Sec. 26.01. Submission of Rolls to Taxing Units.

(a) By July 25, the chief appraiser shall prepare and certify to the assessor for each taxing unit participating in the district that part of the appraisal roll for the district that lists the property taxable by the unit. The part certified to the assessor is the appraisal roll for the unit. The chief appraiser shall consult with the assessor for each taxing unit and notify each unit in writing by April 1 of the form in which the roll will be provided to each unit.

(b) When a chief appraiser submits an appraisal roll for county taxes to a county assessor-collector, he also shall certify the roll to the comptroller. However, the comptroller by rule may provide for submission of only a summary of the appraisal roll. In that event, the chief appraiser shall certify the summary in the form and manner prescribed by the comptroller's rule.

(c) The chief appraiser shall prepare and certify to the assessor for each taxing unit a listing of those properties which are taxable by that unit but which are under protest and therefore not included on the appraisal roll approved by the appraisal review board and certified by the chief appraiser. This listing shall include the appraised market value, productivity value (if applicable), and taxable value as determined by the appraisal district and shall also include the market value, taxable value, and productivity value (if applicable) as claimed by the property owner filing the protest if available. If the property owner does not claim a value and the appraised value of the property in the current year is equal to or less than its value in the preceding year, the listing shall include a reasonable estimate of the market value, taxable value, and productivity value (if applicable) that would be assigned to the property if the taxpayer's claim is upheld. If the property owner does not claim a value and the appraised value of the property is higher than its appraised value in the preceding year, the listing shall include the appraised market value, productivity value (if applicable) and taxable value of the property in the preceding year, except that if there is a reasonable likelihood that the appraisal review board will approve a lower appraised value for the property than its appraised value in the preceding year, the chief appraiser shall make a reasonable estimate of the taxable value that would be assigned to the property if the property owner's claim is upheld. The taxing unit shall use the lower value for calculations as prescribed in Sections 26.04 and 26.041 of this code.

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Sec. 26.012. Definitions.

In this chapter:

(1) "Additional sales and use tax" means an additional sales and use tax imposed by a city under Section 321.101 (b) of this code, a sales and use tax imposed by a county under Chapter 323 of this code, or a sales and use tax imposed by a hospital district.

(2) "Collection rate" means an estimate of the total amount of taxes to be levied in the current year and collected before July 1 of the next year, plus any additional taxes imposed under Chapter 23 of this code collected during the same period, plus the total amount of delinquent taxes levied in any preceding year that will be collected between July 1 of the current year and June 30 of the following year, expressed as a percentage of the total amount of taxes that will be levied in the current year.

(3) "Current debt" means debt service for the current year.

(4) "Current debt rate" means a rate expressed in dollars per $100 of taxable value and calculated according to the following formula: CURRENT DEBT RATE = [(CURRENT DEBT SERVICE - EXCESS COLLECTIONS) ßdividedßby (CURRENT TOTAL VALUE X COLLECTION RATE)] + (CURRENT JUNIOR COLLEGE LEVY ßdividedßby CURRENT TOTAL VALUE) ß{}ßCURRENT DEBT RATE = (CURRENT DEBT SERVICE - EXCESS COLLECTIONS) + ________________ ?? (CURRENT TOTAL VALUE X COLLECTION RATE) CURRENT JUNIOR COLLEGE LEVY __________ ?? CURRENT TOTAL VALUE

(5) "Current junior college levy" means the amount of taxes the governing body proposes to dedicate in the current year to a junior college district under Section 20.48(e), Education Code.

(6) "Current total value" means the total taxable value of property listed on the appraisal roll for the current year, including all appraisal roll supplements and corrections as of the date of the calculation, less the taxable value of property exempted for the current tax year for the first time under Section 11.31, except that the current total value for a school district excludes the total value of homesteads that qualify for a tax limitation as provided by Section 11.26.

(7) "Debt" means a bond, certificate of obligation, or other evidence of indebtedness owed by a taxing unit that is payable in installments over a period of more than one year, not budgeted for payment from maintenance and operations funds, and secured by a pledge of property taxes, or a payment made under contract to secure indebtedness of a similar nature issued by another political subdivision on behalf of the taxing unit.

(8) "Debt service" means the total amount expended or to be expended by a taxing unit from property tax revenues to pay principal of and interest on debts or other payments required by contract to secure the debts.

(9) "Effective maintenance and operations rate" means a rate expressed in dollars per $100 of taxable value and calculated according to the following formula: EFFECTIVE MAINTENANCE AND OPERATIONS RATE = (LAST YEAR'S LEVY - LAST YEAR'S DEBT LEVY - LAST YEAR'S JUNIOR COLLEGE LEVY) ßdividedßby (CURRENT TOTAL VALUE - NEW PROPERTY VALUE) ß{}ßLAST YEAR'S - LAST YEAR'S - LAST YEAR'S JUNIOR LEVY DEBT LEVY COLLEGE LEVY ______________________?? (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)

(10) "Excess collections" means the amount, if any, by which debt taxes collected in the preceding year exceeded the amount anticipated in the preceding year's calculation of the rollback rate, as certified by the collector under Section 26.04(b) of this code.

(11) "Last year's debt levy" means the total of:

(A) the amount of taxes that would be generated by multiplying the total taxable value of property on the appraisal roll for the preceding year, including all appraisal roll supplements and corrections, other than corrections made pursuant to Section 25.25(d) of this code, as of the date of calculation, by the debt rate adopted by the governing body in the preceding year under Section 26.05(a)(1) of this code; and

(B) the amount of debt taxes refunded by the taxing unit in the preceding year for tax years before that year.

(12) "Last year's junior college levy" means the amount of taxes dedicated by the governing body in the preceding year for use of a junior college district under Section 20.48(e), Education Code.

(13) "Last year's levy" means the total of:

(A) the amount of taxes that would be generated by multiplying the total tax rate adopted by the governing body in the preceding year by the total taxable value of property on the appraisal roll for the preceding year, including all appraisal roll supplements and corrections other than corrections made pursuant to Section 25.25(d) of this code, as of the date of the calculation, except that last year's taxable value for a school district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.26 of this code; and

(B) the amount of taxes refunded by the taxing unit in the preceding year for tax years before that year.

(14) "Last year's total value" means the total taxable value of property listed on the appraisal roll for the preceding year, including all appraisal roll supplements and corrections, other than corrections made pursuant to Section 25.25(d) of this code, as of the date of the calculation, except that last year's taxable value for a school district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.26 of this code.

(15) "Lost property levy" means the amount of taxes levied in the preceding year on property value that was taxable in the preceding year but is not taxable in the current year because the property is exempt in the current year under a provision of this code other than Section 11.251, the property has qualified for special appraisal under Chapter 23 of this code in the current year, or the property is located in territory that has ceased to be a part of the unit since the preceding year.

(16) "Maintenance and operations" means any lawful purpose other than debt service for which a taxing unit may spend property tax revenues.

(17) "New property value" means:

(A) the total taxable value of property added to the appraisal roll in the current year by annexation and improvements listed on the appraisal roll that were made after January 1 of the preceding tax year, including personal property located in new improvements that was brought into the unit after January 1 of the preceding tax year; and

(B) property value that is included in the current total value for the tax year succeeding a tax year in which any portion of the value of the property was excluded from the total value because of the application of a tax abatement agreement to all or a portion of the property, less the value of the property that was included in the total value for the preceding tax year.

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Sec. 26.02. Assessment Ratios Prohibited.

The assessment of property for taxation on the basis of a percentage of its appraised value is prohibited. All property shall be assessed on the basis of 100 percent of its appraised value.

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Sec. 26.04. Submission of Roll to Governing Body.

(a) On receipt of the appraisal roll, the assessor for a taxing unit shall determine the total appraised value, the total assessed value, and the total taxable value of property taxable by the unit. He shall also determine, using information provided by the appraisal office, the appraised, assessed, and taxable value of new property.

Text of subsec. (b) as amended by Acts 1987, 70th Leg., ch. 699, Sec. 1, and by Acts 1987, 70th Leg., ch. 988, Sec. 1

(b) By August 1 or as soon thereafter as possible:

(1) the assessor shall submit to the governing body of the unit the appraisal roll for the unit showing the total appraised, assessed, and taxable values of all property and the total taxable value of new property; and

(2) the collector for the unit shall certify to the governing body:

(A) the anticipated collection rate of the unit for the current year; and

(B) if the sum of the amount of taxes imposed in the preceding year that is collected before July 1 of the current year and the amount of delinquent taxes imposed in previous years, including any penalties and interest on those taxes, that is collected on or after July 1 of the preceding year and before July 1 of the current year exceeds the amount that the collector estimated would be collected in calculating the unit's anticipated collection rate for the preceding year, the amount calculated by multiplying the difference between those amounts by a fraction, the numerator of which is the rate component adopted by the governing body under Section 26.05(a)(1) of this code for the preceding year and the denominator of which is the total tax rate adopted for the preceding year.

Text of subsec. (b) as amended by Acts 1987, 70th Leg., ch. 947, Sec. 3

(b) The assessor shall submit the appraisal roll for the unit showing the total appraised, assessed, and taxable values of all property and the total taxable value of new property to the governing body of the unit by August 1 or as soon thereafter as practicable. By August 1, the taxing unit's collector shall certify an estimate of the collection rate for the current year to the governing body. If the collector certified an anticipated collection rate in the preceding year and the actual collection rate in that year exceeded the anticipated rate, the collector shall also certify the amount of debt taxes collected in excess of the anticipated amount in the preceding year.

(c) An officer or employee designated by the governing body shall subtract from the total amount of property taxes imposed by the unit in the preceding year, including taxes imposed on appraised value that was reduced by the final determination of a court in an appeal under Chapter 42 of this code:

(1) the amount of taxes imposed in the preceding year to pay principal of and interest on debt of the unit and to pay lawfully incurred contractual obligations providing security for the payment of principal of and interest on bonds or other evidences of indebtedness issued on behalf of the unit by another political subdivision;

(2) the amount of taxes imposed in the preceding year on property in territory that has ceased to be a part of the unit;

(3) the amount of taxes imposed in the preceding year on taxable value that is exempt in the current year;

(4) the amount of taxes imposed in the preceding year on taxable value that is not taxable in the current year because property appraised at market value in the preceding year is required by law to be appraised at less than market value in the current year;

(5) the amount of taxes imposed in the preceding year pursuant to Subsection (d) of this section to recoup taxes lost in the year before as a result of an error or errors; and

(6) the amount of taxes imposed in the preceding year dedicated to the use of a junior college district under Section 20.48(e), Education Code.

Text of subsec. (c) as amended by Acts 1987, 70th Leg., ch. 947, Sec. 3

(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 LEVYß-ßLOST PROPERTY LEVY) ___________________________ ?? (CURRENT TOTAL VALUEß-ßNEW PROPERTY VALUE) ; and

(2) "Rollback tax rate" means a rate expressed in dollars per $100 of taxable value and calculated according to the following formula: ROLLBACK TAX RATE = (EFFECTIVE MAINTENANCE RATEßXß1.08)ß+ CURRENT DEBT RATE

Text of subsec. (d) as amended by Acts 1987, 70th Leg., ch. 699, Sec. 1, and by Acts 1987, 70th Leg., ch. 988, Sec. 1

(d) The designated officer or employee shall calculate the tax rate that if applied to the total taxable value submitted to the governing body less the taxable value of new property would impose the amount of property taxes determined as provided by Subsection (c) of this section. He shall add to that rate:

(1) the amount that, if applied to the total taxable value submitted to the governing body, will impose the amount of taxes required to be publicized under Subsection (e)(3)(C) of this section;

(2) if one or more errors on the appraisal roll for the previous year were discovered after adoption of the unit's tax rate and if those errors resulted in the loss of more than one percent of the total appraised value for the unit in that year, the amount that, if applied to the total taxable value, will raise the rate calculated under this section to what it would have been if the errors had not occurred plus the amount that will recoup the amount of taxes lost in the preceding year as a result of the errors; and

(3) the amount that, if applied to the total taxable value submitted to the governing body, would impose the amount of taxes needed for the governing body's dedication, if any, to a junior college under Section 20.48(e), Education Code, for the current tax year.

Text of subsec. (d) as amended by Acts 1987, 70th Leg., ch. 947, Sec. 3

(d) The effective tax rate for a county is the sum of the effective tax rates calculated for each type of tax the county levies and the rollback tax rate for a county is the sum of the rollback tax rates calculated for each type of tax the county levies.

(e) By August 7 or as soon thereafter as practicable, the designated officer or employee shall submit the rates to the governing body. He shall deliver by mail to each property owner in the unit or publish in a newspaper in the form prescribed by the comptroller:

(1) the effective tax rate, the rollback 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, except that for a school district, estimated funds necessary for the operation of the district prior to the receipt of the first state education aid payment in the succeeding school year shall be subtracted from the estimated fund balances;

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

(A) the amount of principal and interest that will be paid to service the 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 unit by another political subdivision;

(B) the amount by which taxes imposed for debt are to be increased because of the 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) of this section; and

(4) the amount of additional sales and use tax revenue anticipated in calculations under Section 26.041 of this code.

(5) in the year that a taxing unit calculates an adjustment under Section 26.04(k) or (l) of this code, the unit shall publish a schedule that includes the following elements:

(A) the name of the unit discontinuing the department, function, or activity;

(B) the amount of property tax revenue spent by the unit listed under Paragraph (A) of this subsection to operate the discontinued department, function, or activity in the 12 months preceding the month in which the calculations required by this chapter are made; and

(C) the name of the unit that operates a distinct department, function, or activity in all or a majority of the territory of a taxing unit that has discontinued operating the distinct department, function, or activity; and

(6) in the year following the year in which a taxing unit raised its rollback rate as required by Section 26.04(l) of this code, the taxing unit shall publish a schedule that includes the following elements:

(A) the amount of property tax revenue spent by the unit to operate the department, function, or activity for which the taxing unit raised the rollback rate as required by Section 26.04(l) of this code for the 12 months preceding the month in which the calculations required by this chapter are made; and

(B) the amount published by the unit in the preceding tax year under Section 26.04(e)(5)(B) of this code.

(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 effective and rollback tax rates under this section.

Text of subsec. (g) as amended by Acts 1987, 70th Leg., ch. 699, Sec. 1, and by Acts 1987, 70th Leg., ch. 988, Sec. 1

(g) In Subsections (c) and (d) of this section, "debt" means a bond, warrant, certificate of obligation, or other lawfully authorized evidence of indebtedness issued or assumed by or on behalf of the taxing unit that is:

(1) secured by a pledge of the unit's property taxes;

(2) not payable from revenues budgeted for current maintenance and operating expenses;

(3) payable in installments over a period longer than one year; and

(4) payable solely from property tax revenues.

Text of subsec. (g) as relettered from subsec. (h) by Acts 1987, 70th Leg., ch. 947, Sec. 3 (g) A person who owns taxable property is entitled to an injunction prohibiting the taxing unit in which the property is taxable from adopting a tax rate if the assessor or designated officer or employee of the unit, as applicable, has not complied with the computation or publication requirements of this section and the failure to comply was not in good faith.

(h) Relettered as (g) by Acts 1987, 70th Leg., ch. 947, Sec. 3, eff. Jan. 1, 1988.

(i) For purposes of this section, the anticipated collection rate of a taxing unit is the percentage relationship that the total amount of estimated tax collections for the current year bears to the total amount of taxes imposed for the current year. The total amount of estimated tax collections for the current year is the sum of the collector's estimate of:

(1) the total amount of property taxes imposed in the current year that will be collected before July 1 of the following year, including any penalties and interest on those taxes that will be collected during that period; and

(2) the total amount of delinquent property taxes imposed in previous years that will be collected on or after July 1 of the current year and before July 1 of the following year, including any penalties and interest on those taxes that will be collected during that period.

(j) Subsections (b)(2)(B) and (e)(3)(C)(ii) of this section do not apply to a taxing unit in a tax year if the taxing unit did not impose ad valorem taxes in the preceding year.

(k) This subsection applies to a taxing unit that has agreed by written contract to transfer a distinct department, function, or activity to another taxing unit and discontinues operating that distinct department, function, or activity if the operation of that department, function, or activity in all or a majority of the territory of the taxing unit is continued by another existing taxing unit or by a new taxing unit. The rollback tax rate of a taxing unit to which this subsection applies in the first tax year in which a budget is adopted that does not allocate revenue to the discontinued department, function, or activity is calculated as otherwise provided by this section, except that last year's levy used to calculate the effective maintenance and operations rate of the unit is reduced by the amount of maintenance and operations tax revenue spent by the taxing unit to operate the department, function, or activity for the 12 months preceding the month in which the calculations required by this chapter are made and in which the unit operated the discontinued department, function, or activity. If the unit did not operate that department, function, or activity for the full 12 months preceding the month in which the calculations required by this chapter are made, the unit shall reduce last year's levy used for calculating the effective maintenance and operations rate of the unit by the amount of the revenue spent in the last full fiscal year in which the unit operated the discontinued department, function, or activity.

(l) This subsection applies to a taxing unit that had agreed by written contract to accept the transfer of a distinct department, function, or activity from another taxing unit and operates a distinct department, function, or activity if the operation of a substantially similar department, function, or activity in all or a majority of the territory of the taxing unit has been discontinued by another taxing unit, including a dissolved taxing unit. The rollback tax rate of a taxing unit to which this subsection applies in the first tax year after the other taxing unit discontinued the substantially similar department, function, or activity in which a budget is adopted that allocates revenue to the department, function, or activity is calculated as otherwise provided by this section, except that last year's levy used to calculate the effective maintenance and operations rate of the unit is increased by the amount of maintenance and operations tax revenue spent by the taxing unit that discontinued operating the substantially similar department, function, or activity to operate that department, function, or activity for the 12 months preceding the month in which the calculations required by this chapter are made and in which the unit operated the discontinued department, function, or activity. If the unit did not operate the discontinued department, function, or activity for the full 12 months preceding the month in which the calculations required by this chapter are made, the unit may increase last year's levy used to calculate the effective maintenance and operations rate by an amount not to exceed the amount of property tax revenue spent by the discontinuing unit to operate the discontinued department, function, or activity in the last full fiscal year in which the discontinuing unit operated the department, function, or activity.

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Sec. 26.041. Tax Rate of Unit Imposing Additional Sales and Use Tax.

(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 LEVY--NEW PROPERTY VALUE) -- SALES TAX GAIN RATE and ROLLBACK RATE = (EFFECTIVE MAINTENANCE RATE X 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: ß{ßROLLBACK RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.08) ßdividedßby (TOTAL CURRENT VALUE--NEW PROPERTY VALUE)] + (CURRENT DEBT RATE--SALES TAX REVENUE RATE) (LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.08) + ____________________________ ?? (TOTAL CURRENT 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: ß{ßEFFECTIVE TAX RATE = [(LAST YEAR'S LEVY--LOST PROPERTY LEVY) ßdividedßby (CURRENT TOTAL VALUE--NEW PROPERTY VALUE)] + SALES TAX LOSS RATE (LAST YEAR'S LEVY--LOST PROPERTY LEVY) ____________________________________?? (CURRENT TOTAL VALUE--NEW PROPERTY VALUE) + SALES TAX LOSS RATE and ß{ßROLLBACK TAX RATE = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.08) ßdividedßby (TOTAL CURRENT VALUE--NEW PROPERTY VALUE)] + CURRENT DEBT RATE (LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE X 1.08) + _________________________________ ?? (TOTAL CURRENT 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.

(d) In order to determine the amount of additional sales and use tax revenue for purposes of this section, the designated officer or employee shall use the sales and use tax revenue for the last preceding four quarters for which the information is available as the basis for projecting the additional sales and use tax revenue for the current tax year. If the rate of the additional sales and use tax is increased or reduced, the projection to be used for the first tax year after the effective date of the sales and use tax change shall be adjusted to exclude any revenue gained or lost because of the sales and use tax rate change. If the unit did not impose an additional sales and use tax for the last preceding four quarters, the designated officer or employee shall request the comptroller of public accounts to provide to the officer or employee a report showing the estimated amount of taxable sales and uses within the unit for the previous four quarters as compiled by the comptroller, and the comptroller shall comply with the request. The officer or employee shall prepare the estimate of the additional sales and use tax revenue for the first year of the imposition of the tax by multiplying the amount reported by the comptroller by the appropriate additional sales and use tax rate and by multiplying that product by .95.

(e) If a city that imposes an additional sales and use tax receives payments under the terms of a contract executed before January 1, 1986, in which the city agrees not to annex certain property or a certain area and the owners or lessees of the property or of property in the area agree to pay at least annually to the city an amount determined by reference to all or a percentage of the property tax rate of the city and all or a part of the value of the property subject to the agreement or included in the area subject to the agreement, the governing body, by order adopted by a majority vote of the governing body, may direct the designated officer or employee to add to the effective and rollback tax rates the amount that, when applied to the total taxable value submitted to the governing body, would produce an amount of taxes equal to the difference between the total amount of payments for the tax year under contracts described by this subsection under the rollback tax rate calculated under this section and the total amount of payments for the tax year that would have been obligated to the city if the city had not adopted an additional sales and use tax.

(f) An estimate made by the comptroller under Subsection (d) of this section need not be adjusted to take into account any projection of additional revenue attributable to increases in the total value of items taxable under the state sales and use tax because of amendments of Chapter 151, Tax Code.

(g) If the rate of the additional sales and use tax is increased, the designated officer or employee shall make two projections, in the manner provided by Subsection (d) of this section, of the revenue generated by the additional sales and use tax in the following year. The first projection must take into account the increase and the second projection must not take into account the increase. The officer or employee shall then subtract the amount of the result of the second projection from the amount of the result of the first projection to determine the revenue generated as a result of the increase in the additional sales and use tax. In the first year in which an additional sales and use tax is increased, the effective tax rate for the unit is the effective tax rate before the increase minus a number the numerator of which is the revenue generated as a result of the increase in the additional sales and use tax, as determined under this subsection, and the denominator of which is the current total value minus the new property value.

(h) If the rate of the additional sales and use tax is decreased, the designated officer or employee shall make two projections, in the manner provided by Subsection (d) of this section, of the revenue generated by the additional sales and use tax in the following year. The first projection must take into account the decrease and the second projection must not take into account the decrease. The officer or employee shall then subtract the amount of the result of the first projection from the amount of the result of the second projection to determine the revenue lost as a result of the decrease in the additional sales and use tax. In the first year in which an additional sales and use tax is decreased, the effective tax rate for the unit is the effective tax rate before the decrease plus a number the numerator of which is the revenue lost as a result of the decrease in the additional sales and use tax, as determined under this subsection, and the denominator of which is the current total value minus the new property value.

(i) Any amount derived from the sales and use tax that is or will be distributed by a county to the recipient of an economic development grant made under Chapter 381, Local Government Code, is not considered to be sales and use tax revenue for purposes of this section.

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Sec. 26.042. Effective Tax Rate in County Imposing Sales and Use Tax.

(a) In each tax year in which a county imposes a sales and use tax under the County Sales and Use Tax Act:

(1) if the amount of the tax to be imposed in the current year as determined under Subsection (c) of this section exceeds the amount of the tax, if any, used for purposes of this section in the preceding year as determined under Subsection(c) in that year, the officer or employee designated by the commissioners court to make the calculations provided by Section 26.04 of this code shall subtract from the rate calculated for the county under Section 26.04 of the rate that, if applied to the total taxable value submitted to the commissioners court, would impose taxes equal to the amount by which the amount of the sales and use tax to be imposed in the current year exceeds the amount of the sales and use tax used in the preceding year; or

(2) if the amount of the tax to be imposed in the current year as determined under Subsection (c) of this section is less than the amount of the tax, if any, used for purposes of this section in the preceding year as determined under Subsection (c) in that year, the officer or employee designated by the commissioners court to make the calculations provided by Section 26.04 of this code shall add to the rate calculated for the county under Section 26.04 the rate that, if applied to the total taxable value submitted to the commissioners court, would impose taxes equal to the amount by which the amount of the sales and use tax used in the preceding year exceeds the amount of the sales and use tax to be imposed in the current year.

(b) In a tax year to which this section applies, a reference in Section 26.05, 26.06, or 26.07 of this code to the tax rate calculated for the county under Section 26.04 of this code refers to that rate as adjusted under this section.

(c) In order to determine the amount of sales and use tax revenue for purposes of this section, the designated officer or employee shall use the county sales and use tax revenue for the last preceding four quarters for which the information is available as the basis for projecting sales and use tax revenue for the current tax year. If the county did not impose a sales and use tax for the preceding four quarters, the designated officer or employee shall request the comptroller of public accounts to provide to the officer or employee a report showing the estimated amount of taxable sales and uses within the county for the previous four quarters as compiled by the comptroller, and the comptroller shall comply with the request. The county officer or employee shall prepare an estimate of the county sales and use tax for the first year of the imposition of the tax by multiplying the amount reported by the comptroller by the county sales and use tax rate. For the first, second, and third years in which a county imposes a county sales and use tax, the officer or employee shall multiply the amount of revenue as otherwise determined under this subsection by nine-tenths.

(d) The calculations required under Subsection (c) need not take into account any projections of additional revenue attributable to increases in the total value of items taxable under the state sales and use tax due to amendments to Chapter 151, Tax Code. Added by Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 33, eff. Jan. 1, 1987. Amended by Acts 1987, 70th Leg., ch. 11, Sec. 12, eff. April 2, 1987. Repeal Without reference to the amendment of this section by Acts 1987, 70th Leg., ch. 11, Sec. 12, this section is repealed effective January 1, 1988 by Acts 1987, 70th Leg., ch. 947, Sec. 5.

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Sec. 26.043. Effective Tax Rate in City Imposing Mass Transit Sales and Use Tax.

(a) In the tax year in which a city has set an election on the question of whether to impose a local sales and use tax under Section 8(a), Article 1118z, Revised Statutes, the officer or employee designated to make the calculations provided by Section 26.04 of this code may not make those calculations until the outcome of the election is determined. If the election is determined in favor of the imposition of the tax, the representative shall subtract from the city's rollback and effective tax rates the amount that, if applied to the total taxable value submitted to the governing body, would impose an amount equal to the amount of property taxes budgeted in the current tax year to pay for expenses related to mass transit services.

(b) In a tax year to which this section applies, a reference in Section 26.04(d), 26.05, 26.06, or 26.07 of this code to the city's effective or rollback tax rate refers to that rate as adjusted under this section.

(c) For the purposes of this section, "mass transit services" does not include the construction, reconstruction, or general maintenance of municipal streets. Added by Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 35, eff. Jan. 1, 1987. Amended by Acts 1987, 70th Leg., ch. 947, Sec. 6, eff. Jan. 1, 1988; Acts 1991, 72nd Leg., ch. 736, Sec. 1, eff. June 15, 1991. Sec. 26.044. Effective Tax Rate to Pay for State Criminal Justice Mandate. (a) The first time that a county adopts a tax rate after September 1, 1991, in which the state criminal justice mandate applies to the county, the effective maintenance and operation rate for the county is increased by the rate calculated according to the following formula: (State Criminal Justice Mandate) ____________________?? (Current Total Value - New Property Value) (b) In the second and subsequent years that a county adopts a tax rate, if the amount spent by the county for the state criminal justice mandate increased over the previous year, the effective maintenance and operation rate for the county is increased by the rate calculated according to the following formula: (This Year's State Criminal Justice Mandate - Previous Year's State Criminal Justice Mandate) ________________________________?? (Current Total Value - New Property Value) (c) The county shall include a notice of the increase in the effective maintenance and operation rate provided by this section, including a description and amount of the state criminal justice mandate, in the information published under Section 26.04(e) and Section 26.06(b) of this code.

(d) In this section, "state criminal justice mandate" means the amount spent by the county in the previous 12 months providing for the maintenance and operation cost of keeping inmates in county-paid facilities after they have been sentenced to the institutional division of the Texas Department of Criminal Justice as certified by the county auditor based on information provided by the county sheriff, minus the amount received from state revenue for reimbursement of such costs.

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Sec. 26.045. Rollback Relief for Pollution Control Requirements.

(a) The rollback tax rate for a political subdivision of this state is increased by the rate that, if applied to the total current value, would impose an amount of taxes equal to the amount the political subdivision will spend out of its maintenance and operation funds under Section 26.012(16), Tax Code, to pay for a facility, device, or method for the control of air, water, or land pollution that is necessary to meet the requirements of a permit issued by the Texas Natural Resource Conservation Commission.

(b) In this section, "facility, device, or method for control of air, water, or land pollution" means any land, structure, building, installation, excavation, machinery, equipment, or device, and any attachment or addition to or reconstruction, replacement, or improvement of that property, that is used, constructed, acquired, or installed wholly or partly to meet or exceed rules or regulations adopted by any environmental protection agency of the United States or this state for the prevention, monitoring, control, or reduction of air, water, or land pollution.

(c) To receive an adjustment to the rollback tax rate under this section, a political subdivision shall present information to the executive director of the Texas Natural Resource Conservation Commission in a permit application or in a request for any exemption from a permit that would otherwise be required detailing:

(1) the anticipated environmental benefits from the installation of the facility, device, or method for the control of air, water, or land pollution;

(2) the estimated cost of the pollution control facility, device, or method; and

(3) the purpose of the installation of the facility, device, or method, and the proportion of the installation that is pollution control property.

(d) Following submission of the information required by Subsection (c), the executive director of the Texas Natural Resource Conservation Commission shall determine if the facility, device, or method is used wholly or partly as a facility, device, or method for the control of air, water, or land pollution. If the executive director determines that the facility, device, or method is used wholly or partly to control pollution, the director shall issue a letter to the political subdivision stating that determination and the portion of the cost of the installation that is pollution control property.

(e) The Texas Natural Resource Conservation Commission may charge a political subdivision seeking a determination that property is pollution control property an additional fee not to exceed its administrative costs for processing the information, making the determination, and issuing the letter required by this section. The commission may adopt rules to implement this section.

(f) A political subdivision of the state seeking an adjustment in its rollback tax rate under this section shall provide to its tax assessor a copy of the letter issued by the executive director of the Texas Natural Resource Conservation Commission under Subsection (d). The tax assessor shall accept the copy of the letter from the executive director as conclusive evidence that the facility, device, or method is used wholly or partly as pollution control property and shall adjust the rollback tax rate for the political subdivision as provided for by Subsection (a).

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Sec. 26.05. Tax Rate.

(a) Except as provided by Subsection (c), the governing body of each taxing unit before September 1 or as soon thereafter as practicable shall adopt a tax rate for the current tax year and shall notify the assessor for the unit of the rate adopted. The tax rate consists of two components, each of which must be approved separately. The components are:

(1) the rate that, if applied to the total taxable value, will impose the total amount published under Section 26.04(e)(3)(C) of this code, less any amount of additional sales and use tax revenue that will be used to pay debt service; and

(2) the rate that, if applied to the total taxable value, will impose the amount of taxes needed to fund maintenance and operation expenditures of the unit for the next year.

(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.

(c) If the appraisal roll is delivered to a county after August 22, the county must adopt a tax rate not later than the 30th day after the date on which the appraisal roll is received. If a tax rate is not adopted during this 30-day period, the tax rate for the taxing unit for that tax year is the effective tax rate calculated for that tax year. That rate is treated as an adopted tax rate. Within five days of the adoption of a tax rate pursuant to this subsection, the county must ratify such tax rate as provided by Subsection (b) of this section.

(d) The governing body 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 Section 26.04 of this code until it has held a public hearing on the proposed increase and has otherwise complied with Section 26.06 of this code. 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 of this code.

(e) A person who owns taxable property is entitled to an injunction restraining the collection of taxes by a taxing unit in which the property is taxable if the taxing unit has not complied with the requirements of this section and the failure to comply was not in good faith. An action to enjoin the collection of taxes must be filed prior to the date a taxing unit delivers substantially all of its tax bills.

(f) Except as required by the law under which an obligation was created, the governing body may not apply any tax revenues generated by the rate described in Subsection (a)(1) of this section for any purpose other than the retirement of debt.

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Sec. 26.051. Evidence of Unrecorded Tax Rate Adoption.

(a) If a taxing unit does not make a proper record of the adoption of a tax rate for a year but the tax rate can be determined by examining the tax rolls for that year, the governing body of the taxing unit may take testimony or make other inquiry to determine whether a tax rate was properly adopted for that year. If the governing body determines that a tax rate was properly adopted, it may order that its official records for that year be amended nunc pro tunc to reflect the adoption of the rate.

(b) An amendment of the official records made under Subsection (a) of this section is prima facie evidence that the tax rate entered into the records was properly and regularly adopted for that year. Added by Acts 1989, 71st Leg., ch. 2, Sec. 14.01(a), eff. Aug. 28, 1989. Sec. 26.052. Simplified Tax Rate Notice for Small Taxing Units. (a) This section applies only to a taxing unit for which the total tax rate proposed for the current tax year:

(1) is five cents or less on each $100 valuation of taxable property;

(2) would impose taxes of $150,000 or less when applied to the total taxable value of property taxable by the taxing unit according to the appraisal roll for the current tax year; and

(3) is greater than 103 percent of the effective tax rate calculated as provided by Section 26.04. (b) A taxing unit to which this section applies is exempt from the publication requirements of Section 26.04(e) and is not subject to an injunction under Section 26.04(g) for failure to comply with those publication requirements.

(c) A taxing unit to which this section applies may provide public notice of its proposed tax rate in either of the following methods not later than the seventh day before the date on which the tax rate is adopted:

(1) mailing a notice of the proposed tax rate to each owner of taxable property in the taxing unit; or

(2) publishing notice of the proposed tax rate in the legal notices section of a newspaper having general circulation in the taxing unit.

(d) A taxing unit that provides notice of a proposed tax rate under Subsection (c) is exempt from Sections 26.05(d) and 26.06 and is not subject to an injunction under Section 26.05(e) for failure to comply with Section 26.05(d). A taxing unit that provides notice of a proposed tax rate under Subsection (c) may not adopt a tax rate that exceeds the rate set out in the notice unless the taxing unit provides additional notice under Subsection (c) of the higher rate or complies with Sections 26.05(d) and 26.06 in adopting the higher rate.

(e) Public notice provided under Subsection (c) must specify:

(1) the tax rate that the governing body proposes to adopt;

(2) the date, time, location of the meeting of the governing body of the taxing unit at which the governing body will consider adopting the proposed tax rate; and

(3) if the proposed tax rate for the taxing unit exceeds 103 percent of the unit's effective tax rate calculated as provided by this chapter, a statement substantially identical to the following: "The proposed tax rate would increase total taxes in (name of taxing unit) by (percentage by which the proposed tax rate exceeds the effective tax rate)."

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Sec. 26.06. Notice, Hearing, and Vote on Tax Increase.

(a) A public hearing required by Section 26.05 of this code may not be held before the seventh day after the date the notice of the public hearing on the proposed increase is given. The hearing must be on a weekday that is not a public holiday. 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 hearing, the governing body must afford adequate opportunity for proponents and opponents of the tax increase to present their views. Text of subsec.

(b) as amended by Acts 1987, 70th Leg., ch. 456, Sec. 1 (b) The notice of a public 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 "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 of increase over the tax rate submitted pursuant to Section 26.04 of this code) 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. "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, or 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) of this subdivision, 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.

Text of subsec. (b) as amended by Acts 1987, 70th Leg., ch. 947, Sec. 8

(b) The notice of a public 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 be given in the following form: "NOTICE OF PUBLIC HEARING ON TAX RATE INCREASE "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 of increase over the lower of the effective or rollback tax rates) 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. "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, or indicating the absences.)"

(c) The notice 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.

(d) At the public hearing the governing body shall announce the date, time, and place of the meeting at which it will vote on the proposed tax rate increase. After the hearing it shall give notice of the meeting at which it will vote on the tax rate and the notice shall be in the same form as prescribed by Subsections (b) and (c) of this section, except that it must state the following: "NOTICE OF VOTE ON TAX RATE "The (name of the taxing unit) conducted a public hearing on a proposal to increase your property taxes by (percentage of increase over the lower of the effective tax rate or rollback tax rate) percent on (date and time public hearing was conducted). "The (governing body of the taxing unit) is scheduled to vote on the tax rate at a public meeting to be held on (date and time) at (meeting place)."

(e) The meeting to vote on the increase may not be earlier than the third day or later than the 14th day after the date of the public hearing. The meeting 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. If the governing body does not adopt an increased rate by the 14th day, it must give a new notice under Subsection (d) of this section before it may adopt a rate that exceeds the tax rate calculated as provided by Section 26.04 of this code.

(g) The comptroller by rule shall prescribe the language and format to be used in the part of the notice required by Subsection (b)(2) of this section. A notice under Subsection (b) is not valid if it does not substantially conform to the language and format prescribed by the comptroller under this subsection.

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Sec. 26.07. Election to Repeal Increase.

(a) If the governing body of a taxing unit other than a school district adopts a tax rate that exceeds the rollback tax rate calculated as provided by Section 26.04 of this code, the qualified voters of the taxing unit by petition may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate calculated as provided by Section 26.04 of this code.

(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 10 percent of the number of registered voters of the taxing unit according to the most recent official list of registered voters; 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.

(c) Not later than the 20th day after the day a petition is submitted, the governing body shall determine whether or not the petition is valid and pass a resolution stating its finding. If the governing body fails to act within the time allowed, the petition is treated as if it had been found valid.

(d) If the governing body finds that the petition is valid (or fails to act within the time allowed), it shall order that an election be held in the taxing unit on a date not less than 30 or more than 90 days after the last day on which it could have acted to approve or disapprove the petition. A state law requiring local elections to be held on a specified date does not apply to the election unless a specified date falls within the time permitted by this section. 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 (the rate ad