows:
(3) "Current debt service" means the minimum dollar
amount required to be expended for debt service for the current
year.
SECTION 3. Section 26.04(e), Tax Code, is amended to read as
follows:
(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 an explanation of how 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 minimum dollar amount of principal and
interest required to [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).
SECTION 4. Section 26.05, Tax Code, is amended by adding
Subsections (a-1) and (a-2) to read as follows:
(a-1) The governing body of a taxing unit may approve a rate
described by Subsection (a)(1) that exceeds the rate for the taxing
unit as determined under that subsection only if:
(1) the rate is proposed to be approved by a motion
that:
(A) states the rate determined under Subsection
(a)(1);
(B) states the proposed rate;
(C) states the difference between the proposed
rate and the rate determined under Subsection (a)(1); and
(D) describes the purpose for which the excess
revenue collected from the proposed rate will be used; and
(2) the motion is approved by at least 60 percent of
the members of the governing body.
(a-2) If the governing body of a taxing unit approves a rate
described by Subsection (a)(1) under Subsection (a-1) for a tax
year, the rate approved under Subsection (a-1) is considered to be
the current debt rate of the taxing unit for that tax year. The
officer or employee designated by the governing body to calculate
the voter-approval tax rate of the taxing unit under this chapter
shall recalculate that rate to account for the new current debt
rate, and that recalculated voter-approval tax rate is considered
to be the voter-approval tax rate of the taxing unit for that tax
year.
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.